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HomeMy WebLinkAboutR-2005-188 2005 CDBG and HOME Annual Action Plan Amendment / HouseValues, Inc. Grant AgreementRESOLUTION NO. R-2005- 188 A RESOLUTION A.) Amending the City of Yakima 2005 Community Development Block Grant (CDBG) and HOME Annual Action Plan; and B.) Authorizing the City Manager of the City of Yakima execute an economic development grant agreement with HouseValues, Inc. WHEREAS, the City of Yakima received . and is responsible for the administration and entitlement of CDBG funds made available through the Department of Housing and Urban Development, and authorized by Title 1 of the Housing and Community Development Act of 1974, as amended, and WHEREAS, federal regulations governing the use of CDBG funds for special economic development projects allow the City to use such funds as an economic incentive to provide grants to assist private, for-profit businesses with projects that provide an appropriate level of public benefit, and WHEREAS, HouseValues, Inc., is a for-profit provider of online real estate services; and WHEREAS, HouseValues, Inc. is interested in establishing a technical support center that will provide a public benefit through the creation of an estimated 350 new jobs in the City of Yakima over the course of two years; and WHEREAS, amending the City of Yakima 2005 Community Development Block Grant (CDBG) and HOME Annual Action Plan will authorize up to $200,000 of CDBG funds to assist Housevalues, Inc. to open its new center; and WHEREAS,, the City Council of the City of Yakima deems it to be in the best interest of the City of Yakima to adopt the proposed amendment, and submit the Annual Action Plan to the U. S. Department of Housing and Urban Development as required by federal regulation, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: A.) The 2005 CDBG and HOME Annual Action Plan is hereby amended, and the City Manager and the City Clerk are hereby authorized to execute the CDBG and HOME application documents, including all understandings and certifications contained therein, with the U. S. Department of Housing and Urban Development as required by federal program regulations. The City Manager is hereby designated as the official representative of the City of Yakima to act. in connection with the application and the Annual Action Plan. B.) The City Manager is hereby authorized to execute an economic development grant agreement with HouseValues, Inc. for $200,000.00. ADOPTED BY THE CITY COUNCIL this 6th day of December, 2005. ATTEST: 4c,tii_k_v„, /843-1,-e,,, City Clerk AGREEMENT BETWEEN THE CITY OF YAKIMA AND HOUSE VALUES INC. THIS AGREEMENT (hereinafter "Agreement") is made and entered into by and between the City of Yakima, Washington (hereinafter "City"), a first-class city incorporated under the laws of the State of Washington, and House Values Inc., a Washington corporation (hereinafter "House Values"). WHEREAS, House Values is a private, for-profit provider of support services to real estate agents and mortgage brokers throughout the United States and Canada. WHEREAS, House Values is interested in establishing and maintaining a customer service call center in the City's Community Development Block Grant ("CDBG") Target Area for at least five years. WHEREAS, the City, House Values, the State of Washington (the "State") and the Yakima County Office of Emplo ment and�Training ("OET") have entered into that certain Memorandum of Understanding, dated _ , 2005 (the "Memorandum"), which describes the intent of the parties with respect to certain assistance intended to be provided by the City, the State and the OET to House Values in consideration of House Values' location of such a customer service call center at an existing facility located at 1700 North 6th Street in the City, of which the assistance described in this Agreement is a part. WHEREAS, the City has received and is responsible for the administration of annual Entitlement Grants of CDBG funds made available through the United States Department of Housing and Urban Development (HUD) and authorized by Title I of the Housing and Community Development Act of 1974, as amended. WHEREAS, federal regulations governing the use of CDBG funds for special economic development projects allow the City to use such funds as an economic incentive to provide grants to assist private, for-profit businesses with projects that provides an appropriate level of public benefit. WHEREAS, the City has determined that the CDBG assistance described below is necessary and appropriate to ensure that House Values establishes a customer service call center in the City's CDBG Target Area. WHEREAS, establishment of a customer service call center in the City's CDBG Target Area would provide substantial appropriate public benefits to the City, particularly by creating new jobs. WHEREAS, accordingly, the City wants to encourage House Values to establish a customer service call center in the CDBG Target Area as a special economic development project and is willing to use CDBG funds to assist House Values through a performance grant of not more than $200,000 according to the following terms and conditions. NOW, THEREFORE, in consideration of the mutual covenants, promises, and agreements set forth herein, it is agreed by and between the City and House Values as follows: 1. Term of Agreement. This Agreement shall commence upon execution by the parties hereto and shall terminate at 11:59 p.m. on December 31, 2010, unless the Agreement is earlier terminated by either party in accordance with the terms of this Agreement. Page 1 of 10 2. Definitions. Where used in this Agreement, the following words and terms shall have the meanings indicated. The meanings shall be applicable to the singular, plural, masculine, feminine and neuter of the words and terms. A. "Contract year" means December at 12:01 a.m. to December at 11:59 p.m. during the term of this Agreement. The "first contract year" shall run from 12:01 a.m., December, 2005, to 11:59 p.m., December i �' , 2006. B. "Full time equivalent" or "FTE" means hours worked by an employee or employees equal to 2080 hours per year. For example, two part-time employees working 1040 hours each per year equal one full time equivalent. 3. The Project. House Values intends to establish the Call Center in the City's CDBG Target Area beginning on or about January 2006. Subject to the terms of this Agreement, House Values intends to continually maintain a customer service call center in the City's CDBG Target Area for a period of not less than five (5) years (the "Call Center"). The Call Center shall include a workforce providing client services and sales fulfillment functions. In addition, House Values' rights to reimbursement under this Agreement from time to time shall be subject to the following requirements: A. At the end of the first contract year, the Call Center shall employ a workforce of at least two -hundred (200) FTE's and shall maintain a combined annualized payroll and compensation package of at least Seven Million ($7,000,000) Dollars. B. Over the remainder of the contract period, House Values shall employ a minimum of two hundred (200) FTE's at all times, and shall maintain a combined annualized payroll and compensation package of at least Seven Million ($7,000,000) Dollars. C. The average combined salary [and company benefits for the Call Center's workforce shall be at least $35,000 per year throughout the term of this Agreement. Full-time equivalent employees of the Call Center shall receive a company benefit cafeteria package including, but not limited to, health insurance, vacation time, and sick leave. D. House Values shall establish one or more training programs to assist members of the local community to become qualified to work in the Call Center. Such training programs may be established in conjunction with local educational and job training institutions such as the Yakima Valley Community College, the Tri -Valley Workforce Council, Heritage College, and/or Central Washington University in Ellensburg, Washington. E. House Values shall provide employment opportunities the Call Center for promotion and advancement for minority and low- and moderate -income persons, as defined by federal regulations applicable to CDBG economic development programs. F. House Values shall make employment decisions at the Call Center in a manner that applies equal opportunity principles and House Values affirms, as an aspirational goal, diversity in the Call Center's workforce comparable to the socio-economic and ethnic composition of the available relevant labor market in the County with an emphasis on hiring personnel who qualify for tax incentives such as the Federal Renewal Community administered tax incentives. 4. The Grant. Subject to availability of funds from the identified source of funds and the other provisions of this Agreement, the City shall provide a performance grant to House Values of not more than $200,000, to be disbursed in accordance with this Agreement. All funds granted to House Values by the City shall be for the purpose of reimbursement of expenses incurred to open the Call Page 2 of 10 Center, and train the Call Center's workforce and shall be conditioned on House Values' compliance with the terms and conditions of this Agreement. The performance grant shall be paid as follows: A. If, by January 1, 2006, or as agreed to by the parties, House Values is in compliance with the terms and conditions of this Agreement, including employing a workforce of at least forty (40) FTE's in the City's Renewal Community and in good standing with applicable local and state business requirements, then House Values shall be eligible for up to $100,000.00.. B. At the end of the each contract year, House Values shall be in compliance with the terms and conditions of this Agreement, including employing at least two hundred (200) FTE's at all times, with an average wage and benefit package of $35,000 per employee, then House Values will be eligible for up to $100,000.00. C. In no event shall the total of all grant payments exceed $200,000. D. As discussed more fully in Section 7 of this Agreement, House Values shall submit each request for payment to the City, in the manner and form prescribed from time to time by the City, mailed to the address indicated in Section 32 of this Agreement. The City shall pay House Values for such allowable reimbursement expenses within forty-five (45) days of receipt of such documentation. E. It is the understanding of the parties that if House Values meets its obligations under this Agreement that they shall receive the grant funds described herein, up to $200,000.00, in increments of $100,000.00 upon compliance with Section 4.A; and $100,000.00 upon successfully completing the first contract year of this Agreement in accordance with section 4.B. Nevertheless, the City and House Values agree that if the proceeds of the grant are not paid in full by the end of the first contract year and if the City has CDBG Grant funds available the City will endeavor in the spirit of this Agreement to reimburse allowable expenses during the second contract year. 5. Source of Funds. The source of funds for this Agreement is the City's CDBG Entitlement Grant administered by HUD. It is expressly understood and agreed by the City and House Values that the obligations under this Agreement are contingent upon the City's receipt of CDBG funds adequate to meet the City's obligations under this Agreement. 6. Contact with HUD. House Values understands and agrees that, without the written consent of the City, all direct contact with HUD over any matter related to the project under this Agreement shall be made solely by the City unless otherwise provided herein or provided by law. 7. Reimbursement and Eligible Expenses. A. Performance grant payments shall be provided to House Values only to reimburse it for CDBG-eligible expenses, including employee recruitment and training. The City shall provide House Values with a listing of CDBG-eligible expenses within thirty days after execution of this Agreement and thereafter notify it of any changes to such listing. B. Reimbursement shall be based upon invoices and supporting documentation submitted by House Values. Such invoices and supporting documentation shall demonstrate the eligibility of the expenses in question. The City shall reimburse House Values for such allowable expenses within forty-five (45) days of receipt of such documentation. C. If the City requests data from House Values concerning an action prior to House Values taking such action, the City is not liable for any cost incurred therefore unless and until House Values provides such data and is then advised to proceed by the City. Page 3 of 10 D. Performance grant payments under this Agreement shall not be available to assist House Values to purchase, develop, rehabilitate or improve any real property. E. The City is not liable for the payment of any cost or portion thereof which has been paid, reimbursed or is subject to payment or reimbursement from any source other than House Values' own funds. The City affirms that House Values' receipt of other incentives contemplated by the Memorandum does not relieve or reduce the City's obligations for payment of costs under this Agreement. F. The City is not liable for the payment of any cost or portion thereof that is not incurred in strict accordance with the terms and conditions of this Agreement. 8. Closure of the Call Center. If House Values closes the Call Center before December 31, 2010, House Values shall reimburse the City for any and all grant funds received from the City 9. Conditions of Grant. The obligation of the City to advance any portion of the amounts identified in section 4 of this Agreement are subject to the following additional conditions: A. All actions undertaken in connection with this Agreement and all documents incidental thereto shall be satisfactory in form, scope and substance to the City in its reasonable discretion. B. House Values shall have all applicable and necessary permits, licenses and approvals of any federal, state, and local government or governmental authority. The City shall not unreasonably withhold its approval of any necessary permit, license or other approval necessary for the project described in this Agreement. C. If House Values, or an entity constituting part of House Values, is a corporation, there shall be delivered to the City (with respect to each such corporation, if there be more than one) a certified copy of the record(s) of minutes and Board Resolution of the Board of Directors of each such corporation specifically authorizing its officers to execute this Agreement and all other documents necessary for the consummation of this transaction. The record(s) of the minutes and Resolution of the Board of Directors meeting shall be certified to be true by the Secretary or Assistant Secretary of such corporation(s). D. HUD shall issue a Release of Funds that shall identify any additional requirements with respect to this Agreement, including but not limited to environmental conditions, restrictions and mitigation requirements. House Values shall comply with all such additional requirements. 10. Maintenance and Inspection of Records. House Values shall maintain standard business and accounting records, any other records required herein, and any other records required by the City in writing. Such records shall be available for inspection by City representatives, at the City's expense, at reasonable times during the term of this Agreement and for a period of three (3) years following termination of this Agreement. In the event that any audit or inspection identifies any discrepancy, House Values shall provide the City with appropriate clarification and/or financial adjustments within thirty (30) calendar days of notification of the discrepancy by the City. 11. No City Funds. It is expressly understood that, except for CDBG Entitlement Grant funds, this Agreement shall in no way obligate any funds or resources of the City. 12. No Third Party Benefit. The City shall not be obligated or liable under this Agreement for provision of any goods or services or for payment of any monies to any party other than House Values. Page 4 of 10 13. Disallowed Expenses. Should any expense or charge for which payment has been made by the City be subsequently disallowed or disapproved as a result of any auditing or monitoring by the City, HUD, or any other federal agency, House Values shall refund such amount to the City within ten (10) working days of receipt of written notice specifying the amount disallowed. Refunds of disallowed costs may not be made from any CDBG, HUD, or other federal funds received from or through the City. 14. Annual Report. During the term of this Agreement, House Values shall submit a written report to the City within twenty (20) days after the end of each contract year that demonstrates House Values' establishment and/or maintenance of the workforce and operation described in this Agreement. House Values' report to the City shall describe the number and type of jobs, FTE's, and employees in the Call Center, employee wages as a whole and as distributed among different positions, employee training programs, and other activities relevant to this Agreement. House Values agrees to cooperate with the City and/or HUD in the development, implementation and maintenance of record-keeping systems and to provide data reasonably determined by the City and/or HUD to be necessary for the City and/or HUD to effectively fulfill its monitoring and evaluation responsibilities. Upon request by the City, House Values shall promptly supply copies of its audited financial statements. 15. Compliance with Law. House Values must comply with any and all applicable laws, rules, and regulations promulgated by any federal, state, and/or local governmental agency or regulatory body. Laws that may apply to this Agreement include without limitation: • Title VI of the Civil Rights Act of 1964 (42 USC 200(d)); • Title VIII of the Civil Rights Act of 1968 (42 USC 3601); • Section 3 of the Housing and Urban Development Act of 1968, as amended (12 USC 1701(u)); • Section 109 of the Housing and Urban Development Act of 1974, as amended (42 USC 5309); • Age Discrimination Act of 1975, as amended (42 USC 6101); • Americans with Disabilities Act of 1990; • Civil Rights Restoration Act of 1987; • 49 CFR Part 21; • 24 CFR Part 570; • RCW 49.60; • Davis -Bacon Fair Labor Standards Act (40 US27600000a-276a-5); • Grant Agreement Work Hours and Safety Standards Act, as amended (40 USC 327-333); • Section 504 of the Rehabilitation Act of 1973 (29 USC 794); • Architectural Barriers Act of 1968, as amended (42 USC 4151); • Section 504 of the Rehabilitation Act of 1973, as amended (29 USC 792); • Equal Employment Opportunity (Executive Order 11246, September 24, 1965); • Equal Opportunity in Housing (Executive Order 11063, as amended by Executive Order 12259); • The Hatch Act (5 USC 1501 et seq.); • The National Environmental Policy Act of 1969; • Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 and Amendments of 1987; • Title IV of the Lead -Based Paint Poisoning Prevention Act (42 USC 4831); • HUD Reform Act; • Office of Management and Budget Circulars; Page 5 of 10 • A-87—Cost Principles for State and Local Governments and 24 CFR Part 85, Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments; • A-128—Single Audit Act. 16. Nondiscrimination Provision. During the performance of this Agreement, House Values shall not discriminate on the basis of race, age, color, sex, religion, national origin, creed, marital status, political affiliation, or the presence of any sensory, mental or physical handicap. This provision shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, selection for training, and the provision of services under this Agreement. House Values shall also comply with all applicable equal employment opportunity, affirmative action, and non-discrimination laws and regulations. 17. Subcontracting. House Values agrees that none of the work covered by this Agreement may be subcontracted without the prior written approval of the City, which shall not be unreasonably withheld, conditioned or delayed. In the event the City gives such prior written approval, any subcontracted work or service shall be subcontracted by written contract or agreement and shall be subject by its terms to each and every provision of this Agreement, unless specific waiver is granted in writing by the City. Performance and financing compliance by a subcontractor is the responsibility of House Values. No subcontract shall require payment on a cost plus percentage of cost basis. 18. Status of House Values. House Values and the City understand and expressly agree that House Values is an independent contractor in the performance of each and every part of this Agreement. House Values, as an independent contractor, assumes the entire responsibility for carrying out and accomplishing the terms and conditions of this Agreement on its part to be performed. Additionally, and as an independent contractor, House Values, its agents, employees, and/or representatives shall make no claim of City employment nor shall claim against the City any related employment benefits, social security, and/or retirement benefits. Nothing contained herein shall be interpreted as creating a relationship of servant, employee, partnership or agency between House Values and the City. 19. Representations and Warranties. House Values represents and warrants that: A. All information, reports and data furnished to the City are complete and accurate. B. All financial statements furnished to the City fairly reflect the financial condition of House Values and there has been no matenal change in the financial condition of House Values since said statements. C. No provision of this Agreement contravenes or conflicts with the authority under which House Values is doing business or with the provisions of any existing indenture or agreement of House Values. D. House Values possesses the legal authority to enter into this Agreement and accept payments hereunder and has taken all necessary action to authorize such acceptance. E. This Agreement will not violate any provision of law or result in any breach or constitute a default under any agreement to which House Values is presently a party, or result in the creation of any lien, charge or encumbrance upon any of its property or its assets other than as specifically may be allowed under this Agreement. F. As of the effective date of this Agreement, House Values knows of no litigation or proceedings, nor is in default on any obligations, covenants or conditions on any financing Page 6 of 10 transaction, nor has any tax deficiency or liability, that will interfere with House Values obligations under this Agreement 20. No Insurance. It is understood the City does not maintain liability insurance for House Values and/or its employees, agents, officers, and subcontractors. 21. Liability Insurance. On or before the effective date of this Agreement, House Values shall provide the City with a certificate of insurance as proof of commercial liability insurance with a minimum liability limit of Two Million Dollars ($2,000,000.00) per occurrence combined single limit bodily injury and property damage, and Four Million Dollars ($4,000,000.00) general aggregate. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Agreement. The policy shall name the City, its elected officials, officers, agents and employees as additional insureds and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) calendar days' pnor written notice. The insurance shall be with an insurance company rated A -VII or higher in Best's Guide and admitted in the State of Washington. 22. Workers Compensation. House Values agrees to provide industrial insurance coverage for all of its workers and to provide the City with evidence of such coverage. 23. Indemnification and Hold Harmless. House Values agrees to protect, defend, indemnify, and hold harmless the City, its elected officials, officers, employees and agents from any and all claims, demands, losses, liens, liabilities, penalties, fines, lawsuits, and other proceedings and all judgments, awards, costs and expenses (including reasonable attorneys' fees and disbursements) to the extent arising out of, relating to, or resulting from House Values' performance and/or nonperformance related to this Agreement. In the event that both House Values and the City are negligent, House Values' liability for indemnification of the City shall be limited to the contributory negligence for any resulting suits, actions, claims, liability, damages, judgments, costs and expenses (including reasonable attorney's fees) that can be apportioned to House Values, its officers, employees, agents, and/or subcontractors. Nothing contained in this section of this Agreement shall be construed to create a liability or a right of indemnification in any third party. This section of the Agreement shall survive the term or expiration of this Agreement and shall be binding on the parties to this Agreement. 24. Limitation of Liability. Neither party will be liable to the other party with respect to any subject matter of this Agreement for any indirect, incidental, consequential, special, or exemplary damages (including, without limitation, loss of revenue or goodwill or anticipated profits or lost business), even if such party have been advised of the possibility of such damages. 25. Assignment. House Values' rights under this Agreement, or any interest herein, or claim hereunder, shall not be assigned or transferred in whole or in part by House Values to any other person or entity without the prior written consent of the City which shall not be unreasonably withheld. In the event that such prior written consent to an assignment is granted, then the assignee shall assume all duties, obligations, and liabilities of House Values stated herein. House Values shall notify the City in writing of any proposed merger, consolidation, reorganization, or other corporate or financing transaction. The City's consent shall not be required in the case of any merger, consolidation, reorganization or other corporate or financing transaction involving House Values. Page 7of10 26. Termination. This Agreement may be terminated as follows: A. Either party may terminate this Agreement upon thirty (30) calendar days written notice to the other party in the event that said other party is in default and fails to cure such default within that thirty (30) day period, or such longer period as provided by the non - defaulting party. The notice of termination shall state the reasons therefore and the effective date of the termination. B. This Agreement may be terminated in whole or in part, prior to the completion of the term when both the City and House Values agree that continuation is not feasible or would not produce beneficial results commensurate with the further expenditure of funds. The City and House Values must agree on the termination conditions, including effective date and the portion to be terminated. House Values will not incur new obligations for the terminated portion after the effective date, and will cancel as many outstanding obligations as possible. The City will make funds available to House Values to pay for allowable expenses incurred before the effective date of termination. C. In the event that the funding contemplated herein is no longer available, the City or House Values may terminate this Agreement upon ten (10) calendar days written notice to other party. 27. Conflict of Interest. House Values represents that it, its members, officers, employees, and/or agents do not have any interest, direct or indirect, and shall not hereafter acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of this Agreement. House Values further covenants that it will not knowingly hire anyone or any entity having such a conflict of interest during the performance of this Agreement. 28. Non -Waiver. The waiver of either the City or House Values of the breach of any provision of this Agreement by the other party shall not operate and/or be construed as a waiver of any subsequent breach by either party or prevent either party from enforcing such provision or the remaining terms of this Agreement. 29. Survival. Any provision of this Agreement that imposes an obligation after termination or expiration of this Agreement shall survive the term or expiration of this Agreement and shall be binding on the parties to this Agreement. 30. Severability. It is understood and agreed by the parties hereto that if any part, term, or provision of this Agreement is held by the courts to be illegal, the validity of the remaining provisions shall not be affected, and the rights and obligations of the' parties shall be construed and enforced as if the Agreement did not contain the particular provision held to be invalid. If it should appear that any provision hereof is in conflict with any statutory and/or regulatory provision of the United States or the State of Washington, said provision which may conflict therewith shall be deemed modified to conform to such statutory and/or regulatory provision. 31. Integration and Modification. This Agreement sets forth all of the terms, conditions, and agreements of the parties relative to the subject matter hereof and supersedes any and all such former agreements which are hereby declared terminated and of no further force and effect upon the execution and delivery hereof. There are no terms, conditions, or agreements with respect thereto, except as herein provided and no amendment or modification of this Agreement shall be effective unless reduced to writing and executed by the parties. 32. Notices. Unless stated otherwise herein, all notices and demands shall be in writing and sent to the parties to their addresses as follows: TO CITY: Bill Cook Page 8 of 10 TO HOUSE VALUES: with a copy to: Director of Community and Economic Development City Hall—Second Floor 129 North Second Street Yakima, WA 98901 House Values, Inc. 11332 NE122"dWay Kirkland, WA 98033 House Values -Legal Department 11332 NE122°"Way Kirkland, WA 98033 or to such other addresses as the parties may hereafter designate in writing. Notices and/or demands shall be sent by registered or certified mail, postage prepaid, or hand delivered. Such notices shall be deemed effective when mailed or hand delivered at the addresses specified above. 33.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. 34. Venue. The venue for any action to enforce or interpret this Agreement shall lie in the Superior Court of Washington for Yakima County, Washington. 35. Authority. The person executing this Agreement on behalf of House Values represents and warrants that he or she has been fully authorized by House Values to execute this Agreement on its behalf and to legally bind House Values to all the terms, performances and provisions of this Agreement. The person executing this Agreement on behalf of the City represents and warrants that he or she has been fully authorized by the City to execute this Agreement on its behalf and to legally bind the City to all the terms, performances and provisions of this Agreement. Page 9 of 10 EXECUTED by the City this ' day of , 2005. EXECUTED by House Values this 0O day of ;I)e,CIiM io er , 2005. CITY OF YAKIMA HOU UES, INC By: R. A. Zais, Jr., City Manager ATTEST: Karen S. Roberts, City Clerk City Contract No. agooS /08 Resolution No. R-ggo$. /88 C.\Documents and Settings\dsiebol.CBBLAW\Local Settings\Temporary Internet Files\OLK3\House Values Grant Agmt 11-30-05 (2) FINAL.DOC Page 10 of 10 MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (the "Memorandum") dated 2005, by and among the State of Washington ("State"), the County of Yakima ("County") and the City of Yakima, Washington ("City") (collectively, the "Public Partners"), and HouseValues, Inc. or its affiliates (collectively "HouseValues"), describes the intent of the parties with respect to certain assistance provided by the Public Partners to HouseValues in relation to HouseValues' consideration of locating operations and assets at an existing facility located at 1700 North 6th Street in the City (the "Facility"). Recitals The following recitals are a material part of this Memorandum: 1. HouseValues is negotiating to lease the Facility and, subject to Public Partners' Commitments (defined below) and the final closing of the same as provided below, is considering renovations of the existing building and related site work, including infrastructure development ("Project"). 2. As part of the Project, HouseValues would invest new private capital in the Facility and expand operations to the Facility, resulting in new, full-time employment at the Facility. 3. The Public Partners have discussed with, and initially offered to HouseValues certain incentives, pursuant to the State's letters of June 23, 2005 and July 20, 2005 (the "State Proposal") and County's letters of June 22, 2005 and July 11, 2005 (the "County Proposal"), to permit HouseValues to undertake the Project. 4. Employees working at the Facility would need certain training to perform the work at the Facility. 5. HouseValues and the Public Partners desire and commit to work together in a community partnership in order to provide further benefit to the community in which the Facility is located. 6. HouseValues intends to reasonably cooperate with the Public Partners regarding future business development in Washington State through future press accounts of the favorable business climate in Washington State or by providing testimonial advertising by key House Value officials. 7. Representatives of the parties hereto have negotiated the business terms of this Memorandum as an expression of intent to proceed with further negotiations, and the parties shall not be legally bound hereby, and any legal rights or obligations of the parties shall arise solely out of subsequent negotiation and documentation of the Incentives (as defined below), signed by the respective parties upon corporate approval by HouseValues and legislative approval by the respective Public Partners. Terms NOW, THEREFORE, the parties intend to negotiate toward entenng into legally binding agreements as follows: 1. Statement of Overall Intent. It is the intention of the parties that HouseValues will undertake the Project, in exchange for the incentives described herein (collectively the "Incentives"). The Public Partners will use their best efforts to provide alternative incentives, of equal overall economic value to HouseValues, if, contrary to their intent, they would be unable to provide any portion of the incentives described in this Memorandum. The Public Partners shall seek the approval of any other public entities required for the granting of the incentives in a reasonable time penod and shall fully support the granting of such incentives. 2. HouseValues Commitments. In consideration of the Incentives, HouseValues agrees to undertake the Project as follows: A. Occupancy of Facility. HouseValues currently expects to occupy the Facility and commence operations on or about December 12, 2005. B. Employment. HouseValues will achieve an employment level at the Facility of up to 300 full-time employees (working at least 35 hours per week) as of December 12, 2006, and maintain such minimum employment levels at the Facility for a 5 -year penod after commencement of operations at the Facility. Average salaries for the employees will be at least $35,000 per year. Employment by any affiliate of HouseValues shall be applied to such aggregate level of 300 full-time employees. The Facility has a capacity of 568 employees. C. Operations. Maintain operations at the Facility for the time period indicated in (B) above. D. Investment. Provide new private capital investment (the "Project Investment") in the aggregate amount of up to $2.9 million, allocable approximately as follows: (i) Tenant Improvements: up to $1.8 million. (ii) Furniture, Fixtures and Equipment: up to $1.1 million. 3. Incentives. In consideration of the commitments by HouseValues indicated above, the Public Partners agree to provide the following incentives to HouseValues (the "Incentive(s)"), subject to law and the conditions noted: A. Federal Workforce Investment Act ("WIA"). Both the State and City will support HouseValues with grant funds from this program as follows: (i) The Governor of the State of Washington will commit $100,000 to assist in training workers eligible under the WIA. (ii) The Tn-County Workforce Board and its contractors will provide a WIA training subsidy of 50% of wages for a 10 -week training penod through local job training and placement agencies for eligible employees. ' Based on experiences of companies in Yakima, approximately 10% of the HouseValues workforce will be eligible for this program. B. Governor's Fund. The Governor of the State of Washington commits a $100,000 grant to HouseValues to locate this project in Yakima. This grant comes from a discretionary fund established to assist in attracting and retaining industry in the State of Washington. This grant is subject to legislative appropriation in 2006. C. Federal Renewal Community Tax Credit. The City of Yakima was designated as a Federal Renewal Community which provides HouseValues eligibility to receive a corporate income tax credit of $1,500 for every HouseValues employee that lives inside the renewal community zone. If HouseValues locates their facility inside the Renewal Community area, the company will be eligible for this credit each year until the federal designation expires in December, 2009. Employers in Yakima experience approximately 15% of workforces eligible for this credit. D. Job Skills Program. The State has earmarked a minimum of $100,000 in matching customized training funds to train HouseValues' initial 300 employees. E. Incumbent Worker Fund. The Tri -County Workforce Board and its contractors will provide up to $12,000 for additional training of incumbent workers that meet income eligibility critena established by the Tri -County Workforce Board. F. City Community Development Block Grant ("CDBG"). The City, subject to final council approval, will provide a $200,000 CDBG to HouseValues to be used to cover eligible expenses at the Facility. This grant is subject to a performance-based contractual agreement. G. Permitting Fees.. City and County permitting fees applicable to the Project shall be paid as provided in Exhibit A hereto. The City agrees to fast-track the permitting process to meet HouseValues' timetable and offers a "money back" guarantee if not met. H. Infrastructure Improvements. The City offers to fund necessary improvements (road, water extensions, etc.) if applicable. 4. City Approvals. The City has advised HouseValues that no zoning amendments, conditional use permits, or subdivision approvals or processes are applicable to the Project. HouseValues acknowledges that the City will require architectural approval of the Project, however. 5. Corporate and Legislative Approvals. This Memorandum supersedes and replaces the terms of the State Proposal and the County Proposal. The mutual statements of intent herein are subject to negotiation of the terms of the Incentives acceptable to all parties, legislative approval of the City and County, approvals as to the State Incentives by the Governor's office and other state agencies responsible for the respective state Incentives, and approval by senior management of HouseValues. 6. Cooperation. The Public Partners will cooperate with each other in carrying out the Incentives. IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date first written above. HouseValues, Inc. Yakima County, Washington B y: Name. Title: By: Name: R. A. Zais, Jr. Title: City Manager State of Washington City of Yakima, Washington By: _ By: Name: Name: Title: Title: By: By: Name: Name: Title: Title: CITY CONTRACT NO: ,W1... -419-X7 RESOLUTION NO: nQ-V-T-A/Arg MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (the "Memorandum") dated , 2005, by and among the State of Washington ("State"), the County of Yakima ("County") and the City of Yakima, Washington ("City") (collectively, the "Public Partners"), and House Values, Inc. or its affiliates (collectively "House Values"), describes the intent of the parties with respect to certain assistance provided by the Public Partners to House Values in relation to House Values' consideration of locating operations and assets at an existing facility located at Jogger location in the City (the "Facility"). Recitals The following recitals are a material part of this Memorandum: 1. House Values is negotiating to lease the Facility and, subject to Public Partners' Commitments (defined below) and the final closing of the same as provided below, is considering renovations of the existing building and related site work, including infrastructure development ("Project"). 2. As part of the Project, House Values would invest new private capital in the Facility and expand operations to the Facility, resulting in new, full-time employment at the Facility. 3. The Public Partners have discussed with, and initially offered to House Values certain incentives, pursuant to the State's letters of June 23, 2005 and July , 2005 (the "State Proposal") and County's letters of June 22, 2005 and July 11, 2005 (the "County Proposal"), to permit House Values to undertake the Projects. 4. Employees of the Project would need certain training to perform the work at the Facility. 5. House Values and the Public Partners desire and commit to work together in a community partnership in order to provide further benefit to the community in which the Facility is located. 6. House Values intends to reasonably cooperate with the Public Partners regarding future business development in Washington State through future press accounts of the favorable business climate in Washington State or by providing testimonial advertising by key House Value officials. 7. Representatives of the parties hereto have negotiated the business terms of this Memorandum as an expression of intent to proceed with further negotiations, and the parties shall not be legally bound hereby, and any legal rights or obligations of the parties shall arise solely out of subsequent negotiation and documentation of the Incentives (as defined below), signed by the respective parties upon corporate approval by House Values and legislative approval by the respective Public Partners. Terms NOW, THEREFORE, the parties intend to negotiate toward entering into legally binding agreements as follows: 1. Statement of Overall Intent. It is the intention of the parties that House Values will keep the Facility open and expand the Facility, and thereby undertake the Project, in exchange for the incentives described herein (collectively the "Incentives"). The Public Partners will use their best efforts to provide alternative incentives, of equal overall economic value to House Values, if, contrary to their intent, they would be unable to provide any portion of the incentives described in this Memorandum. The Public Partners shall seek the approval of any other public entities required for the granting of the incentives in a reasonable time period and shall fully support the granting of such incentives. 2. House Values Commitments. In consideration of the Incentives, House Values agrees to undertake the Project as follows: A. Occupancy of Facility. House Values currently expects to occupy the Facility and commence operations on or about November 1, 2005. B. Employment. House Values will achieve a minimum employment level at the Facility of 300 full-time employees (working at least 35 hours per week) as of November 1, 2006, and maintain such minimum employment level at the Facility for a 5 -year period after the commencement of operations at the Facility. Average wages for the 300 full-time employees will be at least $35,000 per year. Employment by any affiliate of House Values, shall be applied to such aggregate level of 300 full-time employees. C. Operations. Maintain operations at the Facility for the time period indicated in (B) above. D. Investment. Provide new private capital investment (the "Project Investment") in the aggregate amount of up to $5 million, allocable approximately as follows: (i) Tenant Improvements: up to $ 2 million. (ii) Furniture, Fixtures and Equipment: up to $3 million. 3. Incentives. In consideration of the commitments by House Values indicated above, the Public Partners agree to provide the following incentives to House Values (the "Incentive(s)", subject to law and the conditions noted: A. Federal Workforce Investment Act ("WIA"). Both the State and the Tri - County Workforce Council will support House Values with grant funds from this program as follows: (i) The Governor of the State of Washington will commit $100,000 to assist in training workers eligible under the WIA. F \WINWORD\YCDA 2005 \Recruitment\HouseValues\MOU.dft.090605.doc (ii) The Tri -County Workforce Board and its contractors will provide a WIA training subsidy of 50% of wages for a 10 -week training period through local job training and placement agencies for eligible employees. Based on experiences of companies in Yakima, approximately 10% of the House Values workforce will be eligible for this program. B. Governor's Fund. The Governor of the State of Washington commits a $100,000 grant to House Values to locate this project in Yakima. This grant comes from a discretionary fund established to assist in attracting and retaining industry in the State of Washington. This grant is subject to legislative appropriation Fall 2005. C. Federal Renewal Community Tax Credit. The City of Yakima was designated as a Federal Renewal Community which provides House Values eligibility to receive a corporate income tax credit of $1,500 for every House Values employee that lives inside the community. House Values will be eligible for this credit each year until the federal designation expires in December, 2009. Employers in Yakima experience approximately 15% of workforces eligible for this credit. D. Job Skills Program. The State has earmarked a minimum of $100,000 in matching customized training funds to train House Values' initial 300 employees. E. Workforce Development. People for People and its workforce training partners will provide up to $12,000 over a twelve month period for additional training of disadvantaged or incumbent workers that meet income eligibility criteria established by the Tri -County Workforce Board. F. City Community Development Block Grant ("CDBG"). The City of Yakima, subject to final council approval, will provide a $200,000 CDBG grant to House Values to be used at the discretion of the company. This grant is subject to a performance based contractual agreement. G. Permitting Fees. City and County permitting fees applicable to the Project shall be paid as provided in Exhibit A hereto. The City agrees to fast-track the permitting process to meet House Values' timetable and offers a "money back" guarantee if not met. 4. City Approvals. The City has advised House Values that no zoning amendments, conditional use permits, or subdivision approvals or processes are applicable to the Project. House Values acknowledges that the City will require a site plan and architectural approval of the Project, however. 5. Corporate and Legislative Approvals. This Memorandum supersedes and replaces the terms of the State Proposal and the County Proposal. The mutual statements of intent herein are subject to negotiation of the terms of the Incentives acceptable to all parties, legislative approval of the City and County, approvals as to the State Incentives by the Governor's office and other state agencies responsible for the respective state Incentives, and approval by senior management of House Values. 6. Cooperation. The Public Partners will cooperate with each other in carrying out the Incentives. F \WINWORD\YCDA 2005\Recruitment\House V alues\MOU.dft.090605.doc IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date first written above. Tri -County Workforce Council House Values, Inc. Yakima County, Washington By: g--c—`"54D Name: Name: Patrick Baldoz Title: Title: Executive Director State of Washington City of Yakima, Washington By: By: ,-,,��� Name: Name: Dick Zai Title: Title: City Manager CoOtn-a* IM. )..005 -tJ$ People For. People J� By: ` . By: Name: Cindy aib-Robinson Name: Title: Direc or of Employment and Training Title: EXHIBIT A Schedule of Permitting Fees—City and County Jensen, Tim From: Alerts@DNB com Sent: Tuesday, November 29, 2005 10 54 AM To: TJENSEN@ci yakima wa us Subject: D&B REPORT ON HOUSEVALUES INC RECEIVED y 6\i- 5 Page 1 of 7 N,.MVN\TY DE E OPMENT Provided under contract for the exclusive use of subscriber: 293-147934 For: TIM JENSEN, Phone: 509-575-6070 1 ©ea deainthionfden BUSINESS INFORMATION REPORT HOUSEVALUES INC 15 LAKE BELLEVIEW DR #100 BELLEVUE WA 98005 TEL: 425 454-0088 DUNS: 11-390-9159 ADVERTISING AGENCY, REAL ESTATE AGENT/MANAGER SIC NOS. 7311 6531 CHIEF EXECUTIVE: IAN MORRIS, PRES-CEO+ SPECIAL EVENTS RATING 4A2 STARTED 1999 SALES F $47,691,000 WORTH $74,600,000 EMPLOYS 205 HISTORY CLEAR FINANCIAL CONDITION GOOD STATEMENT DATE SEP 30 2005 08/05/05 EARNINGS UPDATE: According to published reports, comparative operating results for the 6 months ended June 30, 2005: Revenue of $38,196,000, Net Income of $6,638,000; compared to Revenue of $20,473,000, Net Income of $3,963,000 for the comparable period in the prior year. CUSTOMER SERVICE If you have questions about this report, please call our Customer Resource Center at 1-800-234-3867 from anywhere within the U.S. If you are outside the U.S., contact your local D&B office. *** Additional Decision Support Available Additional D&B products, monitoring services and specialized investigations are available to help you evaluate this company or its industry. Call Dun & Bradstreet's Customer Resource Center at 1-800-234-3867 from anywhere within the U.S. or visit our website at www.dnb.com. SUMMARY ANALYSIS 11/29/2005 * Page 2 of 7 The Summary Analysis section reflects information in D&B's file as of November 28, 2005. RATING SUMMARY . . The "4A" portion of the Rating (the Rating Classification) indicates that the company has a worth from $10 million to $50 million. The "2" on the right (Composite Credit Appraisal) indicates an overall "good" credit appraisal. This credit appraisal was assigned because the payment information in D&B's file indicates that this company's obligations are retired satisfactorily and because of D&B's "strong" assessment of the company's December 31, 2004, fiscal financial statement. Below is an overview of the company's D&B Rating(s) since 05/20/00: RATING DATE APPLIED 4A2 3A2 1R3 11/15/04 09/09/04 07/11/01 05/20/00 PAYMENTS The Payment Summary section reflects payment information in D&B's file as of the date of this report. The PAYDEX for this company is 72. This PAYDEX score indicates that payments to suppliers average 12 days beyond terms, weighted by dollar amounts. When dollar amounts are not considered, approximately 87% of the company's payments are within terms. Below is an overview of the company's dollar -weighted payments, segmented by its suppliers' primary industries: TOTAL LARGEST % DAYS SLOW TOTAL DOLLAR HIGH W/IN RCV'D AMOUNTS CREDIT TERMS <31 31-60 61-90 91+ $ $ % % % % 0 0 Total in D&B's file 21 245,250 100,000 Top 10 Industries: 1 Telephone communictns 5 7,900 5,000 67 33 2 Misc equipment rental 3 100,000 45,000 100 - 3 Misc business credit 2 7,500 5,000 100 - 4 Whol office supplies 2 1,250 1,000 20 80 5 Mfg computers 1 100,000 100,000 50 50 6 Mfg electric wire dev 1 20,000 20,000 50 50 7 Nonclassified 1 5,000 5,000 100 8 Data processing svcs 1 1,000 1,000 100 9 Newspaper-print/publ 1 1,000 1,000 100 10 Whol office equipment 1 250 250 100 11/29/2005 Page 3 of 7 11 OTHER INDUSTRIES 2 350 250 100 Other Payment Categories: Cash experiences 0 0 0 Payment record unknown 1 1,000 1,000 Unfavorable comments 0 0 0 Placed for collection with D&B 0 0 other 0 N/A The highest "Now Owes" on file is $100,000 The highest "Past Due" on file is $100,000 D&B receives nearly 400 million payment experiences each year. We enter these new and updated experiences into D&B Reports as this information is received. PAYMENTS Antic - Anticipated (Payments received prior to date of invoice) Disc - Discounted (Payments received within trade discount period) Ppt - Prompt (Payments received within terms granted) REPORTED PAYING RECORD HIGH NOW PAST SELLING LAST SALE CREDIT OWES DUE TERMS WITHIN 08/05 Ppt 250 -0- -0- 6-12 Mos 05/05 Ppt-Slow 30 20000 10000 7500 1 Mo Slow 30 1000 -0- -0- 6-12 Mos 03/05 Ppt 45000 1 Mo Ppt 40000 1 Mo Ppt 15000 1 Mo Ppt 5000 500 Lease agreement Ppt 2500 500 Lease agreement 02/05 (009) 1000 -0- -0- 1 Mo 12/04 Ppt 1000 1000 -0- 1 Mo Ppt 100 -0- -0- 4-5 Mos Ppt 100 100 -0- 1 Mo Ppt 50 50 -0- 1 Mo Ppt-Slow 30 5000 5000 -0- 1 Mo Ppt-Slow 30 250 100 -0- 1 Mo 11/04 Ppt 5000 5000 -0- 1 Mo Ppt 1000 750 -0- 1 Mo Ppt-Slow 30 100000 100000 100000 1 Mo 10/04 Ppt 2500 1000 -0- 1 Mo 09/04 Ppt 250 -0- -0- 6-12 Mos Ppt 250 -0- -0- 6-12 Mos Lease agreement * Payment experiences reflect how bills are met in relation to the terms granted. In some instances payment beyond terms can be the result of disputes over merchandise, skipped invoices etc. * Each experience shown represents a separate account reported by a supplier. Updated trade experiences replace those previously reported. Amounts may be rounded to nearest figure in prescribed ranges. 11/29/2005 Page 4 of 7 STATEMENT UPDATE 11/09/05 Interim Consolidated statement dated SEP 30 2005: Cash Accts Pec Mktble Securities Prepaid Exps & Other Assets Deferred Income Taxes Other Curr Assets Curr Assets Fixt & Equip Goodwill Intangible Assets -Net Other Assets $ 63,003,000 293,000 25,815,000 1,442,000 929,000 84,000 91,566,000 7,218,000 2,318,000 1,350,000 409,000 Accts Pay Accrued Exps & Other Curr Liabs Accruals Taxes Deferred Rent -Net Deferred Revenue Curr Liabs Deferred Income Taxes Deferred Rent -Net COMMON STOCK DEFERRED STOCK - BASED COMPENSATION RETAINED EARNINGS $ 1,610,000 5,216,000 3,524,000 142,000 273,000 1,455,000 12,220,000 254,000 1,401,000 70,627,000 (3,203,000) 21,562,000 Total Assets 102,861,000 Total 102,861,000 From JAN 01 2005 to SEP 30 2005 sales $61,533,000; gross profit $61,533,000; operating expenses $46,577,000. Operating income $14,956,000; other income $1,295,000; net income before taxes $16,251,000; Federal income tax $5,282,000; net income $10,969,000. Statement obtained from Securities And Exchange Commission. Prepared from books without audit. Accounts receivable shown net less $193,000 allowance. Fixed assets shown net less $3,137,000 depreciation. Explanations: The net worth of this company includes intangibles. FINANCE 05/02/05 Curr Assets Curr Liabs Current Ratio Working Capital Other Assets Worth Sales Long Term Liab Net Profit (Loss) Fiscal Consolidated Fiscal Dec 31 2002 6,876,000 1,261,000 5.45 5,615,000 1,364,000 2,708,000 21,748,000 4,271,000 3,404,000 statement $ 57,562,000 84,000 17,316,000 Cash Accts Rec Mktble Securities Prepaid Expenses & Other Assets Deferred Income Taxes Prepaid 11/29/2005 799,000 222, 000 446,000 Fiscal Dec 31 2003 7,758,000 2,562,000 3.03 5,196,000 2,759,000 3,713,000 25,103,000 4,242,000 2,636,000 dated DEC 31 2004: Accts Pay Accrued Exps/Other Curr Liabilities Accruals Taxes Deferred Rent Deferred Revenue Interim Jun 30 2004 13,640,000 4,479,000 3.05 9,161,000 3,259,000 8,341,000 4,079,000 $ 1,167,000 3,706,000 2,407,000 103,000 261,000 1,014,000 Other Curr Assets 1,605,000 Curr Assets 78,034,000 Fixt & Equip 3,702,000 Goodwill 948,000 Intangible Assets -Net 1,430,000 Other Assets 450,000 Curr Liabs Deferred Rent -Net COMMON STOCK DEFERRED STOCK - BASED COMPENSATION RETAINED EARNINGS Total Assets 84,564,000 Total From JAN 01 2004 to DEC 31 2004 annual sales $47,691,000. Operating expenses $36,382,000. Operating income $11,309,000; other income $199,000; net income before taxes $11,508,000; Federal income tax $4,050,000. Net income $7,458,000. Statement obtained from Securities And Exchange Commission Prepared from statement(s) by Accountant: KPMG LLP, Seattle, Washington. ACCOUNTANTS OPINION: A review of the accountant's opinion indicated that the financial statement meets generally accepted accounting principles and the audit contains no qualifications. Page 5 of 7 8,658,000 1,306,000 68,631,000 (4,624,000) 10,593,000 84,564,000 Accounts receivable shown net less $95,000 allowance. Fixed assets shown net less $2,051,000 depreciation. Explanations: The net worth of this company includes intangibles. On May 2, 2005 the financial information was updated. HISTORY 05/02/05 11/29/2005 IAN MORRIS, PRES-CEO+ MARK POWELL, CHB+ GREGG ESKENAZI, GC -SEC KEN HANSEN, V PRES SALES MICHAEL NELSON, CTO JOHN ZDANOWSKI, CFO CLAYTON LEWIS, CHIEF OPERATING OFFICER DIRECTOR(S): The officers identified by (+) and Robert D Blank, Nicholas Hanauer, Frank M Higgins, Richard Mendenhall, Mark Robison. * * * CORPORATE AND BUSINESS REGISTRATIONS * REPORTED BY THE SECRETARY OF STATE OR OTHER OFFICIAL SOURCE AS OF 11/25/2005 REGISTERED NAME: HOUSEVALUES, INC. CORPORATION TYPE: PROFIT BUSINESS TYPE: CORPORATION REGISTRATION ID #: 28953438 * FILING DATE: 05/28/1999 DURATION: PERPETUAL STATE OF ORGANIZATION (INCORPORATION): WASHINGTON DATE OF ORGANIZATION (INCORPORATION) : 05/28/1999 STATUS: ACTIVE, IN COMPLIANCE WHERE FILED: SECRETARY OF STATE/CORPORATIONS DIVISION, OLYMPIA, WA REGISTERED AGENT: C T CORPORATION SYSTEM, 520 PIKE ST, SEATTLE, WA Page 6 of 7 98101 Stock ownership not available. Business started 1999 by Mark S Powell. INITIAL PUBLIC OFFERING: On Sept 1 2004, HouseValues Inc filed a registration statement with the Securities and Exchange Commission for an initial public offering of an undisclosed number of shares of common stock for proceeds of up to $86,250,000. Certain shareholders will also sell an undisclosed number of shares. No proceeds will be received from the shares sold by the stockholders. An application will be made to list shares on the Nasdaq National Market under the trading symbol "SOLD". The company will use its share of proceeds from general corporate purposes. All converted into common stock prior the offering for working capital and outstanding preferred shares will be to completion of the offering. Prior to the offering, William affiliates own 35.0% of outstanding Blair Capital Partners and its stock. Officers own 33.3% interest. There were 54 shareholders of record as of June 30 2004. IAN MORRIS born 1969. Active here since 2002, originally as Exec V Pres -Marketing. He was named CEO in June 2003 and Pres -Director in 2004. 1997-2002 employed by MSN HomeAdvisor. Holds MBA from Harvard Business School and BS from Bryant College. MARK POWELL born 1959. 1999 -present active here, and named Chb in 2003. 1996-1999 was real estate agent. Prior to that was employed by Val -Pak, Seattle, WA and similar firms. Served four years in US Coast Guard. He also attended Boise State University. GREGG ESKENAZI born 1961. Here since 2004. 1993-2004, employed by Microsoft Corp. Holds JD from University of California, Hastings College of Law and BA from Reed College. KEN HANSEN born 1970. Here since 2003. 2002-2003 employed by Onvia.com. 2001-2002 employed by Qwest Communications. 1998-2001 employed by Staples Communications. Holds BA from Washington State University. MICHAEL NELSON born 1969. Chief Technology Officer here since 2000. 1999-2000, employed by Point.com. 1996-1999, employed by SolutionslQ. Holds BA from University of Washington. JOHN ZDANOWSKI born 1968. Here since Oct 2003. He co-founded Affinity Internet Inc in 1999, and was active there until 2003. 1998-1999 employed by Interliant Inc. Holds MBA from Harvard Business School, MS from Syracuse University and BS from Clarkson University. CLAYTON LEWIS. Lewis served as president and chief operating officer of Onvia, Inc. ROBERT D BLANK. Director since Apr 2004. He is managing director for William Blair Capital Partners since 1998. NICHOLAS HANAUER. Director since Dec 2000. He is partner of Second Avenue Partners since 2000. FRANK M HIGGINS. Director since Apr 2004. Since 2000, he is partner of Second Avenue Partners, which he co-founded. RICHARD MENDENHALL. Driector since Aug 2004. He is co-owner of WMWorks LLC since 2004, and Resource Home Loans since 1995. MARK ROBISON. Director since 2001. He is co-founder of RCI Environmental Inc in 1990, and is Chb there. Business address has changed from 40 Lake Bellevue Dr Ste 1, Bellevue, WA, 98005 to 400 108th Ave Ne, Ste 309, Bellevue, WA, 98004. Business address has changed from 400 108th Ave Ne, Ste 309, Bellevue, WA, 98004 to 15 Lake Belleview Dr Ste 202, Bellevue, WA, 98005. 11/29/2005 Page 7 of 7 OPERA TION 05/02/05 Operates an advertising agency, specialized in advertising consulting. Operates as a real estate agent or manager. Monthly fee basis. Sells to commercial concerns. Territory : United States. EMPLOYEES: 205 which includes officer(s). FACILITIES: Leases 3,300 sq. ft. on third floor of an eight story steel building. LOCATION: Central business section on main street. 11-29(5VD /001) 99999 050184184 Copyright Dun and Bradstreet 2005 11/29/2005 YAKIMA CITY COUNCIL NOTICE OF PUBLIC HEARING Re: Amendment to the 2005 Community Development Block Grant and HOME Action Plan to Assist HouseValues, Inc. to locate and create jobs in the City of Yakima NOTICE IS HEREBY GIVEN that the Yakima City Council will conduct a public hearing to receive comments on a proposed amendment to the 2005 Community Development Block Grant and HOME Annual Action Plan to reallocate $200,000 in budgeted economic development funds to open a satellite contact center for HouseValues, Inc. that will provide as many as 350 new jobs. There will be a 30 -day public comment period starting November 7, 2005 through December 6, 2005 to consider this proposal. For additional information, please contact BiII Cobabe at 575-6101. Written public comment will be accepted through December 6, 2005, addressed to: Bill Cobabe, Office of Neighborhood Development Services, 112 South 8"' Street, Yakima, WA 98901. The public hearing will be held on December 6, 2005, at 2:00 p.m. in the Council Chambers at Yakima City Hall, 129 North 2"d Street, Yakima, WA. Dated this 2"d day of November, 2005. Karen S. Roberts, City Clerk Publish once on Friday, November 4, 2005 Charge to Account Number 10952 ITEM TITLE: SUBMITTED BY: BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. t For Meeting Of December 6, 2005 Conduct a Public Hearing on Proposed Amendments to the 2005 Consolidated Pian (Community Development Block Grant and HOME Annual Action Plan) and consider: A.) Approval of an Amendment to the 2005 CDBG and HOME Annual Action Plan; and B.) Authorizing the City Manager to execute an Economic Development Grant Agreement with HouseValues, Inc. Geittiam Cook, Director, Community and Economic Development (509) 575-6113. CONTACT PERSON/TELEPHONE: A.) Bili Cobabe, ONDS Manager 575-6101 B.) Michael Morales, 575-3533 SUMMARY: The purpose of the public hearing is to provide an opportunity for public comment on a proposal to amend the 2005 CDBG Annual Action Plan. The proposed amendment will reallocate up to $200,000 in CDBG funds to assist HouseValues, Inc. with workforce training and expenses related to opening a new customer support center in Yakima (excluding construction and equipment). Upon completion of the hearing and City Council approval of the amendment, the amended plan will be submitted to the Office of Housing and Urban Development (HUD) for their review and approval. The City was approached by HouseValues to assist the company with its expansion to Yakima. The company is seeking financial assistance from the City's CDBG program to offset their start- up costs, including recruitment and training of their workforce. This proposed assistance package consists of a $200,000 grant, payable in two installments and contingent upon the company creating 200 jobs with a $7,000,000 million payroll in the first 12 months, and, at a minimum, maintaining that workforce and payroll for five years. The agreement also contains a repayment provision for failure to meet or maintain performance goals, including closure, within that five-year period. Attached is a copy of the agreement between the City and HouseValues. Continued on next page Resolution Ordinance Other (Specify) Contract Mail to (name and address): Phone: Funding Source CDBG and HOME funds APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: The hearing was held and closed; and the Resolution adopted. RESOLUTION NO. R-2005-188 HouseValues, Inc. will open its Yakima satellite contact center within the Renewal Community in January 2006. The company will occupy the building at 1700 North 6th Street, which formerly housed Baby Jogger Racing Strollers. Based in Kirkland, Washington HouseValues is a leading marketing partner for real estate and mortgage professionals, and was ranked by Deloitte & Touche as the ninth -fastest-growing technology company in North America last year. Attached is a Dunn & Bradstreet Report on HouseValues. Table 1 City of Yakima Office of Neighborhood Development 2005 CDBG PROPOSED AMENDMENT TO BUDGET 2005 PROPOSED BUDGET AMENDMENT rruvram COMMUNITY IMAGE Public Facilities: (Originally Irrigation) 50,000 Irrigation Rehabilitation Program 5,220 Rehabilitation Relocation 570.201 (i) 12,000 REGIONAL GOVERNMENT SERVICES Community / Public Services 570.201 (e) 17,944 Central WA Oral Health Foundation: SMILE Program (from 2004) 19,832 INCREASE COMMUNITY INVOLVEMENT Sidewalks 570.201 (c) 95,004 ECONOMIC DEVELOPMENT: Job Creation Activities 570.208 House Values 200,000 200,000 2005 Proposed Amendment to Budget 200,000 12/1/2005 mag Expenditure Balances.2005 Proposed Amendment