HomeMy WebLinkAboutR-2001-102 The use of Yakima Center by the Public Facilities District ( PFD )RESOLUTION NO. R-2001- 102
A RESOLUTION of the City of Yakima, Washington, approving the lease of
the Yakima Convention Center to the Yakima Regional Public Facilities
District; and approving an agreement between the City and the Yakima
Regional Public Facilities District for the purpose of financing,
expanding, operating and maintaining the Yakima Convention Center.
WHEREAS, the City of Yakima ("Yakima") currently owns and operates the Yakima
Convention Center (the "Convention Center"), providing first-class meeting, ballroom and other
event facilities;
WHEREAS, the City of Yakima, together with the Cities of Selah and Union Gap, desire
to expand the Convention Center to stimulate economic development by creating jobs; realize
additional sales tax and lodging tax revenues; attract commercial business and tourism; and
provide facilities for convention, special events and community events including public meetings
and performing arts events for, among others in the region, the residents of Yakima (the
"Project");
WHEREAS, pursuant to Chap. 35.57 RCW (the "Act") the Cities of Yakima, Selah and
Union Gap have approved the creation of the Yakima Regional Public Facilities District (the
"District") to assist in completing the Project;
WHEREAS, the District has access to several new revenue sources to complete the
Project, including a state sales and use tax credit (the "Sales Tax"), which operates to shift
0.033% of the retail sales and use taxes generated within the District boundaries to the District;
WHEREAS, the Act requires a 33% local match in order for the I.)istrict to impose the
Sales Tax and, accordingly, Yakima desires to transfer a leasehold interest in the Convention
Center to the District in satisfaction of this match requirement (the value of the Convention
Center and the underlying site is approximately $11,800,000);
WHEREAS, the value of the leasehold interest is estimated to be significantly more than
33% of the net present value of projected Sales Taxes of the District (approximately $2.4
million), thereby satisfying the match requirement;
WHEREAS, Yakima intends to issue bonds and apply the net proceeds to finance the
Project, in consideration for the District's pledge of all Sales Tax receipts to Yakima to pay debt
service on the bonds and other Project costs;
WHEREAS, Yakima also intends to contribute lodging taxes to the District, in an
amount, if any, determined annually by the Yakima City Council, to the operation of the
Convention Center, and will contribute revenues to the District in the event of a Sales Tax
shortfall;
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WHEREAS, Yakima will design and construct the Project, and will operate and maintain
the Convention Center, as expanded by the Project;
WHEREAS, Yakima desires to enter into an agreement with the District providing for
such financing, design, construction, operation and maintenance of the Convention Center, as
expanded by the Project;
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Yakima,
Washington:
Section 1.
Approval of Lease Agreement. The City hereby approves the Lease
Agreement with the District in substantially the form attached as Appendix A hereto (the "Lease
Agreement"), with such changes consistent with the intent of the attached form as the City
Manager shall approve.
Section 2. Approval of Development Agreement. The City hereby approves the
Design, Development, Construction, Financing and Operating Agreement with the District, in
substantially the form attached as Appendix B hereto (the "Development Agreement"), with such
changes consistent with the intent of the attached form as the City Manager shall approve. The
Development Agreement also constitutes a sublease of the Convention Center property back to
the City.
Section 3. Authorization of Documents. The City Manager is hereby authorized to
execute the Lease Agreement and the Development Agreement. The City Manager and his
designee, and each of the other appropriate officers, agents and representatives of Yakima are
each hereby authorized and directed to take such steps, to do such other acts and things, and to
execute such instruments as in their judgment may be necessary, appropriate or desirable in order
to carry out the terms and provisions of, and complete the transactions contemplated by this
resolution.
Section 4. Effective Date. This Resolution shall be in effect from and after its adoption.
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ADOPTED at a regular meeting of the Council of the City of Yakima, Washington this
19th day of June, 2001.
ATTEST: CITY OF YAKIMA, WASHINGTON
By ,,,a/41
City Clerk Mayor.
3
ITEM TITLE:
SUBMITTED BY:
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. I g3
For Meeting Of: June 19, 2001
Public Facilities District (PFD): an ordinance to form a Public Facilities
District and a Resolution to adopt Development and Lease Agreements
Dick Zais, City Manager
Rita Anson, Finance Director'
3 -
CONTACT PERSON/TELEPHONE: Rita Anson #575-6050
Tim Jese ; c ~countant, #575-6050
SUMMARY EXPLANATION: In 1999, the Washington State Legislature passed legislation
that allowed Cities to establish a Public Facilities District (PFD) for the purpose of owning and
operating a Regional Center. Under this legislation, a Public Facility District is allowed to
receive revenue from the state in the form of a sales tax credit, if certain criteria are met. This
revenue comes from sales taxes already paid by the buyer of goods within the City; this is not
a new nor an increased tax. By establishing a PFD, a portion of the sales taxes currently
being collected and going to the state can be directed back to our local area (to the PFD).
For the past several months, the Cities of Yakima, Union Gap and Selah have researched the
possibility of forming a three city PFD for the purpose of re -directing these sales tax revenues to
the local area and using the funds to finance an expansion to the Yakima Convention Center.
The formation of a PFD requires the parties to pass an ordinance for that purpose; the Interlocal
Agreement between the cities is an Attachment to the ordinance and the PFD Charter and
Bylaws are included as exhibits to the Interlocal Agreement. These are the documents needed
to establish the PFD. With the understanding that the Yakima City Council would consider the
formation of a three city PFD at its June 19, 2001 meeting, Union Gap and Selah approved the
formation of a joint PFD at their June 11th and 12 Council meetings, respectively. (Note: the,
Charter, Bylaws and Interlocal Agreement documents passed by the three cities must be
substantially identical. The ordinance needed by Yakima will be somewhat different from that
passed by Union Gap and Selah as Yakima has more involvement in the PFD and therefore the
Yakima ordinance will cover more elements; however, the ordinances may not be inconsistent.)
Continued on next page ...
Resolution X Ordinance X Other (Specify)
Contract
Mail to (name and address): see special instructions in document
Phone:
Funding Source PFD (sales tax cr
APPROVED FOR SUBMIT]. AL:
City Manager
STAFF RECOMMENDATION: Pass Ordinance and Adopt Resolution
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
Page 2/5
In addition to the ordinance and related documents (noted above) that must be passed by all three
cities in order to form the PFD; Yakima and the Public Facilities District must also enter into two
additional agreements to effect the balance of the agreement under which the PFD and the City
would function;
(1) Lease Agreement; Yakima provides a 25 year lease of the Convention Center to PFD,
(2) Design, Development, Construction, Financing and Operating Agreement (aka:
Development Agreement): performs multiple functions:
(a) Assigns responsibility for the Design, Development and Construction of the
expansion of the Convention Center to Yakima and establishes the terms thereof;
(b) Establishes a sublease of the Convention Center from the PFD to Yakima; and
(c) Assigns responsibility for the operation and maintenance of the convention center to
Yakima and establishes the terms thereof
Due to the multiple purposes of the Development Agreement, it is a relatively long and complex
document. When reading the Development Agreement, it is helpful to keep in mind that the
Agreement specifies the authority, responsibilities and restrictions of the PFD and Yakima based
on the agreements that Yakima has leased the Convention Center to the PFD and that the PFD has
sub -leased the facility back to Yakima. (ie: Yakima and the PFD are each a lessor and a lessee)
A Complete Set of the PFD Legal Documents Include:
• Yakima Ordinance establishing the PFD; enclosed
• Interlocal Agreement (as an Attachment to the Ordinance); distributed next week
• Charter (as an Exhibit to the Interlocal Agreement); distributed last week
• Bylaws (as an Exhibit to the Interlocal Agreement); distributed last week
• Resolution to Adopt the following Contracts:; enclosed
• Design, Development, Construction, Financing and Operating Agreement; enclosed
• Lease Agreement; enclosed
• Updated copy of the Ordinance as approved by the cities of Union Gap and Selah, will
be distributed to you, for your records, when received
Please Note:
• For your convenience, you may wish to insert the above documents into the three-ring
binder provided to you last week.
• The Yakima Ordinance is enclosed
• The Interlocal Agreement had one slight change in wording due to a request by the
Selah City Council — it did not change the agreement in any way; however, for
consistency with Selah and Union Gap, Council will need to vote on the new version.
Union Gap is updating the document and Yakima had not received it prior to going to
print; therefore, it is not enclosed. It will be distributed at the Council meeting. Again,
the change made by Selah only changed the location of some wording within the
document, thus, the copy you received last week is still accurate as to all aspects of
the agreement.
• The Charter and Bylaws you received in last week's Council package have not
changed, therefore, copies of these documents are not enclosed.
• The Resolution to approve the Development and Lease Agreements and the
Agreements themselves are enclosed
Page 3/5
OVERVIEW OF FINAL PFD PROPOSAL :
GENERAL:
• A three City Public Facility District; Selah, Union Gap and Yakima
• *Yakima will indemnify Union Gap & Selah from legal challenges to the formation of PFD
• A seven member PFD Board will be appointed as follows:
1 Member - Union Gap City Council Discretion
1 Member - Selah City Council Discretion
1 Member - Yakima City Council Discretion
4 Members - Yakima City Council based on input from community groups
Note: The City that appoints the board member may also remove the member
• Once PFD Board is appointed, the existing Yakima Valley Visitors & Convention Bureau
Advisory Committee previously established by Yakima City Council, will be dissolved
• District's powers to impose the Voted Sales Tax is subject to the approval of all three Cities
prior to placement on the ballot
• Yakima will have approval authority for PFD's annual budget and must approve any
admission and parking fees/taxes, any gambling activities any public display of artwork
and the acquisition or transfer of real and personal property valued over $100,000
• Yakima is responsible for design and construction of Convention Center expansion
FINANCIAL:
• Yakima will issue 25 yr. bonds and use net proceeds to fund Convention Center expansion
• Yakima will provide a 25 year lease of the Convention Center (Building and Land) to the
PFD in satisfaction of the 33% match requirement
• PFD to sub -lease the Convention Center to Yakima to Operate and Maintain
• The Convention Center expansion will cost approx. $10 million, including debt service
• So long as the bonds are outstanding, only Yakima has the ability to dissolve the PFD
• PFD will impose a .033% sales tax (credit) which will re -direct to the PFD revenues that are
currently going to the state (sales tax revenues from sales within the three cities)
• PFD will transfer to Yakima all revenues received; such revenues will be used to pay debt
service on bonds, to pay operating and maintenance expenses of the Convention Center
and/or other Regional Center purposes
• In the event that the District's sales tax revenues are insufficient to cover the debt service
on the bonds, Yakima will have sole responsibility for making up any deficiency; Union
Gap and Selah will not be required to contribute. Note: we believe the probability of this
occurring to be very low and in the unlikely event of such an occurrence, the amount of
any funding requirement from Yakima to be minimal. (For more information, refer to
Attachment B - impact of a 5% and a 10% loss in sales tax revenues from all three Cities and
Attachment C - five year sales tax revenue history for each of the three cities.)
• Yakima will contribute lodging taxes, in an amount, if any, determined annually by the
Yakima City Council, to support debt service payments, operation and maintenance of the
Convention Center and/ or other Regional Center purposes
* This is a new agreement with the Cities of Union Gap and Selah since the last update to Council. They
requested this during the final negotiations prior to their approval of the formation of the PFD
Page 4/5
OTHER CONSIDERATIONS:
The enclosed plan for the formation of the Public Facilities District, the financing of
the expansion of the Convention Center and the on-going operation and maintenance
of the Center is based on weeks of analysis and research including numerous
discussions with legal counsel, bond counsel, bond underwriters, the department of
Revenue, the State Auditors Office, members of the Yakima Visitors and Convention
Bureau its Board and Advisory Committee, staff and Council Members from the Cities
of Selah, Union Gap and Yakima, owners and employees of local motels/hotels,
consultants and appraisers. Many documents and studies have been prepared as part of
this research, including Market/Financial Analysis Study of the Convention Center
Expansion, Preliminary Architect Evaluation and an Appraisal of the existing
Convention Center.
This proposal is based on the combined results of all of the above research keeping in
mind the City's three primary financing objectives; (1) to minimize the impact on the
City's general obligation debt capacity, (2) to maximize the funds available for the
expansion of the Convention Center and (3) to provide a marketable bond offering to
the public. Yakima is establishing a PFD that is different in some significant respects
from other PFDs that have been formed to date and our financing proposal is creative
and sensitive to market changes. Therefore, please keep in mind:
• No guarantees that the bonds will be marketable
• Changes in the Bond Market may require changes to our financing plan, which
could have an impact on the expansion plans
• No guarantees that the Department of Revenue will approve the use of the lease
agreement to satisfy the match requirement (which triggers our ability to attain
the sales tax credit)
• To make the financing plan work, the Convention Center may have to
temporarily reduce operating expenditures and /or non-operating expenditures
such as promotional expenses
Discussions with rating agencies and investment bankers indicate that the financing
plan is both reasonable and achievable; however, nothing is certain until we actually go
to market with the bond issue. In spite of the risks noted above, City staff, legal
counsel and bond counsel believe this proposal to be a conservative, legal and, in the
case of the bonds, a marketable plan.
Page 5/5
NEXT STEPS:
If the Yakima City Council approves the formation of a Public Facilities District
(PFD) the next steps include:
• Appointment of Board Members (staff is preparing an outline of a nomination and
appointment process for Council's review; this will be distributed in the near future)
• Board to Hold Organizational Meeting Within 30 days of Effective Date of PFD
Formation. At this meeting the following needs to occur:
Approve the Lease Agreement
Approve Development Agreement
Impose the State Sales Tax (Credit)
Other Organizational Activities
• Submit Request to Department of Revenue to Commence Transfer of Sales Tax
Revenue to the Public Facilities District
• Commence Pre -construction Activities for the Convention Center Expansion
• Amend existing management agreement for the operation and maintenance of the
Convention Center to be consistent with PFD Development and Lease Agreements
Note: the construction bonds will not be issued before mid year 2002. This is to allow
the sales tax revenues to build up and be sufficient to cover the first debt service
payment on the bonds (which will occur approximately six months after the issuance of
the bonds) and to provide some reserves for future payments.
Attachments: :
A: Questions from one Council Member and related Answers
B: Worksheet identifying impact of a 5% and a 10% reduction in sales tax revenues of the Cities
of Selah, Union Gap and Yakima
C Worksheet reflecting the sales tax revenues for each of the three cities for the past five years
ATTACHMENT A
AGENDA STATEMENT
PUBLIC FACILITIES DISTRICT
QUESTIONS AND ANSWERS:
Following are questions received from a Council Member and the related answers:
1. Under the heading of "Questions and Answers" at the April 18, 2000 Council Study
Session, staff indicated that, "if the City no longer owns the Convention Center, it is
unclear whether or not the City may receive any amount (hotel/motel tax revenues) over
the amount needed to service the existing Convention Center bonds, due to the fact that
the City would no longer own a facility, (underscore added for emphasis) which qualifies
it to receive the hotel/motel tax revenues. Bond Counsel is reviewing this issue." What
was the response of Bond Counsel? (See also Question No. 3 below.)
Since the current proposal calls for the City to Lease the Convention Center to the PFD
(rather than transferring title), this is no longer applicable; however, bond counsel has
indicated transferring the title of the Convention Center to the PFD would not have
prevented the City from collecting the hotel/motel taxes
2. "In the event the District's sales tax revenues are insufficient to cover the debt service
on the bonds, Yakima will have sole responsibility for making up any deficiency."
What would be the City of Yakima's source of funds should there be a deficiency?
This is a risk that Yakima is taking; any needed revenues would come from operating
revenues of the Convention Center, if available; hotel/motel tax revenue, if available; or
the General Fund as a last resort. However, we believe the chances of this occurring are
minimal; a 5% reduction in the sales tax revenues of all three cities would not be enough
to cause these revenues to be insufficient to cover the debt service. (Refer to the attached
worksheet which identifies the impact of a 5% and a 10% reduction in the sales tax
revenues of all three cities.)
3. Yakima will transfer a leasehold interest in the Convention Center and the
underlying site to the district in satisfaction of the local match. Does this include both
the Convention Center building and land? (See also Question No. 1 above.)
Yes, the City will lease the Convention Center building and land to the PFD
Director/F&B
PFD Questions and Answers.doc
Page 2
4. Has Bond Counsel reviewed a proposed management contract, or will this be
accomplished at a later date?
No, the management contract has not yet been drafted; this will need to be done in the
near future. (The financing proposal, however, has been reviewed by Bond Counsel and
by the Bond Underwriters and, although there are never any guarantees as to the
marketability of the bonds until they actually hit the market, they are comfortable that
this is a solid proposal and gave their recommendation to its structure and marketability.
5. The Charter at Article IV (page 3) reads in part: "For the purpose only of
securing the exemption from federal income taxation for interest on
obligations of the District, the District constitutes an authority and
instrumentality of Yakima...". What authorizes this without naming Union
Gap and Selah?
This simply has Yakima "extending" its authority to issue tax exempt bonds to the PFD;
authorization from more than one City is not necessary. This is simply an added option
and is not likely necessary as the PFD has its own authority to issue tax exempt bonds
and due to the fact that Yakima will be issuing the bonds.
6. Article V Powers in the Charter authorizes the District to impose specified charges
and taxes (admission, parking) without limitation (underscore added for emphasis).
How can these Charter powers of the District "be subject to the approval of the
Yakima Council" in an Interlocal Cooperation Agreement? Why wouldn't the
Council approval be stated in the Charter of the District?
The Charter identifies the powers of the PFD, as authorized by the legislature (which is
"without limitation"). However, the PFD may contract with a 3rd party (Yakima, in this
case) to give up some of its legal authority for some consideration. The Charter must
first provide this authority to the PFD and then the PFD may agree to limit its own
authority in "trade" for some other consideration; which it is doing via the Interlocal
Agreement.
Director/F&B
PFD Questions and Answers.doc
ATTACHMENT B
THREE CITY
PUBLIC FACILITY DISTIRCT
SAMPLE DEBT SERVICE PAYMENTS
WITH REDUCED SALES TAX REVENUES:
A. Estimated Annual Debt Service Payment (three cities):
$480,000
Based on $3.7 million par value Revenue Bond and
a $2.6 million par value LTGO Bond
B. Sales Tax Credit (based on year 2000):
$21,872
4.32%
Selah
$84,358
16.65%
Union Gap
$400,576
79.04%
Yakima
$506,806
100.00%
C. Example - 5% Reduction in Sales Tax Revenue of All Three Cities:
$506,806
X .95
$481,466
Tax Revenue Received
$480,000
Less Annual Debt Service Payment Required
$1,466
Excess Revenue (No Contribution Required)
D. Example - 10% Reduction in Sales Tax Revenue of All Three Cities:
$506,806
$0.90
$456,125
$480,000
Less Annual Debt Service Payment Required
Additional Revenues Required
($23,875)
(1st from reserves; then Yakima must contribute to cover balance
of any deficiency)
06/14/2001
PFD - Info - Examples City Contributions - Rev Short fall 05-01-01
ATTACHM
City of Yakima
Public Facilities District Project
State Sales Tax Credit Available
Based on Sales Tax Collected
As Reported by Washington Dept of Revenue
2000
Credit by
Multi -City Tax Credit Calculation 1996 1997 1998 1999 2000 City
Selah Sales Tax $ 448,440 $ 546,159 $ 539,351 $ 599,638 $ 563,359 $ 21,872
Union Gap Sales Tax 1,683,302 1,962,292 1,993,338 1,976,213 2,172,860 84,358
Yakima Sales Tax 9,920,745 10,373,742 10,464,547 10,274,839 10,317,870 400,576
Total Sales Tax Collected $ 12,052,487 $ 12,882,193 $ 12,997,236 $ 12,850,690 $ 13,054,089
Total Sales (Divide by .0085) $ 1,417,939,647 $ 1,515,552,118 $ 1,529,086,588 $ 1,511,845,882 $ 1,535,775,176
State Credit (Times .00033) $ 467,920 $ 500,132 $ 504,599 $ 498,909 $ 506,806 $ 506,806
Annual Percentage Change 6.9% 0.9% -1.1% 1.6%
Average Annual Percentage Change 2.1%
Note: According to the Department of Revenue Local Tax Distribution Report, Local Sales and Use Taxes are distributed as
follows: "15% is given to the county for transactions occurring within cities. The remaining 85 % is distributed to the cities
as their share of the basic or optional tax. Counties receive the full amount attributable to sales in the unincorporated areas,
plus the 15 % share for sales in cities."
Summary: Total sales tax for all three cities combined has hovered around $12.9 million for the past 4 years. However, when
comparing 2000 to 1996, sales tax has demonstrated an average annual percentage increase of 2.1% for that period. A
growth assumption of 1% was used to calculate match requirements, which should be attainable over the extended period of
25 years. The debt issue is planned to maximize project funds, but keep the annual debt service under $480,000.
cje 06/14/2001 public facilities district
CITY OF YAKIMA, WASHINGTON
AN ORDINANCE of the City of Yakima, Washington, approving an
interlocal agreement with the Cities of Selah and Union Gap to form the
Yakima Regional Public Facilities District pursuant to RCW 35.57.020.
PASSED ON (p — (9 , 2001
Prepared by:
PRESTON GATES & ELLIS LLP
5000 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7078
Section 1.
Section 2.
Section 3.
Section 4
Section 5.
Section 6.
Appendix A
TABLE OF CONTENTS
Page
Formation of the District 2
Charter 3
Board of Directors 3
General Authorization 3
Prior Acts 4
Effective Date 4
Interlocal Agreement
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P\SC\SC09L 01/06/14
ORDINANCE NO. 2001- 4'
AN ORDINANCE of the City of Yakima, Washington, approving an
interlocal agreement with the Cities of Selah and Union Gap to form the
Yakima Public Facilities District pursuant to RCW 35.57.020.
WHEREAS, the City of Yakima ("Yakima") currently owns and operates the Yakima
Convention Center (the "Convention Center"), providing first-class meeting, ballroom and other
event facilities;
WHEREAS, the City of Yakima, together with the Cities of Selah and Union Gap, desire
to expand the Convention Center to stimulate economic development by creating jobs; realize
additional sales tax and lodging tax revenues; attract commercial business and tourism; and
provide facilities for convention, special events and community events including public meetings
and performing arts events for, among others in the region, the residents of Yakima, at an
estimated cost of over $10,000,000 (the "Project");
WHEREAS, Chap. 35.57 RCW (the "Act") authorizes one or more cities located in a
county with a population of less than one million to create a public facilities district (a "PFD") to
acquire, remodel, finance and operate one or more "regional centers";
WHEREAS, "regional centers" are defined to include, among other things, existing
convention centers to be improved at a cost of at least $10,000,000 including debt service;
WHEREAS, PFDs have access to several new revenue sources, including a state sales
and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the retail sales and use
taxes generated within the PFD boundaries to the PFD;
WHEREAS, in order to complete the Project and access the Sales Tax, the City wishes to
join with the Cities of Selah and Union Gap to create a PFD solely for the purpose of acquiring
(by purchase, lease or otherwise), financing, improving and operating regional centers, as
defined in the Act (the "District");
WHEREAS, the Act requires a local match in order for the District to impose the Sales
Tax and, accordingly, Yakima will transfer a leasehold interest in the Convention Center to the
District in satisfaction of this match requirement (the value of the Convention Center and the
underlying site is approximately $11,800,000);
WHEREAS, the value of the leasehold interest is estimated to be significantly more than
33% of the net present value projected Sales Taxes of the District (approximately $2.4 million),
thereby satisfying the match requirement;
WHEREAS, Yakima intends to issue bonds and apply net bond proceeds to finance the
Project, in consideration for the District's pledge of all Sales Tax receipts to Yakima to pay debt
service on the bonds and other regional center costs;
WHEREAS, Yakima also intends to contribute lodging taxes to the District, in an
amount, if any, determined annually by the Yakima City Council, to the operation of the
Convention Center, and will contribute revenues to the District in the event of a Sales Tax
shortfall;
WHEREAS, the City is authorized and empowered to enter into the Interlocal Agreement
pursuant to Chap. 39.34 RCW and to form the District pursuant to Chap. 35.57 RCW;
NOW, THEREFORE, BE IT ORDAINED BY the City of Yakima, Washington, as
follows:
Section 1. Approval of Interlocal Agreement; Formation of the District.
Pursuant to RCW 35.57.010(1), the City hereby approves the interlocal agreement
attached as Appendix A hereto (the "Interlocal Agreement"), creating a public facilities district
in cooperation with the Cities of Selah and Union Gap.
forth
t Interlocal
t the of t t c
As set lol Ln in the lnterroCal f'�greerrlellt, name the District shall be the Yakima
Regional Public Facilities District. The District shall be a municipal corporation, an independent
taxing authority and a taxing district. The District shall be coextensive with the boundaries of
Yakima, and the Cities of Selah and Union Gap, as the same may be amended from time to time.
The District shall acquire (by purchase, lease or otherwise), construct, own, remodel, maintain,
equip, reequip, repair, finance, and/or operate one or more regional centers, as defined in
RCW 35.57.020, including the Convention Center, the Project and related parking facilities.
Except as limited by State law and the Interlocal Agreement, the District shall have the
powers, purposes and form set forth in its charter (the "Charter"). As set forth in the Interlocal
and the Charter, in consideration for the mutual promises set forth therein, the District's power to
impose sales and use taxes authorized under RCW 82.14.048 is subject to the City's, the City of
Selah's and the City of Union Gap's approval of any such levy prior to placement on the 'ballot.
In addition, also in consideration for the mutual promises set forth in Appendix A, the District's
annual budget, its power to impose admission charges, parking charges, admissions taxes and
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P \SC\SC09L 01/06/14
parking taxes, and any gambling activity or public display of artwork under authority of the
District is subject to the approval of the Yakima City Council.
Section 2. Charter. The Charter is hereby approved in the form attached as Exhibit A
to the Interlocal Agreement. The Charter shall be amended only with the approval of Yakima,
and the Cities of Selah and Union Gap. The District shall commence its existence effective upon
execution of the Interlocal Agreement by Yakima, and the Cities of Selah and Union Gap.
Section 3. Board of Directors. A board consisting of seven directors (the "Board"),
as initially identified in the Charter, is hereby approved to govern the affairs of the District. The
directors shall be appointed and serve their terms as provided in the Charter. All corporate
powers of the District shall be exercised by or under the authority of the Board; and the business,
property and affairs of the District shall be managed under the direction of the Board, except as
may be otherwise provided for by law or in the Interlocal Agreement or in the Charter.
Section 4. Authorization of Documents. The City Manager is hereby authorized to
execute the Interlocal Agreement. The City Manager and his designee, and each of the other
appropriate officers, agents and representatives of Yakima are each hereby authorized and
directed to take such steps, to do such other acts and things, and to execute such letters,
certificates, agreements, papers, financing statements, assignments or instruments as in their
judgment may be necessary, appropriate or desirable in order to carry out the terms and
provisions of, and complete the transactions contemplated by this ordinance.
Section 5. Prior Acts. All acts taken pursuant to the authority of this ordinance but
prior to its effective date are hereby ratified and confirmed.
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P\SC\SCO9L 01/06/14
Section 6. Effective Date. This ordinance shall be effective 30 days after its passage,
approval and publication as provided by law.
PASSED by the Council of the City of Yakima at a regular meeting thereof, held this
19th day of June, 2001.
ATTEST
City Clerk
APPROVED AS TO FORM:
iiNfroioi) L.
City Attorndy
First Reading:
Publication Date: o - - cJ o D i
Effective Date: rl - att.- a Do
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CITY OF YAKIMA, WASHINGTON
SI MARY PLACE
Mary Place
Mayor
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APPENDIX A
INTERLOCAL AGREEMENT
A-1
P:\SC\SC09L 01/06/14
RESOLUTION NO. R -2001-
A RESOLUTION of the City of Yakima, Washington, approving the lease of
the Yakima Convention Center to the Yakima Regional Public Facilities
District; and approving an agreement between the City and the Yakima
Regional Public Facilities District for the purpose of financing,
expanding, operating and maintaining the Yakima Convention Center.
WHEREAS, the City of Yakima ("Yakima") currently owns and operates the Yakima
Convention Center (the "Convention Center"), providing first-class meeting, ballroom and other
event facilities;
WHEREAS, the City of Yakima, together with the Cities of Selah and Union Gap, desire
to expand the Convention Center to stimulate economic development by creating jobs; realize
additional sales tax and lodging tax revenues; attract commercial business and tourism; and
provide facilities for convention, special events and community events including public meetings
and performing arts events for, among others in the region, the residents of Yakima (the
"Project");
WHEREAS, pursuant to Chap. 35.57 RCW (the "Act") the Cities of Yakima, Selah and
Union Gap have approved the creation of the Yakima Regional Public Facilities District (the
"District") to assist in completing the Project;
WHEREAS, the District has access to several new revenue sources to complete the
Project, including a state sales and use tax credit (the "Sales Tax"), which operates to shift
0.033% of the retail sales and use taxes generated within the District boundaries to the District;
WHEREAS, the Act requires a 33% local match in order for the District to impose the
Sales Tax and, accordingly, Yakima desires to transfer a leasehold interest in the Convention
Center to the District in satisfaction of this match requirement (the value of the Convention
Center and the underlying site is approximately $11,800,000);
WHEREAS, the value of the leasehold interest is estimated to be significantly more than
33% of the net present value of projected Sales Taxes of the District (approximately $2.4
million), thereby satisfying the match requirement;
WHEREAS, Yakima intends to issue bonds and apply the net proceeds to finance the
Project, in consideration for the District's pledge of all Sales Tax receipts to Yakima to pay debt
service on the bonds and other Project costs;
WHEREAS, Yakima also intends to contribute lodging taxes to the District, in an
amount, if any, determined annually by the Yakima City Council, to the operation of the
Convention Center, and will contribute revenues to the District in the event of a Sales Tax
shortfall;
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WHEREAS, Yakima will design and construct the Project, and will operate and maintain
the Convention Center, as expanded by the Project;
WHEREAS, Yakima desires to enter into an agreement with the District providing for
such financing, design, construction, operation and maintenance of the Convention Center, as
expanded by the Project;
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Yakima,
Washington:
Section I.
Approval of Lease Agreement. The City hereby approves the Lease
Agreement with the District in substantially the form attached as Appendix A hereto (the "Lease
Agreement"), with such changes consistent with the intent of the attached form as the City
Manager shall approve.
Section 2. Approval of Development Agreement. The City hereby approves the
Design, Development, Construction, Financing and Operating Agreement with the District, in
substantially the form attached as Appendix B hereto (the "Development Agreement"), with such
changes consistent with the intent of the attached form ac the City Manager shall approve. The
Development Agreement also constitutes a sublease of the Convention Center property back to
the City.
Section 3. Authorization of Documents. The City Manager is hereby authorized to
execute the Lease Agreement and the Development Agreement. The City Manager and his
designee, and each of the other appropriate officers, agents and representatives of Yakima a!
each hereby authorized and directed to take such steps, to do such other acts and things, and to
execute such instruments as in their judgment may be necessary, appropriate or desirable in order
to carry out the terms and provisions of, and complete the transactions contemplated by this
resolution.
Section 4. Effective Date. This Resolution shall be in effect from and after its adoption.
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ADOPTED at a regular meeting of the Council of the City of Yakima, Washington this
19th day of June, 2001.
ATTEST: CITY OF YAKIMA, WASHINGTON
By
City Clerk Mayor
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APPENDIX A
LEASE AGREEMENT
LEASE AGREEMENT
This LEASE AGREEMENT (the "Lease") is made as of , 2001, by and
between the CITY OF YAKIMA, WASHINGTON (the "City"), a muMcipal corporation and
first class city of the State of Washington, and the YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT (the "District", and together with the City, the "Parties"), a public
facilities district created by the City and the Cities of Selah and Union Gap, to lease certain real
property of the City to the District to assist in the design, development, construction, financing
and operation of the Yakima Convention Center, as expanded. Reference is made to that certain
Design, Development, Construction and Financing Agreement dated z, , 2001,
between the undersigned (the "Development Agreement").
1. Effective Date. This Lease and all of the terms and conditions hereof shall
become effective as of the date set forth above; provided that all of the rights, duties and
obligations of the City and the District, as lessor and lessee, respectively, under this Lease are
not and shall not be effective unless and until the Development Agreement becomes effective.
2. Leased Premises. From and after commencement of the Lease Term (as
defined herein), the City hereby leases to the District and the District hereby hires from the City
certain improved real property located in the City of Yakima, Washington, legally described in
Exhibit A attached hereto and by this reference incorporated (the "Premises") and certain
improvements thereon consisting of a convention center, and further improvements to be built on
said Premises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record.
3. Term. The Lease Term of this Lease, and all obligation of the
parties hereto as lessor and lessee, shall commence on the effective date of the Development
Agreement and shall automatically terminate upon expiration or termination of the Development
Agreement, unless otherwise terminated or amended as set forth herein. The District shall be
entitled to possession of the Premises upon commencement of the Lease Term hereunder.
4. Prepaid Rent. Within 60 days after the commencement of the Lease
Term, the District shall pay $50 to the City, which amount represents prepaid rent for the entire
Lease Term. The Parties acknowledge that the value of the Premises and Improvements existing
as of the date of this Lease is appraised at $11,800,000. The value of the leasehold interest in the
Premises hereby transferred is significantly in excess of 33% of the net present value of sales
taxes the District projects that it will collect under RCW 82.14.390 (approximately $2.4 million).
It is the parties' intent that the City lease the Premises to the District in satisfaction of the local
match requirement under RCW 82.14.390.
5. Use of the Premises. The Premises shall be used by the District solely for the
operation and maintenance of the Premises and the lease back of the same to the City and for
other District purposes consistent with the Development Agreement. At no time during the
Lease Term shall the District use the Premises in whole or in part for any unlawful purpose, nor
shall the District permit or commit any nuisance or illegal activity on the Premises.
6. Compliance with Laws. The District shall comply with all municipal,
county, state and federal laws, rules, regulations or ordinances applicable to the Premises and the
Improvements, and the ownership, use and occupancy thereof.
7. Liens and Encumbrances. Except as expressly provided in this Lease, the
District shall keep the Premises and the Improvements thereon free of mechanics' and
materialmen's liens and other liens of like nature including tax liens, and will defend and hold
the City harmless against such liens or claims and against all attorney's fees and other costs and
expenses growing out of or incurred as a result of such liens or claims so long as such liens or
claims arise from the actions of the District and not the actions of the City. The City shall defend
and hold harmless the District against such liens or claims, fees, costs or expenses growing out of
or incurred as a result of the actions of the City and not the actions of the District. Provided,
however, that the District may in good faith and at the District's own expense contest the validity
of any such lien or claim, through litigation if necessary. In the event that the District contests
any lien or claim, the District shall prosecute the contest with reasonable diligence, and the
District shall at all times effectually stay or prevent any official or judicial sale of the Premises
and/or Improvements and the District shall pay or otherwise satisfy any final judgment (unless
the District shall appeal same, in which event the judgment from the last appeal shall be the
applicable judgment), which may be entered against it and thereafter promptly procure record
satisfaction of release of the lien or claim. In the event that the District fails to fully discharge or
in good faith contest any such lien or claim that has been perfected, the City may pay the same,
or any part thereof, and the City shall be the sole judge of the validity of said lien or claim. All
amount so paid by the City shall be recoverable against the District.
8. Maintenance and Repair of Premises and Improvements. The District shall
maintain the Premises and Improvements in good repair and working order, and shall make such
repairs necessary to so maintain the Premises and Improvements.
9. Taxes and Assessments. The District covenants and agrees pay all real
estate taxes and assessments, if any, levied upon the Premises and Improvem, that become
due and payable during the Lease Term prior to delinquency, together with any leasehold excise
tax that may be assessed against the District's leasehold interest hereunder; provided, that if any
such taxes or assessments may be paid in installments without penalty, the District shall have the
right to pay any such taxes or assessments in installments.
The District may contest the legal validity or amount of any tax, assessment or other
charge for which the District may be responsible under this Lease and may institute such
proceedings as the District considers necessary. If the District contests any such tax, assessment
or other charge, the District may withdraw or defer payment or pay under protest, provided the
District shall protect the City and the Premises and Improvements from any lien by adequate
surety bond or other appropriate security.
The City appoints the District as the City's attorney-in-fact for the purpose of making all
payments to any taxing authorities and for the purpose of contesting any taxes. '. sessments or
other charges, conditioned on the District's preventing any lien from being aL.vied on the
Premises or Improvements or upon the City. However, if the District chooses not to contest any
tax, assessment or charge, the District shall give the City timely notice thereof so that the City
may contest any taxes, assessments or charges levied against the Premises or Improvements if
the District fails to do so.
10. Utility Charges. The District shall be solely responsible for and shall
promptly pay all charges for heat, water, light, gas, electricity, sewer and garbage or any other
utility now or hereafter used or consumed on the Premises. In no event shall the City be liable
for an interruption or failure in the supply of such utilities to the Premises.
11. Alterations. Except as permitted by the Development
Agreement, the District shall not alter the Premises or the Improvements without the prior
written consent of the City.
12. Insurance. The District shall, at its sole cost and expense,
procure and maintain in force during the Lease Term all liability and other insurance required to
be procured and maintained by the City under the Development Agreement.
13. Assignment. Except as otherwise provided in Section 22, the
District shall not assign or transfer this Lease or any interest therein, nor shall this Lease or any
interest therein be assignable or transferable by operation of law or by any process or proceeding
of a court, or otherwise, without the prior written consent of the City, which consent shall not be
unreasonably withheld.
14. Eminent Domain.
A. The following definitions apply in construing provisions of this Lease
relating to a taking of or damages to all or a part of the Premises or Improvements or interest
therein by eminent domain or inverse condemnation.
"Taking" means the taking or damaging, including
severance damage, by eminent domain or inverse
condemnation for any public or quasi -public use under any
statute or any purchase or other acquisition under threat of
condemnation. The taking shall be considered to take place
as of the later of the date actual physical possession is taken
by the condemnor, and the date on which the right to
compensation and damages accrues under the law
applicable to the Premises.
ii. "Total taking" means the taking of the fee title to all of the
Premises.
iii. "Substantial taking" means the taking of so much of the
Premises or Improvements or both that one or more of the
following conditions result: (i) the conduct of the District's
use(s) of the Premises would be substantially prevented or
impaired, (ii) the remaining Premises could not be
economically and feasibly be made to be so usable by the
District, or (iii) the Improvements would be other than
reasonably efficient or economic or could not economically
and feasibly be made reasonably efficient or economic for
the District's use.
iv. "Partial taking" means any taking of the fee title that is not
either a total taking or a substantial taking.
v. "Award" means compensation paid for the taking, whether
pursuant to judgment, by agreement or otherwise.
B. The party receiving any notice of an intended taking or a willingness to
make a negotiated private purchase in lieu of condemnation shall promptly give the other party
written notice of the receipt and contents thereof.
C. The City and the District shall each have the right to represent separately
their respective interest in each proceeding or negotiation with respect to the taking or intended
taking and to make full proof of their claim. No agreement, settlement, sale or other transfer to
or with the condemning authority shall he made without the consent of the City, the District and
all leasehold mortgagees.
D. Upon a total taking, the City and the District shall be relieved of all
obligations hereunder and this Lease shall terminate. Such termination of obligations shall not
prejudice the District's right to recover compensation calculated in accordance with the terms
hereof for the taking of the District's interest in the Premises and Improvements. The amount of
damages resulting to the Cityand the District and te, the respective interests of the City and the
District in the Premises by reason of such taking shall be separately determined and computed by
the court having jurisdiction over such eminent domain proceedings. Separate awards and
judgment shall be made with respect to the damage to the City and the District and such awards
shall be paid separately to the City and the District. If the City's and the District's damages (and
awards therefore) cannot or will not be separately determined and computed by such court, then
the award granted shall be divided between the City and the District in a fair and equitable
manner, it being understood that the District's portion is to compensate the District for the loss of
its leasehold interest hereunder, and the City's portion is to compensate the City for the loss of
the right of reversion hereunder and its leasehold interest under the Development Agreement.
E. Within 45 days after the District receives notice of an intended substantial
taking, the District shall provide written notice of the same to the Yakima City Manager. Upon
receipt of such notice the City Manager and the District shall confer as to the level of taking.
The City shall have the final determination as to whether the taking should be treated as a total
taking or partial taking.
P. Upon a partial taking, the Lease shall remain in full force and effect,
covering the remaining Premises. The amount of damages resulting to the City and the District
and their respective interests in the Premises and the Improvements shall be separately
determined and enmpnted by the (-port having iiiricdintinn over such eminent domain
proceedings. Separate awards and judgments shall be made with respect to the damage to the
City and the District, and such awards shall be paid separately to the City and the District,
respectively.
G. If the City's and the District's damages (and the awards therefor) cannot
or will not be determined or computed by the court, then all sums, including damages and
interest, awarded for the fee title or leasehold, or both, shall be deposited promptly with a
mutually agreed upon escrow agent and shall be equitably distributed and disbursed for the
following purposes:
i. To the District for the purpose of compensating the District for the
value of its leasehold interest taken and for restoring any taken
Improvements, plus any amount awarded to remove or relocate
subtenants, plus any amount specifically awarded to or for the
District for detriment to business and severance damages.
ii. To the City, a sum equal to the value of the Premises taken.
iii. To the City, for the purpose of compensating it for the value of the
lost leasehold interest in the Development Agreement.
iv. The remainder to the City, to be applied by the City to the
repayment of Bonds or Additional Bonds (as defined in the
Development Agreement) or to any other lawful use.
H. Upon the taking for the temporary use of all or any part of the Premises or
Improvements for a period of less than 12 months, the rent under this Lease shall not be affected
in any way, and the District shall be entitled to any award for the use or estate taken.
I. Nothing in this Lease shall be deemed to limit the City's right of eminent
domain.
15. Indemnification. To the extent permitted by law, the District shall
defend, indemnify, and hold the City and the Premises harmless from any and all damages or
liabilities at any time occasioned by or arising out of (i) any act, activity or omission of the
District, or anyone holding themselves out under the District (except the City), or (ii) the
occupancy or use of the Premises or any part thereof, by or under the District, excluding the
occupancy and use by the City, or (iii) the state or condition of the Premises and the
Improvements or any part thereof, except to the extent the City shall itself be grossly negligent in
the circumstances.
Without limiting in any way the foregoing indemnification, the District agrees that during
its use and occupancy of the Premises it shall comply with all laws, regulations, rules and
ordinances of the City, the State and the federal government with regard to the use, storage, and
disposal of hazardous and toxic substances on the Premises and the Improvements, and the
District shall to the fullest extent permitted by law defend, indemnify and hold harmless the City
for any and all damages or liabilities with regard to hazardous and toxic substances occasioned
by and arising from the District's activities on the Premises and Improvements.
16. Default. Time is of the essence in this Lease, and in the
event that (i) the District shall default in the payment of taxes, assessments, utility charges or any
other amounts due hereunder, and such default is not caused by the City's failure to meet its
obligations under the Development Agreement, and if such default shall continue for 10 days
following written notice and demand; (ii) the District shall default in the performance or
observation of any other terms, covenants, conditions or agreements of this Lease for 15 days
after written notice and demand,_or in the case of such default that cannot with due diligence and
in good faith be cured within 15 days, the District fails to proceed promptly after such notice and
with due diligence and in good faith, to begin to cure said default, (iii) there shall be filed against
the District in any court or other tribunal pursuant to any statute or other rule of law, either of the
United States or of any State or of any other authority now or hereafter exercising jurisdiction, a
petition in bankruptcy or insolvency proceedings or for reorganization or for the appointment of
a receiver nr trustee of all nr substantially all of the District's property,_ nr for any other form of
debtor relief, unless, such petition be filed against the District and if in good faith the District
promptly thereafter commences and diligently prosecutes any and all proceedings appropriate to
secure the dismissal of such petition and shall secure such dismissal within 60 days after the date
of filing or the commencement of such proceedings, (iv) if the District vacates or abandons the
Premises or improvements, or (v) the District defaults under the Development Agreement and
such default is not cured within the cure periods set forth in the Development Agreement, then
and in any such case, at the City's option and in addition to all other rights and remedies, the
City may, following the expiration of the cure period, if any, provided herein for such default,
immediately declare the District's rights under this Lease terminated and enter the Premises and
the improvements using such force as may be necessary and repossess itself thereof, as of its
former estate, and remove all persons and property from the Premises and the Improvements.
Such shall not constitute a termination Lease and, notwithstanding any such
reentry Jll(111 Volls LlL LV termination L1V11 of this 11V LYY 111 Lull 111 such
reentry, the liability of the District to pay amounts hereunder (including taxes, assessments and
utilities) shall not be extinguished for the balance of the term of this Lease and the District shall
make good to the City any deficiency arising from receipt by the City of any lesser amount than
that hereinbefore agreed upon.
17. Waiver. Neither the acceptance of rental nor any other
actions or omissions by the City at any time after the happening of any event authorizing the
cancellation or forfeiture of this Lease shall operate as a waiver of any past or future violation,
breach or failure to keep or perform any covenant hereof, to deprive the City of its right to cancel
or forfeit this Lease, upon written notice provided for herein, at any time that cause for
cancellation or forfeiture may exist, or be construed so as to at any future time estop the City
from promptly exercising any other option, right, or remedy, including tht., fight to declare an
event of default hereunder that it may have under any term or provision oft;. Lease.
18. Force Majeure. Any prevention, delay, nonperformance or stoppage
due to a "Force Majeure" shall excuse nonperformance for the period of such prevention, delay,
nonperformance or stoppage, except for obligations imposed by this Lease for the payment of
taxes or insurance. "Force Majeure" means any causes or conditions beyond a party's
reasonable control (including, but not limited to fire, explosion, presence of a hazardous
substance, earthquake, storm floods wind drought nr : ct of GM nr one or more of the elements;
court order, legislation, delay or failure to act by civ;' military or other governmental authority
other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war;
breakdown or destruction of, or damage or casualty to, any equipment, facility or other property;
any delay or failure by any third party to provide a necessary service, supply, part, equipment,
personnel or other item; or interruption, suspension, curtailment or other disruption of a utility).
19. Access by the City. At any time during the Lease Teen, the City and the
City's agents shall have the right to enter the Premises and the Improvements on reasonable
notice to examine the same. Nothing contained herein shall be construed to impose upon the
City a duty to repair the Premises or Improvements.
20. Surrender of Premises. At the expiration or sooner termination of this
Lease, the District shall immediately return to the City the Premises and Improvement in its
condition following completion of the Project defined in the Development Agreement, except
reasonable wear and tear and damage by fire or other casualty. Upon termination of the Lease
for any reason the District shall be liable for all costs and expense of restoring the Premises and
Improvements to the condition at the time of completion of the Project, but only if such removal
and restoration is requested by the City. The District's obligation to perforin the covenants of
this Section shall survive the expiration or termination of this Lease.
21. Quiet Enjoyment. The District, upon fully complying with and
promptly performing all of the terms, conditions, and covenants of this Lease on its part to be
performed, shall have and quietly enjoy the Premises for the Lease Term.
22. Leasehold Mortgages. During the term of this Lease, the District shall not
encumber its leasehold interest in the Premises or Improvements without the prior written
consent of the City. Notwithstanding the foregoing, the District is authorized to assign its rights
and interests in this Lease to any financial institution, municipal bond trustee, municipal bond
insurer or other entity as may be necessary to accomplish the financing or refinancing of the
Project, provided that the District must obtain the prior written consent of the Yakima City
Manager.
23. Consent to Lease Back. The parties hereby acknowledge and agree that they
would not execute this Lease but for the agreement by the City to operate and maintain the
Improvements, finance, construct and operate the Project and lease back the Premises to the City
pursuant to the Development Agreement. The obligations of the District under this Section 23
are integral to this Lease and may not be severed herefrom without invalidating the entire Lease.
24. Termination. This Lease may be terminated after notice and
opportunity to cure of any event of default in accordance with Section 16. This Lease shall also
automatically terminate upon termination of the Development Agreement.
25. Amendment. This Lease may not be amended except by written
instrument approved by resolution duly adopted by the District and approved by City ordinance
or resolution. No course of dealing between the parties or delay in exercising any rights
hereunder shall operate as a waiver of any rights of any party.
26. Entire Agreement. This Lease and any collateral instruments
referenced herein contain the entire agreement between the parties hereto and shall not be
modified or amended in any manner except by an instrument in writing executed by the parties
hereto. Previous drafts of this Lease or any portions thereof shall not be utilized in any manner
by either party should any dispute arise as to the intent of this Lease.
27. Notices. All notices which may be or are requested to be
given pursuant to this Lease shall be deemed given when hand delivered, or when deposited in
the U.S. Mail, postage prepaid, and marked registered or certified mail, return receipt requested,
and addressed to the parties at the following addresses unless otherwise provided for herein:
To the City:
VY7ith a copy tV•
.
To the District:
Richard A. Zais, Jr.
city,Mnringer
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Choir
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
28. Severability. If any Willi or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable (with the exception of Section 23), the remainder of this Lease or the application
of such term or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby and shall continue in full force and effect.
29. No Merger. In no event shall (a) the leasehold interest, estate or
rights of the District hereunder, (b) the rights of any leasehold mortgagee upon the District's
leasehold interest, estate or rights hereunder, or (c) the leasehold interest, estate or rights of the
District as sublessor under the Development Agreement, merge with any interest, estate or rights
of the City as fee owner of the Premises and Improvements and lessor under this Lease or as
sublessee under the Development Agreement, it being understood that such leasehold interest,
estate and rights of the District hereunder and such rights of any leasehold mortgagee shall be
deemed to be separate and distinct from the City's interest, estate or rights as fee owner of the
Premises and Improvements, and as sublessee under the Development Agreement
notwithstanding interests, estate right. shall at any time he held or vested in the
notwithstanding j1.1jJ1.0.11U111�, that any such v....vv or right. ..----- --� _-_-_.
same, person, corporation or other entity.
30. Limited Obligation of the District. The District is organized pursuant to Chapter
35.57 RCW as a municipal corporation, separate and distinct from the City. All liabilities
theDistrict be t; fieA exclusively the assets, credit, and properties of the
incurred by shall sas�.,,.... u �Jv�.l from properties
District, and no creditor or other person shall have any right of action against or recourse to the
City or the Cities of Selah or Union Gap, their assets, credit, or services, on account of any debts,
obligations, liabilities or acts or omissions of the District.
31. Attorneys' Fees. In the event of litigation between the City and the
District or their successors or assigns to enforce a right or rights provided by or arising under this
Lease, the non -prevailing party shall pay to the prevailing party reasonable attorneys' fees and
other costs and expenses of litigation, including appeals. The amount of costs and attorneys'
fees shall be included in any judgment or award for the prevailing party and the court or
arbitrator in any such litigation shall determine which is the prevailing party.
32. Recording. The District shall not record this Lease without the
written consent of the City; however, upon the request of either party hereto the other party shall
join in the execution of a memorandum of this Lease for recording purposes. The memorandum
of Lease shall describe the parties, the Premises and Improvements, and the Lease and shall
incorporate this Lease and the Development Agreement by reference.
,41.,E City Clerk
Approved as to form:
7
33 Gov erninLaw. Time. This Lease and the rights of the parties hereto shall
be governed and construed in accordance with the laws of the State of Washington. Time is of
the essence in this Lease.
IN WITNESS WHEREOF, the parties hereto have executed this document as of the day
and year first above written.
DATED thi s day of a , 2001.
CITY OF YAKIMA
Attest:
Richard A. Zais, Jr.
City Manager
YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT
City Attorney
w,� adoi-93 SO
Board of Directors
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that �'�+'' 't ' if 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
}, i tALi of to be the free and voluntary act of such
partyfor the use's and purposes mentioned in the instrument.
Dated: f 1 J r , 2001.
STATE OF WASHINGTON )
COUNTY OF YAKIMA )
(
;,,(;1,�
Notary Public
Print/Type Name - `` 1'
My commission expires t,2
ss.
I certify that I know or have satisfactory evidence that A / (j-1),,, ,,x01;frd,,,�f ryfis 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
( '%t /,, _ of /%%,' 1. t C r t �A -;f, go be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
Dated:
(Use this spa? C .
c+ataraalst:+ .Veal)
tea..
%j›
Notary Public
Print/Type Name
My commission expires ,
[ATTACH EXHIBIT A - LEGAL DESCRIPTION OF THE PREMISES]
K:\25739\00049\SC\SC A20U8
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
A-1
APPENDIX B
DEVELOPMENT AGREEMENT
K:\25739\00049\SC\SC N20UC
DESIGN, DEVELOPMENT,
CONSTRUCTION, FINANCING AND OPERATING AGREEMENT
BY AND BETWEEN
CITY OF YAKIMA, WASHINGTON
and
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
)/(AAA,
o� �1 , 2001
Public Facilities District
Design, Development, Construction,
Financing and Operating Agreement
TABLE OF CONTENTS
Page
I. DEFINITIONS 2
II. INTENT AND RELATIONS 7
A. IntPnt 7
B. Description 8
C. Yakima's Regulatory Role Reserved 8
D. Governing Law and Venue 8
III. SCOPE OF COMMITMENTS 8
A. Commitments by the District 8
1. Repayment Obligation 8
2. District Funds 9
B. Commitments by Yakima 11
1. Site Availability 11
2. Issuance of the Bonds 11
3. Application of Net Proceeds 1 1
4. Design, Development and Construction Responsibility 11
5. Operation and Maintenance Responsibility 11
6. Operation and Maintenance Costs 13
C. Commitment by Yakima to Replenish Sales Tax Shortfall 14
1. Funding Commitment 14
IV. PROJECT COMPONENTS AND OPERATION CRITERIA 14
A. Project Components 14
B. Project Purpose 14
1. Public Access 15
2. Yakima Approval 15
C. Project Contracting and Management 15
V. DEVELOPMENT CRITERIA AND OVERSIGHT 16
A. Generally 16
B. Standards of Performance 16
rle,velopment Schedule awl ubstantial nt.
16
VI. PROJECT COSTS 17
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VII. INSURANCE 17
A. Insurance Requirements 17
B. Insurance Policies 17
C. Adjustments 18
VIII. AS IS 18
A. Due Diligence 18
B. Acceptance 18
IX. LIABILITY 19
A. Indemnification of Yakima 19
X. DESTRUCTION OR CONDEMNATION 20
A. Total or Partial Destruction 20
B. Condemnation 20
XI. RIGHT TO ASSIGN OR OTHERWISE TRANSFER 21
A. Right to Transfer Agreement 21
XII. DEFAULT 21
A. Event of Default of the District 21
B. Force Majeure 22
XIII. REMEDIES 22
A. Remedies Upon Default 22
B. No Waiver by Yakima 23
C. Termination 23
D. Reversion of the Property to Yakima 23
E. Certain Provisions Survive Termination 24
XIV. REPRESENTATIONS AND WARRANTIES 24
A. Yakima's Representations 24
B. The District's Representations and Warranties 24
C. Tax Covenant 24
XV. LEASE BACK 25
A. Sublease 25
B. Rent 25
C. Lease Obligations Assumed 25
XVI. MISCELLANEOUS 25
A. Captions 25
B. Construction 25
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C. Entire Agreement 25
D. Successors and Assigns 25
E. Notice 26
F. Incorporation by Reference 26
G. Execution in Counterparts 26
H. Waiver 26
I. Exculpation 27
J. Severability 27
K. Term 27
I n....o a * 77
1,. rt!! 4,,t1 t1Ieeii!u ,,.., - -- -
EXHIBIT A — LEGAL DESCRIPTION OF THE PROPERTY
EXHIBIT B — DEBT SERVICE SCHEDULE
APPENDIX 1 — PROJECT DOCUMENTS
P\SC\SC09H 01/06/14
DESIGN, DEVELOPMENT,
CONSTRUCTION. FINANCING AND OPERATING AGREEMENT
This DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND
OPERATING AGREEMENT (the "Agreement") is made as ofi , 2001, by and
between the CITY OF YAKIMA, WASHINGTON ("Yakima"), a mu icipal corporation and
first class city of the State of Washington, and the YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT (the "District", and together with Yakima, the "Parties"), a public
facilities district created by Yakima and the Cities of Selah and Union Gap, to provide for the
design, development, construction, financing and operation of the Yakima Convention Center, as
expanded.
WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the
"Convention Center"), providing first-class meeting, ballroom and other event facilities;
WHEREAS, Yakima desires to expand the Convention Center (the "Project");
WHEREAS, the Convention Center, as expanded by the Project, will serve as a Regional
Center under RCW 35.57.030, benefiting the region including residents of Yakima, the City of
Selah and the City of Union Gap (the "Cities") by stimulating economic development, creating
jobs, realizing additional sales and lodging tax revenues, attracting commercial business and
tourism, and providing facilities for convention, special events and community events including
public meetings and performing arts event;
WHEREAS, pursuant to Chap. 35.57 RCW (the "Act"), the Cities have entered into an
Interlocal Agreement to form the District for the purpose of acquiring (by purchase, lease or
otherwise), and assisting with the financing, development and operation of, the Convention
Center as expanded by the Project;
WHEREAS, under the Act, the District has access to several new revenue sources,
including a state sales and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the
retail sales and use taxes generated within the District boundaries to the District;
WHEREAS, the Act requires a local match of 33% of the net present value of the Sales
Tax in order for the District to impose the Sales Tax;
WHEREAS, Yakima has entered into a Lease Agreement transferring a leasehold interest
in the Convention Center property described in Exhibit A hereto (the "Property") (the value of
the Convention Center property is approximately $11,800,000) to the District in satisfaction of
this match requirement (approximately $2.4 million);
WHEREAS, the District will lease back the Property to Yakima pursuant to this
Agreement;
WHEREAS, subject to certain limitations set forth herein, Yakima will issue bonds to
finance the Project, in consideration for the District's pledge of Sales Tax receipts to pay debt
service on the bonds and other Regional Center costs;
WHEREAS, Yakima will apply the net proceeds of the bonds to design, develop and
construct the Project, under the terms set forth herein;
WHEREAS, to provide for stable financing and operation of the Project in light of the
cyclical nature of Sales Taxes, Yakima wishes to provide additional funding in the event of a
Sales Tax shortfall; and
WHEREAS, Yakima will operate the Convention Center, as expanded by the Project, and
will apply certain City lodging taxes (in an amount, if any, determined annually by the City
Council) to pay a portion of the costs of operation and maintenance;
WHEREAS, the Parties desire that Yakima finance, design, develop and operate the
Convention Center as expanded by the Project on the terms set forth herein, and the District and
Yakima assist in financing the Project, also on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual undertaking and promises contained
herein, and the benefits to be realized by each Party including the benefits to the general public
in the region by the completion and operation of the Project, the Parties agree as follows:
I, DEFINITIONS
For purposes of this Agreement, and any agreements supplemental hereto, the terms
defined in this Article shall have the following meanings, except as herein otherwise expressly
provided:
Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima.
Additional Revenue means all revenue received by the District (or by Yakima on behalf
of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking
Charges, Parking Taxes, Voted Sales Tax, and any other revenue derived from the ownership or
operation of the facilities of the District, including investment income; but excluding Sales Tax
Revenue and amounts received from Yakima pursuant to Section III(C) (including investment
earnings thereon).
Administrative Costs means the costs of the District incurred in administering the District
and this Agreement. Administrative Costs shall be specified in the District's annual budget
submitted to Yakima for approval and to the Cities of Selah and Union Gap for review and
comment.
Admission Charge means any charge imposed by the District (or by Yakima on behalf of
the District) for admission to its facilities, including charges for season tickets or subscriptions;
cover charges, or charges for use of seats and tables, and other similar accommodations; charges
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for food and refreshment if free entertainment, recreation, or amusement is provided; charges for
rental or use of equipment or facilities for purposes of recreation or amusement; and automobile
parking charges if the amount of the charge is determined according to the number of passengers
in the automobile.
Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be
paid by any person who pays an Admission Charge.
Agreement means this Design, Development, Construction, Financing and Operating
Agreement.
Beneficial Occupancy shall mean when the Project is granted a temporary or permanent
Certificate of Occupancy for the Convention Center as expanded by the Project from Yakima's
building official.
Bond Counsel means a firm of lawyers nationally recognized and accepted as bond
counsel and so employed by Yakima.
Bond Ordinance means the ordinance(s) of the Yakima Council authorizing the issuance
of the Bonds and any amendments.
Bonds means the bonds, notes or other evidences of indebtedness issued by Yakima
pursuant to and under authority of the Bond Ordinance to finance or refinance the Project.
Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total
interest cost on the Bonds exceeds 5.55%, or if the financing is determined to no longer be
economical.
Board means the governing body vested with the management of the affairs of the
District.
Charter means the Charter of the District, issued pursuant to the Interlocal Agreement, as
amended from time to time.
Code means the Internal Revenue Code of 1986, as amended, and all applicable
regulations and rulings thereunder.
Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project.
Costs of the Project means all capital costs that are paid or incurred by Yakima in
connection with the design, development and construction of the Project, including, but not
limited to all or a portion of the interest on Bonds during the period of construction of such
improvements, and for a period of time thereafter; amounts required to meet any reserve
requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for
expenses, including planning, permitting and design expenses, incident and properly allocable to
the Project; and all other items of expense incident and properly allocable to designing,
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developing and constructing the Project, financing the Project and placing the Project in
operation.
Debt Service means the amount to be paid on the next succeeding Payment Date to pay
the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due
on such Payment Date. A schedule setting forth Debt Service to be paid on the Bonds and any
Additional Bonds shall be attached as Exhibit B at such time as the Bonds or any Additional
Bonds are issued.
Debt Service Fund means the special fund(s) or account(s) established by Yakima under
the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal
of, interest on and redemption price, if any, of Bonds and/or any Additional Bonds.
Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any,
established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which
secures the Bonds and/or any Additional Bonds.
Debt Service Reserve Fund Requirement means the amount required to be deposited to
the Debt Service Reserve Fund, as established in the Bond Ordinance.
District means the public facilities district created pursuant to the Interlocal Agreement.
Event(s) of Default shall be as defined in Article IV herein.
Favorable
Opinion of Bond Counsel means a written legal opinion of Bond Counsel
addressed to Yakima, to the effect that such action is permitted under the laws of the State and
under applicable ordinances of the Yakima Council, including the Bond Ordinance and any
Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any
other bonds of Yakima from gross income for federal income tax purposes under the Code
(subject to the inclusion of any exceptions contained in the opinion delivered upon original
issuance of such bond).
Force Majeure means any causes or conditions beyond a Party's reasonable control
(including, but not limited to fire, explosion, presence of a hazardous substance, earthquake,
storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation,
delay or failure to act by civil, military or other governmental authority other than a party; strike,
lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of,
or damage or casualty to, any equipment, facility or other property; any delay or failure by any
third party to provide a necessary service, supply, part, equipment, personnel or other item; or
interruption, suspension, curtailment or other disruption of a utility).
Governmental Authority shall mean any board, bureau, commission, department, or body
of any municipal, county, state, or federal governmental or quasi -governmental unit, or any
subdivision thereof, having, asserting, or acquiring jurisdiction over the Property or the
management, operation, use, or .mrflrovement thereof.
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Improvements shall mean all buildings, structures, fixtures, improvements and equipment
constructed or located on the Property, including, but not limited to, the structure of the
Convention Center and the parking facilities, elevator(s), lighting, seating, carpeting, HVAC,
plumbing, electrical and mechanical systems.
Insurance Proceeds mean the greater of (i) the proceeds from the insurance policies
actually maintained by Yakima with respect to the Convention Center or Project; or (ii) the
proceeds that would have been available had Yakima maintained the insurance policies required
to be maintained by Yakima under this Agreement.
Interlocal Agreement means the Interlocal Financing Agreement between the Cities
creating the District.
Law(s) and Ordinance(s) shall mean all present and future applicable laws, ordinances,
rules, regulations, resolutions, permits, authorizations, orders and requirements of all federal,
state, county and municipal governments, the departments, bureaus or commissions thereof,
authorities, boards or officers, any national or local board of fire underwriters, or any other body
or bodies exercising similar functions having or acquiring jurisdiction over all or any part of the
Property, including Yakima acting in its governmental capacity.
Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW.
Net Proceeds, when used with reference to the Bonds, means the principal amount of
such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less
the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve
Fund and/or the PFD Revenue Reserve Fund.
Operating Manual means the Operating Standards Manual for the expanded Convention
Center.
Operation and Maintenance Costs means all necessary costs to Yakima of operating and
maintaining the Convention Center as expanded by the Project, including but not limited to
administrative and general expenses, costs of insurance (including reasonable contributions for
self-insurance reserves, if any), consulting technical services and repairs and replacements (to the
extent not properly classifiable as capital costs), real estate taxes, if any, but excluding
depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a
similar nature and debt service on the Bonds and any Additional Bonds.
Outstanding, when used as of any particular time with reference to Bonds or Additional
Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the
Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds
theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or
Additional Bonds with respect to which all liability of Yakima shall have been discharged in
accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and
(3) Bonds or Additional Bonds for the transfer or exchange of or in lieu of or in substitution for
which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima
pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable.
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Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110.
Parking Tax means a tax on any Parking Charge imposed at any parking facility that is
owned or leased by the District pursuant to RCW 35.57.110.
Payment Date means the dates specified in the Bond Ordinance, or any Supplemental
Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with
respect to the Bonds or any Additional Bonds.
Permitted Investments means investments peimitted by State law for investment of
Yakima and District funds, consistent with the terms of the Bonds and any Additional Bonds.
PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if
any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The
amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall
be maintained in the PFD Revenue Reserve Fund shall be established in the Bond Ordinance.
Predevelopment Costs means the cost of all planning, legal, architectural, engineering
and other services incurred by Yakima in connection with the Project until the date of issuance of
the Bonds.
Project means the design, construction, and operation of the additions to the Convention
Center, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site
plans, preliminary specifications, and schematic design documents), construction documents
(including all drawings and specifications necessary to completely describe the Project in detail
to a contractor for the purposes of bidding and construction, schedules, plans and specifications,
and the construction contract) and Project budgets (setting forth the construction contract cost,
taxes, all contingencies, fees and allowances).
Property shall mean the real property described in Exhibit A attached hereto or as
hereafter amended.
Refunding Bonds means bonds, notes or other evidence of indebtedness the proceeds of
which will be used to refund Bonds.
Sales Tax means the nonvoted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of
a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from
the amount of tax otherwise required to be collected or paid over to the State's Department of
Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event,
not more than 75 yearc after the Salec Tax is first collected
----------- --------- ---- ------------- ----- -----------
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Sales Tax Revenue means all Sales Taxes received by the District.
State means the State of Washington.
Substantial Completion shall mean when the Beneficial Occupancy of the Convention
Center as expanded by the Project is achieved.
Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council
amending or supplementing the Bond Ordinance, including any ordinance adopted by the
Yakima Council in connection with the issuance of Additional Bonds.
Voted Sales Tax means any sales and use tax imposed by the District pursuant to
RCW 82.14.048 and approved by the voters.
Yakima means the City of Yakima, Washington, a municipal corporation of the State, as
now or hereafter constituted.
Yakima Council means the City Council of Yakima, or any successor thereto as provided
by law.
IL INTENT AND RELATIONS
A. Intent.
1. Financing. It is the intent of this Agreement that the District lease the
Property to Yakima and that Yakima finance the Project. In consideration for Yakima's
agreement to finance the Project, it is the intent of the Parties that the District transfer all Sales
Tax Revenue to Yakima to pay Predevelopment Costs (to the extent not paid from Net
Proceeds), Debt Service and other Regional Center costs including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). It is
the intent of the Parties that, in the event that Yakima provides notice that amounts on deposit in
the Debt Service Fund and the PFD Revenue Reserve Fund are projected to be insufficient (not
taking into account amounts in the Debt Service Reserve Fund) for Yakima to pay Debt Service
when due, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such
deficiency as set forth in Section III(C).
2. Development. It is the intent of this Agreement that Yakima design,
develop and construct the Project in accordance with the Project Documents and the standards of
performance set forth in Article V. This Agreement is intended by the Parties to establish the
design, development and construction standards and other performance criteria for the Project.
3. Operation. It is the intent of the Parties that Yakima operate and maintain
the Convention Center and the Project, and that Yakima retain all rents, receipts, profits and
other revenues of the Convention Center as expanded by the Project. In consideration for
Yakima's agreement to operate and maintain the Convention Center and the Project, it is the
intent of the Parties that the District pay Additional Revenue, if any, to Yakima, and that Yakima
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pay the District's Administrative Costs. In addition, the Parties intend that Yakima apply certain
Lodging Taxes to pay a portion of Operation and Maintenance Costs, in an amount, if any,
determined on an annual basis by Yakima.
B. Description. The Property is located at 10 North Eighth Street , Yakima,
Washington 98901-2515, as legally described on the attached Exhibit A. The Convention
Center, as improved by the Project, will occupy approximately 47,000 square feet.
C. Yakima's Regulatory Role Reserved. Any Yakima design review and approvals
provided for herein are independent of, in addition to and do not in any way obligate Yakima
with respect to usual and customary Yakima permitting, code compliance and other regulatory
reviews. The outcome of any such regulatory review is independent of and is in no way biased,
prejudiced nr predetermined in any way by this Agreement Nothing in this Agreement is
intended or shall be construed to require that Yakima exercise its discretionary authority under
its regulatory ordinances to further the Project nor bind Yakima to do so. Yakima will process
applications for permits and approvals associated therewith as if such applications were made
without any Yakima participation in such projects.
D. Governing Law and Venue. This Agreement and the rights and obligations of the
Parties shall be governed by, and construed and interpreted in accordance with, the laws of the
State. Any suit filed between the Parties concerning this Agreement shall be commenced in the
Superior Court in Yakima County.
III, SCOPE OF COMMITMENTS
A. Commitments by the District
1. Payment Obligation.
(a) Payment of Debt Service and Predevelopment Costs. In
consideration for Yakima's agreement to issue the Bonds and design, develop and construct the
Project, the District shall pay all Sales Tax Revenue to Yakima to pay Yakima's Debt Service
and Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center
costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and
PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service
Fund pursuant to Section III(C).
(b) Pledge of Sales Tax Revenue, Additional Revenue and other
Receipts of the District. The District hereby pledges Sales Tax Revenue and other amounts to be
paid by the District to Yakima for payment of Debt Service, Predevelopment Costs (to the extent
not paid from Net Proceeds), and other Regional Center costs including but not limited to
funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursir Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). The
obligation: the District to pay Sales Tax Revenue and other amounts due under the Agreement
and to pe rm and observe the other obligations nn its part contained herein shall he absolute
and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or
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otherwise. The District's obligations under this Agreement shall continue in effect and shall
survive the satisfaction of Yakima's obligations under the Bonds, the Bond Ordinance, any
Additional Bonds, and any Supplemental Bond Ordinance until such time as all Predevelopment
Costs and Debt Service have been paid, together with any other amounts owed to Yakima
hereunder.
The Parties acknowledge and agree that Yakima will pledge this Agreement, as well as
the District's Sales Tax Revenue and other amounts to be paid by the District to Yakima, to the
payment of the Bonds and any Additional Bonds. Such pledge will be material to the offer and
sale of the Bonds, and will be disclosed to potential purchasers and purchasers of the Bonds.
Bondholders will rely on this pledge in purchasing the Bonds. So long as the Bonds or any
Additional Bonds are Outstanding, the District shall not issue bonds, or incur any other
obligation, secured by Sales Tax Revenue or by Additional Revenue.
(c) Revenue and Payment Reports. The District shall file annual
financial statements and annual reports with the Cities, as required under Sections 8.5 and 8.6 of
the Charter. Each such report shall bear a current date, be signed by an appropriate and duly
authorized District officer and be supported by reasonable documentation sufficient to sustain the
accuracy of the report.
(d) Termination for Failure To Timely Pay. This Agreement is
specifically conditioned upon the District's timely payment of amounts due hereunder. In the
event that the District fails to transfer amounts as and when required to Yakima, Yakima may
terminate this Agreement pursuant to the provisions contained in Article XIII.
2. District Funds. The District shall establish the following Funds and
accounts: Sales Tax Revenue Fund (or Account), Additional Revenue Fund (or Account), and
the Administrative Fund (or Account). The District may, in its discretion, establish such
additional accounts and subaccounts as the District deems necessary or useful, but the
establishment of any such account or subaccount shall not alter or modify any of the
requirements of this Agreement with respect to a deposit or use of money in the funds.
(a) Sales Tax Revenue Fund. The District shall establish a
Sales Tax Revenue Fund and shall deposit in the Sales Tax Revenue Fund all Sales Tax Revenue
and all net earnings on investments of money in the Sales Tax Revenue Fund. Amounts in the
Sales Tax Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Sales Tax Revenue Fund, and such income and interest shall
become part of the Sales Tax Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Sales Tax Revenue Fund are irrevocably pledged
and shall be used and transferred by the District as follows: Within three working days after
receipt, all amounts on deposit in the Sales Tax Revenue Fund to Yakima to pay Debt Service,
Predevelopment Costs and other Regional Center costs, including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C).
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(b) Additional Revenue Fund. The District shall deposit in the
Additional Revenue Fund all Additional Revenue received by the District and all net earnings on
investments of money in the Additional Revenue Fund. Amounts received from Yakima to pay
Administrative Costs shall be deposited to the Additional Revenue Fund. Amounts in the
Additional Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Additional Revenue Fund, and such income and interest shall
become part of the Additional Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Additional Revenue Fund are irrevocably pledged
and shall be used and transferred by the District at least monthly as follows and in the following
order of priority:
(i)
and
To the Administrative Fund to pay Administrative Costs;
(ii) The remainder, to Yakima to pay Operation and
Maintenance Costs.
To the extent that Additional Revenues are received by Yakima on behalf of the District,
Yakima shall apply such Additional Revenues to pay (i) Administrative Costs and/or (ii)
Operation and Maintenance Costs.
(c) Administrative Fund. The District shall establish an
Administrative Fund. Amounts transferred from the Additional Revenue Fund to pay
Administrative Costs pursuant to subsection (b) shall he deposited to the Administrative Fund.
shall be used to pay Administrative Costs.
Amounts in the Administrative Fund may be invested in Permitted Investments. The
District shall maintain records sufficient to permit calculation of the income on investments and
interest earned on deposit of amounts held in the Administrative Fund, and such income and
interest shall become part of the Administrative Fund unless otherwise applied in accordance
with this Section.
(d) Liens. Except as permitted under this Agreement, the District shall
not create any lien upon funds created hereunder other than the lien hereby created.
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B. Commitments by Yakima
1. Site Availability. Pursuant to the terms of the Lease Agreement between
Yakima and District, dated -;,)„,2,q001, Yakima will lease to the District the Property described in
Exhibit A. The Parties agreethat the leasehold interest in the Property is donated (for nominal
consideration in the form of $50 in rent) by Yakima to the District to be used for the construction
of a Regional Center, as defined in RCW 35.57.030. Moreover, the Parties agree that the value
of the Property is $11,800,000. The value of the leasehold interest in this Property transferred by
the Lease Agreement significantly exceeds 33% of the net present value of the total Sales Taxes
projected to be received by the District (approximately $2.4 million).
2. Issuance of the Bonds. Yakima agrees to issue the Bonds and
Completion Bonds, if necessary. Yakima reserves the right not to issue the Bonds if, at the time
the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55%, or if the financing is
detemiined to no longer be economical. The Bonds shall be in an aggregate principal amount to
be determined by Yakima, at least equal to the projected Costs of the Project, Predevelopment
Costs, amounts to pay costs of issuance and amounts to be deposited to the Debt Service Reserve
Fund, if any.
3. Application of Net Proceeds. Yakima agrees to apply Net Proceeds to
pay Predevelopment Costs and Costs of the Project as follows.
(a) Predevelopment Costs. Yakima has incurred and will continue to
incur Predevelopment Costs for the benefit of the District. Yakima will pay these
Predevelopment Costs from the District's Sales Tax Revenue received by Yakima to the extent
that Predevelopment Costs are not paid from Net Proceeds (at Yakima's election).
(b) Costs of the Project. In addition, Yakima will apply Net Proceeds
to pay Costs of the Project.
4. Design, Development and Construction Responsibility. Yakima shall
design or contract for the design of the Project and construct or contract for the construction of
the Project, in accordance with the Project Documents and with the standards of performance set
forth in Article V and elsewhere in this Agreement.
5. Operation and Maintenance Responsibility.
(a) Operations and Maintenance—Generally. Yakima agrees to
operate and maintain the Improvements including the Convention Center, related parking and,
upon Substantial Completion, the Project, on the terms and in accordance with the standards set
forth herein. Yakima shall operate and maintain the Improvements including the Convention
Center, related parking and the Project as a first class convention center facility, to be kept at all
times in a safe and clean condition.
Yakima shall provide (directly or by contract) all management, supervision, personnel,
materials, equipment, services and supplies necessary to operate, maintain and repair of the
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Improvements and shall take all reasonable precautions to prevent damage, injury or loss by
reason of or related to the operations and maintenance of the Improvements to any person or
property. Yakima shall hire an appropriate number of qualified employees to operate and
maintain the Improvements consistent with the best management practices. Yakima shall
properly supervise and direct its employees and other parties implementing the performance of
its duties, obligations and functions under this Agreement. Yakima shall be fully responsible for
the performance of such employees and other parties.
Yakima shall comply with all applicable Laws and Ordinances relating to the safety of
persons or property or their protection from damage, injury or loss. Yakima shall obtain all
statements, certificates, permits, licenses, rights, and approvals, whether public, private, local,
state or federal, that are necessary or appropriate to the continued operation of the Improvements
ac a first class convention center_ Yakima shall undertake all modifications to the Improvements
required to comply with state, federal and local laws, rules, regulations, judgments, orders and
decrees.
Prior to Substantial Completion of the Project, Yakima shall provide pre -opening
services, including start-up of the Project, mobilization of staff and services, and performance of
marketing and booking plans.
(b) Compliance with the Operating Manual. Yakima shall maintain
the Improvements in substantial compliance with the terms of the Operating Manual during the
term of this Agreement. The Operating Manual shall not be amended except with the written
approval of the Yakima City Manager or his or her designee. The Operating Manual shall not be
revised in a manner that will impair the security of the owners of the Bonds or any Additional
Article VII.
(c) Insurance. Yakima shall maintain insurance as set forth in
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6. Operation and Maintenance Costs.
(a) Obligation To Pay Operation and Maintenance Costs and
Administrative Costs; Right to Receive all Rents and Operating Revenues. Yakima shall pay
Operation and Maintenance Costs from revenues derived from operation of the Convention
Center and the Project, Additional Revenues received from the District, from Lodging Taxes, or
other Yakima funds, as set forth below. Within a reasonable period after receipt of an invoice
therefor, Yakima shall pay to the District its Administrative Costs as set forth in the District's
budget approved by Yakima.
All rents, receipts, profits and other revenue derived from the operation of
the Convention Center and the Project shall be retained by, and shall be the property of, Yakima,
and shall be applied to pay Operation and Maintenance Costs or any other lawful purposes of
Yakima.
(b) Lodging Taxes. To the extent not paid from revenues derived from
operation of the Convention Center and the Project, Additional Revenues received from the
District, or other Yakima funds, Yakima will apply Lodging Taxes to pay Operation and
Maintenance Costs. The amount of Lodging Taxes to be applied to this purpose in any year shall
be determined by the Yakima Council in its sole discretion as part of its annual budget process.
The amount of Lodging Taxes to be applied to pay Operation and Maintenance Costs may vary
from year to year and may equal zero in some years. In any event, the amount of Lodging Taxes
to be applied shall not exceed the amount available after payment of debt service on Yakima's
outstanding bonds (including all or a portion of the Bonds) to which these taxes are pledged.
Yakima's obligation hereunder is limited only to the amounts designated for this purpose
by the Yakima Council. Yakima does not hereby guarantee any obligations or liability of the
District. It is expressly understood and agreed that any obligation or liability arising out of
and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in
connection therewith, shall be satisfied exclusively from the assets and credit of the District, and
no creditor or any other person or entity shall have any recourse to any of the assets, credit, or
services of Yakima on account of any debts, obligations, or liabilities of the District
(c) Amounts Remitted to Yakima. Amounts remitted to Yakima
pursuant to Section III(A)(2)(a) and (2)(b)(ii) shall be used by Yakima for the following
purposes. Receipts that are Sales Tax Revenue shall be used to pay Predevelopment Costs (to
the extent not paid from Net Proceeds), Debt Service, and for the purposes set forth in RCW
35.57.020, as the same may be amended (acquiring, constructing, owning, remodeling,
maintaining, equipping, reequipping, repairing, financing, and operating one or more Regional
Centers). Receipts that are Additional Revenues shall be applied to pay Operation and
Maintenance Costs.
Yakima's obligation hereunder is limited only to the amounts received from the District.
Yakima does not hereby guaranty any debt obligations or liability of the District.
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All amounts remitted to Yakima pursuant to Section III(A)(2)(a) and 2(b)(ii), together
with all rents, receipts, profits and other revenues derived by Yakima from its operation of the
Convention Center, shall be retained by and be the property of Yakima to be applied to pay
Operation and Maintenance Costs (directly or by contract) or for other lawful purposes of
Yakima . It is the Parties intent that all such amounts shall be Yakima funds, accounted for in
Yakima's books and accounts.
(d) Arlrl;tiona1 Support. T., +1,o extent s from time +�, +;,,,o authorized
�u� nuwccivitui uLLJJJlvI c. To Lug. extent, as lavlll Luu'.. w uuLuvlit.i\:u
by the Yakima City Manager, Yakima will utilize its employees to provide oversight and
administrative assistance in working with District to achieve the mutual goals and objectives of
the Cities and District under this Agreement. Unless otherwise specified in this Agreement or
applicable law, actions to be taken or decisions to be made by Yakima will be the responsibility
of the Yakima City Manager or his or her designee. Yakima hereby grants to the extent
permitted by law such person or persons the power, authority, and right to carry out all such
responsibilities.
C. Commitment by Yakima to Replenish Sales Tax Shortfall
1. Funding Commitment.
Yakima shall provide notice to the District in the event that amounts in the Debt Service
Fund and the PFD Revenue Reserve Fund (not taking into account amounts in the Debt Service
Reserve Fund) are projected to be insufficient to pay Debt Service on any Payment Date. In such
event, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency.
Yakima's obligation hereunder is limited only to the amount to be paid to replenish any
projected deficiency in the Debt Service Fund. Yakima does not hereby guarantee any debt
obligations or liability of the District. It is expressly understood and agreed that any obligation
or liability arising out of and/or incurred by the District uy reason of this Agreement, or the
carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets
and credit of the District, and no creditor or any other person or entity shall have any recourse to
any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities
of District.
IV. PROJECT COMPONENTS AND OPERATION CRITERIA
A. Project Components. Yakima shall finance, design and construct the Project in
accordance with the Project Documents, and in accordance with the performance specifications
set forth herein.
B. Project Purpose. The Project is being constructed to serve the needs of the
region, including the residents of Yakima, the City of Seiah and the City of Union Gap.
Following Project completion, Yakima shall be solely responsible for management, operation
and maintenance of the Convention Center, as expanded by the Project, consistent with the terms
of this Agreement and the Operating Manual.
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1. Public Access. Yakima shall provide regular hours during which the
Convention Center will be open to the public (subject to reasonable Admission Charges);
provide public programs; and make available for reasonable public use any ballroom,
auditorium, meeting rooms or other public spaces in the Convention Center (subject to
reasonable security measures).
2. Yakima Approval. In consideration of Yakima's obligations hereunder,
the District agrees that the following shall be subject to the approval of the Yakima Council:
(a) Approval of the Yakima Council:
(i) The District shall not impose Admission Charges or Parking Charges
without the prior approval of the Yakima Council, as set forth in the
Interlocal Agreement and the Charter.
(ii) The District shall not impose Admission Taxes or Parking Taxes
without the prior approval of the Yakima Council.
(iii) The District's annual budget, including Administrative Costs, shall be
subject to the approval of the Yakima Council and to review and
comment by the Cities of Selah and Union Gap.
(iv) The District shall not authorize or engage in gambling activities or
authorize or publicly display any artwork without the prior approval of
the Yakima Council.
(v) Any acquisition or transfer of real and personal property with a value
over $100,000 by lease, sublease, purchase, or sale by the District shall
be subject to approval by the Yakima Council.
C. Project Contracting and Management
1. Yakima shall construct the Project according to the Project Documents.
2. Yakima will select the contractor(s) for the Project through a competitive
bidding process under the Laws of the State, pursuant to procedures designed to provide
maximum practical competition by and from qualified contractors.
3. Yakima shall take reasonable precautions to prevent unnecessary damage,
injury or loss to property, structures, and vegetation in the Project area and shall at its own
expense repair any damage thereto caused by its, or its contractors', actions. Yakima shall
require its contractors to take any and all precautions that may be necessary to render all portions
of the Project and any adjacent areas affected by the Project secure in every respect, and to
decrease the likelihood of accidents from any cause, and to avoid contingencies that are liable to
delay the Project. Yakima shall require its contractors to exercise utmost care when using
explosives or other hazardous materials or equipment, and when utilizing unusual methods.
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These requirements shall in no way relieve Yakima of its responsibility for safety on the Project.
The District shall not be responsible for any unsafe conditions.
V. DEVELOPMENT CRITERIA AND OVERSIGHT
A. Generally. Except as otherwise provided in this Section, the Parties hereby agree
that Yakima shall have sole responsibility for construction of the Project and shall be responsible
for obtaining all necessary rams use, building and mechanical permits, and all other required
permits or approvals for construction of the Project. Yakima shall promptly comply with all
applicable Laws and Ordinances as they relate to the Property and Improvements. Yakima's
responsibility to finance such construction is limited to the extent of Net Proceeds.
R Standards of Performance. Yakima shall perform the terms of this Agreement
according to the following standards:
1. Performance in a good and workmanlike manner and in compliance with
all applicable laws and ordinances, rules, and regulations.
2. Use of materials that are of first class quality and workmanship.
3. Maintenance and warranty of all portions of the Project consistent with the
Project Documents.
C. Development Schedule and Substantial Completion Date.
1. RCW 82.14.390 currently requires that construction of the Project
commence before January 1, 2003. Accordingly, Yakima shall commence
construction of the Project before January 1, 2003, or such later start date
set forth in any amendment to RCW 82.14.390 (the "Date of
Commencement").
2. Yakima shall pursue the design and construction of the Project to achieve
Substantial Completion within 24 months after the Date of
Commencement, excluding time periods when the design, construction or
development of the Project is unavoidably delayed by reasons of Force
Majeure; provided, however, that said date may be extended by the
Yakima City Manager.
VI. PROJECT COSTS. Yakima shall finance, design, construct, and assume the risk of loss
of the Project from Net Proceeds and from other amounts paid by the District to Yakima
pursuant to the Agreement.
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VII. INSURANCE
A. Insurance Requirements. Yakima shall maintain and keep in force insurance
covering all aspects of the construction activity on the Property, including but not limited to the
following requirements:
1. Builder's All Risk Comprehensive Coverage. Yakima shall keep, or shall
require the construction contractor to keep, all Project components, including but not limited to
the Convention Center and parking facilities, insured for Builders All Risk Comprehensive
Coverage including earthquake and flood in any event in an amount not less than one hundred
percent (100%) of the then full "Replacement Cost," being the cost of replacing the Project
components, and all fixtures, equipment, improvements and betterments thereto.
2. Commercial General Liability. Yakima shall carry, and shall require its
construction contractor to carry, Commercial General Liability insurance providing coverage
against claims for bodily injury, death or property damage on the Property with broad form
liability and property damage endorsement, such insurance to afford minimum protection, during
the term of the construction phase, and written for combined single limits of liability of no less
than Ten Million Dollars ($10,000,000), per occurrence, said amount to be adjusted from time to
time with coverage deemed customary under like conditions.
3. Property Damage Insurance. Yakima shall carry property insurance
covering the Property including all Improvements, including earthquake, flood, boiler and
machinery insurance, in an amount equal to at least one hundred percent (100%) of the
replacement cost of all Improvements. Such insurance shall contain coverage against loss or
damage by perils no less broad than the current edition of the ISO Special Form, 1985 Edition.
Yakima shall be responsible for payment of any deductibles under said insurance policies and
any costs of restoration resulting from any uninsured or underinsured losses.
B. Insurance Policies. Insurance policies required herein:
1. Shall be issued by companies authorized to do business in the State with
the following qualifications:
a. The companies must be rated no less than "A," as to general policy
holders rating and no less than "X" as to financial category in accordance with the latest edition
of Best's Key Rating Guide, published by A.M. Best Company, Incorporated.
b. The policies shall be issued as primary policies.
2. Each such policy or certificate of insurance mentioned and required in this
Section VII shall have attached thereto (1) an endorsement that such policy shall not be canceled
or materially changed without at least 30 days' prior written notice to the District and Yakima;
(2) an endorsement to the effect that the insurance as to any one insured shall not be invalidated
by any act or neglect of any other insured; (3) an endorsement pursuant to which the insurance
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carrier waives all rights of subrogation against the Parties hereto; and (4) an endorsement
pursuant to which this insurance is primary and noncontributory.
3. The certificates of insurance and insurance policies shall be furnished to
the District and Yakima prior to commencing any construction under this Agreement. The
certificate(s) shall clearly indicate the insurance and the type, amount and classification, as
required for strict compliance with this Section VII.
4. Cancellation of any insurance or non-payment by Yakima of any premium
for any insurance policies required by this Agreement shall constitute an Event of Default under
Section XII of this Agreement,
C. Adiustmentc. The types of policies, risks insured, coverage amounts, deductibles
and endorsements may be adjusted from time to time as the District and Yakima may mutually
determine.
VIIL AS IS
A. Due Diligence. The District acknowledges that it has diligently investigated to its
full satisfaction the physical condition of the Property and all other matters that in the District's
judgment affect the District's use of the Property and the District's willingness to enter into this
Agreement. The District acknowledges that except as expressly provided for in this Agreement,
neither Yakima nor any employee, officer, agent or representative of Yakima has made any
representations or warranties whatsoever regarding the Property or this transaction or any facts
relating thereto, including, without limitation, any representations or warranties concerning the
physical condition of the Property, access, zoning laws, environmental_ matters, suitability,
feasibility, utilities, or any other matter affecting the Property or the use thereof.
-�- 7�---- 1__ J J 1 A Yakima
1 11
B. Acceptance. Except as expressly provided for in this Agreement, T akirna shall
accept the Property "as is" and "where is" with all faults, of any nature or kind, without any
representations or warranties, express or implied or statutory of any kind whatsoever by the
District or any employee, officer, agent or representative of the District. Upon acceptance by
Yakima of the Property under this Agreement, then Yakima shall be deemed to have accepted
the Property and to have waived and released its right to recover from the District any and all
damages, losses liabilities, costs, or expenses whatsoever (including attorneys' fees and costs)
and claims therefor, whether direct or indirect, known or unknown, foreseen or unforeseen,
which may arise on account of or in any way arising out of or connected with the physical
condition of the Property or any Law or Ordinance:
C. Environmental Contamination. Yakima agrees to indemnify and hold harmless
the District for any environmental contamination existing as of the date of this Agreement.
Yakima agrees to design and develop the Project in such a manner as to minimize, to the extent
financially practicable, the excavation of native soils. In the event Yakima encounters
contaminated soils, Yakima shall be responsible for all costs of remediating the contaminated
coil and for seeking recovery from responsible parties
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The Parties agree that in the event contaminated soils are encountered and any Party
incurs remediation costs, the Parties shall fully cooperate in pursuing claims against those
entities that may be liable.
IX. LIABILITY
A. Indemnification of Yakima.
During the term of this Agreement, to the maximum extent not prohibited by law, the District
agrees to and shall indemnify and hold Yakima harmless from and against all liability, loss,
damage, cost, or expenses (including reasonable attorneys' fees and court costs, amounts paid in
settlements and judgment) arising from or as a result of the death of any person or of any
accident, injury, loss or damage whatsoever to any person or to the property of any person that
occurs on or adjacent to the Property and that is directly or indirectly caused by the acts, errors,
or omissions of the District or its officers, agents, servants, employees, officers, contractors or
subcontractors. The District shall not be responsible for (and such indemnity shall not apply to)
the gross negligence or willful misconduct of Yakima, or their respective officials, servants,
employees or officers.
X. DESTRUCTION OR CONDEMNATION
A. Total or Partial Destruction.
1. If the Convention Center or Project is totally or partially destroyed at any
time after execution of this Agreement, and the Insurance Proceeds are or would have been
sufficient to pay the cost of reconstruction or restoration, or if the uninsured cost of
reconstruction or restoration is less than Two Hundred Fifty Thousand Dollars ($250,000), and
the damage or destruction is such that as a result thereof Yakima cannot meet its obligations
under this Agreement, Yakima shall reconstruct or restore the damage consistent with terms of
this Agreement within two years of the destruction; provided that, if the damage or destruction is
such that Yakima may notwithstanding such damage or destruction continue to fulfill its
obligations under this Agreement, Yakima shall have the discretion to use the Insurance
Proceeds to restore and repair the Property to the extent necessary and appropriate for its
purposes. If the Insurance Proceeds are insufficient and the uninsured cost is more than Two
Hundred Fifty Thousand Dollars ($250,000), Yakima may elect to reconstruct or restore the
damage or to terminate this Agreement by delivery of written notice to the District within 30
days after the destruction.
2. If Yakima elects not to reconstruct or restore the damage, this Agreement
shall terminate and the Property shall revert to Yakima pursuant to Section XIII. The District
shall transfer the Property in its then condition to Yakima, along with any Insurance Proceeds
attributable to the damage or destruction of the Project.
B. Condemnation. If the whole or any substantial part of the Property is taken or
condemned in the exercise of eminent domain powers (or by conveyance in lieu thereof), such
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that Yakima can no longer meet its obligations under this Agreement, this Agreement shall
terminate upon the date when possession of the Property so taken shall be acquired by the
condemning authority. As used herein, "substantial" shall be defined as reasonably preventing
the conduct of Yakima's activities. Yakima shall have the right to claim and recover from the
condemning authority such compensation as may be separately awarded or recoverable by
Yakima in Yakima's own right on account of any and all damage to Yakima's activities by
reason of the condemnation and on account of any cost or loss Yakima might sustain; provided
that,
the T'�_ _1__17 Yakima
�/__ t _�_ _�_ _1 the Lnat, the District shall pay to I akltlla that portion of Its condemnation proceeds equal to L11e
amount of Debt Service on the Outstanding Bonds and Additional Bonds, if any.
XL RIGHT TO ASSIGN OR OTHERWISE TRANSFER
Rialtt to Trnncfor ,4aroomont
1. During the term of this Agreement and at such time as the Bonds or
Additional Bonds are no longer Outstanding, the District shall have the right to assign or
otherwise transfer the Agreement, to such other persons, firms, corporations, partnerships, joint
ventures, and federal, state or municipal government or agency thereof, as the District shall
select (the "Transferee"), provided, however, that:
a. The District must obtain the prior written consent of Yakima;
b. Such assignment or transfer shall be made expressly subject to the
terms, covenants and conditions of this Agreement;
c. The District shall deliver to Yakima a duly executed and recorded
copy of the document evidencing such transfer, including a suitable estoppel agreement(s); and
d. Such transfer shall not be effective to bind Yakima until the
Transferee has assumed all obligations of the District under this Agreement and notice thereof is
given to Yakima, and such notice shall designate the name and address of the Transferee.
2. Said Transferee (and all succeeding and successor Transferees) shall
succeed to all rights and obligations of the District under this Agreement, subject, however, to all
duties and obligations of the District in and pertaining to the then unperformed provisions of this
Agreement. Upon such transfer by the District, or by a successor in accordance with the
requirements of this Section, the District (and/or its successor(s)) as Traii such a transfer
shall not be released and discharged from all of its duties and nhligailons nereunder which
pertain to the then unperformed provisions of this Agreement without the written consent and
release of Yakima.
XIL DEFAULT
A. Event of Default of the District. This section shall apply if the District fails to
keep nhcerve or perform anv of itc rdntiec nr nhliaatinnc Antler thic Agreement (an "Fvent of
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Default"). Notwithstanding the generality of this paragraph, an "Event of Default" shall be
deemed to occur for any of the following specific events:
1. The failure of the District to pay amounts due to Yakima hereunder when
due.
2. Conversion by the District of any portion of the Property to any use other
than the uses permitted under the Charter and this Agreement.
3. The making by the District of an assignment for the benefit of creditors
contrary to the terms of this Agreement, or filing a petition in bankruptcy or of reorganization
under any bankruptcy or insolvency law or filing a petition to effect a composition or extension
of time to pay its debts.
4. The appointment of a receiver or trustee of the property of the District,
which appointment is not vacated or stayed within ninety days.
5. The filing of a petition in bankruptcy against the District or for its
reorganization under any bankruptcy or insolvency law that shall not be dismissed or stayed by
the court within ninety days after such filing.
B. Force Majeure. The District shall not be considered to be in breach of or default
under this Agreement on account of any delay or failure to perform as required by this
Agreement as a result of a Force Majeure event.
XIII. REMEDIES
A. Remedies Upon Default. If an Event of Default on the part of the District shall
occur, then Yakima at any time after periods set forth for the exercise of rights herein shall have
the following cumulative rights and remedies:
1. Provide Notice and Time to Cure. If Yakima desires to take action for an
Event of Default, Yakima shall provide written notice to the District specifying such Event of
Default or Events of Default and stating that Yakima at its option may terminate this Agreement
on the date specified in such notice, which shall be at least 30 days, but no more than 90 days,
after the giving of such notice, unless the District cures such Event of Default.
2. Injunction. Yakima shall be entitled to restrain, by injunction, the
commission of or attempt or threatened commission of an Event of Default and to obtain a
judgment or order specifically prohibiting a violation or breach of any such term or provision of
this Agreement without, in either case, being required to prove or establish that Yakima does not
have an adequate remedy at law. The District hereby waives the requirement of any such proof
and acknowledges that Yakima would not have an adequate remedy at law for the District's
commission of an Event of Default hereunder.
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3. Terminate for Default.
a. Yakima shall be entitled to immediately terminate this Agreement
if any Event of Default continues for a period of 30 days after written notice thereof from
Yakima to the District, or in the case of such Event of Default which cannot with due diligence
and in good faith be cured within 30 days, the District fails to proceed promptly after such notice
and with due diligence and in good faith, to begin to cure said Event of Default; provided that, in
..___L ..__.__...a .e...vr._.. time to ,�.__...,� _,....__. L_ ___e.___�_� ___7_. L__ _____e.i___ _______________ _i`�7_7______
such GVG11L prope L1111G LU L�U1G may be extended 0111y by written permission o1 Yakima.
b. In the event that this Agreement terminates for reasons of an Event
of Default, Yakima, in its sole discretion, shall have the option of exercising one or both of the
following choices:
(i) Receive payment from the District in an amount required to
pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service on the
Outstanding Bonds and any Additional Bonds when due, and the amount necessary to reimburse
Yakima for any amounts paid pursuant to Section III(C).
(ii) Immediately terminate the Lease Agreement.
4. Recover Damages, Costs and Expenses. Yakima shall be entitled to
proceed against the District for all direct damages, costs and expenses arising from the District's
committing an Event of Default hereunder and to recover all such direct damages, costs and
expenses, including reasonable attorneys' fees.
B. No Waiver by Yakima. No failure by Yakima to insist upon the performance of
any of the terms of this Agreement or to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach or of any of the terms of this Agreement.
None of the terms of this Agreement to be kept, observed or performed by the District, and no
breach thereof, shall be waived, altered or modified except by a written instrument executed by
Yakima. No waiver of any breach shall affect or alter this Agreement, but each of the terms of
this Agreement shall continue in full force and effect with respect to any other then existing or
subsequent breach thereof No waiver of any default of the District hereunder shall be implied
from any omission by Yakima to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect any default other than the default
specified in the express waiver and then only for the time and to the extent therein stated. One or
more waivers by Yakima shall not be construed as a waiver of a subsequent breach of the same
covenant, term or conditions.
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C. Termination
Notwithstanding anything to the contrary contained in this Agreement:
1. Termination by Mutual Agreement Prior to Beneficial Occupancy. This
Agreement shall terminate under circumstances where all Parties mutually agree in writing that it
is impossible or impractical to design, develop or construct the Project. In the event that one
Party determines that it is impossible or impractical to design, develop or construct the Project,
the Parties agree to meet and enter into good faith negotiations regarding whether the Project has
become impossible or impractical.
D. Reversion of the Leasehold Interest to Yakitna. In the event that this Agreement
terminates prior to Beneficial Occupancy, Yakima may immediately terminate the Lease
Agreement and reenter and retake the Property, and the District shall promptly:
1. Remove all of its personal property from the Property;
2. Remove all rubble, debris and unusable improvements from the Property
as required by Yakima in its sole discretion;
3. Remove all waste materials and rubbish from and about the Property and
adjacent property; and
4. Satisfy or bond all liens upon the Project (or claims which with notice or
passage of time or both would mature into a lien).
Yakima shall be entitled to retain title to the Property and all Improvements, including the
Convention Center and Project, free and clear of any leasehold interest or other claim of the
District and anyone claiming by, through or under the District.
E. Certain Provisions Survive Termination. The following provisions of this
Agreement shall survive notwithstanding any termination of this Agreement and reversion of the
leasehold interest in the Property and Improvements to Yakima:
1. As Is (Section VIII);
2. Liability (Section IX); and
3. Destruction or Condemnation (Section X).
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XIV. REPRESENTATIONS AND WARRANTIES
A. Yakima's Representations. Yakima hereby represents and warrants to the
District that it has full statutory righ power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the person signing this Agreement on
behalf of Yakima has the authority to bind Yakima and to enter into this transaction; and that
Yakima has taken all requisite action and steps to legally authorize the execution, delivery, and
performance of L111J Agreement.
B. The District's Representations and Warranties. The District hereby represents
and warrants to Yakima that it has full power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the parties signing this Agreement on
behalf of the District have the authority to bind the District and to enter into this transaction; and
that the District has taken all requisite action and steps to legally authorize the execution,
delivery, and performance of this Agreement.
C. Tax Covenant. The District acknowledges that the Bonds are to be issued as tax-
exempt obligations. The District covenants that it will not take any action to cause interest on
the Bonds or any Additional Bonds to be taxable.
XV. LEASE BACK
A. Sublease. The District hereby leases to the City and the City hereby hires from
the District certain improved real property located in the City of Yakima, Washington, legally
described in Exhibit A attached hereto and by this reference incorporated (the "Premises") and
certain improvements thereon consisting of a convention center, and the Project to be built on the
Premises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record, including in particular that certain Lease Agreement
. l and the lessee,
dated between the City, as lessor, District, as 1wJcc, ,�;,;,aa� a � dr;�t, o .
B. Rent. Within 60 days of the date of this Agreement, the City shall pay to the
District $50, which represents prepaid rent for the entire term of this Agreement.
C. Lease Obligations Assumed. Except as other wise provided herein, the District hereby
assigns and the City agrees to assume all duties and obligations of the District under the Lease
Agreement.
XVL MISCELLANEOUS
A. Captions. The headings and captions of this Agreement and the Table of
Contents preceding the body of this Agreement are for convenience and reference only and in no
way define, limit or describe the scope or intent of this Agreement nor in any way affect this
Agreement.
R. Construction. All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the Party or Parties may
-24-
P \SC\SC09H 01/06/14
require. The Parties hereby acknowledge and agree that each was properly represented by
counsel and this Agreement was negotiated and drafted at arms' length so that the judicial rule of
construction to the effect that a legal document shall be construed against the draftsman shall be
inapplicable to this Agreement.
C. Entire Agreement. This Agreement and any collateral instruments referenced
herein contain the entire agreement between the Parties hereto and shall not be modified or
amended in any manner except by an instrument in writing executed by the Parties hereto.
Previous drafts of this Agreement or any portions thereof shall not be utilized in any manner by
either Party should any dispute arise as to the intent of this Agreement.
D. Successors and Assigns. The terms herein contained shall bind and inure to the
benefit of Yakima, its successors and assigns, and the District, its successors and assigns, except
as may be otherwise provided herein.
E. Notices. All notices which may be or are requested to be given pursuant to this
Agreement shall be deemed given when hand delivered, or when deposited in the United States
Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and
addressed to the Parties at the following addresses unless otherwise provided for herein:
To Yakima:
With a copy to:
To the District:
Richard A. Zais, Jr.
City Manager
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
F. Incorporation by Reference. All exhibits and appendices annexed hereto are
hereby incorporated by reference herein.
-25-
P:\SC\SC09H 01/06/14
G. Execution in Counterparts.
1. This Agreement may be executed in any number of counterparts and by
different Parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
Agreement.
2. This Agreement becomes effective when the representatives of the Parties
have executed it,
H. Waiver. The_waiver by either the District or Yakima of the performance of any
covenant, condition, or promise shall not invalidate this Agreement nor shall it be considered a
waiver by such Party of any other covenant, condition, or promise hereunder. The waiver by
either the District or Yakima of the time for perfoiniing any act shall not eonstitate a waiver of
the time for performing any other act or an identical act required to be performed at a later time.
The exercise of any remedy provided by law or the provisions of this Agreement shall not
exclude other consistent remedies unless they are expressly excluded.
1. Exculpation. Notwithstanding anything contained to the contrary in any
provision of this Agreement, it is specifically agreed and understood that there shall be
Le
absolutely no personal liability on the part of any individual officers or directors of Yakima or
the District with respect to any of the obligations, teens, covenants, and conditions of this
Agreement.
J. Severability. If any term or provision of this Agreement or the application thereof
to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of
this Agreement or the application of such 'Willi or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be affected thereby and shall
continue in full force and effect.
K. Tern. This Agreement shall tetniinate on the later of the date that the Bond afld
any Additional Bonds are no longer Outstanding and the date on which the Sales Tax expires.
Amendments_ This Agreement may be amended, only with the written consent of
T
tel... D., ..f ve
LllG .L a! �a�.�•
-26-
P \SC\SC09H 01!06/14
IN WITNESS WHEREOF, the Parties hereto have executed this document as of the day
and year first above written.
DATED this ",i qday of__, 2001.
CITY OF YAKIMA
By
Richard A. Zais, Jr.
City Manager
Attest:
Approved as to form:
City Attorney
r
OnOWSIata Eltaao0/-9y
upo?Do/ -/0.2
YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT
By
-27-
Chair
Board of Directors
P:\SC\SCO9H 01/06/14
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that t ` {i- tk t4%,i -. -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
t ( (/S ?t h /'^ t i,i i ,.t V` t V(l r + be, +L o 7 voluntary' ., + 1
r \/! V /t.i:i=Vii!:t-i'7/;,i- Vl ( fy„{ ;`( `--"---� to VV the fre,e and olunLCU)' U L of such
party for the uses acid purposes Mentioned in the instrument.
Dated:
C. �N
NOTARY )
` 1
PUBLIC
b J
, 2001_:
r
Notary Public
Print/Type Name ___:=},/'`}
My commission expires
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that i)),, �, , „ is the person
who appeared befnrp meg 2nd c iri persnn acknnwledged that he/sl signed this instrt..:ment, nn
oath stated that he/she was authorized to execute the instrument and acknowledged it as the
1(1, ; of )I,)(1/4,�/� J to be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
Dated; '. , 2001.
.
Use this space for notarial stamp/seal)
Notary Public
Print/Type Name
it, if "6-e/1,( z is
My commission expires
-28-
(
(
P-SC\SCo9H 01/06/14
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
A-1
EXHIBIT B
DEBT SERVICE SCHEDULE
(To be attached and incorporated into the Agreement at the time that the Bonds and any
Additional Bonds are issued)
B-1
P:\SC\SCO9H 01/06/14
APPENDIX 1— PROJECT DOCUMENTS
[To Be Attached upon City Approval of Project Documents]
1 P:\SC\SC09H 01/06/14
ITEM TITLE:
SUBMITTED BY:
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. l fS
For Meeting Of: June 19, 2001
Public Facilities District (PFD): an ordinance to form a Public Facilities
District and a Resolution to adopt Development and Lease Agreements
Dick Zais, City Manager
Rita Anson, Finance Director,
a
CONTACT PERSON/TELEPHONE: Rita Anson #575-6050
Tim Je - r , ccountant, #575-6050
SUMMARY EXPLANATION: In 1999, the Washington State Legislature passed legislation
that allowed Cities to establish a Public Facilities District (PFD) for the purpose of owning and
operating a Regional Center. Under this legislation, a Public Facility District is allowed to
receive revenue from the state in the form of a sales tax credit, if certain criteria are met. This
revenue comes from sales taxes already paid by the buyer of goods within the City; this is not
a new nor an increased tax. By establishing a PFD, a portion of the sales taxes currently
being collected and going to the state can be directed back to our local area (to the PFD).
For the past several months, the Cities of Yakima, Union Gap and Selah have researched the
possibility of forming a three city PFD for the purpose of re -directing these sales tax revenues to
the local area and using the funds to finance an expansion to the Yakima Convention Center.
The formation of a PFD requires the parties to pass an ordinance for that purpose; the Interlocal
Agreement between the cities is an Attachment to the ordinance and the PFD Charter and
Bylaws are included as exhibits to the Interlocal Agreement. These are the documents needed
to establish the PFD. With the understanding that the Yakima City Council would consider the
formation of a three city PFD at its June 19, 2001 meeting, Union Gap and Selah approved the
formation of a joint PFD at their June 11th and 12 Council meetings, respectively. (Note: the,
Charter, Bylaws and Interlocal Agreement documents passed by the three cities must be
substantially identical. The ordinance needed by Yakima will be somewhat different from that
passed by Union Gap and Selah as Yakima has more involvement in the PFD and therefore the
Yakima ordinance will cover more elements; however, the ordinances may not be inconsistent.)
Continued on next page ...
Resolution X Ordinance X Other (Specify)
Contract
Mail to (name and address): see special instructions in document
Phone:
Funding Source PFD (sales tax cr
APPROVED FOR SUBMITTAL:
1 ' City Manager
STAFF RECOMMENDATION: Pass Ordinance and Adopt Resolution
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
Page 2/5
In addition to the ordinance and related documents (noted above) that must be passed by all three
cities in order to form the PFD; Yakima and the Public Facilities District must also enter into two
additional agreements to effect the balance of the agreement under which the PFD and the City
would function;
(1) Lease Agreement; Yakima provides a 25 year lease of the Convention Center to PFD,
(2) Design, Development, Construction, Financing and Operating Agreement (aka:
Development Agreement): performs multiple functions:
(a) Assigns responsibility for the Design, Development and Construction of the
expansion of the Convention Center to Yakima and establishes the terms thereof;
(b) Establishes a sublease of the Convention Center from the PFD to Yakima; and
(c) Assigns responsibility for the operation and maintenance of the convention center to
Yakima and establishes the terms thereof
Due to the multiple purposes of the Development Agreement, it is a relatively long and complex
document. When reading the Development Agreement, it is helpful to keep in mind that the
Agreement specifies the authority, responsibilities and restrictions of the PFD and Yakima based
on the agreements that Yakima has leased the Convention Center to the PFD and that the PFD has
sub -leased the facility back to Yakima. (ie: Yakima and the PFD are each a lessor and a lessee)
A Complete Set of the PFD Legal Documents Include:
• Yakima Ordinance establishing the PFD; enclosed
• Interlocal Agreement (as an Attachment to the Ordinance); distributed next week
• Charter (as an Exhibit to the Interlocal Agreement); distributed last week
• Bylaws (as an Exhibit to the Interlocal Agreement); distributed last week
• Resolution to Adopt the following Contracts:; enclosed
• Design, Development, Construction, Financing and Operating Agreement; enclosed
• Lease Agreement; enclosed
• Updated copy of the Ordinance as approved by the cities of Union Gap and Selah, will
be distributed to you, for your records, when received
Please Note:
• For your convenience, you may wish to insert the above documents into the three-ring
binder provided to you last week.
• The Yakima Ordinance is enclosed
• The Interlocal Agreement had one slight change in wording due to a request by the
Selah City Council — it did not change the agreement in any way; however, for
consistency with Selah and Union Gap, Council will need to vote on the new version.
Union Gap is updating the document and Yakima had not received it prior to going to
print; therefore, it is not enclosed. It will be distributed at the Council meeting. Again,
the change made by Selah only changed the location of some wording within the
document, thus, the copy you received last week is still accurate as to all aspects of
the agreement.
• The Charter and Bylaws you received in last week's Council package have not
changed, therefore, copies of these documents are not enclosed.
• The Resolution to approve the Development and Lease Agreements and the
Agreements themselves are enclosed
Page 3/5
OVERVIEW OF FINAL PFD PROPOSAL :
GENERAL:
• A three City Public Facility District; Selah, Union Gap and Yakima
• *Yakima will indemnify Union Gap & Selah from legal challenges to the formation of PFD
• A seven member PFD Board will be appointed as follows:
1 Member - Union Gap City Council Discretion
1 Member - Selah City Council Discretion
1 Member - Yakima City Council Discretion
4 Members - Yakima City Council based on input from community groups
Note: The City that appoints the board member may also remove the member
• Once PFD Board is appointed, the existing Yakima Valley Visitors & Convention Bureau
Advisory Committee previously established by Yakima City Council, will be dissolved
• District's powers to impose the Voted Sales Tax is subject to the approval of all three Cities
prior to placement on the ballot
• Yakima will have approval authority for PFD's annual budget and must approve any
admission and parking fees/taxes, any gambling activities any public display of artwork
and the acquisition or transfer of real and personal property valued over $100,000
• Yakima is responsible for design and construction of Convention Center expansion
FINANCIAL:
• Yakima will issue 25 yr. bonds and use net proceeds to fund Convention Center expansion
• Yakima will provide a 25 year lease of the Convention Center (Building and Land) to the
PFD in satisfaction of the 33 % match requirement
• PFD to sub -lease the Convention Center to Yakima to Operate and Maintain
• The Convention Center expansion will cost approx. $10 million, including debt service
• So long as the bonds are outstanding, only Yakima has the ability to dissolve the PFD
• PFD will impose a .033% sales tax (credit) which will re -direct to the PFD revenues that are
currently going to the state (sales tax revenues from sales within the three cities)
• PFD will transfer to Yakima all revenues received; such revenues will be used to pay debt
service on bonds, to pay operating and maintenance expenses of the Convention Center
and/ or other Regional Center purposes
• In the event that the District's sales tax revenues are insufficient to cover the debt service
on the bonds, Yakima will have sole responsibility for making up any deficiency; Union
Gap and Selah will not be required to contribute. Note: we believe the probability of this
occurring to be very low and in the unlikely event of such an occurrence, the amount of
any funding requirement from Yakima to be minimal. (For more information, refer to
Attachment B - impact of a 5% and a 10% loss in sales tax revenues from all three Cities and
Attachment C - five year sales tax revenue history for each of the three cities.)
• Yakima will contribute lodging taxes, in an amount, if any, determined annually by the
Yakima City Council, to support debt service payments, operation and maintenance of the
Convention Center and/ or other Regional Center purposes
* This is a new agreement with the Cities of Union Gap and Selah since the last update to Council. They
requested this during the final negotiations prior to their approval of the formation of the PFD
Page 4/5
OTHER CONSIDERATIONS:
The enclosed plan for the formation of the Public Facilities District, the financing of
the expansion of the Convention Center and the on-going operation and maintenance
of the Center is based on weeks of analysis and research including numerous
discussions with legal counsel, bond counsel, bond underwriters, the department of
Revenue, the State Auditors Office, members of the Yakima Visitors and Convention
Bureau its Board and Advisory Committee, staff and Council Members from the Cities
of Selah, Union Gap and Yakima, owners and employees of local motels/hotels,
consultants and appraisers. Many documents and studies have been prepared as part of
this research, including Market/Financial Analysis Study of the Convention Center
Expansion, Preliminary Architect Evaluation and an Appraisal of the existing
Convention Center.
This proposal is based on the combined results of all of the above research keeping in
mind the City's three primary financing objectives; (1) to minimize the impact on the
City's general obligation debt capacity, (2) to maximize the funds available for the
expansion of the Convention Center and (3) to provide a marketable bond offering to
the public. Yakima is establishing a PFD that is different in some significant respects
from other PFDs that have been formed to date and our financing proposal is creative
and sensitive to market changes. Therefore, please keep in mind:
• No guarantees that the bonds will be marketable
• Changes in the Bond Market may require changes to our financing plan, which
could have an impact on the expansion plans
• No guarantees that the Department of Revenue will approve the use of the lease
agreement to satisfy the match requirement (which triggers our ability to attain
the sales tax credit)
• To make the financing plan work, the Convention Center may have to
temporarily reduce operating expenditures and /or non-operating expenditures
such as promotional expenses
Discussions with rating agencies and investment bankers indicate that the financing
plan is both reasonable and achievable; however, nothing is certain until we actually go
to market with the bond issue. In spite of the risks noted above, City staff, legal
counsel and bond counsel believe this proposal to be a conservative, legal and, in the
case of the bonds, a marketable plan.
Page 5/5
NEXT STEPS:
If the Yakima City Council approves the formation of a Public Facilities District
(PFD) the next steps include:
• Appointment of Board Members (staff is preparing an outline of a nomination and
appointment process for Council's review; this will be distributed in the near future)
• Board to Hold Organizational Meeting Within 30 days of Effective Date of PFD
Formation. At this meeting the following needs to occur:
Approve the Lease Agreement
Approve Development Agreement
Impose the State Sales Tax (Credit)
Other Organizational Activities
• Submit Request to Department of Revenue to Commence Transfer of Sales Tax
Revenue to the Public Facilities District
• Commence Pre -construction Activities for the Convention Center Expansion
• Amend existing management agreement for the operation and maintenance of the
Convention Center to be consistent with PFD Development and Lease Agreements
Note: the construction bonds will not be issued before mid year 2002. This is to allow
the sales tax revenues to build up and be sufficient to cover the first debt service
payment on the bonds (which will occur approximately six months after the issuance of
the bonds) and to provide some reserves for future payments.
Attachments: :
A: Questions from one Council Member and related Answers
B: Worksheet identifying impact of a 5% and a 10% reduction in sales tax revenues of the Cities
of Selah, Union Gap and Yakima
C Worksheet reflecting the sales tax revenues for each of the three cities for the past five years
ATTACHMENT A
AGENDA STATEMENT
PUBLIC FACILITIES DISTRICT
QUESTIONS AND ANSWERS:
Following are questions received from a Council Member and the related answers:
1. Under the heading of "Questions and Answers" at the April 18, 2000 Council Study
Session, staff indicated that, "if the City no longer owns the Convention Center, it is
unclear whether or not the City may receive any amount (hotel/motel tax revenues) over
the amount needed to service the existing Convention Center bonds, due to the fact that
the City would no longer own a facility, (underscore added for emphasis) which qualifies
it to receive the hoteUmotel tax revenues. Bond Counsel is reviewing this issue." What
was the response of Bond Counsel? (See also Question No. 3 below.)
Since the current proposal calls for the City to Lease the Convention Center to the PFD
(rather than transferring title), this is no longer applicable; however, bond counsel has
indicated transferring the title of the Convention Center to the PFD would not have
prevented the City from collecting the hotel/motel taxes
2. "In the event the District's sales tax revenues are insufficient to cover the debt service
on the bonds, Yakima will have sole responsibility for making up any deficiency."
What would be the City of Yakima's source of funds should there be a deficiency?
This is a risk that Yakima is taking; any needed revenues would come from operating
revenues of the Convention Center, if available; hotel/motel tax revenue, if available; or
the General Fund as a last resort. However, we believe the chances of this occurring are
minimal; a 5% reduction in the sales tax revenues of all three cities would not be enough
to cause these revenues to be insufficient to cover the debt service. (Refer to the attached
worksheet which identifies the impact of a 5% and a 10% reduction in the sales tax
revenues of all three cities.)
3. Yakima will transfer a leasehold interest in the Convention Center and the
underlying site to the district in satisfaction of the local match. Does this include both
the Convention Center building and land? (See also Question No. 1 above.)
Yes, the City will lease the Convention Center building and land to the PFD
Director/F&B
PFD Questions and Answers.doc
Page 2
4. Has Bond Counsel reviewed a proposed management contract, or will this be
accomplished at a later date?
No, the management contract has not yet been drafted; this will need to be done in the
near future. (The financing proposal, however, has been reviewed by Bond Counsel and
by the Bond Underwriters and, although there are never any guarantees as to the
marketability of the bonds until they actually hit the market, they are comfortable that
this is a solid proposal and gave their recommendation to its structure and marketability.
5. The Charter at Article IV (page 3) reads in part: "For the purpose only of
securing the exemption from federal income taxation for interest on
obligations of the District, the District constitutes an authority and
instrumentality of Yakima...". What authorizes this without naming Union
Gap and Selah?
This simply has Yakima "extending" its authority to issue tax exempt bonds to the PFD;
authorization from more than one City is not necessary. This is simply an added option
and is not likely necessary as the PFD has its own authority to issue tax exempt bonds
and due to the fact that Yakima will be issuing the bonds.
6. Article V Powers in the Charter authorizes the District to impose specified charges
and taxes (admission, parking) without limitation (underscore added for emphasis).
How can these Charter powers of the District "be subject to the approval of the
Yakima Council" in an Interlocal Cooperation Agreement? Why wouldn't the
Council approval be stated in the Charter of the District?
The Charter identifies the powers of the PFD, as authorized by the legislature (which is
"without limitation"). However, the PFD may contract with a 3rd party (Yakima, in this
case) to give up some of its legal authority for some consideration. The Charter must
first provide this authority to the PFD and then the PFD may agree to limit its own
authority in "trade" for some other consideration; which it is doing via the Interlocal
Agreement.
Director/F&B
PFD Questions and Answers.doc
ATTACHMENT B
THREE CITY
PUBLIC FACILITY DISTIRCT
SAMPLE DEBT SERVICE PAYMENTS
WITH REDUCED SALES TAX REVENUES:
A. Estimated Annual Debt Service Payment (three cities):
$480,000
Based on $3.7 million par value Revenue Bond and
a $2.6 million par value LTGO Bond
1
B. Sales Tax Credit (based on year 2000):
$21,872
4.32%
Selah
$84,358
16.65%
Union Gap
$400,576
79.04%
Yakima
$506,806
100.00%
C. Example - 5% Reduction in Sales Tax Revenue of All Three Cities:
$506,806
X .95
$481,466
Tax Revenue Received
$480,000
Less Annual Debt Service Payment Required
Excess Revenue (No Contribution Required)
$1,466
D. Example - 10% Reduction in Sales Tax Revenue of All Three Cities:
$506,806
$0.90
$456,125
$480,000
Less Annual Debt Service Payment Required
Additional Revenues Required
($23,875)
(1st from reserves; then Yakima must contribute to cover balance
of any deficiency)
06/14/2001
PFD - Info - Examples City Contributions - Rev Short fall 05-01-01
Multi -City Tax Credit Calculation
Selah Sales Tax
Union Gap Sales Tax
Yakima Sales Tax
Total Sales Tax Collected
Total Sales (Divide by .0085)
State Credit (Times .00033)
Note:
ATTACHMENT C
City of Yakima
Public Facilities District Project
State Sales Tax Credit Available
Based on Sales Tax Collected
As Reported by Washington Dept of Revenue
1996
$ 448,440
1,683,302
9,920,745
$ 12,052,487
$ 1,417,939,647
$ 467,920
Annual Percentage Change
Average Annual Percentage Change
1997
$ 546,159
1,962,292
10,373,742
$ 12,882,193
$ 1,515,552,118
$ 500,132
6.9%
1998
$
539,351
1,993,338
10,464, 547
$ 12,997,236
$ 1,529,086,588
$ 504,599
0.9%
1999
$ 599,638
1,976,213
10,274,839
$ 12,850,690
2000
$ 563,359
2,172, 860
10, 317, 870'
$ 13,054,089
$ 1,511,845,882 $ 1,535,775,176
$ 498,909
-1.1%
2000
Credit by
City
$ 21,872
84,358
400,576
$ 506,806
1.6%
2.1%
According to the Department of Revenue Local Tax Distribution Report, Local Sales and Use Taxes are distributed as
follows: "15% is given to the county for transactions occurring within cities. The remaining 85 % is distributed to the cities
as their share of the basic or optional tax. Counties receive the full amount attributable to sales in the unincorporated areas,
plus the 15 % share for sales in cities."
Summary: Total sales tax for all three cities combined has hovered around $12.9 million for the past 4 years. However, when
comparing 2000 to 1996, sales tax has demonstrated an average annual percentage increase of 2.1% for that period. A
growth assumption of 1% was used to calculate match requirements, which should be attainable over the extended period of
25 years. The debt issue is planned to maximize project funds, but keep the annual debt service under $480,000.
cje 06/14/2001 public facilities district
$ 506,806
ESTABLISHMENT OF THE
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
PRESTON GATES & ELLIS LLP
ESTABLISHMENT OF THE
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
TRANSCRIPT INDEX
1. Yakima City Council Agenda Statement.
2. City of Yakima Ordinance No. 2001-28 approving an interlocal agreement with the
Cities of Selah and Union Gap to form the Yakima Regional Public Facilities District
("PFD"), passed on June 19, 2001.
3. City of Union Gap Ordinance Nos. 2298 and 2300 approving an interlocal agreement
to form the PFD, and copy of minutes of the City of Selah Council Meeting held on
June 12, 2001 showing the motion approving an interlocal agreement.
4. Interlocal Cooperation Agreement to Form a Public Facilities District by and among
the City of Yakima, the City of Selah and the City of Union Gap, executed on
June 25, 2001.
5. PFD Charter.
6. PFD Bylaws.
7. City of Yakima Resolution No. R-2001-102 approving the Lease Agreement and the
Development Agreement.
8. PFD Resolution No. 2001-01 establishing the PFD corporate office, PFD Resolution
No. 2001-02 establishing regular meetings of the Board, PFD Resolution No. 2001-03
approving the Lease Agreement and the Development Agreement, and PFD
Resolution No. 2001-04 imposing a retail sales and use tax.
9. Lease Agreement, dated as of July 27, 2001, by and between the City of Yakima and
the PFD.
10. Design, Development, Construction, Financing and Operating Agreement by and
Between the City of Yakima and the PFD, dated as of July 27, 2001.
11. Yakima City Council Agenda Statement regarding the resolution to appoint board
members of the PFD.
12. Chap. 35.57 RCW Public Facilities Districts.
K:\25739\00049\SC\SC 0211D
1
1
1
1
ITEM TITLE:
SUBMITTED BY:
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. l (S
For Meeting Of: June 19, 2001
Public Facilities District (PFD): an ordinance to form a Public Facilities
District and a Resolution to adopt Development and Lease Agreements
Dick Zais, City Manager
Rita Anson, Finance Director
CONTACT PERSON/TELEPHONE:
3 -
Rita Anson #575-6050
Tim Jes ccountant, #575-6050
SUMMARY EXPLANATION: In 1999, the Washington State Legislature passed legislation
that:allowed Cities to establish a Public Facilities District. (PFD) for the purpose of owning and
operating:a RegionalCenter:,, _Under this legislation, a Public Facility District. is allowed` to
receive. revenue `fro4-ie state :in the form of a sales tax credit; if' certain criteria are met. This
:'.revenue comes �from'sa'Ies taxes already paid by the buyer. of. goods-within.the City; thisrs not ..
a new nor an increased:' tax, ,lay establishing a PFD, a portion of the sales taxes currently
being collected and g itigJo the state can be directed back to our local area (to the PFD).
For the past several` months, the Cities of Yakima, Union Gap and Selah have researched. the
hree city PFD for the purpose of re -directing :these Sales tax revenues; to
e funds .to: finance an expansion' to the Yakima Convention Center. '
possibility of formm
the local'area'and usin
['hefotnationo
f aPF]
agreement between ti
3ylaws. are `included
o establish the,P
ormation of a three
e;parties to pass an ordiriance-for, that purpose `tl e:lnterlocal:
e cities is' an Attachment -to• the ordinance and the PFD Charter<'•an
as -exhibit's to the Interlocal Agreement. These are'the,documents:needed
ith .the, understanding that the Yakirna City Council- would consider the.
PFD, at its June 19, 2001 meeting; Union Gap and.Selah approved the
orriiation of a jouitPFD':at'their June llth and 12 Council meetings, respectively. (Note: the;
.arter, Bylaws and Interlocal Agreement documents passed,,by the three cities must he'
ubstantially identical The ordinarice:needed by Yakima.will besomewhat different from that
passed by Union Gap 4,§e141-1 as Yakima has more, involvement in.the PFD and therefore the
akima ordinane Wilt' covermore elements; however, the ordinance's may not'be inconsistent.)
1
Continued on nextpage;,:':
Resolution X'
Contract Mail'to (name and address): see special instructions iiin'document
Phone:
Ordinance ,',X Other (Specify)
Funding Source :PFD (sales tax cr\7jit
x41
APPROVED FOR SUBIvIITTA'L: � � o • City Manager.
,,STAFF RECOMMENDATION: Pass Ordinance and Adopt Resolution
BOARD/ COMMISSION: RECOMMENDATION:
COUNCIL ACTION:
Page 2/5
In addition to the ordinance and related documents (noted above) that must be passed by all three
cities in order to form the PFD; Yakima and the Public Facilities District must also enter into two
additional agreements to effect the balance of the agreement under which the PFD and the City
would function;
(1) Lease Agreement; Yakima provides a 25 year lease of the Convention Center to PFD,
(2) Design, Development, Construction, Financing and Operating Agreement (aka:
Development Agreement): performs multiple functions:
(a) Assigns responsibility for the Design, Development and Construction of the
expansion of the Convention Center to Yakima and establishes the terms thereof;
(b) Establishes a sublease of the Convention Center from the PFD to Yakima; and
(c) Assigns responsibility for the operation and maintenance of the convention center to
Yakima and establishes the terms thereof
Due to the multiple purposes of the Development Agreement, it is a relatively long and complex
document. When reading the Development Agreement, it is helpful to keep in mind that the
Agreement specifies the authority, responsibilities and restrictions of the PFD and Yakima based
on the agreements that Yakima has leased the Convention Center to the PFD and that the PFD has
sub -leased the facility back to Yakima. (ie: Yakima and the PFD are each a lessor and a lessee)
A Complete Set of the PFD Legal Documents Include:
• Yakima Ordinance establishing the PFD; enclosed
• Interlocal Agreement (as an Attachment to the Ordinance); distributed next week
• Charter (as an Exhibit to the Interlocal Agreement); distributed last week
• Bylaws (as an Exhibit to the Interlocal Agreement); distributed last week
• Resolution to Adopt the following Contracts:; enclosed
• Design, Development, Construction, Financing and Operating Agreement; enclosed
• Lease Agreement; enclosed
• Updated copy of the Ordinance as approved by the cities of Union Gap and Selah, will
be distributed to you, for your records, when received
Please Note:
• For your convenience, you may wish to insert the above documents into the three-ring
binder provided to you last week.
• The Yakima Ordinance is enclosed
• The Interlocal Agreement had one slight change in wording due to a request by the
Selah City Council — it did not change the agreement in any way; however, for
consistency with Selah and Union Gap, Council will need to vote on the new version.
Union Gap is updating the document and Yakima had not received it prior to going to
print; therefore, it is not enclosed. It will be distributed at the Council meeting. Again,
the change made by Selah only changed the location of some wording within the
document, thus, the copy you received last week is still accurate as to all aspects of
the agreement.
• The Charter and Bylaws you received in last week's Council package have not
changed, therefore, copies of these documents are not enclosed.
• The Resolution to approve the Development and Lease Agreements and the
Agreements themselves are enclosed
Page 3/5
OVERVIEW OF FINAL PFD PROPOSAL :
GENERAL:
• A three City Public Facility District; Selah, Union Gap and Yakima
• *Yakima will indemnify Union Gap & Selah from legal challenges to the formation of PFD
• A seven member PFD Board will be appointed as follows:
1 Member - Union Gap City Council Discretion
1 Member - Selah City Council Discretion
1 Member - Yakima City Council Discretion
4 Members - Yakima City Council based on input from community groups
Note: The City that appoints the board member may also remove the member
• Once PFD Board is appointed, the existing Yakima Valley Visitors & Convention Bureau
Advisory Committee previously established by Yakima City Council, will be dissolved
• District's powers to impose the Voted Sales Tax is subject to the approval of all three Cities
prior to placement on the ballot
• Yakima will have approval authority for PFD's annual budget and must approve any
admission and parking fees/taxes, any gambling activities any public display of artwork
and the acquisition or transfer of real and personal property valued over $100,000
• Yakima is responsible for design and construction of Convention Center expansion
FINANCIAL:
• Yakima will issue 25 yr. bonds and use net proceeds to fund Convention Center expansion
• Yakima will provide. a 25 year lease of the Convention Center (Building and Land) to the
PFD in satisfaction of the 33% match requirement
• PFD to sub -lease the Convention Center to Yakima to Operate and Maintain
• The Convention Center expansion will cost approx. $10 million, including debt service
• So long as the bonds are outstanding, only Yakima has the ability to dissolve the PFD
• PFD will impose a .033% sales tax (credit) which will re -direct to the PFD revenues that are
currently going to the state (sales tax revenues from sales within the three cities)
• PFD will transfer to Yakima all revenues received; such revenues will be used to pay debt
service on bonds, to pay operating and maintenance expenses of the Convention Center
and/or other Regional Center purposes
• In the event that the District's sales tax revenues are insufficient to cover the debt service
on the bonds, Yakima will have sole responsibility for making up any deficiency; Union
Gap and Selah will not be required to contribute. Note: we believe the probability of this
occurring to be very low and in the unlikely event of such an occurrence, the amount of
any funding requirement from Yakima to be minimal. (For more information, refer to
Attachment B - impact of a 5% and a 10% loss in sales tax revenues from all three Cities and
Attachment C - five year sales tax revenue history for each of the three cities.)
• Yakima will contribute lodging taxes, in an amount, if any, determined annually by the
Yakima City Council, to support debt service payments, operation and maintenance of the
Convention Center and/or other Regional Center purposes
* This is a new agreement with the Cities of Union Gap and Selah since the last update to Council. They
requested this during the final negotiations prior to their approval of the formation of the PFD
Page 4/5
OTHER CONSIDERATIONS:
The enclosed plan for the formation of the Public Facilities District, the financing of
the expansion of the Convention Center and the on-going operation and maintenance
of the Center is based on weeks of analysis and research including numerous
discussions with legal counsel, bond counsel, bond underwriters, the department of
Revenue, the State Auditors Office, members of the Yakima Visitors and Convention
Bureau its Board and Advisory Committee, staff and Council Members from the Cities
of Selah, Union Gap and Yakima, owners and employees of local motels/hotels,
consultants and appraisers. Many documents and studies have been prepared as part of
this research, including Market/Financial Analysis Study of the Convention Center
Expansion, Preliminary Architect Evaluation and an Appraisal of the existing
Convention Center.
This proposal is based on the combined results of all of the above research keeping in
mind the City's three primary financing objectives; (1) to minimize the impact on the
City's general obligation debt capacity, (2) to maximize the funds available for the
expansion of the Convention Center and (3) to provide a marketable bond offering to
the public. Yakima is establishing a PFD that is different in some significant respects
from other PFDs that have been formed to date and our financing proposal is creative
and sensitive to market changes. Therefore, please keep in mind:
• No guarantees that the bonds will be marketable
• Changes in the Bond Market may require changes to our financing plan, which
could have an impact on the expansion plans
• No guarantees that the Department of Revenue will approve the use of the lease
agreement to satisfy the match requirement (which triggers our ability to attain
the sales tax credit)
• To make the financing plan work, the Convention Center may have to
temporarily reduce operating expenditures and /or non-operating expenditures
such as promotional expenses
Discussions with rating agencies and investment bankers indicate that the financing
plan is both reasonable and achievable; however, nothing is certain until we actually go
to market with the bond issue. In spite of the risks noted above, City staff, legal
counsel and bond counsel believe this proposal to be a conservative, legal and, in the
case of the bonds, a marketable plan.
Page 5/5
NEXT STEPS:
If the Yakima City Council approves the formation of a Public Facilities District
(PFD) the next steps include:
• Appointment of Board Members (staff is preparing an outline of a nomination and
appointment process for Council's review; this will be distributed in the near future)
• Board to Hold Organizational Meeting Within 30 days of Effective Date of PFD
Formation. At this meeting the following needs to occur:
Approve the Lease Agreement
Approve Development Agreement
Impose the State Sales Tax (Credit)
Other Organizational Activities
• Submit Request to Department of Revenue to Commence Transfer of Sales Tax
Revenue to the Public Facilities District
• Commence Pre -construction Activities for the Convention Center Expansion
• Amend existing management agreement for the operation and maintenance of the
Convention Center to be consistent with PFD Development and Lease Agreements
Note: the construction bonds will not be issued before mid year 2002. This is to allow
the sales tax revenues to build up and be sufficient to cover the first debt service
payment on the bonds (which will occur approximately six months after the issuance of
the bonds) and to provide some reserves for future payments.
Attachments: :
A: Questions from one Council Member and related Answers
B: Worksheet identifying impact of a 5% and a 10% reduction in sales tax revenues of the Cities
of Selah, Union Gap and Yakima
C Worksheet reflecting the sales tax revenues for each of the three cities for the past five years
ATTACHMENT A
AGENDA STATEMENT
PUBLIC FACILITIES DISTRICT
QUESTIONS AND ANSWERS:
Following are questions received from a Council Member and the related answers:
1. Under the heading of "Questions and Answers" at the April 18, 2000 Council Study
Session, staff indicated that, "if the City no longer owns the Convention Center, it is
unclear whether or not the City may receive any amount (hotel/motel tax revenues) over
the amount needed to service the existing Convention Center bonds, due to the fact that
the City would no longer own a facility, (underscore added for emphasis) which qualifies
it to receive the hotel/motel tax revenues. Bond Counsel is reviewing this issue." What
was the response of Bond Counsel? (See also Question No. 3 below.)
Since the current proposal calls for the City to Lease the Convention Center to the PFD
(rather than transferring title), this is no longer applicable; however, bond counsel has
indicated transferring the title of the Convention Center to the PFD would not have
prevented the City from collecting the hotel/motel taxes
2. "In the event the District's sales tax revenues are insufficient to cover the debt service
on the bonds, Yakima will have sole responsibility for making up any deficiency."
What would be the City of Yakima's source of funds should there be a deficiency?
This is a risk that Yakima is taking; any needed revenues would come from operating
revenues of the Convention Center, if available; hotel/motel tax revenue, if available; or
the General Fund as a last resort. However, we believe the chances of this occurring are
minimal; a 5% reduction in the sales tax revenues of all three cities would not be enough
to cause these revenues to be insufficient to cover the debt service. (Refer to the attached
worksheet which identifies the impact of a 5% and a 10% reduction in the sales tax
revenues of all three cities.)
3. Yakima will transfer a leasehold interest in the Convention Center and the
underlying site to the district in satisfaction of the local match. Does this include both
the Convention Center building and land? (See also Question No. 1 above.)
Yes, the City will lease the Convention Center building and land to the PFD
Director/F&B
PFD Questions and Answers.doc
Page 2
4. Has Bond Counsel reviewed a proposed management contract, or will this be
accomplished at a later date?
No, the management contract has not yet been drafted; this will need to be done in the
near future. (The financing proposal, however, has been reviewed by Bond Counsel and
by the Bond Underwriters and, although there are never any guarantees as to the
marketability of the bonds until they actually hit the market, they are comfortable that
this is a solid proposal and gave their recommendation to its structure and marketability.
5. The Charter at Article IV (page 3) reads in part: "For the purpose only of
securing the exemption from federal income taxation for interest on
obligations of the District, the District constitutes an authority and
instrumentality of Yakima...". What authorizes this without naming Union
Gap and Selah?
This simply has Yakima "extending" its authority to issue tax exempt bonds to the PFD;
authorization from more than one City is not necessary. This is simply an added option
and is not likely necessary as the PFD has its own authority to issue tax exempt bonds
and due to the fact that Yakima will be issuing the bonds.
6. Article V Powers in the Charter authorizes the District to impose specified charges
and taxes (admission, parking) without limitation (underscore added for emphasis).
How can these Charter powers of the District "be subject to the approval of the
Yakima Council" in an Interlocal Cooperation Agreement? Why wouldn't the
Council approval be stated in the Charter of the District?
The Charter identifies the powers of the PFD, as authorized by the legislature (which is
"without limitation"). However, the PFD may contract with a 3rd party (Yakima, in this
case) to give up some of its legal authority for some consideration. The Charter must
first provide this authority to the PFD and then the PFD may agree to limit its own
authority in "trade" for some other consideration; which it is doing via the Interlocal
Agreement.
Director/F&B
PFD Questions and Answers.doc
r
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1
1
1
1
1
1
1
1
1
1
1
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ATTACHMENT B
THREE CITY
PUBLIC FACILITY DISTIRCT
SAMPLE DEBT SERVICE PAYMENTS
WITH REDUCED SALES TAX REVENUES:
A. Estimated Annual Debt Service Payment (three cities):
$480,000
Based on $3.7 million par value Revenue Bond and
a $2.6 million par value LTGO Bond
B. Sales Tax Credit (based on year 2000):
$21,872
4.32%
Selah
$84,358
16.65%
Union Gap •
$400,576
79.04%
Yakima
$506,806
_ 100.00%
C. Example - 5% Reduction in Sales Tax Revenue of All Three Cities:
$506,806
X .95
$481,466
Tax Revenue Received
$480,000
Less Annual Debt Service Payment Required
Excess Revenue (No Contribution Required)
$1,466
D. Example - 10% Reduction in Sales Tax Revenue of All Three Cities:
$506, 806
$0.90
$456,125
$480,000
Less Annual Debt Service Payment Required
Additional Revenues Required
($23,875)
(1st from reserves; then Yakima must contribute to cover balance
of any deficiency)
06/14/2001
PFD - Info - Examples City Contributions - Rev Short fall 05-01-01
- ill. Mt MI OM - MS S w v- w mu me is En ens En— ,A
Multi -City Tax Credit Calculation
Selah Sales Tax
Union Gap Sales Tax
Yakima Sales Tax
Total Sales Tax Collected
Total Sales (Divide by .0085)
State Credit (Times .00033)
Note:
ATTACHM.
City of Yakima
Public Facilities District Project
State Sales Tax Credit Available
Based on Sales Tax Collected
As Reported by Washington Dept of Revenue
1996
$ 448,440
1,683, 302
9,920,745
$ 12,052,487
$ 1,417,939,647
$ 467,920
Annual Percentage Change
1997
$ 546,159
1,962,292
10,373,742
$ 12,882,193
$ 1,515,552,118
$ 500,132
6.9%
1998
$ 539,351
1,993,338
10,464,547
$ 12,997,236
$ 1,529,086,588
$ 504,599
0.9%
1999
$ 599,638
1,976,213
10,274,839
$ 12,850,690
$ 1,511,845,882 $ 1,535,775,176
2000
$ 563,359
2,172, 860
10, 317, 870
$ 13,054,089
$ 498,909
-1.1%
2000
Credit by
City
$ 21,872
84,358
400,576
$ 506,806 $ 506,806
1.6%
Average Annual Percentage Change 2.1%
According to the Department of Revenue Local Tax Distribution Report, Local Sales and Use Taxes are distributed as
follows: "15% is given to the county for transactions occurring within cities. The remaining 85 % is distributed to the cities
as their share of the basic or optional tax. Counties receive the full amount attributable to sales in the unincorporated areas,
plus the 15 % share for sales in cities."
Summary: Total sales tax for all three cities combined has hovered around $12.9 million for the past 4 years. However, when
comparing 2000 to 1996, sales tax has demonstrated an average annual percentage increase of 2.1% for that period. A
growth assumption of 1% was used to calculate match requirements, which should be attainable over the extended period of
25 years. The debt issue is planned to maximize project funds, but keep the annual debt service under $480,000.
cje 06/14/2001 public facilities district
CITY OF YAKIMA, WASHINGTON
AN ORDINANCE of the City of Yakima, Washington, approving an
interlocal agreement with the Cities of Selah and Union Gap to form the
Yakima Regional Public Facilities District pursuant to RCW 35.57.020.
PASSED ON JUNE 19th , 2001
Prepared by:
PRESTON GATES & ELLIS LLP
5000 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7078
Section 1.
Section 2.
Section 3.
Section 4
Section 5.
Section 6.
Appendix A
TABLE OF CONTENTS
Page
Formation of the District 2
Charter 3
Board of Directors 3
General Authorization 3
Prior Acts 4
Effective Date 4
Interlocal Agreement
-1-
P \SC\SC09L
01/06/14
ORDINANCE NO. 2001- 28
AN ORDINANCE of the City of Yakima, Washington, approving an
interlocal agreement with the Cities of Selah and Union Gap to form the
Yakima Public Facilities District pursuant to RCW 35.57.020.
WHEREAS, the City of Yakima ("Yakima") currently owns and operates the Yakima
Convention Center (the "Convention Center"), providing first-class meeting, ballroom and other
event facilities;
WHEREAS, the City of Yakima, together with the Cities of Selah and Union Gap, desire
to expand the Convention Center to stimulate economic development by creating jobs; realize
additional sales tax and lodging tax revenues; attract commercial business and tourism; and
provide facilities for convention, special events and community events including public meetings
and performing arts events for, among others in the region, the residents of Yakima, at an
estimated cost of over $10,000,000 (the "Project");
WHEREAS, Chap. 35.57 RCW (the "Act") authorizes one or more cities located in a
county with a population of less than one million to create a public facilities district (a "PFD") to
acquire, remodel, finance and operate one or more "regional centers";
WHEREAS, "regional centers" are defined to include, among other things, existing
convention centers to be improved at a cost of at least $10,000,000 including debt service;
WHEREAS, PFDs have access to several new revenue sources, including a state sales
and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the retail sales and use
taxes generated within the PFD boundaries to the PFD;
WHEREAS, in order to complete the Project and access the Sales Tax, the City wishes to
join with the Cities of Selah and Union Gap to create a PFD solely for the purpose of acquiring
(by purchase, lease or otherwise), financing, improving and operating regional centers, as
defined in the Act (the "District");
WHEREAS, the Act requires a local match in order for the District to impose the Sales
Tax and, accordingly, Yakima will transfer a leasehold interest in the Convention Center to the
District in satisfaction of this match requirement (the value of the Convention Center and the
underlying site is approximately $11,800,000);
WHEREAS, the value of the leasehold interest is estimated to be significantly more than
33% of the net present value projected Sales Taxes of the District (approximately $2.4 million),
thereby satisfying the match requirement;
WHEREAS, Yakima intends to issue bonds and apply net bond proceeds to finance the
Project, in consideration for the District's pledge of all Sales Tax receipts to Yakima to pay debt
service on the bonds and other regional center costs;
WHEREAS, Yakima also intends to contribute lodging taxes to the Distract, in an
amount, if any, determined annually by the Yakima City Council, to the operation of the
Convention Center, and will contribute revenues to the Distnct in the event of a Sales Tax
shortfall;
WHEREAS, the City is authonzed and empowered to enter into the Interlocal Agreement
pursuant to Chap. 39.34 RCW and to form the District pursuant to Chap. 35.57 RCW;
NOW, THEREFORE, BE IT ORDAINED BY the City of Yakima, Washington, as
follows:
Section 1. Approval of Interlocal Agreement: Formation of the District.
Pursuant to RCW 35.57.010(1), the City hereby approves the interlocal agreement
attached as Appendix A hereto (the "Interlocal Agreement"), creating a public facilities district
in cooperation with the Cities of Selah and Union Gap.
As set forth in the Interlocal Agreement, the name of the District shall be the Yakima
Regional Public Facilities District. The District shall be a municipal corporation, an independent
taxing authority and a taxing distnct. The District shall be coextensive with the boundaries of
Yakima, and the Cities of Selah and Union Gap, as the same may be amended from time to time.
The District shall acquire (by purchase, lease or otherwise), construct, own, remodel, maintain,
equip, reequip, repair, finance, and/or operate one or more regional centers, as defined in
RCW 35.57.020, including the Convention Center, the Project and related parking facilities.
Except as limited by State law and the Interlocal Agreement, the District shall have the
powers, purposes and form set forth in its charter (the "Charter"). As set forth the Interlocal
and the Charter, in consideration for the mutual.promises set forth therein, the District's power to
impose sales and use taxes authorized under RCW 82.14.048 is subject to the City's, the City of
Selah's and the City of Union Gap's approval of any such levy prior to placement on the ballot.
In addition, also in consideration for the mutual promises set forth in Appendix A, the District's
annual budget, its power to impose admission charges, parking charges, admissions taxes and
-2-
P\SC\SC09L 01/06/14
parking taxes, and any gambling activity or public display of artwork under authority of the
District is subject to the approval of the Yakima City Council.
Section 2. Charter. The Charter is hereby approved in the form attached as Exhibit A
to the Interlocal Agreement. The Charter shall be amended only with the approval of Yakima,
and the Cities of Selah and Union Gap. The District shall commence its existence effective upon
execution of the Interlocal Agreement by Yakima, and the Cities of Selah and Union Gap.
Section 3. Board of Directors. A board consisting of seven directors (the "Board"),
as initially identified in the Charter, is hereby approved to govern the affairs of the District. The
directors shall be appointed and serve their terms as provided in the Charter. All corporate
powers of the District shall be exercised by or under the authority of the Board; and the business,
property and affairs of the District shall be managed under the direction of the Board, except as
may be otherwise provided for by law or in the Interlocal Agreement or in the Charter.
Section 4. Authorization of Documents. The City Manager is hereby authorized to
execute the Interlocal Agreement. The City Manager and his designee, and each of the other
appropriate officers, agents and representatives of Yakima are each hereby authorized and
directed to take such steps, to do such other acts and things, and to execute such letters,
certificates, agreements, papers, financing statements, assignments or instruments as in their
judgment may be necessary, appropriate or desirable in order to carry out the terms and
provisions of, and complete the transactions contemplated by this ordinance.
Section 5. Prior Acts. All acts taken pursuant to the authority of this ordinance but
prior to its effective date are hereby ratified and confirmed.
-3-
P•\SC\SC09L 01/06/14
Section 6. Effective Date. This ordinance shall be effective 30 days after its passage,
approval and publication as provided by law.
PASSED by the Council of the City of Yakima at a regular meeting thereof, held this
19th day of June, 2001.
CITY OF YAKIMA, WASHINGTON
/S/ MARY PLACE
ATTEST
/S/ KAREN S. ROBERTS, CMC
City Clerk
APPROVED AS TO FORM:
/S/ RAYMOND L. PAOLELLA
City Attorney
First Reading:
Publication Date: 6-22 -2001
Effective Date: 7-22-2001
_,.._ is ,•� 'c be a true, and correct copy of the
flied in nay office.
CI'YCLEgK
-4-
Mary Place
Mayor
P lSC\SCO9L 01/06/14
APPENDIX A
INTERLOCAL AGREEMENT
A-1
P:1SC1SC09L 01/06/14
INTERLOCAL COOPERATION AGREEMENT
TO FORM A PUBLIC FACILITIES DISTRICT
By and Among
THE CITY OF YAKIMA
THE CITY OF SELAH
and
THE CITY OF UNION GAP
[DRAFTER'S NOTE:
The date on which this agreement was executed by all three parties was June 25, 2001.]
This INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC
FACILITIES DISTRICT (the "Agreement") is executed by and among the CITY OF YAKIMA,
WASHINGTON ("Yakima"), the CITY OF SELAH, WASHINGTON ("Selah") and the CITY
OF UNION GAP, WASHINGTON ("Union Gap") (Yakima, Selah and Union Gap are
collectively referred to herein as "the Parties") for the purposes of establishing a multi -city
public facilities district to assist in the financing, development and operation of, regional
convention center facilities; stimulating economic development by creating jobs, realizing
additional sales tax and lodging tax revenues and attracting commercial business and tourism;
and providing facilities for community events including public meetings and performing arts
events. The Parties enter into this Agreement effective as of the date of execution by all three
Parties, for the purposes and under the terms contained herein.
WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the
"Convention Center"), providing first-class meeting, ballroom and other event facilities;
WHEREAS, the Parties desire to expand the Convention Center, at an estimated cost of
over $10,000,000 (the "Project");
WHEREAS, Chap. 35.57 RCW (the "Act") authorizes one or more contiguous cities
located in a county with a population of less than one million to create a public facilities district
(a "PFD") to acquire, remodel, finance, and operate one or more "regional centers";
WHEREAS, "regional centers" are defined to include, among other things, existing
convention centers to be improved at a cost of at least ten million dollars including debt service;
WHEREAS, PFDs have access to several new revenue sources, including a -state sales
and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the retail sales and use
taxes generated within the PFD boundaries to the PFD;
WHEREAS, in order to complete the Project and access the Sales Tax, the Parties wish to
create a PFD solely for the purpose of acquiring, constructing, owning, remodeling, maintaining,
equipping, re-equipping, repairing, financing and operating regional centers, as defined in the
Act (the "District");
WHEREAS, the Act requires a 33% local match of the net present value of the Sales Tax
to be collected by the District in order for the District to impose the Sales Tax and, accordingly,
Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the
District in satisfaction of this match requirement (the value of the Convention Center and the
underlying site is approximately $11,800,000);
WHEREAS, the value of leasehold interest is estimated to significantly exceed the net
present value of 33% of the projected Sales Taxes of the District (approximately $2.4 million);
WHEREAS, pursuant to the Design, Development, Construction, Financing and
Operating Agreement between Yakima and the District, the District will sublease the Convention
Center and the underlying site to Yakima, and Yakima will design, develop, construct, operate
and maintain the property in return for certain rights, including the right to retain all revenues of
the Convention Center;
WHEREAS, subject to certain limitations set forth herein, Yakima intends to issue bonds
and apply bond proceeds to finance the Project, in consideration for the District's pledge of Sales
Tax receipts to Yakima to pay debt service on the bonds and other Regional Center costs;
WHEREAS, the Parties are authorized and empowered to enter into this Agreement
pursuant to Chap. 39.34 RCW;
NOW THEREFORE, in consideration of mutual promises and covenants herein, the
Parties agree:
Section 1. Definitions. Except for the terms defined in this section, and unless the
context indicates otherwise, for the purposes of this Agreement and the Related Documents, the
Parties shall use the definitions found in Chap. 35.57 RCW as they may be amended.
Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima.
Additional Revenue means all revenue received by the District (or by Yakima on behalf
of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking
Charges, Parking Taxes, Voted Sales Taxes and any other revenue received by the District and
derived from the District's operation of the facilities, including investment income; but excluding
Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) of the
Development Agreement (including investment earning thereon).
Administrative Costs means the costs of the District incurred in administering the District
and the Development Agreement. Administrative Costs shall be specified in the District's
annual budget submitted to Yakima for approval and to Selah and Union Gap for review and
comment.
Admissions Charge means any charge imposed by the District (or by Yakima on behalf
of the District) for admission to its facilities, including charges for season tickets or
subscriptions; cover charges, or charges for use of seats and tables, and other similar
accommodations; charges for food and refreshment if free entertainment, recreation, or
amusement is provided; charges for rental or use of- equipment or facilities for purposes of
recreation or amusement; and automobile parking charges if the amount of the charge is
determined according to the number of passengers in the automobile.
Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be
paid by any person who pays an Admissions Charge.
Agreement means this interlocal agreement.
Bond Counsel means a firm of lawyers nationally recognized and accepted as bond
counsel and so employed by Yakima.
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Bond Ordinance means the ordinance of the Yakima Council authorizing the issuance of
the Bonds and any amendments and supplements.
Bonds means the bonds, notes or other evidences of indebtedness issued pursuant to and
under authority of the Bond Ordinance to provide for the financing or refinancing of the Project.
Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total
interest cost on the Bonds exceeds 5.55%.
Board means the governing body vested with the management of the affairs of the
District.
Bylaws means the rules adopted for the regulation or management of the affairs of the
District approved by this Agreement and all subsequent amendments.
Charter means the articles of organization of the District approved by this Agreement
and all subsequent amendments.
Code means the Internal Revenue Code of 1986, as amended, and all applicable
regulations and rulings thereunder.
Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project.
Costs of the Project means all capital costs that are paid or incurred by Yakima in
connection with the design, development and construction of the Project, including, but not
limited to all or a portion of the interest on Bonds during the period of construction of such
improvements, and for a period of time thereafter; amounts required to meet any reserve
requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for
expenses, including planning, permitting and design expenses, incident and properly allocable to
the Project; and all other items of expense incident and properly allocable to designing,
developing and constructing the Project, financing the Project and placing the Project in
operation.
Debt Service means the amount to be paid on the next succeeding Payment Date to pay
the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due
on such Payment Date.
Debt Service Fund means the special fund(s) or account(s) established by Yakima
pursuant to the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the
principal of, premium, if any, and interest on Bonds and/or any Additional Bonds.
Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any,
established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which
secures the Bonds and/or any Additional Bonds.
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Development Agreement means the Design, Development, Construction, Financing and
Operating Agreement by and between Yakima and the District.
District means the public facilities district created pursuant to Section 1.
Favorable Opinion of Bond Counsel means, with respect to any action, a written legal
opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under
the laws of the State and under applicable ordinances of the Yakima Council, including the Bond
Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest
on a Bond or any other bonds of Yakima from gross income for federal income tax purposes
under the Code (subject to the inclusion of any exceptions contained in the opinion delivered
upon original issuance of such bond).
Lease Agreement means the Lease Agreement by and between Yakima and the District
providing for the transfer of a leasehold interest in the Convention Center and the underlying site
to the District in satisfaction of the match required under RCW 82.14.390.
Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW.
Net Proceeds, when used with reference to the Bonds, means the principal amount of
such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less
the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve
Fund.
Operating Manual means the Operating Standards Manual for the expanded Convention
Center.
Outstanding, when used as of any particular time with reference to Bonds or Additional
Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the
Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds
theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or
Additional Bonds with respect to which all liability of Yakima shall have been discharged in
accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and
(3) Bonds or Additional Bonds for the transfer or exchange of, or in lieu of, or in substitution for
which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima
pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable.
Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110.
Parking Tax means a tax on any vehicle parking charge imposed at any parking facility
that is owned or leased by the District pursuant to RCW 35.57.110.
Payment Date means the dates specified in the Bond Ordinance, or any Supplemental
Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with
respect to the Bonds or any Additional Bonds.
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PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if
any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The
amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall
be maintained in the PFD Revenue Reserve Fund shall be determined at the time that the Bonds
are issued.
Predevelopment Costs means the cost of all planning, legal, architectural, engineering
and other services incurred by Yakima in connection with the Project until the date of issuance of
the Bonds.
Project means the design, construction, and operation of the additions to the Convention
Center, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site
plans, preliminary specifications, and schematic design documents), construction documents
(including all drawings and specifications necessary to completely describe the Project in detail
to a contractor for the purposes of bidding and construction, schedules, plans and specifications,
and the construction contract) and Project budgets (setting forth the construction contract cost,
taxes, all contingencies, fees and allowances).
Related Documents mean the Charter, the Lease Agreement, the Bylaws and the
Development Agreement.
Refunding Bonds means bonds, notes or other evidence of indebtedness of Yakima the
proceeds of which will be used to refund Bonds.
Sales Tax means the nonvoted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of
a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from
the amount of tax otherwise required to be collected or paid over to the State's Department of
Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event,
not more than 25 years after the Sales Tax is first collected.
Sales Tax Revenue means all Sales Taxes received by the District.
Selah means the City of Selah, Washington, a municipal corporation of the State, as now
or hereafter constituted.
State means the State of Washington.
Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council
amending or supplementing the Bond Ordinance, including any ordinance adopted by the
Yakima Council in connection with the issuance of Additional Bonds.
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Union Gap means the City of Union Gap, Washington, a municipal corporation of the
State, as now or hereafter constituted.
Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW
82.14.048 and approved by the voters.
Yakima means the City of Yakima, a municipal corporation of the State, as now or
hereafter constituted.
Yakima City Manager means the City Manager of Yakima, or any successor to the
office.
Yakima Council means the City Council of Yakima, or any successor thereto as provided
by law.
Section 2. Formation of the District. Pursuant to RCW 35.57.010(1), the Parties
hereby create a public facilities district. The District shall be a municipal corporation, an
independent taxing authority and a taxing district, with the powers and limitations as set forth in
its Charter and this Agreement. The District shall be coextensive with the boundaries of the
Parties, as the same may be amended from time to time.
Section 3. Name. The name of the District shall be the Yakima Regional Public
Facilities District.
Section 4. Purpose. The District shall acquire (by purchase, lease or otherwise),
construct, own, remodel, maintain, equip, reequip, repair, finance, and/or operate (either directly
or by contract) one or more Regional Centers, as defined in RCW 35.57.020. Specifically, the
District shall acquire a leasehold interest in the Convention Center, and finance the Project and
related parking facilities in accordance with the Development Agreement.
Section 5. General Powers. Except as limited by State law, this Agreement and the
Charter, the District shall have and may exercise all lawful powers necessary or convenient to
affect the purposes for which the District is organized and to perform authorized corporate
functions.
Section 6. Specific Powers. Without limitation, the District shall have the following
specific powers:
(a) to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain,
equip, reequip, repair, finance, and operate (either directly or by contract) the Convention
Center, the Project, related parking facilities and any other Regional Center, subject to the
limitations set forth in Section 7;
(b) to accept and expend gifts, grants, and donations;
(c) to impose the following charges, fees, and taxes authorized in RCW 35.57.040:
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(i) Admission Charges, Parking Charges and any other fees or charges for the
use of any of its facilities, subject to the limitations set forth in Section 7;
(ii) Admission Taxes, subject to the limitations set forth in Section 7;
(iii) Parking Taxes, subject to the limitations set forth in Section 7;
(iv) Voted Sales Taxes, subject to the limitations set forth in Section 7;
(v) Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390 to
be collected from those persons who are taxable by the State under
Chaps. 82.08 and 82.12 RCW upon the occurrence of any taxable event
within the District;
(d) to use Sales Tax Revenue, Additional Revenue and other receipts for its purposes;
(e) to contract with a public or private entity (including but not limited to Yakima)
for the construction, financing, operation and/or management of the Project, related
parking or for any other Regional Center owned or operated by the District, subject to
Section 18;
(f) to use the supplemental alternative public works contracting procedures set forth
in Chap. 39.10 RCW:
(g) to acquire and transfer real and personal property by lease, sublease, purchase, or
sale, subject to the limitations set forth in Section 7; and
(h) to issue general obligation bonds (subject to statutory debt limits) or revenue
bonds.
Section 7. Limitations on Powers.
(a) No Power of Eminent Domain. The District shall not have the power of eminent
domain.
(b) Additional Regional Centers — Yakima Approval. The District's power to acquire,
construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either
directly or by contract) any Regional Center other than the Convention Center, the
Project and related parking facilities is subject to the approval of Yakima;
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(c) Convention Center Expansion Project — Yakima Approval.
(i)
Yakima Approval of Parking Taxes and . Admission Taxes. In
consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement, the District's power to impose
Admission Taxes and Parking Taxes shall be subject to the approval of the
Yakima Council.
(ii) Yakima Approval of Admission Charges and Parking Charges. In
consideration for Yakima's agreement to apply Lodging Taxes to pay a
portion of the costs of operating and maintaining the Convention Center
and the Project under the terms of the Development Agreement, the
District's power to impose charges and fees, including all Admission
Charges and Parking Charges, shall be subject to the approval of the
Yakima Council.
(iii) Yakima Approval of Gambling Activity and Public Display of Artwork. In
consideration of Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement, and in consideration for Yakima's
agreement to apply Lodging Taxes to pay a portion of the costs of
operating and maintaining the Convention Center and the Project under
the terms of the Development Agreement, the following activities shall be
subject to the approval of the Yakima Council:
a. any gambling activity under the authority of the District at the
Convention Center; and
b. any public display of artwork under the authority of the District at
the Convention Center.
(iv) Annual Budget Approval and Approval of Property Transfers. In
consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement and in consideration of Yakima's
agreement to apply Lodging Taxes to pay a portion of the costs of
operating and maintaining the Convention Center under the terms of the
Development Agreement, the District's annual budget, including
Administrative Costs, shall be subject to the approval of the Yakima
Council. The District shall forward its proposed annual budget to the
Parties (for review and comment by Selah and Union Gap and for
approval by the Yakima Council) no later than September 1 of the year
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prior to the budget year. The District shall also forward any amendment to
its approved annual budget to Yakima for approval and to Selah and
Union Gap for review and comment. In addition, any acquisition or
transfer of real and personal property with a value over $100,000 by lease,
sublease, purchase, or sale by the District shall be subject to approval by
the Yakima Council.
(d) Party Approval of Voted Sales Tax. Prior to placing on the ballot any Voted Sales
Tax, the District shall forward the draft proposed ballot language to each of the Parties.
The District's power to impose the Voted Sales Tax is subject to the approval of each of
the Parties.
(e) No Political Activity. No funds, assets or property of the District shall be used for
any political activity, except as set forth in the Charter.
(f) No Private Inurement. The District shall not operate in a manner that creates any
private inurement, except that the District may compensate employees; reimburse
employees, Board members, volunteers and agents for reasonable expenses; defend and
indemnify Board members or employees acting in good faith on behalf of the District and
within the scope of their duties; hold harmless Board members or employees acting in
good faith on behalf of the District and within the scope of their duties and provide
liability insurance for employees, Board members, volunteers or other agents.
Section 8. Charter. The Charter is hereby approved in the form set forth as
Exhibit A. The Charter shall be deemed issued upon execution of this Agreement by all of the
Parties. The Charter shall be issued in duplicate originals, each bearing the Yakima seal attested
by the City Clerk of Yakima. One original shall be filed with Yakima; duplicate originals shall
be provided to the District and to the City Clerks of Selah and Union Gap. The Charter shall be
amended only with the approval of each of the Parties.
Section 9. Effect of Issuance of Charter. The District shall commence its existence
effective upon issuance of the Charter by Yakima pursuant to Section 8 (that is, upon execution
of this Agreement by all of the Parties). Except as against the State or the Parties in a proceeding
to cancel or revoke the Charter, delivery of a duplicate original Charter shall conclusively
establish that the District has been established in compliance with the procedures of this
Agreement.
Section 10. Board of Directors. A board consisting of seven directors (the "Board"),
as described in the Charter, is hereby established to govern the affairs of the District. The
directors shall be appointed and serve their terms as provided in the Charter. All corporate
powers of the District shall be exercised by or under the authority of the Board; and the business,
property and affairs of the District shall be managed under the direction of the Board, except as
may be otherwise provided for by law, this Agreement, or in the Charter.
Section 11. Board Removal. As set forth in the Charter, if it is determined for any
reason that any or all of the Board members should be removed from office, the City Council for
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the City that originally appointed the Board member to be removed may by ordinance remove
that Board member from office. The term of any Board member removed pursuant to this
section shall expire when the removal ordinance takes effect. Vacancies created under this
section shall be filled in the manner provided in the Charter.
Section 12. Organizational Meeting. Upon issuance of the Charter, the Yakima City
Manager or his designee shall call an organizational meeting of the initial Board within 30 days,
giving at least three days' advance written notice to each Board Member, unless waived in
writing. At such meeting, the Board shall organize itself, may appoint officers, and shall select
the District's place of business.
Section 13. Bylaws.
(a) The initial Bylaws of the District are hereby approved in the form set forth at
Exhibit B. The power to alter, amend, or repeal the Bylaws or adopt new ones shall be
vested in the Board, except as otherwise provided in this Agreement or in the Charter.
The Bylaws shall be consistent with the Charter.
(b) As necessary and appropriate in the discretion of the Yakima Council, the Yakima
Council may amend the Bylaws by ordinance adopted at or after a public meeting held
with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by
the Yakima Council may not be further amended by the District for one year except with
Yakima Council approval.
Section 14. Dissolution.
So long as the Bonds are Outstanding, if the Yakima Council makes an
affirmative finding that dissolution is warranted for any reason, the existence of the
District may be terminated by ordinance of the Yakima Council adopted at or after a
public meeting, held with notice to the City of Selah, the City of Union Gap, the District
and the Board and affording a reasonable opportunity to be heard and present testimony.
At such time as the Bonds are no longer Outstanding, if all three of the Parties make an
affirmative finding that dissolution is warranted for any reason, the existence of the
District may be terminated by ordinance of the City Council of all three Parties adopted
at or after a public meeting, held with notice to the other Parties, the District and the
Board and affording a reasonable opportunity, to be heard and present testimony. In
either event, dissolution shall be accomplished as provided in the Charter, and shall not
take effect until proper provision has been made for disposition of all District assets.
At such time as the Bonds are no longer Outstanding, one or two of the Parties
may withdraw from this Agreement, by ordinance of the City Council of such Party or
Parties, adopted at or after a public meeting, held with notice to the other Parties, the
District and the Board and affording a reasonable opportunity to be heard and present
testimony. In such event, the District shall not be dissolved but shall continue its
existence in all respects, except that the boundaries of the District shall be deemed
revised to exclude the territory of the withdrawing Party(ies).
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Upon satisfactory completion of dissolution proceedings, the City Clerk of
Yakima shall indicate such dissolution by inscription of "Charter cancelled" on the
Charter of the District on file with the City and, when available, on the duplicate originals
of the District, Selah and Union Gap, and the existence of the District shall cease. The
City Clerk of Yakima shall give notice thereof pursuant to State law and to other persons
requested by the District in its dissolution statement.
The Parties hereby acknowledge that the District's assets and property will largely
be derived from Yakima. Specifically, Yakima will transfer a leasehold interest in the
Convention Center and the underlying site to the District, will issue bonds to pay
Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax
Revenue) and Costs of the Project, will construct the Project, and will apply Lodging
Taxes to pay a portion of the cost of operating and maintaining the Convention Center
and the Project. Accordingly, upon dissolution of the District and the winding up of its
affairs, all of the District interest in the Convention Center, the site, the Project, and all
assets or property of the District that are proceeds of the foregoing shall vest in Yakima
unless the Yakima Council or a trustee or court has provided for the transfer of the
District's interest in the Convention Center, the site, the Project, and proceeds of the
District to a qualified entity or entities that will fulfill the purposes for which the District
was chartered.
At such time as the District acquires any other Regional Center, the Parties shall
enter into a plan providing for the disposition of such Regional Center and related assets
upon dissolution of the District. If Selah or Union Gap fail to enter into such a plan, then
upon dissolution of the District and the winding up of its affairs, title to such Regional
Center and all assets or property of the District that are proceeds of the foregoing shall
vest in Yakima unless the Yakima Council or a trustee or court has provided for the
transfer of the such Regional Center and proceeds of the District to a qualified entity or
entities that will fulfill the purposes for which the District was chartered.
Section 15. Indemnification. The City of Yakima shall indemnify and hold harmless
the Cities of Union Gap and Selah from any liability arising from a challenge to the formation of
the Yakima Regional Public Facilities District under RCW 35.57.010.
Section 16. Ancillary Authority. The Yakima City Manager is granted all such power
and authority as reasonably necessary or convenient to enable him or her to administer this
Agreement efficiently and to perform the duties imposed in this Agreement and the Related
Documents.
Section 17. Term of Agreement. This Agreement shall automatically terminate on the
date on which District is dissolved pursuant to Section 14. Termination shall not relieve any
Party of responsibility for meeting financial and other obligations outstanding at the time of
termination.
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Section 18. Transfer of the Convention Center to the District. Yakima hereby agrees
to enter into the Lease Agreement. The Parties agree that the transfer of a leasehold interest in
the Convention Center and the underlying site to the District pursuant to the Lease Agreement
shall constitute a donation from the City to the District to be used for the construction,
improvement or rehabilitation of a Regional Center as defined in RCW 82.14.390. The value of
the Convention Center and the underlying site is approximately $11,800,000. The Parties agree
that the value of the leasehold interest in the Convention Center and the underlying site to be
transferred pursuant to the Lease Agreement is substantially more than the net present value of
33% of total Sales Taxes to be received by the District (approximately $2.4 million).
Section 19. Management Agreements. Any management contract entered into by the
District or Yakima for the operation or management of the Convention Center and the Project
shall be consistent with the Development Agreement. Prior to executing any management
contract (with the exception of the Development Agreement), the District or Yakima, as
applicable, shall have received a Favorable Opinion of Bond Counsel regarding the terms of the
management contract.
Section 20. Limitation of Liability. The District is a separate legal entity. All
liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and
properties of the District, and no creditor or other person shall have any right of action against or
recourse to the Parties, their assets, credit, or services, on account of any debts, obligations,
liabilities or acts or omissions of the District.
Section 21. Non -Waiver. No waiver by any Party of any term or condition of this
Agreement shall be deemed or construed to constitute a waiver of any other term or condition or
of any subsequent breach whether of the same or of a different provision of this Agreement.
Section 22. No Third -Party Beneficiary. This Agreement is entered into for the
benefit of the residents of the Parties to facilitate the completion of the Project, stimulate
economic development by creating jobs, realize additional sales and lodging tax revenues, attract
commercial business and tourism, and provide facilities for convention, special events,
community events including public meetings and performing arts events. This Agreement is not
entered into with the intent that it shall benefit any party not signing this Agreement, and no
other person or entity shall be entitled to be treated as a third -party beneficiary of this
Agreement; provided that any owner of the Bonds or Additional Bonds shall be a third -party
beneficiary for the purposes of enforcing payments to be made by the District to Yakima in
amounts sufficient for Yakima to pay Debt Service.
Section 23. The City of Yakima intends to contribute lodging taxes to pay a portion of
the cost of operating and maintaining the Convention Center, in an amount, if any, determined
annually by the Yakima City Council. As between the Cities, as set forth in the Development
Agreement, the City of Yakima will also be solely responsible to contribute revenues in the case
of a Sales Tax shortfall. The Cities of Union Gap and Selah shall have no financial
responsibility to the District in the event of a Sales Tax shortfall.
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Section 27. Counterparts. This Agreement may be executed in two or more
counterparts, and each such counterpart shall be deemed to be an original instrument. All such
counterparts together will constitute one and the same Agreement.
IN WITNESS HEREOF, this Agreement is executed by the City of Yakima, the City of
Selah and the City of Union Gap.
Contract No. 2001-70
Ordinance No. 2001-28
THE CITY OF YAKIMA, WASHINGTON
Richard A. Zais, Jr.
City Manager
THE CITY OF SELAH;WASHIiGTON
By:
Robert Jones
Mayor
THE CITY OF UNION GAP,
WASHINGTON
rey C. Reeves,
Mayor
Certified to be a true and correct copy of the
Qrigiwd filed in my office. 7-7—d(
1' CITY CLERK
.
f�'� .► !I,C.�.. Deputy
By 2
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111 CITY OF UNION GAP, WASHINGTON
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ORDINANCE NO. 2298
AN ORDINANCE of the City of Union Gap, Washington, approving an
interlocal agreement with the Cities of Yakima and Selah to form the
Yakima Public Facilities District pursuant to RCW 35.57.020.
WHEREAS, Chap. 35.57 RCW (the "Act") authorizes one or more cities located in a
county with a population of less than one million to create a public facilities district (a "PFD") to
acquire, remodel, finance and operate one or more "regional centers";
WHEREAS, the City wishes to join with the Cities of Yakima and Selah to create a PFD
solely for the purpose of acquiring (by purchase, lease or otherwise), financing, improving and
operating regional centers, as defined in the Act (the "District");
NOW, THEREFORE, BE IT ORDAINED BY the City of Union Gap, Washington, as
follows:
Section 1. Approval of Interlocal Agreement; Formation of the District.
Pursuant to RCW 35.57.010(1), the City hereby approves the interlocal agreement
attached as Appendix A hereto (the "Interlocal Agreement"), creating a public facilities district
in cooperation with Yakima and the City of Selah.
Section 2. Charter. The Charter is hereby approved in the form attached as Exhibit A
to the Interlocal Agreement. The Charter shall be amended only with the approval of the City,
Yakima and the City of Selah. The District shall commence its , existence effective upon
execution of the Interlocal Agreement by the City, Yakima and the City of Selah.
Section 3. Board of Directors. A board consisting of seven directors (the `Board"),
as initially identified in the Charter, is hereby approved to govern the affairs of the District. The
directors shall be appointed and serve their terms as provided in the Charter.
Section 4. Authorization of Documents. The Mayor is hereby authorized to execute
the Interlocal Agreement. The Mayor and his designee, and each of the other appropriate
City of Union Gap, Washington
Ordinance No. 2298
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officers, agents and representatives of the City are each hereby authorized and directed to take
such steps, as in their judgment may be necessary, appropriate or desirable in order to carry out
the terms and provisions of, and complete the transactions contemplated by this ordinance.
Section 5. Prior Acts. All acts taken pursuant to the authority of this ordinance but
prior to its effective date are hereby ratified and confirmed.
Section 6. Effective Date. This ordinance shall be effective 5 days after its passage,
approval and publication as provided by law.
PASSED by the Council of the City of Union Gap this 11th day of June, 2001.
ATTEST
Ka • een M. Holscher
City Clerk
APPROVED AS TO FORM:
City Atto
e
Aubr *l' Reeves, Jr.
Mayor
City of Union Gap, Washington
Ordinance No. 2298
Page 2 of 2
APPENDIX A
INTERLOCAL AGREEMENT
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INTERLOCAL COOPERATION AGREEMENT
TO FORM A PUBLIC FACILITIES DISTRICT
By and Among
THE CITY OF YAKIMA
THE CITY OF SELAH
and
THE CITY OF UNION GAP
[DRAFTER'S NOTE:
The date on which this agreement was executed by all three parties was June 25, 2001.]
This INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC
FACILITIES DISTRICT (the "Agreement") is executed by and among the CITY OF YAKIMA,
WASHINGTON ("Yakima"), the CITY OF SELAH, WASHINGTON ("Selah") and the CITY
OF UNION GAP, WASHINGTON ("Union Gap") (Yakima, Selah and Union Gap are
collectively referred to herein as "the Parties") for the purposes of establishing a multi -city
public facilities district to assist in the financing, development and operation of, regional
convention center facilities; stimulating economic development by creating jobs, realizing
additional sales tax and lodging tax revenues and attracting commercial business and tourism;
and providing facilities for community events including public meetings and performing arts
events. The Parties enter into this Agreement effective as of the date of execution by all three
Parties, for the purposes and under the terms contained herein.
WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the
"Convention Center"), providing first-class meeting, ballroom and other event facilities;
WHEREAS, the Parties desire to expand the Convention Center, at an estimated cost of
over $10,000,000 (the "Project");
WHEREAS, Chap. 35.57 RCW (the "Act") authorizes one or more contiguous cities
located in a county with a population of less than one million to create a public facilities district
(a "PFD") to acquire, remodel, finance, and operate one or more "regional centers";
WHEREAS, "regional centers" are defined to include, among other things, existing
convention centers to be improved at a cost of at least ten million dollars including debt service;
WHEREAS, PFDs have access to several new revenue sources, including a state sales
and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the retail sales and use
taxes generated within the PFD boundaries to the PFD;
WHEREAS, in order to complete the Project and access the Sales Tax, the Parties wish to
create a PFD solely for the purpose of acquiring, constructing, owning, remodeling, maintaining,
equipping, re-equipping, repairing, financing and operating regional centers, as defined in the
Act (the "District");
WHEREAS, the Act requires a 33% local match of the net present value of the Sales Tax
to be collected by the District in order for the District to impose the Sales Tax and, accordingly,
Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the
District in satisfaction of this match requirement (the value of the Convention Center and the
underlying site is approximately $11,800,000);
WHEREAS, the value of leasehold interest is estimated to significantly exceed the net
present value of 33% of the projected Sales Taxes of the District (approximately $2.4 million);
WHEREAS, pursuant to the Design, Development, Construction, Financing and
Operating Agreement between Yakima and the District, the District will sublease the Convention
Center and the underlying site to Yakima, and Yakima will design, develop, construct, operate
and maintain the property in return for certain rights, including the right to retain all revenues of
the Convention Center;
WHEREAS, subject to certain limitations set forth herein, Yakima intends to issue bonds
and apply bond proceeds to finance the Project, in consideration for the District's pledge of Sales
Tax receipts to Yakima to pay debt service on the bonds and other Regional Center costs;
WHEREAS, the Parties are authorized and empowered to enter into this Agreement
pursuant to Chap. 39.34 RCW;
NOW THEREFORE, in consideration of mutual promises and covenants herein, the
Parties agree:
Section 1. Definitions. Except for the terms defined in this section, and unless the
context indicates otherwise, for the purposes of this Agreement and the Related Documents, the
Parties shall use the definitions found in Chap. 35.57 RCW as they may be amended.
Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima.
Additional Revenue means all revenue received by the District (or by Yakima on behalf
of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking
Charges, Parking Taxes, Voted Sales Taxes and any other revenue received by the District and
derived from the District's operation of the facilities, including investment income; but excluding
Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) of the
Development Agreement (including investment earning thereon).
Administrative Costs means the costs of the District incurred in administering the District
and the Development Agreement. Administrative Costs shall be specified in the District's
annual budget submitted to Yakima for approval and to Selah and Union Gap for review and
comment.
Admissions Charge means any charge imposed by the District (or by Yakima on behalf
of the District) for admission to its facilities, including charges for season tickets or
subscriptions; cover charges, or charges for use of seats and tables, and other similar
accommodations; charges for food and refreshment if free entertainment, recreation, or
amusement is provided; charges for rental or use of- equipment or facilities for purposes of
recreation or amusement; and automobile parking charges if the amount of the charge is
determined according to the number of passengers in the automobile.
Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be
paid by any person who pays an Admissions Charge.
Agreement means this interlocal agreement.
Bond Counsel means a firm of lawyers nationally recognized and accepted as bond
counsel and so employed by Yakima.
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Bond Ordinance means the ordinance of the Yakima Council authorizing the issuance of
the Bonds and any amendments and supplements.
Bonds means the bonds, notes or other evidences of indebtedness issued pursuant to and
under authority of the Bond Ordinance to provide for the financing or refinancing of the Project.
Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total
interest cost on the Bonds exceeds 5.55%.
Board means the ' governing body vested with the management of the affairs of the
District.
Bylaws means the rules adopted for the regulation or management of the affairs of the
District approved by this Agreement and all subsequent amendments.
Charter means the articles of organization of the District approved by this Agreement
and all subsequent amendments.
Code means the Internal Revenue Code of 1986, as amended, and all applicable
regulations and rulings thereunder.
Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project.
Costs of the Project means all capital costs that are paid or incurred by Yakima in
connection with the design, development and construction of the Project, including, but not
limited to all or a portion of the interest on Bonds during the period of construction of such
improvements, and for a period of time thereafter; amounts required to meet any reserve
requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for
expenses, including planning, permitting and design expenses, incident and properly allocable to
the Project; and all other items of expense incident and properly allocable to designing,
developing and constructing the Project, financing the Project and placing the Project in
operation.
Debt Service means the amount to be paid on the next succeeding Payment Date to pay
the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due
on such Payment Date.
Debt Service Fund means the special fund(s) or account(s) established by Yakima
pursuant to the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the
principal of, premium, if any, and interest on Bonds and/or any Additional Bonds.
Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any,
established by Yakima under the $ond Ordinance or Supplemental Bond Ordinance, which
secures the Bonds and/or any Additional Bonds.
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Development Agreement means the Design, Development, Construction, Financing and
Operating Agreement by and between Yakima and the District.
District means the public facilities district created pursuant to Section 1.
Favorable Opinion of Bond Counsel means, with respect to any action, a written legal
opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under
the laws of the State and under applicable ordinances of the Yakima Council, including the Bond
Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest
on a Bond or any other bonds of Yakima from gross income for federal income tax purposes
under the Code (subject to the inclusion of any exceptions contained in the opinion 'delivered
upon original issuance of such bond).
Lease Agreement means the Lease Agreement by and between Yakima and the District
providing for the transfer of a leasehold interest in the Convention Center and the underlying site
to the District in satisfaction of the match required under RCW 82.14.390.
Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW.
Net Proceeds, when used with reference to the Bonds, means the principal amount of
such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less
the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve
Fund.
Operating Manual means the Operating Standards Manual for the expanded Convention
Center.
Outstanding, when used as of any particular time with reference to Bonds or Additional
Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the
Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds
theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or
Additional Bonds with respect, to which all liability of Yakima shall have been discharged in
accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and
(3) Bonds or Additional Bonds for the transfer or exchange of, or in lieu of, or in substitution for
which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima
pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable.
Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110.
Parking Tax means a tax on any vehicle parking charge imposed at any parking facility
that is owned or leased by the District pursuant to RCW 35.57.110.
Payment Date means the dates specified in the Bond Ordinance, or any Supplemental
Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with
respect to the Bonds or any Additional Bonds.
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PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if
any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The
amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall
be maintained in the PFD Revenue Reserve Fund shall be determined at the time that the Bonds
are issued.
Predevelopment Costs means the cost of all planning, legal, architectural, engineering
and other services incurred by Yakima in connection with the Project until the date of issuance of
the Bonds.
Project means the design, construction, and operation of the additions to the Convention
Center, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, 'and electrical systems of the Project, detailed site
plans, preliminary specifications, and schematic design documents), construction documents
(including all drawings and specifications necessary to completely describe the Project in detail
to a contractor for the purposes of bidding and construction, schedules, plans and specifications,
and the construction contract) and Project budgets (setting forth the construction contract cost,
taxes, all contingencies, fees and allowances).
Related Documents mean the Charter, the Lease Agreement, the Bylaws and the
Development Agreement.
Refunding Bonds means bonds, notes or other evidence of indebtedness of Yakima the
proceeds of which will be used to refund Bonds.
Sales Tax means the nonvoted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of
a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from
the amount of tax otherwise required to be collected or paid over to the State's Department of
Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event,
not more than 25 years after the Sales Tax is first collected.
Sales Tax Revenue means all Sales Taxes received by the District.
Selah means the City of Selah, Washington, a municipal corporation of the State, as now
or hereafter constituted.
State means the State of Washington.
Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council
amending or supplementing the Bond Ordinance, including any ordinance adopted by the
Yakima Council in connection with the issuance of Additional Bonds.
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Union Gap means the City of Union Gap, Washington, a municipal corporation of the
State, as now or hereafter constituted.
Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW
82.14.048 and approved by the voters.
Yakima means the City of Yakima, a municipal corporation of the State, as now or
hereafter constituted.
Yakima City Manager means the City Manager of Yakima, or any successor to the
office.
Yakima Council means the City Council of Yakima, or any successor thereto as provided
by law.
Section 2. Formation of the District. Pursuant to RCW 35.57.010(1), the Parties
hereby create a public facilities district. The District shall be a municipal corporation, an
independent taxing authority and a taxing district, with the powers and limitations as set forth in
its Charter and this Agreement. The District shall be coextensive with the boundaries of the
Parties, as the same may be amended from time to time.
Section 3. Name. The name of the District shall be the Yakima Regional Public
Facilities District.
Section 4. Purpose. The District shall acquire (by purchase, lease or otherwise),
construct, own, remodel, maintain, equip, reequip, repair, finance, and/or operate (either directly
or by contract) one or more Regional Centers, as defined in RCW 35.57.020. Specifically, the
District shall acquire a leasehold interest in the Convention Center, and finance the Project and
related parking facilities in accordance with the Development Agreement.
Section 5. General Powers. Except as limited by State law, this Agreement and the
Charter, the District shall have and may exercise all lawful powers necessary or convenient to
affect the purposes for which the District is organized and to perform authorized corporate
functions.
Section 6. Specific Powers. Without limitation, the District shall have the following
specific powers:
(a) to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain,
equip, reequip, repair, finance, and operate (either directly or by contract) the Convention
Center, the Project, related parking facilities and any other Regional Center, subject to the
limitations set forth in Section 7;
(b) to accept and expend gifts, grants, and donations;
(c) to impose the following charges, fees, and taxes authorized in RCW 35.57.040:
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(i)
Admission Charges, Parking Charges and any other fees or charges for the
use of any of its facilities, subject to the limitations set forth in Section 7;
(ii) Admission Taxes, subject to the limitations set forth in Section 7;
(iii) Parking Taxes, subject to the limitations set forth in Section 7;
(iv) Voted Sales Taxes, subject to the limitations set forth in Section 7;
(v) Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390 to
be collected from those persons who are taxable by the State under
Chaps. 82.08 and 82.12 RCW upon the occurrence of any taxable event
within the District;
(d) to use Sales Tax Revenue, Additional Revenue and other receipts for its purposes;
(e) to contract with a public or private entity (including but not limited to Yakima)
for the construction, financing, operation and/or management of the Project, related
parking or for any other Regional Center owned or operated by the District, subject to
Section 18;
(f) to use the supplemental alternative public works contracting procedures set forth
in Chap. 39.10 RCW:
(g) to acquire and transfer real and personal property by lease, sublease, purchase, or
sale, subject to the limitations set forth in Section 7; and
(h) to issue general obligation bonds (subject to statutory debt limits) or revenue
bonds.
Section 7. Limitations on Powers.
(a) No Power of Eminent Domain. The District shall not have the power of eminent
domain.
(b) Additional Regional Centers — Yakima Approval. The District's power to acquire,
construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either
directly or by contract) any Regional Center other than the Convention Center, the
Project and related parking facilities is subject to the approval of Yakima;
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(c) Convention Center Expansion Project — Yakima Approval
(i)
Yakima Approval of Parking Taxes and Admission Taxes. In
consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement, the District's power to impose
Admission Taxes and Parking Taxes shall be subject to the approval of the
Yakima Council.
(ii) Yakima Approval of Admission Charges and Parking Charges. In
consideration for Yakima's agreement to apply Lodging Taxes to pay a
portion of the costs of operating and maintaining the Convention Center
and the Project under the terms of the Development Agreement, the
District's power to impose charges and fees, including all Admission
Charges and Parking Charges, shall be subject to the approval of the
Yakima Council.
(iii) Yakima Approval of Gambling Activity and Public Display of Artwork In
consideration of Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement, and in consideration for Yakima's
agreement to apply Lodging Taxes to pay a portion of the costs of
operating and maintaining the Convention Center and the Project under
the terms of the Development Agreement, the following activities shall be
subject to the approval of the Yakima Council:
a. any gambling activity under the authority of the District at the
Convention Center; and
b. any public display of artwork under the authority of the District at
the Convention Center.
(iv) Annual Budget Approval and Approval of Property Transfers. In
consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement and in consideration of Yakima's
agreement to apply Lodging Taxes to pay a portion of the costs of
operating and maintaining the Convention Center under the terms of the
Development Agreement, the District's annual budget, including
Administrative Costs, shall be subject to the approval of the Yakima
Council. The District shall forward its proposed annual budget to the
Parties (for review and co.. nent by Selah and Union Gap and for
approval by the Yakima Council) no later than September 1 of the year
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prior to the budget year. The District shall also forward any amendment to
its approved annual budget to Yakima for approval and to Selah and
Union Gap for review and comment. In addition, any acquisition or
transfer of real and personal property with a value over $100,000 by lease,
sublease, purchase, or sale by the District shall be subject to approval by
the Yakima Council.
(d) Party Approval of Voted Sales Tax. Prior to placing on the ballot any Voted Sales
Tax, the District shall forward the draft proposed ballot language toeach of the Parties.
The District's power to impose the Voted Sales Tax is subject to the approval of each of
the Parties. •
(e) No Political Activity. No funds, assets or property of the District shall be used for
any political activity, except as set forth in the Charter.
(f) No Private Inurement. The District shall not operate in a manner that creates, any
private inurement, except that the District may compensate employees; reimburse
employees, Board members, volunteers and agents for reasonable expenses; defend and
indemnify Board members or employees acting in good faith on behalf of the District and
within the scope of their duties; hold harmless Board members or employees acting in
good faith on behalf of the District and within the scope of their duties and provide
liability insurance for employees, Board members, volunteers or other agents.
Section 8. Charter. The Charter is hereby approved in the form set forth as
Exhibit A. The Charter shall be deemed issued upon execution of this Agreement by all of the
Parties. The Charter shall be issued in duplicate originals, each bearing the Yakima seal attested
by the City Clerk of Yakima. One original shall be filed with Yakima; duplicate originals shall
be provided to the District and to the City Clerks of Selah and Union Gap. The Charter shall be
amended only with the approval of each of the Parties.
Section 9. Effect of Issuance of Charter. The District shall commence its existence
effective upon issuance of the Charter by Yakima pursuant to Section 8 (that is, upon execution
of this Agreement by all of the Parties). Except as against the State or the Parties in a proceeding
to cancel or revoke the Charter, delivery of a duplicate original Charter shall conclusively
establish that the District has been established in compliance with the procedures of this
Agreement.
Section 10. Board of Directors. A board consisting of seven directors (the "Board"),
as described in the Charter, is hereby established to govern the affairs of the District. The
directors shall be appointed and serve their terms as provided in the Charter. All corporate
powers of the District shall be exercised by or under the authority of the Board; and the business,
property and affairs of the District shall be managed under the direction of the Board, except as
may be otherwise provided for by law, this Agreement, or in the Charter.
Section 11. Board Removal. As set forth in the Charter, if it is determined for any
reason that any or all of the Board members should be removed from office, the City Council for
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the City that originally appointed the Board member to be removed may by ordinance remove
that Board member from office. The term of any Board member removed pursuant to this
section shall expire when the removal ordinance takes effect. Vacancies created under this
section shall be filled in the manner provided in the Charter.
Section 12. Organizational Meeting. Upon issuance of the Charter, the Yakima City
Manager or his designee shall call an organizational meeting of the initial Board within 30 days,
giving at least three days' advance written notice to each Board Member, unless waived in
writing. At such meeting, the Board shall organize itself, may appoint officers, and shall select
the District's place of business.
Section 13. Bylaws.
(a) The initial Bylaws of the District are hereby approved in the form set forth at
Exhibit B. The power to alter, amend, or repeal the Bylaws or adopt new ones shall be
vested in the Board, except as otherwise provided in this Agreement or in the Charter.
The Bylaws shall be consistent with the Charter.
(b) As necessary and appropriate in the discretion of the Yakima Council, the Yakima
Council may amend the Bylaws by ordinance adopted at or after a public meeting held
with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by
the Yakima Council may not be further amended by the District for one year except with
Yakima Council approval.
Section 14. Dissolution.
So long as the Bonds are Outstanding, if the Yakima Council makes an
affirmative finding that dissolution is warranted for any reason, the existence of the
District may be terminated by ordinance of the Yakima Council adopted at or after a
public meeting, held with notice to the City of Selah, the City of Union Gap, the District
and the Board and affording a reasonable opportunity to be heard and present testimony.
At such time as the Bonds are no longer Outstanding, if all three of the Parties make an
affirmative finding that dissolution is warranted for any reason, the existence of the
District may be terminated by ordinance of the City Council of all three Parties adopted
at or after a public meeting, held with notice to the other Parties, the District and the
Board and affording a reasonable opportunity to be heard and present testimony. In
either event, dissolution shall be accomplished as provided in the Charter, and shall not
take effect until proper provision has been made for disposition of all District assets.
At such time as the Bonds are no longer Outstanding, one or two of the Parties
may withdraw from this Agreement, by ordinance of the City Council of such Party or
Parties, adopted at or after a public meeting, held with notice to the other Parties, the
District and the Board and affording a reasonable opportunity to be heard and present
testimony. In such event, the District shall not be dissolved but shall continue its
existence in all respects, except that the boundaries of the District shall be deemed
revised to exclude the territory of the withdrawing Party(ies).
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Upon satisfactory completion of dissolution proceedings, the City Clerk of
Yakima shall indicate such dissolution by inscription of "Charter cancelled" on the
Charter of the District on file with the City and, when available, on the duplicate originals
of the District, Selah and Union Gap, and the existence of the District shall cease. The
City Clerk of Yakima shall give notice thereof pursuant to State law and to other persons
requested by the District in its dissolution statement.
The Parties hereby acknowledge that the District's assets and property will largely
be derived from Yakima. Specifically, Yakima will transfer a leasehold interest in the
Convention Center and the underlying site to the Districi, will issue bonds to pay
Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax
Revenue) and Costs of the Project, will construct the Project, and will apply Lodging
Taxes to pay a portion of the cost of operating and maintaining the Convention Center
and the Project. Accordingly, upon dissolution of the District and the winding up of its
affairs, all of the District interest in the Convention Center, the site, the Project, and all
assets or property of the District that are proceeds of the foregoing shall vest in Yakima
unless the Yakima Council or a trustee or court has provided for the transfer of the
District's interest in the Convention Center, the site, the Project, and proceeds of the
District to a qualified entity or entities that will fulfill the purposes for which the District
was chartered.
At such time as the District acquires any other Regional Center, the Partiesshall
enter into a plan providing for the disposition of such Regional Center and related assets
upon dissolution of the District. If Selah or Union Gap fail to enter into such a plan, then
upon dissolution of the District and the winding up of its affairs, title to such Regional
Center and all assets or property of the District that are proceeds of the foregoing shall
vest in Yakima unless the Yakima Council or a trustee or court has provided for the
transfer of the such Regional Center and proceeds of the District to a qualified entity or
entities that will fulfill the purposes for which the District was chartered.
Section 15. Indemnification. The City of Yakima shall indemnify and hold harmless
the Cities of Union Gap and Selah from any liability arising from a challenge to the formation of
the Yakima Regional Public Facilities District under RCW 35.57.010.
Section 16. Ancillary Authority. The Yakima City Manager is granted all such power
and authority as reasonably necessary or convenient to enable him or her to administer this
Agreement efficiently and to perform the duties imposed in this Agreement and the Related
Documents.
Section 17. Term of Agreement. This Agreement shall automatically terminate on the
date on which District is dissolved pursuant to Section 14. Termination shall not relieve any
Party of responsibility for meeting financial and other obligations outstanding at the time of
termination.
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Section 18. Transfer of the Convention Center to the District. Yakima hereby agrees
to enter into the Lease Agreement. The Parties agree that the transfer of a leasehold interest in
the Convention Center and the underlying site to the District pursuant to the Lease Agreement
shall constitute a donation from the City to the District to be used for the construction,
improvement or rehabilitation of a Regional Center as defined in RCW 82.14.390. The value of
the Convention Center and the underlying site is approximately $11,800,000. The Parties agree
that the value of the leasehold interest in the Convention Center and the underlying site to be
transferred pursuant to the Lease Agreement is substantially more than the net present value of
33% of total Sales Taxes to be received by the District (approximately $2.4 million).
Section 19. Management Agreements. Any management contract entered into by the
District or Yakima for the operation or management of the Convention Center and the Project
shall be consistent with the Development Agreement. Prior to executing any management
contract (with the exception of the Development Agreement), the District or Yakima, as
applicable, shall have received a Favorable Opinion of Bond Counsel regarding the terms of the
management contract.
Section 20. Limitation of Liability. The District is a separate legal entity. All
liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and
properties of the District, and no creditor or other person shall have any right of action against or
recourse to the Parties, their assets, credit, or services, on account of any debts, obligations,
liabilities or acts or omissions of the District.
Section 21. Non -Waiver. No waiver by any Party of any term or condition of this
Agreement shall be deemed or construed to constitute a waiver of any other term or condition or
of any subsequent breach whether of the same or of a different provision of this Agreement.
Section 22. No Third -Party Beneficiary. This Agreement is entered into for the
benefit of the residents of the Parties to facilitate the completion of the Project, stimulate
economic development by creating jobs, realize additional sales and lodging tax revenues, attract
commercial business and tourism, and provide facilities for convention, special events,
community events including public meetings and performing arts events. This Agreement is not
entered into with the intent that it shall benefit any party not signing this Agreement, and no
other person or entity shall be entitled to be treated as a third -party beneficiary .of this
Agreement; provided that any owner of. the Bonds or Additional Bonds shall be a third -party
beneficiary for the purposes of enforcing payments to be made by the District to Yakima in
amounts sufficient for Yakima to pay Debt Service.
Section 23. The City of Yakima intends to contribute lodging taxes to pay a portion of
the cost of operating and maintaining the Convention Center, in an amount, if any, determined
annually by the Yakima City Council. As between the Cities, as set forth in the Development
Agreement, the City of Yakima will also be solely responsible to contribute revenues in the case
of a Sales Tax shortfall. The Cities of Union Gap and Selah shall have no financial
responsibility to the District in the event of a Sales Tax shortfall.
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Section 2$. Counterparts. This Agreement may be executed in two or more
counterparts, and each such counterpart shall be deemed to be an original instrument. All such
counterparts together will constitute one and the same Agreement.
IN WITNESS HEREOF, this Agreement is executed by the City of Yakima, the City of
Selah and the City of Union Gap.
Contract No. 2001-70
Ordinance No. 2001-28
THE CITY OF YAKIMA, WASHINGTON
B -
Richard A. Zais, Jr.
City Manager
THE CITYOF SELAI 0,WASHI TGTON
µ��
By:
Robert Jones
Mayor
THE CITY OF UNION GAP,
WASHINGTON
B
iey C. Reeves,
Mayor
'C&-rUth d to be a true and correct copy of the
critginAl filed in ray office. --a%'-
0 \ .1
/11
Deputy
•
-1 3 -
P1SC1SC091 01/06/18
CITY OF UNION GAP, WASHINGTON
ORDINANCE NO. 2300
AN ORDINANCE of the City of Union Gap, Washington, approving an interlocal
agreement with the Cities of Yakima and Selah to form the Yakima Public Facilities District pursuant
to RCW 35.57.020.
WHEREAS, the City previously adopted Ordinance No. 2298 approving an Interlocal
Agreement to form the Yakima Public Facilities District; and
WHEREAS, the City of Selah made changes to the Interlocal Agreement;
NOW, THEREFORE, BE IT ORDAINED BY the City of Union Gap, Washington, as
follows:
Section 1. Approval of Interlocal Agreement; Formation of the District. Pursuant to
RCW 35.57.010(1), the City hereby approves the Interlocal Agreement attached as Appendix A hereto
(the "Interlocal Agreement"), creating a public facilities district in cooperation with Yakima and the
City of Selah.
Section 2. Authorization of Documents. The Mayor is hereby authorized to execute the
Interlocal Agreement. The Mayor and his designee, and each of the other appropriate officers, agents
and representatives of the City are each hereby authorized and directed to take such steps, as in their
judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of,
and complete the transactions contemplated by this ordinance.
Section 3. Prior Acts. All acts taken pursuant to the authority of this ordinance but prior
to its effective date are hereby ratified and confirmed.
Section 4. Effective Date. This ordinance shall be effective 5 days after its passage,
approval and publication as provided by law.
PASSED by the Council of the City of Union Gap this 25th day of June 2001.
ATTEST:
Kathleen M. Holscher, City Clerk
APPROVED AS TO FORM:
C. Reeves, Jr.,,Mayor
ity At c ney Gregory S ' Ligh
City of Selah
Council Minutes
of
June 12, 2001
Regular Meeting
Selah Council Chambers
115 West Naches Avenue
Selah, WA 98942
A. Call to Order — Mayor Bob Jones called the meeting to order at 4-00pm.
B.
Roll Call
Members Present:
Members Excused:
Staff Present:
C. Pledge of Allegiance
D. Agenda Changes
Doug Howie, Jerry Kobes, Keith Larson, Allen Schmid, Herb Schmidt,
Scott Smeback
Ron Deatherage
Frank Sweet, City Supervisor; Kevin Roy, City Attorney; Jerry Davis,
Fire Chief; Dennis Davison, Community Planner; Joe Henne, Public
Works Director; Jeff Hagler, Parks & Recreation Director
City Supervisor Sweet called Council Members' attention to the packet from the City of Union Gap
containing the ordinance passed by the Union Gap City Council on Monday, June 11, 2001 regarding
participation in the Public Facilities District proposed by the City of Yakima. He noted the packet will
be part of the discussion on Item L — 1.
E. Public Appearances
F. Getting To Know Our Businesses
G. Communications
1. Oral -none
2. Written
a. Profile of General Demographic Characteristics: Census 2000
b. Superior Refuse Invoice for Community Days
Council Members expressed their appreciation for Superior Refuse's contributions to the Selah
community
Selah City Council Minutes 6/12/01
Council Members expressed their appreciation for Superior Refuse's contributions to the Selah
community.
Council Member Schmidt presented the City of Selah with a Certificate of Appreciation from the
Farmers Market. This certificate was presented to recognize the outstanding commitment the City of
Selah has given the Farmers Market -for the past five years.
H. Proclamations/Announcements
1 Hire a Veteran Month - June 2001
Mayor Jones read and signed the Proclamation promoting June 2001 as Hire a Veteran Month. He
noted the importance of the contribution veterans have made to our nation.
I. Consent Agenda
All items listed with an asterisk (*) were considered as part of the Consent Agenda.
* 1. Approval of Minutes May 22, 2001
Council Member Schmid noted his name was spelled incorrectly on page three.
* 2 Approval of Claims & Payroll -Claim checks nos. 36327 — 36422 for a total of
$94,641.88 and Payroll checks nos. 46642 — 46734 for a total of $113,339.91
Council Member Kobes moved and Council Member Schmidt seconded to approve the Consent
Agenda with the correction to the May 22, 2001 minutes With voice vote, the motion carried
unanimously.
J. Public Hearings
K. New Business
L. Old Business
1. Public Facilities District
Mayor Jones noted that last week, the City of Selah received the updated copy of the information
regarding the Public Facilities District. He explained that the Public Facilities District is a proposed
collaboration between Selah, Union Gap and Yakima so that 033% sales tax sent to the state will be
returned and used for Yakima Convention Center upgrades. He reported that the ordinance has been
approved by the City of Union Gap with some changes
Rita Anson, City of Yakima Finance Director, was present to answer questions Councilman Howie
asked about potential liability for the City Ms Anson stated that the City of Yakima assumes full
responsibility if sales tax revenue is not sufficient to cover upgrade costs, noting that Selah and Union
Gap will not be held responsible if a deficit occurs (See Section 15)
Selah City Council Minutes 6/12/01
2
City Attorney Roy also questioned the content of the Interlocal Agreement regarding a potential
shortfall, stating responsibility should be spelled out in the body of the agreement.
Kathleen Holscher, Union Gap City Clerk, explained that the RCW is over-riding authority
According to the RCW, Yakima is the responsible party as they are selling the bonds.
City Attorney Roy also questioned the wording of Section 7d regarding a sales tax increase being
placed on the ballot. He asked for a clarification regarding its "approval." Ms. Anson stated that any
sales tax increase must be agreed upon prior to placement on the ballot.
Council Member Larson asked about the need for an increased sales tax. Ms. Anson stated that a PFD
does not necessarily mean increase in the sales tax rate, however, it does have the power to bring an
increased sales tax proposal to voters should there be a need. She noted the revenue projections in the
Agreement are shown at the existing 2001 tax rate
Council Member Schmid asked about the appointment of board members as described on Page 1 of the
Bylaws. Ms. Anson responded that three of the seven members will be appointed at the discretion of
the Yakima, Union Gap and Selah City Councils accordingly. The Yakima City Council will appoint
the four remaining members, based on nominations from local organizations. Councilman Schinid
expressed concern over the power of Yakima to appoint board members, the potential of Yakima
filling vacancies created by the cities of Selah or Union Gap.
City Attorney Roy asked for clarification of the dissolution policy. If bonds are outstanding, only
Yakima can dissolve the PDF. If there are no outstanding bonds, all three must agree. According to
Rita, this is to protect the City of Yakima as they are on the hook for bond repayment.
City Attorney Roy also questioned the discrepancy in effective dates The City of Union Gap has an
effective date of five days from passage, whereas Selah has thirty days from passage. This difference
is due variances in community codes.
Council Member Schmid moved to approve the Interlocal Agreement with the City of Yakima and the
City of Union Gap to form a Public Facilities District pursuant to RCW 35.57.020 He further moved
the Mayor be authorized to sign the agreement as adopted by the City of Union Gap with the correction
of the title of Section 24. Council Member Howie seconded. It was further clarified that the intention
of the motion is to include the Bylaws and Charter provided by the City of Yakima. Roll' was taken.
Councilman Smeback — yes; Councilman Schmid — yes; Councilman Schmidt — yes; Councilman
Larson — yes, Councilman Kobes — yes; Councilman Howie — yes. Motion carried unanimously.
M. Resolutions
1. Resolution Authorizing the Mayor to Sign the Professional Services Contract for Selah
Hearing Examiner with Philip A. Lamb
City Supervisor Frank Sweet reminded Council Members that an ordinance moving to a hearing
examiner was adopted last fall, pnor to adopting the Moratorium on the Acceptance and/or Approval
of Subdivisions, Rezones, and Outside Utility Agreements He noted that the moratonum has now
been lifted, so the Hearing Examiner can be put into action City Attorney Roy stated that he
Selah City Council Minutes 6/12/01
3
anticipates ordinances regarding specific items will be brought for council's approval and/or
amendment in the near future
Council Member Schmid asked for a clarification regarding billing practices as outlined in items 7 and
8 on page 3 of the agreement. Phil Lamb stated that he would submit an itemized statement by the 10th
of the month for work completed as of the end of the prior month.
Council Member Kobes questioned the reimbursement of training costs incurred by Mr. Lamb.
Currently such costs are split 50-50 between the County and the City of Yakima. Mr Lamb stated that
he anticipates he will pro rate a portion of his costs to the City of Selah at the time costs are incurred.
Council Member Kobes asked for a clarification of the role Mr. Lamb will have. City Supervisor
Sweet stated the Planning Commission will no longer be doing subdivisions, plats, and public
hearings, etc. These will be done by and with Mr. Lamb. The Planning Commission will be involved
in long range planning and other issues The City Council still has the option of holding public
hearings if it so chooses and will have access to minutes and materials of Hearing Examiner public
hearings just as it did with the Planning Commission.
Council Member Schmid commented that, as a previous member of the Planning Commission, he
believes this decision will be an excellent move, particularly considering the future of growth
management, etc. Mayor Jones agreed, commenting that the professional/legal expertise of Mr. Lamb
is needed to remove the emotional responses sometimes made with the Planning Commission.
Mr. Lamb clarified that the Planning Commission will continue to serve the City, working on
comprehensive plans, ordinances, long-range planning, etc.
Council Member Schmidt moved and Council Member Smeback seconded to approve the Resolution
authorizing the Mayor To Sign the Professional Services Contract for Selah Hearing Examiner with
Mr. Philip A. Lamb. Roll was taken. Councilman Smeback — yes; Councilman Schmid — yes;
Councilman Schmidt — yes; Councilman Larson — yes; Councilman Kobes — yes; Councilman Howie —
yes Motion carried unanimously.
N. Ordinances
O. Communications
1. Oral
Laura Duncan of 113 East Fremont addressed the City Council concerning the safety on East Fremont.
Ms. Duncan stated there is not striping on the street nor are there any sidewalks. Fire trucks and
construction trucks use that street frequently throughout the day, causing a safety hazard for
pedestrians and other drivers. Public Works Director Joe Henne stated that East Fremont was part of
the six-year street plan, but nothing has been done Mayor Jones told Ms. Duncan that the City tries to
rate projects according to need, and the Council will do the best that it can.
Further discussion on this issue involved the speed limit and possibly encouraging off street parking.
City Supervisor Sweet reminded the Council that with property tax cuts the City has had reduced
revenue.
Selah City Council Minutes 6/12/01
4
Council Member Schmid asked that Public Works look at the intersection on 1S` and Fremont. He has
noted some serious crumbling on the side of the road.
P. Reports/Announcements
1 Mayor
2 Building Code Inspector introduced by City Supervisor Sweet
3 Council Members
4. Boards
5 Departmental
a. Selah Library Board Minutes May 15, 2001 -Unapproved
b. Selah Police Department Monthly Report -April 2001
Mayor Jones stated that tomorrow City crews will be putting up the flags for Flag Day to remain flying
through the 4th of July. He informed the Council that the cleanup in downtown Selah was being done
by community service workers. Mayor Jones also announced the resignation of Jim Thomas from the
Planning Commission and that he is looking for a replacement. He asked that Council Members who
know of any qualified people, to please let him know.
Frank Sweet, City Supervisor, introduced John Gawlik, the new Building Inspector/Code Enforcement
Officer, who came on board as of June 1, 2001. He will be in Union Gap this week learning how they
operate. City Attorney Kevin Roy noted that John Gawlik also serves as security officer for Selah
Municipal Court and has done a fine job in that capacity.
Fire Chief Jerry Davis reported New EMS Director will be starting on July 1.
Public Works Director Joe Henne reported that spring cleanup was done by a group from the
Department of Corrections. He stated the Goodlander LID project has started, but is moving
somewhat slowly because some of the residents who were not in favor of the project have caused a few
delays. Councilman Schmid asked about the chip seal on Fremont, suggesting the City repair it before
any more oil is picked up. Mr. Henne said be believes it has cured now
Community Planner Dennis Davison reported that since the moratorium has been lifted, Chuck
Johnson will be bringing his proposed plat before the City Council again, most likely at the next
meeting. He further reported there will be a study session regarding the sign ordinance. He is
encouraging Mr Lamb and members of the City Council to read the Planning Commission Sign Code
Amendment.
Council Member Kobes asked what the schedule will be regarding this amendment. The Community
Planner stated that there would be a study session prior to the Council meeting. Council Member
Kobes expressed concern that there had not been adequate opportunity for public input. Dennis stated
that a public hearing was held and only two people attended. Copies of the proposed amendment have
been distributed to various sign companies and Chamber of Commerce members. He stated he is not
aware of any opposition to the amendment.
Selah City Council Minutes 6/12/01
5
Jeff Hagler, Parks Director, reported that summer programs have begun at the pool which is now open
for special end -of -the -year functions for the city schools. He further reported there are some problems
with the main boiler, but they are being handled, and it should be up and running shortly A new pool
manager was hired, and she appears to be very good.
Council Member Howie praised the Maintenance Department for their generous donation of logs to the
WIN Program.
Council Member Larson complimented Julie and the new library board, noting it appears that they are
doing a really good job
Council Member Kobes stated the Council should thank Keith and Superior Refuse for their generous
support of Community Days.
Q. Executive Session
(No Executive Session scheduled)
R. Adjournment
Council Member Schmidt moved and Council Member Kobes seconded that the meeting be adjourned.
With voice vote, the motion passed unanimously. The meeting adjourned at 5:15pm.
(Excused)
Ronald Deatherage, Council Member
Gerald Kobes, Council Member
ncil Member
Herb Schmidt,
ATTEST:
ouncil Member
Dale E. Novobielski Tr1asurer
Selah City Council Minutes 6/12/01
Robert L. Jones, Ma
K; it
Member
/-sn
Doug Howie,
-cia)
er
Allen Schm
Council Member
6
INTERLOCAL COOPERATION AGREEMENT
TO FORM A PUBLIC FACILITIES DISTRICT
By and Among
THE CITY OF YAKIMA
THE CITY OF SELAH
and
THE CITY OF UNION GAP
[DRAFTER'S NOTE:
The date on which this agreement was executed by all three parties was June 25, 2001.]
Table Of Contents
Paae
ARTICLE I Name and Seal: Definitions 1
Section 1.1. Name 1
Section 1.2. Seal 1
Section 1.3. Definitions 1
ARTICLE 11 Authority and Limit on Liability 1
Section 2.1. Authority 1
Section 2.2. Limit on Liability 2
Section 2.3. Mandatory Disclaimer 2
ARTICLE III Duration 2
ARTICLE IV Purpose 3
ARTICLE V Powers 4
Section 5.1. Powers 4
Section 5.2. Limitation of Powers 6
ARTICLE VI Board of Directors And Corporate Officers 10
Section 6.1. Powers 10
Section 6.2. Board Composition 10
Section 6.3. Terms of Office 11
Section 6.4. Quorum and Manner of Action 12
Section 6.5. Officers and Division of Duties 13
Section 6.6. Bonding of Corporate Officers 13
Section 6.7. Executive Committee 13
Section 6.8. Removal of Board Members 13
ARTICLE VII Meetings 15
Section 7.1. Board Meetings 15
Section 7.2. Parliamentary Authority 15
Section 7.3. Minutes 16
ARTICLE VIII Procedural Requirements 16
Section 8.1. Board Review and Concurrence 16
Section 8.2. Establishment and Maintenance of Office and Records 17
Section 8.3. Access to Records 17
Section 8.4. Deposit of Public Funds 17
Section 8.5. Reports and Information 18
Section 8.6. Audits and Inspections 18
Section 8.7. Insurance 19
P \SC\SC09Q 01/07/03
Section 8.8. Bylaws 19
Section 8.9. Conflict of Interest 19
Section 8.10. Discrimination 21
ARTICLE IX Amendments to Charter and Bylaws 22
Section 9.1. Proposals to Amend Charter 22
Section 9.2. Charter Amendments 22
Section 9.3. Amendments to Bylaws 23
ARTICLE X Commencement 23
ARTICI..E XT Dissolution 24
Section 11.1. Dissolution Process 24
Section 11.2. Trusteeship 24
ARTICLE XII Approval of Charter 25
P \SC\SCO9Q
P\SC\SC09Q 01/07/03
This INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC
FACILITIES DISTRICT (the "Agreement") is executed by and among the CITY OF YAKIMA,
WASHINGTON ("Yakima"), the CITY OF SELAH, WASHINGTON ("Selah") and the CITY
OF UNION GAP, WASHINGTON ("Union Gap") (Yakima, Selah and Union Gap are
collectively referred to herein as "the Parties") for the purposes of establishing a multi -city
public facilities district to assist in the financing, development and operation of, regional
convention center facilities; stimulating economic development by creating jobs, realizing
additional sales tax and lodging tax revenues and attracting commercial business and tourism;
and providing facilities for community events including public meetings and performing arts
events. The Parties enter into this Agreement effective as of the date of execution by all three
Parties, for the purposes and under the terms contained herein.
WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the
"Convention Center"), providing first-class meeting, ballroom and other event facilities;
WHEREAS, the Parties desire to expand the Convention Center, at an estimated cost of
over $10,000,000 (the "Project");
WHEREAS, Chap. 35.57 RCW (the "Act") authorizes one or more contiguous cities
located in a county with a population of less than one million to create a public facilities district
(a "PFD") to acquire, remodel, finance, and operate one or more "regional centers";
WHEREAS, "regional centers" are defined to include, among other things, existing
convention centers to be improved at a cost of at least ten million dollars including debt service;
WHEREAS, PFDs have access to several new revenue sources, including a state sales
and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the retail sales and use
taxes generated within the PFD boundaries to the PFD;
WHEREAS, in order to complete the Project and access the Sales Tax, the Parties wish to
create a PFD solely for the purpose of acquiring, constructing, owning, remodeling, maintaining,
equipping, re-equipping, repairing, financing and operating regional centers, as defined in the
Act (the "District");
WHEREAS, the Act requires a 33% local match of the net present value of the Sales Tax
to be collected by the District in order for the District to impose the Sales Tax and, accordingly,
Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the
District in satisfaction of this match requirement (the value of the Convention Center and the
underlying site is approximately $11,800,000);
WHEREAS, the value of leasehold interest is estimated to significantly exceed the net
present value of 33% of the projected Sales Taxes of the District (approximately $2.4 million);
WHEREAS, pursuant to the Design, Development, Construction, Financing and
Operating Agreement between Yakima and the District, the District will sublease the Convention
Center and the underlying site to Yakima, and Yakima will design, develop, construct, operate
and maintain the property in return for certain rights, including the right to retain all revenues of
the Convention Center;
WHEREAS, subject to certain limitations set forth herein, Yakima intends to issue bonds
and apply bond proceeds to finance the Project, in consideration for the District's pledge of Sales
Tax receipts to Yakima to pay debt service on the bonds and other Regional Center costs;
WHEREAS, the Parties are authorized and empowered to enter into this Agreement
pursuant to Chap. 39.34 RCW;
NOW THEREFORE, in consideration of mutual promises and covenants herein, the
Parties agree:
Section 1. Definitions. Except for the terms defined in this section, and unless the
context indicates otherwise, for the purposes of this Agreement and the Related Documents, the
Parties shall use the definitions found in Chap. 35.57 RCW as they may be amended.
Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima.
Additional Revenue means all revenue received by the District (or by Yakima on behalf
of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking
Charges, Parking Taxes, Voted Sales Taxes and any other revenue received by the District and
derived from the District's operation of the facilities, including investment income; but excluding
Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) of the
Development Agreement (including investment earning thereon).
Administrative Costs means the costs of the District incurred in administering the District
and the Development Agreement. Administrative Costs shall be specified in the District's
annual budget submitted to Yakima for approval and to Selah and Union Gap for review and
comment.
Admissions Charge means any charge imposed by the District (or by Yakima on behalf
of the District) for admission to its facilities, including charges for season tickets or
subscriptions; cover charges, or charges for use of seats and tables, and other similar
accommodations; charges for food and refreshment if free entertainment, recreation, or
amusement is provided; charges for rental or use of equipment or facilities for purposes of
recreation or amusement; and automobile parking charges if the amount of the charge is
determined according to the number of passengers in the automobile.
Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be
paid by any person who pays an Admissions Charge.
Agreement means this interlocal agreement.
Bond Counsel means a firm of lawyers nationally recognized and accepted as bond
counsel and so employed by Yakima.
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P \SC\SC091 01/06/18
Bond Ordinance means the ordinance of the Yakima Council authorizing the issuance of
the Bonds and any amendments and supplements.
Bonds means the bonds, notes or other evidences of indebtedness issued pursuant to and
under authority of the Bond Ordinance to provide for the financing or refinancing of the Project.
Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total
interest cost on the Bonds exceeds 5.55%.
Board means the governing body vested with the management of the affairs of the
District.
Bylaws means the rules adopted for the regulation or management of the affairs of the
District approved by this Agreement and all subsequent amendments.
Charter means the articles of organization of the District approved by this Agreement
and all subsequent amendments.
Code means the Internal Revenue Code of 1986, as amended, and all applicable
regulations and rulings thereunder.
Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project.
Costs of the Project means all capital costs that are paid or incurred by Yakima in
connection with the design, development and construction of the Project, including, but not
limited to all or a portion of the interest on Bonds during the period of construction of such
improvements, and for a period of time thereafter; amounts required to meet any reserve
requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for
expenses, including planning, permitting and design expenses, incident and properly allocable to
the Project; and all other items of expense incident and properly allocable to designing,
developing and constructing the Project, financing the Project and placing the Project in
operation.
Debt Service means the amount to be paid on the next succeeding Payment Date to pay
the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due
on such Payment Date.
Debt Service Fund means the special fund(s) or account(s) established by Yakima
pursuant to the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the
principal of, premium, if any, and interest on Bonds and/or any Additional Bonds.
Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any,
established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which
secures the Bonds and/or any Additional Bonds.
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P\SC\S C091 01/06/18
Development Agreement means the Design, Development, Construction, Financing and
Operating Agreement by and between Yakima and the District.
District means the public facilities district created pursuant to Section 1.
Favorable Opinion of Bond Counsel means, with respect to any action, a written legal
opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under
the laws of the State and under applicable ordinances of the Yakima Council, including the Bond
Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest
on a Bond or any other bonds of Yakima from gross income for federal income tax purposes
under the Code (subject to the inclusion of any exceptions contained in the opinion delivered
upon original issuance of such bond).
Lease Agreement means the Lease Agreement by and between Yakima and the District
providing for the transfer of a leasehold interest in the Convention Center and the underlying site
to the District in satisfaction of the match required under RCW 82.14.390.
Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW.
Net Proceeds, when used with reference to the Bonds, means the principal amount of
such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less
the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve
Fund.
Operating Manual means the Operating Standards Manual for the expanded Convention
Center.
Outstanding, when used as of any particular time with reference to Bonds or Additional
Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the
Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds
theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or
Additional Bonds with respect to which all liability of Yakima shall have been discharged in
accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and
(3) Bonds or Additional Bonds for the transfer or exchange of, or in lieu of, or in substitution for
which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima
pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable.
Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110.
Parking Tax means a tax on any vehicle parking charge imposed at any parking facility
that is owned or leased by the District pursuant to RCW 35.57.110.
Payment Date means the dates specified in the Bond Ordinance, or any Supplemental
Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with
respect to the Bonds or any Additional Bonds.
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P'\SC\S C091 01/06/18
PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if
any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The
amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall
be maintained in the PFD Revenue Reserve Fund shall be determined at the time that the Bonds
are issued.
Predevelopment Costs means the cost of all planning, legal, architectural, engineering
and other services incurred by Yakima in connection with the Project until the date of issuance of
the Bonds.
Project means the design, construction, and operation of the additions to the Convention
Center, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site
plans, preliminary specifications, and schematic design documents), construction documents
(including all drawings and specifications necessary to completely describe the Project in detail
to a contractor for the purposes of bidding and construction, schedules, plans and specifications,
and the construction contract) and Project budgets (setting forth the construction contract cost,
taxes, all contingencies, fees and allowances).
Related Documents mean the Charter, the Lease Agreement, the Bylaws and the
Development Agreement.
Refunding Bonds means bonds, notes or other evidence of indebtedness of Yakima the
proceeds of which will be used to refund Bonds.
Sales Tax means the nonvoted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of
a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from
the amount of tax otherwise required to be collected or paid over to the State's Department of
Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event,
not more than 25 years after the Sales Tax is first collected.
Sales Tax Revenue means all Sales Taxes received by the District.
Selah means the City of Selah, Washington, a municipal corporation of the State, as now
or hereafter constituted.
State means the State of Washington.
Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council
amending or supplementing the Bond Ordinance, including any ordinance adopted by the
Yakima Council in connection with the issuance of Additional Bonds.
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P ASC \SC091 01/06118
Union Gap means the City of Union Gap, Washington, a municipal corporation of the
State, as now or hereafter constituted.
Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW
82.14.048 and approved by the voters.
Yakima means the City of Yakima, a municipal corporation of the State, as now or
hereafter constituted.
Yakima City Manager means the City Manager of Yakima, or any successor to the
office.
Yakima Council means the City Council of Yakima, or any successor thereto as provided
by law.
Section 2. Formation of the District. Pursuant to RCW 35.57.010(1), the Parties
hereby create a public facilities district. The District shall be a municipal corporation, an
independent taxing authority and a taxing district, with the powers and limitations as set forth in
its Charter and this Agreement. The District shall be coextensive with the boundaries of the
Parties, as the same may be amended from time to time.
Section 3. Name. The name of the District shall be the Yakima Regional Public
Facilities District.
Section 4. Purpose. The District shall acquire (by purchase, lease or otherwise),
construct, own, remodel, maintain, equip, reequip, repair, finance, and/or operate (either directly
or by contract) one or more Regional Centers, as defined in RCW 35.57.020. Specifically, the
District shall acquire a leasehold interest in the Convention Center, and finance the Project and
related parking facilities in accordance with the Development Agreement.
Section 5. General Powers. Except as limited by State law, this Agreement and the
Charter, the District shall have and may exercise all lawful powers necessary or convenient to
affect the purposes for which the District is organized and to perform authorized corporate
functions.
Section 6. Specific Powers. Without limitation, the District shall have -the following
specific powers:
(a) to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain,
equip, reequip, repair, finance, and operate (either directly or by contract) the Convention
Center, the Project, related parking facilities and any other Regional Center, subject to the
limitations set forth in Section 7;
(b) to accept and expend gifts, grants, and donations;
(c)
to impose the following charges, fees, and taxes authorized in RCW 35.57.040:
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(i) Admission Charges, Parking Charges and any other fees or charges for the
use of any of its facilities, subject to the limitations set forth in Section 7;
(ii) Admission Taxes, subject to the limitations set forth in Section 7;
(iii) Parking Taxes, subject to the limitations set forth in Section 7;
(iv) Voted Sales Taxes, subject to the limitations set forth in Section 7;
(v) Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390 to
be collected from those persons who are- taxable by the State under
Chaps. 82.08 and 82.12 RCW upon the occurrence of any taxable event
within the District;
(d) to use Sales Tax Revenue, Additional Revenue and other receipts for its purposes;
(e) to contract with a public or private entity (including but not limited to Yakima)
for the construction, financing, operation and/or management of the Project, related
parking or for any other Regional Center owned or operated by the District, subject to
Section 18;
(f) to use the supplemental alternative public works contracting procedures set forth
in Chap. 39.10 RCW:
(g) to acquire and transfer real and personal property by lease, sublease, purchase, or
sale, subject to the limitations set forth in Section 7; and
(h) to issue general obligation bonds (subject to statutory debt limits) or revenue
bonds.
Section 7. Limitations on Powers.
(a) No Power of Eminent Domain. The District shall not have the power of eminent
domain.
(b) Additional Regional Centers — Yakima Approval. The District's power to acquire,
construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either
directly or by contract) any Regional Center other than the Convention Center, the
Project and related parking facilities is subject to the approval of Yakima;
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(c) Convention Center Expansion Project — Yakima Approval.
(i) Yakima Approval of Parking Taxes and Admission Taxes In
consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement, the District's power to impose
Admission Taxes and Parking Taxes shall be subject to the approval of the
Yakima Council.
(ii) Yakima Approval of Admission Charges and Parking Charges. In
consideration for Yakima's agreement to apply Lodging Taxes to pay a
portion of the costs of operating and maintaining the Convention Center
and the Project under the terms of the Development Agreement, the
District's power to impose charges and fees, including all Admission
Charges and Parking Charges, shall be subject to the approval of the
Yakima Council.
(iii) Yakima Approval of Gambling Activity and Public Display of Artwork. In
consideration of Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement, and in consideration for Yakima's
agreement to apply Lodging Taxes to pay a portion of the costs of
operating and maintaining the Convention Center and the Project under
the terms of the Development Agreement, the following activities shall be
subject to the approval of the Yakima Council:
a. any gambling activity under the authority of the District at the
Convention Center; and
b. any public display of artwork under the authority of the District at
the Convention Center.
(iv) Annual Budget Approval and Approval of Property Transfers. In
consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement and in consideration of Yakima's
agreement to apply Lodging Taxes to pay a portion of the costs of
operating and maintaining the Convention Center under the terms of the
Development Agreement, the District's annual budget, including
Administrative Costs, shall be subject to the approval of the Yakima
Council. The District shall forward its proposed annual budget to the
Parties (for review and comment by Selah and Union Gap and for
approval by the Yakima Council) no later than September 1 of the year
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prior to the budget year. The District shall also forward any amendment to
its approved annual budget to Yakima for approval and to Selah and
Union Gap for review and comment. In addition, any acquisition or
transfer of real and personal property with a value over $100,000 by lease,
sublease, purchase, or sale by the District shall be subject to approval by
the Yakima Council.
(d) Party Approval of Voted Sales Tax. Prior to placing on the ballot any Voted Sales
Tax, the District shall forward the draft proposed ballot language to each of the Parties.
The District's power to impose the Voted Sales Tax is subject to the approval of each of
the Parties.
(e) No Political Activity. No funds, assets or property of the District shall be used for
any political activity, except as set forth in the Charter.
(f) No Private Inurement. The District shall not operate in a manner that creates any
private inurement, except that the District may compensate employees; reimburse
employees, Board members, volunteers and agents for reasonable expenses; defend and
indemnify Board members or employees acting in good faith on behalf of the District and
within the scope of their duties; hold harmless Board members or employees acting in
good faith on behalf of the District and within the scope of their duties and provide
liability insurance for employees, Board members, volunteers or other agents.
Section 8. Charter. The Charter is hereby approved in the form set forth as
Exhibit A. The Charter shall be deemed issued upon execution of this Agreement by all of the
Parties. The Charter shall be issued in duplicate originals, each bearing the Yakima seal attested
by the City Clerk of Yakima. One original shall be filed with Yakima; duplicate originals shall
be provided to the District and to the City Clerks of Selah and Union Gap. The Charter shall be
amended only with the approval of each of the Parties.
Section 9. Effect of Issuance of Charter. The District shall commence its existence
effective upon issuance of the Charter by Yakima pursuant to Section 8 (that is, upon execution
of this Agreement by all of the Parties). Except as against the State or the Parties in a proceeding
to cancel or revoke the Charter, delivery of a duplicate original Charter shall conclusively
establish that the District has been established in compliance with the procedures of this
Agreement.
Section 10. Board of Directors. A board consisting of seven directors (the "Board"),
as described in the Charter, is hereby established to govern the affairs of the District. The
directors shall be appointed and serve their terms as provided in the Charter. All corporate
powers of the District shall be exercised by or under the authority of the Board; and the business,
property and affairs of the District shall be managed under the direction of the Board, except as
may be otherwise provided for by law, this Agreement, or in the Charter.
Section 11. Board Removal. As set forth in the Charter, if it is determined for any
reason that any or all of the Board members should be removed from office, the City Council for
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the City that originally appointed the Board member to be removed may by ordinance remove
that Board member from office. The term of any Board member removed pursuant to this
section shall expire when the removal ordinance takes effect. Vacancies created under this
section shall be filled in the manner provided in the Charter.
Section 12. Organizational Meeting. Upon issuance of the Charter, the Yakima City
Manager or his designee shall call an organizational meeting of the initial Board within 30 days,
giving at least three days' advance written notice to each Board Member, unless waived in
writing. At such meeting, the Board shall organize itself, may appoint officers, and shall select
the District's place of business.
Section 13. Bylaws.
(a) The initial Bylaws of the District are hereby approved in the form set forth at
Exhibit B. The power to alter, amend, or repeal the Bylaws or adopt new ones shall be
vested in the Board, except as otherwise provided in this Agreement or in the Charter.
The Bylaws shall be consistent with the Charter.
(b) As necessary and appropriate in the discretion of the Yakima Council, the Yakima
Council may amend the Bylaws by ordinance adopted at or after a public meeting held
with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by
the Yakima Council may not be further amended by the District for one year except with
Yakima Council approval.
Section 14. Dissolution.
So long as the Bonds are Outstanding, if the Yakima Council makes an
affirmative finding that dissolution is warranted for any reason, the existence of the
District may be terminated by ordinance of the Yakima Council adopted at or after a
public meeting, held with notice to the City of Selah, the City of Union Gap, the District
and the Board and affording a reasonable opportunity to be heard and present testimony.
At such time as the Bonds are no longer Outstanding, if all three of the Parties make an
affirmative finding that dissolution is warranted for any reason, the existence of the
District may be terminated by ordinance of the City Council of all three Parties adopted
at or after a public meeting, held with notice to the other Parties, the District and the
Board and affording a reasonable opportunity to be heard and present testimony. In
either event, dissolution shall be accomplished as provided in the Charter, and shall not
take effect until proper provision has been made for disposition of all District assets.
At such time as the Bonds are no longer Outstanding, one or two of the Parties
may withdraw from this Agreement, by ordinance of the City Council of such Party or
Parties, adopted at or after a public meeting, held with notice to the other Parties, the
District and the Board and affording a reasonable opportunity to be heard and present
testimony. In such event, the District shall not be dissolved but shall continue its
existence in all respects, except that the boundaries of the District shall be deemed
revised to exclude the territory of the withdrawing Party(ies).
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Upon satisfactory completion of dissolution proceedings, the City Clerk of
Yakima shall indicate such dissolution by inscription of "Charter cancelled" on the
Charter of the District on file with the City and, when available, on the duplicate originals
of the District, Selah and Union Gap, and the existence of the District shall cease. The
City Clerk of Yakima shall give notice thereof pursuant to State law and to other persons
requested by the District in its dissolution statement.
The Parties hereby acknowledge that the District's assets and property will largely
be derived from Yakima. Specifically, Yakima will transfer a leasehold interest in the
Convention Center and the underlying site to the District, will issue bonds to pay
Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax
Revenue) and Costs of the Project, will construct the Project, and will apply Lodging
Taxes to pay a portion of the cost of operating and maintaining the Convention Center
and the Project. Accordingly, upon dissolution of the District and the winding up of its
affairs, all of the District interest in the Convention Center, the site, the Project, and all
assets or property of the District that are proceeds of the foregoing shall vest in Yakima
unless the Yakima Council or a trustee or court has provided for the transfer of the
District's interest in the Convention Center, the site, the Project, and proceeds of the
District to a qualified entity or entities that will fulfill the purposes for which the District
was chartered.
At such time as the District acquires any other Regional Center, the Parties shall
enter into a plan providing for the disposition of such Regional Center and related assets
upon dissolution of the District. If Selah or Union Gap fail to enter into such a plan, then
upon dissolution of the District and the winding up of its affairs, title to such Regional
Center and all assets or property of the District that are proceeds of the foregoing shall
vest in Yakima unless the Yakima Council or a trustee or court has provided for the
transfer of the such Regional Center and proceeds of the District to a qualified entity or
entities that will fulfill the purposes for which the District was chartered.
Section 15. Indemnification. The City of Yakima shall indemnify and hold harmless
the Cities of Union Gap and Selah from any liability arising from a challenge to the formation of
the Yakima Regional Public Facilities District under RCW 35.57.010.
Section 16. Ancillary Authority. The Yakima City Manager is granted all such power
and authority as reasonably necessary or convenient to enable him or her to administer this
Agreement efficiently and to perform the duties imposed in this Agreement and the Related
Documents.
Section 17. Term of Agreement. This Agreement shall automatically terminate on the
date on which District is dissolved pursuant to Section 14. Termination shall not relieve any
Party of responsibility for meeting financial and other obligations outstanding at the time of
termination.
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Section 18. Transfer of the Convention Center to the District. Yakima hereby agrees
to enter into the Lease Agreement. The Parties agree that the transfer of a leasehold interest in
the Convention Center and the underlying site to the District pursuant to the Lease Agreement
shall constitute a donation from the City to the District to be- used for the construction,
improvement or rehabilitation of a Regional Center as defined in RCW 82.14.390. The value of
the Convention Center and the underlying site is approximately $11,800,000. The Parties agree
that the value of the leasehold interest in the Convention Center and the underlying site to be
transferred pursuant to the Lease Agreement is substantially more than the net present value of
33% of total Sales Taxes to be received by the District (approximately $2.4 million).
Section 19. Management Agreements. Any management contract entered into by the
District or Yakima for the operation or management of the Convention Center and the Project
shall be consistent with the Development Agreement. Prior to executing any management
contract (with the exception of the Development Agreement), the District • or Yakima, as
applicable, shall have received a Favorable Opinion of Bond Counsel regarding the terms of the
management contract.
Section 20. Limitation of Liability. The District is a separate legal entity. All
liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and
properties of the District, and no creditor or other person shall have any right of action against or
recourse to the Parties, their assets, credit, or services, on account of any debts, obligations,
liabilities or acts or omissions of the District.
Section 21. Non -Waiver. No waiver by any Party of any term, or condition of this
Agreement shall be deemed or construed to constitute a waiver of any other term or condition or
of any subsequent breach whether of the same or of a different provision of this Agreement..
Section 22. No Third -Party Beneficiary. This Agreement is entered into for• the
benefit of the residents of the Parties to facilitate the completion of the Project, stimulate
economic development by creating jobs, realize additional sales and lodging tax revenues, attract
commercial business and tourism, and provide facilities for convention, special events,
community events including public meetings and performing arts events. This Agreement is not
entered into with the intent that it shall benefit any party not signing this Agreement, and no
other person or entity shall be entitled to be treated as a third -party beneficiary of this
Agreement; provided that any owner of the Bonds or Additional Bonds shall be a third -party
beneficiary for the purposes of enforcing payments to be made by the District to Yakima in
amounts sufficient for Yakima to pay Debt Service.
Section 23. The City of Yakima intends to contribute lodging taxes to pay a portion of
the cost of operating and maintaining the Convention Center, in an amount, if any, determined
annually by the Yakima City Council. As between the Cities, as set forth in the Development
Agreement, the City of Yakima will also be solely responsible to contribute revenues in the case
of a Sales Tax shortfall. The Cities of Union Gap and Selah shall have no financial
responsibility to the District in the event of a Sales Tax shortfall.
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Section 21. Counterparts. This Agreement may be executed in two or more
counterparts, and each such counterpart shall be deemed to be an original instrument. All such
counterparts together will constitute one and the same Agreement.
IN WITNESS HEREOF, this Agreement is executed by the City of Yakima, the City of
Selah and the City of Union Gap.
Contract No. 2001-70
Ordinance No. 2001-28
THE CITY OF YAKIMA, WASHINGTON
Richard A. Zais, Jr.
City Manager
THE CITY OF SELAH, WASHI GTON
J'
By:
Robert Jones
Mayor
THE CITY OF UNION GAP,
WASHINGTON
B
rey C. Reeves,
Mayor
C. 9 Stifled to be a true and correct copy of the
orig nti3 filed in my office. 7---g7---53(
0
,p1'
,4
vier
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EXHIBIT A
CHARTER
A-1
P•\SC\SC091
CHARTER
OF THE
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
ARTICLE I
Name and Seal; Definitions
Section 1.1. Name. The name of this public facilities district shall be the YAKIMA
REGIONAL PUBLIC FACILITIES DISTRICT (hereinafter referred to as the "District").
Section 1.2. Seal. The District's seal shall be a circle with the name "YAKIMA
REGIONAL PUBLIC FACILITIES DISTRICT" inscribed therein. The Board shall approve
the seal by resolution.
Section 1.3. Definitions. All capitalized terms used but not defined herein shall have the
meanings set forth in the Interlocal Cooperation Agreement To Form a Public Facilities District
by and among the City of Yakima, Washington ("Yakima"), the City of Selah, Washington
("Selah") and the City of Union Gap, Washington ("Union Gap" and collectively with Yakima
and Selah, the "Cities"), dated June 25, 2001 (the "Interlocal Agreement").
ARTICLE II
Authority and Limit on Liability
Section 2.1. Authority. The District is a public facilities district organized pursuant to
RCW 35.57.010, the Interlocal Agreement, Ordinance No. 2001-28 of Yakima, Ordinance Nos.
2298 and 2300 of Union Gap, and motion of the Selah City Council approved on June 12, 2001.
Section 2.2. Limit on Liability. All liabilities incurred by the District shall be satisfied
exclusively from the assets, credit, and properties of the District, and no creditor or other person
shall have any right of action against or recourse to the Cities, their assets, credit, or services, on
account of any debts, obligations, liabilities or acts or omissions of the District.
Section 2.3. Mandatory Disclaimer. The following disclaimer shall be posted in a
prominent place where the public may readily see it in the District's principal and other offices.
It shall also be printed or stamped on all contracts, notes, bonds, and other documents that may
entail any debt or liability by the District.
The YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT is
organized pursuant to RCW 35.57.010, the Interlocal Financing
Agreement by and among the City of Yakima, Washington, the
City of Selah, Washington and the City of Union Gap,
Washington, dated June 25, 2001 (the "Interlocal Agreement"),
Ordinance No. 2001-28 of the City of Yakima, Ordinance Nos.
2298 and 2300 of the City of Union Gap, and motion of the City of
Selah City Council approved on June 12, 2001. The Interlocal
Agreement provides as follows: "All liabilities incurred by the
District shall be satisfied exclusively from the assets, credit, and
properties of the District, and no creditor or other person shall have
any right of action against or recourse to the Cities of Yakima,
Selah or Union Gap, their assets, credit, or services, on account of
any debts, obligations, liabilities or acts or omissions of the
District."
ARTICLE III
Duration
The duration of the District shall be perpetual except as provided in, the Interlocal
Agreement.
ARTICLE IV
Purpose
The purpose of the District is to provide a legal entity under RCW 35.57.010 and the
Interlocal Agreement to acquire (by purchase, lease or otherwise), construct, own, remodel,
maintain, equip, reequip, repair, finance, and operate (either directly or by contract) one or more
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Regional Centers, as defined in RCW 35.57.020, including, but are not limited to, the
Convention Center consisting of the following components:
a) Operation of Convention Center facilities, including meeting space,
ballroom and other event facilities, with related activities;
b) Operation of Convention Center programs and exhibits;
c) Acquisition, display and maintenance of Convention Center exhibits;
d) Restaurant or other food, beverage and banquet service facilities to
enhance the attractiveness of the Convention Center to visitors;
f) Any other uses reasonably or necessarily related to the operation of
Convention Center facilities; and
g) Related parking.
To the extent appropriate and consistent with the needs and objectives of the Cities and
the District's purpose, the District may acquire, lease and/or operate and manage real property,
including but not limited to the Convention Center; secure financing; undertake or otherwise
provide for the construction and development of the Project; and otherwise undertake and
accomplish all activities and projects necessary for the Project and the operation of the
Convention Center. The District shall have no purpose other than acquisition, construction,
ownership, remodeling, maintenance, equipping, reequipping, repair, financing, and/or operation
(either directly or by contract) of the Convention Center and any other Regional Center approved
under the terms of the Interlocal Agreement.
For the purpose only of securing the exemption from federal income taxation for interest
on obligations of the District, the District constitutes an authority and instrumentality of Yakima
(within the meaning of those terms in federal regulations and rulings pursuant to Section 103 of
the Code).
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ARTICLE V
Powers
Section 5.1. Powers. The District shall have and may exercise all lawful powers
conferred by State law, the Interlocal Agreement, ordinance, this Charter and its Bylaws,
including the usual powers of a corporation for public purposes and, without limitation, the
power to:
A. Hire employees, staff, and services; prescribe their duties, qualifications, and
compensation; and secure the services of consultants for professional services,
technical assistance, or advice;
B . Contract for any corporate purpose with the United States, a state, and any
political subdivision or agency of either, and with individuals, associations and
corporations and other entities (including public or private entities) including the
financing, construction, equipping, operation or management of the Convention
Center and expansion Project, related parking or for any other Regional Center
owned or operated by the District;
C. Sue and be sued in its name;
D . Purchase, lease, exchange, mortgage, encumber, improve, use, or otherwise
transfer or grant security interests in real or personal property or any interests
therein; grant or acquire options on real and personal property; and contract
regarding the income or receipts from real and personal property;
E. Accept and expend gifts, grants, and donations, including funds or property from
the United States, a state, and any municipality or political subdivision or agency
of either, property acquired by any such governmental unit through the exercise of
its power of eminent domain, and funds or property from corporations,
associations, individuals or any other source, and comply with the terms and
conditions therefor;
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F. Impose the following charges, fees, and taxes authorized in RCW 35.57.040:
Admission Charges, Parking Charges and any other fees or charges for services,
goods or use of any of its facilities; Admission Taxes; Parking Taxes; Voted Sales
Taxes; and Sales Taxes at a rate not to exceed the limit set forth in RCW
82.14.390;
G. Use Sales Tax Revenue, Additional Revenue and other receipts for its corporate
purposes;
H. Use the supplemental alternative public works contracting procedures set forth in
Chap. 39.10 RCW;
Borrow or lend its funds, property, credit or services for corporate purposes, or act
as a surety or guarantor for corporate purposes; issue revenue bonds or general
obligation bonds in conformity with the debt limitations set forth in RCW
35.57.030 and other applicable provisions of State law in such principal amounts
as in the discretion of the District shall be necessary or appropriate to provide
sufficient funds for achieving any corporate purposes; provided, however, that all
bonds and notes or liabilities occurring thereunder shall be satisfied exclusively
from the assets, properties or credit of such District, and no creditor or other
person shall have any recourse to the assets, credit or services of the Cities
thereby, unless any or all of the Cities shall by ordinance expressly guarantee such
bonds or notes;
J. Manage, on behalf of the United States, a state, and any municipality or political
subdivision or agency of either, any property acquired by such entity through gift,
purchase, construction, lease, assignment, default, or exercise of the power of
eminent domain;
K. Recommend to the United States, a state, and any municipality or political
subdivision or agency of either, consistent with all applicable laws, such tax,
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financing, and security measures as the District may deem appropriate to
maximize the public interest in activities in which the District by this Charter has
a particular responsibility;
L. Control the use and disposition of corporate property, assets, and credit;
M. Invest and reinvest its funds;
N . Establish the consideration (if any) for property transferred, all in pursuit of
corporate purposes;
0. Maintain books and records as appropriate for the conduct of its affairs;
P. Conduct corporate affairs, carry on its operations, and use its property as allowed
by law and consistent with this Charter, and its Bylaws; name corporate officials;
Identify and recommend to the United States, a state, and any municipality or
political subdivision or agency of either, the acquisition by the appropriate
governmental entity for transfer to or use by the District of property and property
rights, which, if so acquired, whether through purchase or the exercise of eminent
domain, and so transferred or used, would materially advance the purpose for
which the District is chartered; and
R. Exercise and enjoy such other powers as may be authorized by law.
Section 5.2. Limitation of Powers. The District organized under this Charter in all
activities and transactions shall be limited in the following respects:
Q.
A. The District shall have no power of eminent domain;
B. The District may not incur or create any liability that permits recourse by any
party or member of the public to any assets, services, resources, or credit of the
Cities. All liabilities incurred by the District shall be satisfied exclusively from
the assets and credit of the District; no creditor or other person shall have any
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recourse to the assets, credit, or services of the Cities on account of any debts,
obligations, liabilities, acts, or omissions of the District;
C. No funds, assets, or property of the District shall be used for any partisan political
activity or to further the election or defeat of any candidate for public office or
ballot proposition; nor shall any funds or a substantial part of the activities of the
District be used for publicity or educational purposes designed to support or
defeat legislation pending before the Congress of the United States, or the
legislature of the State or the Cities; provided, however, that funds may be used
for representatives of the District to communicate with members of Congress,
State legislators or City council members concerning funding and other matters
directly affecting the District, so long as such activities do not constitute a
substantial part of the District's activities and so long as such activities are not
specifically limited elsewhere in this Charter or the Interlocal Agreement;
D. All Sales Tax Revenue, Additional Revenue, receipts, assets, or credit of the
District shall be applied toward or expended upon services, projects, and activities
authorized by this Charter. No part of the net earnings of the District shall inure
to the benefit of, or be distributable as such to, the Board members, officers of the
District or other private persons, except that the District is authorized and
empowered to:
i. Compensate those persons or entities performing services for the District,
including District employees and legal counsel, a reasonable amount for
services rendered, and reimburse Board members and others for reasonable
expenses actually incurred in performing their duties;
ii. Assist District officials as members of a general class of persons to be
assisted by a District -approved project or activity to the same extent as other
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1
a
members of the class so long as no special privileges or treatment accrues to
such corporate official by reason of his or her status or position in the District;
iii. Defend and indemnify any current or former Board member or employee
and their successors, spouses and marital communities against all costs,
expenses, judgments, and liabilities, including attorneys' fees, reasonably
incurred by or imposed upon him or her in connection with or resulting from
any civil claim, action, or proceeding in which he or she is or may be made a
party by reason of being or having been a corporate official, or by reason of
any action alleged to have been taken or omitted by him or her as such
official, provided that he or she was acting in good faith on behalf of the
District and within the scope of duties imposed or authorized by law. This
power of indemnification shall not be exclusive of other rights to which
corporate officials may be entitled as a matter of law;
iv. Purchase insurance to protect and hold personally harmless any of its
officials, its employees, and its agents from any civil action, claim, or
proceeding instituted against the foregoing individuals arising out of the
performance, in good faith, of duties for, or employment with, the District and
to hold these individuals harmless from any expenses connected with the
defense, settlement, or monetary judgments from such actions, claims, or
proceedings. The purchase of such insurance and its policy limits shall be
discretionary with the Board, and such insurance shall not be considered to be
compensation to the insured individuals. The powers conferred by this
subsection shall not be exclusive of any other powers conferred by law to
purchase liability insurance; and
v. Sell assets for a consideration greater than their reasonable market value
or acquisition costs, charge more for services than the expense of providing
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them, or otherwise secure an increment in a transaction, or carry out any other
transaction or activity, so long as such gain is not the principal object or
purpose of the District's transactions or activities and is applied to or
expended upon services, projects, and activities otherwise authorized as
corporate purposes;
E. The District organized under this chapter shall not issue shares of stock, pay
dividends, make private distribution of assets, make loans to its board members or
employees or otherwise engage in business for private gain;
F. The District's power to acquire (by purchase, lease or otherwise), construct, own,
remodel, maintain, equip, reequip, repair, finance, and operate (either directly or
by contract) any Regional Center other than the Convention Center, the Project
and related parking facilities is subject to the approval of Yakima;
G. In consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs and Costs of the Project under the terms of
the Development Agreement and Yakima's agreement to apply Lodging Taxes to
pay a portion of Operation and Maintenance Costs under the terms of the
Development Agreement, the following District powers shall be subject to the
approval of the Yakima City Council:
i. The District shall not impose Admission Charges or Parking Charges
without the prior approval of the Yakima City Council;
ii. The District shall not impose Admission Taxes or Parking Taxes without
the prior approval of the Yakima City Council;
iii. The District's annual budget, including Administrative Costs, shall be
subject to annual approval by the Yakima City Council;
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iv. Any acquisition or transfer of real and personal property with a value over
$100,000 by lease, sublease, purchase, or sale by the District shall be subject
to approval by the Yakima City Council;
v. Any gambling activity under the authority of the District at the
Convention Center shall be subject to approval by the Yakima City Council;
and
vi. Any public display of artwork under the authority of the District at the
Convention Center shall be subject to approval by the Yakima City Council.
H . The District's power to impose Voted Sales Taxes authorized under
RCW 82.14.048 is subject to the approval by each of the Parties prior to
placement on the ballot.
ARTICLE VI
Board of Directors And Corporate Officers
Section 6.1. Powers. The Board shall govern the affairs of the District. All corporate
powers of the District shall be exercised by or under the authority of, and the business, property
and affairs of the District shall be managed under the direction of, the Board except as may be
otherwise provided in this Charter, the Interlocal Agreement or State law.
Section 6.2. Board Composition. Pursuant to RCW 35.57.010, the Board shall be
composed of seven members. The initial members of the Board shall be appointed as follows.
One Boardmember shall be appointed by the Yakima City Council, one Boardmember by the
Selah City Council and one Boardmember by the Union Gap City Council. Four Boardmembers
shall be appointed by the Yakima City Council based on recommendations from local
organizations such as the local chamber of commerce, local economic development council, and
local labor council. The Boardmembers shall not be council members of the Cities either at the
time of their appointment or at any time thereafter.
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Section 6.3. Terms of Office.
A . The terms of office of the initially appointed members of the Board shall
commence on the effective date of this Charter and shall be staggered as follows:
1. Group I. One member for a one-year term;
2. Group II. One member for a two-year term;
3. Group III. One member for a three-year term; and
4. Group IV. The remainder for four-year terms.
B. With respect to the appointments of the initial Board members, the following
members are assigned to the four groups identified in subsection 6.3.A above for
purposes of determining the length of terms of such initial Board members: the
Group I member shall be appointed by the Yakima City Council, based on
recommendations from local organizations; the Group II member shall be
appointed by the Yakima City Council; the Group III member shall be appointed
by the Yakima City Council, based on recommendations from local organizations;
the remainder of the appointments shall be Group IV members.
C. The expired term of the Group I member shall be filled by the Yakima City
Council, based on recommendations from local organizations.
D. The expired term of the Group II member shall be filled by appointment of the
Yakima City Council.
E. The expired term of the Group III member shall be filled by appointment of the
Yakima City Council, based on recommendations from local organizations.
F. The expired term of one of the Group IV members shall be filled by the Selah
City Council, the expired term of one of the Group IV members shall be tilled by
the Union Gap City Council and the expired term of the remainder of the Group
IV members shall be filled by the Yakima City Council, based on
recommendations from local organizations.
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G Except for the initial members of the board, each member shall be appointed to
serve for a four-year term. Each member shall continue to serve until his or her
successor has been appointed and qualified as provided in the bylaws. Members
may be reappointed to serve not more than four consecutive full terms.
H. Terms shall expire on June 30of the year in which the respective group is
scheduled to terminate. Nominations for new appointees or for reappointment of
existing members shall be processed in the manner provided in the Bylaws.
I. Vacancies occurring during the course of a term shall be filled by appointment by
the City Manager of the City that made the original appointment to the vacant
position, subject to confirmation by the City Council of the City that made the
original appointment to the vacant position, in the manner and to the effect
provided in the Bylaws to complete the unexpired term to which appointed.
Section 6.4. Quorum and Manner of Action. At all meetings of the Board a majority of
directors then in office shall constitute a quorum. The Board may adopt resolutions of the Board
only by an affirmative vote of a majority of the Boardmembers then in office.
Section 6.5. Officers and Division of Duties.
A. The initial officers of the District shall be the President, Vice President, Secretary
and Treasurer of the Board. In no event shall there be less than two officers designated, nor shall
the same person occupy the office of president and that of treasurer, or any office responsible for
custody of funds and maintenance of accounts and finances. Additional officers may be
provided for in the Bylaws.
B. The President shall be the agent of the District for service of process; the Bylaws
may designate additional corporate officials as agents to receive or initiate process. The
corporate officers, who shall be selected from among the membership of the Board as provided
in the Bylaws, shall manage the daily affairs and operations of the District.
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C. The Board shall oversee the activities of the corporate officers, establish and/or
implement policy, participate in corporate activity in matters prescribed by the Interlocal
Agreement, and shall have stewardship for management and determination of all corporate
affairs.
Section 6.6. Bonding of Corporate Officers. Each corporate official responsible for
handling accounts and finances shall file as soon as practicable with the District a fidelity bond
in an amount determined by the District to be adequate and appropriate, and may hold the
corporate office only as long as such a bond continues in effect.
Section 6.7. Executive Committee. The Bylaws may provide for an Executive
Committee, which shall be appointed and/or removed by the Board, and shall have and exercise
such authority of the Board in the management between meetings of the Board, as may be
specified in the Bylaws.
Section 6.8. Removal of Board Members. The City Council of each City may by
ordinance remove from the Board with or without cause any member of the Board appointed by
that City at or after a public meeting, with prior notice to the District and the other Cities. In the
event of removal, members shall be replaced in the same manner as provided for in filling
vacancies on the Board.
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ARTICLE VII
Meetings
Section 7.1. Board Meetings.
A. The Board shall meet at least quarterly each year; special meetings of the Board
may be called as provided by the Charter, the Bylaws or RCW 42.30.010 et seq.
B. The Board shall be the governing body of a public agency as defined in RCW
42.30.020, and all meetings of the board shall be held and conducted in accordance with RCW
42.30.010 et seq. ("The Open Public Meetings Act"). Notice of meetings shall be, given in a
manner consistent with RCW 42.30.010 et se In addition, the District shall routinely provide
reasonable notice of meetings to any individual specifically requesting it in writing.
C. All Board meetings, including executive and all other permanent and ad hoc
committee meetings, shall be open to the public to the extent required by RCW 42.30.010 et seq.
The Board and committees may hold executive sessions to consider matters enumerated in RCW
42.30.010 et seq., or privileged matters recognized by law, and shall enter the cause therefor
upon its official journal. At all public meetings, any citizen shall have a reasonable opportunity
to address the Board either orally or by written petition. Voting by telephone or by proxy is not
permitted.
Section 7.2. Parliamentary Authority. The rules in Robert's Rules of Order (revised)
shall govern the District in all cases to which they are applicable, where they are not inconsistent
with the Charter or with the special rules of order of the District set forth in the Bylaws.
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Section 7.3. Minutes. Copies of the minutes of all regular or special meetings of the
Board shall be available to any person or organization that requests them. The minutes of all
Board meetings shall include a record of individual votes on all matters requiring Board
concurrence or approval.
ARTICLE VIII
Procedural Requirements
Section 8.1. Board Review and Concurrence.
A. At least quarterly, the Board shall review monthly statements of income and
expenses, which compare budgeted expenditures to actual expenditures. The Board shall review
all such information at regular meetings, the minutes of which shall specifically note such
reviews and include such information.
B. General or particular authorization or review and concurrence of the Board by
resolution shall be necessary for any of the following transactions:
1. Transfer or conveyance of an interest in real estate other than release of a
lien or satisfaction of a mortgage after payment has been received and the execution of a lease
for a current term less than one year;
2. The contracting of debts, issuances of notes, debentures, or bonds, and the
mortgaging or pledging of authority assets or credit to secure the same;
3. The donation of money, property or other assets belonging to the District;
4. An action by the District as a surety or guarantor;
5. All capital expenditures in excess of twenty-five thousand dollars
($25,000), and all other transactions in which: (i) the consideration exchanged or received by the
District exceeds the greater of one percent of the previous year's operating budget or twenty-five
thousand dollars ($25,000) or (ii) the performance by the District shall extend over a period
exceeding one year from the date of execution of an agreement therefor;
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6. Adoption of an annual budget approved by the Yakima City Council. The
District shall forward its proposed annual budget to the Cities (for review and comment by Selah
and Union Gap and for approval by the Yakima City Council) no later than September 1 of the
year prior to the budget year. The annual budget shall include a projected operating and capital
budget for the next fiscal year as well as a summary of projects and activities to be undertaken
during the next fiscal year;
7. Certification of annual reports and statements to be filed with the Cities as
true and correct in the opinion of the Board and of its members;
8. Proposed amendments to the Charter and Bylaws; and
9. Such other transactions, duties, and responsibilities as the Charter shall
repose in the Board or the Board may reserve.
Section 8.2. Establishment and Maintenance of Office and Records. The District shall:
A. Maintain a principal office at a location within the boundaries of the Cities;
B. File and maintain with each City a current listing of all Board officials, their
positions and their home addresses, their business and home phone numbers, the address of the
District's principal office and of all other offices used by it, and a current set of its Bylaws; and
C. Maintain all of its records in a manner consistent with the Preservation and
Destruction of Public Records Act, RCW Chapter 40.14.
Section 8.3. Access to Records.
A. The District shall keep an official journal containing the minutes of proceedings at
all meetings of the Board and the resolutions of the Board.
B. Any person shall have access to records and information of the District to the
extent required by State law.
Section 8.4. Deposit of Public Funds. All money belonging to or collected for the use of
the District, coming into the hands of any corporate official or officer thereof, shall be deposited
in a qualified public depositary as determined by the Washington Public Deposit Protection
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Commission. Such monies may be invested at the direction of the Board, by resolution, in
investments that would be lawful for the investments of Yakima funds.
Section 8.5. Reports and Information. The District shall, within five months after the
end of its fiscal year, file an annual report with each City containing financial statements of
assets and liabilities, revenue and expenditures and changes in its financial position during the
previous year; a summary of significant accomplishments; a list of depositories used; a list of
authority officials and a list of officials bonded pursuant to Section 6.6 of this Charter.
Section 8.6. Audits and Inspections. The District is subject to review and audit by the
State Auditor, as provided by law. The District shall send a copy of its audited financial
statements to each City no later than 30 days after such audited financial statements are
available. In addition, the District shall, at any time during normal business hours and as often as
the Yakima City Council, the Yakima City Manager or his designee, or the State Auditor deem
necessary, make available to the Yakima City Council, the Yakima City Manager or his
designee, the State Auditor and, at the request of the City, an independent auditor for
examination all of its financial records, and shall permit the Yakima City Council, the Yakima
City Manager or his designee, State Auditor and, at the request of the City, an independent
auditor to audit, examine and make excerpts or transcripts from such records, and to make audits
of all contracts, invoices, materials, payrolls, records of personnel, conditions of employment
and other data relating to all the aforesaid matters. The District shall review with the Yakima
City Manager or his or her designee within 45 days of receipt and take immediate corrective
action to address any audit findings or qualifications in its audit reports.
Section 8.7. Insurance. The District shall maintain in full force and effect public liability
insurance in an amount sufficient to cover potential claims for bodily injury, death or disability
and for property damage, which may arise from or be related to projects and activities of the
District, naming Yakima as an additional insured, if such insurance shall be available at a
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reasonable price as determined by the Board. If insurance is not maintained the District shall
maintain adequate reserves to cover potential claims and losses.
Section 8.8. Bylaws.
A. The properly adopted Bylaws of the District shall be the official rules for the
governing of meetings and the affairs of the District.
B. The Bylaws may be amended as provided in Article IX of this Charter in order to
provide additional or different rules for governing the District and its activities as are not
inconsistent with this Charter.
C. Amendments to the Bylaws shall be effective 10 days after filing of same with the
City Clerks of Yakima, Selah and Union Gap, unless such amendment(s) shall have been passed
by unanimous vote of the Board and an earlier effective date shall have been set.
Section 8.9. Conflict of Interest.
A. Except as provided in this section, a Board member or employee of the District
may not participate in Board decisions if that person or a member of that person's immediate
family has a financial interest in the issue being decided unless the financial interest is a remote
financial interest and participation is approved under subsection B of this section.
B. A Board member or employee may participate in a decision if that person or a
member of that person's immediate family has only a remote financial interest, the fact and
extent of the interest is disclosed to the Board in a public meeting and is noted in the minutes of
the Board before any participation by the member in the decision, and thereafter in a public
meeting the Board by vote authorizes or approves the participation. If the person whose
participation is under consideration is a Board member, that person may not vote under this
subsection. For purposes of this subsection, "remote financial interest" means:
(i)
that of a nonsalaried officer or director of a nonprofit corporation;
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(ii) that of an employee or agent of a contracting party where the
compensation of the employee or agent consists entirely of fixed wages or salary
and the contract is awarded by bid or by other competitive process;
(iii), that of a landlord or tenant of a contracting party, except in cases
where the property subject to the lease or sublease is owned or managed by the
public corporation;
(iv) that of a holder of less than one percent of the shares of the
corporation or cooperative that is the contracting party; or
(v) that of an owner of a savings and loan or bank savings or share
account or credit union deposit account if the interest represented by the account
is less than two percent of the total deposits held by the institution.
C. A Board member or employee is not considered to be financially interested in a
decision when the decision could not affect that person in a manner different from its effect on
the public.
D. No Board member or employee of the District shall accept, directly or indirectly,
any gift, favor, loan, retainer, entertainment or other thing of monetary value from any person,
firm or corporation having dealings with the District when such acceptance would conflict with
the performance of a Board member or employee's official duties. A conflict, or possibility of
conflict, shall be deemed to exist where a reasonable and prudent person would believe that it
was given for the purpose of obtaining special considerations or influence; provided that
application of this provision shall take into consideration the established customs and practices
of the District.
E. The Board may adopt additional conflict of interest and ethical rules it considers
appropriate.
F. For purposes of this section, "participate in a decision" includes all discussions,
deliberations, preliminary negotiations, and votes.
G. For purposes of this section, "immediate family" means:
1. A spouse;
2. Any parent, parent -in-law, child, son-in-law, or daughter-in-law; and
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3. Any sibling, uncle, aunt, cousin, niece or nephew residing in the
household of the corporate official or employee.
Section 8.10. Discrimination.
A. Board membership may not directly or indirectly be based upon or limited by
creed, age, race, color, religion, sex, national origin, marital status or the presence of any
sensory, mental or physical disability, unless such limitations are necessary for the performance
of the role and no less discriminatory alternatives are available.
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B. To ensure equality of employment opportunity, the District shall not discriminate
in any matter related to employment because of creed, age, race, color, religion, sex, national
origin, marital status or the presence of any sensory, mental or physical disability, unless such
limitations are necessary for the performance of the role and no less discriminatory alternatives
are available. The District shall, in all solicitations or advertisements for employees placed by or
on behalf of the District, state that all qualified applicants will receive consideration for
employment without regard to creed, age, race, color, religion, sex, national origin, marital status
or the presence of any sensory, mental or physical disability, unless such limitations are
necessary for the performance of the role and no less discriminatory alternatives are available.
ARTICLE IX
Amendments to Charter and Bylaws
Section 9.1. Proposals to Amend Charter.
A. Subject to Section 8 of the Interlocal Agreement, the District may propose to the
Yakima City Council that its Charter be amended by resolution passed by a procedure outlined in
its Bylaws at a regular or special meeting of the Board for which 30 days' advance written notice
was given.
B. When required by law, the District shall propose to the Yakima City Council an
amendment to this Charter that will conform to and be consistent with said law.
C. As necessary and appropriate in the discretion of the Yakima City Council, the
Yakima City Council may propose to amend this Charter on its own initiative.
Section 9.2. Charter Amendments. Pursuant to Section 8 of the Interlocal Agreement,
the Charter may be amended only with the approval of all of the Parties to the Interlocal
Agreement, whether in response to a resolution passed by the District's Board of Directors, or on
the initiative of Yakima. After approval of a Charter amendment by all of the Parties, the revised
Charter shall be deemed issued and shall be filed in the same manner as the original Charter.
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Section 9.3. Amendments to Bylaws. The Bylaws of the District may be amended by a
resolution passed by a majority of the Board members in office at the time. Bylaws shall be
reviewed annually after the election of officers with recommendations, if any, for amending the
bylaws proposed by the Executive Committee, if such committee is established, otherwise by an
ad hoc Bylaws Committee appointed by the Board President. At any other time, any Board
member may introduce necessary amendments to the Bylaws to the Board for consideration. As
provided in the Interlocal Agreement, as necessary and appropriate in the• discretion of the
Yakima City Council, the Yakima City Council may amend the Bylaws by ordinance adopted at
or after a public meeting held with notice to the District, Selah and Union Gap. Amendments to
the Bylaws adopted by the Yakima City Council may not be further amended by the District for
one year except with Yakima City Council approval.
ARTICLE X
Commencement
The District shall commence its existence effective upon- the issuance of its Charter.
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ARTICLE XI
Dissolution
Section 11.1. Dissolution Process.
A. Subject to the dissolution procedures set forth in Section 14 of the Interlocal
Agreement, if the Board makes an affirmative finding that dissolution is necessary or appropriate
because the purposes of District may not be fulfilled for any reason, the Board may adopt a
resolution requesting Yakima to dissolve the District.
B. Upon adoption of a motion by the Yakima City Council requesting the following
information, or upon adoption by the District board of a resolution requesting its own
dissolution, the District shall file a dissolution statement with the City Clerk of Yakima setting
forth:
1. The name and principal office of the District;
2. The debts, obligations and liabilities of the District, including conditions
of grants and donations, and the property and assets available to satisfy the same; the provisions
to be made for satisfaction of outstanding liabilities and performance of executory contracts; and
the estimated time for completion of its dissolution;
3. Any pending litigation or contingent liabilities;
4. The Board resolution requesting such dissolution and the date(s) and
proceedings leading toward its adoption, whenever the dissolution be voluntary; and
5. A list of persons to be notified upon completion of dissolution.
Section 11.2. Trusteeship
A. Jurisdiction over dissolution arises in the event the dissolution ordinance enacted
by the Yakima City Council (or by all of the Cities, as set forth in Section 14 of the Interlocal
Agreement) requests Superior Court trusteeship. In the event that the dissolution ordinance(s) so
provide(s), the Superior Court of Yakima County shall have jurisdiction and authority to appoint
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trustees or receivers of corporate property and assets and supervise such trusteeship or
receivership.
B. The trustees appointed by the Superior Court shall take such actions as necessary
during the trusteeship to achieve the object thereof as reasonable. The trustees shall have the
power and authority to reorganize the District and recommend amendment of its Charter and/or
its Bylaws; suspend and/or remove District officials, and manage the assets and affairs of the
District; and exercise any and all District powers as necessary or appropriate to fulfill
outstanding agreements, to restore the capability of the District, to perform the functions and
activities for which it is chartered, to reinstate its credit or credibility with its creditors or
obligees, and, if so authorized by the Superior Court, to oversee its dissolution and appropriate
subsequent transactions.
ARTICLE XII
Approval of Charter
APPROVED by Interlocal Agreement by and among the City of Yakima, Washington,
the City of Selah, Washington and the City of Union Gap, Washington, dated June 25, 2001, and
by Ordinance No. 2001-28 of the City of Yakima adopted on June 19, 2.001, motion of the City
of Selah City Council approved on June 12, 2001, and Ordinance Nos. 2298 and 2300 of the City
of Union Gap adopted on June 11, 2001 and June 25, 2001, respectively.
ATTEST
/s/
City Clerk
City of Yakima, Washington
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EXHIBIT B
BYLAWS
B-1
P•\SC\SC091
BYLAWS OF THE
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
ARTICLE I
Board
Section 1.1. Nominations - Expired Terms. Nominations for appointment or
reappointment to fill expired terms on the Board shall be submitted along with resumes
on the forms provided, to the City Manager of the City responsible for appointing the
Boardmember not later than two months prior to the date the term is due to expire. The
bodies so designated in the Charter shall make nominations. Nominations from local
organizations or any other interested group or agency may be submitted to the Yakima
City Manager for consideration as set forth in the Charter.
Section 1.2. Vacancies. Subject to Section 3 hereof, vacancies on the Board shall
be filled by appointment of the City Manager of the City that made the original
appointment to the vacant position, subject to confirmation by the City Council of the
City that made the original nomination to the vacant position. A vacancy or vacancies on
the Board shall be deemed to exist in the case of the death, disability, resignation or
removal from office of any Board member as provided herein. Upon such an occurrence,
the Board shall notify the body that has the power to nominate a replacement for such a
member and said body shall have the opportunity to nominate another person as Board
member to fill the vacant term, subject to confirmation as prescribed in the Charter. If
the appointing body has not appointed another person as Board member to fill the vacant
term described herein within two calendar months from that body's receipt of notice of
said vacancy, the vacancy shall be filled by the Yakima City Manager. Such person shall
serve pending, and be subject to confirmation as prescribed in the Charter.
Section 1.3. Status of Appointed Members. Members appointed by the
applicable City Manager, under Article VI of the Charter shall serve in an acting capacity
unless confirmed by the applicable City Council. Acting members may attend meetings
and participate in the discussions of the Board's business, but shall not have a vote on
matters before the Board nor shall they be considered "in office" for purposes of
determining a quorum. Once confirmed, appointees shall have the full power and
responsibility of a Board member provided by the Charter and these Bylaws.
ARTICLE II
Officers and Committees
Section 2.1. Officers Designated. The officers of the District shall be a President,
Vice President, Secretary, and Treasurer, each of who shall be elected by the Board.
Such other officers and assistant officers as may be deemed necessary may be elected or
appointed by the Board. No person may simultaneously occupy the office of President
and that of Treasurer, or any office responsible for custody of funds and maintenance of
accounts and finances. In addition to the powers and duties specified below, the officers
shall have such powers and_perform such duties as the Board may prescribe.
Section 2.2. Election, Qualifications and Term of Office. The Board shall elect
each of the officers from among its members. The officers shall be elected by the Board
at the first regular meeting after the term of new or reappointed Board members
commences each year, for a one-year term, and each officer shall hold office during said
one-year term and until his or her successor is elected. The Board at its organizational
meeting shall elect the first officers of the Board.
Section 2.3. Powers and Duties.
a) President. The President shall be the chief executive officer of the District
and shall have general supervision over the business of the District, subject, however, to
the control of the Board of Directors. The President shall preside at all meetings of the
Board. The President may sign and execute, in the name of the District deeds, mortga-
ges, leases, bonds, contracts and other instruments duly authorized by the Board, and
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generally shall perform all duties incident to the office of President and such other duties
as may from time to time be assigned to such office by the Board.
b) Vice -President. At the request of the President or iri case of his or her
absence or disability, the Vice -President shall perform all duties of the President and,
when so acting, shall have all the powers of, and be subject to all restrictions upon, the
President. In addition, the Vice -President shall perform such other duties as may from
time to time be assigned to that office by the Board or the President.
c) Secretary. The Secretary shall:
1. Certify.and keep at the office of the District, or at such other place
as the Board may order, the original or a copy of the Bylaws, as they may have been
amended;
2. Keep at the office of the District, or at such other place as the
Board may order, a book of minutes of all meetings of the Board, recording therein the
time and place of holding, whether regular or special, and, if special, how authorized, the
notice thereof given, and the proceedings thereat;
3. See that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law;
4. Be custodian of the records and seal of the District;
5. Exhibit at all reasonable times to any director, upon request, the
Bylaws and minutes of the proceedings of the directors of the District; and
6. In general, perform all duties _of the office of Secretary and such
other duties as may from time to time be assigned to such office by the Board of
Directors or the President.
d) Treasurer. The Treasurer shall receive and have charge of all funds of the
District and shall disburse such funds only as directed by the Board. The Treasurer shall,
in general, perform all duties incident to the office of chief financial officer and such
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other duties as may from time to time be assigned to such office by the Board or the
President.
Section 2.4. Removal. Upon reasonable prior notice to all Board members of the
alleged reasons for dismissal, the Board by an affirmative vote of the majority of all the
Board members may remove any officer from his or her office (but not from his or her
membership on the Board) whenever in its judgment the best interests of the District will
be served thereby.
Section 2.5. Vacancies. The Board shall fill any office that becomes vacant with
a successor who shall hold office for the unexpired term and until his or her successor
shall have been duly elected.
Section 2.6. Establishment of Committees. The Board, by resolution, may
designate from among its members one or more committees, each consisting of at least
three members, to represent the Board and, except as prohibited by the Charter, act for
and on behalf of the Board. The designation of any such committee and the delegation
thereto of authority shall not operate to relieve any member of the Board of any
responsibility imposed by law.
Section 2.7. Executive Committee. The Executive Committee of the District
shall consist of the President, Vice President, the Secretary and the Treasurer of the
Board and one member -at -large elected by the Board. The provisions for election, quali-
fications, term of office and removal of the member -at -large of the Executive Committee
shall be identical to those of officers of the Board as_provided herein in Sections 2.2, 2.4,
and 2.5 of this Article.
Except as provided in the Charter, the Executive Committee shall have and
exercise such powers of the Board as the Board may from time to time provide by
resolution.
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ARTICLE III
Meetings
Section 3.1. Regular Board Meetings. Regular meetings of the Board shall be
held at least once every quarter at a location within the District. The Board shall
establish such regular meeting time and place by resolution.
Section 3.2. Special Board Meetings. Subject to Article VII of the Charter,
special meetings of the Board may be held at any place at any time whenever called by
the President or a majority of the members of the Board.
Section 3.3. Notice of Regular Board Meetings. No notice of the regular meeting
shall be required, except of the first regular meeting and after any change in the time or
place of such meeting adopted by resolution of the Board as above provided. Notice of
such changed regular meeting shall be given by the Secretary or by the person or persons
calling the meeting by personal communication over the telephone to each Board member
at least 24 hours prior to the time of the meeting or by at least three days' notice by mail,
telegram or written communication. If mailed, notice shall be mailed by U.S. mail,
postage prepaid, to the last known address of each Board member. In addition, the
District shall routinely provide reasonable notice of meetings to any individual
specifically requesting it in writing. At any regular meeting of the Board, any business
may be transacted and the Board may exercise all of its powers.
Section 3.4. Notice of Special Board Meetings. Notice of all special meetings of
the Board shall be given by the Secretary or by the person or persons calling the special
meeting by delivering personally or by mail written notice at least 24 hours prior to the
time of the meeting to each Board member and to each local newspaper of general
circulation and to each radio or television station that has requested notice as provided in
RCW 42.30.080. In addition, the District shall provide notice of special meetings to any
individual specifically requesting it in writing.
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The time and place of the special meeting and the business to be transacted must
be specified in the notice. Final disposition shall not be taken on any other matter at such
meetings.
Section 3.5. Waiver of Notice. Notice as provided in Sections 3.3 and 3.4 hereof
may be dispensed with as to any member of the Board who at or prior to the time the
meeting convenes files with the Board a written waiver of notice or who is actually
present at the meeting at the time it convenes. Such notice may also be dispensed with as
to special meetings called to deal with an emergency involving injury or damage to
persons or property or the likelihood of such injury or damage, where time requirements
of such notice would make notice impractical and increase the likelihood of such injury
or damage. Notice, as provided in Article IX of the Charter concerning proposed
amendments to the Charter or Bylaws and votes on such amendments, may not be
waived.
Section 3.6. Notice to the Cities. Notice of all meetings and minutes of all
meetings of the Board shall be given to the City Clerks of Yakima, Selah and Union Gap.
ARTICLE IV
Amendments to Charter and Bylaws
Section 4.1. Proposals to Amend Charter and Bylaws.
1. Proposals to amend the Charter or Bylaws shall be presented in a format
that strikes over material to be deleted and underlines new material.
2. Any Board member may introduce a proposed amendment to the Charter
or to the Bylaws (which may consist of new Bylaws) at any regular meeting or at any
special meeting of which 30 days' advance notice has been given.
Section 4.2. Board Consideration of Proposed Amendments. If notice of a
proposed amendment to the Charter or to the Bylaws, and information including the text
of the proposed amendment and a statement of its purpose and effect, is provided to
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members of the Board 15 days prior to any regular Board meeting or any special meeting
of which 30 days' advance notice has been given, then the Board may vote on the
proposed amendment at the same meeting as the one at which the amendment is
introduced. If such notice and information is not so provided, the Board may not vote on
the proposed amendment until the next regular Board meeting or special meeting of
which 30 days' advance notice has been given and at least 15 days prior to which meeting
such notice and information is provided to Board members. Germane amendments to the
proposed amendment within the scope of the original amendment will be permitted at the
meeting at which the vote is taken.
Section 4.3. Vote Required for Amendments to Charter or Bylaws. Resolutions
of the Board approving proposed amendments to the Charter or approving amendments to
the Bylaws require an affirmative vote of a majority of the Board members then in office
as provided in the Charter. As provided in the Interlocal Agreement, as necessary and
appropriate in the discretion of the Yakima City Council, the Yakima City Council may
amend the Bylaws by ordinance adopted at or after a public meeting held with notice to
the District, the City of Selah and the City of Union Gap. Amendments to the Bylaws
adopted by the Yakima City Council may not be further amended by the District for one
year except with Yakima City Council approval.
Section 4.4. Cities' Approval of Proposed Charter Amendments. Proposed
Charter amendments adopted by the Board shall be submitted to each of the Parties to the
Interlocal Agreement. The District's Charter may be amended only as provided in
Article IX of the Charter.
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ARTICLE V
Administrative Provisions
Section 5.1. Books and Records. The District shall keep current and complete
books and records of account and shall keep minutes of the proceedings of its Board and
its committees having any of the authority of the Board. The District shall provide no
less than 90 days' written notice to the City of Yakima, the City of Selah, and the City of
Union Gap prior to the destruction of any permanent books and records.
Section 5.2. Indemnification of Board Members. The District elects to defend
and indemnify its present and former Board members and officers and their successors,
spouses and marital communities to the full extent authorized by law and the Charter. In
addition, the right of indemnification shall inure to each Board member or officer and his
or her spouses and marital communities upon his or her appointment to the Board and in
the event of his or her death shall extend to his or her heirs, legal representatives and
estate. Each person who shall act as Board member or officer of the District shall be
deemed to do so in reliance upon such indemnification and such rights shall not be
exclusive of any other right that he or she may have.
Section 5.3. Principal Office. The principal office of the District shall be located
within the District. The Board shall establish the principal office by resolution.
Section 5.4. Fiscal Year. The Fiscal Year of the District shall begin January 1
and end December 31 of each year, except the first fiscal year, which shall run from the
date the Charter was issued to December 31, 2001.
ARTICLE VI
Approval of Bylaws
APPROVED by Interlocal Agreement by and among the City of Yakima,
Washington, the City of Selah, Washington and the City of Union Gap, Washington,
dated June 25, 2001, and by Ordinance No. 2001-28 of the City of Yakima adopted on
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June 19, 2001, motion of the City of Selah City Council approved on June 12, 2001, and
Ordinance Nos. 2298 and 2300 of the City of Union Gap adopted on June 11, 2001 and
June 25, 2001, respectively.
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CHARTER
OF THE
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
ARTICLE I
Name and Seal; Definitions
Section 1.1. Name. The name of this public facilities district shall be the YAKIMA
REGIONAL PUBLIC FACILITIES DISTRICT (hereinafter referred to as the "District").
Section 1.2. Seal. The District's seal shall be a circle with the name "YAKIMA
REGIONAL PUBLIC FACILITIES DISTRICT" inscribed therein. The Board shall approve
the seal by resolution.
Section 1.3. Definitions. All capitalized terms used but not defined herein shall have the
meanings set forth in the Interlocal Cooperation Agreement To Form a Public Facilities District
by and among the City of Yakima, Washington ("Yakima"), the City of Selah, Washington
("Selah") and the City of Union Gap, Washington ("Union Gap" and collectively with Yakima
and Selah, the "Cities"), dated June 25, 2001 (the "Interlocal Agreement").
ARTICLE II
Authority and Limit on Liability
Section 2.1. Authority. The District is a public facilities district organized pursuant to
RCW 35.57.010, the Interlocal Agreement, Ordinance No. 2001-28 of Yakima, Ordinance Nos.
2298 and 2300 of Union Gap, and motion of the Selah City Council approved on June 12, 2001.
Section 2.2. Limit on Liability. All liabilities incurred by the District shall be satisfied
exclusively from the assets, credit, and properties of the District, and no creditor or other person
shall have any right of action against or recourse to the Cities, their assets, credit, or services, on
account of any debts, obligations, liabilities or acts or omissions of the District.
Section 2.3. Mandatory Disclaimer. The following disclaimer shall be posted in a
prominent place where the public may readily see it in the District's principal and other offices.
It shall also be printed or stamped on all contracts, notes, bonds, and other documents that may
entail any debt or liability by the District.
The YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT is
organized pursuant to RCW 35.57.010, the Interlocal Financing
Agreement by and among the City of Yakima, Washington, the
City of Selah, Washington and the City of Union Gap,
Washington, dated June 25, 2001 (the "Interlocal Agreement"),
Ordinance No. 2001-28 of the City of Yakima, Ordinance Nos.
2298 and 2300 of the City of Union Gap, and motion of the City of
Selah City Council approved on June 12, 2001. The Interlocal
Agreement provides as follows: "All liabilities incurred by the
District shall be satisfied exclusively from the assets, credit, and
properties of the District, and no creditor or other person shall have
any right of action against or recourse to the Cities of Yakima,
Selah or Union Gap, their assets, credit, or services, on account of
any debts, obligations, liabilities or acts or omissions of the
District."
ARTICLE III
Duration
The duration of the District shall be perpetual except as provided in the Interlocal
Agreement.
ARTICLE IV
Purpose
The purpose of the District is to provide a legal entity under RCW 35.57.010 and the
Interlocal Agreement to acquire (by purchase, lease or otherwise), construct, own, remodel,
maintain, equip, reequip, repair, finance, and operate (either directly or by contract) one or more
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Regional Centers, as defined in RCW 35.57.020, including, but are not limited to, the
Convention Center consisting of the following components:
a) Operation of Convention Center facilities, including meeting space,
ballroom and other event facilities, with related activities;
b) Operation of Convention Center programs and exhibits;
c) Acquisition, display and maintenance of Convention Center exhibits;
d) Restaurant or other food, beverage and banquet service facilities to
enhance the attractiveness of the Convention Center to visitors;
f) Any other uses reasonably or necessarily related to the operation of
Convention Center facilities; and
g) Related parking.
To the extent appropriate and consistent with the needs and objectives of the Cities and
the District's purpose, the District may acquire, lease and/or operate and manage real property,
including but not limited to the Convention Center; secure financing; undertake or otherwise
provide for the construction and development of the Project; and otherwise undertake and
accomplish all activities and projects necessary for the Project and the operation of the
Convention Center. The District shall have no purpose other than acquisition, construction,
ownership, remodeling, maintenance, equipping, reequipping, repair, financing, and/or operation
(either directly or by contract) of the Convention Center and any other Regional Center approved
under the terms of the Interlocal Agreement.
For the purpose only of securing the exemption from federal income taxation for interest
on obligations of the District, the District constitutes an authority and instrumentality of Yakima
(within the meaning of those terms in federal regulations and rulings pursuant to Section 103 of
the Code).
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ARTICLE V
Powers
Section 5.1. Powers. The District shall have and may exercise all lawful powers
conferred by State law, the Interlocal Agreement, ordinance, this Charter and its Bylaws,
including the usual powers of a corporation for public purposes and, without limitation, the
power to:
A. Hire employees, staff, and services; prescribe their duties, qualifications, and
compensation; and secure the services of consultants for professional services,
technical assistance, or advice;
B . Contract for any corporate purpose with the United States, a state, and any
political subdivision or agency of either, and with individuals, associations and
corporations and other entities (including public or private entities) including the
financing, construction, equipping, operation or management of the Convention
Center and expansion Project, related parking or for any other Regional Center
owned or operated by the District;
C. Sue and be sued in its name;
D . Purchase, lease, exchange, mortgage, encumber, improve, use, or otherwise
transfer or grant security interests in real or personal property or any interests
therein; grant or acquire options on real and personal property; and contract
regarding the income or receipts from real and personal property;
E. Accept and expend gifts, grants, and donations, including funds or property from
the United States, a state, and any municipality or political subdivision or agency
of either, property acquired by any such governmental unit through the exercise of
its power of eminent domain, and funds or property from corporations,
associations, individuals or any other source, and comply with the terms and
conditions therefor;
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F. Impose the following charges, fees, and taxes authorized in RCW 35.57.040:
Admission Charges, Parking Charges and any other fees or charges for services,
goods or use of any of its facilities; Admission Taxes; Parking Taxes; Voted Sales
Taxes; and Sales Taxes at a rate not to exceed the limit set forth in RCW
82.14.390;
G. Use Sales Tax Revenue, Additional Revenue and other receipts for its corporate
purposes;
H. Use the supplemental alternative public works contracting procedures set forth in
Chap. 39.10 RCW;
Borrow or lend its funds, property, credit or services for corporate purposes, or act
as a surety or guarantor for corporate purposes; issue revenue bonds or general
obligation bonds in conformity with the debt limitations set forth in RCW
35.57.030 and other applicable provisions of State law in such principal amounts
as in the discretion of the District shall be necessary or appropriate to provide
sufficient funds for achieving any corporate purposes; provided, however, that all
bonds and notes or liabilities occurring thereunder shall be satisfied exclusively
from the assets, properties or credit of such District, and no creditor or other
person shall have any recourse to the assets, credit or services of the Cities
thereby, unless any or all of the Cities shall by ordinance expressly guarantee such
bonds or notes;
J. Manage, on behalf of the United States, a state, and any municipality or political
subdivision or agency of either, any property acquired by such entity through gift,
purchase, construction, lease, assignment, default, or exercise of the power of
eminent domain;
K. Recommend to the United States, a state, and any municipality or political
subdivision or agency of either, consistent with all applicable laws, such tax,
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financing, and security measures as the District may deem appropriate to
maximize the public interest in activities in which the District by this Charter has
a particular responsibility;
L. Control the use and disposition of corporate property, assets, and credit;
M. Invest and reinvest its funds;
N. Establish the consideration (if any) for property transferred, all in pursuit of
corporate purposes;
0. Maintain books and records as appropriate for the conduct of its affairs;
P. Conduct corporate affairs, carry on its operations, and use its property as allowed
by law and consistent with this Charter, and its Bylaws; name corporate officials;
Q Identify and recommend to the' United States, a state, and any municipality or
political subdivision or agency of either, the acquisition by the appropriate
governmental entity for transfer to or use by the District of property and property
rights, which, if so acquired, whether through purchase or the exercise of eminent
domain, and so transferred or used, would materially advance the purpose for
which the District is chartered; and
R. Exercise and enjoy such other powers as may be authorized by law.
Section 5.2. Limitation of Powers. The District organized under this Charter in all
activities and transactions shall be limited in the following respects:
A. The District shall have no power of eminent domain;
B. The District may not incur or create any liability that permits recourse by any
party or member of the public to any assets, services, resources, or credit of the
Cities. All liabilities incurred by the District shall be satisfied exclusively from
the assets and credit of the District; no creditor or other person shall have any
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recourse to the assets, credit, or services of the Cities on account of any debts,
obligations, liabilities, acts, or omissions of the District;
C. No funds, assets, or property of the District shall be used for any partisan political
activity or to further the election or defeat of any candidate for public office or
ballot proposition; nor shall any funds or a substantial part of the activities of the
District be used for publicity or educational purposes designed to support or
defeat legislation pending before the Congress of the United States, or the
legislature of the State or the Cities; provided, however, that funds may be used
for representatives of the District to communicate with members of Congress,
State legislators or City council members concerning funding and other matters
directly affecting the District, so long as such activities do not constitute a
substantial part of the District's activities and so long as such activities are not
specifically limited elsewhere in this Charter or the Interlocal Agreement;
D . All Sales Tax Revenue, Additional Revenue, receipts, assets, or credit of the
District shall be applied toward or expended upon services, projects, and activities
authorized by this Charter. No part of the net earnings of the District shall inure
to the benefit of, or be distributable as such to, the Board members, officers of the
District or other private persons, except that the District is authorized and
empowered to:
i. Compensate those persons or entities performing services for the District,
including District employees and legal counsel, a reasonable amount for
services rendered, and reimburse Board members and others for reasonable
expenses actually incurred in performing their duties;
ii. Assist District officials as members of a general class of persons to be
assisted by a District -approved project or activity to the same extent as other
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members of the class so long as no special privileges or treatment accrues to
such corporate official by reason of his or her status or position in the District;
iii. Defend and indemnify any current or former Board member or employee
and their successors, spouses and marital communities against all costs,
expenses, judgments, and liabilities, including attorneys' fees, reasonably
incurred by or imposed upon him or her in connection with or resulting from
any civil claim, action, or proceeding in which he or she is or may be made a
party by reason of being or having been a corporate official, or by reason of
any action alleged to have been taken or omitted by him or her as such
official, provided that he or she was acting in good faith on behalf of the
District and within the scope of duties imposed or authorized by law. This
power of indemnification shall not be exclusive of other rights to which
corporate officials may be entitled as a matter of law;
iv. Purchase insurance to protect and hold personally harmless any of its
officials, its employees, and its agents from any civil action, claim, or
proceeding instituted against the foregoing individuals arising out of the
performance, in good faith, of duties for, or employment with, the District and
to hold these individuals harmless from any expenses connected with the
defense, settlement, or monetary judgments from such actions, claims, or
proceedings. The purchase of such insurance and its policy limits shall be
discretionary with the Board, and such insurance shall not be considered to be
compensation to the insured individuals. The powers conferred by this
subsection shall not be exclusive of any other powers conferred by law to
purchase liability insurance; and
v. Sell assets for a consideration greater than their reasonable market value
or acquisition costs, charge more for services than the expense of providing
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them, or otherwise secure an increment in a transaction, or carry out any other
transaction or activity, so long as such gain is not the principal object or
purpose of the District's transactions or activities and is applied to or
expended upon services, projects, and activities otherwise authorized as
corporate purposes;
E. The District organized under this chapter shall not issue shares of stock, pay
dividends, make private distribution of assets, make loans to its board members or
employees or otherwise engage in business for private gain;
F. The District's power to acquire (by purchase, lease or otherwise), construct, own,
remodel, maintain, equip, reequip, repair, finance, and operate (either directly or
by contract) any Regional Center other than the Convention Center, the Project
and related parking facilities is subject to the approval of Yakima;
G. In consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs and Costs of the Project under the terms of
the Development Agreement and Yakima's agreement to apply Lodging Taxes to
pay a portion of Operation and Maintenance Costs under the terms of the
Development Agreement, the following District powers shall be subject to the
approval of the Yakima City Council:
i. The District shall not impose Admission Charges or Parking Charges
without the prior approval of the Yakima City Council;
ii. The District shall not impose Admission Taxes or Parking Taxes without
the prior approval of the Yakima City Council;
iii. The District's annual budget, including Administrative Costs, shall be
subject to annual approval by the Yakima City Council;
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iv. Any acquisition or transfer of real and personal property with a value over
$100,000 by lease, sublease, purchase, or sale by the District shall be subject
to approval by the Yakima City Council;
v. Any gambling activity under the authority of the District at the
Convention Center shall be subject to approval by the Yakima City Council;
and
vi. Any public display of artwork under the authority of the District at the
Convention Center shall be subject to approval by the Yakima City Council.
H . The District's power to impose Voted Sales Taxes authorized under
RCW 82.14.048 is subject to the approval by each of the Parties prior to
placement on the ballot.
ARTICLE VI
Board of Directors And Corporate Officers
Section 6.1. Powers. The Board shall govern the affairs of the District. All corporate
powers of the District shall be exercised by or under the authority of, and the business, property
and affairs of the District shall be managed under the direction of, the Board except as may be
otherwise provided in this Charter, the Interlocal Agreement or State law.
Section 6.2. Board Composition. Pursuant to RCW 35.57.010, the Board shall be
composed of seven members. The initial members of the Board shall be appointed as follows.
One Boardmember shall be appointed by the Yakima City Council, one Boardmember by the
Selah City Council and one Boardmember by the Union Gap City Council. Four Boardmembers
shall be appointed by the Yakima City Council based on recommendations from local
organizations such as the local chamber of commerce, local economic development council, and
local labor council. The Boardmembers shall not be council members of the Cities either at the
time of their appointment or at any time thereafter.
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Section 6.3. Terms of Office.
A . The terms of office of the initially appointed members of the Board shall
commence on the effective date of this Charter and shall be staggered as follows:
1. Group I. One member for a one-year term;
2. Group II. One member for a two-year term;
3. Group III. One member for a three-year term; and
4. Group IV. The remainder for four-year terms.
B. With respect to the appointments of the initial Board members, the following
members are assigned to the four groups identified in subsection 6.3.A above for
purposes of determining the length of terms of such initial Board members: the
Group I member shall be appointed by the Yakima City Council, based on
recommendations from local organizations; the Group II member shall be
appointed by the Yakima City Council; the Group III member shall be appointed
by the Yakima City Council, based on recommendations from local organizations;
the remainder of the appointments shall be Group IV members.
C. The expired term of the Group I member shall be filled by the Yakima City
Council, based on recommendations from local organizations.
D. The expired term of the Group II member shall be filled by appointment of the
Yakima City Council..
E. The expired term of the Group III member shall be filled by appointment of the
Yakima City Council, based on recommendations from local organizations.
F. The expired term of one of the Group IV members shall be filled by the Selah
City Council, the expired term of one of the Group IV members shall be filled by
the Union Gap City Council and the expired term of the remainder of the Group
IV members shall be filled by the Yakima City Council, based on
recommendations from local organizations.
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G. Except for the initial members of the board, each member shall be appointed to
serve for a four-year term. -Each member shall continue to serve until his or her
successor has been appointed and qualified as provided in the bylaws. Members
may be reappointed to serve not more than four consecutive full terms.
H. Terms shall expire on June 30of the year in which the respective group is
scheduled to terminate. Nominations for new appointees or for reappointment of
existing members shall be processed in the manner provided in the Bylaws.
I. Vacancies occurring during the course of a term shall be filled by appointment by
the City Manager of the City that made the original appointment to the vacant
position, subject to confirmation by the City Council of the City that made the
original appointment to the vacant position, in the manner and to the effect
provided in the Bylaws to complete the unexpired term to which appointed.
Section 6.4. Quorum and Manner of Action. At all meetings of the Board a majority of
directors then in office shall constitute a quorum. The Board may adopt resolutions of the Board
only by an affirmative vote of a majority of the Boardmembers then in office.
Section 6.5. Officers and Division of Duties.
A. The initial officers of the District shall be the President, Vice President, Secretary
and Treasurer of the Board. In no event shall there be less than two officers designated, nor shall
the same person occupy the office of president and that of treasurer, or any office responsible for
custody of funds and maintenance of accounts and finances. Additional officers may be
provided for in the Bylaws.
B. The President shall be the agent of the District for service of process; the Bylaws
may designate additional corporate officials as agents to receive or initiate process. The
corporate officers, who shall be selected from among the membership of the Board as provided
in the Bylaws, shall manage the daily affairs and operations of the District.
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C. The Board shall oversee the activities of the corporate officers, establish and/or
implement policy, participate in corporate activity in matters prescribed by the Interlocal
Agreement, and shall have stewardship for management and determination of all corporate
affairs.
Section 6.6. Bonding of Corporate Officers. Each corporate official responsible for
handling accounts and finances shall file as soon as practicable with the District a fidelity bond
in an amount determined by the District to be adequate and appropriate, and may hold the
corporate office only as long as such a bond continues in effect.
Section 6.7. Executive Committee. The Bylaws may provide for an Executive
Committee, which shall be appointed and/or removed by the Board, and shall have and exercise
such authority of the Board in the management between meetings of the Board, as may be
specified in the Bylaws.
Section 6.8. Removal of Board Members. The City Council of each City may by
ordinance remove from the Board with or without cause any member of the Board appointed by
that City at or after a public meeting, with prior notice to the District and the other Cities. In the
event of removal, members shall be replaced in the same manner as provided for in filling
vacancies on the Board.
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ARTICLE VII
Meetings
Section 7.1. Board Meetings.
A. The Board shall meet at least quarterly each year; special meetings of the Board
may be called as provided by the Charter, the Bylaws or RCW 42.30.010 et seq.
B. The Board shall be the governing body of a public agency as defined in RCW
42.30.020, and all meetings of the board shall be held and conducted in accordance with RCW
42.30.010 et seq. ("The Open Public Meetings Act"). Notice of meetings shall be given in a
manner consistent with RCW 42.30.010 et seq. In addition, the District shall routinely provide
reasonable notice of meetings to any individual specifically requesting it in writing.
C. All Board meetings, including executive and all other permanent and ad hoc
committee meetings, shall be open to the public to the extent required by RCW 42.30.010 et seq.
The Board and committees may hold executive sessions to consider matters enumerated in RCW
42.30.010 et seq., or privileged -matters recognized by law, and shall enter the cause therefor
upon its official journal. At all public meetings, any citizen shall have a reasonable opportunity
to address the Board either orally or by written petition. Voting by telephone or by proxy is not
permitted.
Section 7.2. Parliamentary Authority. The rules in Robert's Rules of Order (revised)
shall govern the District in all cases to which they are applicable, where they are not inconsistent
with the Charter or with the special rules of order of the District set forth in the Bylaws.
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Section 7.3. Minutes. Copies of the minutes of all regular or special meetings of the
Board shall be available to any person or organization that requests them. The minutes of all
Board meetings shall include a record of individual votes on all matters requiring Board
concurrence or approval.
ARTICLE VIII
Procedural Requirements
Section 8.1. Board Review and Concurrence.
A. At least quarterly, the Board shall review monthly statements of income and
expenses, which compare budgeted expenditures to actual expenditures. The Board shall review
all such information at regular meetings, the minutes of which shall specifically note such
reviews and include such information.
B. General or particular authorization or review and concurrence of the Board by
resolution shall be necessary for any of the following transactions:
1. Transfer or conveyance of an interest in real estate other than release of a
lien or satisfaction of a mortgage after payment has been received and the execution of a lease
for a current term less than one year;
2. The contracting of debts, issuances of notes, debentures, or bonds, and the
mortgaging or pledging of authority assets or credit to secure the same;
3. The donation of money, property or other assets belonging to the District;
4. An action by the District as a surety or guarantor;
5. All capital expenditures in excess of twenty-five thousand dollars
($25,000), and all other transactions in which: (i) the consideration exchanged or received by the
District exceeds the greater of one percent of the previous year's operating budget or twenty-five
thousand dollars ($25,000) or (ii) the performance by the District shall extend over a period
exceeding one year from the date of execution of an agreement therefor;
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6. Adoption of an annual budget approved by the Yakima City Council. The
District shall forward its proposed annual budget to the Cities (for review and comment by Selah
and Union Gap and for approval by the Yakima City Council) no later than September 1 of the
year prior to the budget year. The annual budget shall include a projected operating and capital
budget for the next fiscal year as well as a summary of projects and activities to be undertaken
during the next fiscal year;
7. Certification of annual reports and statements to be filed with the Cities as
true and correct in the opinion of the Board and of its members;
8. Proposed amendments to the Charter and Bylaws; and
9. Such other transactions, duties, and responsibilities as the Charter shall
repose in the Board or the Board may reserve.
Section 8.2. Establishment and Maintenance of Office and Records. The District shall:
A. Maintain a principal office at a location within the boundaries of the Cities;
B. File and maintain with each City a current listing of all Board officials, their
positions and their home addresses, their business and home phone numbers, the address of the
District's principal office and of all other offices used by it, and a current set of its Bylaws; and
C. Maintain all of its records in a manner consistent with the Preservation and
Destruction of Public Records Act, RCW Chapter 40.14.
Section 8.3. Access to Records.
A. The District shall keep an official journal containing the minutes of proceedings at
all meetings of the Board and the resolutions of the Board.
B. Any person shall have access to records and information of the District to the
extent required by State law.
Section 8.4. Deposit of Public Funds. All money belonging to or collected for the use of
the District, coming into the hands of any corporate official or officer thereof, shall be deposited
in a qualified public depositary as determined by the Washington Public Deposit Protection
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Commission. Such monies may be invested at the direction of the Board, by resolution, in
investments that would be lawful for the investments of Yakima funds.
Section 8.5. Reports and Information. The District shall, within five months after the
end of its fiscal year, file an annual report with each City containing financial statements of
assets and liabilities, revenue and expenditures and changes in its financial position during the
previous year; a summary of significant accomplishments; a list of depositories used; a list of
authority officials and a list of officials bonded pursuant to Section 6.6 of this Charter.
Section 8.6. Audits and Inspections. The District is subject to review and audit by the
State Auditor, as provided by law. The District shall send a copy of its audited financial
statements to each City no later than 30 days after such audited financial statements are
available. In addition, the District shall, at any time during normal business hours and as often as
the Yakima City Council, the Yakima City Manager or his designee, or the State Auditor deem
necessary, make available to the Yakima City Council, the Yakima City Manager or his
designee, the State Auditor and, at the request of the City, an independent auditor for
examination all of its financial records, and shall permit the Yakima City Council, the Yakima
City Manager or his designee, State Auditor and, at the request of the City, an independent
auditor to audit, examine and make excerpts or transcripts from such records, and to make audits
of all contracts, invoices, materials, payrolls, records of personnel, conditions of employment
and other data relating to all the aforesaid matters. The District shall review with the Yakima
City Manager or his or her designee within 45 days of receipt and take immediate corrective
action to address any audit findings or qualifications in its audit reports.
Section 8.7. Insurance. The District shall maintain in full force and effect public liability
insurance in an amount sufficient to cover potential claims for bodily injury, death or disability
and for property damage, which may arise from or be related to projects and activities of the
District, naming Yakima as an additional insured, if such insurance shall be available at a
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reasonable price as determined by the Board. If insurance is not maintained the District shall
maintain adequate reserves to cover potential claims and losses.
Section 8.8. Bylaws.
A. The properly adopted Bylaws of the District shall be the official rules for the
governing of meetings and the affairs of the District.
B. The Bylaws may be amended as provided in Article IX of this Charter in order to
provide additional or different rules for governing the District and its activities as are not
inconsistent with this Charter.
C. Amendments to the Bylaws shall be effective 10 days after filing of same with the
City Clerks of Yakima, Selah and Union Gap, unless such amendment(s) shall have been passed
by unanimous vote of the Board and an earlier effective date shall have been set.
Section 8.9. Conflict of Interest.
A. Except as provided in this section, a Board member or employee of the District
may not participate in Board decisions if that person or a member of that person's immediate
family has a financial interest in the issue being decided unless the financial interest is a remote
financial interest and participation is approved under subsection B of this section.
B. A Board member or employee may participate in a decision if that person or a
member of that person's immediate family has only a remote financial interest, the fact and
extent of the interest is disclosed to the Board in a public meeting and is noted in the minutes of
the Board before any participation by the member in the decision, and thereafter in a public
meeting the Board by vote authorizes or approves the participation. If the person whose
participation is under consideration is a Board member, that person may not vote under this
subsection. For purposes of this subsection, "remote financial interest" means:
(i)
that of a nonsalaried officer or director of a nonprofit corporation;
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(ii) that of an employee or agent of a contracting party where the
compensation of the employee or agent consists entirely of fixed wages or salary
and the contract is awarded by bid or by other competitive process;
(iii) that of a landlord or tenant of a contracting party, except in cases
where the property subject to the lease or sublease is owned or managed by the
public corporation;
(iv) that of a holder of less than one percent of the shares of the
corporation or cooperative that is the contracting party; or
(v) that of an owner of a savings and loan or bank savings or share
account or credit union deposit account if the interest represented by the account
is less than two percent of the total deposits held by the institution.
C. A Board member or employee is not considered to be financially interested in a
decision when the decision could not affect that person in a manner different from its effect on
the public.
D. No Board member or employee of the District shall accept, directly or indirectly,
any gift, favor, loan, retainer, entertainment or other thing of monetary value from any person,
firm or corporation having dealings with the District when such acceptance would conflict with
the performance of a Board member or employee's official duties. A conflict, or possibility of
conflict, shall be deemed to exist where a reasonable and prudent person would believe that it
was given for the purpose of obtaining special considerations or influence; provided that
application of this provision shall take into consideration the established customs and practices
of the District.
E. The Board may adopt additional conflict of interest and ethical rules it considers
appropriate.
F. For purposes of this section, "participate in a decision" includes all discussions,
deliberations, preliminary negotiations, and votes.
G. For purposes of this section, "immediate family" means:
1. A spouse;
2. Any parent, parent -in-law, child, son-in-law, or daughter-in-law; and
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3. Any sibling, uncle, aunt, cousin, niece or nephew residing in the
household of the corporate official or employee.
Section 8.10. Discrimination.
A. Board membership may not directly or indirectly be based upon or limited by
creed, age, race, color, religion, sex, national origin, marital status or the presence of any
sensory, mental or physical disability, unless such limitations are necessary for the performance
of the role and no less discriminatory alternatives are available.
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B. To ensure equality of employment opportunity, the District shall not discriminate
in any matter related to employment because of creed, age, race, color, religion, sex, national
origin, marital status or the presence of any sensory, mental or physical disability, unless such
limitations are necessary for the performance of the role and no less discriminatory alternatives
are available. The District shall, in all solicitations or advertisements for employees placed by or
on behalf of the District, state that all qualified applicants will receive consideration for
employment without regard to creed, age, race, color, religion, sex, national origin, marital status
or the presence of any sensory, mental or physical disability, unless such limitations are
necessary for the performance of the role and no less discriminatory alternatives are available.
ARTICLE IX
Amendments to Charter and Bylaws
Section 9.1. Proposals to Amend Charter.
A. Subject to Section 8 of the Interlocal Agreement, the District may propose to the
Yakima City Council that its Charter be amended by resolution passed by a procedure outlined in
its Bylaws at a regular or special meeting of the Board for which 30 days' advance written notice
was given.
B. When required by law, the District shall propose to the Yakima City Council an
amendment to this Charter that will conform to and be consistent with said law.
C. As necessary and appropriate in the discretion of the Yakima City Council, the
Yakima City Council may propose to amend this Charter on its own initiative.
Section 9.2. Charter Amendments. Pursuant to Section 8 of the Interlocal Agreement,
the Charter may be amended only with the approval of all of the Parties to the Interlocal
Agreement, whether in response to a resolution passed by the District's Board of Directors, or on
the initiative of Yakima. After approval of a Charter amendment by all of the Parties, the revised
Charter shall be deemed issued and shall be filed in the same manner as the original Charter.
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Section 9.3. Amendments to Bylaws. The Bylaws of the District may be amended by a
resolution passed by a majority of the Board members in office at the time. Bylaws shall be
reviewed annually after the election of officers with recommendations, if any, for amending the
bylaws proposed by the Executive Committee, if such committee is established, otherwise by an
ad hoc Bylaws Committee appointed by the Board President. At any other time, any Board
member may introduce necessary amendments to the Bylaws to the Board for consideration. As
provided in the Interlocal Agreement, as necessary and appropriate in the discretion of the
Yakima City Council, the Yakima City Council may amend the Bylaws by ordinance adopted at
or after a public meeting held with notice to the District, Selah and Union Gap. Amendments to
the Bylaws adopted by the Yakima City Council may not be further amended by the District for
one year except with Yakima City Council approval.
ARTICLE X
Commencement
The District shall commence its existence effective upon the issuance of its Charter.
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ARTICLE XI
Dissolution
Section 11.1. Dissolution Process.
A. Subject to the dissolution procedures set forth in Section 14 of the Interlocal
Agreement, if the Board makes an affirmative finding that dissolution is necessary or appropriate
because the purposes of District may not be fulfilled for any reason, the Board may adopt a
resolution requesting Yakima to dissolve the District.
B. Upon adoption of a motion by the Yakima City Council requesting the following
information, or upon adoption by the District board of a resolution requesting its own
dissolution, the District shall file a dissolution statement with the City Clerk of Yakima setting
forth:
1. The name and principal office of the District;
2. The debts, obligations and liabilities of the District, including conditions
of grants and donations, and the property and assets available to satisfy the same; the provisions
to be made for satisfaction of outstanding liabilities and performance of executory contracts; and
the estimated time for completion of its dissolution;
3. Any pending litigation or contingent liabilities;
4. The Board resolution requesting such dissolution and the date(s) and
proceedings leading toward its adoption, whenever the dissolution be voluntary; and
5. A list of persons to be notified upon completion of dissolution.
Section 1 1.2. Trusteeship
A. Jurisdiction over dissolution arises in the event the dissolution ordinance enacted
by the Yakima City Council (or by all of the Cities, as set forth in Section 14 of the Interlocal
Agreement) requests Superior Court trusteeship. In the event that the dissolution ordinance(s) so
provide(s), the Superior Court of Yakima County shall have jurisdiction and authority to appoint
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trustees or receivers of corporate property and assets and supervise, such trusteeship or
receivership.
B. The trustees appointed by the Superior Court shall take such actions as necessary
during the trusteeship to achieve the object thereof as reasonable. The trustees shall have the
power and authority to reorganize the District and recommend amendment of its Charter and/or
its Bylaws; suspend and/or remove District officials, and manage the assets .and affairs of the
District; and exercise any and all District powers as necessary or appropriate to fulfill
outstanding agreements, to restore the capability of the District, to perform the functions and
activities for which it is chartered, to reinstate its credit or credibility with its creditors or
obligees, and, if so authorized by the Superior Court, to oversee its dissolution and appropriate
subsequent transactions.
ARTICLE XII
Approval of Charter
APPROVED by Interlocal Agreement by and among the City of Yakima, Washington,
the City of Selah, Washington and the City of Union Gap, Washington, dated June 25, 2001, and
by Ordinance No. 2001-28 of the City of Yakima adopted on June 19, 2001, motion of the City
of Selah City Council approved on June 12, 2001, and Ordinance Nos. 2298 and 2300 of the City
of Union Gap adopted on June 11, 2001 and June 25, 2001, respectively.
ATTEST
/s/
City Clerk
City of Yakima, Washington
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BYLAWS OF THE
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
ARTICLE I
Board
Section 1.1. Nominations - Expired Terms. Nominations for appointment or
reappointment to fill expired terms on the Board shall be submitted along with resumes
on the forms provided, to the City Manager of the City responsible for appointing the
Boardmember not later than two months prior to the date the term is due to expire. The
bodies so designated in the Charter shall make nominations. Nominations from local
organizations or any other interested group or agency may be submitted to the Yakima
City Manager for consideration as set forth in the Charter.
Section 1.2. Vacancies. Subject to Section 3 hereof, vacancies on the Board shall
be filled by appointment of the City Manager of the City that made the original
appointment to the vacant position, subject to confirmation by the City Council of the
City that made the original nomination to the vacant position. A vacancy or vacancies on
the Board shall be deemed to exist in the case of the death, disability, resignation or
removal from office of any Board member as provided herein. Upon such an occurrence,
the Board shall notify the body that has the power to nominate a replacement for such a
member and said body shall have the opportunity to nominate another person as Board
member to fill the vacant term, subject to confirmation as prescribed in the Charter. If
the appointing body has not appointed another person as Board member to fill the vacant
term described herein within two calendar months from that body's receipt of notice of
said vacancy, the vacancy shall be filled by the Yakima City Manager. Such person shall
serve pending, and be subject to confirmation as prescribed in the Charter.
Section 1.3. Status of Appointed Members. Members appointed by the
applicable City Manager, under Article VI of the Charter shall serve in an acting capacity
unless confirmed by the applicable City Council. Acting members may attend meetings
and participate in the discussions of the Board's business, but shall not have a vote on
matters before the Board nor shall they be considered "in office" for purposes of
determining a quorum. Once confirmed, appointees shall have the full power and
responsibility of a Board member provided by the Charter and these Bylaws.
ARTICLE II
Officers and Committees
Section 2.1. Officers Designated. The officers of the District shall be a President,
Vice President, Secretary, and Treasurer, each of who shall be elected by the Board.
Such other officers and assistant officers as may be deemed necessary may be elected or
appointed by the Board. No person may simultaneously occupy the office of President
and that of Treasurer, or any office responsible for custody of funds and maintenance of
accounts and finances. In addition to the powers and duties specified below, the officers
shall have such powers and perform such duties as the Board may prescribe.
Section 2.2. Election, Qualifications and Term of Office. The Board shall elect
each of the officers from among its members. The officers shall be elected by the Board
at the first regular meeting after the term of new or reappointed Board members
commences each year, for a one-year term, and each officer shall hold office during said
one-year term and until his or her successor is elected. The Board at its organizational
meeting shall elect the first officers of the Board.
Section 2.3. Powers and Duties.
a) President. The President shall be the chief executive officer of the District
and shall have general supervision over the business of the District, subject, however, to
the control of the Board of Directors. The President shall preside at all meetings of the
Board. The President may sign and execute, in the name of the District deeds, mortga-
ges, leases, bonds, contracts and other instruments duly authorized by the Board, and
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generally shall perform all duties incident to the office of President and such other duties
as may from time to time be assigned to such office by the Board.
b) Vice -President. At the request of the President or in case of his or her
absence or disability, the Vice -President shall perform all duties of the President and,
when so acting, shall have all the powers of, and be subject to all restrictions upon, the
President. In addition, the Vice -President shall perform such other duties as may from
time to time be assigned to that office by the Board or the President.
c) Secretary. The Secretary shall:
1. Certify and keep at the office of the District, or at such other place
as the Board may order, the original or a copy of the Bylaws, as they may have been
amended;
2. Keep at the office of the District, or at such other place as the
Board may order, a book of minutes of all meetings of the Board, recording therein the
time and place of holding, whether regular or special, and, if special, how authorized, the
notice thereof given, and the proceedings thereat;
3. See that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law;
4. Be custodian of the records and seal of the District;
5. Exhibit at all reasonable times to any director, upon request, the
Bylaws and minutes of the proceedings of the directors of the District; and
6. In general, perform all duties of the office of Secretary and such
other duties as may from time to time be assigned to such office by the Board of
Directors or the President.
d) Treasurer. The Treasurer shall receive and have charge of all funds of the
District and shall disburse such funds only as directed by the Board. The Treasurer shall,
in general, perform all duties incident to the office of chief financial officer and such
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other duties as may from time to time be assigned to such office by the Board or the
President.
Section 2.4. Removal. Upon reasonable prior notice to all Board members of the
alleged reasons for dismissal, the Board by an affirmative vote of the majority of all the
Board members may remove any officer from his or her office (but not from his or her
membership on the Board) whenever in its judgment the best interests of the District will
be served thereby.
Section 2.5. Vacancies. The Board shall fill any office that becomes vacant with
a successor who shall hold office for the unexpired term and until his or her successor
shall have been duly elected.
Section 2.6. Establishment of Committees. The Board, by resolution, may
designate from among its members one or more committees, each consisting of at least
three members, to represent the Board and, except as prohibited by the Charter, act for
and on behalf of the Board. The designation of any such committee and the delegation
thereto of authority shall not operate to relieve any member of the Board of any
responsibility imposed by law.
Section 2.7. Executive Committee. The Executive Committee of the District
shall consist of the President, Vice President, the Secretary and the Treasurer of the
Board and one member -at -large elected by the Board. The provisions for election, quali-
fications, term of office and removal of the member -at -large of the Executive Committee
shall be identical to those of officers of the Board as provided herein in Sections 2.2, 2.4,
and 2.5 of this Article.
Except as provided in the Charter, the Executive Committee shall have and
exercise such powers of the Board as the Board may from time to time provide by
resolution.
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ARTICLE III
Meetings
Section 3.1. Regular Board Meetings. Regular meetings of the Board shall be
held at least once every quarter at a location within the District. The Board shall
establish such regular meeting time and place by resolution.
Section 3.2. Special Board Meetings. Subject to Article VII of the Charter,
special meetings of the Board may be held at any place at any time whenever called by
the President or a majority of the members of the Board.
Section 3.3. Notice of Regular Board Meetings. No notice of the regular meeting
shall be required, except of the first regular meeting and after any change in the time or
place of such meeting adopted by resolution of the Board as above provided. Notice of
such changed regular meeting shall be given by the Secretary or by the person or persons
calling the meeting by personal communication over the telephone to each Board member
at least 24 hours prior to the time of the meeting or by at least three days' notice by mail,
telegram or written communication. If mailed, notice shall be mailed by U.S. mail,
postage prepaid, to the last known address of each Board member. In addition, the
District shall routinely provide reasonable notice of meetings to any individual
specifically requesting it in writing. At any regular meeting of the Board, any business
may be transacted and the Board may exercise all of its powers.
Section 3.4. Notice of Special Board Meetings. Notice of all special meetings of
the Board shall be given by the Secretary or by the person or persons calling the special
meeting by delivering personally or by mail written notice at least 24 hours prior to the
time of the meeting to each Board member and to each local newspaper of general
circulation and to each radio or television station that has requested notice as provided in
RCW 42.30.080. In addition, the District shall provide notice of special meetings to any
individual specifically requesting it in writing.
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The time and place of the special meeting and the business to be transacted must
be specified in the notice. Final disposition shall not be taken on any other matter at such
meetings.
Section 3.5. Waiver of Notice. Notice as provided in Sections 3.3 and 3.4 hereof
may be dispensed with as to any member of the Board who at or prior to the time the
meeting convenes files with the Board a written waiver of notice or who is actually
present at the meeting at the time it convenes. Such notice may also be dispensed with as
to special meetings called to deal with an emergency involving injury or damage to
persons or property or the likelihood of such injury or damage, where time requirements
of such notice would make notice impractical and increase the likelihood of such injury
or damage. Notice, as provided in Article IX of the Charter concerning proposed
amendments to the Charter or Bylaws and votes on such amendments, may not be
waived.
Section 3.6. Notice to the Cities. Notice of all meetings and- minutes of all
meetings of the Board shall be given to the City Clerks of Yakima, Selah and Union Gap.
ARTICLE IV
Amendments to Charter and Bylaws
Section 4.1. Proposals to Amend Charter and Bylaws.
1 Proposals to amend the Charter or Bylaws shall be presented in a format
that strikes over material to be deleted and underlines new material.
2. Any Board member may introduce a proposed amendment to the Charter
or to the Bylaws (which may consist of new Bylaws) at any regular meeting or at any
special meeting of which 30 days' advance notice has been given.
Section 4.2. Board Consideration of Proposed Amendments. If notice of a
proposed amendment to the Charter or to the Bylaws, and information including the text
of the proposed amendment and a statement of its purpose and effect, is provided to
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members of the Board 15 days prior to any regular Board meeting or any special meeting
of which 30 days' advance notice has been given, then the Board may vote on the
proposed amendment at the same meeting as the one at which the amendment is
introduced. If such notice and information is not so provided, the Board may not vote on
the proposed amendment until the next regular Board meeting or special meeting of
which 30 days' advance notice has been given and at least 15 days prior to which meeting
such notice and information is provided to Board members. Germane amendments to the
proposed amendment within the scope of the original amendment will be permitted at the
meeting at which the vote is taken.
Section 4.3. Vote Required for Amendments to Charter or Bylaws. Resolutions
of the Board approving proposed amendments to the Charter or approving amendments to
the Bylaws require an affirmative vote of a majority of the Board members then in office
as provided in the Charter. As provided in the Interlocal Agreement, as necessary and
appropriate in the discretion of the Yakima City Council, the Yakima City Council may
amend the Bylaws by ordinance adopted at or after a public meeting held with notice to
the District, the City of Selah and the City of Union Gap. Amendments to the Bylaws
adopted by the Yakima City Council may not be further amended by the District for one
year except with Yakima City Council approval.
Section 4.4. Cities' Approval of Proposed Charter Amendments. Proposed
Charter amendments adopted by the Board shall be submitted to each of the Parties to the
Interlocal Agreement. The District's Charter may be amended only as provided in
Article IX of the Charter.
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ARTICLE V
Administrative Provisions
Section 5.1. Books and Records. The District shall keep current and complete
books and records of account and shall keep minutes of the proceedings of its Board and
its committees having any of the authority of the Board. The District shall provide no
less than 90 days' written notice to the City of Yakima, the City of Selah, and the City- of
Union Gap prior to the destruction of any permanent books and records.
Section 5.2. Indemnification of Board Members. The District elects to defend
and indemnify its present and former Board members and officers and their successors,
spouses and marital communities to the full extent authorized by law and the Charter. In
addition, the right of indemnification shall inure to each Board member or officer and his
or her spouses and marital communities upon his or her appointment to the Board and in
the event of his or her death shall extend to his or her heirs, legal representatives and
estate. Each person who shall act as Board member or officer of the District shall be
deemed to do so in reliance upon such indemnification and such rights shall not be
exclusive of any other right that he or she may have.
Section 5.3. Principal Office. The principal office of the District shall be located
within the District. The Board shall establish the principal office by resolution.
Section 5.4. Fiscal Year. The Fiscal Year of the District shall begin January 1
and end December 31 of each year, except the first fiscal year, which shall run from the
date the Charter was issued to December 31, 2001.
ARTICLE VI
Approval of Bylaws
APPROVED by Interlocal Agreement by and among the City of Yakima,
Washington, the City of Selah, Washington and the City of Union Gap, Washington,
dated June 25, 2001, and by Ordinance No. 2001-28 of the City of Yakima adopted on
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June 19, 2001, motion of the City of Selah City Council approved on June 12, 2001, and
Ordinance Nos. 2298 and 2300 of the City of Union Gap adopted on June 11, 2001 and
June 25, 2001, respectively.
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RESOLUTION NO. R-2001-1 '
A RESOLUTION of the City of Yakima, Washington, approving the lease of
the Yakima Convention Center to the Yakima Regional Public Facilities
District; and approving an agreement between the City and the Yakima
Regional Public Facilities District for the purpose of financing,
expanding, operating and maintaining the Yakima Convention Center.
WHEREAS, the City of Yakima ("Yakima") currently owns and operates the Yakima
Convention Center (the "Convention Center"), providing first-class meeting, ballroom and other
event facilities;
WHEREAS, the City of Yakima, together with the Cities of Selah and Union Gap, desire
to expand the Convention Center to stimulate economic development by creating jobs; realize
additional sales tax and lodging tax revenues; attract commercial business and tourism; and
provide facilities for convention, special events and community events including public meetings
and performing arts events for, among others in the region, the residents of Yakima (the
"Proj ect");
WHEREAS, pursuant to Chap. 35.57 RCW (the "Act") the Cities of Yakima, Selah and
Union Gap have approved the creation of the Yakima Regional Public Facilities District (the
"District") to assist in completing the Project;
WHEREAS, the District has access to several new revenue sources to complete the
Project, including a state sales and use tax credit (the "Sales Tax"), which operates to shift
0.033% of the retail sales and use taxes generated within the District boundaries to the District;
WHEREAS, the Act requires a 33% local match in order for the District to impose the
Sales Tax and, accordingly, Yakima desires to transfer a leasehold interest in the Convention
Center to the District in satisfaction of this match requirement (the value of the Convention
Center and the underlying site is approximately $11,800,000);
WHEREAS, the value of the leasehold interest is estimated to be significantly more than
33% of the net present value of projected Sales Taxes of the District (approximately $2.4
million), thereby satisfying the match requirement;
WHEREAS, Yakima intends to issue bonds and apply the net proceeds to finance the
Project, in consideration for the District's pledge of all Sales Tax receipts to Yakima to pay debt
service on the bonds and other Project costs;
WHEREAS, Yakima also intends to contribute lodging taxes to the District, in an
amount, if any, determined annually by the Yakima City Council, to the operation of the
Convention Center, and will contribute revenues to the District in the event of a Sales Tax
shortfall;
1
ADOPTED at a regular meeting of the Council of the City of Yakima, Washington this
19th day of June, 2001.
ATTEST: CITY OF YAKIMA, WASHINGTON
hi KAREN S. RO RTSCMC
City Clerk
3
S/ MARY PLACE
By
Mayor
APPENDIX A
LEASE AGREEMENT
LEASE AGREEMENT
This LEASE AGREEMENT (the "Lease") is made as of July 27, 2001, by and between
the CITY OF* YAKIMA, WASHINGTON (the "City"), a municipal corporation and first class
city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT (the "District", and together with the City, the "Parties"), a public facilities district
created by the City and the Cities of Selah and Union Gap, to lease certain real property of the
City to the District to assist in the design, development, construction, financing and operation of
the Yakima Convention Center, as expanded. Reference is made to that certain Design,
Development, Construction and Financing Agreement dated July 27, 2001, between the
undersigned (the "Development Agreement").
1. Effective Date. This Lease and all of the terms and conditions hereof shall
become effective as of the date set forth above; provided that all of the rights, duties and
obligations of the City and the District, as lessor and lessee, respectively, under this Lease are
not and shall not be effective unless and until the Development Agreement becomes effective.
2. Leased Premises. From and after commencement of the Lease Term (as
defined herein), the City hereby leases to the District and the District hereby hires from the City
certain improved real property located in the City of Yakima, Washington, legally described in
Exhibit A attached hereto and by this reference incorporated (the "Premises") and certain
improvements thereon consisting of a convention center, and further improvements to be built on
said Premises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record.
3. Term. The Lease Term of this Lease, and all obligation of the
parties hereto as lessor and lessee, shall commence on the effective date of the Development
Agreement and shall automatically terminate upon expiration or termination of the Development
Agreement, unless otherwise terminated or amended as set forth herein. The District shall be
entitled to possession of the Premises upon commencement of the Lease Term hereunder.
4. Prepaid Rent. Within 60 days after the commencement of the Lease
Term, the District shall pay $50 to the City, which amount represents prepaid rent for the entire
Lease Term. The Parties acknowledge that the value of the Premises and Improvements existing
as of the date of this Lease is appraised at $11,800,000. The value of the leasehold interest in the
Premises hereby transferred is significantly in excess of 33% of the net present value of sales
taxes the District projects that it will collect under RCW 82.14.390 (approximately $2.4 million).
It is the parties' intent that the City lease the Premises to the District in satisfaction of the local
match requirement under RCW 82.14.390.
5. Use of the Premises. The Premises shall be used by the District solely for the
operation and maintenance of the Premises and the lease back of the same to the City and for
other District purposes consistent with the Development Agreement. At no time during the
Lease Term shall the District use the Premises in whole or in part for any unlawful purpose, nor
shall the District permit or commit any nuisance or illegal activity on the Premises.
6. Compliance with Laws. The District shall comply with all municipal,
county, state and federal laws, rules, regulations or ordinances applicable to the Premises and the
Improvements, and the ownership, use and occupancy thereof.
7. Liens and Encumbrances. Except as expressly provided in this Lease, the
District shall keep the Premises and the Improvements thereon free of mechanics' and
materialmen's liens and other liens of like nature including tax liens, and will defend and hold
the City harmless against such liens or claims and against all attorney's fees and other costs and
expenses growing out of or incurred as a result of such liens or claims so long as such liens or
claims arise from the actions of the District and not the actions of the City. The City shall defend
and hold harmless the District against such liens or claims, fees, costs or expenses growing out of
or incurred as a result of the actions of the City and not the actions of the District. Provided,
however; that the District may in good faith and at the District's own expense contest the validity
of any such lien or claim, through litigation if necessary. In the event that the District contests
any lien or claim, the District shall prosecute the contest with reasonable diligence, and the
District shall at all times effectually stay or prevent any official or judicial sale of the Premises
and/or Improvements and the District shall pay or otherwise satisfy any final judgment (unless
the District shall appeal same, in which event the judgment from the last appeal shall be the
applicable judgment), which may be entered against it and thereafter promptly procure record
satisfaction of release of the lien or claim. In the event that the District fails to fully discharge or
in good faith contest any such lien or claim that has been perfected, the City may pay the same,
or any part thereof, and the City shall be the sole judge of the validity of said lien or claim. All
amount so paid by the City shall be recoverable against the District.
8. Maintenance and Repair of Premises and Improvements. The District shall
maintain the Premises and Improvements in good repair and working order, and shall make such
repairs necessary to so maintain the Premises and Improvements.
9. Taxes and Assessments. The District covenants and agrees to pay all real
estate taxes and assessments, if any, levied upon the Premises and Improvements that become
due and payable during the Lease Term prior to delinquency, together with any leasehold excise
tax that may be assessed against the District's leasehold interest hereunder; provided, that if any
such taxes or assessments may be paid in installments without penalty, the District shall have the
right to pay any such taxes or assessments in installments.
The District may contest the legal validity or amount of any tax, assessment or other
charge for which the District may be responsible under this Lease and may institute such
proceedings as the District considers necessary. If the District contests any such tax, assessment
or other charge, the District may withdraw or defer payment or pay under protest, provided the
District shall protect the City and the Premises and Improvements from any lien by adequate
surety bond or other appropriate security.
The City appoints the District as the City's attorney-in-fact for the purpose of making all
payments to any taxing authorities and for the purpose of contesting any taxes, assessments or
other charges, conditioned on the District's preventing any lien from being levied on the
Premises or Improvements or upon the City. However, if the District chooses not to contest any
tax, assessment or charge, the District shall give the City timely notice thereof so that the City
may contest any taxes, assessments or charges levied against the Premises or Improvements if
the District fails to do so.
10. Utility Charges. The District shall be solely responsible for and shall
promptly pay all charges for heat, water, light, gas, electricity, sewer and garbage or any other
utility now or hereafter used or consumed on the Premises. In no event shall the City be liable
for an interruption or failure in the supply of such utilities to the Premises.
11. Alterations. Except as permitted by the Development
Agreement, the District shall not alter the Premises .or the Improvements without the prior
written consent of the City.
12. Insurance. The District shall, at its sole cost and expense,
procure and maintain in force during the Lease Term all liability and other insurance required to
be procured and maintained by the City under the Development Agreement.
13. Assignment. Except as otherwise provided in Section 22, the
District shall not assign or transfer this Lease or any interest therein, nor shall this Lease or any
interest therein be assignable or transferable by operation of law or by any process or proceeding
of a court, or otherwise, without the prior written consent of the City, which consent shall not be
unreasonably withheld.
14. Eminent Domain.
A. The following definitions apply in construing provisions of this Lease
relating to a taking of or damages to all or a part of the Premises or Improvements or interest
therein by eminent domain or inverse condemnation.
i. "Taking" means the taking or damaging, including
severance damage, by eminent domain or inverse
condemnation for any public or quasi -public use under any
statute or any purchase or other acquisition under threat of
condemnation. The taking shall be considered to take place
as of the later of the date actual physical possession is taken
by the condemnor, and the date on which the right to
compensation and damages accrues under the law
applicable to the Premises.
ii. "Total taking" means the taking of the fee title to all of the
Premises.
iii. "Substantial taking" means the taking of so much of the
Premises or Improvements or both that one or more of the
following conditions result: (i) the conduct of the District's
use(s) of the Premises would be substantially prevented or
impaired, (ii) the remaining Premises could not be
economically and feasibly be made to be so usable by the
District, or (iii) the Improvements would be other than
reasonably efficient or economic or could not economically
and feasibly be made reasonably efficient or economic for
the District's use.
iv. "Partial taking" means any taking of the fee title that is not
either a total taking or a substantial taking.
v. "Award" means compensation paid for the taking, whether
pursuant to judgment, by agreement or otherwise.
B. The party receiving any notice of an intended taking or a willingness to
make a negotiated private purchase in lieu of condemnation shall promptly give the other party
written notice of the receipt and contents thereof.
C. The City and the District shall each have the right to represent separately
their respective interest in each proceeding or negotiation with respect to the taking or intended
taking and to make full proof of their claim. No agreement, settlement, sale or other transfer to
or with the condemning authority shall be made without the consent of the City, the District and
all leasehold mortgagees.
D. Upon a total taking, the City and the District shall be relieved of all
obligations hereunder and this Lease shall terminate. Such termination of obligations shall not
prejudice the District's right to recover compensation calculated in accordance with the terms
hereof for the taking of the District's interest in the Premises and Improvements. The amount of
damages resulting to the City and the District and to the respective interests of the City and the
District in the Premises by reason of such taking shall be separately determined and computed by
the court having jurisdiction over such eminent domain proceedings. Separate awards and
judgment shall be made with respect to the damage to the City and the District and such awards
shall be paid separately to the City and the District. If the City's and the District's damages (and
awards therefore) cannot or will not be separately determined and computed by such court, then
the award granted shall be divided between the City and the District in a fair and equitable
manner, it being understood that the District's portion is to compensate the District for the loss of
its leasehold interest hereunder, and the City's portion is to compensate the City for the loss of
the right of reversion hereunder and its leasehold interest under the Development Agreement.
E. Within 45 days after the District receives notice of an intended substantial
taking, the District shall provide written notice of the same to the Yakima City Manager. Upon
receipt of such notice the City Manager and the District shall confer as to the level of taking.
The City shall have the final determination as to whether the taking should be treated as a total
taking or partial taking.
F. Upon a partial taking, the Lease shall remain in full force and effect,
covering the remaining Premises. The amount of damages resulting to the City and the District
and their respective interests in the Premises and the Improvements shall be separately
determined and computed by the court having jurisdiction over such eminent domain
proceedings. Separate awards and judgments shall be made with respect to the damage to the
City and the District, and such awards shall be paid separately to the City and the District,
respectively.
G. If the City's and the District's damages (and the awards therefor) cannot
or will not be determined or computed by the court, then all sums, including damages and
interest, awarded for the fee title or leasehold, or both, shall be deposited promptly with a
mutually agreed upon escrow agent and shall be equitably distributed and disbursed for the
following purposes:
i. To the District for the purpose of compensating the District for the
value of its leasehold interest taken and for restoring any taken
Improvements, plus any amount awarded to remove or relocate
subtenants, plus any amount specifically awarded to or for the
District for detriment to business and severance damages.
ii. To the City, a sum equal to the value of the Premises taken.
iii. To the City, for the purpose of compensating it for the value of the
lost leasehold interest in the Development Agreement.
iv. The remainder to the City, to be applied by the City to the
repayment of Bonds or Additional Bonds (as defined in the
Development Agreement) or to any other lawful use.
H. Upon the taking for the temporary use of all or any part of the Premises or
Improvements for a period of less than 12 months, the rent under this Lease shall not be affected
in any way, and the District shall be entitled to any award for the use or estate taken.
I. Nothing in this Lease shall be deemed to limit the City's right of eminent
domain.
15. Indemnification. To the extent permitted by law, the District shall
defend, indemnify, and hold the City and the Premises harmless from any and all damages or
liabilities at any time occasioned by or arising out of (i) any act, activity or omission of the
District, or anyone holding themselves out under the District (except the City), or (ii) the
occupancy or use of the Premises or any part thereof, by or under the District, excluding the
occupancy and use by the City, or (iii) the state or condition of the Premises and the
Improvements or any part thereof, except to the extent the City shall itself be grossly negligent in
the circumstances.
Without limiting in any way the foregoing indemnification, the District agrees that during
its use and occupancy of the Premises it shall comply with all laws, regulations, rules and
ordinances of the City, the State and the federal government with regard to the use, storage, and
disposal of hazardous and toxic substances on the Premises and the Improvements, and the
District shall to the fullest extent permitted by law defend, indemnify and hold harmless the City
for any and all damages or liabilities with regard to hazardous and toxic substances occasioned
by and arising from the District's activities on the Premises and Improvements.
16. Default. Time is of the essence in this Lease, and in the
event that (i) the District shall default in the payment of taxes, assessments, utility charges or any
other amounts due hereunder, and such default is not caused by the City's failure to meet its
obligations under the Development Agreement, and if such default shall continue for 10 days
following written notice and demand; (ii) the District shall default in the performance or
observation of any other terms, covenants, conditions or agreements of this Lease for 15 days
after written notice and demand, or in the case of such default that cannot with due diligence and
in good faith be cured within 15 days, the District fails to proceed promptly after such notice and
with due diligence and in good faith, to begin to cure said default, (iii) there shall be filed against
the District in any court or other tribunal pursuant to any statute or other rule of law, either of the
United States or of any State or of any other authority now or hereafter exercising jurisdiction, a
petition in bankruptcy or insolvency proceedings or for reorganization or for the appointment of
a receiver or trustee of all or substantially all of the District's property, or for any other form of
debtor relief, unless, such petition be filed against the District and if in good faith the District
promptly thereafter commences and diligently prosecutes any and all proceedings appropriate to
secure the dismissal of such petition and shall secure such dismissal within 60 days after the date
of filing or the commencement of such proceedings, (iv) if the District vacates or abandons the
Premises or Improvements, or (v) the District defaults under the Development Agreement and
such default is not cured within the cure periods set forth in the Development Agreement, then
and in any such case, at the City's option and in addition to all other rights and remedies, the
City may, following the expiration of the cure period, if any, provided herein for such default,
immediately declare the District's rights under this Lease terminated and enter the Premises and
the Improvements using such force as may be necessary and repossess itself thereof, as of its
former estate, and remove all persons and property from the Premises and the Improvements.
Such reentry shall not constitute a termination of this Lease and, notwithstanding any such
reentry, the liability of the District to pay amounts hereunder (including taxes, assessments and
utilities) shall not be extinguished for the balance of the term of this Lease and the District shall
make good to the City any deficiency arising from receipt by the City of any lesser amount than
that hereinbefore agreed upon.
17. Waiver. Neither the acceptance of rental nor any other
actions or omissions by the City at any time after the happening of any event authorizing the
cancellation or forfeiture of this Lease shall operate as a waiver of any past or future violation,
breach or failure to keep or perform any covenant hereof, to deprive the City of its right to cancel
or forfeit this Lease, upon written notice provided for herein, at any time that cause for
cancellation or forfeiture may exist, or be construed so as to at any future time estop the City
from promptly exercising any other option, right, or remedy, including the right to declare an
event of default hereunder that it may have under any term or provision of this Lease.
18. Force Majeure. Any prevention, delay, nonperformance or stoppage
due to a "Force Majeure" shall excuse nonperformance for the period of such prevention, delay,
nonperformance or stoppage, except for obligations imposed by this Lease for the payment of
taxes or insurance. "Force Majeure" means any causes or conditions beyond a party's
reasonable control (including, but not limited to fire, explosion, presence of a hazardous
substance, earthquake, storm, flood, wind, drought or act of God or one or more of the elements;
court order, legislation, delay or failure to act by civil, military or other governmental authority
other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war;
breakdown or destruction of, or damage or casualty to, any equipment, facility or other property;
any delay or failure by any third party to provide a necessary service, supply, part, equipment,
personnel or other item; or interruption, suspension, curtailment or other disruption of a utility).
19. Access by the City. At any time during the Lease Term, the City and the
City's agents shall have the right to enter the Premises and the Improvements on reasonable
notice to examine the same. Nothing contained herein shall be construed to impose upon the
City a duty to repair the Premises or Improvements.
20. Surrender of Premises. At the expiration or sooner termination of this
Lease, the District shall immediately return to the City the Premises and Improvement in its
condition following completion of the Project defined in the Development Agreement, except
reasonable wear and tear and damage by fire or other casualty. Upon termination of the Lease
for any reason the District shall be liable for all costs and expense of restoring the Premises and
Improvements to the condition at the time of completion of the Project, but only if such removal
and restoration is requested by the City. The District's obligation to perform the covenants of
this Section shall survive the expiration or termination of this Lease.
21. Quiet Enjoyment. The District, upon fully complying with and
promptly performing all of the terms, conditions, and covenants of this Lease on its part to be
performed, shall have and quietly enjoy the Premises for the Lease Term.
22. Leasehold Mortgages. During the term of this Lease, the District shall not
encumber its leasehold interest in the Premises or Improvements without the prior written
consent of the City. Notwithstanding the foregoing, the District is authorized to assign its rights
and interests in this Lease to any financial institution, municipal bond trustee, municipal bond
insurer or other entity as may be necessary to accomplish the financing or refinancing of the
Project, provided that the District must obtain the prior written consent of the Yakima City
Manager.
23. Consent to Lease Back. The parties hereby acknowledge and agree that they
would not execute this Lease but for the agreement by the City to operate and maintain the
Improvements, finance, construct and operate the Project and lease back the Premises to the City
pursuant to the Development Agreement. The obligations of the District under this Section 23
are integral to this Lease and may not be severed herefrom without invalidating the entire Lease.
24. Termination. This Lease may be terminated after notice and
opportunity to cure of any event of default in accordance with Section 16. This Lease shall also
automatically terminate upon termination of the Development Agreement.
25. Amendment. This Lease may not be amended except by written
instrument approved by resolution duly adopted by the District and approved by City ordinance
or resolution. No course of dealing between the parties or delay in exercising any rights
hereunder shall operate as a waiver of any rights of any party.
26. Entire Agreement. This Lease and any collateral instruments
referenced herein contain the entire agreement between the parties hereto and shall not be
modified or amended in any manner except by an instrument in writing executed by the parties
hereto. Previous drafts of this Lease or any portions thereof shall not be utilized in any manner
by either party should any dispute arise as to the intent of this Lease.
27. Notices. All notices which may be or are requested to be
given pursuant to this Lease shall be deemed given when hand delivered, or when deposited in
the U.S. Mail, postage prepaid, and marked registered or certified mail, return receipt requested,
and addressed to the parties at the following addresses unless otherwise provided for herein:
To the City:
With a copy to:
To the District:
Richard A. Zais, Jr.
City Manager
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
28. Severability. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable (with the exception of Section 23), the remainder of this Lease or the application
of such term or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby and shall continue in full force and effect.
29. No Merger. In no event shall (a) the leasehold interest, estate or
rights of the District hereunder, (b) the rights of any leasehold mortgagee upon the District's
leasehold interest, estate or rights hereunder, or (c) the leasehold interest, estate or rights of the
District as sublessor under the Development Agreement, merge with any interest, estate or rights
of the City as fee owner of the Premises and Improvements and lessor under this Lease or as
sublessee under the Development Agreement, it being understood that such leasehold interest,
estate and rights of the District hereunder and such rights of any leasehold mortgagee shall be
deemed to be separate and distinct from the City's interest, estate or rights as fee owner of the
Premises and Improvements, and as sublessee under the Development Agreement
notwithstanding that any such interests, estate or rights shall at any time be held or vested in the
same, person, corporation or other entity.
30. Limited Obligation of the District. The District is organized pursuant to Chapter
35.57 RCW as a municipal corporation, separate and distinct from the City. All liabilities
incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the
District, and no creditor or other person shall have any right of action against or recourse to the
City or the Cities of Selah or Union Gap, their assets, credit, or services, on account of any debts,
obligations, liabilities or acts or omissions of the District.
31. Attorneys' Fees. In the event of litigation between the City and the
District or their successors or assigns to enforce a right or rights provided by or arising under this
Lease, the non -prevailing party shall pay to the prevailing party reasonable attorneys' fees and
other costs and expenses of litigation, including appeals. The amount of costs and attorneys'
fees shall be included in any judgment or award for the prevailing party and the court or
arbitrator in any such litigation shall determine which is the prevailing party.
32. Recording. The District shall not record this Lease without the
written consent of the City; however, upon the request of either party hereto the other party shall
join in the execution of a memorandum of this Lease for recording purposes. The memorandum
of Lease shall describe the parties, the Premises and Improvements, and the Lease and shall
incorporate this Lease and the Development Agreement by reference.
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33. Governing Law: Time This Lease and the rights of the parties hereto shall
be governed and construed in accordance with the laws of the State of Washington. Time is of
the essence in this Lease.
IN WITNESS WHEREOF, the parties hereto have executed this document as of the day
and year first above written.
DATED this-1-7\—day of — , 2001.
CITY OF YAKIMA
By
Richard A. Zais, Jr.
City Manager
Attest:
1)it/C1erk
1
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1
1
1
1
1
1
YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT
Approved as to form:
corffuct aoo/-93
RFsr .trrxa ma.
Chair
Board of Directors
Certified to be a true and correct copy of the
original filed in my office. WO:2-
CITY CLERK
1/V) Deputy
By
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that R"d''ar,C1.4-- 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
int; t''Ai ' of •}, t ,':; ;,rt6^ to be the free and voluntary act of such
party 'for the use's' and purposes mentioned in the instrument.
Dated: 1 ., / , 2001.
Use chi
STATE OF WASHINGTON )
COUNTY OF YAKIMA )
Notary Public r O 2 ,.,
Print/Type Name }vt 1 - -, cis v\ -Ci
My commission expires '`' (0-C-40,2,
`^'
ss.
I certify that I know or have satisfactory evidence that ieWia.,,,,,,/(61��.,/kris the person
who appeared before me, and said person acknowledged that he/she signed this instrument, on
oath stated that he/she was a thorized_to execute tie instrument and acknowledged it as the
of r1- ,,(21 •<f?",,2,'()-h_,!,Yo be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
vDn-
C(
Notary Public
Dated:
Print/Type Name : t r' %I�/'
My commission expires
Certified to be a true and correc copy £):C
original filed in my office. 227/ 2`-
2 CITY CLERK.
By
1e
Deputy
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
A-1
APPENDIX B
DEVELOPMENT AGREEMENT
K:\25739\00049\S C\SC_N20UC
DESIGN, DEVELOPMENT,
CONSTRUCTION, FINANCING AND OPERATING AGREEMENT
BY AND BETWEEN
CITY OF YAKIMA, WASHINGTON
and
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
July 27, 2001
Public Facilities District
Design, Development, Construction,
Financing and Operating Agreement
TABLE OF CONTENTS
Page
I. DEFINITIONS _ 2
II. INTENT AND RELATIONS 7
A. Intent 7
B. Description 8
C. Yakima's Regulatory Role Reserved 8
D. Governing Law and Venue 8
III. SCOPE OF COMMITMENTS 8
A.
Commitments by the District
1. Repayment Obligation
2. District Funds
8
8
9
B. Commitments by Yakima 11
1. Site Availability 11
2. Issuance of the Bonds 11
3. Application of Net Proceeds 11
4. Design, Development and Construction Responsibility 11
5. Operation and Maintenance Responsibility 11
6. Operation and Maintenance Costs 13
C. Commitment by Yakima to Replenish Sales Tax Shortfall
1. Funding Commitment
IV. .PROJECT COMPONENTS AND OPERATION CRITERIA
14
14
14
A. Project Components 14
B. Project Purpose 14
1. Public Access 15
2. Yakima Approval 15
C. Project Contracting and Management _ 15
V. DEVELOPMENT CRITERIA AND OVERSIGHT 16
A. Generally 16
B. Standards of Performance 16
C. Development Schedule and Substantial Completion Date 16
VI. PROJECT COSTS 17
-i-
P:lSC\SCO9H 01/06/14
VII. INSURANCE 17
A. Insurance Requirements 17
B. Insurance Policies 17
C. Adjustments 18
VIII. AS IS 18
A. Due Diligence 18
B. Acceptance 18
IX. LIABILITY 19
A. Indemnification of Yakima 19
X. DESTRUCTION OR CONDEMNATION 20
A. Total or Partial Destruction 20
B. Condemnation 20
XI. RIGHT TO ASSIGN OR OTHERWISE TRANSFER 2,1
A. Right to Transfer Agreement 21
XII. DEFAULT 21
A. Event of Default of the District 21
B. Force Majeure 22
XIII. REMEDIES 22
A. Remedies Upon Default 22
B. No Waiver by Yakima 23
C. Termination 23
D. Reversion of the Property to Yakima 23
E. Certain Provisions Survive Termination 24
XIV. REPRESENTATIONS AND WARRANTIES 24
A. Yakima's Representations 24
B. The District's Representations and Warranties 24
C. Tax Covenant 24
XV. LEASE BACK 25
A. Sublease 25
B. Rent 25
C. Lease Obligations Assumed 25
XVI. MISCELLANEOUS 25
A. Captions 25
B. Construction 25
P•1SC'SCO9H 01/06/14
C. Entire Agreement 25
D. Successors and Assigns 25
E. Notices 26
F. Incorporation by Reference 26
G. Execution in Counterparts 26
H. Waiver 26
I. Exculpation 27
J. Severability 27
K. Term 27
L. Amendments 27
EXHIBIT A — LEGAL DESCRIPTION OF THE PROPERTY
EXHIBIT B — DEBT SERVICE SCHEDULE
APPENDIX 1 — PROJECT DOCUMENTS
P:1SC1SC09H 01/06/14
DESIGN, DEVELOPMENT,
CONSTRUCTION, FINANCING AND OPERATING AGREEMENT
This DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND
OPERATING AGREEMENT (the "Agreement") is made as of July 27, 2001, by and between
the CITY OF YAKIMA, WASHINGTON ("Yakima"), a municipal corporation and first class
city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT (the "District", and together with Yakima, the "Parties"), a public facilities district
created by Yakima and the Cities of Selah and Union Gap, to provide for the design,
development, construction, financing and operation of the Yakima Convention Center, as
expanded.
WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the
"Convention Center"), providing first-class meeting, ballroom and other event facilities;
WHEREAS, Yakima desires to expand the Convention Center (the "Project");
WHEREAS, the Convention Center, as expanded by the Project, will serve as a Regional
Center under RCW 35.57.030, benefiting the region including residents of Yakima, the City of
Selah and the City of Union Gap (the "Cities") by stimulating economic development, creating
jobs, realizing additional sales and lodging tax revenues, attracting commercial business and
tourism, and providing facilities for convention, special events and community events including
public meetings and performing arts event;
WHEREAS, pursuant to Chap. 35.57 RCW (the "Act"), the Cities have entered into an
Interlocal Agreement to form the District for the purpose of acquiring (by purchase, lease or
otherwise), and assisting with the financing, development and operation of, the Convention
Center as expanded by the Project;
WHEREAS, under the Act, the District has access to several new revenue sources,
including a state sales and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the
retail sales and use taxes generated within the District boundaries to the District;
WHEREAS, the Act requires a local match of 33% of the net present value of the Sales
Tax in order for the District to impose the Sales Tax;
WHEREAS, Yakima has entered into a Lease Agreement transferring a leasehold interest
in the Convention Center property described in Exhibit A hereto (the "Property") (the value of
the Convention Center property is approximately $11,800,000) to the District in satisfaction of
this match requirement (approximately $2.4 million);
WHEREAS, the District will lease back the Property to Yakima pursuant to this
Agreement;
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WHEREAS, subject to certain limitations set forth herein, Yakima will issue bonds to
finance the Project, in consideration for the District's pledge of Sales Tax receipts to pay debt
service on the bonds and other Regional Center costs;
WHEREAS, Yakima will apply the net proceeds of the bonds to design, develop and
construct the Project, under the terms setforth herein;
WHEREAS, to provide for stable financing and operation of the Project in light of the
cyclical nature of Sales Taxes, Yakima wishes to provide additional funding in the event of a
Sales Tax shortfall; and
WHEREAS, Yakima will operate the Convention Center, as expanded by the Project, and
will apply certain City lodging taxes (in an amount, if any, determined annually by the City
Council) to pay a portion of the costs of operation and maintenance;
WHEREAS, the Parties desire that Yakima finance, design, develop andoperate the
Convention Center as expanded by the Project on the terms set forth herein, and the District and
Yakima assist in financing the Project, also on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual undertaking and promises contained
herein, and the benefits to be realized by each Party including the benefits to the general public
in the region by the completion and operation of the Project, the Parties agree as follows:
I. DEFINITIONS
For purposes of this Agreement, and any agreements supplemental hereto, the terms
defined in this Article shall have the following meanings, except as herein otherwise expressly
provided:
Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima.
Additional Revenue means all revenue received by the District (or by Yakima on behalf
of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking
Charges, Parking Taxes, Voted Sales Tax, and any other revenue derived from the ownership or
operation of the facilities of the District, including investment income; but excluding Sales Tax
Revenue and amounts received from Yakima pursuant to Section III(C) (including investment
earnings thereon).
Administrative Costs means the costs of the District incurred in administering the District
and this Agreement. Administrative Costs shall be specified in the District's annual budget
submitted to Yakima for approval and to the Cities of Selah and Union Gap for review and
comment.
Admission Charge means any charge imposed by the District (or by Yakima on behalf of
the District) for admission to its facilities, including charges for season tickets or subscriptions;
cover charges, or charges for use of seats and tables, and other similar accommodations; charges
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for food and refreshment if free entertainment, recreation, or amusement is provided; charges for
rental or use of equipment or facilities for purposes of recreation or amusement; and automobile
parking charges if the amount of the charge is determined according to the number of passengers
in the automobile.
Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be
paid by any person who pays an Admission Charge.
Agreement means this Design, Development, Construction, Financing and Operating
Agreement.
Beneficial Occupancy shall mean when the Project is granted a temporary or permanent
Certificate of Occupancy for the Convention Center as expanded by the Project from Yakima's
building official.
Bond Counsel means a firm of lawyers nationally recognized and accepted as bond
counsel and so employed by Yakima.
Bond Ordinance means the ordinance(s) of the Yakima Council authorizing the issuance
of the Bonds and any amendments.
Bonds means the bonds, notes or other evidences of indebtedness issued by Yakima
pursuant to and under authority of the Bond Ordinance to finance or refinance the Project.
Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total
interest cost on the Bonds exceeds 5.55%, or if the financing is determined to no longer be
economical.
Board means the governing body vested with the management of the affairs of the
District.
Charter means the Charter of the District, issued pursuant to the Interlocal Agreement, as
amended from time to time.
Code means the Internal Revenue Code of 1986, as amended, and all applicable
regulations and rulings thereunder.
Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project.
Costs of the Project means all capital costs that are paid or incurred by Yakima in
connection with the design, development and construction of the Project, including, but not
limited to all or a portion of the interest on Bonds during the period of construction of such
improvements, and for a period of time thereafter; amounts required to meet any reserve
requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for
expenses, including planning, permitting and design expenses, incident and properly allocable to
the Project; and all other items of expense incident and properly allocable to designing,
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developing and constructing the Project, financing the Project and placing the Project in
operation.
Debt Service means the amount to be paid on the next succeeding Payment Date to pay
the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due
on such Payment Date. A schedule setting forth Debt Service to be paid on the Bonds and any
Additional Bonds shall be attached as Exhibit B at such time as the Bonds or any Additional
Bonds are issued.
Debt Service Fund means the special fund(s) or account(s) established by Yakima under
the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal
of, interest on and redemption price, if any, of Bonds and/or any Additional Bonds.
Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any,
established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which
secures the Bonds and/or any Additional Bonds.
Debt Service Reserve Fund Requirement means the amount required to be deposited to
the Debt Service Reserve Fund, as established in the Bond Ordinance.
District means the public facilities district created pursuant to the Interlocal Agreement.
Event(s) of Default shall be as defined in Article IV herein.
Favorable Opinion of Bond Counsel means a written legal opinion of Bond. Counsel
addressed to Yakima, to the effect that such action is permitted under the laws of the State and
under applicable ordinances of the Yakima Council, including the Bond Ordinance and any
Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any
other bonds of Yakima from gross income for federal income tax purposes under the Code
(subject to the inclusion of any exceptions contained in the opinion delivered upon original
issuance of such bond).
Force Majeure means any causes or conditions beyond a Party's reasonable control
(including, but not limited to fire, explosion, presence of a hazardous substance, earthquake,
storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation,
delay or failure to act by civil, military or other governmental authority other than a party; strike,
lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of,
or damage or casualty to, any equipment, facility or other property; any delay or failure by any
third party to provide a necessary service, supply, part, equipment, personnel or other item; or
interruption, suspension, curtailment or other disruption of a utility).
Governmental Authority shall mean any board, bureau, commission, department, or body
of any municipal, county, state, or federal governmental or quasi -governmental unit, or any
subdivision thereof, having, asserting, or acquiring jurisdiction over the Property or the
management, operation, use, or improvement thereof.
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Improvements shall mean all buildings, structures, fixtures, improvements and equipment
constructed or located on the Property, including, but not limited to, the structure of the
Convention Center and the parking facilities, elevator(s), lighting, seating, carpeting, HVAC,
plumbing, electrical and mechanical systems.
Insurance Proceeds mean the greater of (i) the proceeds from the insurance policies
actually maintained by Yakima with respect to the Convention Center or Project; or (ii) the
proceeds that would have been available had Yakima maintained the insurance policies required
to be maintained by Yakima under this Agreement.
Interlocal Agreement means the Interlocal Financing Agreement between the Cities
creating the District.
Law(s) and Ordinance(s) shall mean all present and future applicable laws, ordinances,
rules, regulations, resolutions, permits, authorizations, orders and requirements of all federal,
state, county and municipal governments, the departments, bureaus or commissions thereof,
authorities, boards or officers, any national or local board of fire underwriters, or any other body
or bodies exercising similar functions having or acquiring jurisdiction over all or any part of the
Property, including Yakima acting in its governmental capacity.
Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW.
Net Proceeds, when used with, reference to the Bonds, means the principal amount of
such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less
the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve
Fund and/or the PFD Revenue Reserve Fund.
Operating Manual means the Operating Standards Manual for the expanded Convention
Center.
Operation and Maintenance Costs means all necessary costs to Yakima of operating and
maintaining the Convention Center as expanded by the Project, including but not limited to
administrative and general expenses, costs of insurance (including reasonable contributions for
self-insurance reserves, if any), consulting technical services and repairs and replacements (to the
extent not properly classifiable as capital costs), real estate taxes, if any, but excluding
depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a
similar nature and debt service on the Bonds and any Additional Bonds.
Outstanding, when used as of any particular time with reference to Bonds or Additional
Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the
Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds
theretofore cancelled by, Yakima or surrendered to Yakima for cancellation; (2) Bonds or
Additional Bonds with respect to which all liability of Yakima shall have been discharged in
accordance with the Bond Ordinance or Supplemental Bond Ordinance, asapplicable, and
(3) Bonds or Additional Bonds for the transfer or exchange of or in lieu of or in substitution for
which other Bonds or Additional Bonds shall have been authenticated 'and delivered by Yakima
pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable.
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Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110.
Parking Tax means a tax on any Parking Charge imposed at any parking facility that is
owned or leased by the District pursuant to RCW 35.57.110.
Payment Date means the dates specified in the Bond Ordinance, or any Supplemental
Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with
respect to the Bonds or any Additional Bonds.
Permitted Investments means investments permitted by State law for investment of
Yakima and District funds, consistent with the terms of the Bonds and any Additional Bonds.
PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if
any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The
amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall
be maintained in the PFD Revenue Reserve Fund shall be established in the Bond Ordinance.
Predevelopment Costs means the cost of all planning, legal, architectural, engineering
and other services incurred by Yakima in connection with the Project until the date of issuance of
the Bonds.
Project means the design, construction, and operation of the additions to the Convention
Center, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site
plans, preliminary specifications, and schematic design documents), construction documents
(including all drawings and specifications necessary to completely describe the Project in detail
to a contractor for the purposes of bidding and construction, schedules, plans and specifications,
and the construction contract) and Project budgets (setting forth the construction contract cost,
taxes, all contingencies, fees and allowances).
Property shall mean the real property described in Exhibit A attached hereto or as
hereafter amended.
Refunding Bonds means bonds, notes or other evidence of indebtedness the proceeds of
which will be used to refund Bonds.
Sales Tax means the nonvoted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of
a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from
the amount of tax otherwise required to be collected or paid over to the State's Department of
Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event,
not more than 25 years after the Sales Tax is first collected.
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Sales Tax Revenue means all Sales Taxes received by the District.
State means the State of Washington.
Substantial Completion shall mean when the Beneficial Occupancy of the Convention
Center as expanded by the Project is achieved.
Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council
amending or supplementing the Bond Ordinance, including any ordinance adopted by the
Yakima Council in connection with the issuance of Additional Bonds.
Voted Sales Tax means any sales and use tax imposed by the District pursuant to
RCW 82.14.048 and approved by the voters.
Yakima means the City of Yakima, Washington, a municipal corporation of the State, as
now or hereafter constituted.
Yakima Council means the City Council of Yakima, or any successor thereto as provided
by law.
II. INTENT AND RELATIONS
A. Intent.
1. Financing. It is the intent of this Agreement that the District lease the
Property to Yakima and that Yakima finance the Project. In consideration for Yakima's
agreement to finance the Project, it is the intent of the Parties that the District transfer all Sales
Tax Revenue to Yakima to pay Predevelopment Costs (to the extent not paid from Net
Proceeds), Debt Service and other Regional Center costs including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). It is
the intent of the Parties that, in the event that Yakima provides notice that amounts on deposit in
the Debt Service Fund and the PFD Revenue Reserve Fund are projected to be insufficient (not
taking into account amounts in the Debt Service Reserve Fund) for Yakima to pay Debt Service
when due, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such
deficiency as set forth in Section III(C).
2. Development. It is the intent of this Agreement that Yakima design,
develop and construct the Project in accordance with the Project Documents and the standards of
performance set forth in Article V. This Agreement is intended by the Parties to establish the
design, development and construction standards and other performance criteria for the Project.
3. Operation. It is the intent of the Parties that Yakima operate and maintain
the Convention Center and the Project, and that Yakima retain all rents, receipts, profits and
other revenues of the Convention Center as expanded by the Project. In consideration for
Yakima's agreement to operate and maintain the Convention Center and the Project, it is the
intent of the Parties that the District pay Additional Revenue, if any, to Yakima, and that Yakima
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pay the District's Administrative Costs. In addition, the Parties intend that Yakima apply certain
Lodging Taxes to pay a portion of Operation and Maintenance Costs, in an amount, if any,
determined on an annual basis by Yakima.
B. Description. The Property is located at 10 North Eighth Street , Yakima,
Washington 98901-2515, as legally described on the attached Exhibit A. The Convention
Center, as improved by the Project, will occupy approximately 47,000 square feet.
C. Yakima's Regulatory Role Reserved. Any Yakima design review and approvals
provided for herein are independent of, in addition to and do not in any way obligate Yakima
with respect to usual and customary Yakima permitting, code compliance and other regulatory
reviews. The outcome of any such regulatory review is independent of and is in no way biased,
prejudiced or predetermined in any way by this Agreement. Nothing in this Agreement is
intended or shall be construed to require that Yakima exercise its discretionary authority under
its regulatory ordinances to further the Project nor bind Yakima to do so. Yakima will process
applications for permits and approvals associated therewith as if such applications were made
without any Yakima participation in such projects.
D. Governing Law and Venue. This Agreement and the rights and obligations of the
Parties shall be governed by, and construed and interpreted in accordance with, the laws of the
State. Any suit filed between the Parties concerning this Agreement shall be commenced in the
Superior Court in Yakima County.
HI. SCOPE OF COMMITMENTS
A. Commitments by the District
1. Payment Obligation.
(a) Payment of Debt Service and Predevelopment Costs. In
consideration for Yakima's agreement to issue the Bonds and design, develop and construct the
Project, the District shall pay all Sales Tax Revenue to Yakima to pay Yakima's Debt Service
and Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center
costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and
PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service
Fund pursuant to Section III(C).
(b) Pledge of Sales Tax Revenue, Additional Revenue and other
Receipts of the District. The District hereby pledges Sales Tax Revenue and other amounts to be
paid by the District to Yakima for payment of Debt Service, Predevelopment Costs (to the extent
not paid from Net Proceeds), and other Regional Center costs including but not limited to
funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). The
obligation of the District to pay Sales Tax Revenue and other amounts due under the Agreement
and to perform and observe the other obligations on its part contained herein shall be absolute
and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or
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otherwise. The District's obligations under this Agreement shall continue in effect and shall
survive the satisfaction of Yakima's obligations under the Bonds, the Bond Ordinance, any
Additional Bonds, and any Supplemental Bond Ordinance until such time as all Predevelopment
Costs and Debt Service have been paid, together with any other amounts owed to Yakima
hereunder.
The Parties acknowledge and agree that Yakima will pledge this Agreement, as well as
the District's Sales Tax Revenue and other amounts to be paid by the District to Yakima, to the
payment of the Bonds and any Additional Bonds. Such pledge will be material to the offer and
sale of the Bonds, and will be disclosed to potential purchasers and purchasers of the Bonds.
Bondholders will rely on this pledge in purchasing the Bonds. So long as the Bonds or any
Additional Bonds are Outstanding, the District shall not issue bonds, or incur any other
obligation, secured by Sales Tax Revenue or by Additional Revenue.
(c) Revenue and Payment Reports. The District shall file annual
financial statements and annual reports with the Cities, as required under Sections 8.5 and 8.6 of
the Charter. Each such report shall bear a current date, be signed by an appropriate and duly
authorized District officer and be supported by reasonable documentation sufficient to sustain the
accuracy of the report.
(d) Termination for Failure To Timely Pay. This Agreement is
specifically conditioned upon the District's timely payment of amounts due hereunder. In the
event that the District fails to transfer amounts as and when required to Yakima, Yakima may
terminate this Agreement pursuant to the provisions contained in Article XIII.
2. District Funds. The District shall establish the following Funds and
accounts: Sales Tax Revenue Fund (or Account), Additional Revenue Fund (or Account), and
the Administrative Fund (or Account). The District may, in its discretion, establish such
additional accounts and subaccounts as the District deems necessary or useful, but the
establishment of any such account or subaccount shall not .alter or modify any of the
requirements of this Agreement with respect to a deposit or use of money in the funds.
(a) Sales Tax Revenue Fund. The District shall establish a
Sales Tax Revenue Fund and shall deposit in the Sales Tax Revenue Fund all Sales Tax Revenue
and all net earnings on investments of money in the Sales Tax Revenue Fund. Amounts in the
Sales Tax Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Sales Tax Revenue Fund, and such income and interest shall
become part of the Sales Tax Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Sales Tax Revenue Fund are irrevocably pledged
and shall be used and transferred by the District as follows: Within three working days after
receipt, all amounts on deposit in the Sales Tax Revenue Fund to Yakima to pay Debt Service,
Predevelopment Costs and other Regional Center costs, including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C).
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(b) Additional Revenue Fund. The District shall deposit in the
Additional Revenue Fund all Additional Revenue received by the District and all net earnings on
investments of money in the Additional Revenue Fund. Amounts received from Yakima to pay
Administrative Costs shall be deposited to the Additional Revenue Fund. Amounts in the
Additional Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Additional Revenue Fund, and such income and interest shall
become part of the Additional Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Additional Revenue Fund are irrevocably pledged
and shall be used and transferred by the District at least monthly as follows and in the following
order of priority: _
and
Maintenance Costs.
(i) To the Administrative Fund to pay Administrative Costs;
(ii) The remainder, to Yakima to pay Operation and
To the extent that Additional Revenues are received by Yakima on behalf of the District,
Yakima shall apply such Additional Revenues to pay (i) Administrative Costs and/or (ii)
Operation and Maintenance Costs.
(c) Administrative Fund. The District shall establish an
Administrative Fund. Amounts transferred from the Additional Revenue Fund to pay
Administrative Costs pursuant to subsection (b) shall be deposited to the Administrative Fund.
shall be used to pay Administrative Costs.
Amounts in the Administrative Fund may be invested in Permitted Investments. The
District shall maintain records sufficient to permit calculation of the income on investments and
interest earned on deposit of amounts held in the Administrative Fund, and such income and
interest shall become part of the Administrative Fund unless otherwise applied in accordance
with this Section.
(d) Liens. Except as permitted under this Agreement, the District shall
not create any lien upon funds created hereunder other than the lien hereby created.
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B. Commitments by Yakima
1. Site Availability. Pursuant to the terms of the Lease Agreement between
Yakima and District, dated July 27, 2001, Yakima will lease to the District the Property
described in Exhibit A. The 'Parties agree that the leasehold interest in the Property is donated
(for nominal consideration in the form of $50 in rent) by Yakima to the District to be used for the
construction of a Regional Center, as defined in RCW 35.57.030. Moreover, the Parties agree
that the value of the Property is $11,800,000. The value of the leasehold interest in this Property
transferred by the Lease Agreement significantly exceeds 33% of the net present value of the
total Sales Taxes projected to be received by the District (approximately $2.4 million).
2. Issuance of the Bonds. Yakima agrees to issue the Bonds and
Completion Bonds, if necessary. Yakima reserves the right not to issue the Bonds if, at the time
the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55%, or if the financing is
determined to no longer be economical. The Bonds shall be in an aggregate principal amount to
be determined by Yakima, at least equal to the projected Costs of the Project, Predevelopment
Costs, amounts to pay costs of issuance and amounts to be deposited to the Debt Service Reserve
Fund, if any.
3. Application of Net Proceeds. Yakima agrees to apply Net Proceeds to
pay Predevelopment Costs and Costs of the Project as follows.
(a) Predevelopment Costs. Yakima has incurred and will continue to
incur Predevelopment Costs for the benefit of the District. Yakima will pay these
Predevelopment Costs from the District's Sales Tax Revenue received by Yakima to the extent
that Predevelopment Costs are not paid from Net Proceeds (at Yakima's election).
(b) Costs of the Project In addition, Yakima will apply Net Proceeds
to pay Costs of the Project.
4. Design, Development and Construction Responsibility. Yakima shall
design or contract for the design of the Project and construct or contract for the construction of
the Project, in accordance with the Project Documents and with the standards of performance set
forth in Article V and elsewhere in this Agreement.
5. Operation and Maintenance Responsibility.
(a) Operations and Maintenance—Generally. Yakima agrees to
operate and maintain the Improvements including the Convention Center, related parking and,
upon Substantial Completion, the Project, on the terms and in accordance with the standards set
forth herein. Yakima shall operate and maintain the Improvements including the Convention
Center, related parking and the Project as a first class convention center facility, to be kept at all
times in a safe and clean condition.
Yakima shall provide (directly or by contract) all management, supervision, personnel,
materials, equipment, services and supplies necessary to operate, maintain and repair of the
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Improvements and shall take all reasonable precautions to prevent damage, injury or loss by
reason of or related to the operations and maintenance of the Improvements to any person or
property. Yakima shall hire an appropriate number of qualified employees to operate and
maintain the Improvements consistent with the best management practices. Yakima shall
properly supervise and direct its employees and other parties implementing the performance of
its duties, obligations and functions under this Agreement. Yakima shall be fully responsible for
the performance of such employees and other parties.
Yakima shall comply with all applicable Laws and Ordinances relating to the safety of
persons or property or their protection from damage, injury or loss. Yakima shall obtain all
statements, certificates, permits, licenses, rights, and approvals, whether public, private, local,
state or federal, that are necessary or appropriate to the continued operation of the Improvements
as a first class convention center. Yakima shall undertake all modifications to the Improvements
required to comply with state, federal and local laws, rules, regulations, judgments, orders and
decrees.
Prior to Substantial Completion of the Project, Yakima shall- provide pre -opening
services, including start-up of the Project, mobilization of staff and services, and performance of
marketing and booking plans.
(b) Compliance with the Operating Manual. Yakima shall maintain
the Improvements in substantial compliance with the tenns of the Operating Manual during the
term of this Agreement. The Operating Manual shall not be amended except with the written
approval of the Yakima City Manager or his or her designee. The Operating Manual shall not be
revised in a manner that will impair the security of the owners of the Bonds or any Additional
Bonds.
Article VII.
(c) Insurance. Yakima shall maintain insurance as set forth in
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6. Operation and Maintenance Costs.
(a) Obligation To Pay Operation and Maintenance Costs and
Administrative Costs; Right to Receive all Rents and Operating Revenues. Yakima shall pay
Operation and Maintenance Costs from revenues derived from operation of the Convention
Center and the Project, Additional Revenues received from the District, from Lodging Taxes, or
other Yakima funds, as set forth below. Within a reasonable period after receipt of an invoice
therefor, Yakima shall pay to the District its Administrative Costs as set forth in the District's
budget approved by Yakima.
All rents, receipts, profits and other revenue derived from the operation of
the Convention Center and the Project shall be .retained by, and shall be the property of, Yakima,
and shall be applied to pay Operation and Maintenance Costs or any other lawful purposes of
Yakima.
(b) Lodging Taxes. To the extent not paid from revenues derived from
operation of the Convention Center and the Project, Additional Revenues received from the
District, or other Yakima funds, Yakima will apply Lodging Taxes to pay Operation and
Maintenance Costs. The amount of Lodging Taxes to be applied to this purpose in any year shall
be determined by the Yakima Council in its sole discretion as part of its annual budget process.
The amount of Lodging Taxes to be applied to pay Operation and Maintenance Costs may vary
from year to year and may equal zero in some years. In any event, the amount of Lodging Taxes
to be applied shall not exceed the amount available after payment of debt service on Yakima's
outstanding bonds (including all or a portion of the Bonds) to which these taxes are pledged.
Yakima's obligation hereunder is limited only to the amounts designated for this purpose
by the Yakima Council. Yakima does not hereby guarantee any obligations or liability of the
District. It is expressly understood and agreed that any obligation or liability arising out of
and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in
connection therewith, shall be satisfied exclusively from the assets and credit of the District, and
no creditor or any other person or entity shall have any recourse to any of the assets, credit, or
services of Yakima on account of any debts, obligations, or liabilities of the District
(c) Amounts Remitted to Yakima. Amounts remitted to Yakima
pursuant to Section III(A)(2)(a) and (2)(b)(ii) shall be used by Yakima for the following
purposes. Receipts that are Sales Tax Revenue shall be used to pay Predevelopment Costs (to
the extent not paid from Net Proceeds), Debt Service, and for the purposes set forth in RCW
35.57.020, as the same may be amended (acquiring, constructing, owning, remodeling,
maintaining, equipping, reequipping, repairing, financing, and operating one or more Regional
Centers). Receipts that are Additional Revenues shall be applied to pay Operation and
Maintenance Costs.
Yakima's obligation hereunder is limited only to the amounts received from the District.
Yakima does not hereby guaranty any debt obligations or liability of the District.
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All amounts remitted to Yakima pursuant to Section III(A)(2)(a) and 2(b)(ii), together
with all rents, receipts, profits and other revenues derived by Yakima from its operation of the
Convention Center, shall be retained by and be the property of Yakima to be applied to pay
Operation and Maintenance Costs (directly or by contract) or for other lawful purposes of
Yakima . It is the Parties intent that all such amounts shall be Yakima funds, accounted for in
Yakima's books and accounts.
(d) Additional Support. To the extent, as from time to time authorized
by the Yakima City Manager, Yakima will utilize its employees to provide oversight and
administrative assistance in working with District to achieve the mutual goals and objectives of
the Cities and District under this Agreement. Unless otherwise specified in this Agreement or
applicable law, actions to be taken or decisions to be made by Yakima will be the responsibility
of the Yakima City Manager or his or her designee. Yakima hereby grants to the extent
permitted by law such person or persons the power, authority, and right to carry out all such
responsibilities.
C. Commitment by Yakima to Replenish Sales Tax Shortfall -
1. Funding Commitment.
Yakima shall provide notice to the District in the event that amounts in the Debt Service
Fund and the PFD Revenue Reserve Fund (not taking into account amounts in the Debt Service
Reserve Fund) are projected to be insufficient to pay Debt Service on any Payment Date. In such
event, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency.
Yakima's obligation hereunder is limited only to the amount to be paid to replenish any
projected deficiency in the Debt Service Fund. Yakima does not hereby guarantee any debt
obligations or liability of the District. It is expressly understood and agreed that any obligation
or liability arising out of and/or incurred by the District by reason of this Agreement, or the
carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets
and credit of the District, and no creditor or any other person or entity shall have any recourse to
any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities
of District.
IV. PROJECT COMPONENTS AND OPERATION CRITERIA
A. Project Components. Yakima shall finance, design and construct the Project in
accordance with the Project Documents, and in accordance with the performance specifications
set forth herein.
B. Project Purpose. The Project is being constructed to serve the needs of the
region, including the residents of Yakima, the City of Selah and the City of Union Gap.
Following Project completion, Yakima shall be solely responsible for management, operation
and maintenance of the Convention Center, as expanded by the Project, consistent with the terms
of this Agreement and the Operating Manual.
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1. Public Access. Yakima shall provide regular hours during which the
Convention Center will be open to the public (subject to reasonable Admission Charges);
provide public programs; and make available for reasonable public use any ballroom,
auditorium, meeting rooms or other public spaces in the Convention Center (subject to
reasonable security measures).
2. Yakima Approval. In consideration of Yakima's obligations hereunder,
the District agrees that the following shall be subject to the approval of the Yakima Council:
(a) Approval of the Yakima Council:
(i)
The District shall not impose Admission Charges or Parking Charges
without the prior approval of the Yakima Council, as set forth in the
Interlocal Agreement and the Charter.
(ii) The District shall not impose Admission Taxes or Parking Taxes
without the prior approval of the Yakima Council.
(iii) The District's annual budget, including Administrative Costs, shall be
subject to the approval of the Yakima Council and to review and
comment by the Cities of Selah and Union Gap.
(iv) The District shall not authorize or engage in gambling activities or
authorize or publicly display any artwork without the prior approval of
the Yakima Council.
(v) Any acquisition or transfer of real and personal property with a value
over $100,000 by lease, sublease, purchase, or sale by the District shall
be subject to approval by the Yakima Council.
C. Project Contracting and Management
1. Yakima shall construct the Project according to the Project Documents.
2. Yakima will select the contractor(s) for the Project through a competitive
bidding process under the Laws of the State, pursuant to procedures designed to provide
maximum practical competition by and from qualified contractors.
3. Yakima shall take reasonable precautions to prevent unnecessary damage,
injury or loss to property, structures, and vegetation in the Project area and shall at its own
expense repair any damage thereto caused by its, or its contractors', actions. Yakima shall
require its contractors to take any and all precautions that may be necessary to render all portions
of the Project and any adjacent areas affected by the Project secure in every respect, and to
decrease the likelihood of accidents from any cause, and to avoid contingencies that are liable to
delay the Project. Yakima shall require its contractors to exercise utmost care when using
explosives or other hazardous materials or equipment, and when utilizing unusual methods.
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These requirements shall in no way relieve Yakima of its responsibility for safety on the Project.
The District shall not be responsible for any unsafe conditions.
V. DEVELOPMENT CRITERIA AND OVERSIGHT
A. Generally. Except as otherwise provided in this Section, the Parties hereby agree
that Yakima shall have sole responsibility for construction of the Project and shall be responsible
for obtaining all necessary land use, building and mechanical permits, and all other required
permits or approvals for construction of the Project. Yakima shall promptly comply with all
applicable Laws and Ordinances as they relate to the Property and Improvements. Yakima's
responsibility to finance such construction is limited to the extent of Net Proceeds.
B. Standards of Performance. Yakima shall perform the terms of this Agreement
according to the following standards:
1. Performance in a good and workmanlike manner and in compliance with
all applicable laws and ordinances, rules, and regulations.
2. Use of materials that are of first class quality and workmanship.
3. Maintenance and warranty of all portions of the Project consistent with the
Project Documents.
C. Development Schedule and Substantial Completion Date.
1. RCW 82.14.390 currently requires that construction of the Project
commence before January 1, 2003. Accordingly, Yakima shall commence
construction of the Project before January 1, 2003, or such later start date
set forth in any amendment to RCW 82.14.390 (the "Date of
Commencement").
2. Yakima shall pursue the design and construction of the Project to achieve
Substantial Completion within 24 months after the Date of
Commencement, excluding time periods when the design, construction or
development of the Project is unavoidably delayed by reasons of Force
Majeure; provided, however, that said date may be extended by the
Yakima City Manager.
VI. PROJECT COSTS. Yakima shall finance, design, construct, and assume the risk of loss
of the Project from Net Proceeds and from other amounts paid by the District to Yakima
pursuant to the Agreement.
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VII. INSURANCE
A. Insurance Requirements. Yakima shall maintain and keep in force insurance
covering all aspects of the construction activity on the Property, including but not limited to the
following requirements:
1. Builder's All Risk Comprehensive Coverage. Yakima shall keep, or shall
require the construction contractor to keep, all Project components, including but not limited to
the Convention Center and parking facilities, insured for Builders All Risk Comprehensive
Coverage including earthquake and flood in any event in an amount not less than one hundred
percent (100%) of the then- full "Replacement Cost," being the cost of replacing the Project
components, and all fixtures, equipment, improvements and betterments thereto.
2. Commercial General Liability. Yakima shall carry, and shall require its
construction contractor to carry, Commercial General Liability insurance providing coverage
against claims for bodily injury, death or property damage on the Property with broad form
liability and property damage endorsement, such insurance to afford minimum protection, during
the term of the construction phase, and written for combined single limits of liability of no less
than Ten Million Dollars ($10,000,000), per occurrence, said amount to be adjusted from time to
time with coverage deemed customary under like conditions.
3. Property Damage Insurance. Yakima shall carry property insurance
covering the Property including all Improvements, including earthquake, flood, boiler and
machinery insurance, in an amount equal to at least one hundred percent (100%) of the
replacement cost of all Improvements. Such insurance shall contain coverage against loss or
damage by perils no less broad than the current edition of the ISO Special Form, 1985 Edition.
Yakima shall be responsible for payment of any deductibles under said insurance policies and
any costs of restoration resulting from any uninsured or underinsured losses.
B. Insurance Policies. Insurance policies required herein:
1. Shall be issued by companies authorized to do business in the State with
the following qualifications:
a. The companies must be rated no less than "A," as to general policy
holders rating and no less than "X" as to financial category in accordance with the latest edition
of Best's Key Rating Guide, published by A.M. Best Company, Incorporated.
b. The policies shall be issued as primary policies.
2. Each such policy or certificate of insurance mentioned and required in this
Section VII shall have attached thereto (1) an endorsement that such policy shall not be canceled
or materially changed without at least 30 days' prior written notice to the District and Yakima;
(2) an endorsement to the effect that the insurance as to any one insured shall not be invalidated
by any act or neglect of any other insured; (3) an endorsement pursuant to which the insurance
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carrier waives all rights of subrogation against the Parties hereto; and (4) an endorsement
pursuant to which this insurance is primary and noncontributory.
3. The certificates of insurance and insurance policies shall be furnished to
the District and Yakima prior to commencing any construction under this Agreement. The
certificate(s) shall clearly indicate the insurance and the type, amount and classification, as
required for strict compliance with this Section VII.
4. Cancellation of any insurance or non-payment by Yakima of any premium
for any insurance policies required by this Agreement shall constitute an Event of Default under
Section XII of this Agreement.
C. Adjustments. The types of policies, risks insured, coverage amounts, deductibles
and endorsements may be adjusted from time to time as the District and Yakima may mutually
determine.
VIII. AS IS
A. Due Diligence. The District acknowledges that it has diligently investigated to its
full satisfaction the physical condition of the Property and all other matters that in the District's
judgment affect the District's use of the Property and the District's willingness to enter into this
Agreement. The District acknowledges that except as expressly provided for in this Agreement,
neither Yakima nor any employee, officer, agent or representative of Yakima has made any
representations or warranties whatsoever regarding the Property or this transaction or any facts
relating thereto, including, without limitation, any representations or warranties concerning the
physical condition of the Property, access, zoning laws, environmental matters, suitability,
feasibility, utilities, or any other matter affecting the Property or the use thereof.
B. Acceptance. Except as expressly provided for in this Agreement, Yakima shall
accept the Property "as is" and "where is" with all faults, of any nature or kind, without any
representations or warranties, express or implied or statutory of any kind whatsoever by the
District or any employee, officer, agent or representative of the District. Upon acceptance by
Yakima of the Property under this Agreement, then Yakima shall be deemed to have accepted
the Property and to have waived and released its right to recover from the District any and all
damages, losses liabilities, costs, or expenses whatsoever (including attorneys' fees and costs)
and claims therefor, whether direct or indirect, known or unknown, foreseen or unforeseen,
which may arise on account of or in any way arising out of or connected with the physical
condition of the Property or any Law or Ordinance.
C. Environmental Contamination. Yakima agrees to indemnify and hold harmless
the District for any environmental contamination existing as of the date of this Agreement.
Yakima agrees to design and develop the Project in such a manner as to minimize, to the extent
financially practicable, the excavation of native soils. In the event Yakima encounters
contaminated soils, Yakima shall be responsible for all costs of remediating the contaminated
soil, and for seeking recovery from responsible parties.
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The Parties agree that in the event contaminated soils are encountered and any Party
incurs remediation costs, the Parties shall fully cooperate in pursuing claims against those
entities that may be liable.
IX LIABILITY
A. Indemnification of Yakima.
During the term of this Agreement, to the maximum extent not prohibited by law, the District
agrees to and shall indemnify and hold Yakima harmless from and against all liability, loss,
damage, cost, or expenses (including reasonable attorneys' fees and court costs, amounts paid in
settlements and judgment) arising from or as a result of the death of any person or of any
accident, injury, loss or damage whatsoever to any person or to the property of any person that
occurs on or adjacent to the Property and that is directly or indirectly caused by the acts, errors,
or omissions of the District or its officers, agents, servants, employees, officers, contractors or
subcontractors. The District shall not be responsible for (and such indemnity shall not apply to)
the gross negligence or willful misconduct of Yakima, or their respective officials, servants,
employees or officers.
X. DESTRUCTION OR CONDEMNATION
A. Total or Partial Destruction.
1. If the Convention Center or Project is totally or partially destroyed at any
time after execution of this Agreement, and the Insurance Proceeds are or would have been
sufficient to pay the cost of reconstruction or restoration, or if the uninsured cost of
reconstruction or restoration is less than Two Hundred Fifty Thousand Dollars ($250,000), and
the damage or destruction is such that as a result thereof Yakima cannot meet its obligations
under this Agreement, Yakima shall reconstruct or restore the damage consistent with terms of
this Agreement within two years of the destruction; provided that, if the damage or destruction is
such that Yakima may notwithstanding such damage or destruction continue to fulfill its
obligations under this Agreement, Yakima shall have the discretion to use the Insurance
Proceeds to restore and repair the Property to the extent necessary and appropriate for its
purposes. If the Insurance Proceeds are insufficient and the uninsured cost is more than Two
Hundred Fifty Thousand Dollars ($250,000), Yakima may elect to reconstruct or restore the
damage or to terminate this Agreement by delivery of .written notice to the District within 30
days after the destruction.
2. If Yakima elects not to reconstruct or restore the damage, this Agreement
shall terminate and the Property shall revert to Yakima pursuant to Section XIII. The District
shall transfer the Property in its then condition to Yakima, along with any Insurance Proceeds
attributable to the damage or destruction of the Project.
B. Condemnation. If the whole or any substantial part of the Property is taken or
condemned in the exercise of eminent domain powers (or by conveyance in Lieu thereof), such
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that Yakima can no longer meet its obligations under this Agreement, this Agreement shall
terminate upon the date when possession of the Property so taken shall be acquired by the
condemning authority.' As used herein, "substantial" shall be defined as reasonably preventing
the conduct of Yakima's activities. Yakima shall have the right to claim and recover from the
condemning authority such compensation as may be separately awarded or recoverable by
Yakima in Yakima's own right on account of any and all damage to Yakima's activities by
reason of the condemnation and on account of any cost or loss Yakima might sustain; provided
that, the District shall pay to Yakima that portion of its condemnation proceeds equal to the
amount of Debt Service on the Outstanding Bands and Additional Bonds, if any.
XL RIGHT TO ASSIGNOR OTHERWISE TRANSFER
A. Right to Transfer Agreement.
1. During the term of this Agreement and at such time as the Bonds or
Additional Bonds are no longer Outstanding, the District shall have the right to assign or
otherwise transfer the Agreement, to such other persons, firms, corporations, partnerships, joint
ventures, and federal, state or municipal government or agency thereof, as the District shall
select (the "Transferee"), provided, however, that:
a. The District must obtain the prior written consent of Yakima;
b. Such assignment or transfer shall be made expressly subject to the
terms, covenants and conditions of this Agreement;
c. The District shall deliver to Yakima a duly executed and recorded
copy of the document evidencing such transfer, including a suitable estoppel agreement(s); and
d. Such transfer shall not be effective to bind Yakima until the
Transferee has assumed all obligations of the District under this Agreement and notice thereof is
given to Yakima, and such notice shall designate the name and address of the Transferee.
2. Said Transferee (and all succeeding and successor Transferees) shall
succeed to all rights and obligations of the District under this Agreement, subject, however, to all
duties and obligations of the District in and pertaining to the then unperformed provisions of this
Agreement. Upon such transfer by the District, or by a successor in accordance with the
requirements of this Section, the District (and/or its successor(s)) as Transferor in such a transfer
shall not be released and discharged from all of its duties and obligations hereunder which
pertain to the then unperformed provisions of this Agreement without the written consent and
release of Yakima.
XII. DEFA ULT
A. Event of Default of the District. This section shall apply if the District fails to
keep, observe, or perform any of its duties or obligations under this Agreement (an "Event of
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Default"). Notwithstanding the generality of this paragraph, an "Event of Default" shall be
deemed to occur for any of the following specific events:
1. The failure of the District to pay amounts due to Yakima hereunder when
due.
2. Conversion by the District of any portion of the Property to any use other
than the uses permitted under the Charter and this Agreement.
3. The making by the District of an assignment for the benefit of creditors
contrary to the terms of this Agreement, or filing a petition in bankruptcy or of reorganization
under any bankruptcy or insolvency law or filing a petition to effect a composition or extension
of time to pay its debts.
4. The appointment of a receiver or trustee of the property of the District,
which appointment is not vacated or stayed within ninety days.
5. The filing of a petition in bankruptcy against the District or for its
reorganization under any bankruptcy or insolvency law that shall not be dismissed or stayed by
the court within ninety days after such filing.
B. Force Majeure. The District shall not be considered to be in breach of or default
under this Agreement on account of any delay or failure to perform as required by this
Agreement as a result of a Force Majeure event.
XIII. REMEDIES
A. Remedies Upon Default. If an Event of Default on the part of the District shall
occur, then Yakima at any time after periods set forth for the exercise of rights herein shall have
the following cumulative rights and remedies:
1. Provide Notice and Time to Cure. If Yakima desires to take action for an
Event of Default, Yakima shall provide written notice to the District specifying such Event of
Default or Events of Default and stating that Yakima at its option may terminate this Agreement
on the date specified in such notice, which shall be at least 30 days, but no more than 90 days,
after the giving of such notice, unless the District cures such Event of Default.
2. Injunction. Yakima shall be entitled to restrain, by injunction, the
commission of or attempt or threatened commission of an Event of Default and to obtain a
judgment or order specifically prohibiting a violation or breach of any such term or provision of
this Agreement without, in either case, being required to prove or establish that Yakima does not
have an adequate remedy at law. The District hereby waives the requirement of any such proof
and acknowledges that Yakima would not have an adequate remedy at law for the District's
commission of an Event of Default hereunder.
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3. Terminate for Default.
a. Yakima shall be entitled to immediately terminate this Agreement
if any Event of Default continues for a period of 30 days after written notice thereof from
Yakima to the District, or in the case of such Event of Default which cannot with due diligence
and in good faith be cured within 30 days, the District fails to proceed promptly after such notice
and with due diligence and in good faith, to begin to cure said Event of Default; provided that, in
such event proper time to cure may be extended only by written permission of Yakima.
b. In the event that this Agreement terminates for reasons of an Event
of Default, Yakima, in its sole discretion, shall have the option of exercising one or both of the
following choices:
(i) Receive payment from the District in an amount required to
pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service on the
Outstanding Bonds and any Additional Bonds when due, and the amount necessary to reimburse
Yakima for any amounts paid pursuant to Section III(C).
(ii) Immediately terminate the Lease Agreement.
4. Recover Damages, Costs and Expenses. Yakima shall be entitled to
proceed against the District for all direct damages, costs and expenses arising from the District's
committing an Event of Default hereunder and to recover all such direct damages, costs and
expenses, including reasonable attorneys' fees.
B. No Waiver by Yakima. No failure by Yakima to insist upon the performance of
any of the terms of this Agreement or to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach or of any of the terms of this Agreement.
None of the terms of this Agreement to be kept, observed or performed by the District, and no
breach thereof, shall be waived, altered or modified except by a written instrument executed by
Yakima. No waiver of any breach shall affect or alter this Agreement, but each of the terms of
this Agreement shall continue in full force and effect with respect to any other then existing or
subsequent breach thereof. No waiver of any default of the District hereunder shall be implied
from any omission by Yakima to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect any default other than the default
specified in the express waiver and then only for the time and to the extent therein stated. One or
more waivers by Yakima shall not be construed as a waiver of a subsequent -breach of the same
covenant, term or conditions.
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C. Termination
Notwithstanding anything to the contrary contained in this Agreement:
1. Termination by Mutual Agreement Prior to Beneficial Occupancy. This
Agreement shall terminate under circumstances where all Parties mutually agree in writing that it
is impossible or impractical to design, develop or construct the Project. In the event that one
Party determines that it is impossible or impractical to design, develop or construct the Project,
the Parties agree to meet and enter into good faith negotiations regarding whether the Project has
become impossible or impractical.
D. Reversion of the Leasehold Interest to Yakima. In the event that this Agreement
terminates prior to Beneficial Occupancy, Yakima may immediately terminate the Lease
Agreement and reenter and retake the Property, and the District shall promptly:
1. Remove all of its personal property from the Property;
2. Remove all rubble, debris and unusable improvements from the Property
as required by Yakima in its sole discretion;
3. Remove all waste materials and rubbish from and about the Property and
adjacent property; and
4. Satisfy or bond all liens upon the Project (or claims which with notice or
passage of time or both would mature into a lien).
Yakima shall be entitled to retain title to the Property and all Improvements, including the
Convention Center and Project, free and clear of any leasehold interest or other claim of the
District and anyone claiming by, through or under the District.
E. Certain Provisions Survive Termination. The following provisions of this
Agreement shall survive notwithstanding any termination of this Agreement and reversion of the
leasehold interest in the Property and Improvements to Yakima:
1. As Is (Section VIII);
2. Liability (Section IX); and
3. Destruction or Condemnation (Section X).
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XIV. REPRESENTATIONS AND WARRANTIES
A. Yakima's Representations. Yakima hereby represents and warrants to the
District that it has full statutory right, power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the person signing this Agreement on
behalf of Yakima has the authority to bind Yakima and to enter into this transaction; and that
Yakima has taken all requisite action and steps to legally authorize the execution, delivery, and
performance of this Agreement.
B. The District's Representations and Warranties. The District hereby represents
and warrants to Yakima that it has full power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the parties signing this Agreement on
behalf of the District have the authority to bind the District and to enter into this transaction; and
that the District has taken all requisite action and steps to legally authorize the execution,
delivery, and performance of this Agreement.
C. Tax Covenant. The District acknowledges that the Bonds are to be issued as tax-
exempt obligations. The District covenants that it will not take any action to cause interest on
the Bonds or any Additional Bonds to be taxable.
XV. LEASE BACK
A. Sublease. The District hereby leases to the City and the City hereby hires from
the District certain improved real property located in the City of Yakima, Washington, legally
described in Exhibit A attached hereto and by this reference incorporated (the "Premises") and
certain improvements thereon consisting of a convention center, and the Project to be built on the
Premises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record, including in particular that certain Lease Agreement
between the City, as lessor, and the District, as lessee, dated July 27, 2001.
B. Rent. Within 60 days of the date of this Agreement, the City shall pay to the
District $50, which represents prepaid rent for the entire term of this Agreement.
C. Lease Obligations Assumed._Except as other wise provided herein, the District hereby
assigns and the City agrees to assume all duties and obligations of the District under the Lease
Agreement.
XVI. MISCELLANEOUS
A. Captions. The headings and captions of this Agreement and the Table of
Contents preceding the body of this Agreement are for convenience and reference only and in no
way define, limit or describe the scope or intent of this Agreement nor in any way affect this
Agreement.
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B. Construction. All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the Party or Parties may
require. The Parties hereby acknowledge and agree that each was properly represented by
counsel and this Agreement was negotiated and drafted at arms' length so that the judicial rule of
construction to the effect that a legal document shall be construed against the draftsman shall be
inapplicable to this Agreement.
C. Entire Agreement. This Agreement and any collateral instruments referenced
herein contain the entire agreement between the Parties hereto and shall not be modified or
amended in any manner except by an instrument in writing executed by the Parties hereto.
Previous drafts of this Agreement or any portions thereof shall not be utilized in any manner by
either Party should any dispute arise as to the intent of this Agreement.
D. Successors and Assigns. The terms herein contained shall bind and inure to the
benefit of Yakima, its successors and assigns, and the District, its successors and assigns, except
as may be otherwise provided herein.
E. Notices. All notices which may be or are requested to be given pursuant to this
Agreement shall be deemed given when hand delivered, or when deposited in the United States
Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and
addressed to the Parties at the following addresses unless otherwise provided for herein:
To Yakima:
With a copy to:
To the District:
Richard A. Zais, Jr.
City Manager
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
F. Incorporation by Reference. All exhibits and appendices annexed hereto are
hereby incorporated by reference herein.
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G. Execution in Counterparts.
1. This Agreement may be executed in any number of counterparts and by
different Parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
Agreement.
2. This Agreement becomes effective when the representatives of the Parties
have executed it.
H. Waiver. The_waiver by either the District or Yakima of the performance of any
covenant, condition, or promise shall not invalidate this Agreement nor shall it be considered a
waiver by such Party of any other covenant, condition, or promise hereunder. The waiver by
either the District or Yakima of the time for performing any act shall not constitute a waiver of
the time for performing any other act or an identical act required to be performed at a later time.
The exercise of any remedy provided by law or the provisions of this Agreement shall not
exclude other consistent remedies unless they are expressly excluded.
I. Exculpation. Notwithstanding anything contained to the contrary in any
provision of this Agreement, it is specifically agreed and understood that there shall be
absolutely no personal liability on the part of any individual officers or directors of Yakima or
the District with respect to any of the obligations, terms, covenants, and conditions of this
Agreement.
J. Severability. If any term or provision of this Agreement or the application thereof
to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of
this Agreement or the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be affected thereby and shall
continue in full force and effect.
K. Term. This Agreement shall terminate on the later of the date that the Bonds and
any Additional Bonds are no longer Outstanding and the date on which the Sales Tax expires.
L. Amendments. This Agreement may be amended, only with the written consent of
the Parties.
-26-
P:1SC\SC09H 01/06/14
IN WITNESS WHEREOF, the Parties hereto have executed this document as of the day
and year first above written.
k"--
DATED this day of -11,,-SH , 2001.
CITY OF YAICIMA
By
Richard A. Zais, Jr.
City Manager
Attest:
City Clerk
Approved as to
City Attorney
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XEKLLITICA Vet
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II YAKIMA REGIONAL PUBLIC
C:7 • FACILITIES DISTRICT
B
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Certified to be a true and correct copy of the
original filed in my office.
CITY CLERK
-27-
f:...SC\SCO9H
Deputy
01/06/14
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
EXHIBIT B
DEBT SERVICE SCHEDULE
(To be attached and incorporated into the Agreement at the time that the Bonds and any
Additional Bonds are issued)
B-1
P \SC\SCO9H • 01/06/14
RESOLUTION NO. 2001-01
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE YAKIMA REGIONAL
PUBLIC FACILITIES DISTRICT ESTABLISHING A PRINCIPAL
CORPORATE OFFICE FOR THE DISTRICT.
WHEREAS, the Yakima Regional Public Facilities District (the "District") is a public
facilities district formed by the Cities of Yakima, Selah and Union Gap pursuant to Chap. 35.57
RCW;
WHEREAS, pursuant to Section 5.3 of the District's bylaws, the principal office of the
District shall be located within the District;
WHEREAS, also pursuant to Section 5.3, the Board shall establish the principal office by
resolution;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT, as follows:
Section 1. Principal Corporate Office. The principal corporate office of the District
shall be located at the following address: 10 North 8th Street. Yakima WA 98901
Section 2 . This resolution shall be effective immediately.
ADOPTED this 24th day of July, 2001.
BOARD OF DIRECTORS,
YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT
Preside t
ATTEST:
Approved by a vote of the Directors:
7 Ayes; b Nays
Secretary
K:\25739\00049\S C\SC_R20 UZ
-1-
RESOLUTION NO. 2001-02
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE YAKIMA REGIONAL
PUBLIC FACILITIES DISTRICT SETTING A DATE AND PLACE FOR MEETINGS OF
THE BOARD OF DIRECTORS.
WHEREAS, the Yakima Regional Public Facilities District (the "District") is a public
facilities district formed by the Cities of Yakima, Selah and Union Gap pursuant to Chap. 35.57
RCW;
WHEREAS, pursuant to Section 3.1 of the District's bylaws, regular meetings of the
Board of Directors of the District (the "Board") shall be held at least once every quarter at a
location within the District;
WHEREAS, also pursuant to Section 3.1, the Board shall establish such regular meeting
time and place by resolution;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT, as follows:
Section 1. Regular Meeting Date. Regular Board meetings shall be held at least once
every quarter, on each Third Tuesday of the month at 8:30 AM.
Section 2. Regular Meeting Place. Regular Board meetings shall be held at the
following location:108 North 8th Street Yakima. WA 98901.
Section 3. Effective Date. This resolution shall be effective immediately.
ADOPTED this 24th day of July, 2001.
BOARD OF DIRECTORS,
YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT
By.
.
ATTEST:
Approved by a vote of the Directors:
2 AyeS;O Naysiz_
oAd.oL__ o
Secretary
Presi . ent
RESOLUTION NO. 2001-03
A RESOLUTION of the Yakima Regional Public Facilities District approving the lease of the
Yakima Convention Center from the City of Yakima, Washington; and approving
an agreement and sublease between the District and the City for the purpose of
financing, expanding, operating and maintaining the Yakima Convention Center.
WHEREAS, the City of Yakima ("Yakima") currently owns and operates the Yakima
Convention Center (the "Convention Center"), providing first-class meeting, ballroom and other
event facilities; and
WHEREAS, pursuant to Chap. 35.57 RCW (the "Act") the cities of Yakima, Selah and
Union Gap created the Yakima Regional Public Facilities District (the "District") to assist in
expanding the Convention Center to stimulate economic development by creating jobs; realize
additional sales tax and lodging tax revenues; attract commercial business and tourism; and
provide facilities for convention, special events and community events including public meetings
and performing arts events (the "Project"), and
WHEREAS, the District has access to several new revenue sources to complete the
Project, including a state sales and use tax credit (the "Sales Tax"), which operates to shift
0.033% of the retail sales and use taxes generated within the District boundaries to the District;
and
WHEREAS, the Act requires a 33% local match in order for the District to impose the
Sales Tax and, accordingly, Yakima desires to transfer a leasehold interest in the Convention
Center to the District in satisfaction of this match requirement (the value of the Convention
Center and the underlying site is approximately $11,800,000), and
WHEREAS, the value of the leasehold interest is estimated to be significantly more than
33% of the net present value of projected Sales Taxes of the District (approximately $2.4
million), thereby satisfying the match requirement, and
WHEREAS, Yakima intends to issue bonds and apply bond proceeds to finance the
Project, in consideration of the District's pledge of all Sales Tax receipts to Yakima to pay debt
service on the bonds and other Project costs, and
WHEREAS, Yakima also intends to contribute lodging taxes to the District, in an
amount, if any, determined annually by the Yakima City Council, to the operation of the
Convention Center, and will contribute revenues to the District in the event of a Sales Tax
shortfall, and
WHEREAS, Yakima will design and construct the Project, and will operate and maintain
the Convention Center, as expanded by the Project, and
WHEREAS, the District desires to lease the Convention Center from Yakima and to enter
into an agreement and sublease with Yakima providing for such financing, design, construction,
operation and maintenance of the Convention Center, as expanded by the Project,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT, as follows:
Section 1. Approval of Lease Agreement. The District hereby approves the
Lease Agreement with Yakima in substantially the form attached as Appendix A hereto (the
1
"Lease iA greement"), with such changes consistent with the intent of the attached form as the
President of the Board of Directors of the District, or his or her designee, shall approve.
Section 2. Approval of Development Agreement. The District hereby approves the
Design, Development, Construction, Financing and Operating Agreement with Yakima, in
substantially the form attached as Appendix B hereto (the "Development Agreement"), with such
changes consistent with the intent of the attached form as the President of the Board of Directors
of the District, or his or her designee, shall approve. The Development Agreement also
constitutes a sublease of the Convention Center property back to Yakima.
Section 3. Authorization of Documents. The President of the Board of Directors of
the District is hereby authorized to execute the Lease Agreement and the Development
Agreement. The President and his or her designee, and each of the other appropriate officers,
agents and representatives of the District are each hereby authorized and directed to take such
steps, to do such other acts and things, and to execute such instruments as in their judgment may
be necessary, appropriate or desirable in order to carry out the terms and provisions of, and
complete the transactions contemplated by this resolution.
Section 4. Effective Date. This Resolution shall be in effect from and after its adoption.
ADOPTED this 24 day of July, 2001.
ATTEST:
Approved by a vote of the Directors:
7 Ayes; 0 Nays
BOARD OF DIRECTORS,
YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT
By:
Secretary
P esident
APPENDIX A
LEASE AGREEMENT
i$
LEASE AGREEMENT
This LEASE AGREEMENT (the "Lease") is made as of July 27, 2001, by and between
the CITY OF YAKIMA, WASHINGTON (the "City"), a municipal corporation and first class
city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT (the "District", and together with the City, the "Parties"), a public facilities district
created by the City and the Cities of Selah and Union Gap, to lease certain real property of the
City to the District to assist in the design, development, construction, financing and operation of
the Yakima Convention Center, as expanded. Reference is made to that certain Design,
Development, Construction and Financing Agreement dated July 27, 2001, between the
undersigned (the "Development Agreement").
1. Effective Date. This Lease and all of the terms and conditions hereof shall
become effective as of the date set forth above; provided that all of the rights, duties and
obligations of the City and the District, as lessor and lessee, respectively, under this Lease are
not and shall not be effective unless and until the Development Agreement becomes effective.
2. Leased Premises. From and after commencement of the Lease Term (as
defined herein), the City hereby leases to the District and the District hereby hires from the City
certain improved real property located in the City of Yakima, Washington, legally described in
Exhibit A attached hereto and by this reference incorporated (the "Premises"). and certain
improvements thereon consisting of a convention center, and further improvements to be built on
said Premises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record.
3. Term. The Lease Term of this Lease, and all obligation of the
parties hereto as lessor and lessee, shall commence on the effective date of the Development
Agreement and shall automatically terminate upon expiration or termination of the Development
Agreement, unless otherwise terminated or amended as set forth herein. The District shall be
entitled to possession of the Premises upon commencement of the Lease Term hereunder.
4. Prepaid Rent. Within 60 days after the commencement of the Lease
Term, the District shall pay $50 to the City, which amount represents prepaid rent for the entire
Lease Term. The Parties acknowledge that the value of the Premises and Improvements existing
as of the date of this Lease is appraised at $11,800,000. The value of the leasehold interest in the
Premises hereby transferred is significantly in excess of 33% of the net present value of sales
taxes the District projects that it will collect under RCW 82.14.390 (approximately $2.4 million).
It is the parties' intent that the City lease the Premises to the District in satisfaction of the local
match requirement under RCW 82.14.390.
5. Use of the Premises. The Premises shall be used by the District solely for the
operation and maintenance of the Premises and the lease back of the same to the City and for
other District purposes consistent with the Development Agreement. At no time during the
Lease Term shall the District use the Premises in whole or in part for any unlawful purpose, nor
shall the District permit or commit any nuisance or illegal activity on the Premises.
6. Compliance with Laws. The District shall comply with all municipal,
county, state and federal laws, rules, regulations or ordinances applicable to the Premises and the
Improvements, and the ownership, use and occupancy thereof
7. Liens and Encumbrances. Except as expressly provided in this Lease, the
District shall keep the Premises and the Improvements thereon free of mechanics' and
materialmen's liens and other liens of like nature including tax liens, and will defend and hold
the City harmless against such liens or claims and against all attorney's fees and other costs and
expenses growing out of or incurred as a result of such liens or claims so long as such liens or
claims arise from the actions of the District and not the actions of the City. The City shall defend
and hold harmless the District against such liens or claims, fees, costs or expenses growing out of
or incurred as a result of the actions of the City and not the actions of the District. Provided,
however; that the District may in good faith and at the District's own expense contest the validity
of any such lien or claim, through litigation if necessary. In the event that the District contests
any lien or claim, the District shall prosecute the contest with reasonable diligence, and the
District shall at all times effectually stay or prevent any official or judicial sale of the Premises
and/or Improvements and the District shall pay or otherwise satisfy any final judgment (unless
the District shall appeal same, in which event the judgment from the last appeal shall be the
applicable judgment), which may be entered against it and thereafter promptly procure record
satisfaction of release of the lien or claim. In the event that the District fails to fully discharge or
in good faith contest any such lien or claim that has been perfected, the City may pay the same,
or any part thereof, and the City shall be the sole judge of the validity of said lien or claim. All
amount so paid by the City shall be recoverable against the District.
8. Maintenance and Repair of Premises and Improvements. The District shall
maintain the Premises and Improvements in good repair and working order, and shall make such
repairs necessary to so maintain the Premises and Improvements.
9. Taxes and Assessments. The District covenants and agrees to pay all real
estate taxes and assessments, if any, levied upon the Premises and Improvements that become
due and payable during the Lease Term prior to delinquency, together with any leasehold excise
tax that may be assessed against the District's leasehold interest hereunder; provided, that if any
such taxes or assessments may be paid in installments without penalty, the District shall have the
right to pay any such taxes or assessments in installments.
The District may contest the legal validity or amount of any tax, assessment or other
charge for which the District may be responsible under this Lease and may institute such
proceedings as the District considers necessary. If the District contests any such tax, assessment
or other charge, the District may withdraw or defer payment or pay under protest, provided the
District shall protect the City and the Premises and Improvements from any lien by adequate
surety bond or other appropriate security.
The City appoints the District as the City's attorney-in-fact for the purpose of making all
payments to any taxing authorities and for the purpose of contesting any taxes, assessments or
other charges, conditioned on the District's preventing any lien from being levied on the
Premises or Improvements or upon the City. However, if the District chooses not to contest any
tax, assessment or charge, the District shall give the City timely notice thereof so that the City
may contest any taxes, assessments or charges levied against the Premises or Improvements if
the District fails to do so.
10. Utility Charges. The District shall be solely responsible for and shall
promptly pay all charges for heat, water, light, gas, electricity, sewer and garbage or any other
utility now or hereafter used or consumed on the Premises. In no event shall the City be liable
for an interruption or failure in the supply of such utilities to the Premises.
11. Alterations. Except as permitted by the Development
Agreement, the District shall not alter the Premises or the Improvements without the prior
written consent of the City.
12. Insurance. The District shall, at its sole cost and expense,
procure and maintain in force during the Lease Term all liability and other insurance required to
be procured and maintained by the City under the Development Agreement.
13. Assignment. Except as otherwise provided in Section 22, the
District shall not assign or transfer this Lease or any interest therein, nor shall this Lease or any
interest therein be assignable or transferable by operation of law or by any process or proceeding
of a court, or otherwise, without the prior written consent of the City, which consent shall not be
unreasonably withheld.
14. Eminent Domain.
A. The following definitions apply in construing provisions of this Lease
relating to a taking of or damages to all or a part of the Premises or Improvements or interest
therein by eminent domain or inverse condemnation.
"Taking" means the taking or damaging, including
severance damage, by eminent domain or inverse
condemnation for any public or quasi -public use under any
statute or any purchase or other acquisition under threat of
condemnation. The taking shall be considered to take place
as of the later of the date actual physical possession is taken
by the condemnor, and the date on which the right to
compensation and damages accrues under the law
applicable to the Premises.
ii. "Total taking" means the taking of the fee title to all of the
Premises.
iii. "Substantial taking" means the taking of so much of the
Premises or Improvements or both that one or more of the
following conditions result: (i) the conduct of the District's
use(s) of the Premises would be substantially prevented or
impaired, (ii) the remaining Premises could not be
economically and feasibly be made to be so usable by the
District, or (iii) the Improvements would be other than
reasonably efficient or economic or could not economically
and feasibly be made reasonably efficient or economic for
the District's use.
iv. "Partial taking" means any taking of the fee title that is not
either a total taking or a substantial taking.
v. "Award" means compensation paid for the taking, whether
pursuant to judgment, by agreement or otherwise.
B. The party receiving any notice of an intended taking or a willingness to
make a negotiated private purchase in lieu of condemnation shall promptly give the other party
written notice of the receipt and contents thereof.
C. The City and the District shall each have the right to represent separately
their respective interest in each proceeding or negotiation with respect to the taking or intended
taking and to make full proof of their claim. No agreement, settlement, sale or other transfer to
or with the condemning authority shall be made without the consent of the City, the District and
all leasehold mortgagees.
D. Upon a total taking, the City and the District shall be relieved of all
obligations hereunder and this Lease shall terminate. Such termination of obligations shall not
prejudice the District's right to recover compensation calculated in accordance with the terms
hereof for the taking of the District's interest in the Premises and Improvements. The amount of
damages resulting to the City and the District and to the respective interests of the City and the
District in the Premises by reason of such taking shall be separately determined and computed by
the court having jurisdiction over such eminent domain proceedings. Separate awards and
judgment shall be made with respect to the damage to the City and the District and such awards
shall be paid separately to the City and the District. If the City's and the District's damages (and
awards therefore) cannot or will not be separately determined and computed by such court, then
the award granted shall be divided between the City and the District in a fair and equitable
manner, it being understood that the District's portion is to compensate the District for the loss of
its leasehold interest hereunder, and the City's portion is to compensate the City for the loss of
the right of reversion hereunder and its leasehold interest under the Development Agreement.
E. Within 45 days after the District receives notice of an intended substantial
taking, the District shall provide written notice of the same to the Yakima City Manager. Upon
receipt of such notice the City Manager and the District shall confer as to the level of taking.
The City shall have the final determination as to whether the taking should be treated as a total
taking or partial taking.
F. Upon a partial taking, the Lease shall remain in full force and effect,
covering the remaining Premises. The amount of damages resulting to the City and the District
and their respective interests in the Premises and the Improvements shall be separately
determined and computed by the court having jurisdiction over such eminent domain
proceedings. Separate awards and judgments shall be made with respect to the damage to the
City and the District, and such awards shall be paid separately to the City and the District,
respectively.
G. If the City's and the District's damages (and the awards therefor) cannot
or will not be determined or computed by the court, then all. sums, including damages and
interest, awarded for the fee title or leasehold, or both, shall be deposited promptly with a
mutually agreed upon escrow agent and shall be equitably distributed and disbursed for the
following purposes:
i. To the District for the purpose of compensating the District for the
value of its leasehold interest taken and for restoring any taken
Improvements, plus any amount awarded to remove or relocate
subtenants, plus any amount specifically awarded to or for the
District for detriment to business and severance damages.
ii. To the City, a sum equal to the value of the Premises taken.
iii. To the City, for the purpose of compensating it for the value of the
lost leasehold interest in the Development Agreement.
iv. The remainder to the City, to be applied by the City to the
repayment of Bonds or Additional Bonds (as defined in the
Development Agreement) or to any other lawful use.
H. Upon the taking for the temporary use of all or any part of the Premises or
Improvements for a period of less than 12 months, the rent under this Lease shall not be affected
in any way, and the District shall be entitled to any award for the use or estate taken.
I. Nothing in this Lease shall be deemed to limit the City's right of eminent
domain.
15. Indemnification. To the extent permitted by law, the District shall
defend, indemnify, and hold the City and the Premises harmless from any and all damages or
liabilities at any time occasioned by or arising out of (i) any act, activity or omission of the
District, or anyone holding themselves out under the District (except the City), or (ii) the
occupancy or use of the Premises or any part thereof, by or under the District, excluding the
occupancy and use by the City, or (iii) the state or condition of the Premises and the
Improvements or any part thereof, except to the extent the City shall itself be grossly negligent in
the circumstances.
Without limiting in any way the foregoing indemnification, the District agrees that during
its use and occupancy of the Premises it shall comply with all laws, regulations, rules and
ordinances of the City, the State and the federal government with regard to the use, storage, and
disposal of hazardous and toxic substances on the Premises and the Improvements, and the
District shall to the fullest extent permitted by law defend, indemnify and hold harmless the City
for any and all damages or liabilities with regard to hazardous and toxic substances occasioned
by and arising from the District's activities on the Premises and Improvements.
16. Default. Time is of the essence in this Lease, and in the
event that (i) the' District shall default in the payment of taxes, assessments, utility charges or any
other amounts due hereunder, and such default is not caused by the City's failure to meet its
obligations under the Development Agreement, and if such default shall continue for 10 days
following written notice and demand; (ii) the District shall default in the performance or
observation of any other terms, covenants, conditions or agreements of this Lease for 15 days
after written notice and demand, or in the case of such default that cannot with due diligence and
in good faith be cured within 15 days, the District fails to proceed promptly after such notice and
with due diligence and in good faith, to begin to cure said default, (iii) there shall be filed against
the District in any court or other tribunal pursuant to any statute or other rule of law, either of the
United States or of any State or of any other authority now or hereafter exercising jurisdiction, a
petition in bankruptcy or insolvency proceedings or for reorganization or for the appointment of
a receiver or trustee of all or substantially all of the District's property, or for any other form of
debtor relief, unless, such petition be filed against the District and if in good faith the District
promptly thereafter commences and diligently prosecutes any and all proceedings appropriate to
secure the dismissal of such petition and shall secure such dismissal within 60 days after the date
of filing or the commencement of such proceedings, (iv) if the District vacates or abandons the
Premises or Improvements, or (v) the District defaults under the Development Agreement and
such default is not cured within the cure periods set forth in the Development Agreement, then
and in any such case, at the City's option and in addition to all other rights and remedies, the
City may, following the expiration of the cure period, if any, provided herein for such default,
immediately declare the District's rights under this Lease terminated and enter the Premises and
the Improvements using such force as may be necessary and repossess itself thereof, as of its
former estate, and remove all persons and property from the Premises and the Improvements.
Such reentry shall not constitute a termination of this Lease and, notwithstanding any such
reentry, the liability of the District to pay amounts hereunder (including taxes, assessments and
utilities) shall not be extinguished for the balance of the term of this Lease and the District shall
make good to the City any deficiency arising from receipt by the City of any lesser amount than
that hereinbefore agreed upon.
17. Waiver. Neither the acceptance of rental nor any other
actions or omissions by the City at any time after the happening of any event authorizing the
cancellation or forfeiture of this Lease shall operate as a waiver of any past or future violation,
breach or failure to keep or perform any covenant hereof, to deprive the City of its right to cancel
or forfeit this Lease, upon written notice provided for herein, at any time that cause for
cancellation or forfeiture may exist, or be construed so as to at any future time estop the City
from promptly exercising any other option, right, or remedy, including the right to declare an
event of default hereunder that it may have under any term or provision of this Lease.
18. Force Majeure. Any prevention, delay, nonperformance or stoppage
due to a "Force Majeure" shall excuse nonperformance for the period of such prevention, delay,
nonperformance or stoppage, except for obligations imposed by this Lease for the payment of
taxes or insurance. "Force Majeure" means any causes or conditions beyond a party's
reasonable control (including, but not limited to fire, explosion, presence of a hazardous
substance, earthquake, storm, flood, wind, drought or act of God or one or more of the elements;
court order, legislation, delay or failure to act by civil, military or other governmental authority
other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war;
breakdown or destruction of, or damage or casualty to, any equipment, facility or other property;
any delay or failure by any third party to provide a necessary service, supply, part, equipment,
personnel or other item; or interruption, suspension, curtailment or other disruption of a utility).
19. Access by the City. At any time during the Lease Term, the City and the
City's agents shall have the right to enter the Premises and the Improvements on reasonable
notice to examine the same. Nothing contained herein shall be construed to impose upon the
City a duty to repair the Premises or Improvements.
20. Surrender of Premises. At the expiration or sooner termination of this
Lease, the District shall immediately return to the City the Premises and Improvement in its
condition following completion of the Project defined in the Development Agreement, except
reasonable wear and tear and damage by fire or other casualty. Upon termination of the Lease
for any reason the District shall be liable for all costs and expense of restoring the Premises and
Improvements to the condition at the time of completion of the Project, but only if such removal
and restoration is requested by the City. The District's obligation to perform the covenants of
this Section shall survive the expiration or termination of this Lease.
21. Quiet Enjoyment. The District, upon fully complying with and
promptly performing all of the terms, conditions, and covenants of this Lease on its part to be
performed, shall have and quietly enjoy the Premises for the Lease Term.
22. Leasehold Mortgages. During the term of this Lease, the District shall not
encumber its leasehold interest in the Premises or Improvements without the prior written
consent of the City. Notwithstanding the foregoing, the District is authorized -to assign its rights
and interests in this Lease to any financial institution, municipal bond trustee, municipal bond
insurer or other entity as may be necessary to accomplish the financing or refinancing of the
Project, provided that the District must obtain the prior written consent of the Yakima City
Manager.
23. Consent to Lease Back. The parties hereby acknowledge and agree that they
would not execute this Lease but for the agreement by the City to operate and maintain the
Improvements, finance, construct and operate the Project and lease back the Premises to the City
pursuant to the Development Agreement. The obligations of the District under this Section 23
are integral to this Lease and may not be severed herefrom without invalidating the entire Lease.
24. Termination. This Lease may be terminated after notice and
opportunity to cure of any event of default in accordance with Section 16. This Lease shall also
automatically terminate upon termination of the Development Agreement.
25. Amendment. This Lease may not be amended except by written
instrument approved by resolution duly adopted by the District and approved by City ordinance
or resolution. No course of dealing between the parties or delay in exercising any rights
hereunder shall operate as a waiver of any rights of any party.
26. Entire Agreement. This Lease and any collateral instruments
referenced herein contain the entire agreement between the parties hereto and shall not be
modified or amended in any manner except by an instrument in writing executed by the parties
hereto. Previous drafts of this Lease or any portions thereof shall not be utilized in any manner
by either party should any dispute arise as to the intent of this Lease.
27. Notices. All notices which may be or are requested to be
given pursuant to this Lease shall be deemed given when hand delivered, or when deposited in
the U.S. Mail, postage prepaid, and marked registered or certified mail, return receipt requested,
and addressed to the parties at the following addresses unless otherwise provided for herein:
To the City:
With a copy to:
To the District:
Richard A. Zais, Jr.
City Manager
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
28. Severability. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable (with the exception of Section 23), the remainder of this Lease or the application
of such term or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby and shall continue in full force and effect.
29. No Merger. In no event shall (a) the leasehold interest, estate or
rights of the District hereunder, (b) the rights of any leasehold mortgagee upon the District's
leasehold interest, estate or rights hereunder, or (c) the leasehold interest, estate or rights of the
District as sublessor under the Development Agreement, merge with any interest, estate or rights
of the City as fee owner of the Premises and Improvements and lessor under this Lease or as
sublessee under the Development Agreement, it being understood that such leasehold interest,
estate and rights of the District hereunder and such rights of any leasehold mortgagee shall be
deemed to be separate and distinct from the City's interest, estate or rights as fee owner of the
Premises and Improvements, and as sublessee under the Development Agreement
notwithstanding that any such interests, estate or rights shall at any time be held or vested in the
same, person, corporation or other entity.
30. Limited Obligation of the District. The District is organized pursuant to Chapter
35.57 RCW as a municipal corporation, separate and distinct from the City. All liabilities
incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the
District, and no creditor or other person shall have any right of action against or recourse to the
City or the Cities of Selah or Union Gap, their assets, credit, or services, on account of any debts,
obligations, liabilities or acts or omissions of the District.
31. Attorneys' Fees. In the event of litigation between the City and the
District or their successors or assigns to enforce a right or rights provided by or arising under this
Lease, the non -prevailing party shall pay to the prevailing party reasonable attorneys' fees and
other costs and expenses of litigation, including appeals. The amount of costs and attorneys'
fees shall be included in any judgment or award for the prevailing party and the court or
arbitrator in any such litigation shall determine which is the prevailing party.
32. Recording. The District shall not record this Lease without the
written consent of the City; however, upon the request of either party hereto the other party shall
join in the execution of a memorandum of this Lease for recording purposes. The memorandum
of Lease shall describe the parties, the Premises and Improvements, and the Lease and shall
incorporate this Lease and the Development Agreement by reference.
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33, Governing Law: Tirne. This Lease and the nghts of the parties hereto shall
be governed and construed in accordance with the laws of the State of Washington. Time is of
the essence in this Lease.
IN WITNESS WHEREOF, the parties hereto have executed this document as of the day
and year first above written.
DATED thisZ7day of
CITY OF Y_ KIMIA
By
Richard A. Zais, Jr.
City Manager
Attest:
,2001.
YAKIMA REGIONAL PUBLIC
FACII ,ITIES DISTRICT
City/Clerk
Approved as to form:
r't =wax? ,770(3 � - 93
Chair
Board of Directors
Certified to be a true and correct copy of the
original filed in my office. „A/02_
CITY CLERK
By /��/� .1i1� Deputy
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that l'''L1) �- `'J," 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 n to be the free and voluntary act of such
party `for the uses' and purposes mentioned in the instrument.
Dated: ;,7 , 2001.
Notary Public {, O%' '-
Print/Type Name .'ACT f
My commission expires '" 62- c{ 2
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that f •-;),/4r-is the person
who appeared before me, and said person acknowledged that he/she signed this instrument, on
oath stated that he/she was ai*horized_to execute the instrument and acknowledged it as the
(
r
of ,v. (i�7i.,c/ ()_.J 4Ao be the free and voluntary act of such
party for the uses and purposes mentior ed in the instrument.
,ort . ,
Notai`YJPurtlic
Print/Type Name s`//'
My commission expires -/5
Dated:
Use this spac + _ •seal)
Certified to be a true and correctcopy . ie
original filed in my office. Vi
CITY CLERK
By
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
A-1
APPENDIX B
DEVELOPMENT AGREEMENT
K:\25739\00049\S C\S C_N 20UC
DESIGN, DEVELOPMENT,
CONSTRUCTION, FINANCING AND OPERATING AGREEMENT
BY AND BETWEEN
CITY OF YAKIMA, WASHINGTON
and
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
July 27, 2001
Public Facilities District
Design, Development, Construction,
Financing and Operating Agreement
TABLE OF CONTENTS
Page
I. DEFINITIONS _ 2
II. INTENT AND RELATIONS 7
A. Intent 7
B. Description 8
C. Yakima's Regulatory Role Reserved 8
D. Governing Law and Venue 8
III. SCOPE OF COMMITMENTS 8
A.
Commitments by the District
1. Repayment Obligation
2. District Funds
8
8
9
B. Commitments by Yakima 11
1. Site Availability 11
2. Issuance of the Bonds 11
3. Application of Net Proceeds 11
4. Design, Development and Construction Responsibility 11
5. Operation and Maintenance Responsibility 11
6. Operation and Maintenance Costs 13
C. Commitment by Yakima to Replenish Sales Tax Shortfall
1. Funding Commitment
IV. .PROJECT COMPONENTS AND OPERATION CRITERIA
14
14
14
A. Project Components 14
B. Project Purpose 14
1. Public Access 15
2. Yakima Approval 15
C. Project Contracting and Management _ 15
V. DEVELOPMENT CRITERIA AND OVERSIGHT 16
A. Generally 16
B. Standards of Performance 16
C: Development Schedule and Substantial Completion Date 16
VI. PROJECT COSTS 17
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VII. INSURANCE 17
A. Insurance Requirements 17
B. Insurance Policies 17
C. Adjustments 18
VIII. AS IS 18
A. Due Diligence 18
B. Acceptance 18
IX. LIABILITY 19
A. Indemnification of Yakima 19
X. DESTRUCTION OR CONDEMNATION 20
A. Total or Partial Destruction 20
B. Condemnation 20
XI. RIGHT TO ASSIGN OR OTHERWISE TRANSFER 21
A. Right to Transfer Agreement 21
XII. DEFAULT 21
A. Event of Default of the District 21
B. Force Majeure 22
XIII. REMEDIES 22
A. Remedies Upon Default 22
B. No Waiver by Yakima 23
C. Termination 23
D. Reversion of the Property to Yakima 23
E. Certain Provisions Survive Termination 24
XIV. REPRESENTATIONS AND WARRANTIES 24
A. Yakima's Representations 24
B. The District's Representations and Warranties 24
C. Tax Covenant 24
XV. LEASE BACK 25
A. Sublease 25
B. Rent 25
C. Lease Obligations Assumed 25
XVI. MISCELLANEOUS 25
A. Captions 25
B. Construction 25
P:1SC1SC09H 01/06/14
C. Entire Agreement 25
D. Successors and Assigns 25
E. Notices 26
F. Incorporation by Reference 26
G. Execution in Counterparts 26
H. Waiver 26
I. Exculpation 27
J. Severability 27
K. Term 27
L. Amendments 27
EXHIBIT A — LEGAL DESCRIPTION OF THE PROPERTY
EXHIBIT B — DEBT SERVICE SCHEDULE
APPENDIX 1 — PROJECT DOCUMENTS
P:1SC\SC09H 01/06/14
DESIGN, DEVELOPMENT,
CONSTRUCTION, FINANCING AND OPERATING AGREEMENT
This DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND
OPERATING AGREEMENT (the "Agreement") is made as of July 27, 2001, by and between
the CITY OF YAKIMA, WASHINGTON ("Yakima"), a municipal corporation and first class
city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT (the "District", and together with Yakima, the "Parties"), a public facilities district
created by Yakima and the Cities of Selah and Union Gap, to provide for the design,
development, construction, financing and operation of ; the Yakima Convention Center, as
expanded.
WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the
"Convention Center"), providing first-class meeting, ballroom and other event facilities;
WHEREAS, Yakima desires to expand the Convention Center (the "Project");
WHEREAS, the Convention Center, as expanded by the Project, will serve as a Regional
Center under RCW 35.57.030, benefiting the region including residents of Yakima, the City of
Selah and the City of Union Gap (the "Cities") by stimulating economic development, creating
jobs, realizing additional sales and lodging tax revenues, attracting commercial business and
tourism, and providing facilities for convention, special events and community events including
public meetings and performing arts event;
WHEREAS, pursuant to Chap. 35.57 RCW (the "Act"), the Cities have entered into an
Interlocal Agreement to form the District for the purpose of acquiring (by purchase, lease or
otherwise), and assisting with the financing, development and operation of, the Convention
Center as expanded by the Project;
WHEREAS, under the Act, the District has access to several new revenue sources,
including a state sales and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the
retail sales and use taxes generated within the District boundaries to the District;
WHEREAS, the Act requires a local match of 33% of the net present value of the Sales
Tax in order for the District to impose the Sales Tax;
WHEREAS, Yakima has entered into a Lease Agreement transferring a leasehold interest
in the Convention Center property described in Exhibit A hereto (the "Property") (the value of
the Convention Center property is approximately $11,800,000) to the District in satisfaction of
this match requirement (approximately $2.4 million);
WHEREAS, the District will lease back the Property to Yakima pursuant to this
Agreement;
WHEREAS, subject to certain limitations set forth herein, Yakima will issue bonds to
finance the Project, in consideration for the District's pledge of Sales Tax receipts to pay debt
service on the bonds and other Regional Center costs;
WHEREAS, Yakima will apply the net proceeds of the bonds to design, develop and
construct the Project, under the terms set forth herein;
WHEREAS, to provide for stable financing and operation of the Project in light of the
cyclical nature of Sales Taxes, Yakima wishes to provide additional funding in the event of a
Sales Tax shortfall; and
WHEREAS, Yakima will operate the Convention Center, as expanded by the Project, and
will apply certain City lodging taxes (in an amount, if any, determined annually by the City
Council) to pay a portion of the costs of operation and maintenance;
WHEREAS, the Parties desire that Yakima finance, design, develop and operate the
Convention Center as expanded by the Project on the terms set forth herein, and the District and
Yakima assist in financing the Project, also on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual undertaking and promises contained
herein, and the benefits to be realized by each Party including the benefits to the general public
in the region by the completion and operation of the Project, the Parties agree as follows:
L DEFINITIONS
For purposes of this Agreement, and any agreements supplemental hereto, the terms
defined in this Article shall have the following meanings, except as herein otherwise expressly
provided:
Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima.
Additional Revenue means all revenue received by the District (or by Yakima on behalf
of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking
Charges, Parking Taxes, Voted Sales Tax, and any other revenue derived from the ownership or
operation of the facilities of the District, including investment income; but excluding Sales Tax
Revenue and amounts received from Yakima pursuant to Section III(C) (including investment
earnings thereon).
Administrative Costs means the costs of the District incurred in administering the District
and this Agreement. Administrative Costs shall be specified in the District's annual budget
submitted to Yakima for approval and to the Cities of Selah and Union Gap for review and
comment.
Admission Charge means any charge imposed by the District (or by Yakima on behalf of
the District) for admission to its facilities, including charges for season tickets or subscriptions;
cover charges, or charges for use of seats and tables, and other similar accommodations; charges
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for food and refreshment if free entertainment, recreation, or amusement is provided; charges for
rental or use of equipment or facilities for purposes of recreation or amusement; and automobile
parking charges if the amount of the charge is determined according to the number of passengers
in the automobile.
Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be
paid by any person who pays an Admission Charge.
Agreement means this Design, Development, Construction, Financing and Operating
Agreement.
Beneficial Occupancy shall mean when the Project is granted a temporary or permanent
Certificate of Occupancy for the Convention Center as expanded by the Project from Yakima's
building official.
Bond Counsel means a firm of lawyers nationally recognized and accepted as bond
counsel and so employed by Yakima.
Bond Ordinance means the ordinance(s) of the Yakima Council authorizing the issuance
of the Bonds and any amendments.
Bonds means the bonds, notes or other evidences of indebtedness issued by Yakima
pursuant to and under authority of the Bond Ordinance to finance or refinance the Project.
Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total
interest cost on the Bonds exceeds 5.55%, or if the financing is determined to no longer be
economical.
Board means the governing body vested with the management of the affairs of the
District.
Charter means the.Charter of the District, issued pursuant to the Interlocal Agreement, as
amended from time to time.
Code means the Internal Revenue Code of 1986, as amended, and all applicable
regulations and rulings thereunder.
Completion Bonds means additional bonds of Yakima issued to pay,Costs of the Project.
Costs of the Project means all capital costs that are paid or incurred by Yakima in
connection with the design, development and construction of the Project, including, but not
limited to all or a portion of the interest on Bonds during the period of construction of such
improvements, and for a period of time thereafter; amounts required to meet any reserve
requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for
expenses, including planning, permitting and design expenses, incident and properly allocable to
the Project; and all other items of expense incident and properly allocable to designing,
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developing and constructing the Project, financing the Project and placing the Project in
operation.
• Debt Service means the amount to be paid on the next succeeding Payment Date to pay
the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due
on such Payment Date. A schedule setting forth Debt Service to be paid on the Bonds and any
Additional Bonds shall be attached as Exhibit B at such time as the Bonds or any Additional
Bonds are issued.
Debt Service Fund means the special fund(s) or account(s) established by Yakima under
the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal
of, interest on and redemption price, if any, of Bonds and/or any Additional Bonds.
Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any,
established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which
secures the Bonds and/or any Additional Bonds.
Debt Service Reserve Fund Requirement means the amount required to be deposited to
the Debt Service Reserve Fund, as established in the Bond Ordinance.
District means the public facilities district created pursuant to the Interlocal Agreement.
Event(s) of Default shall be as defined in Article IV herein.
Favorable Opinion of Bond Counsel means a written legal opinion of Bond Counsel
addressed to Yakima, to the effect that such action is permitted under the laws of the State and
under applicable ordinances of the Yakima Council, including the Bond Ordinance and any
Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any
other bonds of Yakima from gross income for federal income tax purposes under the Code
(subject to the inclusion of any exceptions contained in the opinion delivered upon original
issuance of such bond).
Force Majeure means any causes or conditions beyond a Party's reasonable control
(including, but not limited to fire, explosion, presence of a hazardous substance, earthquake,
storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation,
delay or failure to act by civil, military or other governmental authority other than a party; strike,
lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of,
or damage or casualty to, any equipment, facility or other property; any delay or failure by any
third party to provide a necessary service, supply, part, equipment, personnel or other item; or
interruption, suspension, curtailment or other disruption of a utility).
Governmental Authority shall mean any board, bureau, commission, department, or body
of any municipal, county, state, or federal governmental or quasi -governmental unit, or any
subdivision thereof, having, asserting, or acquiring jurisdiction over the Property or the
management, operation, use, or improvement thereof.
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Improvements shall mean all buildings, structures, fixtures, improvements and equipment
constructed or located on the Property, including, but not limited to, the structure of the
Convention Center and the parking facilities, elevator(s), lighting, seating, carpeting, HVAC,
plumbing, electrical and mechanical systems.
Insurance Proceeds mean the greater of (i) the proceeds from the insurance policies
actually maintained by Yakima with respect to the Convention Center or Project; or (ii) the
proceeds that would have been available had Yakima maintained the insurance policies required
to be maintained by Yakima under this Agreement.
Interlocal Agreement means the Interlocal Financing Agreement between the Cities
creating the District.
Law(s) and Ordinance(s) shall mean all present and future applicable laws, ordinances,
rules, regulations, resolutions, permits, authorizations, orders and requirements of all federal,
state, county and municipal governments, the departments, bureaus or commissions thereof,
authorities, boards or officers, any national or local board of fire underwriters, or any other body
or bodies exercising similar functions having or acquiring jurisdiction over all or any part of the
Property, including Yakima acting in its governmental capacity.
Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW.
Net Proceeds, when used with reference to the Bonds, means the principal amount of
such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less
the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve
Fund and/or the PFD Revenue Reserve Fund.
Operating Manual means the Operating Standards Manual for the expanded Convention
Center.
Operation and Maintenance Costs means all necessary costs to Yakima of operating and
maintaining the Convention Center as expanded by the Project, including but not limited to
administrative and general expenses, costs of insurance (including reasonable contributions for
self-insurance reserves, if any), consulting technical services and repairs and replacements (to the
extent not properly classifiable as capital costs), real estate taxes, if any, but excluding
depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a
similar nature and debt service on the Bonds and any Additional Bonds.
Outstanding, when used as of any particular time with reference to Bonds or Additional
Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the
Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds
theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or
Additional Bonds with respect to which all liability of Yakima shall have been discharged in
accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and
(3) Bonds or Additional Bonds for the transfer or exchange of or in lieu of or in substitution for
which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima
pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable.
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Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110.
Parking Tax means a tax on any Parking Charge imposed at any parking facility that is
owned or leased by the District pursuant to RCW 35.57.110.
Payment Date means the dates specified in the Bond Ordinance, or any Supplemental
Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with
respect to the Bonds or any Additional Bonds.
Permitted Investments means investments permitted by State law for investment of
Yakima and District funds, consistent with the terms of the Bonds and any Additional Bonds.
PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if
any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The
amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall
be maintained in the PFD Revenue Reserve Fund shall be established in the Bond Ordinance.
Predevelopment Costs means the cost of all planning, legal, architectural, engineering
and other services incurred by Yakima in connection with the Project until the date of issuance of
the Bonds.
Project means the design, construction, and operation of the additions to the Convention
Center, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, and electrical systems of the Project,, detailed site
plans, preliminary specifications, and schematic design documents), construction documents
(including all drawings and specifications necessary to completely. describe the Project in detail
to a contractor for the purposes of bidding and construction, schedules, plans and specifications,
and the construction contract) and Project budgets (setting forth the construction contract cost,
taxes, all contingencies, fees and allowances).
Property shall mean the real property described in Exhibit A attached hereto or as
hereafter amended.
Refunding Bonds means bonds, notes or other evidence of indebtedness the proceeds of
which will be used to refund Bonds.
Sales Tax means the nonvoted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of
a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from
the amount of tax otherwise required to be collected or paid over to the State's Department of
Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event,
not more than 25 years after the Sales Tax is first collected.
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Sales Tax Revenue means all Sales Taxes received by the District.
State means the State of Washington.
Substantial Completion shall mean when the Beneficial Occupancy of the Convention
Center as expanded by the Project is achieved.
1 Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council
amending or supplementing the Bond Ordinance, including any ordinance adopted by the
Yakima Council in connection with the issuance of Additional Bonds.
Voted Sales Tax means any sales and use tax imposed by the District pursuant to
RCW 82.14.048 and approved by the voters.
Yakima means the Cityof Yakima, Washington, a municipal corporation of the State, as
now or hereafter constituted.
Yakima Council means the City Council of Yakima, or any successor thereto as provided
by law.
II. INTENT AND RELATIONS
1i A. Intent.
1. Financing. It is the intent of this Agreement that the District lease the
Property to Yakima and that Yakima finance the Project. In consideration for Yakima's
agreement to finance the Project, it is the intent of the Parties that the District transfer all Sales
Tax Revenue to Yakima to pay Predevelopment Costs (to the extent not paid from Net
Proceeds), Debt Service and other Regional Center costs including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). It is
the intent of the Parties that, in the event that Yakima provides notice that amounts on deposit in
the Debt Service Fund and the PFD Revenue Reserve Fund are projected to be insufficient (not
taking into account amounts in the Debt Service Reserve Fund) for Yakima to pay Debt Service
when due, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such
deficiency as set forth in Section III(C).
2. Development. It is the intent of this Agreement that Yakima design,
develop and construct the Project in accordance with the Project Documents and the standards of
performance set forth in Article V. This Agreement is intended by the Parties to establish the
design, development and construction standards and other performance criteria for the Project.
3. Operation. It is the intent of the Parties that Yakima operate and maintain
the Convention Center and the Project, and that Yakima retain all rents, receipts, profits and
other revenues of the Convention Center as expanded by the Project. In consideration for
Yakima's agreement to operate and maintain the Convention Center and the Project, it is the
intent of the Parties that the District pay Additional Revenue, if any, to Yakima, and that Yakima
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pay the District's Administrative Costs. In addition, the Parties intend that Yakima apply certain
Lodging Taxes to pay a portion of Operation and Maintenance Costs, in an amount, if any,
determined on an annual basis by Yakima.
B. Description. The Property is located at 10 North Eighth Street , Yakima,
Washington 98901-2515, as legally described on the attached Exhibit A. The Convention
Center, as improved by the Project, will occupy approximately 47,000 square feet.
C. Yakima's Regulatory Role Reserved. Any Yakima design review and approvals
provided for herein are independent of, in addition to and do not in any way obligate Yakima
with respect to usual and customary Yakima permitting, code compliance and other regulatory
reviews. The outcome of any such regulatory review is independent of and is in no way biased,
prejudiced or predetermined in any way by this Agreement. Nothing in this Agreement is
intended or shall be construed to require that Yakima exercise its discretionary authority under
its regulatory ordinances to further the Project nor bind Yakima to do so. Yakima will process
applications for permits and approvals associated therewith as if such applications were made
without any Yakima participation in such projects.
D. Governing Law and Venue. This Agreement and the rights and obligations of the
Parties shall be governed by, and construed and interpreted in accordance with, the laws of the
State. Any suit filed between the Parties concerning this Agreement shall be commenced in the
Superior Court in Yakima County.
HI. SCOPE OF COMMITMENTS
A. Commitments by the District
1. Payment Obligation.
(a) Payment of Debt Service and Predevelopment Costs. In
consideration for Yakima's agreement to issue the Bonds and design, develop and construct the
Project, the District shall pay all Sales Tax Revenue to Yakima to pay Yakima's Debt Service
and Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center
costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and
PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service
Fund pursuant to Section III(C).
(b) Pledge of Sales Tax Revenue, Additional Revenue and other
Receipts of the District. The District hereby pledges Sales Tax Revenue and other amounts to be
paid by the District to Yakima for payment of Debt Service, Predevelopment Costs (to the extent
not paid from Net Proceeds), and other Regional Center costs including but not limited to
funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). The
obligation of the District to pay Sales Tax Revenue and other amounts due under the Agreement
and to perform and observe the other obligations on its part contained herein shall be absolute
and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or
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otherwise. The District's obligations under this Agreement shall continue in effect and shall
survive the satisfaction of Yakima's obligations under the Bonds, the Bond Ordinance, any
Additional Bonds, and any Supplemental Bond Ordinance until such time as all Predevelopment
Costs and Debt Service have been paid, together with any other amounts owed to Yakima
hereunder.
The Parties acknowledge and agree that Yakima will pledge this Agreement, as well as
the District's Sales Tax Revenue and other amounts to be paid by the District to Yakima, to the
payment of the Bonds and any Additional Bonds. Such pledge will be material to the offer and
sale of the Bonds, and will be disclosed to potential purchasers and purchasers of the Bonds.
Bondholders will rely on this pledge in purchasing the Bonds. So long as the Bonds or any
Additional Bonds are Outstanding, the District shall not issue bonds, or incur any other
obligation, secured by Sales Tax Revenue or by Additional Revenue.
(c) Revenue and Payment Reports. The District shall file annual
financial statements and annual reports with the Cities, as required under Sections 8.5 and 8.6 of
the Charter. Each such report shall bear a current date, be signed by an appropriate and duly
authorized District officer and be supported by reasonable documentation sufficient to sustain the
accuracy of the report.
(d) Termination for Failure To Timely Pay. This Agreement is
specifically conditioned upon the District's timely payment of amounts due hereunder. In the
event that the District fails to transfer amounts as and when required to Yakima, Yakima may
terminate this Agreement pursuant to the provisions contained in Article XIII.
2. District Funds. The District shall establish the following Funds and '
accounts: Sales Tax Revenue Fund (or Account), Additional Revenue Fund (or Account), and
the Administrative Fund (or Account). The District may, in its discretion, establish such
additional accounts and subaccounts as the District deems necessary or useful, but the
establishment of any such account or subaccount shall not alter or modify any of the
requirements of this Agreement with respect to a deposit or use of money in the funds.
(a) Sales Tax Revenue Fund. The District shall establish a
Sales Tax Revenue Fund and shall deposit in the Sales Tax Revenue Fund all Sales Tax Revenue
and all net earnings on investments of money in the Sales Tax Revenue Fund. Amounts in the
Sales Tax Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Sales Tax Revenue Fund, and such income and interest shall
become part of the Sales Tax Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Sales Tax Revenue Fund are irrevocably pledged
and shall be used and transferred by the District as follows: Within three working days after
receipt, all amounts on deposit in the Sales Tax Revenue Fund to Yakima to pay Debt Service,
Predevelopment Costs and other Regional Center costs, including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C).
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(b) Additional Revenue Fund. The District shall deposit in the
Additional Revenue Fund all Additional Revenue received by the District and all net earnings on
investments of money in the Additional Revenue Fund. Amounts received from Yakima to pay
Administrative Costs shall be deposited to the Additional Revenue Fund. Amounts in the
Additional Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Additional Revenue Fund, and such income and interest shall
become part of the Additional Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Additional Revenue Fund are irrevocably pledged
and shall be used and transferred by the District at least monthly as follows and in the following
order of priority: _
and
Maintenance Costs.
(i) To the Administrative Fund to pay Administrative Costs;
(ii) The remainder, to Yakima to pay Operation and
To the extent that Additional Revenues are received by Yakima on behalf of the District,
Yakima shall apply such Additional Revenues to pay (i) Administrative Costs and/or (ii)
Operation and Maintenance Costs.
(c) Administrative Fund. The District shall establish an
Administrative Fund. Amounts transferred from the Additional Revenue Fund to pay
Administrative Costs pursuant to subsection (b) shall be deposited to the Administrative Fund.
shall be used to pay Administrative Costs.
Amounts in the Administrative Fund may be invested in Permitted Investments. The
District shall maintain records sufficient to permit calculation of the income on investments and
interest earned on deposit of amounts held in the Administrative Fund, and such income and
interest shall become part of the Administrative Fund unless otherwise applied in accordance
with this Section.
(d) Liens. Except as permitted under this Agreement, the District shall
not create any lien upon funds created hereunder other than the lien hereby created.
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B. Commitments by Yakima
1. Site Availability. Pursuant to the terms of the Lease Agreement between
Yakima and District, dated July 27, 2001, Yakima will lease to the District the Property
described in Exhibit A. The Parties agree that the leasehold interest in the Property is donated
(for nominal consideration in the form of $50 in rent) by Yakima to the District to be used for the
construction of a Regional Center, as defined in RCW,35.57.030. Moreover, the Parties agree
that the value of the Property is $11,800,000. The value of the leasehold interest in this Property
transferred by the Lease Agreement significantly exceeds 33% of the net present value of the
total Sales Taxes projected to be received by the District (approximately $2.4 million).
2. Issuance of the Bonds. Yakima agrees to issue the Bonds and
Completion Bonds, if necessary. Yakima reserves the right not to issue the Bonds if, at the time
the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55%, or if the financing is
determined to no longer be economical. The Bonds shall be in an aggregate principal amount to
be determined by Yakima, at least equal to the projected Costs of the Project, Predevelopment
Costs, amounts to pay costs of issuance and amounts to be deposited to the Debt Service Reserve
Fund, if any.
3. Application of Net Proceeds. Yakima agrees to apply Net Proceeds to
pay Predevelopment Costs and Costs of the Project as follows.
(a) Predevelopment Costs. Yakima has incurred and will continue to
incur Predevelopment Costs for the benefit of the District. Yakima will pay these
Predevelopment Costs from the District's Sales Tax Revenue received by Yakima to the extent
that Predevelopment Costs are not paid from Net Proceeds (at Yakima's election).
(b) Costs of the Project. In addition, Yakima will apply Net Proceeds
to pay Costs of the Project.
4. Design, Development and Construction Responsibility. Yakima shall
design or contract for the design of the Project and construct or contract for the construction of
the Project, in accordance with the Project Documents and with the standards of performance set
forth in Article V and elsewhere in this Agreement.
5. Operation and Maintenance Responsibility.
(a) Operations and Maintenance—Generally. Yakima agrees to
operate and maintain the Improvements including the Convention Center, related parking and,
upon Substantial Completion, the Project, on the terms and in accordance with the standards set
forth herein. Yakima shall operate and maintain the Improvements including the Convention
Center, related parking and the Project as a first class convention center facility, to be kept at all
times in a safe and clean condition.
Yakima shall provide (directly or by contract) all management, supervision, personnel,
materials, equipment, services and supplies necessary to operate, maintain and repair of the
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Improvements and shall take all reasonable precautions to prevent damage, injury or loss by
reason of or related to the operations and maintenance of -the Improvements to any person or
property. Yakima shall hire an appropriate number of qualified employees to operate and
maintain the Improvements consistent with the best management practices. Yakima shall
properly supervise and direct its employees and other parties implementing the performance of
its duties, obligations and functions under this Agreement. Yakima shall be fully responsible for
the performance of such employees and other parties.
Yakima shall comply with all applicable Laws and Ordinances relating to the safety of
persons or property or their protection from damage, injury or loss. , Yakima shall obtain all
statements, certificates, permits, licenses, rights, and approvals, whether public, private, local,
state or federal, that are necessary or appropriate to the continued operation of the Improvements
as a first class convention center. Yakima shall undertake all modifications to the Improvements
required to comply with state, federal and local laws, rules, regulations, judgments, orders and
decrees.
Prior to Substantial Completion of the Project, Yakima shall- provide pre -opening
services, including start-up of the Project, mobilization of staff and services, and performance of
marketing and booking plans.
(b) Compliance with the Operating Manual. Yakima shall maintain
the Improvements in substantial compliance with the terms of the Operating Manual during the
term of this Agreement. The Operating Manual shall not be amended except with the written
approval of the Yakima City Manager or his or her designee. The Operating Manual shall not be
revised in a manner that will impair the security of the owners of the Bonds or any Additional
Bonds.
Article VII.
(c) Insurance. Yakima shall maintain insurance as set forth .in
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6. Operation and Maintenance Costs.
(a) Obligation To Pay Operation and Maintenance Costs and
Administrative Costs; Right to Receive all Rents and Operating Revenues. Yakima shall pay
Operation and Maintenance Costs from revenues derived from operation of the Convention
Center and the Project, Additional Revenues received from the District, from Lodging Taxes, or
other Yakima funds, as set forth below. Within a reasonable period after receipt of an invoice
therefor, Yakima shall pay to the District its Administrative Costs as set forth in the District's
budget approved by Yakima.
All rents, receipts, profits and other revenue derived from the operation of
the Convention Center and the Project shall be retained by, and shall be the property of, Yakima,
and shall be applied to pay Operation and Maintenance Costs or any other lawful purposes of
Yakima.
(b) Lodging Taxes. To the extent not paid from revenues derived from
operation of the Convention Center and the Project, Additional Revenues received from the
District, or other Yakima funds, Yakima will apply Lodging Taxes to pay Operation and
Maintenance Costs. The amount of Lodging Taxes to be applied to this purpose in any year shall
be determined by the Yakima Council in its sole discretion as part of its annual budget process.
The amount of Lodging Taxes to be applied to pay Operation and Maintenance Costs may vary
from year to year and may equal zero in some years. In any event, the amount of Lodging Taxes
to be applied shall not exceed the amount available after payment of debt service on Yakima's
outstanding bonds (including all or a portion of the Bonds) to which these taxes are pledged.
Yakima's obligation hereunder is limited only to the amounts designated for this purpose
by the Yakima Council. Yakima does not hereby guarantee any obligations or liability of the
District. It is expressly understood and agreed that any obligation or liability arising out of
and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in
connection therewith, shall be satisfied exclusively from the assets and credit of the District, and
no creditor or any other person or entity shall have any recourse to any of the assets, credit, or
services of Yakima on account of any debts, obligations, or liabilities of the District
(c) Amounts Remitted to Yakima. Amounts remitted to Yakima
pursuant to Section III(A)(2)(a) and (2)(b)(ii) shall be used by Yakima for the following
purposes. Receipts that are Sales Tax Revenue shall be used to pay Predevelopment Costs (to
the extent not paid from Net Proceeds), Debt Service, and for the purposes set forth in RCW
35.57.020, as the same may be amended (acquiring, constructing, owning, remodeling,
maintaining, equipping, reequipping, repairing, financing, and operating one or more Regional
Centers). Receipts that are Additional Revenues shall be applied to pay Operation and
Maintenance Costs.
Yakima's obligation hereunder is limited only to the amounts received from the District.
Yakima does not hereby guaranty any debt obligations or liability of the District.
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All amounts remitted to Yakima pursuant to Section III(A)(2)(a) and 2(b)(ii), together
with all rents, receipts, profits and other revenues derived by Yakima from its operation of the
Convention Center, shall be retained by and be the property of Yakima to be applied to pay
Operation and Maintenance Costs (directly or by contract) or for other lawful purposes of
Yakima . It is the Parties intent that all such amounts shall be Yakima ,funds, accounted for in
Yakima's books and accounts.
(d) Additional Support. To the extent, as from time to time authorized
by the Yakima City Manager, Yakima will utilize its employees to provide oversight and
administrative assistance in working with District to achieve the mutual goals and objectives of
the Cities and District under this Agreement. Unless otherwise specified in this Agreement or
applicable law, actions to be taken or decisions to be made by Yakima will be the responsibility
of the Yakima City Manager or his or her designee. Yakima hereby grants to the extent
permitted by law such person or persons the power, authority, and right to carry out all such
responsibilities.
C. Commitment by Yakima to Replenish Sales Tax Shortfall -
1. Funding Commitment.
Yakima shall provide notice to the District in the event that amounts in the Debt Service
Fund and the PFD Revenue Reserve Fund (not taking into account amounts in the Debt Service
Reserve Fund) are projected to be insufficient to pay Debt Service on any Payment Date. In such
event, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency.
Yakima's obligation hereunder is limited only to the amount to be paid to replenish any
projected deficiency in the Debt Service Fund. Yakima does not hereby guarantee any debt
obligations or liability of the District. It is expressly understood and agreed that any obligation
or liability arising out of and/or incurred by the District by reason of this Agreement, or the
carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets
and credit of the District, and no creditor or any other person or entity shall have any recourse to
any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities
of District.
IV. PROJECT COMPONENTS AND OPERATION CRITERIA
A. Project Components. Yakima shall finance, design and construct the Project in
accordance with the Project Documents, and in accordance with the performance .specifications
set forth herein.
B. Project Purpose. The Project is being constructed to serve the needs of the
region, including the residents of Yakima, the City of Selah and the City of Union Gap.
Following Project completion, Yakima shall be solely responsible for management, operation
and maintenance of the Convention Center, as expanded by the Project, consistent with the terms
of this Agreement and the Operating Manual.
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1. Public Access. Yakima shall provide regular hours during which the
Convention Center will be open to the public (subject to reasonable Admission Charges);
provide public programs; and make available for reasonable public use any ballroom,
auditorium, meeting rooms or other public spaces in the Convention Center (subject to
reasonable security measures).
2. Yakima Approval. In consideration of Yakima's obligations hereunder,
the District agrees that the following shall be subject to the approval of the Yakima Council:
(a) Approval of the Yakima Council:
(i) The District shall not impose Admission Charges or Parking Charges
without the prior approval of the Yakima Council, as set forth in the
Interlocal Agreement and the Charter.
(ii) The District shall not impose Admission Taxes or Parking Taxes
without the prior approval of the Yakima Council.
(iii) The District's annual budget, including Administrative Costs, shall be
subject to the approval of the Yakima Council and to review and
comment by the Cities of Selah and Union Gap.
(iv) The District shall not authorize or engage in gambling activities or
authorize or publicly display any artwork without the prior approval of
the Yakima Council.
(v) Any acquisition or transfer of real and personal property with a value
over $100,000 by lease, sublease, purchase, or sale by the District shall
be subject to approval by the Yakima Council.
C. Project Contracting and Management
1. Yakima shall construct the Project according to the Project Documents.
2. Yakima will select the contractor(s) for the Project through a competitive
bidding process under the Laws of the State, pursuant to procedures designed to provide
maximum practical competition by and from qualified contractors.
3. Yakima shall take reasonable precautions to prevent unnecessary damage,
injury or loss to property, structures, and vegetation in the Project area and shall at its own
expense repair any damage thereto caused by its, or its contractors', actions. Yakima shall
require its contractors to take any and all precautions that may be necessary to render all portions
of the Project and any adjacent areas affected by the Project secure in every respect, and to
decrease the likelihood of accidents from any cause, and to avoid contingencies that are liable to
delay the Project. Yakima shall require its contractors to exercise utmost care when using
explosives or other hazardous materials or equipment, and when utilizing unusual methods.
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These requirements shall in no way relieve Yakima of its responsibility for safety on the Project.
The District shall not be responsible for any unsafe conditions.
V. DEVELOPMENT CRITERIA AND OVERSIGHT
A. Generally. Except as otherwise provided in this Section, the Parties hereby agree
that Yakima shall have sole responsibility for construction of the Project and shall be responsible
for obtaining all necessary land use, building and mechanical permits, and all other required
permits or approvals for construction of the Project. Yakima shall promptly comply with all
applicable Laws and Ordinances as they relate to the Property and Improvements. Yakima's
responsibility to finance such construction is limited to the extent of Net Proceeds.
B. Standards of Performance. Yakima shall perform the terms of this Agreement
according to the following standards:
1. Performance in a good and workmanlike manner and in compliance with
all applicable laws and ordinances, rules, and regulations.
2. Use of materials that are of first class quality and workmanship.
3. Maintenance and warranty of all portions of the Project consistent with the
Project Documents.
C. Development Schedule and Substantial Completion Date.
1. RCW 82.14.390 currently requires that construction of the Project
commence before January 1, 2003. Accordingly, Yakima shall commence
construction of the Project before January 1, 2003, or such later start date
set forth in any amendment to RCW 82.14.390 (the "Date of
Commencement").
2. Yakima shall pursue the design and construction of the Project to achieve
Substantial Completion within 24 months after the Date of
Commencement, excluding time periods when the design, construction or
development of the Project is unavoidably delayed by reasons of Force
Majeure; provided, however, that said date may be extended by the
Yakima City Manager.
VI. PROJECT COSTS. Yakima shall finance, design, construct, and assume the risk of loss
of the Project from Net Proceeds and from other amounts paid by the District to Yakima
pursuant to the Agreement.
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VII. INSURANCE
A. Insurance Requirements. Yakima shall maintain and keep in force insurance
covering all aspects of the construction activity on the Property, including but not limited to the
following requirements:
1. Builder's All Risk Comprehensive Coverage. Yakima shall keep, or shall
require the construction contractor to keep, all Project components, including but not limited to
the Convention Center and parking facilities, insured for Builders All Risk Comprehensive
Coverage including earthquake and flood in any event in an amount not less than one hundred
percent (100%) of the then_ full "Replacement Cost," being the cost of replacing the Project
components, and all fixtures, equipment, improvements and betterments thereto.
2. Commercial General Liability. Yakima shall carry, and shall require its
construction contractor to carry, Commercial General Liability insurance providing coverage
against claims for bodily injury, death or property damage on the Property with broad form
liability and property damage endorsement, such insurance to afford minimum protection, during
the term of the construction phase, and written for combined single limits of liability of no less
than Ten Million Dollars ($10,000,000), per occurrence, said amount to be adjusted from time to
time with coverage deemed customary under like conditions.
3. Property Damage Insurance. Yakima shall carry property insurance
covering the Property including all Improvements, including earthquake, flood, boiler and
machinery insurance, in an amount equal to at least one hundred percent (100%) of the
replacement cost of all Improvements. Such insurance shall contain coverage against loss or
damage by perils no less broad than the current edition of the ISO Special Form, 1985 Edition.
Yakima shall be responsible for payment of any deductibles under said insurance policies and
any costs of restoration resulting from any uninsured or underinsured losses.
B. Insurance Policies. Insurance policies required herein:
1. Shall be issued by companies authorized to do business in the State with
the following qualifications:
a. The companies must be rated no less than "A," as to general policy
holders rating and no less than "X" as to financial category in accordance with the latest edition
of Best's Key Rating Guide, published by A.M. Best Company, Incorporated.
b. The policies shall be issued as primary policies.
2. Each such policy or certificate of insurance mentioned and required in this
Section VII shall have attached thereto (1) an endorsement that such policy shall not be canceled
or materially changed without at least 30 days' prior written notice to the District and Yakima;
(2) an endorsement to the effect that the insurance as to any one insured shall not be invalidated
by any act or neglect of any other insured;, (3) an endorsement pursuant to which the insurance
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1
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carrier waives all rights of subrogation against the Parties hereto; and (4) an endorsement
pursuant to which this insurance is pnmary and noncontributory.
3. The certificates of insurance and insurance policies shall be furnished to
the District and Yakima prior to commencing any construction under this Agreement. The
certificate(s) shall clearly indicate the insurance and the type, amount and classification, as
required for strict compliance with this Section VII.
4. Cancellation of any insurance or non-payment by Yakima of any premium
for any insurance policies required by this Agreement shall constitute an Event of Default under
Section XII of this Agreement.
C. Adjustments. The types of policies, risks insured, coverage amounts, deductibles
and endorsements may be adjusted from time to time as the District and Yakima may mutually
determine.
VIII. ASIS
A. Due Diligence. The District acknowledges that it has diligently investigated to its
full satisfaction the physical condition of the Property and all other matters that in the District's
judgment affect the District's use of the Property and the District's willingness to enter into this
Agreement. The District acknowledges that except as expressly provided for in this Agreement,
neither Yakima nor any employee, officer, agent or representative of Yakima has made any
representations or warranties whatsoever regarding the Property or this transaction or any facts
relating thereto, including, without limitation, any representations or warranties concerning the
physical condition of the Property, access, zoning laws, environmental matters, suitability,
feasibility, utilities, or any other matter affecting the Property or the use thereof
B. Acceptance. Except as expressly provided for in this Agreement, Yakima shall
accept the Property ,"as is" and "where is" with all faults, of any nature or kind, without any
representations or warranties, express or implied or statutory of any kind whatsoever by the
District or any employee, officer, agent or representative of the District. Upon acceptance by
Yakima of the Property under this Agreement, then Yakima shall be deemed to have accepted
the Property and to have waived and released its right- to recover from the District any and all
damages, losses liabilities, costs, or expenses whatsoever (including attorneys' fees and costs)
and claims therefor, whether direct or indirect, known or unknown, foreseen or unforeseen,
which may arise on account of or in any way arising out of or connected with the physical
condition of the Property or any Law or Ordinance.
C. Environmental Contamination. Yakima agrees to indemnify and hold harmless
the District for any environmental contamination existing as of the date of this Agreement.
Yakima agrees to design and develop the Project in such a mariner as to minimize, to the extent
financially practicable, the excavation of native soils. In the event Yakima encounters
contaminated soils, Yakima shall be responsible for all costs of remediating the contaminated
soil, and for seeking recovery from responsible parties.
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The Parties agree that in the event contaminated soils are encountered and any Party
incurs remediation costs, the Parties shall fully cooperate in pursuing claims against those
entities that may be liable.
IX. LIABILITY
A. Indemnification of Yakima.
During the term of this Agreement, to the maximum extent not prohibited by law, the District
agrees to and shall indemnify and hold Yakima harmless from and against all liability, loss,
damage, cost, or expenses (including reasonable attorneys' fees and court costs, amounts paid in
settlements and judgment) arising from or as a result of the death of any person or of any
accident, injury, loss or damage whatsoever to any person or to the property of any person that
occurs on or adjacent to the Property and that is directly or indirectly caused by the acts, errors,
or omissions of the District or its officers, agents, servants, employees, officers, contractors or
subcontractors. The District shall not be responsible for (and such indemnity shall not apply to)
the gross negligence or willful misconduct of Yakima, or their respective officials, servants,
employees or officers.
X. DESTRUCTION OR CONDEMNATION
A. Total or Partial Destruction.
1. If the Convention Center or Project is totally or partially destroyed at any
time after execution of this Agreement, and the Insurance Proceeds are or would have been
sufficient to pay the cost of reconstruction or restoration, or if the uninsured cost of
reconstruction or restoration is less than Two Hundred Fifty Thousand Dollars ($250,000), and
the damage or destruction is such that as a result thereof Yakima cannot meet its obligations
under this Agreement, Yakima shall reconstruct or restore the damage consistent with terms of
this Agreement within two years of the destruction; provided that, if the damage or destruction is
such that Yakima may notwithstanding such damage or destruction continue to fulfill its
obligations under this Agreement, Yakima shall have the discretion to use the Insurance
Proceeds to restore and repair the Property to the extent necessary and appropriate for its
purposes. If the Insurance Proceeds are insufficient and the uninsured cost is more than Two
Hundred Fifty Thousand Dollars ($250,000), Yakima may elect to reconstruct or restore the
damage or to terminate this Agreement by delivery of .written notice to the District within 30
days after the destruction.
2. If Yakima elects not to reconstruct or restore the damage, this Agreement
shall terminate and the Property shall revert to Yakima pursuant to Section XIII. The District
shall transfer the Property in its then condition to Yakima, along with any Insurance Proceeds
attributable to the damage or destruction of the Project.
B. Condemnation. If the whole or any substantial part of the Property is taken or
condemned in the exercise of eminent domain powers (or by conveyance in lieu thereof), such
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that Yakima can no longer meet its obligations under this Agreement, this Agreement shall
terminate upon- the date when possession of the Property so taken shall be acquired by the
condemning authority. As used herein, "substantial" shall be defined as reasonably preventing
the conduct of Yakima's activities. Yakima shall have the right to claim and recover from the
condemning authority such compensation as may be separately awarded or recoverable by
Yakima in Yakima's own right on account of any and all damage to Yakima's activities by
reason of the condemnation and on account of any cost or loss Yakima might sustain; provided
that, the District shall pay to Yakima that portion of its condemnation proceeds equal to the
amount of Debt Service on the Outstanding Bonds and Additional Bonds, if any.
XL RIGHT TO ASSIGN OR OTHERWISE TRANSFER
A. Right to Transfer Agreement.
1. During the term of this Agreement and at such time as the Bonds or
Additional Bonds are no longer Outstanding, the District shall have the right to assign or
otherwise transfer the Agreement, to such other persons, firms, corporations, partnerships, joint
ventures, and federal, state or municipal government or agency thereof, as the District shall
select (the "Transferee"), provided, however, that:
a. The District must obtain the prior written consent of Yakima;
b. Such assignment or transfer shall be made expressly subject to the
terms, covenants and conditions of this Agreement;
c. The District shall deliver to Yakima a duly executed and recorded
copy of the document evidencing such transfer, including a suitable estoppel agreement(s); and
d. Such transfer shall not be effective to bind Yakima until the
Transferee has assumed all obligations of the District under this Agreement and notice thereof is
given to Yakima, and such notice shall designate the name and address of the Transferee.
2. Said Transferee (and all succeeding and successor Transferees) shall
succeed to all rights and obligations of the District under this Agreement, subject; however, to all
duties and obligations of the District in and pertaining to the then unperformed provisions of this
Agreement. Upon such transfer by the District, or by a successor in accordance with the
requirements of this Section, the District (and/or its successor(s)) as Transferor in such a transfer
shall not be released and discharged from all of its duties and obligations hereunder which
pertain to the thenunperformed provisions of this Agreement without the written consent and
release of Yakima.
XIL DEFA UL T
A. Event of Default of the District. This section shall apply if the District fails to
keep, observe, or perform any of its duties or obligations under this Agreement (an "Event of
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Default"). Notwithstanding the generality of this paragraph, an "Event of Default" shall be
deemed to occur for any of the following specific events:
1. The failure of the District to pay amounts due to Yakima hereunder when
due.
2. Conversion by the District of any portion of the Property to any use other
than the uses permitted under the Charter and this Agreement.
3. The making by the District of an assignment for the benefit of creditors
contrary to the terms of this Agreement, or filing a petition in bankruptcy or of reorganization
under any bankruptcy or insolvency law or filing a petition to effect a composition or extension
of time to pay its debts.
4. The appointment of a receiver or trustee of the property of the District,
which appointment is not vacated or stayed within ninety days.
5. The filing of a petition in bankruptcy against the District or for its
reorganization under any bankruptcy or insolvency law that shall not be dismissed or stayed by
the court within ninety days after such filing.
B. Force Majeure. The District shall not be considered to be in breach of or default
under this Agreement on account of any delay or failure to perform as required by this
Agreement as a result of a Force Majeure event.
XIII. REMEDIES
A. Remedies Upon Default. If an Event of Default on the part of the District shall
occur, then Yakima at any time after periods set forth for the exercise of rights herein shall have
the following cumulative rights and remedies:
1. Provide Notice and Time to Cure. If Yakima desires to take action for an
Event of Default, Yakima shall provide written notice to the District specifying such Event of
Default or Events of Default and stating that Yakima at its option may terminate this Agreement
on the date specified in such notice, which shall be at least 30 days, but no more than 90 days,
after the giving of such notice, unless the District cures such Event of Default.
2. Injunction. Yakima shall be entitled to restrain, by injunction, the
commission of or attempt or threatened commission of an Event of Default and to obtain a
judgment or order specifically prohibiting a violation or breach of any such term or provision of
this Agreement without, in either case, being required to prove or establish that Yakima does not
have an adequate remedy at law. The District hereby waives the requirement of any such proof
and acknowledges that Yakima would not have an adequate remedy at law for the District's
commission of an Event of Default hereunder.
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3. Terminate for Default.
a. Yakima shall be entitled to immediately terminate this Agreement
if any Event of Default continues for a period of 30 days after written notice thereof from
Yakima to the District, or in the case of such Event of Default which cannot with due diligence
and in good faith be cured within 30 days, the District fails to proceed promptly after such notice
and with due diligence and in good faith, to begin to cure said Event of Default; provided that, in
such event proper time to cure may be extended only by written permission of Yakima.
b. In the event that this Agreement terminates for reasons of an Event
of Default, Yakima, in its sole discretion, shall have the option of exercising one or both of the
following choices:
(i) Receive payment from the District in an amount required to
pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service on the
Outstanding Bonds and any Additional Bonds when due, and the amount necessary to reimburse
Yakima for any amounts paid pursuant to Section III(C).
(ii) Immediately terminate the Lease Agreement.
4. Recover Damages, Costs and Expenses. Yakima shall be entitled to
proceed against the District for all direct damages, costs and expenses arising from the District's
committing an Event of Default hereunder and to recover all such direct damages, costs and
expenses, including reasonable attorneys' fees.
B. No Waiver by Yakima. No failure by Yakima to insist upon the performance of
any of the terms of this Agreement or to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach or of any of the terms of this Agreement.
None of the terms of this Agreement to be kept, observed or performed by the District, and no
breach thereof, shall be waived, altered or modified except by a written instrument executed by
Yakima. No waiver of any breach shall affect or alter this Agreement, but each of the terms of
this Agreement shall continue in full force and effect with respect to any other then existing or
subsequent breach thereof. No waiver of any default of the District hereunder shall be implied
from any omission by Yakima to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect any default other than the default
specified in the express waiver and then only for .the time and to -the extent therein stated. One or
more waivers by Yakima shall not be construed as a waiver of a subsequent breach of the same
covenant, term or conditions.
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P:1SC1SC09H 01/06/14
C. Termination
Notwithstanding anything to the contrary contained in this Agreement:
1. Termination by Mutual Agreement Prior to Beneficial Occupancy. This
Agreement shall terminate under circumstances where all Parties mutually agree in writing that it
is impossible or impractical to design, develop or construct the Project. In the event that one
Party determines that it is impossible or impractical to design, develop or construct the Project,
the Parties agree to meet and enter into good faith negotiations regarding whether the Project has
become impossible or impractical.
D. Reversion of the Leasehold Interest to Yakima. In the event that this Agreement
terminates prior to Beneficial Occupancy, Yakima may immediately terminate the Lease
Agreement and reenter and retake the Property, and the District shall promptly:
1. Remove all of its personal property from the Property;
2. Remove all rubble, debris and unusable improvements from the Property
as required by Yakima in its sole discretion;
3. Remove all waste materials and rubbish from and about the Property and
adjacent property; and
4. Satisfy or bond all liens upon the Project (or claims which with notice or
passage of time or both would mature into a lien).
Yakima shall be entitled to retain title to the Property and all Improvements, including the
Convention Center and Project, free and clear of any leasehold interest or other claim of the
District and anyone claiming by, through or under the District.
E. Certain Provisions Survive Termination. The following provisions of this
Agreement shall survive notwithstanding any termination of this Agreement and reversion of the
leasehold interest in the Property and Improvements to Yakima:
1. As Is (Section VIII);
2. Liability (Section IX); and
3. Destruction or Condemnation (Section X).
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P:1SC\SC09H 01/06/14
XIV. REPRESENTATIONS AND WARRANTIES
A. Yakima's Representations. Yakima hereby represents and warrants to the
District that it has full statutory right, power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the person signing this Agreement on
behalf of Yakima has the authority to bind Yakima and to enter into this transaction; and that
Yakima has taken all requisite action and steps to legally authorize the execution, delivery, and
performance of this Agreement.
B. The District's Representations and Warranties. The District hereby represents
and warrants to Yakima that it has full power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the parties signing this Agreement on
behalf of the District have the authority to bind the District and to enter into this transaction; and
that the District has taken all requisite action and steps to legally authorize the execution,
delivery, and performance of this Agreement.
C. Tax Covenant. The District acknowledges that the Bonds are to be issued as tax-
exempt obligations. The District covenants that it will not take any action to cause interest on
the Bonds or any Additional Bonds to be taxable.
XV. LEASE BACK
A. Sublease. The District hereby leases to the City and the City hereby hires from
the District certain improved real property located in the City of Yakima, Washington, legally
described in Exhibit A attached hereto and by this reference incorporated (the "Premises") and
certain improvements thereon consisting of a convention center, and the Project to be built on the
Premises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record, including in particular that certain Lease Agreement
between the City, as lessor, and the District, as lessee, dated July 27, 2001.
B. Rent. Within 60 days of the date of this Agreement, the City shall pay to the _
District $50, which represents prepaid rent for the entire term of this Agreement.
C. Lease Obligations Assumed._Except as other wise provided herein, the District hereby
assigns and the City agrees to assume all duties and obligations of the District under the Lease
Agreement.
XVI. MISCELLANEOUS
A. Captions. The headings and captions of this Agreement and the Table of
Contents preceding the body of this Agreement are for convenience and reference only and in no
way define, limit or describe the scope or intent of this Agreement nor in any way affect this
Agreement.
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P-\SC1SC09H 01/06/14
B. Construction. All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the Party or Parties may
require. The Parties hereby acknowledge and agree that each was properly represented by
counsel and this Agreement was negotiated and drafted at arms' length so that the judicial rule of
construction to the effect that a legal document shall be construed against the draftsman shall be
inapplicable to this Agreement.
C. Entire Agreement. This Agreement and any collateral instruments referenced
herein contain the entire agreement between the Parties hereto and shall not be modified or
amended in any manner except by an instrument in writing executed by the Parties hereto.
Previous drafts of this Agreement or any portions thereof shall not be utilized in any manner by
either Party should any dispute arise as to the intent of this Agreement.
D. Successors and Assigns. The terms herein contained shall bind and inure to the
benefit of Yakima, its successors and assigns, and the District, its successors and assigns, except
as may be otherwise provided herein.
E. Notices. All notices which may be or are requested to be given pursuant to this
Agreement shall be deemed given when hand delivered, or when deposited in the United States
Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and
addressed to the Parties at the following addresses unless otherwise provided for herein:
To Yakima:
With a copy to:
To the District:
Richard A. Zais, Jr.
City Manager
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
F. Incorporation by Reference. All exhibits and appendices annexed hereto are
hereby incorporated by reference herein.
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P \SC\SC09H 01/06!14
G. Execution in Counterparts.
1. This Agreement may be executed in any number of counterparts and by
different Parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
Agreement.
2. This Agreement becomes effective when the representatives of the Parties
have executed it.
H. Waiver. The_waiver by either the District or Yakima of the performance of any
covenant, condition, or promise shall not invalidate this Agreement nor shall it be considered a
waiver by such Party of any other covenant, condition, or promise hereunder. The waiver by
either the District or Yakima of the time for performing any act shall not constitute a waiver of
the time for performing any other act or an identical act required to be performed at a later time.
The exercise of any remedy provided by law or the provisions of this Agreement shall not
exclude other consistent remedies unless they are expressly excluded.
I. Exculpation. Notwithstanding anything contained to the contrary in any
provision of this Agreement, it is specifically agreed and understood that there shall be
absolutely no personal liability on the part of any individual officers or directors of Yakima or
the District with respect to any of the obligations, terms, covenants, and conditions of this
Agreement.
J. Severability. If any term or provision of this Agreement or the application thereof
to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of
this Agreement or the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be affected thereby and shall
continue in full force and effect.
K. Term. This Agreement shall terminate on the later of the date that the Bonds and
any Additional Bonds are no longer Outstanding and the date on which the Sales Tax expires.
L. Amendments. This Agreement may be amended, only with the written consent of
the Parties.
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P:1SC1SC09H 01/06/14
1
1
1
1
1
1
1
1
1
1
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IN WITNESS WHEREOF, the Parties hereto have executed this document as of the day
and year first above written.
DATED this -;.-1 day of .11d --L-1/4-1 , 2001.
CITY OF YAKIMA
By
Attest:
Richard A. Zais, Jr.
City Manager
City Clerk
Approved as to form.
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City Attorney
arry caermo, ,e,00/– 91/
V84.1.17104! ZS: —ieLe7‘;'/-7‘2'Z
YAKIMA REGIONAL PUBLIC ,•
FACILITIES DISTRICT
Certified to be a true and correct copy of the
original filed in my office.
CITY CLERK
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PASC \SCO9H
Deputy
01/06/14
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
A-1
EXHIBIT B
DEBT SERVICE SCHEDULE
(To be attached and incorporated into the Agreement at the time that the Bonds and any
Additional Bonds are issued)
B-1
P\SC\SC091-4" 01/06/14
RESOLUTION NO. 2001-04
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT, YAKIMA COUNTY, WASHINGTON,
IMPOSING A 0.033% RETAIL SALES AND USE TAX.
ADOPTED: JULY 24, 2001
C:\WINDOWS\TEMP\Sales Tax Res 07-24-01 final lap.doc Last printed 07/27/01 11.54 AM
A RESOLUTION
RESOLUTION NO. 2001-04
OF THE BOARD OF DIRECTORS OF THE YAKIMA
REGIONAL PUBLIC FACILITIES DISTRICT, YAKIMA
COUNTY, WASHINGTON, IMPOSING A 0.033%
RETAIL SALES AND USE TAX.
WHEREAS, the Yakima Regional Public Facilities Distract (the "District") is a public
facilities district formed by the Cities of Yakima, Selah and Union Gap pursuant to Chap. 35.57
RCW (the "Act") to assist in financing the expansion and operation of the Yakima Convention
Center;
WHEREAS, under the Act, the District is authorized to acquire, construct, own, remodel,
maintain, equip, reequip, repair, finance, and operate one or more "regional centers";
WHEREAS, the District wishes to make improvements to the Yakima Convention Center
at an estimated cost of over $10,000,000 (the "Project"), stimulating economic development,
creating jobs, realizing additionalsales and lodging tax revenues, attracting commercial business
and tourism, and providing facilities for convention, special events and community events
including public meetings and performing arts event;
WHEREAS, pursuant to RCW 35.57.040 and to fund regional centers such as the Project,
the District is authorized to impose a retail sales and use tax under RCW 82.14.390;
WHEREAS, the rate of tax may not exceed 0.033% of the selling price in the case of a
sales tax or the value of the article used in the case of a use tax;
WHEREAS, the tax will be deducted from the amount of tax otherwise required to be
collected or paid over to the State, operating to shift a share of the sales and use tax revenues to
the District;
WHEREAS, moneys collected must be matched with a one-third local match from public
or private sources including, but not limited to, in-kind contributions used in all phases of the
development or improvement of the regional center or land that is donated and used for the siting
of the regional center;
WHEREAS, pursuant to a Lease Agreement, the City of Yakima intends to lease the
Yakima Convention Center to the District, effecting both an in-kind contribution to be used in
the development of the regional center and the donation of land to be used for the siting of the
regional center;
WHEREAS, the value of the Yakima Convention Center is approximately $11,800,000
and the value of the leasehold interest in this property significantly exceeds 33% of the net
present value of the total sales and use taxes projected to be received by the District
(approximately $2.4 million), and is thus sufficient to satisfy the local match requirement;
WHEREAS, pursuant to a Design, Development, Construction, Financing and Operating
Agreement between the District and the City of Yakima, the City of Yakima will make other
contributions to the Project, including issuing bonds to finance the Project, allocating lodging
taxes to the operation of the Project, and providing funding on behalf of District in the event of a
Sales Tax shortfall;
C:\WINDOWS\TEMP\Sales Tax Res 07-24-01 final lap.doc Last printed 07/27/01 11.54 AM
District. The tax shall be levied and collected in an amount equal to the value of the article used
by the taxpayer multiplied by the rate m effect for the retail sales tax under Section 2.
Section 4. Taxable Events. The taxes imposed pursuant to Sections 2 and 3 shall be
in addition to other taxes authorized by law, and shall be collected from those persons who are
taxable by the State of Washington under Chaps. 82.08 and 82.12 RCW, respectively, upon the
occurrence of any taxable event within the official boundaries of this District.
Section 5. Duration of the Tax. The taxes imposed pursuant to Sections 2 and 3 shall
be in effect from August 1, 2001 until the earlier of (1) the date on which the bonds issued by the
City of Yakima to finance the Project are fully retired, and (2) the date that is 25 years after the
date of first collection.
Section 6. Consistency with State Tax. The taxes imposed herein shall comply with
all applicable rules, regulations, laws, and court decisions regarding sales and use excise taxes as
imposed by the State of Washington under Chapters 82.08 and 82.12 RCW and applicable
regulations. The provisions of those chapters, to the extent they are not inconsistent with this
resolution, shall apply as though fully set forth herein.
Section 7. Collection of the Tax. The Secretary of the Board of Directors of the
District shall transmit a copy of this resolution to the State Department of Revenue. The District
shall contract with the State Department of Revenue for the administration and collection of the
taxes imposed herein. The President and/or Secretary of the Board of Directors of the District is
hereby authorized to negotiate and execute such agreement on such terms has he or she deems to
be in the best interests of the District.
Section 8. Distribution of Tax Proceeds and Limiting the Use Thereof The District
Treasurer shall deposit the proceeds of the taxes imposed herein and received from the
Department of Revenue in the District's Sales Tax Revenue Fund. The Sales Tax Revenue Fund
shall be used by the District solely for the purposes set forth in RCW 35.57.020.
Section 9. General Authorization. The President of the Board of Directors of the
District, and each of the other appropriate.officers, agents and representatives of the District are
each hereby authorized and directed to take such steps, to do such other acts and things, and to
execute such letters, certificates, agreements, papers, financing statements, assignments or
instruments as in their judgment may be necessary, appropriate or desirable in order to carry out
the terms and provisions of, and complete the transactions contemplated by this resolution.
Section 10. Prior Acts. All acts taken pursuant to the authority of this resolution but
prior to its effective date are hereby ratified and confirmed.
Section 11. Severability. If any provision of this resolution or its application to any
person or circumstance is held invalid, the remainder of the resolution or the application of the
provision to other persons or circumstances is not affected.
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P:\S Cls C090. 01/07/27
Section 12. Effective Date. This resolution shall be effective immediately.
ADOPTED this 24th day of July, 2001.
ATTEST:
Approved by a vote of the Directors:
Ayes; 0 Nays
waecu Crc(.1
Secretary
BOARD OF DIRECTORS,
YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT
By:
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P\SC1SC090 01/07/27
CERTIFICATE
I, the undersigned, Secretary of the Board of Directors of Yakima Regional Public
Facilities District (herein called the "Board") and keeper of the records of the District, DO
HEREBY CERTIFY:
1. That the attached resolution is a true and correct copy of Resolution No. 2001-04
of the District (herein called the "Resolution"), as fmally passed at a meeting of the Board held
on the 24th day of July. 2001, and duly recorded in my office.
2. That said meeting was duly convened and held in all respects in accordance with
law, and to the extent required by law, due and proper notice of such meeting was given; that
quorum of the Board was present throughout the meeting and a legally sufficient number of
members of the Board voted in the proper manner for the adoption of said Resolution; that all
other requirements and proceedings incident to the proper adoption of said Resolution have been
duly fulfilled, ' carried out and otherwise observed, and that I am authorized to execute this
certificate.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of July 2001.
Secretary of the Board
P•1SC\SC09O 01/07/27
LEASE AGREEMENT
This LEASE AGREEMENT (the "Lease") is made as of July 27, 2001, by and between
the CITY OF' YAKIMA, WASHINGTON (the "City"), a municipal corporation and first class
city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT (the "District", and together with the City, the "Parties"), a public facilities district
created by the City and the Cities of Selah and Union Gap, to lease certain real property of the
City to the District to assist in the design, development, construction, financing and operation of
the Yakima Convention Center, as expanded. Reference is made to that certain Design,
Development, Construction and Financing Agreement dated July 27, 2001, between the
undersigned (the "Development Agreement").
1. Effective Date. This Lease and all of the terms and conditions hereof shall
become effective as of the date set forth above; provided that all of the rights, duties and
obligations of the City and the District, as lessor and lessee, respectively, under this Lease are
not and shall not be effective unless and until the Development Agreement becomes effective.
2. Leased Premises. From and after commencement of the Lease Term (as
defined herein), the City hereby leases to the District and the District hereby hires from the City
certain improved real property located in the City of Yakima, Washington, legally described in
Exhibit A attached hereto and by this reference incorporated (the "Premises") and certain
improvements thereon consisting of a convention center, and further improvements to be built on
said Py emises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record.
3. Term. The Lease Term of this Lease, and all obligation of the
parties hereto as lessor and lessee, shall commence on the effective date of the Development
Agreement and shall automatically terminate upon expiration or termination of the Development
Agreement, unless otherwise terminated or amended as set forth herein. The District shall be
entitled to possession of the Premises upon commencement of the Lease Term hereunder.
4. Prepaid Rent. Within 60 days after the commencement of the Lease
Term, the District shall pay $50 to the City, which amount represents prepaid rent for the entire
Lease Term. The Parties acknowledge that the value of the Premises and Improvements existing
as of the date of this Lease is appraised at $11,800,000. The value of the leasehold interest in the
Premises hereby transferred is significantly in excess of 33% of the net present value of sales
taxes the District projects that it will collect under RCW 82.14.390 (approximately $2.4 million).
It is the parties' intent that the City lease the Premises to the District in satisfaction of the local
match requirement under RCW 82.14.390.
5. Use of the Premises. The Premises shall be used by the District solely for the
operation and maintenance of the Premises and the lease back of the same to the City and for
other District purposes consistent with the Development Agreement. At no time during the
Lease Term shall the District use the Premises in whole or in part for any unlawful purpose, nor
shall the District permit or commit any nuisance or illegal activity on the Premises.
6. Compliance with Laws. The District shall comply with all municipal,
county, state and federal laws, rules, regulations or ordinances applicable to the Premises and the
Improvements, and the ownership, use and occupancy thereof.
7. Liens and Encumbrances. Except as expressly provided in this Lease, the
District shall keep the Premises and the Improvements thereon free of mechanics' and
materialmen's liens and other liens of like nature including tax liens, and will defend and hold
the City harmless against such liens or claims and against all attorney's fees and other costs and
expenses growing out of or incurred as a result of such liens or claims so long as such liens or
claims arise from the actions of the District and not the actions of the City. The City shall defend
and hold harmless the District against such liens or claims, fees, costs or expenses growing out of
or incurred as a result of the actions of the City and not the actions of the District. Provided,
however, that the District may in good faith and at the District's own expense contest the validity
of any such lien or claim, through litigation if necessary. In the event that the District contests
any lien or claim, the District shall prosecute the contest with reasonable diligence, and the
District shall at all times effectually stay or prevent any official or judicial sale of the Premises
and/or Improvements and the District shall pay or otherwise satisfy any final judgment (unless
the District shall appeal same, in which event the judgment from the last appeal shall be the
applicable judgment), which may be entered against it and thereafter promptly procure record
satisfaction of release of the lien or claim. In the event that the District fails to fully discharge or
in good faith contest any such lien or claim that has been perfected, the City may pay the same,
or any part thereof, and the City shall be the sole judge of the validity of said lien or claim. All
amount so paid by the City shall be recoverable against the District.
8. Maintenance and Repair of Premises and Improvements. The District shall
maintain the Premises and Improvements in good repair and working order, and shall make such
repairs necessary to so maintain the Premises and Improvements.
9. Taxes and Assessments. The District covenants and agrees to pay all real
estate taxes and assessments, if any, levied upon the Premises and Improvements that become
due and payable during the Lease Term prior to delinquency, together with any leasehold excise
tax that may be assessed against the District's leasehold interest hereunder; provided, that if any
such taxes or assessments may be paid in installments without penalty, the District shall have the
right to pay any such taxes or assessments in installments.
The District may contest the legal validity or amount of any tax, assessment or other
charge for which the District may be responsible under this Lease and may institute such
proceedings as the District considers necessary. If the District contests any such tax, assessment
or other charge, the District may withdraw or defer payment or pay under protest, provided the
District shall protect the City and the Premises and Improvements from any lien by adequate
surety bond or other appropriate security.
The City appoints the District as the City's attorney-in-fact for the purpose of making all
payments to any taxing authorities and for the purpose of contesting any taxes, assessments or
other charges, conditioned on the District's preventing any lien from being levied on the
Premises or Improvements or upon the City. However, if the District chooses not to contest any
tax, assessment or charge, the District shall give the City timely notice thereof so that the City
may contest any taxes, assessments or charges levied against the Premises or Improvements if
the District fails to do so.
10. Utility Charges. The District shall be solely responsible for and shall
promptly pay all charges for heat, water, light, gas, electricity, sewer and garbage or any other
utility now or hereafter used or consumed on the Premises. In no event shall the City be liable
for an interruption or failure in the supply of such utilities to the Premises.
11. Alterations. Except as permitted by the Development
Agreement, the District shall not alter the Premises or the Improvements without the prior
written consent of the City.
12. Insurance. The District shall, at its sole cost and expense,
procure and maintain in force during the Lease Term all liability and other insurance required to
be procured and maintained by the City under the Development Agreement.
13. Assignment. Except as otherwise provided in Section 22, the
District shall not assign or transfer this Lease or any interest therein, nor shall this Lease or any
interest therein be assignable or transferable by operation of law or by any process or proceeding
of a court, or otherwise, without the prior written consent of the City, which consent shall not be
unreasonably withheld.
14. Eminent Domain.
A. The following definitions apply in construing provisions of this Lease
relating to a taking of or damages to all or a part of the Premises or Improvements or interest
therein by eminent domain or inverse condemnation.
"Taking" means the taking or damaging, including
severance damage, by eminent domain or inverse
condemnation for any public or quasi -public use under any
statute or any purchase or other acquisition under threat of
condemnation. The taking shall be considered to take place
as of the later of the date actual physical possession is taken
by the condemnor, and the date on which the right to
compensation and damages accrues under the law
applicable to the Premises.
ii. "Total taking" means the taking of the fee title to all of the
Premises.
iii. "Substantial taking" means the taking of so much of the
Premises or Improvements or both that one or more of the
following conditions result: (i) the conduct of the District's
use(s) of the Premises would be substantially prevented or
impaired, (ii) the remaining Premises could not be
economically and feasibly be made to be so usable by the
District, or (iii) the Improvements would be other than
reasonably efficient or economic or could not economically
and feasibly be made reasonably efficient or economic for
the District's use.
iv. "Partial taking" means any taking of the fee title that is not
either a total taking or a substantial taking.
v. "Award" means compensation paid for the taking, whether
pursuant to judgment, by agreement or otherwise.
B. The party receiving any notice of an intended taking or a willingness to
make a negotiated private purchase in lieu of condemnation shall promptly give the other party
written notice of the receipt and contents thereof.
C. The City and the District shall each have the right to represent separately
their respective interest in each proceeding or negotiation with respect to the taking or intended
taking and to make full proof of their claim. No agreement, settlement, sale or other transfer to
or with the condemning authority shall be made without the consent of the City, the District and
all leasehold mortgagees.
D. Upon a total taking, the City and the District shall be relieved of all
obligations hereunder and this Lease shall terminate. Such termination of obligations shall not
prejudice the District's right to recover compensation calculated in accordance with the terms
hereof for the taking of the District's interest in the Premises and Improvements. The amount of
damages resulting to the City and the District and to the respective interests of the City and the
District in the Premises by reason of such taking shall be separately determined and computed by
the court having jurisdiction over such eminent domain proceedings. Separate awards and
judgment shall be made with respect to the damage to the City and the District and such awards
shall be paid separately to the City and the District. If the City's and the District's damages (and
awards therefore) cannot or will not be separately determined and computed by such court, then
the award granted shall be divided between the City and the District in a fair and equitable
manner, it being understood that the District's portion is to compensate the District for the loss of
its leasehold interest hereunder, and the City's portion is to compensate the City for the loss of
the right of reversion hereunder and its leasehold interest under the Development Agreement.
E. Within 45 days after the District receives notice of an intended substantial
taking, the District shall provide written notice of the same to the Yakima City Manager. Upon
receipt of such notice the City Manager and the District shall confer as to the level of taking.
The City shall have the final determination as to whether the taking should be treated as a total
taking or partial taking.
F. Upon a partial taking, the Lease shall remain in full force and effect,
covering the remaining Premises. The amount of damages resulting to the City and the District
and their respective interests in the Premises and the Improvements shall be separately
determined and computed by the court having jurisdiction over such eminent domain
proceedings. Separate awards and judgments shall be made with respect to the damage to the
1
City and the District, and such awards shall be paid separately to the City and the District,
respectively.
G. If the City's and the District's damages (and the awards therefor) cannot
or will not be determined or computed by the court, then all sums, including damages and
interest, awarded for the fee title or leasehold, or both, shall be deposited promptly with a
mutually agreed upon escrow agent and shall be equitably distributed and disbursed for the
following purposes:
i. To the District for the purpose of compensating the District for the
value of its leasehold interest taken and for restoring any taken
Improvements, plus any amount awarded to remove or relocate
subtenants, plus any amount specifically awarded to or for the
District for detriment to business and severance damages.
ii. To the City, a sum equal to the value of the Premises taken.
iii. To the City, for the purpose of compensating it for the value of the
lost leasehold interest in the Development Agreement.
iv. The remainder to the City, to be applied by the City to the
repayment of Bonds or Additional Bonds (as defined in the
Development Agreement) or to any other lawful use.
H. Upon the taking for the temporary use of all or any part of the Premises or
Improvements for a period of less than 12 months, the rent under this Lease shall not be affected
in any way, and the District shall be entitled to any award for the use or estate taken.
I. Nothing in this Lease shall be deemed to limit the City's right of eminent
domain.
15. Indemnification. To the extent permitted by law, the District shall
defend, indemnify, and hold the City and the Premises harmless from any and all damages or
liabilities at any time occasioned by or arising out of (i) any act, activity or omission of the
District, or anyone holding themselves out under the District (except the City), or (ii) the
occupancy or use of the Premises or any part thereof, by or under the District, excluding the
occupancy and use by the City, or (iii) the state or condition of the Premises and the
Improvements or any part thereof, except to the extent the City shall itself be grossly negligent in
the circumstances.
Without limiting in any way the foregoing indemnification, the District agrees that during
its use and occupancy of the Premises it shall comply with all laws, regulations, rules and
ordinances of the City, the State and the federal government with regard to the use, storage, and
disposal of hazardous and toxic substances on the Premises and the Improvements, and the
District shall to the fullest extent permitted by law defend, indemnify and hold harmless the City
for any and all damages or liabilities with regard to hazardous and toxic substances occasioned
by and arising from the District's activities on the Premises and Improvements.
16. Default. Time is of the essence in this Lease, and in the
event that (i) the District shall default in the payment of taxes, assessments, utility charges or any
other amounts due hereunder, and such default is not caused by the City's failure to meet its
obligations under the Development Agreement, and if such default shall continue for 10 days
following written notice and demand; (ii) the District shall default in the performance or
observation of any other terms, covenants, conditions or agreements of this Lease for 15 days
after written notice and demand, or in the case of such default that cannot with due diligence and
in good faith be cured within 15 days, the District fails to proceed promptly after such notice and
with due diligence and in good faith, to begin to cure said default, (iii) there shall be filed against
the District in any court or other tribunal pursuant to any statute or other rule of law, either of the
United States or of any State or of any other authority now or hereafter exercising jurisdiction, a
petition in bankruptcy or insolvency proceedings or for reorganization or for the appointment of
a receiver or trustee of all or substantially all of the District's property, or for any other form of
debtor relief, unless, such petition be filed against the District and if in good faith the District
promptly thereafter commences and diligently prosecutes any and all proceedings appropriate to
secure the dismissal of such petition and shall secure such dismissal within 60 days after the date
of filing or the commencement of such proceedings, (iv) if the District vacates or abandons the
Premises or Improvements, or (v) the District defaults under the Development Agreement and
such default is not cured within the cure periods set forth in the Development Agreement, then
and in any such case, at the City's option and in addition to all other rights and remedies, the
City may, following the expiration of the cure period, if any, provided herein for such default,
immediately declare the District's rights under this Lease terminated and enter the Premises and
the Improvements using such force as may be necessary and repossess itself thereof, as of its
former estate, and remove all persons and property from the Premises and the Improvements.
Such reentry shall not constitute a termination of this Lease and, notwithstanding any such
reentry, the liability of the District to pay amounts hereunder (including taxes, assessments and
utilities) shall not be extinguished for the balance of the term of this Lease and the District shall
make good to the City any deficiency arising from receipt by the City of any lesser amount than
that hereinbefore agreed upon.
17. Waiver. Neither the acceptance of rental nor any other
actions or omissions by the City at any time after the happening of any event authorizing the
cancellation or forfeiture of this Lease shall operate as a waiver of any past or future violation,
breach or failure to keep or perform any covenant hereof, to deprive the City of its right to cancel
or forfeit this Lease, upon written notice provided for herein, at any time that cause for
cancellation or forfeiture may exist, or be construed so as to at any future time estop the City
from promptly exercising any other option, right, or remedy, including the right to declare an
event of default hereunder that it may have under any term or provision of this Lease.
18. Force Majeure. Any prevention, delay, nonperformance or stoppage
due to a "Force Majeure" shall excuse nonperformance for the period of such prevention, delay,
nonperformance or stoppage, except for obligations imposed by this Lease for the payment of
taxes or insurance. "Force Majeure" means any causes or conditions beyond a party's
reasonable control (including, but not limited to fire, explosion, presence of a hazardous
substance, earthquake, storm, flood, wind, drought or act of God or one or more of the elements;
court order, legislation, delay or failure to act by civil, military or other governmental authority
other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war;
breakdown or destruction of, or damage or casualty to, any equipment, facility or other property;
any delay or failure by any third party to provide a necessary service, supply, part, equipment,
personnel or other item; or interruption, suspension, curtailment or other disruption of a utility).
19. Access by the City. At any time during the Lease Term, the City and the
City's agents shall have the right to enter the Premises and the Improvements on reasonable
notice to examine the same. Nothing contained herein shall be construed to impose upon the
City a duty to repair the Premises or Improvements.
20. Surrender of Premises. At the expiration or sooner termination of this
Lease, the District shall immediately return to the City the Premises and Improvement in its
condition following completion of the Project defined in the Development Agreement, except
reasonable wear and tear and damage by fire or other casualty. Upon termination of the Lease
for any reason the District shall be liable for all costs and expense of restoring the Premises and
Improvements to the condition at the time of completion of the Project, but only if such removal
and restoration is requested by the City. The District's obligation to perform the covenants of
this Section shall survive the expiration or termination of this Lease.
21. Quiet Enjoyment. The District, upon fully complying with and
promptly performing all of the terms, conditions, and covenants of this Lease on its part to be
performed, shall have and quietly enjoy the Premises for the Lease Term.
22. Leasehold Mortgages. During the term of this Lease, the District shall not
encumber its leasehold interest in the Premises or Improvements without the prior written
consent of the City. Notwithstanding the foregoing, the District is authorized to assign its rights
and interests in this Lease to any financial institution, municipal bond trustee, municipal bond
insurer or other entity as may be necessary to accomplish the financing or refinancing of the
Project, provided that the District must obtain the prior written consent of the Yakima City
Manager.
23. Consent to Lease Back. The parties hereby acknowledge and agree that they
would not execute this Lease but for the agreement by the City to operate and maintain the
Improvements, finance, construct and operate the Project and lease back the Premises to the City
pursuant to the Development Agreement. The obligations of the District under this Section 23
are integral to this Lease and may not be severed herefrom without invalidating the entire Lease.
24. Termination. This Lease may be terminated after notice and
opportunity to cure of any event of default in accordance with Section 16. This Lease shall also
automatically terminate upon termination of the Development Agreement.
25. Amendment. This Lease may not be amended except by written
instrument approved by resolution duly adopted by the District and approved by City ordinance
or resolution. No course of dealing between the parties or delay in exercising any rights
hereunder shall operate as a waiver of any rights of any party.
26. Entire Agreement. This Lease and any collateral instruments
referenced herein contain the entire agreement between the parties hereto and shall not be
modified or amended in any manner except by an instrument in writing executed by the parties
hereto. Previous drafts of this Lease or any portions thereof shall not be utilized in any manner
by either party should any dispute arise as to the intent of this Lease.
27. Notices. All notices which may be or are requested to be
given pursuant to this Lease shall be deemed given when hand delivered, or when deposited in
the U.S. Mail, postage prepaid, and marked registered or certified mail, return receipt requested,
and addressed to the parties at the following addresses unless otherwise provided for herein:
To the City:
With a copy to:
To the District:
Richard A. Zais, Jr.
City Manager
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
28. Severability. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable (with the exception of Section 23), the remainder of this Lease or the application
of such term or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby and shall continue in full force and effect.
29. No Merger. In no event shall (a) the leasehold interest, estate or
rights of the District hereunder, (b) the rights of any leasehold mortgagee upon the District's
leasehold interest, estate or rights hereunder, or (c) the leasehold interest, estate or rights of the
District as sublessor under the Development Agreement, merge with any interest, estate or rights
of the City as fee owner of the Premises and Improvements and lessor under this Lease or as
sublessee under the Development Agreement, it being understood that such leasehold interest,
estate and rights of the District hereunder and such rights of any leasehold mortgagee shall be
deemed to be separate and distinct from the City's interest, estate or rights as fee owner of the
Premises and Improvements, and as sublessee under the Development Agreement
notwithstanding that any such interests, estate or rights shall at any time be held or vested in the
same, person, corporation or other entity.
30. Limited Obligation of the District. The District is organized pursuant to Chapter
35.57 RCW as a municipal corporation, separate and distinct from the City. All liabilities
incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the
District, and no creditor or other person shall have any right of action against or recourse to the
City or the Cities of Selah or Union Gap, their assets, credit, or services, on account of any debts,
obligations, liabilities or acts or omissions of the District.
31. Attorneys' Fees. In the event of litigation between the City and the
District or their successors or assigns to enforce a right or rights provided by or arising under this
Lease, the non -prevailing party shall pay to the prevailing party reasonable attorneys' fees and
other costs and expenses of litigation, including appeals. The amount of costs and attorneys'
fees shall be included in any judgment or award for the prevailing party and the court or
arbitrator in any such litigation shall determine which is the prevailing party.
32. Recording. The District shall not record this Lease without the
written consent of the City; however, upon the request of either party hereto the other party shall
join in the execution of a memorandum of this Lease for recording purposes. The memorandum
of Lease shall describe the parties, the Premises and Improvements, and the Lease and shall
incorporate this Lease and the Development Agreement by reference.
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33, Governing Law: Time. This Lease and the rights of the parties hereto shall
be governed and construed in accordance with the laws of the State of Washington. Time is of
the essence in this Lease.
R.( WITNESS WHEREOF, the parties hereto have executed this document as of the day
and year first above written.
DATED thii- day of _ , 2001.
CITY OF YAKIMMIA
Attest:
fith& City/Clerk
Approved as to form:
YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT
Chair
Richard A. Zais, Jr. Board of Directors
City Manager
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=1, comact m aoo1-93
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Certified to be a true and correct copy of the
original filed in my office. V2/6
CITY CLERK
By Deputy
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that C4''=.dialM1. 4 -- 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
1A k.•\ .4.0v(4-' of }"�I�,I� ur to be the free and voluntary act of such
party'for the uses and purposes mentioned in the instrument.
Dated: 11; / , 2001.
rT;
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. Notary Public
Print/Type Name J G' n `t% / 0 1-`'`d"
My commission expires '`1
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that�(����;�;�'' 51„;;r%r1s the person
who appeared before me, and said person acknowledged that he/she signed this instrument, on
oath stated that he/she was ap'thorized to execute _the instrument and acknowledged it as the
'f„ �9./rte )00,z/),-.04e/e4
ofh_ t(o be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
Dated:
Use this spa seal)
,801.
Notal Pudic
Print/Type Name
My commission expires -/
Certified to be a true and correct, copy 3 'i:.fe
original filed in my office. ,Q�7_Cz
2 CITY CLERK
By
E�epac:y
p
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
A-1
DESIGN, DEVELOPMENT,
CONSTRUCTION, FINANCING AND OPERATING AGREEMENT
BY AND BETWEEN
CITY OF YAKIMA, WASHINGTON
and
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
July 27, 2001
Public Facilities District
Design, Development, Construction,
Financing and Operating Agreement
TABLE OF CONTENTS
Page
I. DEFINITIONS _ 2
II. INTENT AND RELATIONS 7
A. Intent 7
B. Description 8
C. Yakima's Regulatory Role Reserved 8
D. Governing Law and Venue 8
III. SCOPE OF COMMITMENTS 8
A.
Commitments by the District
1. Repayment Obligation
2. District Funds
8
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9
B. Commitments by Yakima 11
1. Site Availability 11
2. Issuance of the Bonds 11
3. Application of Net Proceeds 11
4. Design, Development and Construction Responsibility 11
5. Operation and Maintenance Responsibility 11
6. Operation and Maintenance Costs 13
C.
Commitment by Yakima to Replenish Sales Tax Shortfall
1. Funding Commitment
IV. PROJECT COMPONENTS AND OPERATION CRITERIA
14
14
14
A. Project Components 14
B. Project Purpose 14
1. Public Access 15
2. Yakima Approval 15
C. Project Contracting and Management 15
V. DEVELOPMENT CRITERIA AND OVERSIGHT 16
A. Generally 16
B. Standards of Performance 16
C. Development Schedule and Substantial Completion Date 16
VI. PROJECT COSTS 17
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VII. INSURANCE 17
A. Insurance Requirements 17
B. Insurance Policies 17
C. Adjustments 18
VIII. AS IS 18
A. Due Diligence 18
B. Acceptance 18
IX. LIABILITY 19
A. Indemnification of Yakima 19
X. DESTRUCTION OR CONDEMNATION 20
A. Total or Partial Destruction 20
B. Condemnation 20
XI. RIGHT TO ASSIGN OR OTHERWISE TRANSFER 21
A. Right to Transfer Agreement 21
XII. DEFAULT 21
A. Event of Default of the District 21
B. Force Majeure 22
XIII. REMEDIES 22
A. Remedies Upon Default 22
B. No Waiver by Yakima 23
C. Termination 23
D. Reversion of the Property to Yakima 23
E. Certain Provisions Survive Termination 24
XIV. REPRESENTATIONS AND WARRANTIES 24
A. Yakima's Representations 24
B. The District's Representations and Warranties 24
C. Tax Covenant 24
XV. LEASE BACK 25
A. Sublease 25
B. Rent 25
C. Lease Obligations Assumed 25
XVI. MISCELLANEOUS 25
A. Captions 25
B. Construction 25
P•1SC\.SC09H 01/06/14
C. Entire Agreement 25
D. Successors and Assigns 25
E. Notices 26
F. Incorporation by Reference 26
G. Execution in Counterparts 26
H. Waiver 26
I. Exculpation 27
J. Severability 27
K. Term 27
L. Amendments 27
EXHIBIT A — LEGAL DESCRIPTION OF THE PROPERTY
EXHIBIT B — DEBT SERVICE SCHEDULE
APPENDIX .1 — PROJECT DOCUMENTS
P:1SC\SC09H 01/06/14
DESIGN, DEVELOPMENT,
CONSTRUCTION, FINANCING AND OPERATING AGREEMENT
This DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND
OPERATING AGREEMENT (the "Agreement") is made as of July 27, 2001, by and between
the CITY OF YAKIMA, WASHINGTON ("Yakima"), a municipal corporation and first class
city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT (the "District", and together with Yakima, the "Parties"), a public facilities district
created by Yakima and the Cities of Selah and Union Gap, to provide for the design,
development, construction, financing and operation of the Yakima Convention Center, as
expanded.
WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the
"Convention Center"), providing first-class meeting, ballroom and other event facilities;
WHEREAS, Yakima desires to expand the Convention Center (the "Project");
WHEREAS, the Convention Center, as expanded by the Project, will serve as a Regional
Center under RCW 35.57.030, benefiting the region including residents of Yakima, the City of
Selah and the City of Union Gap (the "Cities") by stimulating economic development, creating
jobs, realizing additional sales and lodging tax revenues, attracting commercial business and
tourism, and providing facilities for convention, special events and community events including
public meetings and performing arts event;
WHEREAS, pursuant to Chap. 35.57 RCW (the "Act"), the Cities have entered into an
Interlocal Agreement to form the District for the purpose of acquiring (by purchase, lease or
otherwise), and assisting with the financing, development and operation of, the Convention
Center as expanded by the Project;
WHEREAS, under the Act, the District has access to several new revenue sources,
including a state sales and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the
retail sales and use taxes generated within the District boundaries to the District;
WHEREAS, the Act requires a local match of 33% of the net present value•of the Sales
Tax in order for the District to impose the Sales Tax;
WHEREAS, Yakima has entered into a Lease Agreement transferring a leasehold interest
in the Convention Center property described in Exhibit A hereto (the "Property") (the value of
the Convention Center property is approximately $11,800,000) to the District in satisfaction of
this match requirement (approximately $2.4 million);
WHEREAS, the District will lease back the Property to Yakima pursuant to this
Agreement;
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WHEREAS, subject to certain limitations set forth herein, Yakima will issue bonds to
finance the Project, in consideration for the District's pledge of Sales Tax receipts to pay debt
service on the bonds and other Regional Center costs;
WHEREAS, Yakima will apply the net proceeds of the bonds to design, develop and
construct the Project, under the terms set forth herein;
WHEREAS, to provide for stable financing and operation of the Project in light of the
cyclical nature of Sales Taxes, Yakima wishes to provide additional funding in the event of a
Sales Tax shortfall; and
WHEREAS, Yakima will operate the Convention Center, as expanded by the Project, and
will apply certain City lodging taxes (in an amount, if any, determined annually by the City
Council) to pay a portion of the costs of operation and maintenance;
WHEREAS, the Parties desire that Yakima finance, design, develop and operate the
Convention Center as expanded by the Project on the terms set forth herein, and the District and
Yakima assist in financing the Project, also on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual undertaking and promises contained
herein, and the benefits to be realized by each Party including the benefits to the general public
in the region by the completion and operation of the Project, the Parties agree as follows:
L DEFINITIONS
For purposes of this Agreement, and any agreements supplemental hereto, the terms
defined in this Article shall have the following meanings, except as herein otherwise expressly
provided:
Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima.
Additional Revenue means all revenue received by the District (or by Yakima on behalf
of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking
Charges, Parking Taxes, Voted Sales Tax, and any other revenue derived from the ownership or
operation of the facilities of the District, including investment income; but excluding Sales Tax
Revenue and amounts received from Yakima pursuant to Section III(C) (including investment
earnings thereon).
Administrative Costs means the costs of the District incurred in administering the District
and this Agreement. Administrative Costs shall be specified in the Distnct's annual budget
submitted to Yakima for approval and to the Cities of Selah and Union Gap for review and
comment.
Admission Charge means any charge imposed by the District (or by Yakima on behalf of
the District) for admission to its facilities, including charges for season tickets or subscriptions;
cover charges, or charges for use of seats and tables, and other similar accommodations; charges
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for food and refreshment if free entertainment, recreation, or amusement is provided; charges for
rental or use of equipment or facilities for purposes of recreation or amusement; and automobile
parking charges if the amount of the charge is determined according to the number of passengers
in the automobile.
Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be
paid by any person who pays an Admission Charge.
Agreement means this Design, Development, Construction, Financing and Operating
Agreement.
Beneficial Occupancy shall mean when the Project is granted a temporary or permanent
Certificate of Occupancy for the Convention Center as expanded by the Project from Yakima's
building official.
Bond Counsel means a firm of lawyers nationally recognized and accepted as bond
counsel and so employed by Yakima.
Bond Ordinance means the ordinance(s) of the Yakima Council authorizing the issuance
of the Bonds and any amendments.
Bonds means the bonds, notes or other evidences of indebtedness issued by Yakima
pursuant to and under authority of the Bond Ordinance to finance or refinance the Project.
Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total
interest cost on the Bonds exceeds 5.55%, or if the financing is determined to no longer be
economical.
Board means the governing body vested with the management of the affairs of the
District.
Charter means the Charter of the District, issued pursuant to the Interlocal Agreement, as
amended from time to time.
Code means the Internal Revenue Code of 1986, as amended, and all applicable
regulations and rulings thereunder.
Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project.
Costs of the Project means all capital costs that are paid or incurred by Yakima in
connection with the design, development and construction of the Project, including, but not
limited to all or a portion of the interest on Bonds during the period of construction of such
improvements, and for a period of time thereafter; amounts required to meet any reserve
requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for
expenses, including planning, permitting and design expenses, incident and properly allocable to
the Project; and all other items of expense incident and properly allocable to designing,
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developing and constructing the Project, financing the Project and placing the Project in
operation.
Debt Service means the amount to be paid on the next succeeding Payment Date to pay
the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due
on such Payment Date. A schedule setting forth Debt Service to be paid on the Bonds and any
Additional Bonds shall be attached as Exhibit B at such time as the Bonds or any Additional
Bonds are issued.
Debt Service Fund means the special fund(s) or account(s) established by Yakima under
the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal
of, interest on and redemption price, if any, of Bonds and/or any Additional Bonds.
Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any,
established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which
secures the Bonds and/or any Additional Bonds.
Debt Service Reserve Fund Requirement means the amount required to be deposited to
the Debt Service Reserve Fund, as established in the Bond Ordinance.
District means the public facilities district created pursuant to the Interlocal Agreement.
Event(s) of Default shall be as defined in Article IV herein.
Favorable Opinion of Bond Counsel means a written legal opinion of Bond Counsel
addressed to Yakima, to the effect that such action is permitted under the laws of the State and
under applicable ordinances of the Yakima Council, including the Bond Ordinance and any
Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any
other bonds of Yakima from gross income for federal income tax purposes under the Code
(subject to the inclusion of any exceptions contained in the opinion delivered upon original
issuance of such bond).
Force Majeure means any causes or conditions beyond a Party's reasonable control
(including, but not limited to fire, explosion, presence of a hazardous substance, earthquake,
storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation,
delay or failure to act by civil, military or other governmental authority other than a party; strike,
lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of,
or damage or casualty to, any equipment, facility or other property; any delay or failure by any
third party to provide a necessary service, supply, part, equipment, personnel or' other item; or
interruption, suspension, curtailment or other disruption of a utility).
Governmental Authority shall mean any board, bureau, commission, department, or body
of any municipal, county, state, or federal governmental or quasi -governmental unit, or any
subdivision thereof, having, asserting, or acquiring jurisdiction over the Property or the
management, operation, use, or improvement thereof.
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Improvements shall mean all buildings, structures, fixtures, improvements and equipment
constructed or located on the Property, including, but not limited to, the structure of the
Convention Center and the parking facilities, elevator(s), lighting, seating, carpeting, HVAC,
plumbing, electrical and mechanical systems.
Insurance Proceeds mean the greater of (i) the proceeds from the insurance policies
actually maintained by Yakima with respect to the Convention Center or Project; or (ii) the
proceeds that would have been available had Yakima maintained the insurance policies required
to be maintained by Yakima under this Agreement.
Interlocal Agreement means the Interlocal Financing Agreement between the Cities
creating the District.
Law(s) and Ordinance(s) shall mean all present and future applicable laws, ordinances,
rules, regulations, resolutions, permits, authorizations, orders and requirements of all federal,
state, county and municipal governments, the departments, bureaus or commissions thereof,
authorities, boards or officers, any national or local board of fire underwriters, or any other body
or bodies exercising similar functions having or acquiring jurisdiction over all or any part of the
Property, including Yakima acting in its governmental capacity.
Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW.
Net Proceeds, when used with reference to the Bonds, means the principal amount of
such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less
the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve
Fund and/or the PFD Revenue Reserve Fund.
Operating Manual means the Operating Standards Manual for the expanded Convention
Center.
Operation and Maintenance Costs means all necessary costs to Yakima of operating and
maintaining the Convention Center as expanded by the Project, including but not limited to
administrative and general expenses, costs of insurance (including reasonable contributions for
self-insurance reserves, if any), consulting technical services and repairs and replacements (to the
extent not properly classifiable as capital costs), real estate taxes, if any, but excluding
depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a
similar nature and debt service on the Bonds and any Additional Bonds.
Outstanding, when used as of any particular time with reference to Bonds or Additional
Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the
Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds
theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or
Additional Bonds with respect to which all liability of Yakima shall have been discharged in
accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and
(3) Bonds or Additional Bonds for the transfer or exchange of or in lieu of or in substitution for
which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima
pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable.
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Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110.
Parking Tax means a tax on any Parking Charge imposed at any parking facility that is
owned or leased by the District pursuant to RCW 35.57.110.
Payment Date means the dates specified in the Bond Ordinance, or any Supplemental
Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with
respect to the Bonds or any Additional Bonds.
Permitted Investments means investments permitted by State law for investment of
Yakima and District funds, consistent with the terms of the Bonds and any Additional Bonds.
PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if
any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The
amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall
be maintained in the PFD Revenue Reserve Fund shall be established in the Bond Ordinance.
Predevelopment Costs means the cost of all planning, legal, architectural, engineering
and other services incurred by Yakima in connection with the Project until the date of issuance of
the Bonds.
Project means the design, construction, and operation of the additions to the Convention
Center, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site
plans, preliminary specifications, and schematic design documents), construction documents
(including all drawings and specifications necessary to completely describe the Project in detail
to a contractor for the purposes of bidding and construction, schedules, plans and specifications,
and the construction contract) and Project budgets (setting forth the construction contract cost,
taxes, all contingencies, fees and allowances).
Property shall mean the real property described in Exhibit A attached hereto or as
hereafter amended.
Refunding Bonds means bonds, notes or other evidence of indebtedness the proceeds of
which will be used to refund Bonds.
Sales Tax means the nonvoted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of
a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from
the amount of tax otherwise required to be collected or paid over to the State's Department of
Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event,
not more than 25 years after the Sales Tax is first collected.
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Sales Tax Revenue means all Sales Taxes received by the District.
State means the State of Washington.
Substantial Completion shall mean when the Beneficial Occupancy of the Convention
Center as expanded by the Project is achieved.
Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council
amending or supplementing the Bond Ordinance, including any ordinance adopted by the
Yakima Council in connection with the issuance of Additional Bonds.
Voted Sales Tax means any sales and use tax imposed by the District pursuant to
RCW 82.14.048 and approved by the voters.
Yakima means the City of Yakima, Washington, a municipal corporation of the State, as
now or hereafter constituted.
Yakima Council means the City Council of Yakima, or any successor thereto as provided
by law.
II. INTENT AND RELATIONS
A. Intent.
1. Financing. It is the intent of this Agreement that the District lease the
Property to Yakima and that Yakima finance the Project. In consideration for Yakima's
agreement to finance the Project, it is the intent of the Parties that the District transfer all Sales
Tax Revenue to Yakima to pay Predevelopment Costs (to the extent not paid from Net
Proceeds), Debt Service and other Regional Center costs including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). It is
the intent of the Parties that, in the event that Yakima provides notice that amounts on deposit in
the Debt Service Fund and the PFD Revenue Reserve Fund are projected to be insufficient (not
taking into account amounts in the Debt Service Reserve Fund) for Yakima to pay Debt Service
when due, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such
deficiency as set forth in Section III(C).
2. Development. It is the intent of this Agreement that Yakima design,
develop and construct the Project in accordance with the Project Documents and the standards of
performance set forth in Article V. This Agreement is intended by the Parties to establish the
design, development and construction standards and other performance criteria for the Project.
3. Operation. It is the intent of the Parties that Yakima operate and maintain
the Convention Center and the Project, and that Yakima retain all rents, receipts, profits and
other revenues of the Convention Center as expanded by the Project. In consideration for
Yakima's agreement to operate and maintain the Convention Center and the Project, it is the
intent of the Parties that the District pay Additional Revenue, if any, to Yakima, and that Yakima
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pay the District's Administrative Costs. In addition, the Parties intend that Yakima apply certain
Lodging Taxes to pay a portion of Operation and Maintenance Costs, in an amount, if any,
determined on an annual basis by Yakima.
B. Description. The Property is located at 10 North Eighth Street , Yakima,
Washington 98901-2515, as legally described on the attached Exhibit A. The Convention
Center, as improved by the Project, will occupy approximately 47,000 square feet.
C. Yakima's Regulatory Role Reserved. Any Yakima design review and approvals
provided for herein are independent of, in addition to and do not in any way obligate Yakima
with respect to usual and customary Yakima permitting, code compliance and other regulatory
reviews. The outcome of any such regulatory review is independent of and is in no way biased,
prejudiced or predetermined in any way by this Agreement. Nothing in this Agreement is
intended or shall be construed to require that Yakima exercise its discretionary authority under
its regulatory ordinances to further the Project nor bind Yakima to do so. Yakima will process
applications for permits and approvals associated therewith as if such applications were made
without any Yakima participation in such projects.
D. Governing Law and Venue. This Agreement and the rights and obligations of the
Parties shall be governed by, and construed and interpreted in accordance with, the laws of the
State. Any suit filed between the Parties concerning this Agreement shall be commenced in the
Superior Court in Yakima County.
HI. SCOPE OF COMMITMENTS
A. Commitments by the District
1. Payment Obligation.
(a) Payment of Debt Service and Predevelopment Costs. In
consideration for Yakima's agreement to issue the Bonds and design, develop and construct the
Project, the District shall pay all Sales Tax Revenue to Yakima to pay Yakima's Debt Service
and Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center
costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and
PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service
Fund pursuant to Section III(C).
(b) Pledge of Sales Tax Revenue, Additional Revenue and other
Receipts of the District. The District hereby pledges Sales Tax Revenue and other amounts to be
paid by the District to Yakima for payment of Debt Service, Predevelopment Costs (to the extent
not paid from Net Proceeds), and other Regional Center costs including but not limited to
funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). The
obligation of the District to pay Sales Tax Revenue and other amounts due under the Agreement
and to perform and observe the other obligations on its part contained herein shall be absolute
and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or
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otherwise. The District's obligations under this Agreement shall continue in effect and shall
survive the satisfaction of Yakima's obligations under the Bonds, the Bond Ordinance, any
Additional Bonds, and any Supplemental Bond Ordinance until such time as all Predevelopment
Costs and Debt Service have been paid, together with any other amounts owed to Yakima
hereunder.
The Parties acknowledge and agree that Yakima will pledge this Agreement, as well as
the District's Sales Tax Revenue and other amounts to be paid by the District to Yakima, to the
payment of the Bonds and any Additional Bonds. Such pledge will be material to the offer and
sale of the Bonds, and will be disclosed to potential purchasers and purchasers of the Bonds.
Bondholders will rely on this pledge in purchasing the Bonds. So long as the Bonds or any
Additional Bonds are Outstanding, the District shall not issue bonds, or incur any other
obligation, secured by Sales Tax Revenue or by Additional Revenue.
(c) Revenue and Payment Reports. The District shall file annual
financial statements and annual reports with the Cities, as required under Sections 8.5 and 8.6 of
the Charter. Each such report shall bear a current date, be signed by an appropriate and duly
authorized District officer and be supported by reasonable documentation sufficient to sustain the
accuracy of the report.
(d) Termination for Failure To Timely Pay. This Agreement is
specifically conditioned upon the District's timely payment of amounts due hereunder. In the
event that the District fails to transfer amounts as and when required to Yakima, Yakima may
terminate this Agreement pursuant to the provisions contained in Article XIII.
2. District Funds. The District shall establish the following Funds and
accounts: Sales Tax Revenue Fund (or Account), Additional Revenue Fund (or Account), and
the Administrative Fund (or Account). The District may, in its discretion, establish such
additional accounts and subaccounts as the District deems necessary or useful, but the
establishment of any such account or subaccount shall not alter or modify any of the
requirements of this Agreement with respect to a deposit or use of money in the funds.
(a) Sales Tax Revenue Fund. The District shall establish a
Sales Tax Revenue Fund and shall deposit in the Sales Tax Revenue Fund all Sales Tax Revenue
and all net earnings on investments of money in the Sales Tax Revenue Fund. Amounts in the
Sales Tax Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Sales Tax Revenue Fund, and such income and interest shall
become part of the Sales Tax Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Sales Tax Revenue Fund are irrevocably pledged
and shall be used and transferred by the District as follows: Within three working days after
receipt, all amounts on deposit in the Sales Tax Revenue Fund to Yakima to pay Debt Service,
Predevelopment Costs and other Regional Center costs, including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C).
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(b) Additional Revenue Fund. The District shall deposit in the
Additional Revenue Fund all Additional Revenue received by the District and all net earnings on
investments of money in the Additional Revenue Fund. Amounts received from Yakima to pay
Administrative Costs shall be deposited to the Additional Revenue Fund. Amounts in the
Additional Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Additional Revenue Fund, and such income and interest shall
become part of the Additional Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Additional Revenue Fund are irrevocably pledged
and shall be used and transferred by the District at least monthly as follows and in the following
order of prionty: _
and
Maintenance Costs.
(i) To the Administrative Fund to pay Administrative Costs;
(ii) The remainder, to Yakima to pay Operation and
To the extent that Additional Revenues are received by Yakima on behalf of the District,
Yakima shall apply such Additional Revenues to pay (i) Administrative Costs and/or (ii)
Operation and Maintenance Costs.
(c) Administrative Fund. The District shall establish an
Administrative Fund. Amounts transferred from the Additional Revenue Fund to pay
Administrative Costs pursuant to subsection (b) shall be deposited to the Administrative Fund.
shall be used to pay Administrative Costs.
Amounts in the Administrative Fund may be invested in Permitted Investments. The
District shall maintain records sufficient to permit calculation of the income on investments and
interest earned on deposit of amounts held in the Administrative Fund, and such income and
interest shall become part of the Administrative Fund unless otherwise applied in accordance
with this Section.
(d) Liens. Except as permitted under this Agreement, the District shall
not create any lien upon funds created hereunder other than the lien hereby created.
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B. Commitments by Yakima
1. Site Availability. Pursuant to the terms of the Lease Agreement between
Yakima and District, dated July 27, 2001, Yakima will lease to the District the Property
described in Exhibit A. The Parties agree that the leasehold interest in the Property is donated
(for nominal consideration in the form of $50 in rent) by Yakima to the District to be used for the
construction of a Regional Center, as defined in RCW 35.57.030. Moreover, the. Parties agree
that the value of the Property is $11,800,000. The value of the leasehold interest in this Property
transferred by the Lease Agreement significantly exceeds 33% of the net present value of the
total Sales Taxes projected to be received by the District (approximately $2.4 million).
2. Issuance of the Bonds. Yakima agrees to issue the Bonds and
Completion Bonds, if necessary. Yakima reserves the right not to issue the Bonds if, at the time
the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55%, or if the financing is
determined to no longer be economical. The Bonds shall be in an aggregate principal amount to
be determined by Yakima, at least equal to the projected Costs of the Project, Predevelopment
Costs, amounts to pay costs of issuance and amounts to be deposited to the Debt Service Reserve
Fund, if any.
3. Application of Net Proceeds. Yakima agrees to apply Net Proceeds to
pay Predevelopment Costs and Costs of the Project as follows.
(a) Predevelopment Costs. Yakima has incurred and will continue to
incur Predevelopment Costs for the benefit of the District. Yakima will pay these
Predevelopment Costs from the District's Sales Tax Revenue received by Yakima to the extent
that Predevelopment Costs are not paid from Net Proceeds (at Yakima's election).
(b) Costs of the Project In addition, Yakima will apply Net Proceeds
to pay Costs of the Project.
4. Design, Development and Construction Responsibility. Yakima shall
design or contract for the design of the Project and construct or contract for the construction of
the Project, in accordance with the Project Documents and with the standards of performance set
forth in Article V and elsewhere in this Agreement.
5. Operation and Maintenance Responsibility.
(a) Operations and Maintenance—Generally. Yakima agrees to
operate and maintain the Improvements including the Convention Center, related parking and,
upon Substantial Completion, the Project, on the terms and in accordance with the standards set
forth herein. Yakima shall operate and maintain the Improvements including the Convention
Center, related parking and the Project as a first class convention center facility, to be kept at all
times in a safe and clean condition.
Yakima shall provide (directly or by contract) all management, supervision, personnel,
materials, equipment, services and supplies necessary to operate, maintain and repair of the
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Improvements and shall take all reasonable precautions to prevent damage, injury or loss by
reason of or related to the operations and maintenance of the Improvements to any person or
property. Yakima shall hire an appropriate number of qualified employees to operate and
maintain the Improvements consistent with the best management practices. Yakima shall
properly supervise and direct its employees and other parties implementing the performance of
its duties, obligations and functions under this Agreement. Yakima shall be fully responsible for
the performance of such employees and other parties.
Yakima shall comply with all applicable Laws and Ordinances relating to the safety of
persons or property or their protection from damage, injury or loss. Yakima shall obtain all
statements, certificates, permits, licenses, rights, and approvals, whether public, private, local,
state or federal, that are necessary or appropriate to the continued operation of the Improvements
as a first class convention center. Yakima shall undertake all modifications to the Improvements
required to comply with state, federal and local laws, rules, regulations, judgments, orders and
decrees.
Prior to Substantial Completion of the Project, Yakima shall- provide pre -opening
services, including start-up of the Project, mobilization of staff and services, and performance of
marketing and booking plans.
(b) Compliance with the Operating Manual. Yakima shall maintain
the Improvements in substantial compliance with the terms of the Operating Manual during the
term of this Agreement. The Operating Manual shall not be amended except with the written
approval of the Yakima City Manager or his or her designee. The Operating Manual shall not be
revised in a manner that will impair the security of the owners of the Bonds or any Additional
Bonds.
Article VII.
(c) Insurance. Yakima shall maintain insurance as set forth in
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6. Operation and Maintenance Costs.
(a) Obligation To Pay Operation and Maintenance Costs and
Administrative Costs; Right to Receive all Rents and Operating Revenues. Yakima shall pay
Operation and Maintenance Costs from revenues derived from operation of the Convention
Center and the Project, Additional Revenues received from the District, from Lodging Taxes, or
other Yakima funds, as set forth below. Within a reasonable period after receipt of an invoice
therefor, Yakima shall pay to the Distnct its Administrative Costs as set forth in the District's
budget approved by Yakima.
All rents, receipts, profits and other revenue derived from the operation of
the Convention Center and the Project shall be retained by, and shall be the property of, Yakima,
and shall be applied to pay Operation and Maintenance Costs or any other lawful purposes of
Yakima.
(b) Lodging Taxes. To the extent not paid from revenues derived from
operation of the Convention Center and the Project, Additional Revenues received from the
District, or other Yakima funds, Yakima will apply Lodging Taxes to pay Operation and
Maintenance Costs. The amount of Lodging Taxes to be applied to this purpose in any year shall
be determined by the Yakima Council in its sole discretion as part of its annual budget process.
The amount of Lodging Taxes to be applied to pay Operation and Maintenance Costs may vary
from year to year and may equal zero in some years. In any event, the amount of Lodging Taxes
to be applied shall not exceed the amount available after payment of debt service on Yakima's
outstanding bonds (including all or a portion of the Bonds) to which these taxes are pledged.
Yakima's obligation hereunder is limited only to the amounts designated for this purpose
by the Yakima Council. Yakima does not hereby guarantee any obligations or liability of the
District. It is expressly understood and agreed that any obligation or liability arising out of
and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in
connection therewith, shall be satisfied exclusively from the assets and credit of the District, and
no creditor or any other person or entity shall have any recourse to any of the assets, credit, or
services of Yakima on account of any debts, obligations, or liabilities of the District
(c) Amounts Remitted to Yakima. Amounts remitted to Yakima
pursuant to Section III(A)(2)(a) and (2)(b)(ii) shall be used by Yakima for the following
purposes. Receipts that are Sales Tax Revenue shall be used to pay Predevelopment Costs (to
the extent not paid from Net Proceeds), Debt Service, and for the purposes set forth in RCW
35.57.020, as the same may be amended (acquiring, constructing, owning, remodeling,
maintaining, equipping, reequipping, repairing, financing, and operating one or more Regional
Centers). Receipts that are Additional Revenues shall be applied to pay Operation and
Maintenance Costs.
Yakima's obligation hereunder is limited only to the amounts received from the District.
Yakima does not hereby guaranty any debt obligations or liability of the District.
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All amounts remitted to Yakima pursuant to Section III(A)(2)(a) and 2(b)(ii), together
with all rents, receipts, profits and other revenues derived by Yakima from its operation of the
Convention Center, shall be retained by and be the property of Yakima to be applied to pay
Operation and Maintenance Costs (directly or by contract) or for other lawful purposes of
Yakima . It is the Parties intent that all such amounts shall be Yakima funds, accounted for in
Yakima's books and accounts.
(d) Additional Support. To the extent, as from time to time authorized
by the Yakima City Manager, Yakima will utilize its employees to provide oversight and
administrative assistance in working with District to achieve the mutual goals and objectives of
the Cities and District under this Agreement. Unless otherwise specified in this Agreement or
applicable law, actions to be taken or decisions to be made by Yakima will be the responsibility
of the Yakima City Manager or his or her designee. Yakima hereby grants to the extent
permitted by law such person or persons the power, authority, and right to carry out all such
responsibilities.
C. Commitment by Yakima to Replenish Sales Tax Shortfall -
1. Funding Commitment.
Yakima shall provide notice to the District in the event that amounts in the Debt Service
Fund and the PFD Revenue Reserve Fund (not taking into account amounts in the Debt Service
Reserve Fund) are projected to be insufficient to pay Debt Service on any Payment Date. In such
event, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency.
Yakima's obligation hereunder is limited only to the amount to be paid to replenish any
projected deficiency in the Debt Service Fund. Yakima does not hereby guarantee any debt
obligations or liability of the District. It is expressly understood and agreed that any obligation
or liability arising out of and/or incurred by the District by reason of this Agreement, or the
carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets
and credit of the District, and no creditor or any other person or entity shall have any recourse to
any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities
of District.
IV. PROJECT COMPONENTS AND OPERATION CRITERIA
A. Project Components. Yakima shall finance, design and construct the Project in
accordance with the Project Documents, and in accordance with the performance specifications
set forth herein.
B. Project Purpose. The Project is being constructed to serve the needs of the
region, including the residents of Yakima, the City of Selah and the City of Union Gap.
Following Project completion, Yakima shall be solely responsible for management, operation
and maintenance of the Convention Center, as expanded by the Project, consistent with the terms
of this Agreement and the Operating Manual.
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1. Public Access. Yakima shall provide regular hours during which the
Convention Center will be open to the public (subject to reasonable Admission Charges);
provide public programs; and make available for reasonable public use any ballroom,
auditorium, meeting rooms or other public spaces in the Convention Center (subject to
reasonable security measures).
2. Yakima Approval. In consideration of Yakima's obligations hereunder,
the District agrees that the following shall be subject to the approval of the Yakima Council:
(a) Approval of the Yakima Council:
(i) The District shall not impose Admission Charges or Parking Charges
without the prior approval of the Yakima Council, as set forth in the
Interlocal Agreement and the Charter.
(ii) The District shall not impose Admission Taxes or Parking Taxes
without the prior approval of the Yakima Council.
(iii) The District's annual budget, including Administrative Costs, shall be
subject to the approval of the Yakima Council and to review and
comment by the Cities of Selah and Union Gap.
(iv) The District shall not authorize or engage in gambling activities or
authorize or publicly display any artwork without the prior approval of
the Yakima Council.
(v) Any acquisition or transfer of real and personal property with a value
over $100,000 by lease, sublease, purchase, or sale by the District shall
be subject to approval by the Yakima Council.
C. Project Contracting and Management
1. Yakima shall construct the Project according to the Project Documents.
2. Yakima will select the contractor(s) for the Project through a competitive
bidding process under the Laws of the State, pursuant to procedures designed to provide
maximum practical competition by and from qualified contractors.
3. Yakima shall take reasonable precautions to prevent unnecessary damage,
injury or loss to property, structures, and vegetation in the Project area and shall at its own
expense repair any damage thereto caused by its, or its contractors', actions. Yakima shall
require its contractors to take any and all precautions that may be necessary to render all portions
of the Project and any adjacent areas affected by the Project secure in every respect, and to
decrease the likelihood of accidents from any cause, and to avoid contingencies that are liable to
delay the Project. Yakima shall require its contractors to exercise utmost care when using
explosives or other hazardous materials or equipment, and when utilizing unusual methods.
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These requirements shall in no way relieve Yakima of its responsibility for safety on the Project.
The District shall not be responsible for any unsafe conditions.
V. DEVELOPMENT CRITERIA AND OVERSIGHT
A. Generally. Except as otherwise provided in this Section, the Parties hereby agree
that Yakima shall have sole responsibility for construction of the Project and shall be responsible
for obtaining all necessary land use, building and mechanical permits, and all other required
permits or approvals for construction of the Project. Yakima shall promptly comply with all
applicable Laws and Ordinances as they relate to the Property and Improvements. Yakima's
responsibility to finance such construction is limited to the extent of Net Proceeds.
B. Standards of Performance. Yakima shall perform the terms of this Agreement
according to the following standards:
1. Performance in a good and workmanlike manner and in compliance with
all applicable laws and ordinances, rules, and regulations.
2. Use of materials that are of first class quality and workmanship.
3. Maintenance and warranty of all portions of the Project consistent with the
Project Documents.
C. Development Schedule and Substantial Completion Date.
1. RCW 82.14.390 currently requires that construction of the Project
commence before January 1, 2003. Accordingly, Yakima shall commence
construction of the Project before January 1, 2003, or such later start date
set forth in any amendment to RCW 82.14.390 (the "Date of
Commencement").
2. Yakima shall pursue the design and construction of the Project to achieve
Substantial Completion within 24 months after the Date of
Commencement, excluding time periods when the design, construction or
development of the Project is unavoidably delayed by reasons of Force
Majeure; provided, however, that said date may be extended by the
Yakima City Manager.
VI. PROJECT COSTS. Yakima shall finance, design, construct, and assume the risk of loss
of the Project from Net Proceeds and from other amounts paid by the District to Yakima
pursuant to the Agreement.
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VII. INSURANCE
A. Insurance Requirements. Yakima shall maintain and keep in force insurance
covering all aspects of the construction activity on the Property, including but not limited to the
following requirements:
1. Builder's All Risk Comprehensive Coverage. Yakima shall keep, or shall
require the construction contractor to keep, all Project components, including but not limited to
the Convention Center and parking facilities, insured for Builders All Risk Comprehensive
Coverage including earthquake and flood in any event in an amount not less than one hundred
percent (100%) of the then- full "Replacement Cost," being the cost of replacing the Project
components, and all fixtures, equipment, improvements and betterments thereto.
2. Commercial General Liability. Yakima shall carry, and shall require its
construction contractor to carry, Commercial General Liability insurance providing coverage
against claims for bodily injury, death or property damage on the Property with broad form
liability and property damage endorsement, such insurance to afford minimum protection, during
the term of the construction phase, and written for combined single limits of liability of no less
than Ten Million Dollars ($10,000,000), per occurrence, said amount to be adjusted from time to
time with coverage deemed customary under like conditions.
3. Property Damage Insurance. Yakima shall carry property insurance
covering the Property including all Improvements, including earthquake, flood, boiler and
machinery insurance, in an amount equal to at least one hundred percent (100%) of the
replacement cost of all Improvements. Such insurance shall contain coverage against loss or
damage by perils no less broad than the current edition of the ISO Special Form, 1985 Edition.
Yakima shall be responsible for payment of any deductibles under said insurance policies and
any costs of restoration resulting from any uninsured or underinsured losses.
B. Insurance Policies. Insurance policies required herein:
1. Shall be issued by companies authorized to do business in the State with
the following qualifications:
a. The companies must be rated no less than "A," as to general policy
holders rating and no less than "X" as to financial category in accordance with the latest edition
of Best's Key Rating Guide, published by A.M. Best Company, Incorporated.
b. The policies shall be issued as primary policies.
2. Each such policy or certificate of insurance mentioned and required in this
Section VII shall have attached thereto (1) an endorsement that such policy shall not be canceled
or materially changed without at least 30 days' prior written notice to the District and Yakima;
(2) an endorsement to the effect that the insurance as to any one insured shall not be invalidated
by any act or neglect of any other insured; (3) an endorsement pursuant to which the insurance
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carrier waives all rights of subrogation against the Parties hereto; and (4) an endorsement
pursuant to which this insurance is primary and noncontributory.
3. The certificates of insurance and insurance policies shall be furnished to
the District and Yakima prior to commencing any construction under this Agreement. The
certificate(s) shall clearly indicate the insurance and the type, amount and classification, as
required for strict compliance with this Section VII.
4. Cancellation of any insurance or non-payment by Yakima of any premium
for any insurance policies required by this Agreement shall constitute an Event of Default under
Section XII of this Agreement.
C. Adjustments. The types of policies, risks insured, coverage amounts, deductibles
and eridorsements may be adjusted from time to time as the District and Yakima may mutually
determine.
VIII. AS IS
A. Due Diligence. The District acknowledges that it has diligently investigated to its
full satisfaction the physical condition of the Property and all other matters that in the District's
judgment affect the District's use of the Property and the District's willingness to enter into this
Agreement. The District acknowledges that except as expressly provided for in this Agreement,
neither Yakima nor any employee, officer, agent or representative of Yakima has made any
representations or warranties whatsoever regarding the Property or this transaction or any facts
relating thereto, including, without limitation, any representations or warranties concerning the
physical condition of the Property, access, zoning laws, environmental matters, suitability,
feasibility, utilities, or any other matter affecting the Property or the use thereof
B. Acceptance. Except as expressly provided for in this Agreement, Yakima shall
accept the Property "as is" and "where is" with all faults, of any nature or kind, without any
representations or warranties, express or implied or statutory of any kind whatsoever by the
District or any employee, officer, agent or representative of the District. Upon acceptance by
Yakima of the Property under this Agreement, then Yakima shall be deemed to have accepted
the Property and to have waived and released its right to recover from the District any and all
damages, losses liabilities, costs, or expenses whatsoever (including attorneys' fees and costs)
and claims therefor, whether direct or indirect, known or unknown, foreseen or unforeseen,
which may arise on account of or in any way arising out of or connected with the physical
condition of the Property or any Law or Ordinance.
C. Environmental Contamination. Yakima agrees to indemnify and hold harmless
the District for any environmental contamination existing as of the date of this Agreement.
Yakima agrees to design and develop the Project in such a manner as to minimize, to the extent
financially practicable, the excavation of native soils. In the event Yakima encounters
contaminated soils, Yakima shall be responsible for all costs of remediating the contaminated
soil, and for seeking recovery from responsible parties.
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The Parties agree that in the event contaminated soils are encountered and any Party
incurs remediation costs, the Parties shall fully cooperate in pursuing claims against those
entities that may be liable.
IX LIABILITY
A. Indemnification of Yakima.
During the term of this Agreement, to the maximum extent not prohibited by law, the District
agrees to and shall indemnify and hold Yakima harmless from and against all liability, loss,
damage, cost, or expenses (including reasonable attorneys' fees and court costs, amounts paid in
settlements and judgment) arising from or as a result of the death of any person or of any
accident, injury, loss or damage whatsoever to any person or to the property of any person that
occurs on or adjacent to the Property and that is directly or indirectly caused by the acts, errors,
or omissions of the District or its officers, agents, servants, employees, officers, contractors or
subcontractors. The District shall not be responsible for (and such indemnity shall not apply to)
the gross negligence or willful misconduct of Yakima, or their respective officials, servants,
employees or officers.
X. DESTRUCTION OR CONDEMNATION
A. Total or Partial Destruction.
1. If the Convention Center or Project is totally or partially destroyed at any
time after execution of this Agreement, and the Insurance Proceeds are or would have been
sufficient to pay the cost of reconstruction or restoration, or if the uninsured cost of
reconstruction or restoration is less than Two Hundred Fifty Thousand Dollars ($250,000), and
the damage or destruction is such that as a result thereof Yakima cannot meet its obligations
under this Agreement, Yakima shall reconstruct or restore the damage consistent with terms of
this Agreement within two years of the destruction; provided that, if the damage or destruction is
such that Yakima may notwithstanding such damage or destruction continue to fulfill its
obligations under this Agreement, Yakima shall have the discretion to use the Insurance
Proceeds to restore and repair the Property to the extent necessary and appropriate for its
purposes. If the Insurance Proceeds are insufficient and the uninsured cost is more than Two
Hundred Fifty Thousand Dollars ($250,000), Yakima may elect to reconstruct or restore the
damage or to terminate this Agreement by delivery of written notice to the District within 30
days after the destruction.
2. If Yakima elects not to reconstruct or restore the damage, this Agreement
shall terminate and the Property shall revert to Yakima pursuant to Section XIII. The District
shall transfer the Property in its then condition to Yakima, along with any Insurance Proceeds
attributable to the damage or destruction of the Project.
B. Condemnation. If the whole or any substantial part of the Property is taken or
condemned in the exercise of eminent domain powers (or by conveyance in lieu thereof), such
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that Yakima can no longer meet its obligations under this Agreement, this Agreement shall
terminate upon the date when possession of the Property so taken shall be acquired by the
condemning authority. As used herein, "substantial" shall be defined as reasonably preventing
the conduct of Yakima's activities. Yakima shall have the right to claim and recover from the
condemning authority such compensation as may be separately awarded or recoverable by
Yakima in Yakima's own right on account of any and all damage to Yakima's activities by
reason of the condemnation and on account of any cost or loss Yakima might sustain; provided
that, the District shall pay to Yakima that portion of its condemnation proceeds equal to the
amount of Debt Service on the Outstanding Bonds and Additional Bonds, if any.
XL RIGHT TO ASSIGN OR OTHERWISE TRANSFER
A. Right to Transfer Agreement.
1. During the term of this Agreement and at such time as the Bonds or
Additional Bonds are no longer Outstanding, the District shall have the right to assign or
otherwise transfer the Agreement, to such other persons, firms, corporations, partnerships, joint
ventures, and federal, state or municipal government or agency thereof, as the District shall
select (the "Transferee"), provided, however, that:
a. The District must obtain the prior written consent of Yakima;
b. Such assignment or transfer shall be made expressly subject to the
terms, covenants and conditions of this Agreement;
c. The District shall deliver to Yakima a duly executed and recorded
copy of the document evidencing such transfer, including a suitable estoppel agreement(s); and
d. Such transfer shall not be effective to bind Yakima until the
Transferee has assumed all obligations of the District under this Agreement and notice thereof is
given to Yakima, and such notice shall designate the name and address of the Transferee.
2. Said Transferee (and all succeeding and successor Transferees) shall
succeed to all rights and obligations of the District under this Agreement, subject, however, to all
duties and obligations of the District in and pertaining to the then unperformed provisions of this
Agreement. Upon such transfer by the District, or by a successor in accordance with the
requirements of this Section, the District (and/or its successor(s)) as Transferor in such a transfer
shall not be released and discharged from all of its duties and obligations hereunder which
pertain to the then unperformed provisions of this Agreement without the written consent and
release of Yakima.
XII. DEFA ULT
A. Event of Default of the District. This section shall apply if the District fails to
keep, observe, or perform any of its duties or obligations under this Agreement (an "Event of
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Default"). Notwithstanding the generality of this paragraph, an "Event of Default" shall be
deemed to occur for any of the following specific events:
1. The failure of the District to pay amounts due to Yakima hereunder when
due.
2. Conversion by the District of any portion of the Property to any use other
than the uses permitted under the Charter and this Agreement.
3. The making by the District of an assignment for the benefit of creditors
contrary to the terms of this Agreement, or filing a petition in bankruptcy or of reorganization
under any bankruptcy or insolvency law or filing a petition to effect a composition or extension
of time to pay its debts.
4. The appointment of a receiver or trustee of the property of the District,
which appointment is not vacated or stayed within ninety days.
5. The filing of a petition in bankruptcy against the District or for its
reorganization under any bankruptcy or insolvency law that shall not be dismissed or stayed by
the court within ninety days after such filing.
B. Force Majeure. The District shall not be considered to be in breach of or default
under this Agreement on account of any delay or failure to perform as required by this
Agreement as a result of a Force Majeure event.
XIII. REMEDIES
A. Remedies Upon Default. If an Event of Default on the part of the District shall
occur, then Yakima at any time after periods set forth for the exercise of rights herein shall have
the following cumulative rights and remedies:
1. Provide Notice and Time to Cure. If Yakima desires to take action for an
Event of Default, Yakima shall provide written notice to the District specifying such Event of
Default or Events of Default and stating that Yakima at its option may terminate this Agreement
on the date specified in such notice, which shall be at least 30 days, but no more than 90 days,
after the giving of such notice, unless the District cures such Event of Default.
2. Injunction. Yakima shall be entitled to restrain, by injunction, the
commission of or attempt or threatened commission of an Event of Default and to obtain a
judgment or order specifically prohibiting a violation or breach of any such term or provision of
this Agreement without, in either case, being required to prove or establish that Yakima does not
have an adequate remedy at law. The District hereby waives the requirement of any such proof
and acknowledges that Yakima would not have an adequate remedy at law for the District's
commission of an Event of Default hereunder.
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3. Terminate for Default.
a. Yakima shall be entitled to immediately terminate this Agreement
if any Event of Default continues for a period of 30 days after written notice thereof from
Yakima to the District, or in the case of such Event of Default which cannot with due diligence
and in good faith be cured within 30 days, the District fails to proceed promptly after such notice
and with due diligence and in good faith, to begin to cure said Event of Default; provided that, in
such event proper time to cure may be extended only by written permission of Yakima.
b. In the event that this Agreement terminates for reasons of an Event
of Default, Yakima, in its sole discretion, shall have the option of exercising one or both of the
following choices:
(i) Receive payment from the District in an amount required to
pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service on the
Outstanding Bonds and any Additional Bonds when due, and the amount necessary to reimburse
Yakima for any amounts paid pursuant to Section III(C).
(ii) Immediately terminate the Lease Agreement.
4. Recover Damages, Costs and Expenses. Yakima shall be entitled to
proceed against the District for all direct damages, costs and expenses arising from the District's
committing an Event of Default hereunder and to recover all such direct damages, costs and
expenses, including reasonable attorneys' fees.
B. No Waiver by Yakima. No failure by Yakima to insist upon the performance of
any of the terms of this Agreement or to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach or of any of the terms of this Agreement.
None of the terms of this Agreement to be kept, observed or performed by the District, and no
breach thereof, shall be waived, altered or modified except by a written instrument executed by
Yakima. No waiver of any breach shall affect or alter this Agreement, but each of the terms of
this Agreement shall continue in full force and effect with respect to any other then existing or
subsequent breach thereof. No waiver of any default of the District hereunder shall be implied
from any omission by Yakima to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect any default other than the default
specified in the express waiver and then only for the time and to the extent therein stated. One or
more waivers by Yakima shall not be construed as a waiver of a subsequent breach of the same
covenant, term or conditions.
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C. Termination
Notwithstanding anything to the contrary contained in this Agreement:
1. Termination by Mutual Agreement Prior to Beneficial Occupancy. This
Agreement shall terminate under circumstances where all Parties mutually agree in writing that it
is impossible or impractical to design, develop or construct the Project. In the event that one
Party determines that it is impossible or impractical to design, develop or construct the Project,
the Parties agree to meet and enter into good faith negotiations regarding whether the Project has
become impossible or impractical.
D. Reversion of the Leasehold Interest to Yakima. In the event that this Agreement
terminates prior to Beneficial Occupancy, Yakima may immediately terminate the Lease
Agreement and reenter and retake the Property, and the District shall promptly:
1. Remove all of its personal property from the Property;
2. Remove all rubble, debris and unusable improvements from the Property
as required by Yakima in its sole discretion;
3. Remove all waste materials and rubbish from and about the Property and
adjacent property; and
4. Satisfy or bond all liens upon the Project (or claims which with notice or
passage of time or both would mature into a lien).
Yakima shall be entitled to retain title to the Property and all Improvements, including the
Convention Center and Project, free and clear of any leasehold interest or other claim of the
District and anyone claiming by; through or under the District.
E. Certain Provisions Survive Termination. The following provisions of this
Agreement shall survive notwithstanding any termination of this Agreement and reversion of the
leasehold interest in the Property and Improvements to Yakima:
1. As Is (Section VIII);
2. Liability (Section IX); and
3. Destruction or Condemnation (Section X).
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XIV. REPRESENTATIONS AND WARRANTIES
A. Yakima's Representations. Yakima hereby represents and warrants to the
District that it has full statutory right, power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the person signing this Agreement on
behalf of Yakima has the authority to bind Yakima and to enter into this transaction; and that
Yakima has taken all requisite action and steps to legally authorize the execution, delivery, and
performance of this Agreement.
B. The District's Representations and Warranties. The District hereby represents
and warrants to Yakima that it has full power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the parties signing this Agreement on
behalf of the District have the authority to bind the District and to enter into this transaction; and
that the District has taken all requisite action and steps to legally authorize the execution,
delivery, and performance of this Agreement.
C. Tax Covenant. The District acknowledges that the Bonds are to be issued as tax-
exempt obligations. The District covenants that it will not take any action to cause interest on
the Bonds or any Additional Bonds to be taxable.
XV. LEASE BACK
A. Sublease. The District hereby leases to the City and the City hereby hires from
the District certain improved real property located in the City of Yakima, Washington, legally
described in Exhibit A attached hereto and by this reference incorporated (the "Premises") and
certain improvements thereon consisting of a convention center, and the Project to be built on the
Premises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record, including in particular that certain Lease Agreement
between the City, as lessor, and the District, as lessee, dated July 27, 2001.
B. Rent. Within 60 days of the date of this Agreement, the City shall pay to the
District $50, which represents prepaid rent for the entire term of this Agreement.
C. Lease Obligations Assumed._Except as other wise provided herein, the District hereby
assigns and the City agrees to assume all duties and obligations of the District under the Lease
Agreement.
XVI. MISCELLANEOUS
A. Captions. The headings and captions of this Agreement and the Table of
Contents preceding the body of this Agreement are for convenience and reference only and in no
way define, limit or describe the scope or intent of this Agreement nor in any way affect this
Agreement.
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B. Construction. All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the Party or Parties may
require. The Parties hereby acknowledge and agree that each was properly represented by
counsel and this Agreement was negotiated and drafted at arms' length so that the judicial rule of
construction to the effect that a legal document shall be construed against the draftsman shall be
inapplicable to this Agreement.
C. Entire Agreement. This Agreement and any collateral instruments referenced
herein contain the entire agreement between the Parties hereto and shall not be modified or
amended in any manner except by an instrument in writing executed by the Parties hereto.
Previous drafts of this Agreement or any portions thereof shall not be utilized in any manner by
either Party should any dispute arise as to the intent of this Agreement.
D. Successors and Assigns. The terms herein contained shall bind and inure to the
benefit of Yakima, its successors and assigns, and the District, its successors and assigns, except
as may be otherwise provided herein.
E. Notices. All notices which may be or are requested to be given pursuant to this
Agreement shall be deemed given when hand delivered, or when deposited in the United States
Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and
addressed to the Parties at the following addresses unless otherwise provided for herein:
To Yakima:
With a copy to:
To the District:
Richard A. Zais, Jr.
City Manager
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
F. Incorporation by Reference. All exhibits and appendices annexed hereto are
hereby incorporated by reference herein.
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G. Execution in Counterparts.
1. This Agreement may be executed in any number of counterparts and by
different Parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
Agreement.
2. This Agreement becomes effective when the representatives of the Parties
have executed it.
H. Waiver. The_waiver by either the District or Yakima of the performance of any
covenant, condition, or promise shall not invalidate this Agreement nor shall it be considered a
waiver by such Party of any other covenant, condition, or promise hereunder. The waiver by
either the District or Yakima of the time for performing any act shall not constitute a waiver of
the time for performing any other act or an identical act required to be performed at a later time.
The exercise of any remedy provided by law or the provisions of this Agreement shall not
exclude other consistent remedies unless they are expressly excluded.
I. Exculpation. Notwithstanding anything contained to the contrary in any
provision of this Agreement, it is specifically agreed and understood that there shall be
absolutely no personal liability on the part of any individual officers or directors of Yakima or
the District with respect to any of the obligations, terms, covenants, and conditions of this
Agreement.
J. Severability. If any term or provision of this Agreement or the application thereof
to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of
this Agreement or the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be affected thereby and shall
continuein full force and effect.
K. Term. This Agreement shall terminate on the later of the date that the Bonds and
any Additional Bonds are no longer Outstanding and the date on which the Sales Tax expires.
L. Amendments. This Agreement may be amended, only with the written consent of
the Parties.
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IN WITNESS WHEREOF, the Parties hereto have executed this document as of the day
and year first above written.
DATED this alk ---day of , 2001.
CITY OF YAKIMA
By
Attest:
Richard A. Zais, Jr.
City Manager
City Clerk
Approved as to form:
City Attorney
arra lwar �a� , ,z00/-- 911
luuntArrioa lea
YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT
Certified to be a true and correct copy of the
criginal filed in my office. . iyzAZ
CITY CLERK
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
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EXHIBIT B
DEBT SERVICE SCHEDULE
(To be attached and incorporated into the Agreement at the time that the Bonds and any
Additional Bonds are issued)
B-1
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. (71
For Meeting Of: Tuly 10, 2001
ITEM TITLE: Resolution to Appoint five board members to the board of directors
of the Yakima Regional Public Facilities District (PFD)
SUBMITTED BY: PFD Board of Directors Selection Committee: Mary Place, Mayor; John
Puccinelli and Bernie Sims, Council Members; Deb Krautworm, YVV&C
Board and Skip Semon, YVV&C Advisory Committee
CONTACT PERSON/TELEPHONE: Rita Anson, Finance Director (#575-6070
0
SUMMARY EXPLANATION:
At their June 19, 2001 meeting, the Yakima City Council approved Ordinance #2001-28, and the
related interlocal agreement with the Cities of Selah and Union Gap, to establish a three city
Public Facilities District. The next step in the formation of the PFD is for the councils of the three
cities to appoint the board members. The Yakima City Council, under the terms of the interlocal
agreement and the PFD Charter shall appoint five of the seven board members; at least four of
whom must be nominated by local organizations.
Notification regarding the board positions and application process was placed in the Yakima
Herald Republic newspaper and was sent to the following organizations, Yakima Valley Visitors
and Convention Center (YVV&C) Board of Directors and Advisory Committee, Yakima Chamber
of Commerce, Yakima Hispanic Chamber of Commerce, Association DeBarrios Hispanos De •
Yakima, Yakima Washington Lions Club, Kamikian Kiwanis, Yakima Kiwanis, Sunrise Rotary,
Yakima Rotary Club, Southwest Rotary, Yakima Downtown Association, Westside Merchants
Association, Allied Arts Council, and Capitol Theater.
Continued on next page.
Resolution X Ordinance Other (Specify)
Contract Mail to (name and address):
Phone:
Funding Source N/A
APPROVED FOR SUBMITTAL:
`l City Manager
STAFF RECOMMENDATION: Accept Selection Committee's Recommendation and
Adopt Resolution
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
RESOLUTION NO. R-200110 S
A RESOLUTION appointing five board members to the board of directors of the
Yakima Regional Public Facilities District.
WHEREAS, Chap. 35.57 RCW (the "Act") authorizes one or more cities located in
a county with a population of less than one million to create a public facilities district to
acquire, remodel, finance and operate one or more convention, conference or special
event centers that serve as "regional centers";
WHEREAS, pursuant to Ordinance No. 2001-28, the City Council of the City of
Yakima, Washington (the "City") approved the execution of an interlocal agreement (the
"Interlocal Agreement") among the City, the City of Selah and the City of Union Gap
creating the Yakima Regional Public Facilities District (the "District") for the purpose of
assisting in the financing, expansion and operation of the Yakima Convention Center;
WHEREAS, the Act provides that the District "shall be governed by a board of
directors consisting of seven members selected as follows: (i) three members appointed
by the legislative authorities of the cities and towns; and (ii) four members appointed by
the legislative authority based on recommendations from local organizations;
WHEREAS, the Act further provides that the members of the board of directors
shall be appointed in accordance with the terms of the Interlocal Agreement and shall
serve four-year terms, which terms shall initially be staggered;
WHEREAS, the Interlocal Agreement and the District's Charter incorporated by
reference therein provide that the initial members of the board of directors shall be
appointed as follows: five board members shall be appointed by the Yakima City
Council (including four based on recommendations from local organizations), one board
member by the Selah City Council, and one board member by the Union Gap City
Council;
WHEREAS, five initial board members have been identified by the selection
committee to serve as the City's appointees to the District's board of directors, including
four board members recommended by local organizations;
WHEREAS, the City Council now desires to appoint such board members to
serve on the board of directors of the District in accordance with the Interlocal
Agreement and the Charter; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Council hereby appoints the following persons to serve as board
members of the board of directors of the Yakima Regional Public Facilities District.
1. Mr. Richard Ostrander, based on recommendations from local
organizations, for a one-year term. Mr. Ostrander shall be designated as a Group I
board member for the purposes of Section 6.3 of the Charter;
2. Mr. Brian Johnson, based on applications from community at large and
based on Council discretion, for a two-year term. Mr. Johnson shall be designated as a
Group II board member for the purposes of Section 6.3 of the Charter;
3. Mr. Don Schussler, based on recommendations from local organizations,
for a three-year term. Mr. Schussler shall be designated as a Group III board member for
the purposes of Section 6.3 of the Charter;
4. Mrs. Wanda Riel, based on recommendations from local organizations,
for a four-year term. Mrs. Riel shall be designated as a Group IV board member for
the purposes of Section 6.3 of the Charter; and
5. Mr. Dan Marples, based on recommendations from local organizations,
for a four-year term. Mr. Marples shall also be designated as a Group IV board member
for the purposes of Section 6.3 of the Charter.
ADOPTED BY THE CITY COUNCIL this 10th day of July, 2001.
ATTEST:
City Clerk
K:\25739\00049\S C\SC_R20U Q
ary Place, Mayor
Local Improvements—Filling and Draining Lowlands—Waterways 3556.240
current expense fund of such city or by bonding the city or
by pledging revenues to be derived from rents and issues
'erefrom, lands abutting upon the shore lines or right -of -
/ay of such canals or waterways to a distance, depth or
width of not more than three hundred feet back from the
banks or shore lines of such canals or waterways on either
side or both sides thereof, or not more than three hundred
lineal feet back from and abutting on the outer lines of such
rights-of-way on either side or both sides of such rights-of-
way, and such area of such abutting lands as the council or
commission may deem necessary for its use for public
docks, bridges, wharves, streets and other conveniences of
navigation and commerce and for its own use and benefit
generally. [1965 c 7 § 35.56.240. Prior: 1913 c 16 § 18,
part; RRS § 9466, part.]
3556.250 Waterways—Abutting city owned lands—
Lease of. If the city is not using the abutting lands so
acquired it may lease any parcels thereof as may be deemed
for the best interest and convenience of navigation, com-
merce and the public interest and welfare to private individu-
als or concerns for terms not exceeding thirty years each at
such annual rate or rental as the city council or commission
of such city may deem just, proper and fair, for the purpose
of erecting wharves for wholesale and retail warehouses and
for general commercial purposes and manufacturing sites,
but the said city shall never convey or part with title to the
abutting lands above mentioned and so acquired nor with the
-intro] other than in the manner herein specified. Any lease
leases granted by the city on such abutting lands shall
never be transferred or assigned without the consent of the
city council or commission having been first obtained.
A city shall never lease to any individual or concern
more than four hundred lineal feet of canal or waterway
frontage of said land and no individual or concern shall ever
hold or occupy by lease, sublease, or otherwise more than
the said four hundred lineal feet of said frontage: PROVID-
ED, That any individual or concern may acquire by lease or
sublease whatever additional frontage of such abutting land
may be in the judgment of the city council or commission
necessary for the use of such individual or concern, upon
petition presented to the city council or commission therefor
signed by not less than five hundred resident freeholders of
such city. [1965 c 7 § 35.56.250. Prior: 1913 c 16 § 18,
part; RRS § 9466, part.]
35.56.260 Waterways—Abutting lands—Lessee
must lease shoreline property. At the time that the city
leases to any individual or concern any of the land abutting
on the area between the shore lines and the dock lines the
same individual or concern must likewise for the same
period of time lease all of the area between the shore line
and dock line of such canal or waterway lying contiguous to
and immediately in front of the abutting land so leased.
[ 1965 c 7 § 35.56.260. Prior: 1913 c 16 § 18, part; RRS §
9466, part.]
35.56.270 Work by day labor. When a city under-
akes any improvement authorized by this chapter and the
expenditures required exceed the sum of five hundred
dollars, it shall be done by contract and shall be let to the
(2000 Ed.)
lowest responsible bidder, after due notice, under such
regulation as may be prescribed by ordinance: PROVIDED,
That the city council or commission may reject all bids
presented and readvertise, or, if m the judgment of the city
council or commission the work can be performed, or
supplies or matenals furnished by the city independent of
contract, cheaper than under the bid submitted, it may after
having so advertised and examined the bids, cause the work
to be performed or supplies or materials to be furnished
independent of contract. This section shall be construed as
a concurrent and cumulative power conferred on cities and
shall not be construed as in any wise repealing or affecting
any law now in force relating to the performing, execution
and construction of public works. [ 1965 c 7 § 35.56.270.
Pnor: 1913 c 16 § 20; RRS § 9468.]
35.56.280 Reassessments. If any assessment is found
to be invalid for any cause or if it is set aside for any reason
in judicial proceeding, a reassessment may be made and all
laws then in force relative to the reassessment of local
assessments, for street or other improvements, shall, as far
as practical, be applicable hereto. [1965 c 7 § 35.56.280.
Prior: 1913 c 16 § 16; RRS § 9464.]
Local improvements. assessments and reassessments: Chapter 35.44 RCW
35.56.290 Provisions of chapter not exclusive. The
provisions of this chapter shall not be construed as repealing
or in any wise affecting other existing laws relative to the
making of any such improvements but shall be considered as
concurrent therewith. [1965 c 7 § 35.56.290. Prior: 1929
c 63 § 5; 1913 c 16 § 22; RRS § 9470.]
Sections
35.57.010
35.57.020
35.57.030
35.57.040
35.57.050
35.57.060
35.57.070
35.57.080
35.57.090
35.57 100
35.57 110
35.57.900
Chapter 35.57
PUBLIC FACILITIES DISTRICTS
Creation—Board of directors—Corporate powers.
Regional centers—Charges and fees—Powers.
General obligation bonds.
Authorized charges, fees, and taxes—Gifts.
Travel. expense reimbursement policy—Required.
Expenditure of funds—Purposes.
Service provider agreements.
Purchases and sales—Procedures.
Revenue bonds—Limitations.
Tax on admissions.
Tax on vehicle parking charges.
Severability -1999 c 165
35.57.010 Creation—Board of directors—Corporate
powers. (1) The legislative authority of any town or city
located in a county with a population of less than one
million may create a public facilities district. The legislative
authonties of any contiguous group of towns or cities located
in a county or counties each with a population of less than
one million may enter an agreement under chapter 39.34
RCW for the creation and joint operation of a public
facilities distnct.
(2) A public facilities district shall be coextensive with
the boundaries of the city or town or contiguous group of
cines or towns that created the distract.
[Title 35 RCW—page 185)
3557.010 Title 35 RCW: Cities and Towns
(3)(a) A public facilities district created by a single city
or town shall be governed by a board of directors copsi"sting
',f five members selected as follows. (i) Two members
appointed by the legislative authority of the city or town;
and (ii) three members appointed by legislative authority
based on recommendations from local organizations. The
members appointed under (a)(i) of this subsection, shall not
be members of the legislative authority of the city or town.
The members appointed under (a)(ii) of this subsection, shall
be based on recommendations received from local organiza-
tions that may include, but are not limited to the local
chamber of commerce, local economic development council.
and local labor council. The members shall serve four-year
terms. Of the initial members. one must be appointed for a
one-year term, one must be appointed for a two-year term.
one must be appointed for a three-year term, and the
ffemainder must be appointed for four-year terms.
(b) A public facilities distnct created by [a] contiguous
group of cities and towns shall be governed by a board of
directors consisting of seven members selected as follows:
(i) Three members appointed by the legislative authonties of
the cities and towns; and (ii) four members appointed by the
legislative authonty based on recommendations from local
organizations. The members appointed under (b)(i) of this
subsection shall not be members of the legislative authorities
of the cities and towns. The members appointed under
(b)(ii) of this subsection. shall be based on recommendations
received from local organizations that include. but are not
'mited to the local chamber of commerce. local economic
evelopment council. local labor council, and a neighbor-
hood organization that is directly affected by the location of
the regional center in their area. The members of the board
of directors shall be appointed in accordance with the terms
of the agreement under chapter 39.34 RCW for the joint
operation of the distnct and shall serve four-year terms. Of
the initial members, one must be appointed for a one-year
term, one must be appointed for a two-year term, one must
be appointed for a three-year term. and the remainder must
be appointed for four-year terms.
(4) A public facilities distnct is a municipal corporation,
an independent taxing "authority" within the meaning of
Article VII, section 1 of the state Constitution, and a "taxing
distnct" within the meaning of Article VII, section 2 of the
state Constitution.
(5) A public facilities district shall constitute a body
corporate and shall possess all the usual powers of a corpo-
ration for public purposes as well as all other powers that
may now or hereafter be specifically conferred by statute,
including, but not limited to. the authonty to hire employees.
staff. and services. to enter into contracts, and to sue and be
sued.
(6) A public facilities district may acquire and transfer
real and personal property by lease. sublease. purchase, or
sale. No direct or collateral attack on any metropolitan
facilities distnct purported to be authorized or created in
conformance with this chapter may be commenced more
than thirty days after creation by the city legislative authon-
. [1999 c 165 § 1.]
35.57.020 Regional centers—Charges and fees—
Powers. (1) A public facilities district is authorized to
[Title 35 RCW—page 186]
acquire, construct, own, remodel. maintain, equip, reequip,
repair, finance, and operate one or more regional centers.
For purposes of this chapter, "regional center" means a
convention, conference, or special events center, or any
combination of facilities, and related parking facilities.
serving a regional population constructed, improved, or
rehabilitated after July 25. 1999, at a cost of at least ten
million dollars, including debt service. "Regional center"
also includes an existing convention. conference, or special
events center, and related parking facilities, serving a
regional population, that is improved or rehabilitated after
July 25. 1999. where the costs of improvement or rehabilita-
non are at least ten million dollars, including debt service.
A regional center is conclusively presumed to serve a
regional population if state and local government investment
in the construction, improvement, or rehabilitation of the
regional center is equal to or greater than ten million dollars.
(2) A public facilities district may impose charges and
fees for the use of its facilities, and may accept and expend
or use gifts. grants, and donations for the purpose of a
regional center.
(3) A public facilities district may impose charges. fees,
and taxes authonzed in RCW 35.57.040, and use revenues
denved therefrom for the purpose of paying principal and
interest payments on bonds issued by the public facilities
district to construct a regional center.
(4) Notwithstanding the establishment of a career. civil,
or merit service system, a public facilities district may
contract with a public or private entity for the operation or
management of its public facilities.
(5) A public facilities distnct is authorized to use the
supplemental alternative public works contracting procedures
set forth in chapter 39.10 RCW in connection with the
design, construction, reconstruction. remodel, or alteration of
any regional center. [1999 c 165 § 2.]
35.57.030 General obligation bonds. (1) To carry
out the purpose of this chapter, a public facilities district
may issue general obligation bonds, not to exceed an
amount, together with any outstanding nonvoter -approved
general obligation indebtedness, equal to one-half of one
percent of the value of the taxable property within the
district, as the term "value of the taxable property" is defined
in RCW 39.36.015. A facilities district additionally may
issue general obligation bonds for capital purposes only,
together with any outstanding general obligation indebted-
ness, not to exceed an amount equal to one and one-fourth
percent of the value of the taxable property within the
district, as the term "value of the taxable property" is defined
in RCW 39.36.015, when authorized by the voters of the
public facilities distnct pursuant to Article VIII, section 6 of
the state Constitution, and to provide for the retirement
thereof by taxes authorized in chapter 165, Laws of 1999.
(2) General obligation bonds may be issued with a
matunty of up to thirty years, and shall be issued and sold
in accordance with the provisions of chapter 39.46 RCW.
(3) The general obligation bonds may be payable from
the operating revenues of the public facilities district in
addition to the tax receipts of the district. [1999 c 165 § 3.]
(2000 Ed.)
Public Facilities Districts
35.57.040 Authorized charges, fees, and taxes—
Gifts. (1) The board of directors of the public facilities
district may impose the following for the purpose of funding
a regional center:
(a) Charges and fees for the use of any of its facilities;
(b) Admission charges under RCW 35.57.100;
(c) Vehicle parking charges under RCW 35.57.110; and
(d) Sales and use taxes authorized under RCW
82.14.048 and 82.14.390.
(2) The board may accept and expend or use gifts,
grants, and donations for the purpose of a regional center.
The revenue from the charges, fees, and taxes imposed under
this section shall be used only for the purposes authorized by
this chapter [1999 c 165 § 4.]
35.57.050 Travel, expense reimbursement policy—
Required. The board of directors of the public facilities
distnct shall adopt a resolution that may be amended from
time to time that shall establish the basic requirements
governing methods and amounts of reimbursement payable
to such distnct officials and employees for travel and other
business expenses incurred on behalf of the distnct. The
resolution shall. among other things, establish procedures for
approving such expenses; the form of the travel and expense
voucher; and requirements governing the use of credit cards
issued in the name of the distnct. The resolution may also
establish procedures for payment of per diem to board
members The state auditor shall. as provided by general
law, cooperate with the public facilities district in establish -
ng adequate procedures for regulating and auditing the
reimbursement of all such expenses. [ 1999 c 165 § 5.]
35.57.060 Expenditure of funds—Purposes. The
board of directors of the public facilities distnct shall have
authonty to authorize the expenditure of funds for the public
purposes of preparing and distributing information to the
general public and promoting, advertising, improving,
developing. operating. and maintaining a regional center.
Nothing contained in this section may be construed to
authorize preparation and distribution of information to the
general public for the purpose of influencing the outcome of
a distnct election. [ 1999 c 165 § 6.]
35.57.070 Service provider agreements. The public
facilities district may secure services by means of an
agreement with a service provider. The public facilities
district shall publish notice. establish criteria, receive and
evaluate proposals, and negotiate with respondents under
requirements set forth by district resolution. [ 1999 c 165 §
7.]
35.57.080 Purchases and sales—Procedures. In
addition to provisions contained in chapter 39 04 RCW, the
public facilities distnct is authorized to follow procedures
contained in RCW 43 19 1906 and 43.19 1911 for all
purchases. contracts for purchase, and sales [ 1999 c 165 §
8]
35.57.090 Revenue bonds—Limitations. (1) A
public facilities district may issue revenue bonds to fund
revenue -generating facilities, or portions of facilities, which
(2000 Ed.)
35.57.040
it is authorized to provide or operate. Whenever revenue
bonds are to be issued, the board of directors of the district
shall create or have created a special fund or funds from
which, along with any reserves created pursuant to RCW
39.44.140, the principal and interest on such revenue bonds
shall exclusively be payable. The board may obligate the
district to set aside and pay into the special fund or funds a
fixed proportion or a fixed amount of the revenues from the
public improvements, projects. or facilities. and all related
additions, that are funded by the revenue bonds. This
amount or proportion shall be a lien and charge against these
revenues. subject only to operating and maintenance expens-
es. The board shall have due regard for the cost of opera-
tion and maintenance of the public improvements. projects.
or facilities, or additions. that are funded by the revenue
bonds. and shall not set aside into the special fund or funds
a greater amount or proportion of the revenues that in its
judgment will be available over and above the cost of
maintenance and operation and the amount or proportion. if
any, of the revenue so previously pledged. The board may
also provide that revenue bonds payable out of the same
source or sources of revenue may later be issued on a parity
with any revenue bonds being issued and sold.
(2) Revenue bonds issued under this section shall not be
an indebtedness of the district issuing the bonds. and the
interest and principal on the bonds shall only be payable
from the revenues lawfully pledged to meet the pnncipal and
interest requirements and any reserves created under RCW
39 44.140. The owner or bearer of a revenue bond or any
interest coupon issued under this section shall not have any
claim against the distnct ansing from the bond or coupon
except for payment from the revenues lawfully pledged to
meet the pnncipal and interest requirements and any reserves
created under RCW 39.44.140 The substance of the
limitations included in this subsection shall be plainly
printed, wntten, or engraved on each bond issued under this
section.
(3) Revenue bonds with a maturity in excess of thirty
years shall not be issued. The board of directors of the
district shall by resolution determine for each revenue bond
issue the amount, date, form, terns, conditions. denomina-
tions, maximum fixed or variable interest rate or rates.
maturity or maturities, redemption rights, registration
privileges, manner of execution, manner of sale, callable
provisions, if any, and covenants including the refunding of
existing revenue bonds. Facsimile signatures may be used
on the bonds and any coupons. Refunding revenue bonds
may be issued in the same manner as revenue bonds are
issued. [ 1999 c 165 § 9.]
35.57.100 Tax on admissions. A public facility
distnct may levy and fix a tax of not more than one cent on
twenty cents or fraction thereof to be paid by the person who
pays an adrrussion charge to a regional center. This includes
a tax on persons who are admitted free of charge or at
reduced rates if other persons pay a charge or a regular
higher charge for the same pnvileges or accommodations.
The term "admission charge" includes:
(1) A charge made for season tickets or subscnptions;
[Title 35 RCW—page 187]
s
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
35.57.100 Title 35 RCW: Cities and Towns
(2) A cover charge, or a charge made for use of seats
and tables reserved or otherwise, and other similar accom-
modations;
(3) A 'charge made for food and refreshment if free
entertainment, recreation, or amusement is provided;
(4) A charge made for rental or use of equipment or
facilities for purposes of recreation or amusement; if the
rental of the equipment or facilities is necessary to the
enjoyment of a pnvilege for which a general admission is
charged, the combined charges shall be considered as the
admission charge;
(5) Automobile parking charges if the amount of the
charge is determined according to the number of passengers
in the automobile. [ 1999 c 165 § 10.]
35.57.110 Tax on vehicle parking charges. A public
facility district may levy and fix a tax on any vehicle
parking charges imposed at any parking facility that is
owned or leased by the public facility district as part of a
regional center. No county or city or town within which the
regional center is located may impose a tax of the same or
similar kind on any vehicle parking charges at the facility.
For the purposes of this section, "vehicle parking charges"
means only the actual parking charges exclusive of taxes and
service charges and the value of any other benefit conferred.
The tax authorized under this section shall be at the rate of
not more than ten percent. [1999 c 165 § 11.]
35.57.900 Severability -1999 c 165. If any provision
Df this act or its application to any person or circumstance is
held invalid, the remainder of the act or the application of
the provision to other persons or circumstances is not
affected. [1999 c 165 § 23.]
Chapter 35.58
METROPOLITAN MUNICIPAL CORPORATIONS
Sections
35.58.010 Declaration of policy and purpose.
35.58.020 Definitions.
35.58.030 Corporations authorized—Limitation on boundaries.
35.58.040 Territory which must be included or excluded—Boundaries.
35.58.050 Functions authorized.
35.58.060 Unauthorized functions to be performed under other law
35.58.070 Resolution, petition for election—Requirements, procedure.
35.58.080 Hearings on petition, resolution—Inclusion, exclusion of
territory—Boundaries—Calling election.
35.58.090 Election procedure to form corporation and levy tax—
Qualified voters—Establishment of corporation—First
meeting of council.
35.58.100 Additional functions—Authorized by election.
35.58.110 Additional functions—Authorized without election.
35.58.112 Recommended comprehensive plan for performance of addi-
tional function—Study and preparation.
35.58.114 Recommended comprehensive plan for performance of addi-
tional function—Resolution for special election to autho-
rize additional function--Contents—Hearings—Election
procedure.
35.58.116 Proposition for issuance of general obligation bonds or levy
of general tax—Submission at same election or special
election.
.58.120 Metropolitan council—Composition.
-'.58.130 Metropolitan council—Organization, chairman, procedures.
35.58.140 Metropolitan council—Terms.
35.58.150 Metropolitan council—Vacancies.
[Title 35 RCW—page 188]
35.58.160 Metropolitan council—Compensation—Waiver of compensa-
tion.
35.58.170 Corporation name and seal.
35.58.180 General powers of corporation.
35.58.190 Performance of function or functions ---Commencement date.
35.58.200 Powers relative to water pollution abatement.
35.58.210 Metropolitan water pollution abatement advisory committee.
35.58.215 Powers relative to systems of sewerage.
35.58.220 Powers relative to water supply
35.58.230 Metropolitan water advisory committee.
35.58.240 Powers relative to transportation.
35.58.245 Public transportation function—Authorization by election
required—Procedure.
35.58.250 Other local public passenger transportation service prohibit-
ed—Agreements—Purchase--Condemnation.
35.58.260 Transportation function—Acquisition of city system.
35.58.265 Acquisition of existing transportation system—Assumption
of labor contracts—Transfer of employees—Preservation
of employee benefits—Collective bargaining.
35.58.268 Public transportation employees—Payroll deduction for
political action committees.
35.58.270 Metropolitan transit commission.
35.58.271 Public transportation in municipalities—Financing.
35.58.2711 Local sales and use taxes for financing public transportation
systems.
35.58.2712 Public transportation feasibility study—Advanced financial
support payments. .
35.58.272 Public transportation systems—Definitions.
35.58.2721 Public transportation systems—Authority of municipalities
to acquire, operate, etc.—Indebtedness—Bond issues.
35.58.273 Public transportation systems—Motor vehicle excise tax
authorized—Credits—Public hearing on route and de-
sign—Rules—Sales and use tax on rental cars.
35.58.274 Public transportation systems—Motor vehicles exempt from
tax.
35.58.275 Public transportation systems—Provisions of motor vehicle
excise tax chapter applicable.
35.58.276 Public transportation systems—When tax due and payable—
Collection.
35.58.277 Public transportation systems—Remittance of tax by county
auditor
35.58.278 Public transportation systems—Distribution of tax.
35.58.279 Public transportation systems—Crediting and use of tax
revenues.
Public transportation systems—Internal combustion equip-
ment to comply with pollution control standards.
Public transportation systems—Parking facilities to be in
conjunction with system stations or transfer facilities.
Public transportation systems—Research, testing, develop-
ment. etc., of systems—Powers to comply with federal
laws.
Public transportation systems—Six-year transit plans.
Public transportation systems—Annual report by department.
Powers relative to garbage disposal.
Powers relative to parks and parkways.
Metropolitan park board.
Powers relative to planning.
Eminent domain.
Powers may be exercised with relation to public rights of
way without franchise --Conditions.
35.58.340 Disposition of unneeded property
35.58.350 Powers and functions of metropolitan municipal corpora-
tion—Where vested—Powers of metropolitan council.
35.58.360 Rules and regulations—Penalties—Enforcement.
35.58.370 Merit system.
35.58.380 Retention of existing personnel.
35.58.390 Prior employees pension rights preserved.
35.58.400 Prior employees sick leave and vacation rights preserved.
35.58.410 Budget—Expenditures—Revenue estimates—Requirements
for a county assuming the powers of a metropolitan
municipal corporation.
35.58.420 Supplemental income payments by component city and
county
35.58.430 Funds—Disbursements—Treasurer—Expenses—Election
expenses.
35.58.2791
35.58.2792
35.58.2794
35.58.2795
35.58.2796
35.58.280
35.58.290
35.58.300
35.58.310
35.58.320
35.58.330
(2000 Ed.)
Local Retail Sales and Use Taxes
soaring housing prices. In order to address these problems, the legislature
[tends to use resources strategically to build on our state's strengths while
.idressing threats to our prosperity " [1999 c 311 § 1 ]
Part headings and subheadings not law -1999 c 311: "Part
headings and subheadings used in this act are not any part of the law "
[1999 c 311 §601]
Effective date -1999 c 311: "Sections 1, 101. 201. 301 through 305,
401, 402, 601, and 605 of this act take effect August 1. 1999 " [1999 c 311
§ 604 ]
Severability -1999 c 311: "If any provision of this act or its
application to any person or circumstance is held invalid. the remainder of
the act or the application of the provision to other persons or circumstances
is not affected." (1999 c 311 § 606.]
Intent -1997 c 366: "The legislature recognizes the economic
hardship that rural distressed areas throughout the state have undergone in
recent years Numerous rural distressed areas across the state have
encountered serious economic downturns resulting in significant job loss
and business failure. In 1991 the legislature enacted two major pieces of
legislation to promote economic development and job creation. with
particular emphasis on worker training, income. and emergency services
support, along with community revitalization through planning services and
infrastructure assistance. However even though these programs have been
of assistance, rural distressed areas still face serious economic problems
including: Above-average unemployment rates from job losses and below-
average employment growth. low rate of business start-ups: and persistent
erosion of vitally important resource -driven industries.
The legislature also recognizes that rural distressed areas in Washing-
ton have an abiding ability and consistent will to overcome these economic
obstacles by building upon their historic foundations of business enterprise,
local leadership. and outstanding work ethic.
The legislature intends to assist rural distressed areas in their ongoing
efforts to address these difficult economic problems by providing a
omprehensive and significant array of economic tools. necessary to harness
e persistent and undaunted spirit of enterprise that resides in the citizens
Jf rural distressed areas throughout the state.
The further intent of this act is to provide:
(1) A strategically designed plan of assistance, emphasizing state.
local, and private sector leadership and partnership;
(2) A comprehensive and significant array of business assistance.
services. and tax incentives that are accountable and performance driven;
(3) An array of community assistance including infrastructure
development and business retention. attraction. and expansion programs that
will provide a competitive advantage to rural distressed areas throughout
Washington; and
(4) Regulatory relief to reduce and streamline zoning, permitting, and
regulatory requirements in order to enhance the capability of businesses to
grow and prosper in rural distressed areas." [ 1997 c 366 § 1 1
Goals -1997 c 366: "The primary goals of chapter 366. Laws of
1997 are to:
(1) Promote the ongoing operation of business in rural distressed
areas;
(2) Promote the expansion of existing businesses in rural distressed
areas;
(3) Attract new businesses to rural distressed areas;
(4) Assist in the development of new businesses from within rural
distressed areas;
(5) Provide family wage jobs to the citizens of rural distressed areas:
and
(6) Promote the development of communities of excellence in rural
distressed areas." [ 1997 c 366 § 2.]
Severability -1997 c 366: "If any provision of this act or its
application to any person or circumstance is held invalid. the remainder of
the act or the application of the provision to other persons or circumstances
is not affected." [1997 c 366 § 11 ]
Captions and part headings not law -1997 c 366: "Section
captions and part headings used in this act are not any part of the law "
11997 c 366 § 12.]
82.14.380 -Distressed county assistance account—
Created—Distributions. (1) The distressed county assis-
tance account is created in the state treasury. Into this
account shall be placed a portion of all motor vehicle excise
(2000 Ed.)
82.14.370
tax receipts as provided in *RCW 82.44.110. At such times
as distributions are made under **RCW 82.44.150, the state
treasurer shall distribute the funds in the distressed county
assistance account to each county imposing the sales and use
tax authonzed under RCW 82.14.370 as of January 1, 1999.
in the same proportions as distributions of the tax imposed
under RCW 82.14.370 for these counties for the previous
quarter.
(2) Funds distributed from the distressed county assis-
tance account shall be expended by the counties for cnminal
justice and other purposes. [ 1999 c 311 § 201; 1998 c 321
§ 10 (Referendum Bill No. 49. approved November 3.
1998).]
Reviser's note: *(1) RCW 82.44 110 was repealed by 2000 c 1 § 3
effective January 1. 2000.
**(2) RCW 82.44 150 was repealed by 2000 c 1 § 3. effective January
1 2000, without cognizance of its amendment by 1999 c 94 § 30.
Finding—Intent—Part headings and subheadings not law—
Effective date—Severability-1999 c 311: See notes following RCW
82.14.370.
Purpose—Severability-1998 c 321: See notes following RCW
82.14.045
Effective dates--Application-1998 c 321 §§ 1-21, 44. and 45: See
note following RCW 82.14.045
Referral to electorate -1998 c 321 §§ 1-21 and 44-46: See note
following RCW 82.14.045
82.14.390 Sales and use tax for regional centers.
(1) Except as provided in subsection (6) of this section, the
governing body of a public facilities district created under
chapter 35.57 or 36.100 RCW that commences construction
of a new regional center. or improvement or rehabilitation of
an existing new regional center, before January 1. 2003, may
impose a sales and use tax in accordance with the terms of
this chapter The tax is in addition to other taxes authonzed
by law and shall be collected from those persons who are
taxable by the state under chapters 82.08 and 82.12 RCW
upon the occurrence of any taxable event within the public
facilities district. The rate of tax shall not exceed 0.033
percent of the selling puce in the case of a sales tax or value
of the article used in the case of a use tax.
(2) The tax imposed under subsection (1) of this section
shall be deducted from the amount of tax otherwise required
to be collected or paid over to the department of revenue
under chapter 82.08 or 82.12 RCW. The department of
revenue shall perform the collection of such taxes on behalf
of the county at no cost to the public facilities distnct.
(3) No tax may be collected under this section before
August 1, 2000. The tax imposed in this section shall expire
when the bonds issued for the construction of the regional
center and related parking facilities are retired, but not more
than twenty-five years after the tax is first collected.
(4) Moneys collected under this section shall only be
used for the purposes set forth in RCW 35.57.020 and must
be matched with an amount from other public or private
sources equal to thirty-three percent of the amount collected
under this section, provided that amounts generated from
nonvoter approved taxes authorized under chapter 35.57
RCW or nonvoter approved taxes authorized under chapter
36.100 RCW shall not constitute a public or private source.
For the purpose of this section, public or private sources
includes, but is not limited to cash or in-kind contributions
used in all phases of the development or improvement of the
[Title 82 RCW—page 101]
82_14.390 Title 82 RCW: Excise Taxes
regional center, land that is donated and used for the siting
of the regional center, cash or in-kind contributions from
public or private foundations. or amounts attributed to
private sector partners as part of a public and private
partnership agreement negotiated by the public facilities dis-
tnct.
(5) The combined total tax levied under this section
shall not be greater than 0 033 percent. If both a public
facilities district created under chapter 35.57 RCW and a
public facilities distnct created under chapter 36 100 RCW
impose a tax under this section. the tax imposed by a public
facilities distnct created under chapter 35.57 RCW shall be
credited against the tax imposed by a public facilities district
created under chapter 36 100 RCW
(6) A public facilities district created under chapter
36 100 RCW is not eligible to impose the tax under this
section if the legislative authonty of the county where the
public facilities distnct is located has imposed a sales and
use tax under RCW 82 14.0485 or 82.14 0494 [ 1999 c 165
§ 13]
Severability -1999 c 164: See RCW 35.57 900.
82.14.400 Sales and use tax for zoo, aquarium, and
wildlife facilities—Authorizing proposition—
Distributions. (1) Upon the joint request of a metropolitan
park district. a city with a population of more than one
hundred fifty thousand. and a county legislative authonty in
a county with a national park and a population of more than
five hundred thousand and less than one million five hundred
housand. the county shall submit an authonzing proposition
to the county voters. fixing and imposing a sales and use tax
in accordance with this chapter for the purposes designated
in subsection (4) of this section and identified in the joint
request. Such proposition must be placed on a ballot for a
special or general election to be held no later than one year
after the date of the joint request.
(2) The proposition is approved if it receives the votes
of a majonty of those voting on the proposition.
(3) The tax authonzed in this section is in addition to
any other taxes authorized by law and shall be collected
from those persons who are taxable by the state under
chapters 82.08 and 82.12 RCW upon the occurrence of any
taxable event within the county. The rate of tax shall equal
no more than one-tenth of one percent of the selling price in
the case of a sales tax. or value of the article used. in the
case of a use tax
(4) Moneys received from any tax imposed under this
section shall be used solely for the purpose of providing
funds for:
(a) Costs associated with financing. design. acquisition.
construction. equipping. operating. maintaining. remodeling,
repairing. reequipping, or improvement of zoo. aquarium.
and wildlife preservation and display facilities that are
currently accredited by the American zoo and aquarium
association: or
(b) Those costs associated with (a) of this subsection
and costs related to parks located within a county descnbed
'n subsection (1) of this section -
(5) The department of revenue shall perform the
collection of such taxes on behalf of the county at no cost to
the county In lieu of the charge for the administration and
[Title 82 RCW—page 102]
collection of local sales and use taxes under RCW 82.14.050
from which the county is exempt under this subsection (5),
a percentage of the tax revenues authonzed by this section
equal to one-half of the maximum percentage provided in
RCW 82.14 050 shall be transferred annually to the depart-
ment of community. trade. and econonuc development. or its
successor agency. from the funds allocated under subsection
(6)(b) of this section for a period of twelve years from the
first date of distribution of funds under subsection (6)(b) of
this section The department of community. trade. and
economic development. or its successor agency, shall use
funds transferred to it pursuant to this subsection (5) to
provide. operate, and maintain community-based housing
under chapter 43.185 RCW for persons who are mentally ill.
(6) If the joint request and the authonzing proposition
include provisions for funding those costs included within
subsection (4)(b) of this section. the tax revenues authonzed
by this section shall be allocated annually as follows.
(a) Fifty percent to the zoo and aquarium advisory
authonty: and
(b) Fifty percent to be distributed on a per capita basis
as set out in the most recent population figures for unincor-
porated and incorporated areas only within that county. as
determined by the office of financial management. solely for
parks. as follows. To any metropolitan park distnct. to cities
and towns not contained within a metropolitan park distnct.
and the remainder to the county Moneys received under
this subsection (6)(b) by a county may not be used to replace
or supplant existing per capita funding.
(7) Funds shall be distributed annually by the county
treasurer to the county. and cities and towns located within
the county. in the manner set out in subsection (6)(b) of this
section
(8) Prior to expenditure of any funds received by the
county under subsection (6)(b) of this section. the county
shall establish a process which considers needs throughout
the unincorporated areas of the county in consultation with
community advisory councils established by ordinance.
(9) By December 31. 2005, and thereafter. the county or
any city with a population greater than eighty thousand must
provide at least one dollar match for every two dollars
received under this section.
(10) Properties subject to a memorandum of agreement
between the federal bureau of land management. the adviso-
ry council on histonc preservation, and the Washington state
historic preservation officer have pnority for funding from
money received under subsection (6)(b) of this section for
implementation of the stipulations in the memorandum of
agreement.
(a) At least one hundred thousand dollars of the first
four years of allocations under subsection (6)(b) of this
section. to be matched by the county or city with one dollar
for every two dollars received, shall be used to implement
the stipulations of the memorandum of agreement and for
other historical, archaeological. architectural, and cultural
preservation and improvements related to the properties.
(b) The amount in (a) of this subsection shall come
equally from the allocations to the county and to the city in
which the properties are located, unless otherwise agreed to
by the county and the city.
(c) The amount in (a) of this subsection shall not be
construed to displace or be offered in Lieu of any lease
(2000 Ed.)
cry eLeze
'fir/ /mI ,iJA 9890/
INTERLOCAL COOPERATION AGREEMENT
TO FORM A PUBLIC FACILITIES DISTRICT
By and Among
THE CITY OF YAKIMA
ee..4 7D s
UTEV® THE CITY OF SELAH
and
THE CITY OF UNION GAP
[DRAFTER'S NOTE:
The date on which this agreement was executed by all three parties was June 25, 2001.]
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This INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC
FACILITIES DISTRICT (the "Agreement") is executed by and among the CITY OF YAKIMA,
WASHINGTON ("Yakima"), the CITY OF SELAH, WASHINGTON ("Selah") and the CITY
OF UNION GAP, WASHINGTON ("Union Gap") (Yakima, Selah and Union Gap are
collectively referred to herein as "the Parties") for the purposes of establishing a multi -city
public facilities district to assist in the financing, development and operation of, regional
convention center facilities; stimulating economic development by creating jobs, realizing
additional sales tax and lodging tax revenues and attracting commercial business and tourism;
and providing facilities for community events including public meetings and performing arts
events. The Parties enter into this Agreement effective as of the date of execution by all three
Parties, for the purposes and under the terms contained herein.
WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the
"Convention Center"), providing first-class meeting, ballroom and other event facilities;
WHEREAS, the Parties desire to expand the Convention Center, at an estimated cost of
over $10,000,000 (the "Project");
WHEREAS, Chap. 35.57 RCW (the "Act") authorizes one or more contiguous cities
located in a county with a population of less than one million to create a public facilities district
(a "PFD") to acquire, remodel, finance, and operate one or more "regional centers";
WHEREAS, "regional centers" are defined to include, among other things, existing
convention centers to be improved at a cost of at least ten million dollars including debt service;
WHEREAS, PFDs have access to several new revenue sources, including a state sales
and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the retail sales and use
taxes generated within the PFD boundaries to the PFD;
WHEREAS, in order to complete the Project and access the Sales Tax, the Parties wish to
create a PFD solely for the purpose of acquiring, constructing, owning, remodeling, maintaining,
equipping, re-equipping, repairing, financing and operating regional centers, as defined in the
Act (the "District");
WHEREAS, the Act requires a 33% local match of the net present value of the Sales Tax
to be collected by the District in order for the District to impose the Sales Tax and, accordingly,
Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the
District in satisfaction of this match requirement (the value of the Convention Center and the
underlying site is approximately $11,800,000);
WHEREAS, the value of leasehold interest is estimated to significantly exceed the net
present value of 33% of the projected Sales Taxes of the District (approximately $2.4 million);
WHEREAS, pursuant to the Design, Development, Construction, Financing and
Operating Agreement between Yakima and the District, the District will sublease the Convention
Center and the underlying site to Yakima, and Yakima will design, develop, construct, operate
1111111111 1111111 11111/111 72a�3C22o3fW1
R'43
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and maintain the property in return for certain rights, including the right to retain all revenues of
the Convention Center;
WHEREAS, subject to certain limitations set forth herein, Yakima intends to issue bonds
and apply bond proceeds to finance the Project, in consideration for the District's pledge of Sales
Tax receipts to Yakima to pay debt service on the bonds and other Regional Center costs;
WHEREAS, the Parties are authorized and empowered to enter into this Agreement
pursuant to Chap. 39.34 RCW;
NOW THEREFORE, in consideration of mutual promises and covenants herein, the
Parties agree:
Section 1. Definitions. Except for the terms defined in this section, and unless the
context indicates otherwise, for the purposes of this Agreement and the Related Documents, the
Parties shall use the definitions found in Chap. 35.57 RCW as they may be amended.
Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima.
Additional Revenue means all revenue received by the District (or by Yakima on behalf
of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking
Charges, Parking Taxes, Voted Sales Taxes and any other revenue received by the District and
derived from the District's operation of the facilities, including investment income; but excluding
Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) of the
Development Agreement (including investment earning thereon).
Administrative Costs means the costs of the District incurred in administering the District
and the Development Agreement. Administrative Costs shall be specified in the District's
annual budget submitted to Yakima for approval and to Selah and Union Gap for review and
comment.
Admissions Charge means any charge imposed by the District (or by Yakima on behalf
of the District) for admission to its facilities, including charges for season tickets or
subscriptions; cover charges, or charges for use of seats and tables, and other similar
accommodations; charges for food and refreshment if free entertainment, recreation, or
amusement is provided; charges for rental or use of equipment or facilities for purposes of
recreation or amusement; and automobile parking charges if the amount of the charge is
determined according to the number of passengers in the automobile.
Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be
paid by any person who pays an Admissions Charge.
Agreement means this interlocal agreement.
Bond Counsel means a fiini of lawyers nationally recognized and accepted as bond
counsel and so employed by Yakima.
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Bond Ordinance means the ordinance of the Yakima Council authorizing the issuance of
the Bonds and any amendments and supplements.
Bonds means the bonds, notes or other evidences of indebtedness issued pursuant to and
under authority of the Bond Ordinance to provide for the financing or refinancing of the Project.
Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total
interest cost on the Bonds exceeds 5.55%.
Board means the governing body vested with the management of the affairs of the
District.
Bylaws means the rules adopted for the regulation or management of the affairs of the
District approved by this Agreement and all subsequent amendments.
Charter means the articles of organization of the District approved by this Agreement
and all subsequent amendments.
Code means the Internal Revenue Code of 1986, as amended, and all applicable
regulations and rulings thereunder.
Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project.
Costs of the Project means all capital costs that are paid or incurred by Yakima in
connection with the design, development and construction of the Project, including, but not
limited to all or a portion of the interest on Bonds during the period of construction of such
improvements, and for a period of time thereafter; amounts required to meet any reserve
requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for
expenses, including planning, permitting and design expenses, incident and properly allocable to
the Project; and all other items of expense incident and properly allocable to designing,
developing and constructing the Project, financing the Project and placing the Project in
operation.
Debt Service means the amount to be paid on the next succeeding Payment Date to pay
the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due
on such Payment Date.
Debt Service Fund means the special fund(s) or account(s) established by Yakima
pursuant to the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the
principal of, premium, if any, and interest on Bonds and/or any Additional Bonds.
Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any,
established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which
secures the Bonds and/or any Additional Bonds.
IYIIIII
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t21 AA Yakima Co, WA
Development Agreement means the Design, Development, Construction, Financing and
Operating Agreement by and between Yakima and the District.
District means the public facilities district created pursuant to Section 1.
Favorable Opinion of Bond Counsel means, with respect to any action, a written legal
opinion of Bond Counsel addressed to Yakima, to the effect that such action is peiniitted under
the laws of the State and under applicable ordinances of the Yakima Council, including the Bond
Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest
on a Bond or any other bonds of Yakima from gross income for federal income tax purposes
under the Code (subject to the inclusion of any exceptions contained in the opinion delivered
upon original issuance of such bond).
Lease Agreement means the Lease Agreement by and between Yakima and the District
providing for the transfer of a leasehold interest in the Convention Center and the underlying site
to the District in satisfaction of the match required under RCW 82.14.390.
Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW.
Net Proceeds, when used with reference to the Bonds, means the principal amount of
such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less
the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve
Fund.
Operating Manual means the Operating Standards Manual for the expanded Convention
Center.
Outstanding, when used as of any particular time with reference to Bonds or Additional
Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the
Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds
theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or
Additional Bonds with respect to which all liability of Yakima shall have been discharged in
accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and
(3) Bonds or Additional Bonds for the transfer or exchange of, or in lieu of, or in substitution for
which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima
pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable.
Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110.
Parking Tax means a tax on any vehicle parking charge imposed at any parking facility
that is owned or leased by the District pursuant to RCW 35.57.110.
Payment Date means the dates specified in the Bond Ordinance, or any Supplemental
Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with
respect to the Bonds or any Additional Bonds.
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PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if
any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The
amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall
be maintained in the PFD Revenue Reserve Fund shall be determined at the time that the Bonds
are issued.
Predevelopment Costs means the cost of all planning, legal, architectural, engineering
and other services incurred by Yakima in connection with the Project until the date of issuance of
the Bonds.
Project means the design, construction, and operation of the additions to the Convention
Center, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site
plans, preliminary specifications, and schematic design documents), construction documents
(including all drawings and specifications necessary to completely describe the Project in detail
to a contractor for the purposes of bidding and construction, schedules, plans and specifications,
and the construction contract) and Project budgets (setting forth the construction contract cost,
taxes, all contingencies, fees and allowances).
Related Documents mean the Charter, the Lease Agreement, the Bylaws and the
Development Agreement.
Refunding Bonds means bonds, notes or other evidence of indebtedness of Yakima the
proceeds of which will be used to refund Bonds.
Sales Tax means the nonvoted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of
a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from
the amount of tax otherwise required to be collected or paid over to the State's Department of
Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event,
not more than 25 years after the Sales Tax is first collected.
Sales Tax Revenue means all Sales Taxes received by the District.
Selah means the City of Selah, Washington, a municipal corporation of the State, as now
or hereafter constituted.
State means the State of Washington.
Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council
amending or supplementing the Bond Ordinance, including any ordinance adopted by the
Yakima Council in connection with the issuance of Additional Bonds.
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Union Gap means the City of Union Gap, Washington, a municipal corporation of the
State, as now or hereafter constituted.
Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW
82.14.048 and approved by the voters.
Yakima means the City of Yakima, a municipal corporation of the State, as now or
hereafter constituted.
Yakima City Manager means the City Manager of Yakima, or any successor to the
office.
Yakima Council means the City Council of Yakima, or any successor thereto as provided
by law.
Section 2. Formation of the District. Pursuant to RCW 35.57.010(1), the Parties
hereby create a public facilities district. The District shall be a municipal corporation, an
independent taxing authority and a taxing district, with the powers and limitations as set forth in
its Charter and this Agreement. The District shall be coextensive with the boundaries of the
Parties, as the same may be amended from time to time.
Section 3. Name. The name of the District shall be the Yakima Regional Public
Facilities District.
Section 4. Purpose. The District shall acquire (by purchase, lease or otherwise),
construct, own, remodel, maintain, equip, reequip, repair, finance, and/or operate (either directly
or by contract) one or more Regional Centers, as defined in RCW 35.57.020. Specifically, the
District shall acquire a leasehold interest in the Convention Center, and finance the Project and
related parking facilities in accordance with the Development Agreement.
Section 5. General Powers. Except as limited by State law, this Agreement and the
Charter, the District shall have and may exercise all lawful powers necessary or convenient to
affect the purposes for which the District is organized and to perform authorized corporate
functions.
Section 6. Specific Powers. Without limitation, the District shall have the following
specific powers:
(a) to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain,
equip, reequip, repair, finance, and operate (either directly or by contract) the Convention
Center, the Project, related parking facilities and any other Regional Center, subject to the
limitations set forth in Section 7;
(b) to accept and expend gifts, grants, and donations;
(c)
to impose the following charges, fees, and taxes authorized in RCW 35.57.040:
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(i) Admission Charges, Parking Charges and any other fees or charges for the
use of any of its facilities, subject to the limitations set forth in Section 7;
(ii) Admission Taxes, subject to the limitations set forth in Section 7;
(iii) Parking Taxes, subject to the limitations set forth in Section 7;
(iv) Voted Sales Taxes, subject to the limitations set forth in Section 7;
(v) Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390 to
be collected from those persons who are taxable by the State under
Chaps. 82.08 and 82.12 RCW upon the occurrence of any taxable event
within the District;
(d) to use Sales Tax Revenue, Additional Revenue and other receipts for its purposes;
(e) to contract with a public or private entity (including but not limited to Yakima)
for the construction, financing, operation and/or management of the Project, related
parking or for any other Regional Center owned or operated by the District, subject to
Section 18;
(f) to use the supplemental alternative public works contracting procedures set forth
in Chap. 39.10 RCW:
(g) to acquire and transfer real and personal property by lease, sublease, purchase, or
sale, subject to the limitations set forth in Section 7; and
(h) to issue general obligation bonds (subject to statutory debt limits) or revenue
bonds.
Section 7. Limitations on Powers.
(a) No Power of Eminent Domain. The District shall not have the power of eminent
domain.
(b) Additional Regional Centers — Yakima Approval. The District's power to acquire,
construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either
directly or by contract) any Regional Center other than the Convention Center, the
Project and related parking facilities is subject to the approval of Yakima;
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(c) Convention Center Expansion Project — Yakima Approval.
(i) Yakima Approval of Parking Taxes and Admission Taxes. In
consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement, the District's power to impose
Admission Taxes and Parking Taxes shall be subject to the approval of the
Yakima Council.
(ii) Yakima Approval of Admission Charges and Parking Charges. In
consideration for Yakima's agreement to apply Lodging Taxes to pay a
portion of the costs of operating and maintaining the Convention Center
and the Project under the terms of the Development Agreement, the
District's power to impose charges and fees, including all Admission
Charges and Parking Charges, shall be subject to the approval of the
Yakima Council.
(iii) Yakima Approval of Gambling Activity and Public Display of Artwork. In
consideration of Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
terms of the Development Agreement, and in consideration for Yakima's
agreement to apply Lodging Taxes to pay a portion of the costs of
operating and maintaining the Convention Center and the Project under
the terms of the Development Agreement, the following activities shall be
subject to the approval of the Yakima Council:
a. any gambling activity under the authority of the District at the
Convention Center; and
b. any public display of artwork under the authority of the District at
the Convention Center.
(iv) Annual Budget Approval and Approval of Property Transfers. In
consideration for Yakima's agreement to issue the Bonds and apply Net
Proceeds to pay Predevelopment Costs (to the extent that such costs are
not to be paid from Sales Tax Revenue) and Costs of the Project under the
teiius of the Development Agreement and in consideration of Yakima's
agreement to apply Lodging Taxes to pay a portion of the costs of
operating and maintaining the Convention Center under the terms of the
Development Agreement, the District's annual budget, including
Administrative Costs, shall be subject to the approval of the Yakima
Council. The District shall forward its proposed annual budget to the
Parties (for review and comment by Selah and Union Gap and for
approval by the Yakima Council) no later than September 1 of the year
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prior to the budget year. The District shall also forward any amendment to
its approved annual budget to Yakima for approval and to Selah and
Union Gap for review and comment. In addition, any acquisition or
transfer of real and personal property with a value over $100,000 by lease,
sublease, purchase, or sale by the District shall be subject to approval by
the Yakima Council.
(d) Party Approval of Voted Sales Tax. Prior to placing on the ballot any Voted Sales
Tax, the District shall forward the draft proposed ballot language to each of the Parties.
The District's power to impose the Voted Sales Tax is subject to the approval of each of
the Parties.
(e) No Political Activity. No funds, assets or property of the District shall be used for
any political activity, except as set forth in the Charter.
(f) No Private Inurement. The District shall not operate in a manner that creates any
private inurement, except that the District may compensate employees; reimburse
employees, Board members, volunteers and agents for reasonable expenses; defend and
indemnify Board members or employees acting in good faith on behalf of the District and
within the scope of their duties; hold harmless Board members or employees acting in
good faith on behalf of the District and within the scope of their duties and provide
liability insurance for employees, Board members, volunteers or other agents.
Section 8. Charter. The Charter is hereby approved in the form set forth as
Exhibit A. The Charter shall be deemed issued upon execution of this Agreement by all of the
Parties. The Charter shall be issued in duplicate originals, each bearing the Yakima seal attested
by the City Clerk of Yakima. One original shall be filed with Yakima; duplicate originals shall
be provided to the District and to the City Clerks of Selah and Union Gap. The Charter shall be
amended only with the approval of each of the Parties.
Section 9. Effect of Issuance of Charter. The District shall commence its existence
effective upon issuance of the Charter by Yakima pursuant to Section 8 (that is, upon execution
of this Agreement by all of the Parties). Except as against the State or the Parties in a proceeding
to cancel or revoke the Charter, delivery of a duplicate original Charter shall conclusively
establish that the District has been established in compliance with the procedures of this
Agreement.
Section 10. Board of Directors. A board consisting of seven directors (the "Board"),
as described in the Charter, is hereby established to govern the affairs of the District. The
directors shall be appointed and serve their terms as provided in the Charter. All corporate
powers of the District shall be exercised by or under the authority of the Board; and the business,
property and affairs of the District shall be managed under the direction of the Board, except as
may be otherwise provided for by law, this Agreement, or in the Charter.
Section 11. Board Removal. As set forth in the Charter, if it is deteimined for any
reason that any or all of the Board members should be removed from office, the City Council for
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the City that originally appointed the Board member to be removed may by ordinance remove
that Board member from office. The term of any Board member removed pursuant to this
section shall expire when the removal ordinance takes effect. Vacancies created under this
section shall be filled in the manner provided in the Charter.
Section 12. Organizational Meeting. Upon issuance of the Charter, the Yakima City
Manager or his designee shall call an organizational meeting of the initial Board within 30 days,
giving at least three days' advance written notice to each Board Member, unless waived in
writing. At such meeting, the Board shall organize itself, may appoint officers, and shall select
the District's place of business.
Section 13. Bylaws.
(a) The initial Bylaws of the District are hereby approved in the form set forth at
Exhibit B. The power to alter, amend, or repeal the Bylaws or adopt new ones shall be
vested in the Board, except as otherwise provided in this Agreement or in the Charter.
The Bylaws shall be consistent with the Charter.
(b) As necessary and appropriate in the discretion of the Yakima Council, the Yakima
Council may amend the Bylaws by ordinance adopted at or after a public meeting held
with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by
the Yakima Council may not be further amended by the District for one year except with
Yakima Council approval.
Section 14. Dissolution.
So long as the Bonds are Outstanding, if the Yakima Council makes an
affirmative finding that dissolution is warranted for any reason, the existence of the
District may be terminated by ordinance of the Yakima Council adopted at or after a
public meeting, held with notice to the City of Selah, the City of Union Gap, the District
and the Board and affording a reasonable opportunity to be heard and present testimony.
At such time as the Bonds are no longer Outstanding, if all three of the Parties make an
affirmative finding that dissolution is warranted for any reason, the existence of the
District may be terminated by ordinance of the City Council of all three Parties adopted
at or after a public meeting, held with notice to the other Parties, the District and the
Board and affording a reasonable opportunity to be heard and present testimony. In
either event, dissolution shall be accomplished as provided in the Charter, and shall not
take effect until proper provision has been made for disposition of all District assets.
At such time as the Bonds are no longer Outstanding, one or two of the Parties
may withdraw from this Agreement, by ordinance of the City Council of such Party or
Parties, adopted at or after a public meeting, held with notice to the other Parties, the
District and the Board and affording a reasonable opportunity to be heard and present
testimony. In such event, the District shall not be dissolved but shall continue its
existence in all respects, except that the boundaries of the District shall be deemed
revised to exclude the territory of the withdrawing Party(ies).
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Upon satisfactory completion of dissolution proceedings, the City Clerk of
Yakima shall indicate such dissolution by inscription of "Charter cancelled" on the
Charter of the District on file with the City and, when available, on the duplicate originals
of the District, Selah and Union Gap, and the existence of the District shall cease. The
City Clerk of Yakima shall give notice thereof pursuant to State law and to other persons
requested by the District in its dissolution statement.
The Parties hereby acknowledge that the District's assets and property will largely
be derived from Yakima. Specifically, Yakima will transfer a leasehold interest in the
Convention Center and the underlying site to the District, will issue bonds to pay
Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax
Revenue) and Costs of the Project, will construct the Project, and will apply Lodging
Taxes to pay a portion of the cost of operating and maintaining the Convention Center
and the Project. Accordingly, upon dissolution of the District and the winding up of its
affairs, all of the District interest in the Convention Center, the site, the Project, and all
assets or property of the District that are proceeds of the foregoing shall vest in Yakima
unless the Yakima Council or a trustee or court has provided for the transfer of the
District's interest in the Convention Center, the site, the Project, and proceeds of the
District to a qualified entity or entities that will fulfill the purposes for which the District
was chartered.
At such time as the District acquires any other Regional Center, the Parties shall
enter into a plan providing for the disposition of such Regional Center and related assets
upon dissolution of the District. If Selah or Union Gap fail to enter into such a plan, then
upon dissolution of the District and the winding up of its affairs, title to such Regional
Center and all assets or property of the District that are proceeds of the foregoing shall
vest in Yakima unless the Yakima Council or a trustee or court has provided for the
transfer of the such Regional Center and proceeds of the District to a qualified entity or
entities that will fulfill the purposes for which the District was chartered.
Section 15. Indemnification. The City of Yakima shall indemnify and hold harmless
the Cities of Union Gap and Selah from any liability arising from a challenge to the formation of
the Yakima Regional Public Facilities District under RCW 35.57.010.
Section 16. Ancillary Authority. The Yakima City Manager is granted all such power
and authority as reasonably necessary or convenient to enable him or her to administer this
Agreement efficiently and to perform the duties imposed in this Agreement and the Related
Documents.
Section 17. Term of Agreement. This Agreement shall automatically teiininate on the
date on which District is dissolved pursuant to Section 14. Termination shall not relieve any
Party of responsibility for meeting financial and other obligations outstanding at the time of
tet minati on.
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Section 18. Transfer of the Convention Center to the District. Yakima hereby agrees
to enter into the Lease Agreement. The Parties agree that the transfer of a leasehold interest in.
the Convention Center and the underlying site to the District pursuant to the Lease Agreement
shall constitute a donation from the City to the District to be used for the construction,
improvement or rehabilitation of a Regional Center as defined in RCW 82.14.390. The value of
the Convention Center and the underlying site is approximately $11,800,000. The Parties agree
that the value of the leasehold interest in the Convention Center and the underlying site to be
transferred pursuant to the Lease Agreement is substantially more than the net present value of
33% of total Sales Taxes to be received by the District (approximately $2.4 million).
Section 19. Management Agreements. Any management contract entered into by the
District or Yakima for the operation or management of the Convention Center and the Project
shall be consistent with the Development Agreement. Prior to executing any management
contract (with the exception of the Development Agreement), the District or Yakima, as
applicable, shall have received a Favorable Opinion of Bond Counsel regarding the terms of the
management contract.
Section 20. Limitation of Liability. The District is a separate legal entity. All
liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and
properties of the District, and no creditor or other person shall have any right of action against or
recourse to the Parties, their assets, credit, or services, on account of any debts, obligations,
liabilities or acts or omissions of the District.
Section 21. Non -Waiver. No waiver by any Party of any term or condition of this
Agreement shall be deemed or construed to constitute a waiver of any other term or condition or
of any subsequent breach whether of the same or of a different provision of this Agreement.
Section 22. No Third -Party Beneficiary. This Agreement is entered into for the
benefit of the residents of the Parties to facilitate the completion of the Project, stimulate
economic development by creating jobs, realize additional sales and lodging tax revenues, attract
commercial business and tourism, and provide facilities for convention, special events,
community events including public meetings and performing arts events. This Agreement is not
entered into with the intent that it shall benefit any party not signing this Agreement, and no
other person or entity shall be entitled to be treated as a third -party beneficiary of this
Agreement; provided that any owner of. the Bonds or Additional Bonds shall be a third -party
beneficiary for the purposes of enforcing payments to be made by the District to Yakima in
amounts sufficient for Yakima to pay Debt Service.
Section 23. The City of Yakima intends to contribute lodging taxes to pay a portion of
the cost of operating and maintaining the Convention Center, in an amount, if any, determined
annually by the Yakima City Council. As between the Cities, as set forth in the Development
Agreement, the City of Yakima will also be solely responsible to contribute revenues in the case
of a Sales Tax shortfall. The Cities of Union Gap and Selah shall have no financial
responsibility to the District in the event of a Sales Tax shortfall.
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Section 27. Counterparts. This Agreement may be executed in two or more
counterparts, and each such counterpart shall be deemed to be an original instrument. All such
counterparts together will constitute one and the same Agreement.
IN WITNESS HEREOF, this Agreement is executed by the City of Yakima, the City of
Selah and the City of Union Gap.
Contract No. 2001-70
Ordinance No. 2001-28
Certified to be a t,ue and correct copy of the
original filed in my office. Y.--31,0/
CITY CLERIC:
=Z
THE CITY OF YAKIMA, WASHINGTON
Richard A. Zais, Jr.
City Manager
Robert Jones
Mayor
THE CITY OF UNION GAP,
WASHINGTON
By: G•
Trey C. Reeves,
Mayor
Cor; ifod to be u true and correct copy of the
ori Auhl filed in my office. 7-v-,26-6(
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Return Address
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Document 1 Title
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Legal Description (abbreviated form. i.e. lot, blk, plat or S,T,R quarter/quarter)
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❑ Emergency nonstandard document recording I am requesting an emergency nonstandard
recording for an additional fee as provided in RCW 36 18 010 I understand that the
recording processing requirements may cover up or otherwise obscure some part of the text
of the original document
Signature
The Auditor/Recorder will rely on the information provided on the form. The staff will not read the document to verify the accuracy or
completeness of the indexing information provided herein.
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$19 00 Yakima Co, WA
LEASE AGREEMENT
This LEASE AGREEMENT (the "Lease") is made as of July 27, 2001, by and between
the CITY OF YAKIMA, WASHINGTON (the "City"), a municipal corporation and first class
city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT (the "District", and together with the City, the "Parties"), a public facilities district
created by the City and the Cities of Selah and Union Gap, to lease certain real property of the
City to the District to assist in the design, development, construction, financing and operation of
the Yakima Convention Center, as expanded. Reference is made to that certain Design,
Development, Construction and Financing Agreement dated July 27, 2001, between the
undersigned (the "Development Agreement").
1. Effective Date. This Lease and all of the terms and conditions hereof shall
become effective as of the date set forth above; provided that all of the rights, duties and
obligations of the City and the District, as lessor and lessee, respectively, under this Lease are
not and shall not be effective unless and until the Development Agreement becomes effective.
2. Leased Premises. From and after commencement of the Lease Term (as
defined herein), the City hereby leases to the District and the District hereby hires from the City
certain improved real property located in the City of Yakima, Washington, legally described in
Exhibit A attached hereto and by this reference incorporated (the "Premises") and certain
improvements thereon consisting of a convention center, and further improvements to be built on
said Premises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record.
3. Term. The Lease Term of this Lease, and all obligation of the
parties hereto as lessor and lessee, shall commence on the effective date of the Development
Agreement and shall automatically terminate upon expiration or termination of the Development
Agreement, unless otherwise terminated or amended as set forth herein. The District shall be
entitled to possession of the Premises upon commencement of the Lease Term hereunder.
4. Prepaid Rent. Within 60 days after the commencement of the Lease
Term, the District shall pay $50 to the City, which amount represents prepaid rent for the entire
Lease Term. The Parties acknowledge that the value of the Premises and Improvements existing
as of the date of this Lease is appraised at $11,800,000. The value of the leasehold interest in the
Premises hereby transferred is significantly in excess of 33% of the net present value of sales
taxes the District projects that it will collect under RCW 82.14.390 (approximately $2.4 million).
It is the parties' intent that the City lease the Premises to the District in satisfaction of the local
match requirement under RCW 82.14.390.
5. Use of the Premises. The Premises shall be used by the District solely for the
operation and maintenance of the Premises and the lease back of the same to the City and for
other District purposes consistent with the Development Agreement. At no time during the
Lease Term shall the District use the Premises in whole or in part for any unlawful purpose, nor
shall the District permit or commit any nuisance or illegal activity on the Premises.
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6. Compliance with Laws. The District shall comply with all municipal,
county, state and federal laws, rules, regulations or ordinances applicable to the Premises and the
Improvements, and the ownership, use and occupancy thereof.
7. Liens and Encumbrances. Except as expressly provided in this Lease, the
District shall keep the Premises and the Improvements thereon free of mechanics' and
materialmen's liens and other liens of like nature including tax liens, and will defend and hold
the City harmless against such liens or claims and against all attorney's fees and other costs and
expenses growing out of or incurred as a result of such liens or claims so long as such liens or
claims arise from the actions of the District and not the actions of the City. The City shall defend
and hold harmless the District against such liens or claims, fees, costs or expenses growing out of
or incurred as a result of the actions of the City and not the actions of the District. Provided,
however, that the District may in good faith and at the District's own expense contest the validity
of any such lien or claim, through litigation if necessary. In the event that the District contests
any lien or claim, the District shall prosecute the contest with reasonable diligence, and the
District shall at all times effectually stay or prevent any official or judicial sale of the Premises
and/or Improvements and the District shall pay or otherwise satisfy any final judgment (unless
the District shall appeal same, in which event the judgment from the last appeal shall be the
applicable judgment), which may be entered against it and thereafter promptly procure record
satisfaction of release of the lien or claim. In the event that the District fails to fully discharge or
in good faith contest any such lien or claim that has been perfected, the City may pay the same,
or any part thereof, and the City shall be the sole judge of the validity of said lien or claim. All
amount so paid by the City shall be recoverable against the District.
8. Maintenance and Repair of Premises and Improvements. The District shall
maintain the Premises and Improvements in good repair and working order, and shall make such
repairs necessary to so maintain the Premises and Improvements.
9. Taxes and Assessments. The District covenants and agrees to pay all real
estate taxes and assessments, if any, levied upon the Premises and Improvements that become
due and payable during the Lease Term prior to delinquency, together with any leasehold excise
tax that may be assessed against the District's leasehold interest hereunder; provided, that if any
such taxes or assessments may be paid in installments without penalty, the District shall have the
right to pay any such taxes or assessments in installments.
The District may contest the legal validity or amount of any tax, assessment or other
charge for which the District may be responsible under this Lease and may institute such
proceedings as the District considers necessary. If the District contests any such tax, assessment
or other charge, the District may withdraw or defer payment or pay under protest, provided the
District shall protect the City and the Premises and Improvements from any lien by adequate
surety bond or other appropriate security.
The City appoints the District as the City's attorney-in-fact for the purpose of making all
payments to any taxing authorities and for the purpose of contesting any taxes, assessments or
other charges, conditioned on the District's preventing any lien from being levied on the
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Premises or Improvements or upon the City. However, if the District chooses not to contest any
tax, assessment or charge, the District shall give the City timely notice thereof so that the City
may contest any taxes, assessments or charges levied against the Premises or Improvements if
the District fails to do so.
10. Utility Charges. The District shall be solely responsible for and shall
promptly pay all charges for heat, water, light, gas, electricity, sewer and garbage or any other
utility now or hereafter used or consumed on the Premises. In no event shall the City be liable
for an interruption or failure in the supply of such utilities to the Premises.
11. Alterations. - Except as permitted by the Development
Agreement, the District shall not alter the Premises or the Improvements without the prior
written consent of the City.
12. Insurance. The District shall, at its sole cost and expense,
procure and maintain in force during the Lease Tenn all liability and other insurance required to
be procured and maintained by the City under the Development Agreement.
13. Assignment. Except as otherwise provided in Section 22, the
District shall not assign or transfer this Lease or any interest therein, nor shall this Lease or any
interest therein be assignable or transferable by operation of law or by any process or proceeding
of a court, or otherwise, without the prior written consent of the City, which consent shall not be
unreasonably withheld.
14. Eminent Domain.
A. The following definitions apply in construing provisions of this Lease
relating to a taking of or damages to all or a part of the Premises or Improvements or interest
therein by eminent domain or inverse condemnation.
"Taking" means the taking or damaging, including
severance damage, by eminent domain or inverse
condemnation for any public or quasi -public use under any
statute or any purchase or other acquisition under threat of
condemnation. The taking shall be considered to take place
as of the later of the date actual physical possession is taken
by the condemnor, and the date on which the right to
compensation and damages accrues under the law
applicable to the Premises.
ii. "Total taking" means the taking of the fee title to all of the
Premises.
iii. "Substantial taking" means the taking of so much of the
Premises or Improvements or both that one or more of the
following conditions result: (i) the conduct of the District's
use(s) of the Premises would be substantially prevented or
impaired, (ii) the remaining Premises could not be
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economically and feasibly be made to be so usable by the
District, or (iii) the Improvements would be other than
reasonably efficient or economic or could not economically
and feasibly be made reasonably efficient or economic for
the District's use.
iv. "Partial taking" means any taking of the fee title that is not
either a total taking or a substantial taking.
v. "Award" means compensation paid for the taking, whether
pursuant to judgment, by agreement or otherwise.
B. The party receiving any notice of an intended taking or a willingness to
make a negotiated private purchase in lieu of condemnation shall promptly give the other party
written notice of the receipt and contents thereof.
C. The City and the District shall each have the right to represent separately
their respective interest in each proceeding or negotiation with respect to the taking or intended
taking and to make full proof of their claim. No agreement, settlement, sale or other transfer to
or with the condemning authority shall be made without the consent of the City, the District and
all leasehold mortgagees.
D. Upon a total taking, the City and the District shall be relieved of all
obligations hereunder and this Lease shall terminate. Such termination of obligations shall not
prejudice the District's right to recover compensation calculated in accordance with the terms
hereof for the taking of the District's interest in the Premises and Improvements. The amount of
damages resulting to the City and the District and to the respective interests of the City and the
District in the Premises by reason of such taking shall be separately determined and computed by
the court having jurisdiction over such eminent domain proceedings. Separate awards and
judgment shall be made with respect to the damage to the City and the District and such awards
shall be paid separately to the City and the District. If the City's and the District's damages (and
awards therefore) cannot or will not be separately determined and computed by such court, then
the award granted shall be divided between the City and the District in a fair and equitable
manner, it being understood that the District's portion is to compensate the District for the loss of
its leasehold interest hereunder, and the City's portion is to compensate the City for the loss of
the right of reversion hereunder and its leasehold interest under the Development Agreement.
E. Within 45 days after the District receives notice of an intended substantial
taking, the District shall provide written notice of the same to the Yakima City Manager. Upon
receipt of such notice the City Manager and the District shall confer as to the level of taking.
The City shall have the final determination as to whether the taking should be treated as a total
taking or partial taking.
F. Upon a partial taking, the Lease shall remain in full force and effect,
covering the remaining Premises. The amount of damages resulting to the City and the District
and their respective interests in the Premises and the Improvements shall be separately
determined and computed by the court having jurisdiction over such eminent domain
proceedings. Separate awards and judgments shall be made with respect to the damage to the
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City and the District, and such awards shall be paid separately to the City and the District,
respectively.
G. If the City's and the District's damages (and the awards therefor) cannot
or will not be determined or computed by the court, then all sums, including damages and
interest, awarded for the fee title or leasehold, or both, shall be deposited promptly with a
mutually agreed upon escrow agent and shall be equitably distributed and disbursed for the
following purposes:
i. To the District for the purpose of compensating the District for the
- value of its leasehold interest taken and for restoring any taken
Improvements, plus any amount awarded to remove or relocate
subtenants, plus any amount specifically awarded to or for the
District for detriment to business and severance damages.
ii. To the City, a sum equal to the value of the Premises taken.
iii. To the City, for the purpose of compensating it for the value of the
lost leasehold interest in the Development Agreement.
iv. The remainder to the City, to be applied by the City to the
repayment of Bonds or Additional Bonds (as defined in the
Development Agreement) or to any other lawful use.
H. Upon the taking for the temporary use of all or any part of the Premises or
Improvements for a period of less than 12 months, the rent under this Lease shall not be affected
in any way, and the District shall be entitled to any award for the use or estate taken.
domain.
I. Nothing in this Lease shall be deemed to limit the City's right of eminent
15. Indemnification. To the extent permitted by law, the District shall
defend, indemnify, and hold the City and the Premises harmless from any and all damages or
liabilities at any time occasioned by or arising out of (i) any act, activity or omission of the
District, or anyone holding themselves out under the District (except the City), or (ii) the
occupancy or use of the Premises or any part thereof, by or under the District, excluding the
occupancy and use by the City, or (iii) the state or condition of the Premises and the
Improvements or any part thereof, except to the extent the City shall itself be grossly negligent in
the circumstances.
Without limiting in any way the foregoing indemnification, the District agrees that during
its use and occupancy of the Premises it shall comply with all laws, regulations, rules and
ordinances of the City, the State and the federal government with regard to the use, storage, and
disposal of hazardous and toxic substances on the Premises and the Improvements, and the
District shall to the fullest extent permitted by law defend, indemnify and hold hainiless the City
for any and all damages or liabilities with regard to hazardous and toxic substances occasioned
by and arising from the District's activities on the Premises and Improvements.
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16. Default. Time is of the essence in this Lease, and in the
event that (i) the District shall default in the payment of taxes, assessments, utility charges or any
other amounts due hereunder, and such default is not caused by the City's failure to meet its
obligations under the Development Agreement, and if such default shall continue for 10 days
following written notice and demand; (ii) the District shall default in the performance or
observation of any other temis, covenants, conditions or agreements of this Lease for 15 days
after written notice and demand, or in the case of such default that cannot with due diligence and
in good faith be cured within 15 days, the District fails to proceed promptly after such notice and
with due diligence and in good faith, to begin to cure said default, (iii) there shall be filed against
the District in any court or other tribunal pursuant to any statute or other rule of law, either of the
United States or of any State or of any other authority now or hereafter exercising jurisdiction, a
petition in bankruptcy or insolvency proceedings or for reorganization or for the appointment of
a receiver or trustee of all or substantially all of the District's property, or for any other form of
debtor relief, unless, such petition be filed against the District and if in good faith the District
promptly thereafter commences and diligently prosecutes any and all proceedings appropriate to
secure the dismissal of such petition and shall secure such dismissal within 60 days after the date
of filing or the commencement of such proceedings, (iv) if the District vacates or abandons the
Premises or Improvements, or (v) the District defaults under the Development Agreement and
such default is not cured within the cure periods set forth in the Development Agreement, then
and in any such case, at the City's option and in addition to all other rights and remedies, the
City may, following the expiration of the cure period, if any, provided herein for such default,
immediately declare the District's rights under this Lease terminated and enter the Premises and
the Improvements using such force as may be necessary and repossess itself thereof, as of its
former estate, and remove all persons and property from the Premises and the Improvements.
Such reentry shall not constitute a termination of this Lease and, notwithstanding any such
reentry, the liability of the District to pay amounts hereunder (including taxes, assessments and
utilities) shall not be extinguished for the balance of the term of this Lease and the District shall
make good to the City any deficiency arising from receipt by the City of any lesser amount than
that hereinbefore agreed upon.
17. Waiver. Neither the acceptance of rental nor any other
actions or omissions by the City at any time after the happening of any event authorizing the
cancellation or forfeiture of this Lease shall operate as a waiver of any past or future violation,
breach or failure to keep or perform any covenant hereof, to deprive the City of its right to cancel
or forfeit this Lease, upon written notice provided for herein, at any time that cause for
cancellation or forfeiture may exist, or be construed so as to at any future time estop the City
from promptly exercising any other option, right, or remedy, including the right to declare an
event of default hereunder that it may have under any term or provision of this Lease.
18. Force Majeure. Any prevention, delay, nonperfoiinance or stoppage
due to a "Force Majeure" shall excuse nonperfoiinance for the period of such prevention, delay,
nonperfolinance or stoppage, except for obligations imposed by this Lease for the payment of
taxes or insurance. "Force Majeure" means any causes or conditions beyond a party's
reasonable control (including, but not limited to fire, explosion, presence of a hazardous
substance, earthquake, stows, flood, wind, drought or act of God or one or more of the elements;
court order, legislation, delay or failure to act by civil, military or other governmental authority
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other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war;
breakdown or destruction of, or damage or casualty to, any equipment, facility or other property;
any delay or failure by any third party to provide a necessary service, supply, part, equipment,
personnel or other item; or interruption, suspension, curtailment or other disruption of a utility).
19. Access by the City. At any time during the Lease Term, the City and the
City's agents shall have the right to enter the Premises and the Improvements on reasonable
notice to examine the same. Nothing contained herein shall be construed to impose upon the
City a duty to repair the Premises or Improvements.
20. Surrender of Premises. At the expiration or sooner termination of this
Lease, the District shall immediately return to the City the Premises and Improvement in its
condition following completion of the Project defined in the Development Agreement, except
reasonable wear and tear and damage by fire or other casualty. Upon termination of the Lease
for any reason the District shall be liable for all costs and expense of restoring the Premises and
Improvements to the condition at the time of completion of the Project, but only if such removal
and restoration is requested by the City. The District's obligation to perfoun the covenants of
this Section shall survive the expiration or termination of this Lease.
21. Quiet Enjoyment. The District, upon fully complying with and
promptly performing all of the terms, conditions, and covenants of this Lease on its part to be
performed, shall have and quietly enjoy the Premises for the Lease Term.
22. Leasehold Mortgages. During the term of this Lease, the District shall not
encumber its leasehold interest in the Premises or Improvements without the prior written
consent of the City. Notwithstanding the foregoing, the District is authorized to assign its rights
and interests in this Lease to any financial institution, municipal bond trustee, municipal bond
insurer or other entity as may be necessary to accomplish the financing or refinancing of the
Project, provided that the District must obtain the prior written consent of the Yakima City
Manager.
23. Consent to Lease Back. The parties hereby acknowledge and agree that they
would not execute this Lease but for the agreement by the City to operate and maintain the
Improvements, finance, construct and operate the Project and lease back the Premises to the City
pursuant to the Development Agreement. The obligations of the District under this Section 23
are integral to this Lease and may not be severed herefrom without invalidating the entire Lease.
24. Termination. This Lease may be terminated after notice and
opportunity to cure of any event of default in accordance with Section 16. This Lease shall also
automatically telininate upon termination of the Development Agreement.
25. Amendment. This Lease may not be amended except by written
instrument approved by resolution duly adopted by the District and approved by City ordinance
or resolution. No course of dealing between the parties or delay in exercising any rights
hereunder shall operate as a waiver of any rights of any party.
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26. Entire Agreement. This Lease and any collateral instruments
referenced herein contain the entire agreement between the parties hereto and shall not be
modified or amended in any manner except by an instrument in writing executed by the parties
hereto. Previous drafts of this Lease or any portions thereof shall not be utilized in any manner
by either party should any dispute arise as to the intent of this Lease.
27. Notices. All notices which may be or are requested to be
given pursuant to this Lease shall be deemed given when hand delivered, or when deposited in
the U.S. Mail, postage prepaid, and marked registered or certified mail, return receipt requested,
and addressed to the parties at the following addresses unless otherwise provided for herein:
To the City:
With a copy to:
To the District:
Richard A. Zais, Jr.
City Manager
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
28. Severability. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable (with the exception of Section 23), the remainder of this Lease or the application
of such term or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby and shall continue in full force and effect.
29. No Merger. In no event shall (a) the leasehold interest, estate or
rights of the District hereunder, (b) the rights of any leasehold mortgagee upon the District's
leasehold interest, estate or rights hereunder, or (c) the leasehold interest, estate or rights of the
District as sublessor under the Development Agreement, merge with any interest, estate or rights
of the City as fee owner of the Premises and Improvements and lessor under this Lease or as
sublessee under the Development Agreement, it being understood that such leasehold interest,
estate and rights of the District hereunder and such rights of any leasehold mortgagee shall be
deemed to be separate and distinct from the City's interest, estate or rights as fee owner of the
Premises and Improvements, and as sublessee under the Development Agreement
notwithstanding that any such interests, estate or rights shall at any time be held or vested in the
same, person, corporation or other entity.
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30. Limited Obligation of the District. The District is organized pursuant to Chapter
35.57 RCW as a municipal corporation, separate and distinct from the City. All liabilities
incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the
District, and no creditor or other person shall have any right of action against or recourse to the
City or the Cities of Selah or Union Gap, their assets, credit, or services, on account of any debts,
obligations, liabilities or acts or omissions of the District.
31. Attorneys' Fees. In the event of litigation between the City and the
District or their successors or assigns to enforce a right or rights provided by or arising under this
Lease, the non -prevailing party shall pay to the prevailing party reasonable attorneys' fees and
other costs and expenses of litigation, including appeals. The amount of costs and attorneys'
fees shall be included in any judgment or award for the prevailing party and the court or
arbitrator in any such litigation shall determine which is the prevailing party.
32. Recording. The District shall not record this Lease without the
written consent of the City; however, upon the request of either party hereto the other party shall
join in the execution of a memorandum of this Lease for recording purposes. The memorandum
of Lease shall describe the parties, the Premises and Improvements, and the Lease and shall
incorporate this Lease and the Development Agreement by reference.
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33. Governing Law; Time. This Lease and the rights of the parties hereto shall
be governed and construed in accordance with the laws of the State of Washington. Time is of
the essence in this Lease.
IN WITNESS WHEREOF, the parties hereto have executed this document as of the day
and year first above written.
DATED this --L day of — � � , 2001.
CITY OF YAKIMA
By
Richard A. Zais, Jr.
City Manager
Attest:
YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT
By
Chair
Board of Directors
Approved as to form:
City Attorney
Certi- * 'i a be a trite aud correct copy or the
origins filed hi yr cfiicc.
CITY CLERK
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
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erry
/Z9 A/ ,e -- Sr
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DESIGN, DEVELOPMENT,
CONSTRUCTION, FINANCING AND OPERATING AGREEMENT
BY AND BETWEEN
CITY OF YAKIMA, WASHINGTON
and
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT
for / »tits ME do FT 0F C07s /sr /Z. ,&,/99,
,Iusarvs 4clei/yZi
�-i
Lee-M-ts On Pa 33
July 27, 2001
l�-C(o�c't'i�cm
- qy9
/k/4//2/,,27 l) 6')/1 j26(2
11 11 11
R M ANSON
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$41 00 Yakima Co, WA
Public Facilities District
Design, Development, Construction,
Financing and Operating Agreement
TABLE OF CONTENTS
Page
I. DEFINITIONS _ 2
II. INTENT AND RELATIONS 7
A. Intent 7
B. Description 8
C. Yakima's Regulatory Role Reserved 8
D. Governing Law and Venue 8
III. SCOPE OF COMMITMENTS 8
A.
Commitments by the District
1. Repayment Obligation
2. District Funds
8
8
9
B. Commitments by Yakima 11
1. Site Availability 11
2. Issuance of the Bonds 11
3. Application of Net Proceeds 11
4. Design, Development and Construction Responsibility 11
5. Operation and Maintenance Responsibility 11
6. Operation and Maintenance Costs 13
C.
Commitment by Yakima to Replenish Sales Tax Shortfall
1. Funding Commitment
IV. PROJECT COMPONENTS AND OPERATION CRITERIA
A. Project Components
B. Project Purpose 14
1. Public Access 15
2. Yakima Approval 15
C. Project Contracting and Management 15
14
14
14
14
V. DEVELOPMENT CRITERIA AND OVERSIGHT 16
A. Generally 16
B. Standards of Performance 16
C. Development Schedule and Substantial Completion Date 16
VI. PROJECT COSTS 17
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VII. INSURANCE 17
A. Insurance Requirements 17
B. Insurance Policies 17
C. Adjustments 18
VIII. AS IS 18
A. Due Diligence 18
B. Acceptance 18
IX. LIABILITY 19
A. Indemnification of Yakima 19
X. DESTRUCTION OR CONDEMNATION 20
A. Total or Partial Destruction 20
B. Condemnation 20
XI. RIGHT TO ASSIGN OR OTHERWISE TRANSFER 21
A. Right to Transfer Agreement 21
XII. DEFAULT 21
A. Event of Default of the District 21
B. Force Majeure 22
XIII. REMEDIES 22
A. Remedies Upon Default 22
B. No Waiver by Yakima 23
C. Termination �3
D. Reversion of the Property to Yakima 23
E. Certain Provisions Survive Termination 24
XIV. REPRESENTATIONS AND WARRANTIES 24
A. Yakima's Representations 24
B. The District's Representations and Warranties 24
C. Tax Covenant 24
XV. LEASE BACK 25
A. Sublease 25
B. Rent 25
C. Lease Obligations Assumed 25
XVI. MISCELLANEOUS 25
A. Captions 25
B. Construction 25
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C. Entire Agreement 25
D. Successors and Assigns 25
E. Notices 26
F. Incorporation by Reference 26
G. Execution in Counterparts 26
H. Waiver 26
I. Exculpation 27
J. Severability 27
K. Term 27
L. Amendments 27
EXHIBIT A — LEGAL DESCRIPTION OF THE PROPERTY
EXHIBIT B — DEBT SERVICE SCHEDULE
APPENDIX 1 — PROJECT DOCUMENTS
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AGR $41 00 Yakima Co, WA
DESIGN, DEVELOPMENT,
CONSTRUCTION, FINANCING AND OPERATING AGREEMENT
This DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND
OPERATING AGREEMENT (the "Agreement") is made as of July 27, 2001, by and between
the CITY OF YAKIMA, WASHINGTON ("Yakima"), a municipal corporation and first class
city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT (the "District", and together with Yakima, the "Parties"), a public facilities district
created by Yakima and the Cities of Selah and Union Gap, to provide for the design,
development, construction, financing and operation of the Yakima Convention Center, as
expanded.
WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the
"Convention Center"), providing first-class meeting, ballroom and other event facilities;
WHEREAS, Yakima desires to expand the Convention Center (the "Project");
WHEREAS, the Convention Center, as expanded by the Project, will serve as a Regional
Center under RCW 35.57.030, benefiting the region including residents of Yakima, the City of
Selah and the City of Union Gap (the "Cities") by stimulating economic development, creating
jobs, realizing additional sales and lodging tax revenues, attracting commercial business and
tourism, and providing facilities for convention, special events and community events including
public meetings and performing arts event;
WHEREAS, pursuant to Chap. 35.57 RCW (the "Act"), the Cities have entered into an
Interlocal Agreement to form the District for the purpose of acquiring (by purchase, lease or
otherwise), and assisting with the financing, development and operation of, the Convention
Center as expanded by the Project;
WHEREAS, under the Act, the District has access to several new revenue sources,
including a state sales and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the
retail sales and use taxes generated within the District boundaries to the District;
WHEREAS, the Act requires a local match of 33% of the net present value of the Sales
Tax in order for the District to impose the Sales Tax;
WHEREAS, Yakima has entered into a Lease Agreement transferring a leasehold interest
in the Convention Center property described in Exhibit A hereto (the "Property") (the value of
the Convention Center property is approximately $11,800,000) to the District in satisfaction of
this match requirement (approximately $2.4 million);
WHEREAS, the District will lease back the Property to Yakima pursuant to this
Agreement;
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WHEREAS, subject to certain limitations set forth herein, Yakima will issue bonds to
finance the Project, in consideration for the District's pledge of Sales Tax receipts to pay debt
service on the bonds and other Regional Center costs;
WHEREAS, Yakima will apply the net proceeds of the bonds to design, develop and
construct the Project, under the terms set forth herein;
WHEREAS, to provide for stable financing and operation of the Project in light of the
cyclical nature of Sales Taxes, Yakima wishes to provide additional funding in the event of a
Sales Tax shortfall; and
WHEREAS, Yakima will operate the Convention Center, as expanded by the Project, and
will apply certain City lodging taxes (in an amount, if any, determined annually by the City
Council) to pay a portion of the costs of operation and maintenance;
WHEREAS, the Parties desire that Yakima finance, design, develop and operate the
Convention Center as expanded by the Project on the terms set forth herein, and the District and
Yakima assist in financing the Project, also on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual undertaking and promises contained
herein, and the benefits to be realized by each Party including the benefits to the general public
in the region by the completion and operation of the Project, the Parties agree as follows:
L DEFINITIONS
For purposes of this Agreement, and any agreements supplemental hereto, the terms
defined in this Article shall have the following meanings, except as herein otherwise expressly
provided:
Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima.
Additional Revenue means all revenue received by the District (or by Yakima on behalf
of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking
Charges, Parking Taxes, Voted Sales Tax, and any other revenue derived from the ownership or
operation of the facilities of the District, including investment income; but excluding Sales Tax
Revenue and amounts received from Yakima pursuant to Section III(C) (including investment
earnings thereon).
Administrative Costs means the costs of the District incurred in administering the District
and this Agreement. Administrative Costs shall be specified in the District's annual budget
submitted to Yakima for approval and to the Cities of Selah and Union Gap for review and
comment.
Admission Charge means any charge imposed by the District (or by Yakima on behalf of
the District) for admission to its facilities, including charges for season tickets or subscriptions;
cover charges, or charges for use of seats and tables, and other similar accommodations; charges
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for food and refreshment if free entertainment, recreation, or amusement is provided; charges for
rental or use of equipment or facilities for purposes of recreation or amusement; and automobile
parking charges if the amount of the charge is determined according to the number of passengers
in the automobile.
Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be
paid by any person who pays an Admission Charge.
Agreement means this Design, Development, Construction, Financing and Operating
Agreement.
Beneficial Occupancy shall mean when the Project is granted a temporary or permanent
Certificate of Occupancy for the Convention Center as expanded by the Project from Yakima's
building official.
Bond Counsel means a firm of lawyers nationally recognized and accepted as bond
counsel and so employed by Yakima.
Bond Ordinance means the ordinance(s) of the Yakima Council authorizing the issuance
of the Bonds and any amendments.
Bonds means the bonds, notes or other evidences of indebtedness issued by Yakima
pursuant to and under authority of the Bond Ordinance to finance or refinance the Project.
Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total
interest cost on the Bonds exceeds 5.55%, or if the financing is determined to no longer be
economical.
Board means the governing body vested with the management of the affairs of the
District.
Charter means the Charter of the District, issued pursuant to the Interlocal Agreement, as
amended from time to time.
Code means the Internal Revenue Code of 1986, as amended, and all applicable
regulations and rulings thereunder.
Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project.
Costs of the Project means all capital costs that are paid or incurred by Yakima in
connection with the design, development and construction of the Project, including, but not
limited to all or a portion of the interest on Bonds during the period of construction of such
improvements, and for a period of time thereafter; amounts required to meet any reserve
requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for
expenses, including planning, permitting and design expenses, incident and properly allocable to
the Project; and all other items of expense incident and properly allocable to designing,
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developing and constructing the Project, financing the Project and placing the Project in
operation.
Debt Service means the amount to be paid on the next succeeding Payment Date to pay
the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due
on such Payment Date. A schedule setting forth Debt Service to be paid on the Bonds and any
Additional Bonds shall be attached as Exhibit B at such time as the Bonds or any Additional
Bonds are issued.
Debt Service Fund means the special fund(s) or account(s) established by Yakima under
the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal
of, interest on and redemption price, if any, of Bonds and/or any Additional Bonds.
Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any,
established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which
secures the Bonds and/or any Additional Bonds.
Debt Service Reserve Fund Requirement means the amount required to be deposited to
the Debt Service Reserve Fund, as established in the Bond Ordinance.
District means the public facilities district created pursuant to the Interlocal Agreement.
Event(s) of Default shall be as defined in Article IV herein.
Favorable Opinion of Bond Counsel means a written legal opinion of Bond Counsel
addressed to Yakima, to the effect that such action is permitted under the laws of the State and
under applicable ordinances of the Yakima Council, including the Bond Ordinance and any
Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any
other bonds of Yakima from gross income for federal income tax purposes under the Code
(subject to the inclusion of any exceptions contained in the opinion delivered upon original
issuance of such bond).
Force Majeure means any causes or conditions beyond a Party's reasonable control
(including, but not limited to fire, explosion, presence of a hazardous substance, earthquake,
storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation,
delay or failure to act by civil, military or other governmental authority other than a party; strike,
lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of,
or damage or casualty to, any equipment, facility or other property; any delay or failure by any
third party to provide a necessary service, supply, part, equipment, personnel or other item; or
interruption, suspension, curtailment or other disruption of a utility).
Governmental Authority shall mean any board, bureau, commission, department, or body
of any municipal, county, state, or federal governmental or quasi -governmental unit, or any
subdivision thereof, having, asserting, or acquiring jurisdiction over the Property or the
management, operation, use, or improvement thereof.
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Improvements shall mean all buildings, structures, fixtures, improvements and equipment
constructed or located on the Property, including, but not limited to, the structure of the
Convention Center and the parking facilities, elevator(s), lighting, seating, carpeting, HVAC,
plumbing, electrical and mechanical systems.
Insurance Proceeds mean the greater of (i) the proceeds from the insurance policies
actually maintained by Yakima with respect to the Convention Center or Project; or (ii) the
proceeds that would have been available had Yakima maintained the insurance policies required
to be maintained by Yakima under this Agreement.
Interlocal Agreement means the Interlocal Financing Agreement between the Cities
creating the District.
Law(s) and Ordinance(s) shall mean all present and future applicable laws, ordinances,
rules, regulations, resolutions, peg niits, authorizations, orders and requirements of all federal,
state, county and municipal governments, the departments, bureaus or commissions thereof,
authorities, boards or officers, any national or local board of fire underwriters, or any other body
or bodies exercising similar functions having or acquiring jurisdiction over all or any part of the
Property, including Yakima acting in its governmental capacity.
Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW.
Net Proceeds, when used with reference to the Bonds, means the principal amount of
such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less
the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve
Fund and/or the PFD Revenue Reserve Fund.
Operating Manual means the Operating Standards Manual for the expanded Convention
Center.
Operation and Maintenance Costs means all necessary costs to Yakima of operating and
maintaining the Convention Center as expanded by the Project, including but not limited to
administrative and general expenses, costs of insurance (including reasonable contributions for
self-insurance reserves, if any), consulting technical services and repairs and replacements (to the
extent not properly classifiable as capital costs), real estate taxes, if any, but excluding
depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a
similar nature and debt service on the Bonds and any Additional Bonds.
Outstanding, when used as of any particular time with reference to Bonds or Additional
Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the
Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds
theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or
Additional Bonds with respect to which all liability of Yakima shall have been discharged in
accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and
(3) Bonds or Additional Bonds for the transfer or exchange of or in lieu of or in substitution for
which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima
pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable.
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Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110.
Parking Tax means a tax on any Parking Charge imposed at any parking facility that is
owned or leased by the District pursuant to RCW 35.57.110.
Payment Date means the dates specified in the Bond Ordinance, or any Supplemental
Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with
respect to the Bonds or any Additional Bonds.
Permitted Investments means investments permitted by State law for investment of
Yakima and District funds, consistent with the terms of the Bonds and any Additional Bonds.
PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if
any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The
amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall
be maintained in the PFD Revenue Reserve Fund shall be established in the Bond Ordinance.
Predevelopment Costs means the cost of all planning, legal, architectural, engineering
and other services incurred by Yakima in connection with the Project until the date of issuance of
the Bonds.
Project means the design, construction, and operation of the additions to the Convention
Center, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site
plans, preliminary specifications, and schematic design documents), construction documents
(including all drawings and specifications necessary to completely describe the Project in detail
to a contractor for the purposes of bidding and construction, schedules, plans and specifications,
and the construction contract) and Project budgets (setting forth the construction contract cost,
taxes, all contingencies, fees and allowances).
Property shall mean the real property described in Exhibit A attached hereto or as
hereafter amended.
Refunding Bonds means bonds, notes or other evidence of indebtedness the proceeds of
which will be used to refund Bonds.
Sales Tax means the nonvoted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of
a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from
the amount of tax otherwise required to be collected or paid over to the State's Depai tent of
Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event,
not more than 25 years after the Sales Tax is first collected.
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Sales Tax Revenue means all Sales Taxes received by the District.
State means the State of Washington.
Substantial Completion shall mean when the Beneficial Occupancy of the Convention
Center as expanded by the Project is achieved.
Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council
amending or supplementing the Bond Ordinance, including any ordinance adopted by the
Yakima Council in connection with the issuance of Additional Bonds.
Voted Sales Tax means any sales and use tax imposed by the District pursuant to
RCW 82.14.048 and approved by the voters.
Yakima means the City of Yakima, Washington, a municipal corporation of the State, as
now or hereafter constituted.
Yakima Council means the City Council of Yakima, or any successor thereto as provided
by law.
II. INTENT AND RELATIONS
A. Intent.
1. Financing. It is the intent of this Agreement that the District lease the
Property to Yakima and that Yakima finance the Project. In consideration for Yakima's
agreement to finance the Project, it is the intent of the Parties that the District transfer all Sales
Tax Revenue to Yakima to pay Predevelopment Costs (to the extent not paid from Net
Proceeds), Debt Service and other Regional Center costs including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). It is
the intent of the Parties that, in the event that Yakima provides notice that amounts on deposit in
the Debt Service Fund and the PFD Revenue Reserve Fund are projected to be insufficient (not
taking into account amounts in the Debt Service Reserve Fund) for Yakima to pay Debt Service
when due, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such
deficiency as set forth in Section III(C).
2. Development. It is the intent of this Agreement that Yakima design,
develop and construct the Project in accordance with the Project Documents and the standards of
performance set forth in Article V. This Agreement is intended by the Parties to establish the
design, development and construction standards and other performance criteria for the Project.
3. Operation. It is the intent of the Parties that Yakima operate and maintain
the Convention Center and the Project, and that Yakima retain all rents, receipts, profits and
other revenues of the Convention Center as expanded by the Project. In consideration for
Yakima's agreement to operate and maintain the Convention Center and the Project, it is the
intent of the Parties that the District pay Additional Revenue, if any, to Yakima, and that Yakima
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pay the District's Administrative Costs. In addition, the Parties intend that Yakima apply certain
Lodging Taxes to pay a portion of Operation and Maintenance Costs, in an amount, if any,
determined on an annual basis by Yakima.
B. Description. The Property is located at 10 North Eighth Street , Yakima,
Washington 98901-2515, as legally described on the attached Exhibit A. The Convention
Center, as improved by the Project, will occupy approximately 47,000 square feet.
C. Yakima's Regulatory Role Reserved. Any Yakima design review and approvals
provided for herein are independent of, in addition to and do not in any way obligate Yakima
with respect to usual and customary Yakima peiuiitting, code compliance and other regulatory
reviews. The outcome of any such regulatory review is independent of and is in no way biased,
prejudiced or predetemiined in any way by this Agreement. Nothing in this Agreement is
intended or shall be construed to require that Yakima exercise its discretionary authority under
its regulatory ordinances to further the Project nor bind Yakima to do so. Yakima will process
applications for permits and approvals associated therewith as if such applications were made
without any Yakima participation in such projects.
D. Governing Law and Venue. This Agreement and the rights and obligations of the
Parties shall be governed by, and construed and interpreted in accordance with, the laws of the
State. Any suit filed between the Parties concerning this Agreement shall be commenced in the
Superior Court in Yakima County.
HI. SCOPE OF COMMITMENTS
A. Commitments by the District
1. Payment Obligation.
(a) Payment of Debt Service and Predevelopment Costs. In
consideration for Yakima's agreement to issue the Bonds and design, develop and construct the
Project, the District shall pay all Sales Tax Revenue to Yakima to pay Yakima's Debt Service
and Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center
costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and
PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service
Fund pursuant to Section III(C).
(b) Pledge of Sales Tax Revenue, Additional Revenue and other
Receipts of the District. The District hereby pledges Sales Tax Revenue and other amounts to be
paid by the District to Yakima for payment of Debt Service, Predevelopment Costs (to the extent
not paid from Net Proceeds), and other Regional Center costs including but not limited to
funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). The
obligation of the District to pay Sales Tax Revenue and other amounts due under the Agreement
and to perform and observe the other obligations on its part contained herein shall be absolute
and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or
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otherwise. The District's obligations under this Agreement shall continue in effect and shall
survive the satisfaction of Yakima's obligations under the Bonds, the Bond Ordinance, any
Additional Bonds, and any Supplemental Bond Ordinance until such time as all Predevelopment
Costs and Debt Service have been paid, together with any other amounts owed to Yakima
hereunder.
The Parties acknowledge and agree that Yakima will pledge this Agreement, as well as
the District's Sales Tax Revenue and other amounts to be paid by the District to Yakima, to the
payment of the Bonds and any Additional Bonds. Such pledge will be material to the offer and
sale of the Bonds, and will be disclosed to potential purchasers and purchasers of the Bonds.
Bondholders will rely on this pledge in purchasing the Bonds. So long as the Bonds or any
Additional Bonds are Outstanding, the District shall not issue bonds, or incur any other
obligation, secured by Sales Tax Revenue or by Additional Revenue.
(c) Revenue and Payment Reports. The District shall file annual
financial statements and annual reports with the Cities, as required under Sections 8.5 and 8.6 of
the Charter. Each such report shall bear a current date, be signed by an appropriate and duly
authorized District officer and be supported by reasonable documentation sufficient to sustain the
accuracy of the report.
(d) Termination for Failure To Timely Pay. This Agreement is
specifically conditioned upon the District's timely payment of amounts due hereunder. In the
event that the District fails to transfer amounts as and when required to Yakima, Yakima may
terminate this Agreement pursuant to the provisions contained in Article XIII.
2. District Funds. The District shall establish the following Funds and
accounts: Sales Tax Revenue Fund (or Account), Additional Revenue Fund (or Account), and
the Administrative Fund (or Account). The District may, in its discretion, establish such
additional accounts and subaccounts as the District deems necessary or useful, but the
establishment of any such account or subaccount shall not alter or modify any of the
requirements of this Agreement with respect to a deposit or use of money in the funds.
(a) Sales Tax Revenue Fund. The District shall establish a
Sales Tax Revenue Fund and shall deposit in the Sales Tax Revenue Fund all Sales Tax Revenue
and all net earnings on investments of money in the Sales Tax Revenue Fund. Amounts in the
Sales Tax Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Sales Tax Revenue Fund, and such income and interest shall
become part of the Sales Tax Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Sales Tax Revenue Fund are irrevocably pledged
and shall be used and transferred by the District as follows: Within three working days after
receipt, all amounts on deposit in the Sales Tax Revenue Fund to Yakima to pay Debt Service,
Predevelopment Costs and other Regional Center costs, including but not limited to funding
and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and
reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C).
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(b) Additional Revenue Fund. The District shall deposit in the
Additional Revenue Fund all Additional Revenue received by the District and all net earnings on
investments of money in the Additional Revenue Fund. Amounts received from Yakima to pay
Administrative Costs shall be deposited to the Additional Revenue Fund. Amounts in the
Additional Revenue Fund may be invested in Permitted Investments. The District shall maintain
records sufficient to permit calculation of the income on investments and interest earned on
deposit of amounts held in the Additional Revenue Fund, and such income and interest shall
become part of the Additional Revenue Fund unless otherwise applied in accordance with this
Section. The money and investments in the Additional Revenue Fund are irrevocably pledged
and shall be used and transferred by the District at least monthly as follows and in the following
order of priority:
(i) To the Administrative Fund to pay Administrative Costs;
and
(ii) The remainder, to Yakima to pay Operation and
Maintenance Costs.
To the extent that Additional Revenues are received by Yakima on behalf of the District,
Yakima shall apply such Additional Revenues to pay (i) Administrative Costs and/or (ii)
Operation and Maintenance Costs.
(c) Administrative Fund. The District shall establish an
Administrative Fund. Amounts transferred from the Additional Revenue Fund to pay
Administrative Costs pursuant to subsection (b) shall be deposited to the Administrative Fund.
shall be used to pay Administrative Costs.
Amounts in the Administrative Fund may be invested in Permitted Investments. The
District shall maintain records sufficient to permit calculation of the income on investments and
interest earned on deposit of amounts held in the Administrative Fund, and such income and
interest shall become part of the Administrative Fund unless otherwise applied in accordance
with this Section.
(d) Liens. Except as permitted under this Agreement, the District shall
not create any lien upon funds created hereunder other than the lien hereby created.
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B. Commitments by Yakima
1. Site Availability. Pursuant to the terms of the Lease Agreement between
Yakima and District, dated July 27, 2001, Yakima will lease to the District the Property
described in Exhibit A. The Parties agree that the leasehold interest in the Property is donated
(for nominal consideration in the form of $50 in rent) by Yakima to the District to be used for the
construction of a Regional Center, as defined in RCW 35.57.030. Moreover, the Parties agree
that the value of the Property is $11,800,000. The value of the leasehold interest in this Property
transferred by the Lease Agreement significantly exceeds 33% of the net present value of the
total Sales Taxes projected to be received by the District (approximately $2.4 million).
2. Issuance of the Bonds. Yakima agrees to issue the Bonds and
Completion Bonds, if necessary. Yakima reserves the right not to issue the Bonds if, at the time
the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55%, or if the financing is
determined to no longer be economical. The Bonds shall be in an aggregate principal amount to
be determined by Yakima, at least equal to the projected Costs of the Project, Predevelopment
Costs, amounts to pay costs of issuance and amounts to be deposited to the Debt Service Reserve
Fund, if any.
3. Application of Net Proceeds. Yakima agrees to apply Net Proceeds to
pay Predevelopment Costs and Costs of the Project as follows.
(a) Predevelopment Costs. Yakima has incurred and will continue to
incur Predevelopment Costs for the benefit of the District. Yakima will pay these
Predevelopment Costs from the District's Sales Tax Revenue received by Yakima to the extent
that Predevelopment Costs are not paid from Net Proceeds (at Yakima's election).
(b) Costs of the Project. In addition, Yakima will apply Net Proceeds
to pay Costs of the Project.
4. Design, Development and Construction Responsibility. Yakima shall
design or contract for the design of the Project and construct or contract for the construction of
the Project, in accordance with the Project Documents and with the standards of performance set
forth in Article V and elsewhere in this Agreement.
5. Operation and Maintenance Responsibility.
(a) Operations and Maintenance—Generally. Yakima agrees to
operate and maintain the Improvements including the Convention Center, related parking and,
upon Substantial Completion, the Project, on the terms and in accordance with the standards set
forth herein. Yakima shall operate and maintain the Improvements including the Convention
Center, related parking and the Project as a first class convention center facility, to be kept at all
times in a safe and clean condition.
Yakima shall provide (directly or by contract) all management, supervision, personnel,
materials, equipment, services and supplies necessary to operate, maintain and repair of the
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Improvements and shall take all reasonable precautions to prevent damage, injury or loss by
reason of or related to the operations and maintenance of the Improvements to any person or
property. Yakima shall hire an appropriate number of qualified employees to operate and
maintain the Improvements consistent with the best management practices. Yakima shall
properly supervise and direct its employees and other parties implementing the performance of
its duties, obligations and functions under this Agreement. Yakima shall be fully responsible for
the perfounance of such employees and other parties.
Yakima shall comply with all applicable Laws and Ordinances relating to the safety of
persons or property or their protection from damage, injury or loss. Yakima shall obtain all
statements, certificates, permits, licenses, rights, and approvals, whether public, private, local,
state or federal, that are necessary or appropriate to the continued operation of the Improvements
as a first class convention center. Yakima shall undertake all modifications to the Improvements
required to comply with state, federal and local laws, rules, regulations, judgments, orders and
decrees.
Prior to Substantial Completion of the Project, Yakima shall provide pre -opening
services, including start-up of the Project, mobilization of staff and services, and perfoiniance of
marketing and booking plans.
(b) Compliance with the Operating Manual. Yakima shall maintain
the Improvements in substantial compliance with the terms of the Operating Manual during the
term of this Agreement. The Operating Manual shall not be amended except with the written
approval of the Yakima City Manager or his or her designee. The Operating Manual shall not be
revised in a manner that will impair the security of the owners of the Bonds or any Additional
Bonds.
Article VII.
(c) Insurance. Yakima shall maintain insurance as set forth in
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6. Operation and Maintenance Costs.
(a) Obligation To Pay Operation and Maintenance Costs and
Administrative Costs; Right to Receive all Rents and Operating Revenues. Yakima shall pay
Operation and Maintenance Costs from revenues derived from operation of the Convention
Center and the Project, Additional Revenues received from the District, from Lodging Taxes, or
other Yakima funds, as set forth below. Within a reasonable period after receipt of an invoice
therefor, Yakima shall pay to the District its Administrative Costs as set forth in the District's
budget approved by Yakima.
All rents, receipts, profits and other revenue derived from the operation of
the Convention Center and the Project shall be retained by, and shall be the property of, Yakima,
and shall be applied to pay Operation and Maintenance Costs or any other lawful purposes of
Yakima.
(b) Lodging Taxes. To the extent not paid from revenues derived from
operation of the Convention Center and the Project, Additional Revenues received from the
District, or other Yakima funds, Yakima will apply Lodging Taxes to pay Operation and
Maintenance Costs. The amount of Lodging Taxes to be applied to this purpose in any year shall
be determined by the Yakima Council in its sole discretion as part of its annual budget process.
The amount of Lodging Taxes to be applied to pay Operation and Maintenance Costs may vary
from year to year and may equal zero in some years. In any event, the amount of Lodging Taxes
to be applied shall not exceed the amount available after payment of debt service on Yakima's
outstanding bonds (including all or a portion of the Bonds) to which these taxes are pledged.
Yakima's obligation hereunder is limited only to the amounts designated for this purpose
by the Yakima Council. Yakima does not hereby guarantee any obligations or liability of the
District. It is expressly understood and agreed that any obligation or liability arising out of
and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in
connection therewith, shall be satisfied exclusively from the assets and credit of the District, and
no creditor or any other person or entity shall have any recourse to any of the assets, credit, or
services of Yakima on account of any debts, obligations, or liabilities of the District
(c) Amounts Remitted to Yakima. Amounts remitted to Yakima
pursuant to Section III(A)(2)(a) and (2)(b)(ii) shall be used by Yakima for the following
purposes. Receipts that are Sales Tax Revenue shall be used to pay Predevelopment Costs (to
the extent not paid from Net Proceeds), Debt Service, and for the purposes set forth in RCW
35.57.020, as the same may be amended (acquiring, constructing, owning, remodeling,
maintaining, equipping, reequipping, repairing, financing, and operating one or more Regional
Centers). Receipts that are Additional Revenues shall be applied to pay Operation and
Maintenance Costs.
Yakima's obligation hereunder is limited only to the amounts received from the District.
Yakima does not hereby guaranty any debt obligations or liability of the District.
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All amounts remitted to Yakima pursuant to Section III(A)(2)(a) and 2(b)(ii), together
with all rents, receipts, profits and other revenues derived by Yakima from its operation of the
Convention Center, shall be retained by and be the property of Yakima to be applied to pay
Operation and Maintenance Costs (directly or by contract) or for other lawful purposes of
Yakima . It is the Parties intent that all such amounts shall be Yakima funds, accounted for in
Yakima's books and accounts.
(d) Additional Support. To the extent, as from time to time authorized
by the Yakima City Manager, Yakima will utilize its employees to provide oversight and
administrative assistance in working with District to achieve the mutual goals and objectives of
the Cities and District under this Agreement. Unless otherwise specified in this Agreement or
applicable law, actions to be taken or decisions to be made by Yakima will be the responsibility
of the Yakima City Manager or his or her designee. Yakima hereby grants to the extent
permitted by law such person or persons the power, authority, and right to carry out all such
responsibilities.
C. Commitment by Yakima to Replenish Sales Tax Shortfall
1. Funding Commitment.
Yakima shall provide notice to the District in the event that amounts in the Debt Service
Fund and the PFD Revenue Reserve Fund (not taking into account amounts in the Debt Service
Reserve Fund) are projected to be insufficient to pay Debt Service on any Payment Date. In such
event, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency.
Yakima's obligation hereunder is limited only to the amount to be paid to replenish any
projected deficiency in the Debt Service Fund. Yakima does not hereby guarantee any debt
obligations or liability of the District. It is expressly understood and agreed that any obligation
or liability arising out of and/or incurred by the District by reason of this Agreement, or the
carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets
and credit of the District, and no creditor or any other person or entity shall have any recourse to
any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities
of District.
IV. PROJECT COMPONENTS AND OPERATION CRITERIA
A. Project Components. Yakima shall finance, design and construct the Project in
accordance with the Project Documents, and in accordance with the perfouliance specifications
set forth herein.
B. Project Purpose. The Project is being constructed to serve the needs of the
region, including the residents of Yakima, the City of Selah and the City of Union Gap.
Following Project completion, Yakima shall be solely responsible for management, operation
and maintenance of the Convention Center, as expanded by the Project, consistent with the terms
of this Agreement and the Operating Manual.
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1. Public Access. Yakima shall provide regular hours during which the
Convention Center will be open to the public (subject to reasonable Admission Charges);
provide public programs; and make available for reasonable public use any ballroom,
auditorium, meeting rooms or other public spaces in the Convention Center (subject to
reasonable security measures).
2. Yakima Approval. In consideration of Yakima's obligations hereunder,
the District agrees that the following shall be subject to the approval of the Yakima Council:
(a) Approval of the Yakima Council:
(i) The District shall not impose Admission Charges or Parking Charges
without the prior approval of the Yakima Council, as set forth in the
Interlocal Agreement and the Charter.
(ii) The District shall not impose Admission Taxes or Parking Taxes
without the prior approval of the Yakima Council.
(iii) The District's annual budget, including Administrative Costs, shall be
subject to the approval of the Yakima Council and to review and
comment by the Cities of Selah and Union Gap.
(iv) The District shall not authorize or engage in gambling activities or
authorize or publicly display any artwork without the prior approval of
the Yakima Council.
(v) Any acquisition or transfer of real and personal property with a value
over $100,000 by lease, sublease, purchase, or sale by the District shall
be subject to approval by the Yakima Council.
C. Project Contracting and Management
1. Yakima shall construct the Project according to the Project Documents.
2. Yakima will select the contractor(s) for the Project through a competitive
bidding process under the Laws of the State, pursuant to procedures designed to provide
maximum practical competition by and from qualified contractors.
3. Yakima shall take reasonable precautions to prevent unnecessary damage,
injury or loss to property, structures, and vegetation in the Project area and shall at its own
expense repair any damage thereto caused by its, or its contractors', actions. Yakima shall
require its contractors to take any and all precautions that may be necessary to render all portions
of the Project and any adjacent areas affected by the Project secure in every respect, and to
decrease the likelihood of accidents from any cause, and to avoid contingencies that are liable to
delay the Project. Yakima shall require its contractors to exercise utmost care when using
explosives or other hazardous materials or equipment, and when utilizing unusual methods.
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These requirements shall in no way relieve Yakima of its responsibility for safety on the Project.
The District shall not be responsible for any unsafe conditions.
V. DEVELOPMENT CRITERIA AND OVERSIGHT
A. Generally. Except as otherwise provided in this Section, the Parties hereby agree
that Yakima shall have sole responsibility for construction of the Project and shall be responsible
for obtaining all necessary land use, building and mechanical permits, and all other required
permits or approvals for construction of the Project. Yakima shall promptly comply with all
applicable Laws and Ordinances as they relate to the Property and Improvements. Yakima's
responsibility to finance such construction is limited to the extent of Net Proceeds.
B. Standards of Performance. Yakima shall perform the terms of this Agreement
according to the following standards:
1. Performance in a good and workmanlike manner and in compliance with
all applicable laws and ordinances, rules, and regulations.
2. Use of materials that are of first class quality and workmanship.
3. Maintenance and warranty of all portions of the Project consistent with the
Project Documents.
C. Development Schedule and Substantial Completion Date.
1. RCW 82.14.390 currently requires that construction of the Project
commence before January 1, 2003. Accordingly, Yakima shall commence
construction of the Project before January 1, 2003, or such later start date
set forth in any amendment to RCW 82.14.390 (the "Date of
Commencement").
2. Yakima shall pursue the design and construction of the Project to achieve
Substantial Completion within 24 months after the Date of
Commencement, excluding time periods when the design, construction or
development of the Project is unavoidably delayed by reasons of Force
Majeure; provided, however, that said date may be extended by the
Yakima City Manager.
VI. PROJECT COSTS. Yakima shall finance, design, construct, and assume the risk of loss
of the Project from Net Proceeds and from other amounts paid by the District to Yakima
pursuant to the Agreement.
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VII. INSURANCE
A. Insurance Requirements. Yakima shall maintain and keep in force insurance
covering all aspects of the construction activity on the Property, including but not limited to the
following requirements:
1. Builder's All Risk Comprehensive Coverage. Yakima shall keep, or shall
require the construction contractor to keep, all Project components, including but not limited to
the Convention Center and parking facilities, insured for Builders All Risk Comprehensive
Coverage including earthquake and flood in any event in an amount not less than one hundred
percent (100%) of the then- full "Replacement Cost," being the cost of replacing the Project
components, and all fixtures, equipment, improvements and betterments thereto.
2. Commercial General Liability. Yakima shall carry, and shall require its
construction contractor to carry, Commercial General Liability insurance providing coverage
against claims for bodily injury, death or property damage on the Property with broad form
liability and property damage endorsement, such insurance to afford minimum protection, during
the teiiii of the construction phase, and written for combined single limits of liability of no less
than Ten Million Dollars ($10,000,000), per occurrence, said amount to be adjusted from time to
time with coverage deemed customary under like conditions.
3. Property Damage Insurance. Yakima shall carry property insurance
covering the Property including all Improvements, including earthquake, flood, boiler and
machinery insurance, in an amount equal to at least one hundred percent (100%) of the
replacement cost of all Improvements. Such insurance shall contain coverage against loss or
damage by perils no less broad than the current edition of the ISO Special Form, 1985 Edition.
Yakima shall be responsible for payment of any deductibles under said insurance policies and
any costs of restoration resulting from any uninsured or underinsured losses.
B. Insurance Policies. Insurance policies required herein:
1. Shall be issued by companies authorized to do business in the State with
the following qualifications:
a. The companies must be rated no less than "A," as to general policy
holders rating and no less than "X" as to financial category in accordance with the latest edition
of Best's Key Rating Guide, published by A.M. Best Company, Incorporated.
b. The policies shall be issued as primary policies.
2. Each such policy or certificate of insurance mentioned and required in this
Section VII shall have attached thereto (1) an endorsement that such policy shall not be canceled
or materially changed without at least 30 days' prior written notice to the District and Yakima;
(2) an endorsement to the effect that the insurance as to any one insured shall not be invalidated
by any act or neglect of any other insured; (3) an endorsement pursuant to which the insurance
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carrier waives all rights of subrogation against the Parties hereto; and (4) an endorsement
pursuant to which this insurance is primary and noncontributory.
3. The certificates of insurance and insurance policies shall be furnished to
the District and Yakima prior to commencing any construction under this Agreement. The
certificate(s) shall clearly indicate the insurance and the type, amount and classification, as
required for strict compliance with this Section VII.
4. Cancellation of any insurance or non-payment by Yakima of any premium
for any insurance policies required by this Agreement shall constitute an Event of Default under
Section XII of this Agreement.
C. Adjustments. The types of policies, risks insured, coverage amounts, deductibles
and endorsements may be adjusted from time to time as the District and Yakima may mutually
deter i�iine.
VIII. ASIS
A. Due Diligence. The District acknowledges that it has diligently investigated to its
full satisfaction the physical condition of the Property and all other matters that in the District's
judgment affect the District's use of the Property and the District's willingness to enter into this
Agreement. The District acknowledges that except as expressly provided for in this Agreement,
neither Yakima nor any employee, officer, agent or representative of Yakima has made any
representations or warranties whatsoever regarding the Property or this transaction or any facts
relating thereto, including, without limitation, any representations or warranties concerning the
physical condition of _ =e Property, access, zoning laws, environmental matters, suitability,
feasibility, utilities, or : v other matter affecting the Property or the use thereof.
B. Acceptance. Except as expressly provided for in this Agreement, Yakima shall
accept the Property "as is" and "where is" with all faults, of any nature or kind, without any
representations or warranties, express or implied or statutory of any kind whatsoever by the
District or any employee, officer, agent or representative of the District. Upon acceptance by
Yakima of the Property under this Agreement, then Yakima shall be deemed to have accepted
the Property and to have waived and released its right to recover from the District any and all
damages, losses liabilities, costs, or expenses whatsoever (including attorneys' fees and costs)
and claims therefor, whether direct or indirect, known or unknown, foreseen or unforeseen,
which may arise on account of or in any way arising out of or connected with the physical
condition of the Property or any Law or Ordinance.
C. Environmental Contamination. Yakima agrees to indemnify and hold harmless
the District for any environmental contamination existing as of the date of this Agreement.
Yakima agrees to design and develop the Project in such a manner as to minimize, to the extent
financially practicable, the excavation of native soils. In the event Yakima encounters
contaminated soils, ' Ikima shall be responsible for all costs of remediating the contaminated
soil, and for seeking recovery from responsible parties.
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The Parties agree that in the event contaminated soils are encountered and any Party
incurs remediation costs, the Parties shall fully cooperate in pursuing claims against those
entities that may be liable.
IX. LIABILITY
A. Indemnification of Yakima.
During the term of this Agreement, to the maximum extent not prohibited by law, the District
agrees to and shall indemnify and hold Yakima harmless from and against all liability, loss,
damage, cost, or expenses (including reasonable attorneys' fees and court costs, amounts paid in
settlements and judgment) arising from or as a result of the death of any person or of any
accident, injury, loss or damage whatsoever to any person or to the property of any person that
occurs on or adjacent to the Property and that is directly or indirectly caused by the acts, errors,
or omissions of the District or its officers, agents, servants, employees, officers, contractors or
subcontractors. The District shall not be responsible for (and such indemnity shall not apply to)
the gross negligence or willful misconduct of Yakima, or their respective officials, servants,
employees or officers.
X. DESTRUCTION OR CONDEMNATION
A. Total or Partial Destruction.
1. If the Convention Center or Project is totally or partially destroyed at any
time after execution of this Agreement, and the Insurance Proceeds are or would have been
sufficient to pay the cost of reconstruction or restoration, or if the uninsured cost of
reconstruction or restoration is less than Two Hundred Fifty Thousand Dollars ($250,000), and
the damage or destruction is such that as a result thereof Yakima cannot meet its obligations
under this Agreement, Yakima shall reconstruct or restore the damage consistent with terms of
this Agreement within two years of the destruction; provided that, if the damage or destruction is
such that Yakima may notwithstanding such damage or destruction continue to fulfill its
obligations under this Agreement, Yakima shall have the discretion to use the Insurance
Proceeds to restore and repair the Property to the extent necessary and appropriate for its
purposes. If the Insurance Proceeds are insufficient and the uninsured cost is more than Two
Hundred Fifty Thousand Dollars ($250,000), Yakima may elect to reconstruct or restore the
damage or to terminate this Agreement by delivery of written notice to the District within 30
days after the destruction.
2. If Yakima elects not to reconstruct or restore the damage, this Agreement
shall teiriiinate and the Property shall revert to Yakima pursuant to Section XIII. The District
shall transfer the Property in its then condition to Yakima, along with any Insurance Proceeds
attributable to the damage or destruction of the Project.
B. Condemnation. If the whole or any substantial part of the Property is taken or
condemned in the exercise of eminent domain powers (or by conveyance in lieu thereof), such
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that Yakima can no longer meet its obligations under this Agreement, this Agreement shall
terminate upon the date when possession of the Property so taken shall be acquired by the
condemning authority. As used herein, "substantial" shall be defined as reasonably preventing
the conduct of Yakima's activities. Yakima shall have the right to claim and recover from the
condemning authority such compensation as may be separately awarded or recoverable by
Yakima in Yakima's own right on account of any and all damage to Yakima's activities by
reason of the condemnation and on account of any cost or loss Yakima might sustain; provided
that, the District shall pay to Yakima that portion of its condemnation proceeds equal to the
amount of Debt Service on the Outstanding Bonds and Additional Bonds, if any.
XL RIGHT TO ASSIGN OR OTHERWISE TRANSFER
A. Right to Transfer Agreement.
1. During the term of this Agreement and at such time as the Bonds or
Additional Bonds are no longer Outstanding, the District shall have the right to assign or
otherwise transfer the Agreement, to such other persons, firms, corporations, partnerships, joint
ventures, and federal, state or municipal government or agency thereof, as the District shall
select (the "Transferee"), provided, however, that:
a. The District must obtain the prior written consent of Yakima;
b. Such assignment or transfer shall be made expressly subject to the
terms, covenants and conditions of this Agreement;
c. The District shall deliver to Yakima a duly executed and recorded
copy of the document evidencing such transfer, including a suitable estoppel agreement(s); and
d. Such transfer shall not be effective to bind Yakima until the
Transferee has assumed all obligations of the District under this Agreement and notice thereof is
given to Yakima, and such notice shall designate the name and address of the Transferee.
2. Said Transferee (and all succeeding and successor Transferees) shall
succeed to all rights and obligations of the District under this Agreement, subject, however, to all
duties and obligations of the District in and pertaining to the then unperformed provisions of this
Agreement. Upon such transfer by the District, or by a successor in accordance with the
requirements of this Section, the District (and/or its successor(s)) as Transferor in such a transfer
shall not be released and discharged from all of its duties and obligations hereunder which
pertain to the then unperformed provisions of this Agreement without the written consent and
release of Yakima.
XII. DEFA ULT
A. Event of Default of the District. This section shall apply if the District fails to
keep, observe, or perfoun any of its duties or obligations under this Agreement (an "Event of
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Default"). Notwithstanding the generality of this paragraph, an "Event of Default" shall be
deemed to occur for any of the following specific events:
1. The failure of the District to pay amounts due to Yakima hereunder when
due.
2. Conversion by the District of any portion of the Property to any use other
than the uses permitted under the Charter and this Agreement.
3. The making by the District of an assignment for the benefit of creditors
contrary to the terms of this Agreement, or filing a petition in bankruptcy or of reorganization
under any bankruptcy or insolvency law or filing a petition to effect a composition or extension
of time to pay its debts.
4. The appointment of a receiver or trustee of the property of the District,
which appointment is not vacated or stayed within ninety days.
5. The filing of a petition in bankruptcy against the District or for its
reorganization under any bankruptcy or insolvency law that shall not be dismissed or stayed by
the court within ninety days after such filing.
B. Force Majeure. The District shall not be considered to be in breach of or default
under this Agreement on account of any delay or failure to perform as required by this
Agreement as a result of a Force Majeure event.
XIII. REMEDIES
A. Remedies Upon Default. If an Event of Default on the part of the District shall
occur, then Yakima at any time after periods set forth for the exercise of rights herein shall have
the following cumulative rights and remedies:
1. Provide Notice and Time to Cure. If Yakima desires to take action for an
Event of Default, Yakima shall provide written notice to the District specifying such Event of
Default or Events of Default and stating that Yakima at its option may terminate this Agreement
on the date specified in such notice, which shall be at least 30 days, but no more than 90 days,
after the giving of such notice, unless the District cures such Event of Default.
2. Injunction. Yakima shall be entitled to restrain, by injunction, the
commission of or attempt or threatened commission of an Event of Default and to obtain a
judgment or order specifically prohibiting a violation or breach of any such term or provision of
this Agreement without, in either case, being required to prove or establish that Yakima does not
have an adequate remedy at law. The District hereby waives the requirement of any such proof
and acknowledges that Yakima would not have an adequate remedy at law for the District's
commission of an Event of Default hereunder.
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3. Terminate for Default.
a. Yakima shall be entitled to immediately terminate this Agreement
if any Event of Default continues for a period of 30 days after written notice thereof from
Yakima to the District, or in the case of such Event of Default which cannot with due diligence
and in good faith be cured within 30 days, the District fails to proceed promptly after such notice
and with due diligence and in good faith, to begin to cure said Event of Default; provided that, in
such event proper time to cure may be extended only by written peiuiission of Yakima.
b. In the event that this Agreement terminates for reasons of an Event
of Default, Yakima, in its sole discretion, shall have the option of exercising one or both of the
following choices:
(i) Receive payment from the District in an amount required to
pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service on the
Outstanding Bonds and any Additional Bonds when due, and the amount necessary to reimburse
Yakima for any amounts paid pursuant to Section III(C).
(ii) Immediately terminate the Lease Agreement.
4. Recover Damages, Costs and Expenses. Yakima shall be entitled to
proceed against the District for all direct damages, costs and expenses arising from the District's
committing an Event of Default hereunder and to recover all such direct damages, costs and
expenses, including reasonable attorneys' fees.
B. No Waiver by Yakima. No failure by Yakima to insist upon the performance of
any of the terms of this Agreement or to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach or of any of the terms of this Agreement.
None of the terms of this Agreement to be kept, observed or performed by the District, and no
breach thereof, shall be waived, altered or modified except by a written instrument executed by
Yakima. No waiver of any breach shall affect or alter this Agreement, but each of the terms of
this Agreement shall continue in full force and effect with respect to any other then existing or
subsequent breach thereof. No waiver of any default of the District hereunder shall be implied
from any omission by Yakima to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect any default other than the default
specified in the express waiver and then only for the time and to the extent therein stated. One or
more waivers by Yakima shall not be construed as a waiver of a subsequent breach of the same
covenant, term or conditions.
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C. Termination
Notwithstanding anything to the contrary contained in this Agreement:
1. Termination by Mutual Agreement Prior to Beneficial Occupancy. This
Agreement shall terminate under circumstances where all Parties mutually agree in writing that it
is impossible or impractical to design, develop or construct the Project. In the event that one
Party determines that it is impossible or impractical to design, develop or construct the Project,
the Parties agree to meet and enter into good faith negotiations regarding whether the Project has
become impossible or impractical.
D. Reversion of the Leasehold Interest to Yakima. In the event that this Agreement
terminates prior to Beneficial Occupancy, Yakima may immediately terminate the Lease
Agreement and reenter and retake the Property, and the District shall promptly:
1. Remove all of its personal property from the Property;
2. Remove all rubble, debris and unusable improvements from the Property
as required by Yakima in its sole discretion;
3. Remove all waste materials and rubbish from and about the Property and
adjacent property; and
4. Satisfy or bond all liens upon the Project (or claims which with notice or
passage of time or both would mature into a lien).
Yakima shall be entitled to retain title to the Property and all Improvements, including the
Convention Center and Project, free and clear of any leasehold interest or other claim of the
District and anyone claiming by, through or under the District.
E. Certain Provisions Survive Termination. The following provisions of this
Agreement shall survive notwithstanding any termination of this Agreement and reversion of the
leasehold interest in the Property and Improvements to Yakima:
1. As Is (Section VIII);
2. Liability (Section IX); and
3. Destruction or Condemnation (Section X).
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XIV. REPRESENTATIONS AND WARRANTIES
A. Yakima's Representations. Yakima hereby represents and warrants to the
District that it has full statutory right, power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the person signing this Agreement on
behalf of Yakima has the authority to bind Yakima and to enter into this transaction; and that
Yakima has taken all requisite action and steps to legally authorize the execution, delivery, and
performance of this Agreement.
B. The District's Representations and Warranties. The District hereby represents
and warrants to Yakima that it has full power and authority to enter into this Agreement and
perform in accordance with its terms and provisions; that the parties signing this Agreement on
behalf of the District have the authority to bind the District and to enter into this transaction; and
that the District has taken all requisite action and steps to legally authorize the execution,
delivery, and performance of this Agreement.
C. Tax Covenant. The District acknowledges that the Bonds are to be issued as tax-
exempt obligations. The District covenants that it will not take any action to cause interest on
the Bonds or any Additional Bonds to be taxable.
XV. LEASE BACK
A. Sublease. The District hereby leases to the City and the City hereby hires from
the District certain improved real property located in the City of Yakima, Washington, legally
described in Exhibit A attached hereto and by this reference incorporated (the "Premises") and
certain improvements thereon consisting of a convention center, and the Project to be built on the
Premises (the "Improvements"). Such Premises are subject to all easements, reservations,
encumbrances and restrictions of record, including in particular that certain Lease Agreement
between the City, as lessor, and the District, as lessee, dated July 27, 2001.
B. Rent. Within 60 days of the date of this Agreement, the City shall pay to the
District $50, which represents prepaid rent for the entire term of this Agreement.
C. Lease Obligations Assumed._Except as other wise provided herein, the District hereby
assigns and the City agrees to assume all duties and obligations of the District under the Lease
Agreement.
XVL MISCELLANEOUS
A. Captions. The headings and captions of this Agreement and the Table of
Contents preceding the body of this Agreement are for convenience and reference only and in no
way define, limit or describe the scope or intent of this Agreement nor in any way affect this
Agreement.
B. Construction. All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the Party or Parties may
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require. The Parties hereby acknowledge and agree that each was properly represented by
counsel and this Agreement was negotiated and drafted at arms' length so that the judicial rule of
construction to the effect that a legal document shall be construed against the draftsman shall be
inapplicable to this Agreement.
C. Entire Agreement. This Agreement and any collateral instruments referenced
herein contain the entire agreement between the Parties hereto and shall not be modified or
amended in any manner except by an instrument in writing executed by the Parties hereto.
Previous drafts of this Agreement or any portions thereof shall not be utilized in any manner by
either Party should any dispute arise as to the intent of this Agreement.
D. Successors and Assigns. The terms herein contained shall bind and inure to the
benefit of Yakima, its successors and assigns, and the District, its successors and assigns, except
as may be otherwise provided herein.
E. Notices. All notices which may be or are requested to be given pursuant to this
Agreement shall be deemed given when hand delivered, or when deposited in the United States
Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and
addressed to the Parties at the following addresses unless otherwise provided for herein:
d
To Yakima:
With a copy to:
To the District:
Richard A. Zais, Jr.
City Manager
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Raymond L. Paolella, Esq.
City Attorney
City of Yakima
200 South Third Street
Yakima, WA 98901
Richard E. Ostrander
Chair
Yakima Regional Public Facilities District
10 N. 8th Street
Yakima, WA 98901
F. Incorporation by Reference. All exhibits and appendices annexed hereto are
hereby incorporated by reference herein.
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G. Execution in Counterparts.
1. This Agreement may be executed in any number of counterparts and by
different Parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
Agreement.
2. This Agreement becomes effective when the representatives of the Parties
have executed it.
H. Waiver. The_waiver by either the District or Yakima of the performance of any
covenant, condition, or promise shall not invalidate this Agreement nor shall it be considered a
waiver by such Party of any other covenant, condition, or promise hereunder. The waiver by
either the District or Yakima of the time for performing any act shall not constitute a waiver of
the time for performing any other act or an identical act required to be performed at a later time.
The exercise of any remedy provided by law or the provisions of this Agreement shall not
exclude other consistent remedies unless they are expressly excluded.
I. Exculpation. Notwithstanding anything contained to the contrary in any
provision of this Agreement, it is specifically agreed and understood that there shall be
absolutely no personal liability on the part of any individual officers or directors of Yakima or
the District with respect to any of the obligations, teens, covenants, and conditions of this
Agreement.
J. Severability. If any term or provision of this Agreement or the application thereof
to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of
this Agreement or the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be affected thereby and shall
continue in full force and effect.
K. Term. This Agreement shall terminate on the later of the date that the Bonds and
any Additional Bonds are no longer Outstanding and the date on which the Sales Tax expires.
L. Amendments. This Agreement may be amended, only with the written consent of
the Parties.
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IN WITNESS WHEREOF, the Parties hereto have executed this document as of the day
and year first above written.
DATED this-AZ\\day of�,�e� , 2001.
CITY OF YAKIMA
By
Attest:
Richard A. Zais, Jr.
City Manager
Az/4
City Clerk
Approved as to form:
City Attorney
YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT
Chair
Board of Directors
Certified to be. a true and correct copy of f,11,'
original filen in my office.
CITY CLERK
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PG P I41 0A Yakima Co, WA
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or
who appeared before me, and
oath stated that he/she was a
.l%A/4-(j! of
have satisfactory evidence that'.1- '-"i '=%-ri' is the person
said person acknowledged that he/she signed this instrument, on
uthorized to execute the instrument and acknowledged it as the
v1(„ /'l,%,-- to be the free and voluntary act of such
party for the uses and purposes
mentioned in the instrument.
, 2001.
Notary Public
Print/Type Name
My commission expires,
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
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:
Use this space for notarial stamp/seal)
, 2001.
Notary Public
Print/Type Name
My commission expires
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616 Yakima Co, WA
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property located at 10 No. 8th Street, Yakima, Washington,
including accompanying parking lots:
Lot 1 and the E 60 feet of Lots 15 & 16, Block 149,
together with vacated alley; and
Lots 1-8 & the E 60 feet of Lots 9-16, Block 150;
together with vacated alley, and the E 220 feet of
vacated "A" Street; and
Lots 1-4, 6-8 and 9-14, Block 170, together with
vacated alley; and
Lots 1-3 and 14-16, Block 169;
All in Husons Addition to North Yakima as recorded in
Vol. "A" of Plats, pg. 11, records of Yakima County,
Washington.
lgC
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( 2N
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5-6
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EXHIBIT B
DEBT SERVICE SCHEDULE
(To be attached and incorporated into the Agreement at the time that the Bonds and any
Additional Bonds are issued)
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£41 AA Yakima Co, WA
YAKIMA REGIONAL PUBLIC FACILITIES DISTzuCT
RESOLUTION NO. 2O2O-OI
A RESOLUTION of the Board of Directors of the Yakima Regional Public
Facilities District authorizing the execution of an amendment to the Design,
Development, Construction, Financing and Operating Agreement between
the District and the City of Yakima, Washington relating to the Yakima
Convention Center; and approving certain matters related thereto.
WHEREAS, pursuant to chapter 35.57 of the Revised Code of Washington ("RCW") and
an Interlocal Agreement dated July 25,2001, as amended (the "Interlocal Agreement"), the City
of Yakima, Washington (the "City") and the Cities of Selah and Union Gap, Washington, created
the Yakima Regional Public Facilities District (the "District"); and
WHEREAS, the District is authorized by chapter 35.57 RCW and the Interlocal Agreement
to acquire, construct, own, remodel, maintain, rehabilitate, repair, finance and operate one or more
"regional centers" as defined in RCW 35.57.020, including, but not limited to, convention,
conference or special event centers, or any combination of such facilities, with associated parking;
and
WHEREAS, pursuant to the terms of the Design, Development, Construction, Financing
and Operating Agreement between the City and the District dated July 27,2001 (the "Operating
Agreement"), the City owns and operates the Yakima Convention Center (the "Convention
Center"), a "regional center" within the meaning of chapter 35.57 RCW and a convention center
within the meaning of chapter 67.28 RCW; and
WHEREAS, the District, as authorized by RCW 82.14.390, imposed a0.033o/o sales and
use tax (the "Sales T*"), to assist in financing the design, development, acquisition, construction,
operation, rehabilitation, improvement and management of the Convention Center (as further
defined in the Operating Agreement, the "Project"); and
WHEREAS, the payment of the principal of and interest on the 2007 Bonds allocable to
the Convention Center is payable from and secured by a pledge of Sales Tax revenue; and
WHEREAS, the 2007 Bonds may be called for redemption on any date on or after May 1,
2017 at a price of par, plus accrued interest, if any, to the date of redemption, and the City Council
has determined it to be in the best interest of the City to refund all or a portion of the 2007 Bonds
with proceeds of one or more series of Refunding Bonds (as defined in the Operating Agreement);
and
WHEREAS, the City issued its Limited Tax General Obligation and Refunding Bonds,
2007 (the *2007 Bonds"), and applied a portion of the proceeds of such 2007 Bonds (a) to refund
certain then-outstanding obligations of the City issued in 2002 to finance the construction of and
expansion to the Convention Center and (b) to finance various capital projects of the City,
including renovations to the downtown area of the City; and
WHEREAS, the City and the District now desire to expand, rehabilitate and improve the
Convention Center, including related parking (the "Expansion Project"); and
WHEREAS, the City Council has determined it in the best interest of the City to issue its
limited tax general obligation bonds as "Completion Bonds" and "Additional Bonds" under the
Operating Agreement and to use proceeds of such bonds to finance and/or reimburse the City for
costs of the Expansion Project and will pledge Sales Tax revenue to the repayment of bonds issued
for such purpose; and
WHEREAS, pursuant to the Operating Agreement, the Sales Tax shall expire when the
Bonds or any Additional Bonds are retired, or in any event, not more than 25 years after the Sales
Tax is first collected; and
WHEREAS, pursuant to Chapter 164, Laws of 2017, the Washington State Legislature
extended the time period for the Sales Taxes imposed under RCW 82.14.390 from a maximum 25
year term to a maximum 40 year teim; and
WHEREAS, the parties to the Operating Agreement now desire to amend such Agreement
to reflect the extended 40 year term of the Sales Taxes and to make other clarifying revisions as
provided herein;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT, as follows:
Section 1. Definitions. Unless the context clearly requires otherwise, capitalized terms
used in this resolution have the meanings given such terms in the recitals hereof and in the
Operating Agreement.
Section 2. Approval of Amendment to Operating Agreement. The Board hereby
approves the Amendment to Design, Development, Construction, Financing and Operating
Agreement by and between the District and the City, substantially in the form attached hereto as
Exhibit A and incorporated herein by this reference (the "Amendment"). The President of the
Board is hereby authorized and directed to execute and deliver the Amendment to the City,
substantially in the form attached hereto with only those modifications as determined by the
President of the Board to be necessary.
Section 3. General Authorization. Upon the passage and approval of this resolution,
the proper officials of the District, including but not limited to the President and other officers of
the District, are authorized and directed to execute all other documents and closing certificates,
and to undertake all action necessary for the prompt execution and delivery of any Additional
Bonds and the transfer of Sales Tax revenue to the City.
Section 4. Effective Date. This resolution shall become effective upon its approval as
provided by law.
ADOPTED by the Board of Directors of the Yakima Regional Public Facilities District at
a special open public meeting thereof held this 17th day of March, 2020.
YAKIMA REGIONAL PUBLIC FACILITIES
DISTRICT
3
Exhibit A
FORM OF AMENDMENT
AMENDMENT TO DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND
OPERATING AGREEMENT
(Yakima Convention Center)
THIS AMENDMENT TO DESIGN, DEVELOPMENT, CONSTRUCTION,
FINANCING AND OPERATING AGREEMENT (this "Amendment"), dated March 17, 2020, is
by and between the CITY OF YAKIMA, WASHINGTON ("Yakima"), a municipal corporation
and first class city of the State of Washington, and the YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT (the "District" and together with Yakima, the "Parties"), a public
facilities district created by Yakima and the Cities of Selah and Union Gap, and amends the terms
of the Design, Development, Construction, Financing and Operating Agreement dated July 27,
2001 (the "Operating Agreement") by and between Yakima and the District.
RECITALS
WHEREAS, the District is a public facilities district created pursuant to chapter 35.57
RCW (the "Act") and an Interlocal Agreement dated as of June 25, 2001 (the "Interlocal
Agreement); and
WHEREAS, the District is authorized by the Act and the Interlocal Agreement to acquire,
construct, own, remodel, maintain, reequip, repair, finance and operate one or more "regional
centers" as defined in RCW 35.57.020, including, but not limited to, convention, conference, or
special event centers, or any combination of such facilities, with associated parking; and
WHEREAS, the Parties entered into the Operating Agreement to provide for the design,
development, construction, expansion, rehabilitation, improvement, financing and operation of the
Yakima Convention Center (the "Convention Center"), a "regional center" owned and operated
by Yakima; and
WHEREAS, under the terms of the Operating Agreement, the District agreed to remit
revenues of a sales and use tax imposed by the District under RCW 82.14.485 to the City to assist
in financing the Convention Center; and
WHEREAS, pursuant to Chapter 164, Laws of 2017, the Washington State Legislature
extended the time period for the sales taxes imposed under RCW 82.14.485 from a maximum 25
year term to a maximum 40 year term; and
WHEREAS, the Parties now desire to amend the Operating Agreement to reflect the
extended 40 year term of the sales tax and to make other clarifying changes as provided herein;
NOW, THEREFORE, the Parties hereto agree as follows:
Section 1.01. Definitions; Intent of the Parties. All capitalized words and phrases,
including those in the recitals, not otherwise defined herein shall have the meanings given to them
in the Operating Agreement.
-1-
Section 1.02. Amendments to Operating Agreement. Section I of the Operating
Agreement is hereby amended as follows (deletions are stricken and additions are double
underlined):
Completion Bonds mean any additional bonds or other indebtedness issued by
Yakima from time to time to pay Costs of the Project.
Project means the design, construction, expansion, improvement and operation of
the Convention Center, including additions thereto, as described in the Project Documents.
Project Documents means all design documents (including drawings describing the
structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed
site plans, preliminary specifications, and schematic design documents), construction
documents (including all drawings and specifications necessary to completely describe the
Project in detail to a contractor for the purposes of bidding and construction, schedules,
plans and specifications and the construction contract) and Project budgets (setting forth
the construction contract cost, taxes, all contingencies, fees and allowances), relating to the
Convention Center as they may be approved from time to time.
Sales Tax means the non -voted sales and use tax to be imposed by the District in
accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the
case of a sales tax or value of the article used in the case of a use tax, which tax shall be
deducted from the amount of tax otherwise required to be collected or paid over to the
State's Department of Revenue and shall expire when the Bonds and any Additional Bonds
are retired, or, in any event, not more than 40 years after the Sales Tax is first collected.
Sales Tax shall also include any other Sales Tax lawfully imposed by the District in the
future for paying costs of the Project.
Section 1.03 Survival of Provisions. Except to the extent modified by this Amendment,
the terms of the Operating Agreement shall continue in full force and effect until the expiration or
termination of the Operating Agreement in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment, all as of the
day and year first above mentioned.
CITY OF YAKIMA, WASHINGTON
By
De<
'entatic
CnTY CONTRACT
R I OLUTION NO:,
YAKIMA REGIONAL PUBLIC
FACILITIES DISTRICT
-3-