HomeMy WebLinkAboutR-1997-010 Loan Application / CERB / N. 7th Street and “P”, “Q”, & “R” StreetsRESOLUTION NO. R-97- /0
A RESOLUTION Authorizing and directing the City Manager to apply for a loan
from the Washington State Community Economic Revitalization
Board to finance public infrastructure improvements in the vicinity
of North 7th Street and East of "P", "Q", and "R" Streets.
WHEREAS, economic development is a priority of the City of Yakima, and the City
intends to approach economic development on an inclusive, comprehensive basis which
involves public, private and community-based efforts to achieve new investment and
redevelopment in the City, and
WHEREAS, Trailwagons/Chinook, Inc. has proposed formation of a private/public
partnership to develop a new manufacturing facility in the vicinity of North 7th Street, east of
Boise Cascade Mill within the State -designated Community Empowerment Zone, and
WHEREAS, the proposed manufacturing facility represents a significant opportunity for
reinvestment and redevelopment in Yakima, with substantial opportunities and economic
diversification and job creation which would benefit the local economy, and
WHEREAS, the proposed manufacturing facility will require improvements to public
infrastructure in the vicinity of North 7th Street and East of "P", "Q", and "R" Streets,
WHEREAS, the State Community Economic Revitalization Board (CERB) provides
low-interest loans for new infrastructure and infrastructure expansion projects that foster
economic diversification and job creation in economically distressed areas of the state, and
WHEREAS, improvements to public infrastructure which will be required for the
proposed manufacturing facility appear to be appropriate for CERB financing, and
WHEREAS, it is in the best interests of the City of Yakima that the proposed
manufacturing facility and associated improvements to public infrastructure in the vicinity of
North 7th Street and East of "P", "Q", and "R" Streets be constructed expeditiously and that
all appropriate state financial assistance be utilized, now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager is hereby authorized and directed to execute and submit the attached
application, including all understandings and assurances contained therein, for CERB
financing for improvements to public infrastructure associated with the proposed
manufacturing facility. The City Manager is hereby designated as the official representative
of the City to act in connection with that funding application and is authorized to take such
additional actions as may be necessary and prudent to complete the application process.
ADOPTED BY THE CITY COUNCIL this '7 SI' day of J puary,19'7.
ATTEST:
RESOLUTION FOR APPLICATION FOR CERB LOAN
Lynn Buchanan, Mayor
December 18, 1996
COMMUNITY ECONOMIC REVITALIZATION BOARD
Traditional Program
APPLICATION FOR FUNDING
CERTIFICATION
Government applicant:
Federal Tax Number:
Contact:
Title:
Telephone:
Address:
$750,000 maximum CERB limit per project.
Amount of CERB loan requested:
Amount of CERB grant requested:
Local match (10% of CERB request):
Other funding sources/amOunt:
Total cost of project:
Project ilescriptierg
Mr. Gag Lukeharts, President/ Trail Wagons/Chinook, Inc. has submitted a proposal to relocate and
expand Itis existing manufacturing facility production capacity by constructing new facilities on ten acres of
newly acciitired land. 1.'e new facilities will consist of three structures totaling 103,200 square feet in overall
size. The project Site, which is zoned for industrial uses, is bounded by Interstate 82, the Yakima River,
Rotary Lake,the Yakima Greenway and beyond to the north; single-family residences across North 4th Street
on the west; single-family residences on the west, and vacant Trail Wagons, Inc. -owned land to the east. The
M-2, Heavy Industrial District zoning designation provides for manufacturing, assembling, fabrication,
processing, distribution and storage facilities. The expansion site enjoys excellent freeway visibility; an
invaluable asset to facility operation and successful sales.
City of Yakima. Yakima County
91-6001293
Glenn J. Valenzuela
Director. Community & Economic Deva els
(509) 575-6113
129 North Second Street...th.
Yakima. Washington 98901...
$139.
$0
700.1.?,..w.,
90.000
$3.845.400
APPLICATION FOR FUNDING CERB - 1
CITY OF YAKIMA, WASHINGTON
December 17, 1996
The proposed expansion will retain 89 existing jobs and create 40 new hill -time (i; l hs) positions at wages,
exceeding the county average. The employer has agreed to actively work with the Employment Secur' •
Department to identify and hire Community Empowerment Zone residents.
Mr. Lukehart has secured a $2,000,000 industrial revenue bond to fund the $2,000,000 cost of relocation and
facility expansion. The City of Yakima application for State CERB assistance is to provide for extension off
public utilities to support project site development. Public infrastructure improvements include: 1) the
construction of a new sewer lift station and connection of the new lift station to existing City sewer system;
and installation of water lines to support the relocation and development of the proposed manufacturing
facility expansion site. h<}
The development of industrially -zoned parcels within this area is a k ' srategy'c " City's economic;
development program. This project would spur the developmento this area into one of mier industrial
locations within the Yakima Urban Area. 'This improvement will also:allow for additiohOlyeStment and
development opportunities within the State -designated CommunityttnicaiOierinent ?.one (C'"1z) by providing
necessary infrastructure improvements to improve employment opportunities for local residents, stimulate
industrial and commercial activity, expand the taxbase through increased:'revenues for local public services,
encourage private investment in the community's econoy::and. to improve the overall quality of life within
the community
Attach resolution authorizin 'thea ' #longi.
Declaration: ; IEREB'i(CERTIFY THAT THE INFORMATION GIVEN IN THIS
APPLICATION TOTE COMMUNITY ECONOMIC REVITALIZATION BOARD IS TRUE AND
CORRECT TO THE BEST OF.MY KNOWLEDGE AND BELIEF.
Signature of keSponsible Official:
Print of Type Name: tTitle:
APPLICATION FOR FUNDING CERB-2
CITY OF YAKIMA, WASHINGTON
December 17, 1996
COMMUNITY ECONOMIC REVITALIZATION BOARD
A. REQUEST FOR FUNDING
In order to improve the economic vitality of the state, CERB has been authorized to make Loans and grants to political
subdivisions of Washington State to assist qualified applicants by financing all or part of the cost o f public facilities.
In most cases, CERB will choose to give funding in the form of a loan rather than a grant, and interest on the loan will be
determined by the most current rate for Washington State bonds or by the rate for CERB funds. As a rule, loan payments are
made in equal annual amounts on January 1 or July 1, depending on the date of the first disbursement_ If the first
disbursement is between January 1 and June 30, repayment begins July 1 following the first anniversary of the disbursement
of funds. If the first disbursement is between July 1 and December 31, repayment begins January 1 following the first
anniversary of the first disbursement of funds. The loan payment installments are based on an ordinary :;t *pity, compounded
annually; the first payment should include all interest from the date of first disbursement. "mamum period for
repayment of a CERB loan is 20 years.
If an applicant requests either a grant, a lower interest on a CERB loan, or a deferral:{ the t' n payment, then the
applicant must justify the request.
Al. Indicate what type of CERB funding you are requesti
(Request should equal total indicated on Page 1): -
• A loan of $ 139.700
-,4'
• If a deferral is requested, please indicate ▪ number of years
• Describe the loan terms: annual interest rafe
payment „;number of years for':r
• Indicate the loan payment schedule ▪ Attache '
• Explain justification tor ag :, ... Grant fundingtl'requested.
A2. a 4 If CER13' decidesto award a Islm of CERB funds to your community, how will the loan be
repaid? Indicate how the loan would be repaid if the private sector participation proceeds
as anticipated?
to ofrst
nt
'The City'S::verall ability to repay the requested CERB loan will be based upon the projected
:increased *revenues gained from the associated project area's increased water and sewer user
ev nues-over the life of the improvements. In addition the employer, via a Development
Agreement (attached) will assure repayment to the City of Yakima of all CERB funding received
associated with this project.
b.) How would the Igan be repaid if the private sector does not proceed as planned?
The private developer will reimburse the City of Yakima for all CERB funding received
associated with this project via the Development Agreement attached.
NB: If a CERB loan is given to a jurisdiction, that jurisdiction is obligating its full faith and credit
to repay the loan, regardless of the project which prompted the application for CERB funding.
APPLICATION FOR FUNDING CERB - 3
CITY OF YAKIMA, WASHINGTON
LOAN REPAYMENT SCHEDULE/DEBT SERVICE CHART
Trail wagons, Inc. txpansion Loan
(A)
Beginning
Lean Balance
(B) (C)
Annual
Debt Service !Interest
(D)
Principal
(B -C)
(E)
Ending
Loan Balance
(Al)
(AD)
>il,OMNts'•
1?.WAVAPX0740:11BM
•60;av 7 - ww:e..., ' :t1w5',":',.;'‘ •- ;WA:
igfxfM,:ii:•:-:,:-:.:,i-mAig-iii:::
-•iiiMsMiii:::i.i,;:,;:•::::ii:"i:i:::.:::.iiiiii?:iiii:
1
$139,700
$11,539 $7,684
$3,856
$135,844
2
$135,844
$11,539
$7,471
$4,068
$131,776
3
$131,776
$11,539
$7,248
$4,292
$127,485
4
$127,485
$11,539
$7,012
$4,528
$122,957
5
$122,957
$11,539
$6,763
$4,777
$118,181
6
_
$118,181
$11,539
$6,500
$5,039
$113,142
7
. $113,142
$11,539
$6,223
$5,316
$107,825
8
$107,825
I $11,539
$5,930
I $5,609
$102,216
9
$102,216
$11,539
$5,622
$5,917
$96,299
10
$96,299
$11,539
$5,296
$6,243
$90,056
11
$90,056
$11,539
$4,953
$6,586
$83,470
12
$83,470
.
$11,539
$4,591
$6,948
$76,522
13
$76,522
$11,539
• $4,209
$7,331
$69,191
19
$69,191
$11,539
$3,806
$7,734
$61,458
15
$61,458
$11,539
$3,380
$8,159 1 $53,298
I16 I $53,298
$11,539
$2,931 $8,608 $44,691
e,dili Cal
17 .7-2.1,07.1.
$11 ,539
$7,458 $9,081 $35,609
18 $35,609
1
$11,539
$1,959 $9,581 1 $26,029
19 526,029
$11,539
$1,432 $10,108 $15,921
20
Wzgailimi0iimi:O•a*:44i4Vtimwal
$15 921
$11 539
\oAiNiini,MMUMMIIMMEMPUMMOZAMMUM:-
$876 $10 664 $5 258
-,....,&,,mr.:,,,, . K(sv,mi • aVri•
December 17, 1996
B. IDENTIFICATION OF PUBLIC FACILITY PROJECT AND COSTS
(The term "public facilities" may include development of land and improvements for public facilities, as well as the
acquisition, construction, rehabilitation, alteration, expansion or improvement of such a facility.)
BL Describe the entire public facility project, including the parts that you are not asking CERB to
fund. Attach any appropriate sketches.
The Trail Wagons/Chinook, Inc. relocation and expansion project proposal represents a comprephensive
project supporting both a public facilities activity and an economic development activity. The overall
project represents a model cooperative effort between Yakima County, City of Yakima, Washington State
Department of Transportation, Trail Wagons/Chinook, Inc., and state CERB and federal CDBG funding
sources.
The project is designed to benefit two distinct groups: 1) the residents o>;: .w -income target area
neighborhood adjacent to the new manufacturing facility will benefit front 'rtia +g r and capital facility
improvements; 2) eighty-nine current employees of Trail Wagons/Chinook, Inc + 1:.40 additional new
employees will benefit from the relocation and expansion of this fat
''
Federal CDBG funding will be used to support the instillation of. water and se v les within the
unincorporated neighborhood area and also to make roadway .improvements within name area to
facilitate vehicular access to the area, and provide for publieutllity:impvements whiChwill afford area
residents the opportunity to connect to City of Yakima public;sewer anvater services. The target area
neighborhood is characterized by narrow, unimproved roadways without curb, gutter, sidewalks and street
lighting. Target area households are currently :scived by private s
State CERB funding will be used to install watetirtd.::sewer Irnes w i the City of Yakima project area
to support the relocation and development of the manufactiiririg facility. In addition, the City of Yakima
will be responsible for sewer r lai ;extension from eh exittiog,station to a new lift station.
•
Washington State Departinent Of Transponatioiiwill be responsible for the development of E. "R" Street
and associated infrastractnre irt the area of North. First Street to the right -of --way for Buwalda Street. This
area also its within the city vrYa
Trail Wagons/Chinook, Inc 1 aa..secured a $2,000,000 industrial revenue bond commitment through the
Washington Economic Development Finance Authority to finance facility relocation and expansion; and
has emitted an additional $5,000 to help offset the CDBG cost of E. "R" Street improvements to be
provided by Yakima county CDBG funding sources (see letter attached).
B2. Identify tine :location of the public facility project. Attach a map of the area.
The publiita facility project is located on currently undeveloped land (Parcel No. 191307-34001) at North
7th Street and East of "P", "Q", and "R" Streets within the State -designated Community Empowerment
Zone in the northeast portion of the City of Yakima zoned for industrial development. See attached
vicinity/site map.
ow wells and septic systems.
B3. What is the private development associated with this public facility project?
The expansion of an existing 60,000 square foot manufacturing facility by constructing a new 103,200
square foot facility. The expansion will retain 89 existing jobs and create 40 new full-time (FTEs)
positions at wages exceeding the county average wage.
APPLICATION FOR FUNDING CERB - 4
CITY OF YAKIMA, WASHINGTON
W8DOT
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MANUFACTURING SITS
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December 18, 1996
B4. Describe how the public facility project will enhance or encourage other development in the
immediate area.
The public facility will enhance or encourage other development in the immediate area upon project
completion through the presence of an improved infrastructure which will provide a much-needed
incentive for additional economic development activity in the immediate area. Such activity would fulfill
the City's revitalization/reinvestment goal of developing additional industrial sites without sacrificing the
environmental integrity of the area. The proposed improvements will allow for timely and future
reinvestment in an industrial development that has the potential to produce additional jobs for other under
employed and unemployed Community Empowerment Zone residents.
B5. List all permits required for the public sector project and give their current status (applied
for, application being prepared, permit issued, etc.). Provide a narrative discussion of the
status of all environmental permits and all environmental issues
;Apticipated
��`tlmpletion
Status?t :}- s .
Permit IssuerDate '� '��::x.
Curb & Sidewalk City of Yakima Ayg'iable.`"
Street City of Yakima ::. Available
Sewer City of Yakima :. .Available{`.,
Water City of Yakima 'Available: >::.
prainage (Drywells) City of Yakima Available""t
Hydrant Installation City of Yakima ''.. Ava .ai ie;
Explain status of environmental permits/issues:
B6. If no environmental permits arerequired for the project:(e.g., S mrelines Permit, Environmental
Impact Statement, etc.), plea blain why: .4— "' :;:;.;. ? ::
A Preliminary Envie mental Checklist was submitted November 15, 1996. On December 20, 1996 the
City of Yakima issued a:Miiigated. Determinon of Nonsignificance (MDNS) under WAC 197-11-
340(2),.The City :will not acl on::ttiis proposal for '15 days is currently under review by City staff. Written
comments regarding this determination,°svUL be accepted unti 5:00 pm on January 6,1997.
'rut Wagons/0460k, T c , 8411 prepare, as needed, Environmental Audit for hazardous waste,
Geotechnical Repott:and Traffu= Analysis related to this development proposal.
B7. Will °Oils project Upgrade an existing facility? No . Build a new one? Yes What other
services will the.proposed facility provide to the community? For example, will it solve any
continuingphysieal problems in the area?
Other direct or indirect services the proposed facility will provide to the community include increased
wages through the creation of 40 additional FTEs with a potential earning power of approximately
$260,850 in the first year of operation and an additional $111,080 by the third year of operation;
reflecting an additional overall local economic benefit of $371,930 in wages for area residents. In
addition it is the City's hope that this project serve as a catalyst to reinvestment opportunities and
development activity within the area currently bypassed due to the lack of adequate public infrastructure.
APPLICATION FOR FUNDING CERB - 5
CITY OF YAKIMA, WASHINGTON
December 17, 1996
B& List each funding source and amount, note whether the amount has been provided or is being
requested. Give the date that the funds were approved or the date that requested funds are
expected to be approved.
SourCA Dale
• CERB loan iequested February, 1997
• CERB grant requested
• Local match igniam1292
• Other known sources:
Total funding:
$14.5ACKL__
(Amount should equal total in "Sources and Uses of Project Costs" form.)
B9. What is the projected annual operating cost of the proposed public facilit ect?
:0.
The projected annual cost of operating and maintaining the new sewor4lgt statoi ad extension of and
new forcernain is estimated at $10,500 dollars; while the anticipatediOrnifil cost of hyfro-c1eaning the 8 -
inch sewer line extension is $500 - $600. The estimated annual cost of epeiating and Oin.jaining the new
8 -inch water line extension is $650. Total high-end estiWted aruival operation'i " to the City of
Yakima is projected as $11,750. These costs were derived through city records of Mstoficat expenses
associated with similar projects. The projected operating poz$4,‘y.ojr covered in the future through
water and sewer rates. V. .. • ' ''‘ 4''''
• 4i-: . , .. .::• ,,,.
.1::iE'Vii:::i: si:4,•ii:•::ii.
B10. Whenever a state agency is considering; awaraitg grants or leariSltor a county, city, or town to
finance public facilities, it shall consider whether Ihe county, citieOrtown that is requesting the
grant or loan is a party to a county-widle planningpcgicy relatingeStO the type of public facility for
which the grant or loan is sought. Is your city, toWn*r:tturityit party to such a policy?
"'•••• - • • nwei.e 'eeeagie:
il.....:
businesses and industry within the designated minvestment
armiThe proposed proje*4part kboordinatvit 01 nt effort to improve economic development at
diversify the local d0Ofiqrny. The City of Yalgina's reinvestment and economic development strategy
within the State-designatedCommunity Empowerment Zone is to fonnulate and enact a coordinated
approachlOdeVelop an-attNelie through job creation, job and business development
strategies whitheeneouetlie location of
area., and to facilitate the retention and expansion of existing commercial and industrial business
enterprises to protirkite econoirtidieVitalization and growth.
:. .
The-001as embarked upon a coordinated approach to job.creation and skills development/training for
its cointentnity residents to effectively reduce unemployment in our community. In an effort to meet
prograMObjeotiveS, the City of Yakima has requested that Trail Wagons/Chinook, Inc. give priority to
under eMployed and unemployed workers residing within the State -designated Community
Empowernient Zone. Employment Security Department has already agreed to use its computer
capabilities to identify potential employees from within the Community Empowerment Zone area.
APPLICATION FOR FUNDING CERB -6
CITY OF YAKIMA, WASHINGTON
December 17, 1996
C. PRIVATE SECTOR COMMITMENT
C1. In order to show that a specific private investment is ready to occur but will do so only if CERB assistance is made
available to the applicant, CERB requires a signed Contingency Agreements) between the applicant and the private
sector representative(s). (See enclosed example of a Contingency Agreement.) If a developer is involved, there also
must be a signed Contingency Agreement between the developer and the proposed tenant
•
The Contingency Agreement should outline the basic intended agreement between the public and private sectors and
should include:
• The estimated capital investment by the private sector.
• The estimated number of jobs to be retained or created because of the private sector project.
• An explanation of the need for the public improvement
• A brief description of the project's phases. R:>,:,... .
• An agreement by the private sector to contact the Private Industry Council and Emplo rreint" e urity for
assistance in filling new positions.
Attach a Contingency Agreement to this.form for each private sector entitv,;.
C2. Describe the proposed private development or expansion
Gary Lukehart, President and CEO, Trail Wagons, Inc `t as i mitt4a proposal toe:. Itis existing
60,000 square foot manufacturing facility by constructing at w 1 3 square foot favi l is The facility
will consist of three separate buildings located on approximately: Len ales of land zoned for industrial
uses. The new site, located in the northea$ttrrn portion of the: CIty's Community Empowerment Zone
enjoys unobscured visibility from I-82. The project is surrounded by ow -income neighborhoods situated
on the urban fringe of the Yakima urban area;-...;.d:`a e: pically cha t ted by substandard, unimproved
roadways and inadequate public infrastructure;(wat D en I sewer). +` ti:"'
w full-time (FTEs) positions at wages
The expansion will ;vain 89 titisting jobs ndcreatt3-
exceeding the county::verage waw
C3. Identify names(s) of pr vate.sect r::firm and cop#act person(s) directly involved in the development
or expansion that should be siipperted b .the public facility project:
<liE firm: T`tt `l agons, Inc.
Contact/Title: kehart, President/CEO
Telephone: (509 ::248-9026
C4. How longhas the firm been in business? 20 years . Describe the nature of the work done.
Trail Wagos/Chinook, Inc. has been manufacturing in the City of Yakima since 1976. Trail
Wagons/Chinook, Inc. is a recreational vehicle manufacturing corporation privately owned and operated
by GaryLukehart. Trail Wagons produces customized luxury vans and specialty conversions on pickup
trucks and sport utility vehicles distributing them throughout the Pacific Northwest. The company also
produces and markets a line of mini-motorhomes and camper vans under the Chinook name plate.
Chinook motorhomes are distributed through recreational vehicle dealers across the United States and
Canada.
APPLICATION FOR FUNDING CERB - 7
CITY OF YAKIMA, WASHINGTON
December 17, 1996
C5. Where is the firm currently located? Please provide company address.
Trail Wagons/Chinook, Inc. current operation is located at 1100 East Lincoln Avenue, Yakima.
C6. List the number of current employees by type ofjob:
Job Description
• Management/Administration
• Technical/Professional
• Office/Clerical
• Sales Work
• Skilled crafts work
• Others
Totals
Current Average
Number Annual
(in FTEs) Salary
_a_ _lam
4 31,EQ
_5_ ZUM
4 432210.
6 ....10.S4.
122 tS7.4
4.V . ..
...32___ '''s'l likkii:
• How many of these positions are for seasonal work? in Fits.
se.
C7. Describe the relationship between the private sector project an ..retention or creation of
employment opportunities by the firm:
CERB funding would provide construction tof :approximately,
from the existing lift station at East "P" Streetand the..I3uwalda
be located 100 feet north of "P" Street on North 4th:Stiegt; and thei
feet of water lines to insure theayailability of adequa.. fii flow to
The project will resu1t.,in
project startup. 'Frail Wago
and third year of facThty
Trail Wagons/Chinookslii
residents with assistance
employees and ereation of
rates.within the Yakima u
average.
near feet of sewer main extension
right-of-way to a new lift station to
nsion of approximate 2,000 linear
manufacturing facility site.
rettiifibn of 89 current employees and veffi hire an additional 10 persons f
Chinook, Inc. intends to hire an additional 30 employees between the fit.
rattbn...at.an average hourly wage which exceeds the county -wide average.
seek the employment of Community Empowerment Zone
m. eEtttplbArient Security Department Yakima office. The retention of 89
:pew FlEsWill be a positive step towards reducing high area unemployment
n rata Yakima County overall which annually are twice that of the State
C8. Home:Many and what types ofjobs will be retained or created by the firm as a result of the private
sectorProject? When will newly created jobs be added to the payroll? Wage data should gxclude
fringe benefits(38%).
The result of this project will allow the continued retention of 89 FTEs currently employed at Trail
Wagons/Chinook, Inc. In addition to the 89 jobs retained, approximately 40 new positions will be created
to meet expanded capacity needs.
APPLICATION FOR FUNDING CERB -8
CITY OF YAKIMA, WASHINGTON
December 17, 1996
Nbr Jobs Nbr Jobs Local
Nbr Jobs Created Created Annual/ Prevailing
Retained Year 1 Year 3 Hourly Hourly
Job Description (in FTEs) (in FTEs) (in Flts) Wages Wages
Mgmt•/Admin. ___1_ --IL- —1- $ am
Technical/Prof. 4 __I_ -Si- $15.13
Office/Clerical 5 _1 __O__ $ £22
Sales 4 --1 -_IL_ $ 21.14
Skilled crafts _SL._ _ 2 $14,51 $ 21-$25
Others 67 4 --27 $ $2a " ` Ali.
Totals: 89 _10_ _.34_
ME, For Yearl 10 new jobs will be created; 20 to 30 new jobs will be created for Y -earl' Total of 4Onew
jobs will be created. ''-• ; "
Y. -•fix..-•.
• Management positions should be indicated as an annual salary.:..<...:; <'>r'; -.•
•• Retained jobs are defined as jobs that would otherwise be lost to the
Projected annual gross payroll for all job classifications:
Existing Year 1 Year
$1,835,614...--. , 4 $2,207.544
How many of these positions are for seasonal work? � FTEs.
C9. On what are these jot projections based? .:Attach supporting information such as a business plan or
year-end financial statements (financial statements may be unaudited). Explain why the
projections are realistic. ,;'::' :{
Job projections art based on ,current levels of employment and the last five years history of employment.
The entire CERB application is considered public information. Financial and commercial
information provided by the private business in the application will be treated as confidential by the
Department of Community, Trade and Economic Development to the extent permitted by 42.17
RCW.
C10. How do the wage levels of this company compare with the area's prevailing wage rates?
Explain the differences if applicable. Identify the source for local prevailing wage data..
The average hourly wholly burdened cost for an employee by Trail Wagons/Chinook, Inc. exceeds the
county -wide average wage.
APPLICATION FOR FUNDING CERB - 9
CITY OF YAKIMA, WASHINGTON
December 17, 1996
Cli. Describe opportunities that exist within the company for advancement.
A 30 -day review following job start and a potential merit increase; subsequent salary increase based up
6 -month review of job performance. Increased production capacity often results in increased professioi.
training and skills development. It is anticipated that further expansion of existing facilities will create:
additional opportunities for advancement within the company.
C12. Will the private sector offer expanded employment opportunities for community workers who have
not been able to find permanent jobs? What groups might it help and how?
Trail Wagons/Chinook, Inc. plans to offer stable year round employment to Community Empowerment:
Zone residents. CEZ area residents will be offered employment within the company with the assistance
of the State's Employment Security Department, Yakima office.
C13. Indicate the construction schedule for the proposed private sector project:
Trail Wagons/Chinook, Inc. anticipates construction start-up during Fall, :9„.:nth full occupancy of
new facility anticipated by end of 1997.
C14. List all permits for the private sector p, ect and give their currentstatus (app Cies ” , application
being prepared, permit issued, etc.). Provide a narrativediscussion of the status'
environmental permits and all environmental issues:: " ""t ` »O
Jssuer Status''
rmi
Building
PlumbtnE
Electrical
Mechanical:
Water
City of Yakima
C15. What private decisions or authorizations still must be made before the private sector begins work
on the proposed project?
14:.0
.,. ew
n: Under Review
.„0;Ljinsigt Review
Under Review
Anticipated
Completion
f11 1997
faILL9E
f 11222
alum
Eali 1997
Mr. Lukcla€::::h'as submitted a request for multiple funding assistance to support this comprehensive
project pr sal which involves the City of Yakitna, Yakima County, Washington State Department of
Transportation, and both state CERB and federal CDBG funding sources. Requests for state CERB,
federal CDBG funding assistance will be submitted according to their individual and specific application
submittal timelines.
C16. Has the private sector secured investment and loan commitments for the capital' investment
project? For what percentage of the total project? If all funding has not been secured, what is the
estimated schedule for securing funding commitments for the total private sector project?
Yes, loan commitments have been secured for 100% of the private sector project through the use of a
$2,000,000 industrial revenue bond issued by the Washington Economic Development Finance Authority.
APPLICATION FOR FUNDING CERI3 -10
CITY OF YAKIMA, WASHINGTON
December 17, 1996
D. ECONOMIC IMPACT ON THE COMMUNITY
Di. Describe the current economic conditions of your community. Provide the most recent data
available. Please provide narrative information describing the economic situation of the
jurisdiction.
Date of
Data Estimate
• Total Labor Force
• Total Manufacturing Labor Force
• 3 -Year Avg. Unemployment Rate
• Per Capita Income
• Per Capita Project Cost Per
Applicant Jurisdiction:
123800 as of October. 1996
12300 as of October. 1996
12.9% as of 1993 - 1995,
$17.760 as of 1
$18.52 as of ,Ap
of'
Explanation of Current Economic Conditions:
.0:eiir ,
Median family incomes, as estimated by the U.S. CensusandfiUD, 1ave rise. n very s ... in,„the Yakima
MSA during the past five years. In 1990, the Census estirnat median family income was S27,507. For
1995, this figure is an estimated $31,200, which representi*.percent appreciatiOn over the 1990
..
estimate, or an average annual increase of 169 percent. Betwee 1 ''and 1995, the HUD estimated
median family income showed no increase. i(HUD Northwesti::;:j:::p., Area Quarterly Economic Report,
1st Quarter, 1995) .iig: .'i' •::::•:' :
:i: •::iii", •K- '!::::,,... 'kliki;.:11.5.7-0.2,,,,,,..:0. t.,::
NOTE: As of 2nd Quarter,1995,.U.S. Department iitHOUSiog & I.1,0litiii Development (HUD) will provide
Quarterly Economic Repoitt:.0#*tti-annual bAis with t:SOri.tigind Fall report The Fall 1996 report has
not yet been released.
The
„„....:
The Oty of Yakima IrtigilS a ftderally designated "economically distressed" community. The County of
Yakima, receiyes 25 pereentofttiefUrids.allocatalor federal welfare payments.
D2. :. .:tiVillation chitigels an iitipOrpnt indicator of general economic growth or decline. How has the
pOptilation changeain your'tiriimunity in the last five years?
.,.., City of Yakima County of Yakima
• Ta1:1)01414On 54.843 as of .129/2 207.600 as of April 1. 1996
• Total *iiation 62.670 as of 1996 204.100 as of April 1. 1995
• Percent change 14.3% 1.7%
(Population statistics based on State OFM forecast as of April 1, 1996)
APPLICATION FOR FUNDING CERB - 11
CITY OF YAKIMA, WASHINGTON
December 17, 1996
Explanation of Population Change:
Population growth within the Yakima Urban Area is largely due to increases in the Hispanic populata'
since the Immigration Reform Act of 1986, other in -migration and natural growth. Yakima Count;
predominantly Hirai agricultural area with a population of 190,000, has a minority population of over 36.,.
making it the highest concentration of minorities in Washington State, as well as one of the fastest
growing minority populations in the nation. The State of Washington ranks 12th in U.S. Hispanic
population. Half of these permanent Hispanic residents live within Yakima County, where one in four
permanent residents is Hispanic. The largest single concentration remains within the Yakima
metropolitan area.
D3. One of the goals of CERB is to encourage diversification of the employment base in communities.
Describe the current employment profile of your community and indicate how this project will
bring about diversification:
•
The fastest growing occupational categories within the Yakima Urban Area baften 198 t and 1990 were
service and food industries. Since that trend is expected to continue :`wtitirnt intervention many
households will not generate annual incomes which exceed 80 percent: the county median household
income. City of Yakima average unemployment is approximately. 4 percerl :: mpared to a 9.8%
average for Yakima County.yxka
``
The diversification and growth of the industrial base wlaldina urban area is a y>element to
improvement in the quality of life for area low to moderate'frObrrieifesidents. The prOtilied expansion
project will retain 89 current jobs and generate an additional; %:Fl sat an average wage rate which
exceeds the county -wide average wage. Funding of this request ill insure that both current and newly
proposed job positions will not be loss to the Trail;'Wagons southmCalifomia industrial site.
ifs to the ctiMjnitinity that are anticipated
D4. Describe any other direct or indirect econotnie
because of this project:
The proposed facility cxpanilWproject will. provider increased wages through the creation
additional FTEs with°:.;potential eamrng power of approximately $260,850 in the first year's expan
operation and an addit anal 51.1;1:,080 in the facititys third year of expanded operation. Associated puL .. _
infrast:ructununproven nts wfil pr v fle>incentive for additional economic development activity within
the rmmediate area Indirectly the:carrerit facility would be attractive as and overall commercitiI
::de reloprnent..
The Vr posed industrial development will potentially impact 29 existing residences adjacent to the project
site: :PrOposed utility upgrades will afford area residents the opportunity to connect to City of Yakima
domestic water and;sanitary sewer services. Low to moderate income households will benefit from the
opport t it :to CCO3eCt to City utility services using reduced sliding scale connection fees.
Eight-ninet89) existing Trail Wagons employees will be able to retain their jobs, while 40 additional
persons Will be afforded employment opportunities at an average hourly wage which exceeds the county-
wide average wage. The generation of 40 new full-time employment positions at a wage rate which
exceeds the county average hourly wage will be a positive step towards reducing high area unemployment
for both City of Yakima and Yakima County residents. In addition, the location of additional industrially
zoned property adjacent to this manufacturing facility provides opportunity for increased industrial
development, and with it additional job opportunities for area residents.
APPLICATION FOR FUNDING CERB - 12
CITY OF YAKIMA, WASHINGTON
December 17, 1996
D5. Provide evidence of local support for this project. Note: Examples of local support could include
letters from local city councils, county commissioners, chambers of commerce, etc. Statements
from the local city council and county commissioners are strongly encouraged. A statement from
t• &. . • 1 • t.n't 1 1• X11 . I1
Letters of community support for the proposed facility expansion project and public infrastructure
improvements are attached.
E. FINANCIAL INFORMATION ON CITIES, TOWNS, AND COUNTIES
This section examines the general financial status of cities, towns, and counties to determine ability to
support project costs. Questions 1-10 examine the current fiscal status of the jurisdiction. Questions 12-15
examine potential revenue generated by the private sector project.
El. Please provide annual financial reports for your jurisdiction for the past three mo 'current years.
Please submit annual reports submitted to the Stated Auditor. If pre li itiaty reports are complete
but have not yet been submitted to the State Auditor, please provide prelbnlnary report along
with any completed State Auditor reports
Annual fmancial reports for the City of Yakima for 1994,1:9993 and 1r6 -are attac
•
Identify funds (General Fund, etc.) that could repay a CEtB`1oan:.::If any of these !'d cannot be
used for the CERB project, please explain. (Explain future ca al needs in the context of these
funds and describe how future needs are anticipated to affeCt.;.,.;;;;d balances.)
The City of Yakima will recapture loans front t e applicant in accordance;with the Development
Agreement attached.''
K•
In general, is the financialinformation on funds:represei t itive of the past five years' experience?
Yes. If "no", please: explain.`<; ....
E2. In the context of the Ioca government's overall: annual budget, induding capital improvement
plans, evaluate the need.for`'CB;RB:as;stance
The City of Yaklrna does:not.:nave the ability to invest in future capital facility improvements without
state or federal :asS stance. IBUdgeted expenditures for capital improvements for 1997 ($21,082,714)
represent 21 percentof the Cm's total estimated budget of $100,555,373 for the upcoming fiscal period.
Water witi sewer Capital investments for the new sewer lift station have already been budgeted for the
1997 fiscal period.,
E3. Will the°locaI.government use general obligation bonds for the construction of this public facility
project? If "no", please explain. (e.g., future capital finance needs, limited debt capacity, issuance
costs, etc:)
No. The City of Yakima willnot use general obligation bonds for construction of this public
infrastructure improvement project. The City cannot issue bonds quickly enough to ensure that this
project will go forward in a timely manner which may affect a potential loss of 129 jobs to Trail
Wagons/Chinook, Inc.'s southem California industrial site.
APPLICATION FOR FUNDING CERB -13
CITY OF YAKIMA, WASHINGTON
December 17, 1996
E4. Has the use of revenue bonds been explored for this public facility project? Explain the outcome
and describe why revenue bonds would or would not be applicable for this project.
Yes. The use of revenue bonds has been explored for this public facility project, however the use of
revenue bonds would not be applicable for this project due to timing. Timing does not permit use of
revenue bonds to ensure project success.
ES. Regular LOCAL taxing authority: (Indicate "n/a" if not applicable.)
• Has the jurisdiction ever voted to increase the regular property tax rate over the 106% lid?
No. The City of Yakima has not voted to increase the regular property tax rate over the 106% lid.
• What is the LOCAL sales tax rate?
• What is the LOCAL Real Estate Excise Tax rate?
• What is the LOCAL Business & Oocupation Tax rate?
• What is the LOCAL Utility Tax rate?
E6. If unused local taxing authority exists, please explain maximum taxing authoi € snot
imposed for each tax.
Local communities in Eastern Washington, forehe most part, v
declined to institute B&O taxation.
E7. In general, is the prior year's revenue
B&O and utility taxes) representative
Yes. In general, the prior years°:revenue
and utility taxes) is representative of the
APPLICATION FOR FUNDING
CITY OF YAKIMA, WASHINGTON
0 taxes; as an unfair taxand have
from local tax sources (pr iperty, miles, real estate excise,
of the past five years' experience?
from local tax sources (property, sales, real estate excise, B&C
past fiv years experience.
CERI3.14
December 17, 1996
E8. Rates and Charges: Show rates and indicate system of charges, e.g., monthly or bimonthly,
unit used, etc. (Indicate "n/a" (f the jurisdiction does not operate the utility.)
Rates & Charges
;::.
* The above rate ° lculations are mile moot : s , not monthly.
** Reven i :.figures am:hp ngersep rated in inanner which will accommodate this format.
E9. Special Assessment=
•
-
"
•
. as jurisdiction used authority to form ULIDs, LIDs or RIDs to make general
assessments for capital projects? Yes .
Date of the last ULID, LID or RID formed: September, 1995
Project Cost: $113,335.77
Was a ULID, LID or RID considered for this public facility project?
An LID was considered for this public facility project, however, the process is too time
consuming to meet application and project deadlines.
APPLICATION FOR FUNDING CERB - 15
CITY OF YAKIMA, WASHINGTON
Rate'
Date of Last
Increase
Revenue From
Prior Year"
Number
Customers
SEWER
Service Char ee Volume
...„:,,...
•,....„:$A,,...:::•.. . • <t•.t.,....
Industrial 6" meter
�J..::t.i.•..v:
.'J�!:?`n ”}`J/J�:-v��...ppWWyyrr. }: •••,..:4....,..,......w.4.,,,,
',,\{wo''./J/.„40••• -.. n}.'vii44;IN:'':r
Commercial 2 meter
l .4.,..".:•,...:. �w ,/!
•^::nn
r,
$1.31/cd
:::... .•/y ;/r.r..%••••,�..::.
$271.00
,;r��-\:
$3245
F,....„�m�':�
$20.43
rr••%`M :
Jan -96
; .. . t?Xf/A "?' / F;. ;}:
Jan -96
•:.fwN!/0:,.,.,•}
Jan -96
' .�%
..,:::•;•- 4.f.:.
:: ,l/M
$6 442,388
v \ U v1'ti,�•k� '::..../".
it ..Kit,
•- r .:fr! :
"si
/4,:
t A
iP w
•v•�
::. \ \'^ r'
Na <' »y
.�. -=vt - E � c. vk.:•:,
21 612
�9f\ .j::
23
j::a.\.
.
gJr..?t}:A„`
r..:
2,164..„,:,:.;::lv!i•
-flt\?
9
7:lfg::;,':::::
r r f
..:..''...
.
-es •entia /= x 4 meter
}.}'%/.YC,!',Y/r.. .N1:r--;— -w�.+4::'
•ey:.,. ...
����
Connection tee
..,..t: }?,,^� • • ' ..r.r. `;.x' ':,: r, .:. � ..: .. S;Y`�:
Na
^:%:f.� '•'.,a”' f
?},. :::'n. ;./}i•}: i:rl..//lin,.. .}: ,Y itY..:.::}i:•}: :i _ •...-
.:i::::: ",.;:.`v.: i'Vii? :.yf: w •'
WATER ...... .......... .. �....>F";..i,{...{::'•..
•
... /i>•::
December 17,1996
E10. A few of the other sources of funding for economic development projects are listed below. Indicate
whether your jurisdiction has made application to any of the funding sources for this public facili
project and what the outcome was:
XesLa
FEDERAL:
Economic Development Administration
ELL—
Farmers Home Administration
•••••••••1•11.1•10=9 No
Rural Development Administration
Other: None
STATE:
Transportation Improvement Board
Community Development Block Grant
Development Loan Fund
HUD 1
Public Works Trust Fund
Department of Ecology
Other: Nang
01•0111•101.0.111/10=0
Yes
the outcome of the frii0estigartOri of otheauta
Due to the timing and urgency 004 request. Thiiproject is scheduled for completion in Winter 1997.
• .
Ell. During the ifir$year thatthe private sector participant is operating, indicate the estimated revenue
generated fori.pelOcal gtivpritm entjiiiIsdict. ion.
(L4etii. lax rate ritedts that rate Otich is imposed by the jurisdiction and generates revenue to it. Ifyou
do *have authWity to impose the tar, enter "not applicable" in the blank for local tax rate. For
sales tax revenue,: provide an estimate even if the private sector participant guahfies for a sales tax
deferrat,fr:
011111•••011111111111111MMININ
APPLICATION FOR FUNDING CERB -16
CITY OF YAKIMA, WASHINGTON
December 17, 1996
ESTIMATED LOCAL REVENUE FROM PRIVATE SECTOR:
$237296 X 0.014 • 13,322
LOCAL sales tax rate sales tax revenue
annual taxable sales
and services
$2,000,000 X 0015 a 131150
increase in
LOCAL prop. tax rata prop. tax revenue
assessed valuation (3.8488f1000)
99000,000 X
annual gross income
1278 X
water consumption
1278 X
sewer consumption
0
LOCAL B & O tax rate
a
5,
IMO tax revenue
$12
580,018 X 0.0556 •
electric consumption
$2646
total utility revenue X
Other revenues'komm
electric rates
(per phone, gas, electric)
$370
utity:taie`>ra_.. ':titity tax revenue
(aty S. vet
tees, tee, etc.
SD
misc. revenue
APPLICATION FOR FUNDING CEGB - 17
CITY OF YAKIMA, WASHINGTON
December 18, 1996
ESTIMATED STATE REVENUE FROM PRIVATE SECTOR:
Estimate the annual state revenue from the private sector for the first year of business for retail sties tax,
property tax and business and occupation tax.
ESTIMATED STATE REVENUE FROM PRIVATE SECTOR:
annual taxable sales
and services
$2,000,CCO
X ores
STATE sales & use tax rate sales & use tax revenue
X 0.013949
assessed valuation STATE property tax
(3.90491000)
--Anne X 0.015
gross receipts B & 0 tax rate
Total annual STATE revenue from private sector
property tax revenue
Total LOCAL and STATE revenues from private sector
Note: RTS refers to "ready to serve" charges.
, .,....0
E.12 Will a revenue stream be generated that cold repay B la outside of the system's normal
operations and maintenatiet .00.0.4? Please de:Ser,,i.
The City's overall:00104o pay:Wrequested CUB loariVill be based upon the projected increased
revenues gained from the associated project area 4ncreased property and sales taxes over the life of the
improvements:and the unburxnent • f x n Ities through a Development Agreement with the
priyate Se---ps.. • ' #rtisip .'•'" ..i:::
..5,:4.
• ::ii:;.::
E13. 'Ailiihat date W)'0.!:$ector participant's first year of operation begin?
• ,
. .
Trail Wagons/Chi:4o*, Inc.:innficipates hill occupancy of new manufacturing :facility by Winter 1997.
Will it be functioning at full capacity at that date? Yes
: •
E14. Does the private sector participant plain to apply for a sales tax deferral?
Yes. Theprivate sector employer has been granted a sales tax deferral from the State Revenue
Department (copy attached).
The company expects the deferral to begin ApustLIM and end ac:ember 31, 1922.
APPLICATION FOR FUNDING CERB -18
CITY OF YAKIMA, WASHINGTON
December 17, 1996
E15. How will the CERB project be maintained by the applicant? Please explain.
The private developer will enter into a Development Agreement for full and timely repayment of all
CERB funds received associated with this project. See Attachment 2
SOURCES AND USES OF PROJECT COSTS
Refer to Total Project Cost Breakdown attached.
APPLICATION FOR FUNDING CERB -19
CITY OF YAKIMA, WASHINGTON
City of Yakima
Sources & Uses of Protect Costs
CERB Project Budget
Project Duration: 16 Months (July 1997 - October 1998)
Source 1 Source 2 1 Source 3
Source 4
Source 5
Total
CDBG
Yakima City of
County Yakima/
CERB
City of
Yakima/
WSDOT
Private
General Administration
$4,000
$2,000
$6,000
(CDBG contract execution, files and
record keeping, civil rights compliance)
$o
Project Administration
$15,000
$10,000
(Project Manager, Consultant Fees,
Subreclplent Fees, Environmental R.vl
1
1
Engineering Fees
$105,600
$68,200
$117,000
$290,800
Water/sewer side connections
$71,000
$3,600
$74,600
Sewer Improvements
$139,400
$136,000
$229,000
$277,300
$97,900
$97,700
$64,700
$345,000
$5,000
$514,400
$298,600
$579,000
1
Water Improvements
Street Improvements
Commerclal/Industr►al Facilities
$2,000,000
$2,000,000
Other: Public Involvement
$57,000
$57,000
Total
$700,000
$1Z000
$443,400
I $685,000
- $2,005,000
[ $3,845,400
Trail ncJettilnfinic; Inn
WASHINGTON STATE ENVIRONMENTAL POLICY ACT
MITIGATED DETERMINATION OF NONSIGNIFICANCE
CITY OF YAKIMA, WASHINGTON
December 20, 1996
PROJECT DESCRIPTION: The construction of a 103,200 square foot manufacturing
complex. Subject parcel (191307-34001) lies within an M-2 zoning district with a combined square
footage of approximately 554,098 square feet. The proposed use is a 'permitted use' in the M-2
zoning district.
PROPONENT: Trail Wagons/Chinook, Inc.
LOCATION: Vicinity of North 7th Street, east of "R" Street (north of Boise Cascade Mill)
LEAD AGENCY: City of Yakima.
FILE NUMBER: UAZO EC#37-96
DETERMINATION: The lead agency for this proposal, after reviewing the Environmental
Checklist and related information, has determined that the project does have a probable significant
adverse impact on the environment and an environmental impact statement (EIS) will not be required
as provided under RCW 43.21C.030(2c) provided measures are taken to mitigate potential adverse
impacts.
This Mitigated Determination of Nonsignificance (MDNS) is hereby conditioned upon the following
mitigating measures, as authorized under WAC 197-11-660 and YMC 6.88 (B)5 as supported by
these findings and policies:
FINDTNG: 100 -YEAR FLOODPLAIN LOCATION
The proposed project site is located within the 100 -Year Floodplain, Zone "A" (National Flood
Insurance Program, Flood Insurance Rate Map, Panel 6 of 6, Community -Panel Number 530311
0006,A, effective date of December 15, 1981).
Policy:
"A development permit shall be obtained before construction or development begins within any area
of special flood hazard as established in Section 11.58050. Specifically, the following information
is required prior to permit issuance:
1. Elevation in relation to mean sea level, of the lowest floor (including basement) of all
structures;
2. Elevation in relation to mean sea level to which any structure has been floodproofed;
3. Certification by a registered professional engineer or architect that the floodproofing
methods for any non-residential structure meet the floodproofing criteria in Section
11.58.150 2;
4. Description of the extent to which any water -course will be altered or relocated as a result
of proposed development (Ord. 3052 § 3, 1987: Ord. 2560 § 1 (part), 1981).
Mitigation Measures:
The Developer provide the City of Yakima with certification by a registered professional engineer o
architect that the floodproofing methods for any non-residential structure meet the floodproofing
criteria in Section 11.58.150 2, Yakima Municipal Code.
FINDING: PRESENCE OF WETLANDS/CRITICAL AREAS
City of Yakima records indicate the location of wetlands on-site.
Policy:
* "Ensure that the development activities in or around wetlands do not negatively affectthe
public safety, health, and welfare by disrupting the wetlands' ability to reduce flood and
storm drainage". (Ord. 3344 § 8, 1991).
* The Critical Areas Protection Overlay District is established to protect the defined GMA
required Critical Areas (Ord. 95-60).
Mitigation Measures:
The developer provide the City of Yakima with a Wetlands Delineation Study. Depending on the
findings of the Wetlands Delineation Study, additional conditions may be necessary as part of the
Critical Areas Overlay District.
[ X ] This MDNS is issued under WAC 197-11-340(2); the lead agency will not act: on this
proposal for 15 days from the date below. Written comments regarding this determination will be
accepted until 5:00 p.m. onn ar L.19_21. Such comments may be addressed to Glenn J.
Valenzuela, SEPA Administrative Official, 129 North 2nd Street, Yakima, Washington 98901.
RESPONSIBLE OFFICIAL:
POSITION / TITLE:
TELEPHONE:
ADDRESS:
DATE:
SIGNATURE:
Glenn J. Valenzuela
SEPA Responsible Official & Director of Community
& Economic Development
(509) 575-6113
129 N. 2n• tree, Yakima,WA 98901
This determination may be appealed p suant to
North 2nd Street, Yakima WA 98901 ' writing
comment period (January 13, 1997). :Be prep
Mc _ 'de, Assistant Planner (509) 576- 49 for
edged by Representativ
Date: / 2-, ( 791
licant:
C §6.88.17 ' to the Yakima City Council, 129
ter than fiv - working days after the end of the
to make factual objections. Contact Vaughn
information.
RECEIVED
• CITY OF YAKIMA
DEC 2 6 t996
OFFICE OF CITY COUNCIL
BOARD OF YAKIIVIA COUNTY COMMISSIONERS
* Disticigne
James M. Lewis
Hon. Lynn Buchanan, Mayor
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
*1Its *
Bettie Ingham Wiliam H. Hower
December 24, 1996
Re: Letter of Support for City of Yakima CERB Application
Trail Wagons/Chinook, Inc. Project
Dear Mayor Buchanan:
Yakima County enthusiastically supports the City of Yakima's application for CERB funds to extend
utilities to the Trail Wagons/Chinook relocation and expansion project in the NE Yakima area.
This project is a uniquely cooperative effort between Yakima County, the City of Yakima, Washington
State Department of Transportation, the private sector, and state CERB and federal CDBG funding
sources. It is comprehensive in scope, supporting both a public facilities activity and an economic
development activity.
The project fulfills a critical community employment need by retaining 89 existing, permanent full-time
jobs and creating an additional 40 full-time jobs over the next three years of operation with wages
exceeding the County's average wage. This project further has the benefit of more fully utilizing close -
in lands that had previously been passed over because of the lack of access and utilities.
We wish you success with this application.
Sincerely,
B s ARD OF CO � • MMISSIONERS
.7 , . 11 . 1
William H. Flower, Commissioner
128 North Second Street • Akins. Washington 98901 • 509-574-1500 • FAX 509-574-1501
-J
D I D
PRESTON GATES & ELLIS
ATTORNEYS
]December 30, 1996
0 t,00
Mr. Glenn J. Valenzuela
Director
Department of Community and Economic Development
City of Yakima
129 N. 2nd Street
Yakima, WA 98901
Re: CERB Loan; Draft Agreements with Trail Wagons/Q inook, Inc.
Dear Mr. Valenzuela:
Enclosed please find drafts of the development agreement and deed of trust. I look
forward to addressing with you a number of issues raised by the development agreement.
You might ask Trail Wagons to provide the City with (1) a lender's ALTA title insurance
policy (ALTA form 1970B); (2) documents, such as Articles of Inaxporation and Bylaws,
showing the legal status of Trail Wagons; and (3) documents showing that Gary Lukehart is
authorized to execute the development agreement and the deed of trust.
I look forward to working with you in finalizing the draft agreements.
ATM: am
Enclosure
t.MYAl12577-00.02PIG.RAUO.DOC 12/3796 4:46 P14
Sincerely yours,
PRESTON GATES & riLts
By
Aaron T. McGrath
A PARTNERSHIP INCLUDING A PROFESSIONAL CORPORATION
ANCHORAGE • COEUR D'ALENE • LOS ANGELES • PORTLAND • SPOZANIE • TACOMA • WASHINGTON. D.C'.
5000 COLUMBIA CENTER 701 FIFTH AVENUE SEATTLE. WASHINGTON 98104-7078 PHONE: (206) 623-7580 FACSIMILE: (206) 67:3-7022
DRAFT
12/30/96 04:47 PM
DEVELOPMENT AGREEMENT
This Development Agreement (the "Agreement") is made as of this day of
, 1997 by The City of Yakima, Washington, a municipal corporation
organized under the laws of the State of Washington (the "City") and Trail Wagons/Chinook,
Inc., [a Washington corporation] ("Developer").
RECITALS
A. Developer intends to construct new manufacturing facilities on undeveloped land
that it owns (the "Property"). The Property is described on Exhibit A attached hereto. The
Property is located in the City of Yakima and is within an area designated by the State of
Washington as a Community Empowerment Zone ("CEZ Ana"). The location and boundaries of
the CEZ Area are described on Exhibit B attached hereto.
B. Developer has received a commitment from the Washington Economic
Development Finance Authority for issuance of S2,000,000 in industrial revenue bonds.
C. Construction of the new manufacturing facilities is expected to occur at the same
time as, and as a part oil projects undertaken by the City, Yakima County, and the Washington
State Department of Transportation, to improve adjacent roadways and improve utility services to
adjacent neighborhoods. Construction of the new manufacturing facilities, together with the
adjacent public improvements, shall be referred to hereinafter as the "Project." The Project is
expected to (1) preserve eighty-nine existing jobs and create forty new full-time jobs; (2) benefit
the residents of adjacent neighborhoods; and (3) encourage additional economic development in
the area.
D. The City intends to borrow up to [S139,700] from the State of Washington
through a loan program administered by the Community Economic Revitalization Board (the
"CERB Loan"). [The outstanding principal balance on the CERB Loan will bear interest at
the rate of five -and -one-half percent (5.5%) per annum. The CERB Loan will be subject to
a twenty (20) year repayment schedule. Loan payments of equal amounts will be due from
the City once annually. The amount of the annual loan payments will be based on an
ordinary annuity, compounded annually, with the first payment to include all interest from
the date of the first disbursement. If the first disbursement of the CERB Loan occurs
between January 1, 1997, and June 30, 1997, the first loan payment will be due on July 1,
1998. If the first disbursement occurs between July 1, 1997, and December 31, 1997, the
first loan payment will be due on January 1, 1999. Subsequent payments will be due on the
anniversary of the date on which the first payment was due.]
E. The City intends to use the loan proceeds to pay for expenses associated with the
extension and improvement of water and sewer lines in the area of the new manuficturing
facilities.
F. As consideration for the extension and improvement of the water and sewer lines,
Developer agrees (1) to pay to the City the amount that the City pays or becomes obligates1 to pay
pursuant to the CERB Loan and (2) to offer stable full-time employment to residents of the CEZ
Area.
AGREEMENT
In consideration of the mutual promises herein, City and Developer agree as follows:
1.City's Oblation to Construct Public Improvements. The City intends to use the
CERB Loan to finance, in part or in whole, the extension and improvement of approximately
2,000 linear feet of municipal water infrastructure and approximately 900 linear :feet of municipal
sewer infrastructure to serve the new manufacturing facilities (the 'Public Improvements"). The
City shall use its bests efforts to . obtain the CERB Loan and to use it to pay for expenses
associated with the Public Improvements. However, the City has no duty to (1) enter into the
CERB Loan; (2) accept disbursements of the CERB Loan; (3) use the CERB Loan to pay for
expenses associated with the Public Improvements; or (4) commence or complete construction of
the Public Improvements.
2. Developer's Obligation to Pay the City. If the City obtains the CERB Loan and
uses it to pay for expenses associated with the Public Improvements, Developer shall pay to the
City every amount that the City pays or is obligated to pay pursuant to the CERB Loan,
including, without limitation:
2.1 The outstanding balance of the CERB Loan, together with interest accrued
thereon, whether due in annual installments or due immediately in whole.
2.2 The costs and attorney fees associated with the closing of the CERB Loan.
2.3 The costs and attorney fees incurred by the City to enforce its rights under
the CERB Loan.
2.4 The costs and attorney fees incurred by the State of Washington for which
the City is liable under the CERB Loan.
So long as the City obtains the CERB Loan and uses it to pay for expenses associated
with the Public Improvements, Developer shall make the above payments even if the Public
Improvements are not completed. The City does not warrant that the CERB Loan will be
sufficient to pay for every expense associated with the Public Improvements.
2 AA71112573400.0211CJOCIADOC ursoese,evaes
3. When Payments Due. The City may demand from Developer, and Developer shall
pay to the City within fourteen (14) days of demand, every amount that the City has paid or elects
to pay or will be obligated to pay pursuant to the CERB Loan. However, the City may, at its
option, and without waiving its right to receive payment within fourteen (14) days of demand,
provide Developer with a schedule of payment dates and amounts. Developer shall, in this event,
make payments on the dates set forth in the schedule.
4. Security. To secure its obligations hereunder, Developer shall execute and deliver
to City as beneficiary a Deed of Trust encumbering the Property, in the form attached hereto as
Exhibit C (the "Deed of Trust"). The City shall not be required to pursue any remedy under the
Deed of Trust prior to bringing an action on this Agreement. This Agreement, the Deed of Trust,
and any other documents executed by Developer in connection with this obligation to pay the City
are sometimes referred to hereinafter as the "Loan Documents." A default under any of the terms
of the Loan Documents shall, at the option of City, be a default under this Agreement.
5. Prepayment. If the City is entitled to prepay the CERB Loan, Developer may,
without penalty, pay all amounts evidenced by the Loan Documents before they become due.
Any prepayment shall not reduce the payments required at any subsequent time. If, as a result of
prepayment, the City incurs any costs, expenses, fees, charges, premiums or losses, Developer
shall pay such items upon demand.
6. Late Charges. If any amount due under this Agreement is unpaid more than
fourteen (14) days after it is due, there shall be added to each delinquent payment a late charge
equal to five percent (5%) of the payment.
7. Employment of CEZ Area Residents. Developer shall, to the satisfaction of the
City:
7.1 Offer stable full-time employment to residents of the CEZ Area;
7.2 Use all available methods, including notices and newspaper advertisements,
to notify residents of the CEZ Area of employment opportunities;
7.3 Coordinate with the Private Industry Council and the State Employment
Security Department for assistance in filling new positions created by the Project;
7.4 Provide an annual report to the City, commencing January 1, 1998,
detailing (1) the total number of employees; (2) the number of employeesresidents of the CFZwho are residents ofthe
CEZ Area; (3) the number of positions offered in the preceding year to
(4) the steps taken in the preceding year to make jobs available to residents of the CEZ Area; (5)
the number of positions expected to become available in the neat year, (6) the steps that will be
taken to make these new positions available to residents of the CEZ Area.
In the event that the State of Washington modifies the boundaries of the CEZ Area,
Exhibit B may be replaced with a description of the modified CEZ Areal.
3 11.01025731141.029CJOI3U0.00C 1230011t47P11
8. Conveyance of Property: Change of 4vmershin. If; wiithout the City's prior writtei.
consent, (1) all or any part of or any interest in the Property is sold, transferred, conveyed, leased,
further encumbered, or a contract of sale or other conveyance entaxed into with respect thereto,
or (2) there is a transfer of any beneficial interest in Developer, then, upon the occurrence of any
one or more of the foregoing events, the City may, at its option, declare all amounts evidenced by
the Loan Documents immediately due and payable. •
The execution and delivery by Developer of any joint venture agreement, partnership
agreement, declaration of trust, option agreement or other instrument whereunder any other
person or corporation may become entitled, directly or indirectly, to the possession or erjoyment
of the Property, or the income or other benefits derived or to be derived therefrom shall in each
case be deemed to be a conveyance or assignment of the Developers interest in the Property for
the purposes of this section, and shall require the prior written consent of the City. The
obligations of Developer are not assignable nor assumable by any person or firm, nor may any
person or firm take or receive the property "subject to" this Agreement, without the prior written
consent of the City. The City reserves the right to charge an assumption or transfer fee and/or to
impose such other conditions as it deems appropriate as a condition of granting consent to any
sale or further encumbrance against the Property or any other ,action requiring such consent
hereunder.
9. Compliance With Appliilr Laws and Re�u'r�ments. In the performance of this
Agreement and the construction of the new manufacturing fatuities, Developer shall comply, in.ar
material respects, with applicable Federal and State laws, orders, rules and regulations ane
Developer shall defend, protect and save harmless the City and its officers and employees, from
and against all claims, suits, actions, liability, loss, damage and expense arising from any ikilure of
the Developer or its officers, employees, contractors, agents, or invitees, to comply with the
same. Whenever Developer is informed of any violation of any such law, ordinance, rule,
regulation, license, permit or authorization committed by it or any of its officers, employees,
contractors, agents, or invitees, Developer shall immediately desist from and/or prevent or.correct
such violation.
10. Title and Fire Insurance. Developer shall, at Developer's expense, furnish Lender
with an acceptable mortgagee's ALTA title insurance policy (ALTA form 1970B) on the Property
insuring City in the full amount of the CERB Loan and showing the Deed of Trust in first lien
position with no other liens or encumbrances. Developer shall also provide fire and extended
coverage insurance in the amount of the replacement value of the Property, naming the City as the
beneficiary and additional loss payee, as its interest may appear.
11. Default. All amounts evidenced by the Loan Documents shall become due and
payable, at the option of the City, upon Developer's default hereunder. '"Default" shall mean any
breach of; or failure to comply with, any covenant, agreement, teem or condition contained in the
Loan Documents including the occurrence of any of the following:
4 J1A11126731600.02PCJOCUOICC 121019eitePI
11.1 Failure to pay when due any amount payable under this Agreement or
under any of the other Loan Documents.
11.2 Failure to substantially complete development of the Property as evidenced
by the City's receipt of a certificate of substantial completion executed by Developer on or before
the date that is two (2) years after the date hereof
11.3 Failure, in the reasonable judgment of the City, to (1) offer stable full-time
employment to residents of the CEZ Area; (2) use all available methods to notify residents of the
CEZ Area of employment opportunities; (3) coordinate with the Private Industry Councxil and the
State Employment Security Department for assistance in filling new positions created by the
Project; or (4) provide the City with an annual report regarding employment of residents of the
CEZ Area.
11.4 Any sale or conveyance of the Property or any portion thereof without the
City's prior written approval.
11.5 Any failure to pay or other default in any other indebtedness secured by the
Property.
11.6 The appointment of a receiver or liquidator for the Developer or its
Property, the filing of any state or federal bankruptcy or insolvency petition by or against the
Developer, or any assignment by Developer for the benefit of its creditors.
12. Remedi . Upon the occurrence of Default, the City may in its sole discretion, do
any one or more of the following:
12.1 Declare the Estimated Outstanding Payment and all other amounts
evidenced by the Loan Documents immediately due and payable without demand, protest, notice
of protest, notice of default, presentment for payment or further notice of any kind;
12.2 Repossess, sell, or otherwise dispose of any and all of the collateral;
12.3 Proceed to enforce such other and additional rights and remedies that the
City may have hereunder or under the Loan Documents or under any other agreements with
Developer or as may be provided by law.
13. Costs and Fees. Developer shall pay all costs associated with the closing of the
Loan Documents including, without limitation, title insurance costs, recording fees, and escrow
fees. In addition, Developer shall pay to the City upon demand all (1) costs and attorney fees
incurred by the City in connection with the preparation and execution of the Loan Documents; (2)
costs and attorney fees incurred by the City to enforce its rights under the Loan Documents; (3)
costs and attorney fees incurred by the City in connection with any amendment, modification, or
extension of the Loan Documents.
5 AiATIA2573101021C.COUOD3C 121011116111111
14. Notices and Demad. Any notice or demand which either party hereto is required
or desires to give to or make upon the other shall be in writing and shall be delivered or made by
United States registered or certified mail, return receipt requested, postage prepaid, addressed in
the case of the City to:
City of Yakima
129 North Second Street
Yakima, Washington 98901
Attn: Glenn J. Valenzuela
and addressed in the case of the Developer to:
Mr. Gary Lukehart
President/CEO
Trail Wagons/Chinook, Inc.
subject to the right of any such party to designate a different address by notice similarly given.
Any notice or demand so sent shall be deemed to have been given or made when delivered) as evi-
denced by the return receipt.
115. Venue and Applicable Ltw. Developer agrees that the venue of any actionhereon
may be laid in Yakima County, Yakima, Washington, at the option of the City, and that this
Agreement shall be construed according to the laws of the State of Washington.
Notice Concerning Oral Agreements
Oral agreements or oral commitmen to lend money, extend
credit or to forbear from enforcing repayment of a debt are
not enforceable under Washington law.
6 11411A257WOMCGACJOCLICLCIOC 1 3 S n.7 ar
IN WITNESS WHEREOF, the parties hereto have executed this Agreement u dale day
and year first above written.
Trail Wagons/Chinook, Inc., a [Washington
corporation]
By
Gary Lukehart
Its President/CEO
The City of Yakima, Washington, a municipal
corporation
BY
Its
7 .L1A110257WILOZCX0JOXICIC 120CtlS t47
STATE OF WASHINGTON )
)ss -
COUNTY OF )
On this day of , 1997, before me, the undersigned, n Notary Public in
and for the State of Washington, duly commissioned and sworn, personalty appeared Gary
Lukehart, to me known to be the President/CEO of Trail Wagons/Chinook, Inc., a [Washington
corporation]; the corporation that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said corporation
for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute
the said instrument and that the seal affixed is the corporate seal of said corporation.
WITNESS my hand and official seal hereto affixed the day and year in this certificate
above written.
Notary Public for the State of Washington,
residing at _® ---
My appointment expire
Print Name
STATE OF WASHINGTON )
) ss.
COUNTY OF )
On this day of , 1997, before me, the undersigned, a Notary :Public in
and for the State of Washington, duly commissioned and swoon, personally appeared
_ , to me known to be the of The City
of Yakima, a Washington municipal corporation; the corporation that executed the within and
foregoing instrument, and acknowledged the said instnument to be the free and voluntary act and
d of said corporation for the uses and purposes thein mentioned, and on oath stated that he
is authorized to execute the said instrument and that the seal affixed is the corporate seal of said
corporation.
WITNESS my hand and official seal hereto affixed the day and year in this certificate
above written.
Notary Public for the State of Washington,
reading at ®_. My appointment expires _
Print Name
$ 1471/ 25T9141021•GE IXLC OC MOP it® Pit
EXHIBIT A
Legal Description
THAT PORTION OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER, OF
SECTION 7, TOWNSHIP 13 NORTH, RANGE 19, W.M., LYING SOUTHWESTERLY OF
SR 82, AS CONVEYED TO THE STATE OF WASHINGTON FOR HIGHWAY BY
INSTRUMENT RECORDED FEBRUARY 6, 1959 UNDER AUDITOR'S FILE NO. 1757605;
EXCEPT THAT PORTION OF THE NORTH HALF, OF THE SOUTHEAST QUARTER, OF
THE SOUTHWEST QUARTER, LYING WEST OF THE FOLLOWING DESCRIBED LINE:
BEGINNING AT A POINT ON THE NORTH LINE OF THE NORTH HALF, OF THE
SOUTHEAST QUARTER, OF THE SOUTHWEST OF SAID SECTION 7, A DISTANCE OF
710 FEET, EAST OF THE SOUTHEAST CORNER OF LOT 10 PARK ADDITION TO
NORTH YAKIMA, (NOW YAKIMA) AS RECORDED IN VOLUME "A" OF PLATS, PAGE
13, THENCE SOUTH TO THE SOUTH LINE OF SAID SUBDIVISION; AND EXCEPT
THAT PORTION THEREOF LYING WESTERLY OF THE EAST LINE AND AIDE EAST
LINE EXTENDED, OF THE PLAT OF MOYERS ADDITION TO NORTH YAKIMA, AS
RECORDED IN VOLUME "B" OF PLATS, PAGE 73, RECORDS OF YAKIMA COUNTY,
WASHINGTON; AND EXCEPT THAT PORTION THEREOF LYING EASTERLY OF THE
FOLLOWING DESCRIBED TRAVERSE LINE; COMMENCING AT THE SOUTHWEST'
CORNER, OF THE SOUTHWEST QUARTER OF SECTION 7, TOWNSHIP 13 NORTH,
RANGE 19 EAST, W.M.; THENCE SOUTH 88 31' 26", EAST, REFERENCE BEARING,
ALONG THE SOUTH LINE OF SAID SUBDIVISION, 1833.07 FEET TO THE POINT OF
BEGINNING OF SAID TRAVERSE LINE; THENCE NORTH 76" 50' EAST, 156.31 FEET;
THENCE NORTH O 30" EAST, 145.77 FEET; THENCE NORTH 21' 23' EAST;186.27 FEET;
THENCE NORTH 42" 48' EAST, 109.7 FEET TO THE SOUTHWESTERLY RIGHT OF
WAY OF SR 82 AND TERMINUS OF SAID TRAVERSE LINE.
9 .11.41711‘26730.0102PCXCUO.DOC 1301111et47
[Attach map of CEZ Area.]
EXHIBIT B
10
1.1A1 .L10G 12,10196 kV EV
V
Recording Requested by and 0.-‘1 co 01"N'' -
after Recording mail to:
telN�
PRESTON THORGRIMSON SHIDLERO
GATES & ELLIS
5000 Columbia Seafirst Center
701 Fifth Avenue
Seattle, WA 98104-7011
Attention: Jay A. Reich
DEED OF TRUST
SECURITY AGREEMENT
ASSIGNMENT OF LEASES AND RENTS
AND FIXTURE FILING
GRANTOR TRAIL WAGONS/CHINOOK, INC.
TRUSTEE:
BENEFICIARY: THE CITY OF YAKIMA, WASHINGTON
RECORDED AT THE REQUEST OF
AND AFTER RECORDING RETURN TO
Preston Thorgrimson Shidler
Gates & Ellis
5000 Columbia Center
701 Fifth Avenue
Seattle, WA 98104
Attn: Jay A. Reich
DRAFT
112/30/96 05:02 PM
DEED OF TRUST, SECURITY AGREEMENT
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES
AND RENTS AND FIXTURE FILING ("Deed of Trust") is made as of this day of
1997, by Trail Wagons/Chinook, Inc., Washington corporation, as grantor and
debtor ("Grantor"), whose address is , to
as trustee ("Trustee"), whose address iF
for the benefit of the City of Yakima„ Washington, a
municipal corporation under the laws of the State of Washington, as beneficiary and se cunxl party
("Beneficiary"), whose address is 129 North Second Street, Yakima, Washington 98901.
WITNESSETH:
GRANTOR HEREBY IRREVOCABLY GRANTS, BARGAINS, SELLS, CONVEYS,
TRANSFERS AND ASSIGNS:
A To Trustee, in trust, with power of sale and right of entry and possession, 1111 of its
present and future estate, right, title and interest in and to that certain real property located in the
County of Yakima, State of Washington, as more particularly described in Exhibit A attached
hereto and made a part hereof; including all hereditaments, appurtenances, easements and rights
thereto or used in connection therewith or as a means of access thereto, together with all right,
title and interest that Grantor now has or may hereafter acquire in the following and any proceeds
thereof:
1. All income, rents, royalties, revenues, issues, profits and proceeds from any and all of such
real property, subject, however, to the right, power and authority hereinafter conferred
upon Beneficiary or reserved to Grantor to collect and apply such income, rents, royalties,
revenues, issues, profits and proceeds.
2. All deposits or other security or advanced payments, including, without limiting the
generality of the foregoing, rental payments, made by or on behalf of Grantor to others
with respect to (i) utility service for all or any part of said property or any improvements
thereon, (ii) insurance policies relating to said property or any improvements thereon,
(iii) cleaning, maintenance, repair or similar services for said property or any part thereof
or any improvements thereon, (iv) rental of equipment used in the operation of any part of
said property or any improvements thereon, and (v) parking services for all or any part of
said property.
3. All fixtures now or hereafter affixed to such real property, including all buildings,
structures and improvements of every kind and description now or hereafter erected or
placed thereon and any and all machinery, boilers, equipment (including, without
limitation, all equipment for the generation or distribution of air, water, heat, electricity,
light, telephone, fuel or refrigeration or for ventilating or air-conditioning purposes or for
sanitary or drainage purposes or for the removal of dust, refuse or garbage), fire sprinklers
and alarms, control devices, partitions, appliances, cabinets, awnings, window shades,
blinds, drapes and drapery rods and brackets, screens, carpeting and other floor coverings,
incinerators and other property of every kind and description now or hereafter placed,
attached, axed or installed in such buildings, structures or improvements, and all
replacements, repairs, additions, accessions or substitutions or proceeds thereto or
therefor, but excluding movable trade fixtures owned by tenants leasing space in the
Improvements; all of such fixtures whether now or hereafter placed thereon, being hereby
declared to be real property and referred to hereinafter as the 'Improvements.'
4. All damages, royalties and revenue of every kind, nature and description whatsoever that
Grantor may be entitled to receive from any person or entity owning or having or hereafter
acquiring a right to the oil, gas or mineral rights and reservations of such real property,
with the right in Beneficiary to receive and receipt therefor and apply the same to the
indebtedness secured hereby either before or after any default hereunder, and Beneficiary
shall have the right to demand, sue for and recover any such payments but shall not be
required so to do.
5. All proceeds and claims arising on account of any damage to or taking of such real
property or the Improvements or any part thereof and. all causes of action and recoveries
for any loss or diminution in the value of such real property or the Improvements,
including the proceeds of any policy of insurance covering the Improvements or the
proceeds of any condemnation action or transfer in lieu of condemnation.
All of the property conveyed or intended to be conveyed to Trustee in Paragraph A. above
is hereinafter referred to as the "Real Property.'
B. To Beneficiary, as secured party, a security interest in any portion of the Real
Property owned by Grantor which may be construed to be personal property and in all other
personal property of every kind and description, whether now existing or hereafter acquired and
owned by Grantor, or in which Grantor has an interest, now or at any time hereafter attached to,
2
Amezmiuxuapc.Jocupixe 12,30v96 5-02PM
erected upon, situated in or upon, forming a part of appurtenant to, used or useful in the
construction or operation of or in connection with, or arising from the use or enjoyment of all or
any portion of, or from any lease or agreement pertaining to, the Reel Property, including:
1. All equipment, machinery, inventory, fixtures, fittings, appliances, apparatus, furnishings,
furniture and all other property of every kind and any replacements thereof or additions
thereto now or at any time appurtenant to or located upon the Real Property, all personal
property of every kind now or at any time hereafter located on or appurtenant to the Real
Property and used in connection with the use, enjoyment, occupancy or operation of the
Real Property. Without limiting the foregoing general description, such property includes
all equipment and facilities for the generation or distribution of air, water, heat, electricity,
light, fuel, telephone, or refrigeration, or for ventilation or air conditioning purposes or for
sanitary drainage purposes or for the removal of dust, refuse or garbage, or for any
activity related to the maintenance or repair of the Property, or for the pursuit of any other
activity in which Debtor may be engaged on the Property, and including without limitation
all motor vehicles owned, leased or used by Debtor, tools, musical instruments and
systems, cabinets, awnings, window shades, venetian blinds, drapes and drapery rods and
brackets, screens, carpeting and other window and floor coverings, decorative fixtures,
plants, cleaning apparatus, and cleaning equipment, refrigeration equipment, cables,
computers, software, books, supplies, kitchen equipment, tractors, lawn mowers, ground
sweepers and tools, swimming pools, Jacuzzis, recreational or play equipment together
with all substitutions, accessions, repairs, additions and replacements to any of the
foregoing.
2. All income, rents, royalties, revenues, issues, profits and proceeds from any and all of the
Real Property.
3. All goodwill, trademarks, trade names, all names by which the ]Property is operated or
known, option rights, purchase contracts, goods, consumer goods, documents, books and
records, rights of action whether known or unknown and general intangibles of Grantor
relating to the Real Property; all accounts, deposit accounts, contract rights, instruments,
chattel paper and other rights of Grantor for payment of money, for property sold or lent,
for services rendered, for money lent, or for advances or deposits made, and any other
intangible property of Grantor related to the Real Property.
4. All water stock relating to the Real Property, shares of stock or other evidence of
ownership of any part of the Real Property that is owned by Grantor in common with
others, and all documents of membership in any owners' or members' association or similar
group having responsibility for managing or operating any part of the Real Property.
5. All plans and specifications prepared for construction of the Improvements and all
surveys, maps, plats, studies, data and drawings related thereto; and also all contracts and
agreements of Grantor relating to such plans and specifications or to such studies, data
and drawings, or to the construction, maintenance or repair of Improvements.
3
,MAm1110573e-0o.e u'.000 1200A0sc0
6. All licenses ('including, but not limited to, any liquor licenses, operating licenses or similar
matters), contracts, management contracts or agreements, franchise agreements, permits,
authorization, approvals or certificates required or used in connection with the
construction, ownership, operation, repair or maintenance of the Improvements.
7. All substitutions, accessions, additions and replacements to any of the foregoing; all
proceeds of any of the foregoing property, including, without limitation, proceeds of any
voluntary or involuntary disposition, diminution in value or claim respecting any such
property (pursuant to judgment, condemnation award or otherwise) and all goods, docu-
ments, general intangibles, chattel paper and accounts, wherever located, acquired with
cash proceeds of any of the foregoing or proceeds thereof
All of the property assigned or transferred or intended to be assigned or transferred to
Beneficiary in paragraph B. above is hereinafter referred to as the 'Personal Property.'
All of the Real Property and the Personal Property is referred to herein collectively as the
"Property." The parties intend that the definition of Property is to be broadly construed and in the
case of doubt as to whether a particular item is included in the definition of Property, the doubt
should be resolved in favor of inclusion.
TO HAVE AND TO HOLD said Property bargained and described, together with all and
singular the lands, tenements, privileges, water rights, hereditaments and appurtenances thereto
belonging or in anywise appertaining, and the reversion and reversions, remainder and remainders,
rents, issues and profits thereof and all of the estate, right, title, claim and demands whatsoever of
Grantor, either in law or in equity, of in and to the above -bargained property forever,
FOR THE PURPOSE OF SECURING:
ONE: Payment of the indebtedness evidenced by a Development Agreement of even date
herewith and any renewals, extensions or modifications thereof and any replacements or
substitutions therefor (the "Development Agreement").
TWO: Payment of such further sums as Grantor may hereafter borrow from Beneficiary
when evidenced by another note or instrument reciting it is so secured, payable to Beneficiary or
order and made by Grantor or any successor in ownership, together with all extensions, renewals,
modifications, amendments and replacements thereto.
THREE: Payment of all other amounts agreed or provided to be paid by Grantor and
such further sums as may be advanced or loaned by Beneficiary to Grantor hereunder or under the
Development Agreement or under the other Loan Documents (as defined below).
FOUR: Performance of each agreement of Grantor herein contained or contained in
Development Agreement or any other agreement given by Grantor to Beneficiary for the purpose
of further securing any indebtedness hereby secured (this Deed of Trust, the Development
4
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Agreement, and any and all such other agreements being referred to herein as the "Loan
Documents").
GRANTOR REPRESENTS, WARRANTS, COVENANTS AND AGREES AS FOLLOWS:
ARTICLE I: COVENANTS
1.01. Payment of Note and Perfumance of Deed of Trust. Grantor will pay the principal,
interest and other charges payable under the Note according to its terms, and will perform and
comply with each and every term, covenant and condition hereof and of the Note.
1.02. Warranty of Title. Grantor represents and warrants that at the time of the delivery of this
Deed of Trust, (i) Grantor is seized in fee simple of the Real Property and owns outright every
part thereof; (ii) there are no liens or encumbrances against or upon the Real Property other than
those permitted by Beneficiary on its mortgagee's policy of title insurance insuring the lien of this
Deed of Trust (the "Permitted Encumbrances"), and none will be created or suffered to be created
by Grantor during the term of this Deed of Trust, except as have been disclosed to and approved
by :Beneficiary in writing and upon such terms and conditions as may be satisfactory to
Beneficiary; (iii) Grantor has good right to make this Deed of Tnrst; (m) Grantor has good and
absolute title to all existing Personal Property, and has good right, ii111 power and lawful rurthority
to convey and encumber the same in the manner and form conveyed and encumbered hereby,
(v) the Personal Property is free and clear of all liens, charges, and encumbrances whatsoever,
including, security agreements, conditional sales contracts and anything of a similar nature, and
none will be created or suffered to be created by Grantor, (vi) there is no financing statemen
covering the Property, or any part thereof, on file in any public office; (vii) the Real :Property
constitutes one or more tax parcels, each with a separate tax assessment independent of any land
or improvements not covered by this Deed of Trust; (viii) the Real Property constitutes one or
more legal lots capable of being conveyed without violation of any subdivision or platting laws or
regulations; and (Dc) Grantor will warrant and forever defend the title to the Property against the
claims of all persons whomsoever. —
1.03. Taxes. Liens and Other Charge.
Grantor will pay when due:
(A) All taxes, assessments and other governmental or public charges affecting the Property,
including any accrued interest, cost or penalty thereon and will submit receipts therefor to
Beneficiary at least ten (10) days before delinquency;
(B) All encumbrances (including any debt secured by deeds of trust), ground rents, liens or
charges, with interest, on the Property or any part thereof; and all costs and fees related
thereto (provided that nothing in this Section 1.03(B) shall be construed as a consent by
Beneficiary to any such encumbrances, ground rents, liens, or charges). .
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MAnr12573 .1229CJ000PDoc 12930•111 502 vel
Grantor shall have the right to contest the amount or validity, in whole or in part, of any such
taxes, assessments, encumbrances, liens, or charges by appropriate proceedings conducted in
good faith and with due diligence, in which event, Grantor, upon prior written notice to
Beneficiary, may postpone or defer payment of such encumbrance, lien, or charge, .if and so long
as
(1)
such proceedings shall operate to prevent the collection of the encumbrance, lien,
or charge;
(2) neither the Property nor any part thereof would by reason of such postponement or
deferment be in danger of being forfeited or lost; and
Grantor, before the date such encumbrance, lien, or charge becomes delinquent,
gives such reasonable security as may be requested by Beneficiary to insure
payment of such encumbrance, lien, or charge and prevent any forfeiture or loss of
the Property or any part thereof,
(C) All charges for utilities or services, including, but not limited to, electricity, gas, garbage,
sewer and water, and
(3)
(D)
All costs, fees and expenses of this Deed of Trust, including cost of evidence of title,
Trustee's fees and attorneys' fees required to be paid herein.
1.04. Further Taxes. In the event of the passage, after the date of this Deed of Trust, of any law
deducting from the value of the Property for the purposes of taxation, any lien thereon, or
changing in any way the laws now in force for the taxation of deeds of trust or debts secured by
deeds of trust, or the manner of the collection of any such taxes, so as to affect the Beneficiary's
interest in this Deed of Trust, or imposing payment of the whole or any portion of any taxes,
assessments or other similar charges against the Property upon Beneficiary, the indebtedness
secured hereby shall immediately become due and payable at the option of Beneficiary; provided,
however, that such election by Beneficiary shall be ineffective if such law either (a) shall not
impose a tax upon Beneficiary nor increase any tax now payable by Beneficiary, or (b) shall
impose a tax upon Beneficiary or increase any tax now payable by Beneficiary and prior to the
due date of such tax: (i) Grantor is permitted by law and can become legally obligated to pay
such tax or the increased portion thereof (in addition to all interest, and other charges payable
hereunder and under the Note) without exceeding the limits imposed by applicable interest rate
laws; (ii) Grantor does pay such tax or increased portion; and ('iii) Grantor agrees with Beneficiary
in writing to pay, or reimburse Beneficiary for the payment of; any such tax or increased portion
thereof when thereafter levied or assessed against the Property or any portion thereof The
obligations of Grantor under such agreement shall be secured hereby.
1.05. Insurance. Grantor will at all times provide, maintain and keep in force:
(A) Policies of insurance insuring the Property against loss or damage by fire and all other
causes of loss embraced by coverage of the type now known as special cause of loss form
6
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(B)
coverage, and against such other risks or hazards as Beneficiary from time to time
reasonably may designate. Such policies shall be in anamount sufficient to prevent
Beneficiary or Grantor from becoming a co-insurer under the terms of the applicable
policies, but in any event in an amount not less than 100% of the then hill replacement
cost of the Improvements (exchisive of the cost of excavations, foundations and footings
below the lowest basement floor) without deduction for physical depreciation. Such
policies shall contain agreed amount, replacement cost and inflation guard endorsements.
Flood insurance upon the Property in the event that the Property is located in a designated
flood plain and such insurance is available pursuant to the provisions of the Flood Disaster
Protection Act of 1973 or other applicable legislation (Beneficiary reserves the right to
require that Grantor secure flood insurance in excess of the sunount provided by the Flood
Disaster Protection Act of 1973, if such insurance is commercially available, up to the
amount of insurance required in Section 1.05(A) hereof).
(C) General liability insurance against claims for bodily injury or death or for damage or injury
to property occurring upon, in, or about the Property, in such amount as may be required
by Beneficiary but in no event less than S2,000,000.
(D) During the period of any construction of or on the Improvements, builder's risk insurance
under special cause of loss form coverage in an amount satisfactory to Beneficiary.
(E) Such other insurance, and in such amounts, as may from time to time be reasonably
required by Beneficiary against the same or other insurable hazards which at the time are
commonly insured against in the case of premises similarly situated, clue regard being
given to the height and type of buildings thereon and their construction, use and
occupancy.
Grantor shall furnish Beneficiary with certificates evidencing each policy required to be
provided by Grantor hereunder and celified copies of each policy. All policies for such insurance
shall be issued by companies approved by Beneficiary, shall be on the new simplified ISO forms or
other forms approved by Beneficiary, shall be subject to the approval of Beneficiary as to amount,
content, form, and expiration date, and shall provide that they may not be cancelled without thirty
(30) days prior written notice to Beneficiary. All policies except the general liability policy shall
contain a Lender's Loss Payable Endorsement (Form 372), or its equivalent, in favor of
Beneficiary insuring that the proceeds thereof shall be payable to Beneficiary (to the extent of its
interest). The general liability and builder's risk policies shall name Beneficiary as an additional
insured.
At least thirty (30) days before expiration of any policy required to be provided by
Grantor hereunder, Grantor shall furnish Beneficiary proof of issuance of a policy continuing in
force the insurance covered by the policy so expiring. Grantor shall furnish Beneficiary receipts
for the payment of premiums on such insurance policies or other evidence of such payment
reasonably satisfactory to Beneficiary. In the event that Grantor does not deposit witl
7
.cvun1•573aaacr .aoc OWN spa we
Beneficiary evidence of renewal of expiring insurance and evidence of payment of premium
thereon at least thirty (30) days before expiration of any policy, then Beneficiary may, but shall
not be obligated to, procure such insurance and pay the premiums therefor. In such event,
Grantor agrees to repay to Beneficiary the premiums thereon promptly on demand.
1.06. Casualty. Grantor hereby assigns to Beneficiary all insurance proceeds that it may be
entitled to receive, and such proceeds shall be delivered to and held by Beneficiary to be applied
first, towards reimbursement of all reasonable costs and expenses of Beneficiary in connection
with recovery of same, and then to the reduction of the indebtedness secured hereby, without the
application of a prepayment fee, or Beneficiary may, at its option, require Grantor to immediately
restore any portion or all of the Improvements to their original condition and, in that event,
Beneficiary shall make the insurance proceeds available to Grantor as restoration progresses. The
application of insurance proceeds to the reduction of the amount outstanding on the Development
Agreement shall not serve to cure any existing default. If the proceeds are sufficient to pay in full
the indebtedness and other sums secured hereby, then any excess proceeds shall be paid over to
Grantor.
In the event of the foreclosure of this Deed of Trust or other transfer of the title to the
Property in extinguishment, in whole or in part, of the indebtedness secured hereby, all right, title
and interest of Grantor in and to any insurance policy, or premiums or payments in satisfaction of
claims or any other rights thereunder then in force shall pass to the purchaser or grantee
notwithstanding the amount of any bid at such foreclosure sale.
After the happening of any casualty, whether or not required to be insured against under
the policies to be provided by Grantor hereunder, Grantor shall give prompt written notice thereof
to Beneficiary.
1.07. Condemnation. If the Property or any part thereof is taken or damaged by reason of any
public improvement, condemnation proceeding, or conveyance in lieu thereof or in any other
manner, Beneficiary shall be entitled to all compensation, awards and other payments or relief
therefor, and shall be entitled, at its option, to commence, appear in and prosecute in its own
name any action or proceeding, or to make any compromise or settlement in connection with such
taking or damage. All such compensation, awards, damages, rights of action and proceeds (the
"Proceeds") are hereby assigned to Beneficiary, who shalt, after deducting therefrom all its
reasonable expenses, including attorneys' fees, apply the Proceeds to the reduction of the
indebtedness secured hereby, without the application of any prepayment fee. The application of a
condemnation award to the reduction of the amount outstanding on the Development Agreement
shall not serve to cure any existing default.
If any part of the automobile parking areas included within the Real Property is taken by
condemnation, Grantor will provide alternate parking facilities in kind, size and location sufficient
to comply with all leases for the Property and governmental zoning laws, ordinances or
regulations affecting the Property. Grantor will furnish to Beneficiary satisfactory assurance of
provision of substitute parking free of liens and in conformity with all such leases and zoning laws.
If Grantor fails to or cannot replace such parking spaces immediately after the taking thereof
8
,R„ 411pS,3pmc2P JOOUP.00c =ON ema Pr
Beneficiary shall have the right, at its option, to treat such failure as an Event of Default
hereunder entitling Beneficiary to exercise any of its remedies hereunider.
1.08.Care of the Proper y. Grantor will:
(A) Keep the Property in good condition and repair and not commit or permit any waste or
deterioration of the Property or suffer any act or occurrence that would impair the security
for the debt secured hereby,
(B) Not remove, demolish or substantially alter any portion of the Property or permit or suffer
such to be done, without Beneficiary's prior written consent (except such alterations as
may be required by laws, ordinances or regulations of governmental authorities, or in
accordance with the approved plans and specifications for Grantor's rehabilitation of the
Property);
(C) Comply with all laws, ordinances, rules, regulations and orders of governmental
authorities now or hereafter affecting the Property or requiring any alterations or
improvements to be made thereon, and perform all of its obligations under any covenant,
condition, restriction or agreement of record affecting the Property;
(D) Not commit, suffer or permit any act to be done in, upon or to the Property in violation of
any law or ordinance or any covenant, condition or restriction affecting the Property,
(E) Do any and all acts which, from the character or use of the Proprty, may be reasonably
necessary to protect and preserve the security of Beneficiary, the specific enumerations
herein not excluding the general;
(F) Perform all of Grantor's obligations or covenants under any encumbrance affecting the
Property, including without limitation, leases, declarations, covenants, conditions,
restrictions or other agreements relating to or affecting the Property;
(G) Not create, suffer or permit any lien or encumbrance against or affecting the Property
except the Permitted Encumbrances;
(H) Not take or permit to be taken any actions that might invalidate any insurance carried on
the Property,
(1) Not permit any new building or additions to existing structures to be erected on the
Property without the prior written consent of Beneficiary, and not construct any
improvements on the Property or undertake any site development work unless approved
by Beneficiary,
Not initiate or acquiesce in any change in the use or nature of the occupancy of the
Property or in any zoning or other land use classification affecting the Property without
the prior written consent of Beneficiary, -
9
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.cvan112s730.00.0:Pc.1OOP.00c r, wa
(K) Insure that at all times the Property constitutes one or more tax parcels and one or more
legal lots capable of being conveyed without violation of any subdivision or platting laws,
ordinances, rules or regulations, or other laws regulating the dimension or separation of
real property.
1.09. Further Assurances. If required by Beneficiary at any time during the term of this Deed of
Trust,. Grantor will execute, acknowledge and deliver to Beneficiary, in form satisfactory to
Beneficiary, such chattel mortgages, security agreements or other similar security instruments, in
form and substance satisfactory to Beneficiary, covering ail property of any kind whatsoever
situated on the Property owned by Grantor or in which Grantor has any interest which, in the sole
opinion of Beneficiary, is essential to the operation of the Real Property covered
this Deed of
Trust. Grantor shall further, from time to time, within fifteen (15) days by
Beneficiary, execute, acknowledge and deliver any financing statement, renewal, affidavit,
certificate, continuation statement or other document as Beneficiary may request in order to
perfect, preserve, continue, extend or maintain the security interest under and the priority of this
Deed of Trust and any such chattel mortgage or other security instrument. Grantor further agrees
to pay to Beneficiary on demand all costs and expenses incurred by Beneficiary in connection with
the preparation, execution, recording, filing and refiling of any such instrument or document
including the charges for examining title and the attorney's fee for rendering an opinion as to the
validity and priority of the lien of this Deed of Trust and of such chattel mortgage or other
security instrument. However, neither a request so made by Beneficiary nor the failure of
Beneficiary to make such request shall be construed as a release of such Property, or any part
thereof'; from the conveyance of title by this Deed of Trust, it being understood and agreed that
this covenant and any such chattel mortgage, security agreement or other similar security
instrument, delivered to Beneficiary, are cumulative and given as additional security. Any breach
of such security agreement shall constitute an event of Default under this Deed of Trust.
1.10. Leases and Other Agreements Affecting the Properly Assignment.
(A) Grantor will fully and promptly keep, observe, perform and satisfy each obligation,
condition, covenant and restriction affecting the Property or imposed on it under any agreement
between Grantor and a third party relating to the Property (Including, without limitation, any
leases or rental agreements for any portion of the Property (the "Leases") and any contracts
relating to the construction, maintenance or management of the Property (the "Contracts) so that
there will be no default thereunder and so that the persons obligated thereon shall be and remain
at all times obligated to perform thereunder. Grantor will not permit to exist any condition, event
or fact which could allow or serve as a basis or justification for any such person to avoid such
performance. All right, title and interest of Grantor in the Leases and the Contracts, are hereby
assigned to Beneficiary absolutely and irrevocably and not as additional security. Grantor
expressly agrees that it is the intention of Grantor and Beneficiary that such assignment is absolute
and shall entitle Beneficiary to collect, subject to the license granted in Section 2.02 hereof, Rents
(as defined in Section 2.01) due under the Leases without the taking of any additional steps by
Beneficiary (Including but not limited to the taking of possession of the Property or the
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AVi111112573101029CJODUP.DOC saoX18 w
appointment of a receiver). Notice of such assignment shall be given to the tenant or tenants
thereunder as may be required by Beneficiary.
Without the prior written consent of Beneficiary, Grantor shall not:
(1) make or permit any termination (other than expiration according to the terms of
the agreement) or material amendment of any of the Leases or Contracts;
(2) accept prepayments of rent under the Leases exceeding one month in addition to a
security deposit;
modify or amend any such Leases or, except where the lessee is in default, cancel
or terminate the same or accept a surrender of the leased premises, provided
however, that Grantor may renew, modify or amend Leases or take other action in
the ordinary course of business with respect to residential tenancies and in
accordance with the Loan Agreement;
(4) consent to the assignment or subletting of the whole or any portion of any lessee's
interest under any of the Leases;
create or permit any lien or encumbrance which upon foreclosure, would be
. superior to any such Leases; or
(6) in any other manner impair Beneficiary's rights and interest with respect to the
rents received from the Leases or the Contracts.
All security or other deposits received from tenants under the Leases shall be segregated
and maintained in an account satisfactory with Beneficiary in compliance with applicable laws and
with an institution satisfactory to Beneficiary.
(3)
(5)
(B) All Leases shall be on a form provided to Beneficiary, and Contracts shall be
subject to the prior written approval of Beneficiary. M Beneficiary's option, Leases and
Contracts may be made superior or subordinate to this Deed of Trust. Notice of such assignment
shall be given to the tenants or parties 'thereunder as may be required by Beneficiary.
(C) Grantor, or its designees approved in writing by Beneficiary, shall be the exclusive
manager of the Property. Any management agreement affecting the Property shall be subject to
the prior written approval of Beneficiary, shall expressly subordinate to this Deed of Trust and the
lien hereof, and shall be terminable by Beneficiary or the purchaser at any foreclosure sale upon
such sale or transfer in lieu thereof without payment of any fee or other amounts to the manager.
1.11. Expenses.
(A) Beneficiary or Trustee shall have the right to employ an attorney in connection
with their rights under the Loan Documents and Grantor shall pay all attorneys' fees, costs an
11
MAT1025734-00102 CJOCUW.coc ,a09a►sffiP1@
expenses, including expenses of retaking, holding, preparing for sale or selling (including cost of
evidence or search of title, the costs of appraisals and the costs and expenses of an investigation
of the Property for Hazardous Waste (as defined below) and other environmental characteristics)
in connection with any action or actions that may be brought for the foreclosure of this Deed of ,
Trust, possession of the Property, the protection of or the defense of the priority of the lien
provided for hereby, the appointment of a receiver, or the enforcement of any and all covenants or
rights contained in or secured by this Deed of Trust.
(B) Grantor will pay immediately upon demand after expenditure all sums expended or
expense incurred by Trustee or Beneficiary, including, without limitation, attorneys' fees, under
any of the terms of this Deed of Trust, with interest from date of expenditure at the Default Rate.
(C) Grantor will pay any reasonable amount required by Beneficiary for any statement
requested by Grantor regarding the obligations secured hereby.
1.12. Books. Records and Accounts. Grantor will keep and maintain, or cause to be kept and
maintained, in the county where the Property is located, proper and accurate books, records and
accounts reflecting all items of income and expense in connection with the operation of the
Property or in connection with any services, equipment or furnishings provided in connection with
the operation of the Property. Beneficiary or its designee shall have the right from time to time at
all times during normal business hours to examine such books, records and accounts at the office
of Grantor or other person or entity maintaining such books, records and accounts and to make
copies or extracts thereof as Beneficiary or its designee shall desire.
1.13. Inspection of Property. Beneficiary is authorized, for itself, its agents or employees to
enter at any reasonable time during normal business hours upon any part of the Property for the
purpose of inspecting the same, determining Grantor's compliance with the provisions of this
Deed of Trust and for the purpose of performing any of the acts it is authorized to perform under
the terms of this Deed of Trust. Grantor agrees to cooperate with Beneficiary to facilitate such
inspections. —
Beneficiary shall also be entitled to examine all records and documents relating to the
Property, or the operations or conduct of any activities thereon, whether such records are in the
possession of or under the control of Grantor, the Property manager, governmental agencies or
entities having jurisdiction over the Property or otherwise. To the extent that such records and
documents are not under the control of Grantor, Grantor shall cooperate with Beneficiary to
facilitate such examination.
1.14. Property Compliance.
(A) The Improvements and their use comply fully with (and no notices of violation
have been received in connection with) environmental, air quality, zoning, flood plain, planning,
subdivision, building, health, labor, discrimination, fire, traffic, safety, wetlands, shoreline and
other governmental or regulatory rules, laws, ordinances, statutes, codes and requirements
applicable to the Property (collectively, the *Building Laws'). Grantor has received such final
12
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certificates as may be required or customary and evidencing compliance with all buildings codes
and permits, and approval of full occupancy of the Improvements and of all installations therein..
Grantor shall cause the Property to be continuously in compliance with all Building Laws (as the
same may be amended from time to time). All buildings constructed on the Real Property are
higher than the 100 -year flood plain or are covered by adequate flood insurance.
(B) Grantor agrees to protect, defend, indemnify and hold Beneficiary harmless from
and against all liability threatened against or suffered by Beneficiary by reason of a breach by
Grantor of the foregoing representations and warranties contained in the preceding subparagraph
A.. The foregoing indemnity shall include the cost of all alterations to the Property ('including
architectural, engineering, legal and au;,ounting costs), all fines, fees and penalties, and all legal
and other expenses (including attorneys' fees), incurred in connection with the Property being in
violation of any Building Law and for the cost of collection of the sums due under the indemnity.
In the event that Beneficiary shall becorne the owner of the Property by foreclosure or deed in lieu
of foreclosure of the Deed of Trust, the foregoing indemnification obligation shall survive such
foreclosure or deed in lieu of foreclosure.
1.16. Collateral Security Instrumen . Grantor covenants and agrees that if Beneficiary at any
time holds additional security for any olbligations secured hereby, it shall have the right to enforce
the terms thereof or otherwise realize upon the same, at its option, either before or concurrently
herewith or after a sale is made hereunder, and may apply the proceeds upon the indebtedness
secured hereby without affecting the status of or waiving any right to exhaust all or any other
security, including the security hereunder, and without waiving any breach or default or any right
of power whether exercised hereunder or contained herein or in any such other security.
1.17. Suits Affecting Properly. Grantor agrees to appear in and defend any action or
proceeding purporting to affect the Property or security of this Deed of Trust or any other
security for the obligations secured hereby, the interest of Beneficiary or the rights, powers or
duties of Trustee hereunder. Grantor agrees to notify Beneficiary before it commences any action
or proceeding relating to any part of the Property or the security of this Deed of Trust (except
actions to terminate month-to-month tenancies or evict tenants to the extent permitted by Section
1.10 hereof). Grantor agrees to pay all costs and expenses, including cost of evidence of title and
reasonable attorneys' fees in any action or proceeding in which Beneficiary or Trustee may appear
or be made a party, including, but not limited to, foreclosure or other proceeding commenced by
those claiming a right to any part of the Property under any prior or subordinate liens, any
forfeiture proceeding, in any action to partition or condemn all or part of the Property, and in any
action concerning the disposition or availability of insurance proceeds relating to the Property,
whether or not such proceedings are pursued to fmal judgment. Grantor hereby assigns to
Beneficiary all proceeds payable by third parties arising from claims or events of impairment or
loss to the Property, and agrees that Beneficiary may require that such amount be paid directly to
Beneficiary. In any claim, action or proceeding affecting the Property or Beneficiary's security in
which Beneficiary appears (including any claim on the title insurance policy insuring the lien of
this Deed of Trust), Grantor fully waives any rights to privacy or nondisclosure it may have with
regard to information provided to Beneficiary in connection with the loan secured hereby.
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1.18. Beneficiary's Right to Defend Action and Cure Certain Defaults. Beneficiary shall have
the right to appear in and defend any action or proceeding at law or in equity or in bankruptcy
purporting to affect the Property or any security for the obligations secured hereby. Beneficiary
shall be allowed and paid all Beneficiary's costs, charges and expenses, including cost of evidence
of title and reasonable attorneys' fees incurred in such action or proceeding in which Beneficiary
may appear.
If Grantor fails to make any payment or to do any act as herein provided, then Beneficiary
or Trustee, but without obligation so to do and without notice to or demand upon Grantor and
without releasing Grantor from any obligation hereof shall have the right to: make or do the
same in such manner and to such extent as either may deem necessary to protect the security
hereo>; Beneficiary or Trustee being authorized to enter upon the Property for such purposes;
commence, appear in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any
encumbrance, charge or lien that in the judgment of either appears to be prior or superior hereto;
and, in exercising any such power, incur any liability, expend whatever amounts in Beneficiary's or
Trustee's absolute discretion it may deem necessary therefor, including cost of evidence of title
and attorneys' fees.
Grantor hereby agrees to pay on demand, with interest at the Default Rate from the date
of expenditure, all of Beneficiary's costs, charges, expenses and amounts referred to above in this
Section 1.18, including cost of evidence of title and reasonable attorneys' fees incurred in such
action or proceeding in which Beneficiary may appear. All costs, charges and expenses so
incurred, together with interest thereon as aforesaid, shall be secured by the lien of this Deed of
Trust.
1.19. Hazardous Materials.
(A) Grantor hereby indemnifies Beneficiary and agrees to hold Beneficiary harmless
from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any
and every kind whatsoever (including, without limitation, any Environmental Liability as defined
below) paid, incurred or suffered by, or asserted against, the Beneficiary for, with respect to, or as
a direct or indirect result of (i) the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, discharging or release from, the Property or any other property legally or
beneficially owned (or in which any interest or estate is owned) by the Grantor of any Hazardous
Material (as defined below); or (d) the presence of any asbestos on the Property (iincluding,
without limitation, the cost of removal) regardless of whether or not caused by, or within the
control of Grantor. The obligations of Grantor under this Section 1.19 shall survive any
foreclosure of this Deed of Trust, any conveyance of the Property in lieu of such foreclosure, or
the satisfaction and release of the Loan Documents.
The term "gnvironmental Liability" shall mean any claim, demand, obligation, cause of
action, accusation, allegation, order, violation, damage (including foreseeable consequential
damage), injury, judgment, penalty or fine, cost of Enforcement or cost of Remedial Action, or
any other cost or expense whatsoever, including reasonable attorneys' fees and disbursements,
14
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resulting from the violation or alleged violation of any Environmental Law or from anv
Enforcement or Remedial Action. The foregoing Environmental Liability is limited, however, t
any loss, claim or expense incurred before a foreclosure sale pursuant to this Deed of Trust, if
any, and included in the successful bid at such foreclosure. The term "Environmental Lig" shall
mean any federal, state or local laws, ordinances, codes, regulations, rules, orders, ar decrees
regulating, relating to, or imposing liability or standards of conduct: concerning, any environmental
matters, including, but not limited to, matters related to air pollution, water pollution, noise
control, Hazardous Material, soil condition or industrial hygiene. The term "Enforcement or
Remedial Action" shall mean any step taken by any person, agency or entity to enforce
compliance 'with or to collect or impose penalties, fines, or other sanctions provided by any
Environmental Law. The term "jazardous _Material" shall mean any hazardous, toxic or
dangerous waste, substance, material, pollutant or contaminant, as defined in or regulated now or
in the future by the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Sections 9601 a Am., the Resource Conversation Recovery Act
("RCRA"), 42 U.S.C. Sections 9601 gt mi., the Clean Water Act, 33 U.S.C. Sections 1251 a
sed., the Safe Drinking Water Act, 42 U.S.C. Sections 300(f) el L., the Toxic Substances
Control Act, 15 U.S.C. Sections 2601 g , rte., the Washington State Model Toxics Control Act,
RCW Ch. 70.105D, the Washington State Hazardous Waste Management Act, RCW Ch. 70.105
or rules and regulations of the EPA and the Washington Department of Ecology, any so-called
"superfund" or "superlien" law, and any other federal, state or local law, regulation, ordinance or
order or common law decision, including, without limitation, petroleum products or by-products,
polychlorinated biphenyls (PCBs), asbestos and urea formaldehyde.
(B) Grantor hereby represents and warrants that neither Grantor nor, to the be. -
knowledge of Grantor, any other person has ever caused or permitted any Hazardous Material to
be placed, held, located or disposed of (except in compliance with all applicable Environmental
Laws), on, under or at the Property, or any other real property legally or beneficially owned (or in
which any interest or estate is owned) by Grantor in any state now or hereafter having in effect a
so-called "Superlien" law or ordinance (the effect of which would be to create a hen on the
Property to secure any obligation in connection with such real property in such other state), and
neither the Property, or any part thereof; or any other real property legally or beneficially owned
(or in which any interest or estate is owned) by Grantor in any state now or hereafter having in
effect a so-called "Superlien" law or ordinance, has ever been used (whether by the Grantor or, to
the best knowledge of Grantor, by any other person) to generate, manufacture, store, treat or
dispose of any Hazardous Material. Grantor further represents and further warrants that neither
Grantor, nor to the best knowledge of Grantor, any other person, has ever caused or permitted
any asbestos to be located on or in the Property (except asbestos which has been removed from
the Property in compliance with all applicable Environmental Laws). To the best knowledge of
Grantor after due inquiry, Grantor has no knowledge of any proceeding or inquiry by any
governmental authority (mcluding, without limitation, the United States Environmental Protection
Agency and Washington State Department of Ecology) with respect to the present* of any
Hazardous Material or substance on the Property or the migration thereof from or to adjoining
property. To the best of Grantor's knowledge after due inquiry, there has been no investigation
nor does Grantor have any knowledge of any contemplated investigation, by any local, state or
15
JtVahR1572)41132VGJOCUPDOC =US 5:02 POO
federal governmental agency with authority to regulate, promulgate, administer or enforce any
Environmental Laws within 2,000 yards of the Property.
(C) Grantor shall
cause or permit the Property
generate, manufacture, treat,
or transport to or from the
applicable Environmental
keep and maintain the Property in compliance with and shall not
to be in violation of any Environmental Law. Grantor shall not use,
store, allow to remain or dispose of on, under, or about the Property
Property any Hazardous Materials (except in compliance with all
Laws).
Grantor shall immediately advise Beneficiary in writing of (i) any and all enforcement,
cleanup, remedial, removal, or other governmental or regulatory actions instituted, completed, or
threatened pursuant to any Environmental Law affecting the Property, (ii) all claims made or
threatened by any third party against Grantor or the Property relating to damage, contribution,
cost recovery compensation, loss, or injury resulting from any Environmental Liability, and
(iii) Grantor's discovery of any occurrence or condition on any real property adjoining or in the
vicinity of the Property that could cause the Property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability, or use of the Property under any
Environmental Laws.
Beneficiary shall have the right to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Environmental Liability and to have its
reasonable attorneys' fees in connection therewith paid by Grantor. Except in the case of
emergencies (which shall be deemed to exist for a maximum of 24 hours), without Beneficiary's
prior written consent, which shall not be unreasonably withheld, Grantor shall not take any
remedial action in response to the presence of any Hazardous Material on, under or about the
Property.
1.20. Conveyance of Property. Change of Ownership. It without Beneficiary's prior written
consent, (i) all or any part of or any interest in the Property is sold, transferred, conveyed, leased
(other than residential tenancies in accordance with the Loan Agreement), further encumbered, or
a contract of sale or other conveyance entered into with respect thereto, or (u) there is a transfer
of any beneficial interest in Grantor, then, upon the occurrence of any one or more of the
foregoing events, Beneficiary shall have the right, at its option, to declare all amounts secured
hereby immediately due and payable.
The execution and delivery by the Grantor of any joint venture agreement, partnership
agreement, declaration of trust, option agreement or other instrument whereunder any other
person or corporation may become entitled, directly or indirectly, to the possession or enjoyment
of the Property, or the income or other benefits derived or to be derived therefrom shall in each
case be deemed to be a conveyance or assignment of the Grantor's interest in the Property for the
purposes of this section, and shall require the prior written consent of the Beneficiary.
Beneficiary reserves the right to charge an assumption or transfer fee and/or to impose such other
conditions as it deems appropriate as a condition of granting consent to any sale or further
encumbrance against the Property or any other action requiring such consent hereunder.
16
d,A,M257304:10.021GJOOUPDoc 12130191 51Q PM
1.21. Anti -forfeiture. Grantor hereby further expressly represents and warrants to Beneficiary
that neither Grantor nor any other person involved with the Property has committed or engaged in
any act, enterprise or omission affording the federal government or any state or local government
the right of forfeiture as against the Property or any part thereof or any monies paid in
performance of its obligations under any of the Loan Documents. Grantor hereby covenants and
agrees not to commit, pennit or suffer to exist any act or omission or engage in any enterprise
affording such right of forfeiture. In furtherance thereof Grantor hereby indemnifies Beneficiary
and agrees to defend and hold Beneficiary harmless from and against any loss, damage or injury
by reason of the breach of the covenants and agreements or the warranties and representations set
forth in the preceding sentence. Without limiting the generality of the foregoing, the ,filing of
formal charges or the commencement of proceedings against Grantor, Beneficiary or all or any
part of the Property under any federal or state law for which forfeiture of the Property or any part
thereof or of any monies paid in performance of Grantor's obligations under the Loan Documents
shall, at the election of the Beneficiary, constitute an Event of Default hereunder without notice or
opportunity to cure.
RTIC lQ: A�SSIG1lNT OF RENES
2.01. As_sjgrunent of Rents. Grantor hereby absolutely and unconditionally assigns and transfers
to Beneficiary all the income, rents, royalties, revenue, issues, profits and proceeds (collectively,
the "Rents") of the Property, whether now due, past due or to become due, and hereby gives to
and confers upon Beneficiary the right, power and authority to collect the Rents. Grantor
irrevocably appoints Beneficiary its true and lawful attorney at the option of Beneficiary at am'
time, either by itself through an agent or a receiver, to demand, receive and enforce payment, tk
give receipts, releases and satisfactions, and to sue, either in the name of Grantor or in the name
of Beneficiary, for all the Rents. It is agreed that neither the foregoing assignment of Rents to
Beneficiary, nor the exercise by Beneficiary of any of its rights or remedies under this
Section 2.01 or under Section 2.02, nor the appointment of a receiver or possession of the
Property by a receiver shall make Beneficiary a 'mortgagee -in -possession" or otherwise
responsible or liable in any manner with respect to the Property or the use, occupancy or
enjoyment or operation of all or any portion thereof unless and until Beneficiary in person
assumes actual possession thereof. Nothing herein shall require :Beneficiary to have a receiver
appointed to collect any Rents, but Beneficiary shall be entitled to such appointment at its option
in accordance with this Deed of Trust. This Assignment of Rents is intended to be perfected,
absolute and choate upon recording as provided in RCW 7.28.230.
17
OAT4161579041CLIMIMMP.COC 1 A 6:02 P41
2.02. License to Collect. Notwithstanding anything to the contrary herein, so long as no Event
of Default exists, Grantor shall have a license to collect all Rents and to retain, use and enjoy the
same. Upon any occurrence of an Event of Default hereunder such license shall be automatically
revoked and all rights shall revert to Beneficiary who then shall have the right to exercise all of its
rights as absolute owner of the Leases and Rents. Grantor agrees that payments made by tenants
or occupants to Beneficiary shall, as to such tenants, be considered as though made to Grantor
and in discharge of tenants' obligations to Grantor to the extent of such payments. Nothing herein
contained shall be construed as obliging Beneficiary to perform'any of Grantor's covenants under
any lease or rental agreement. Grantor shall execute and deliver to Beneficiary, upon demand,
any further or supplemental assignments deemed desirable by Beneficiary in order to further carry
out and confirm the intentions of this Section 2.02 and upon failure of the Grantor so to comply,
Beneficiary shall have the right to, in addition to any other rights or remedies, at its option,
declare all obligations secured by this Deed of Trust to be immediately due and payable.
ARTICLE III: SECURITY AGREEMENT AND FIXTURE FILING
3.01. Security Agreement. This Deed of Trust creates a lien on the Property, and to the extent
the Property is not real property under applicable law this Deed of Trust constitutes a security
agreement under the Washington Uniform Commercial Code and any other applicable law. If
required by Beneficiary, at any time during the term of this Deed of Trust, Grantor will execute
and deliver to Beneficiary, in form satisfactory to Beneficiary, additional security agreements,
financing statements or other instruments covering all Personal Property or fixtures of Grantor
which may at any time be furnished, placed on, or annexed or made appurtenant to the Real
Property or used, useful or held for use in the operation of the Improvements. Grantor father
agrees that:
(A) The obligations covered by this Security Agreement include future advances in all forms;
(B) Beneficiary may: commingle any personal property that comes into its possession;
repledge such personal property upon terms that impair Grantor's right to redeem such;
and require Grantor to assemble the personal property and make it available to Beneficiary
at a place to be designated by Beneficiary which is reasonably convenient to both parties.
To the extent Beneficiary is required for any reason to provide commercially reasonable
notice to Grantor, Grantor agrees that notice mailed by first class mail five (5) days before
the event of which notice is given, is commercially reasonable notice;
(C) The standard by which Beneficiary's rights and duties under Article 9 of RCW Ch. 62.A,
including but not limited to Part 5 thereo shall be measured is negligence or willful
misconduct;
(D) Grantor shall notify Beneficiary in writing within 30 days of any change in name of
Grantor or its structure. Nothing herein shall be construed as a consent by Beneficiary to a
change in corporate structure otherwise prohibited hereby.
18
du►TA257maQAWoouP.noc ante 5:02
Grantor hereby irrevocably constitutes and appoints Beneficiary the attorney-in-fact of
Grantor, to execute, deliver and file with the appropriate filing officer or office such security
agreements, financing statements or other instruments as Beneficiary may request or require in
order to impose and perfect the lien and security interest hereof more specifically on the Personal
Property or any fixture.
If Grantor enters into a separate security agreement with Beneficiary relating to any of the
Personal Property or fixtures, the terms of such security agreement shall govern the rights and
remedies of Beneficiary in the event of default thereunder. Any breach of or default under any
such security agreement shall constitute an event of default under this Deed of Trust.
3.02. Fixtures. It is understood and agreed that, in order to protect Beneficiary from the effect
of RCW 62A.9-313, as amended from time to time, in the event that (i) Grantor intends to
purchase any goods which may become fixtures attached to the Property, or any part thereof; and
(ii) such goods will be subject to a purchase money security interest held by a seller or any other
pAY:
(A) Grantor shall, before executing any security agreement or other document
evidencing such security interest, obtain the prior written approval of Beneficiary, and all requests
for such written approval shall be in writing and contain the following information:
(1) a description of the fixtures to be replaced, added to, installed or
substituted;
(2) the address at which the fixtures will be replaced, added to, installed or
substituted; and
(3) the name and address of the proposed holder and proposed amount of the
security interest,
and any failure of Grantor to obtain such approval shall be a materiall breach of Grantor's covenant
under this Deed of Trust, and shall, at the option of Beneficiary, entitle Beneficiary to all rights
and remedies provided for herein upon default provided, that Beneficiary shall be deemed to have
approved such agreement if it fails to object to such agreement within thirty (30) days of its actual
receipt of Grantor's written request for such approval. No consent by Beneficiary pursuant to this
subsection shall be deemed to constitute an agreement to subordinate the right of the Beneficiary
in fixtures or other property covered by this Deed of Trust.
(B) If at any time Grantor fails to make any payment on an obligation secured by a
purchase money security interest in the Personal Property or any factures, Beneficiary, at its
option, may at any time pay the amount secured by such security interest and the amount so paid
shall be (1) secured by this Deed of Trust and shall I' a lien on the Property having the same
priorities as the liens and security interests created by this Deed of Trust, and (2) payable on
demand. If Grantor shall fail to make such payment to Beneficiary within ten (10) days after
19
21ATYi1573G413.C49CJX P.®OC 12204e,'i
demand, the amount due under the Loan Documents, at the option of Beneficiary, become due
and payable immediately.
(C) Beneficiary shall have the right to acquire by assignment from the holder of such
security interest any and all contract rights, accounts receivable, negotiable or non-negotiable
instruments, or other evidence of Grantor's indebtedness for such Personal Property or fixtures,
and, upon acquiring such interest by assignment, shall have the right to enforce the security
interest as assignee thereof in accordance with the terms and provisions of the Washington
Uniform Commercial Code then in effect, and in accordance with any other provisions of law.
(D) Whether or not Beneficiary has paid the indebtedness secured by or taken an
assignment of such security interest, Grantor covenants to pay all sums and perform all
obligations secured thereby, and if Grantor at any time shall be in default for a period of ten (10)
days under such security agreement, it shall be a material breach of Grantor's covenants under this
Deed of Trust, and Beneficiary may, at its option, declare the principal sum secured hereby
immediately due and payable, time being of the essence.
3.03. Fixture Filing. To the extent that any of the Property. constitutes a fixture, this Deed of
Trust shall serve as a fixture filing pursuant to the Washington Uniform Commercial Code.
ARTICLE N: DEFAULTS AND REMEDIES
4.01. Events of Default. If any of the following events shall occur ("Events of Default"):
(A) Failure to pay when due any amount payable under this Agreement or under any of
the other Loan Documents.
(B) Failure to substantially complete development of the Property as evidenced by the
City's receipt of a certificate of substantial completion executed by Developer on or before the
date that is two (2) years after the date hereof. —
(C) Failure, in the reasonable judgment of the City, to (1) offer stable full-time
employment to residents of the CEZ Area; (2) use all available methods to notify residents of the
CEZ Area of employment opportunities; (3) coordinate with the Private Industry Council and the
State Employment Security Department for assistance in filling new positions created by the
Project; or (4) provide the City with an annual report regarding employment of residents of the
CEZ Area.
(E) Any sale or conveyance of the Property or any portion thereof without the City's
prior written approval.
(F) Any failure to pay or other default in any other indebtedness secured by the
Property.
20
11 .DOC 1 S * PY
(G) The appointment of a receiver or liquidator for the Developer or its Property, the
filing of any state or federal bankruptcy or insolvency petition by or against the Developer, or any
assignment by Developer for the benefit of its creditors.(A) Failure to pay when due any amount
payable under the Note or under any of the other Loan Documents.
then and in any such event, the Beneficiary shall be entitled to exercise all rights, and shall have
the benefit of all remedies provided by law or set forth in this Deed of Trust or in any other
instrument given to secure the indebtedness evidenced by the Note, including the right to declare
all stuns secured hereby immediately due and payable. No waiver by Beneficiary of any default on
the part of Grantor shall be construed as a waiver of any subsequent default hereunder.
4.02. Foreclosure Sale. If an Event of Default occurs and Beneficiary so, requests, Trustee shall
sell the Property in accordance with the Deed of Trust Act of the State of Washington (RCW.
Chapter 61.24 as existing now or hereafter amended) at public auction to the highest bidder. Any
person except Trustee may bid at Trustee's sale. Trustee shall apply the proceeds of the sale as
follows: (i) to the expenses of sale, including Trustee's fee and attorneys' fee; (ii) to all the
indebtedness evidenced by the Note and all other indebtedness secured by this Deed of Trust or
any other Loan Document; (iii) the surplus, if any, shall be distributed in accordance with the
Deed of Trust Act. Trustee shall deliver to the purchaser at the sale its deed, without warranty,
which shall convey to the purchaser the interest in the Property which Grantor had or had the
power to convey at the time of its execution of this Deed of Trust and such as it may have
acquired thereafter. Trustee's deed shall recite the facts showing that the sale was conducted it
compliance with all the requirements of the law and of this Deed of Trust, which recital shall b,
prima facie evidence of such compliance and conclusive evidence thereof in favor of bona fide
purchasers and encumbrancers for value. The power of sale conferred by this Deed of Trust and
by the Deed of Trust Act of the State of Washington is not an exclusive remedy, and when not
exercised Beneficiary may foreclose this Deed of Trust as a mortgage.
Beneficiary shall have the right to proceed as to the Personal Property in accordance with
Beneficiary's rights and remedies in respect to real property -or sell the Personal Property
separately and without regard to the remainder of the Property in accordance with Beneficiary's
rights and remedies provided by the Washington Uniform Commercial Code as well as other
rights and remedies available at law or iin equity.
4.03. Other Remedies Upon Default. Upon the occurrence of an Event of Default, Beneficiary
is authorized, either by itself or by its agent to be appointed by it for that purpose or by a receiver
appoint -t by a court of competent jurisdiction, to enter into and upon and take and hold
possession of any portion or all of the Property, both real and personal, and exclude Grantor and
all other persons therefrom; to operate and manage the Property and rent and lease the same; to
perform such reasonable acts of repair or protection as may be reasonably necessary or proper to
conserve the value thereof, and collect any Rents for the benefit and protection of Beneficiary,
and from time to time apply or accumulate such Rents in such order and manner as Beneficiary or
such receiver, in its sole discretion, shall consider advisable, to or upon the following: the
expenses of receivership, if any; the proper costs of upkeep, maintenance;, repair and/or operatic),
of the Property; the repayment of any sums theretofore or thereafter advanced pursuant to tb.
21
11A11105734 7 OOUP.Doc 'moo apt Pit
terms of this Deed of Trust, the interest then due or next to become due upon the indebtedness
secured hereby, and the taxes and assessments upon the Property then due or next to become due,
or upon the unpaid principal of such indebtedness. The collection or receipt of Rents by
Beneficiary, its agent or receiver, after notice of default and notice of sale shall not affect or
impair such default or notices or any sale proceedings predicated thereon. Any Rents in the
possession of Beneficiary, its agent or receiver, at the time of sale and not theretofore applied as
herein provided, shall be applied in the same manner and for the same purposes as the proceeds of
the sale.
Neither Trustee nor Beneficiary shall be under any obligation to make any of the payments
or do any of the acts referred to in this Section 4.03, and any of the actions referred to in this
Section 4.03 may be taken by Beneficiary without regard to the adequacy of the security for the
indebtedness evidenced by the Note.
4.04. Effect of Foreclosure on Leases. Beneficiary shall have the right, at its option, to
foreclose this Deed of Trust subject to the rights of any tenants of the Property, and the failure to
make any tenants a party defendant to any foreclosure proceeding will not be asserted by the
Grantor as a defense in any action or suit instituted to collect the indebtedness secured hereby or
any deficiency remaining after foreclosure. Any such tenant whom Beneficiary elects to not make
a party or subject to any foreclosure action shall continue in possession of its leasehold for the
unexpired term of its lease and shall attorn to Beneficiary or other purchaser at the sale.
4.05. Sale in Parcels: Marshalling. The Property, real, personal or mixed, may be sold as an
entirety or in parcels, by one sale or by several sales held at one time or at different times, all as
Trustee or Beneficiary, in its unrestricted discretion, may elect. Grantor, for and on behalf of
itself and all persons claiming by, through or under Grantor, waives any and all right to have the
Property marshalled upon any foreclosure sale and agrees that, upon foreclosure, the Property
maybe sold as an entirety and not in parcels.
4.06. Appointment of Receiver. Beneficiary, separately or in any action to foreclose this Deed
of Trust, shall be entitled (without regard to the adequacy of any security for the Note, the
absence of waste or deterioration of the Property or other arguments based on equity), to the
appointment of a receiver of the Rents of the Property who shall have, in addition to a the rights
and powers customarily given to and exercised by such receiver, all the rights and powers granted
to Beneficiary by the covenants contained herein. Once appointed, at Beneficiary's option, such
receiver may remain in place until all amounts secured hereby are paid in full
4.07. Payment of Proceeds. Whenever this Deed of Trust requires that amounts payable by a
third party be paid directly to Beneficiary (for example, insurance proceeds and proceeds of
claims of loss or damage to the Property), Beneficiary may enforce such right with a preliminary
injunction or temporary restraining order. Grantor agrees that irreparable harm may result if such
payments are not made directly to Beneficiary. Grantor agrees not to oppose a motion for such
injunction or restraining order provided that arrangements are made to deposit such sums in a
third party depository.
22
tv, coc =MS 5:02 w
ARTI V• GENERAL COVENANT'S
5.01. No Waiver. Grantor covenants and agrees that the acceptance by Beneficiary of any sum
secured hereby after its due date, or in an amount less than the sum then due, shall not constitute
a waiver by Beneficiary of its rights either to require prompt payment when due of all other sums
so secured or to declare a default or exercise such other rights as Nevin provided for failure so to
pay. No failure by Beneficiary to 'insist upon strict performance of any term, covenant or
condition hereof nor failure to exercise any right or remedy hereunder, shall constitute a waiver
of any such breach of such term, covenant or condition or of the later exercise of such right or
remedy. All waivers shall be in writing,.
5.02. Remedies Cumulative. No remedy herein conferred upon or reserved to Trustee or
Beneficiary is intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute.
5.03. Plats• Easements and Other Agreemen . At any time upon written request of Beneficiary,
payment of its fees and presentation of this Deed of Trust and the Note for endorsement (m case
of full reconveyance, for cancellation and retention), nttion), without affecting the liability of any person
for the payment of the indebtedness or the effect of the Deed of Trust upon the remainder of the
Property, Trustee may (i) consent to the malting of any map or plat of said Real Property; (n) join
in granting any easement or creating any restriction thereon; (iii) join in any subordination or other
agreement affecting this Deed of Trust or the lien or charge thereof;, (iv) reconvey, withot
warranty, all or any part of the Real Property. The grantee in any reconveyance may be described
as the "person or persons legally entitled thereto," and the recitals therein of arty matters or facts
shall be conclusive proof of the truthfiulness thereof. Grantor agrees to pay Trustee's fee for full
or partial reconveyance, together with a recording fee, if Trustee, at its option, elects to record
said reconveyance.
5.04. Noticgg. All notices hereunder shall be deemed to have been duly given if mailed by
United States registered or certified mail (return receipt requested and postage prepaid), sent by a
reputable overnight delivery service, or personally delivered to the parties at the addresses set
forth on page one of this Deed of Trust (or at such other addresses as shall be given in writing by
any party to the other), and shall be deemed complete upon any such mailing, sending or delivery.
5.05. Heirs and Assigns; Terminology. This Deed of Trust applies to, inures to the benefit of
and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors
and assigns. The term "Grantor" shall mean both the original Grantor and any subsequent owner
or owners of any of the Property. The term "Beneficiary" shall mean the owner and holder,
including pledgees, of the Note, whether or not named as Beneficiary herein. In this Deed of
Trust, whenever the context so requires, the masculine gender includes the feminine and/or
neuter, and the singular number includes the plural. The term "and/or" as used herein means one
or the other or both, or any one or all, or any combination of the things or persons in connection
with which the words are used.
23
41011112STOMCOPCX101.112.00C 12031111151:02
The captions or headings are inserted only as a matter of convenience and for reference,
and in no way define, limit or describe the scope or intent of this Deed of Trust nor in any way
affect this Deed of Trust.
5.06. Severability. If any provision hereof should be held unenforceable or void, then such
provision shall be deemed separable from the remaining provisions and shall in no way affect the
validity of this Deed of Trust, except that if such provision relates to the payment of any monetary
sum then Beneficiary may, at its option, declare the indebtedness and all other sums secured
hereby immediately due and payable, provided that no prepayment fee shall be payable in the
event Beneficiary elects to exercise the option to accelerate contained in this Section 5.06.
Grantor acknowledges and agrees that this document constitutes, among others, three
separate agreements: a Deed of Trust, a Security Agreement and an Assignment of Leases and
Rents, each of which may be construed and enforced independently of the others even though the
provisions hereof are common to all.
5.07. Time Is of the Essence. Time is of the essence hereof in connection with all obligations of
Grantor herein or in the Note. By accepting payment of any sum secured hereby after its due
date, Beneficiary does not waive its right either to require prompt payment when due of all other
sums so secured or to declare default for failure so to pay.
5.08. Jury Trials. It is mutually agreed by Grantor and Beneficiary that they each waive trial by
jury in any action, proceeding, or counterclaim brought by either of them against the other on any
matter whatsoever arising out of or in any way connected with the Note, this Deed of Trust or the
loan secured hereby.
5.09. Oral Agreements. Oral agreements or oral commitments to loan money, extend credit, or
to forbear from enforcing repayment of a debt are not enforceable under Washington law.
5.10. Non -Agricultural Use. The Real Property which is the subject of this Deed of Trust is not
used principally or primarily for agricultural or farming purposes.
5.11. Governing Law. This Deed of Trust is to be governed by and construed in accordance
with the laws of the State of Washington.
24
11A71g577940.02111c100UP.00c 12120.00112PM
IN WITNESS WHEREOF, Grantor has executed this instrument as of the date first
written above.
GRANTOR
Trail Wagons/Chinook, Inc., a Washington
corporation
By —
Gary Luckhart
Its PresidentiCEO
STATE OF WASHINGTON )
)ss.
COUNTY OF )
On this day of �_, 1997, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally appeared Gat
Lukehart, to me known to be the President/CEO of Trail Wagons/Chinook, Inc., a Washington
corporation; the corporation that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act: and deed of said corporation
for the uses and purposes therein mentioned, and on oath stated that he its authorized to execute
the said instrument and that the seal affixed is the corporate seal of said corporation.
WITNESS my hand and official seal hereto affixed the day and year in this certificate
above written.
25
Notary Public for the State of Washington,
residing at ._
My appointment expires
Print Name
k TR01257Jp.0102PC;i CUP.0OG 1 6 &CQ PAI
EXHIBIT A
Legal Description
THAT PORTION OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER, OF
SECTION 7, TOWNSHIP 13 NORTH, RANGE 19, W.M., LYING SOUTHWESTERLY OF
SR 82, AS CONVEYED TO THE STATE OF WASHINGTON FOR HIGHWAY BY
INSTRUMENT RECORDED FEBRUARY 6, 1959 UNDER AUDITOR'S FILE NO. 1757605;
EXCEPT THAT PORTION OF THE NORTH HALF, OF THE SOUTHEAST QUARTER, OF
THE SOUTHWEST QUARTER, LYING WEST OF THE FOLLOWING DESCRIBED LINE:
BEGINNING AT A POINT ON THE NORTH LINE OF THE NORTH HALF, OF THE
SOUTHEAST QUARTER, OF THE SOUTHWEST OF SAID SECTION 7, A DISTANCE OF
710 FEET, EAST OF THE SOUTHEAST CORNER OF LOT 10 PARK ADDITION TO
NORTH YAKIMA, (NOW YAKIMA) AS RECORDED IN VOLUME "A" OF PLATS, PAGE
13, THENCE SOUTH TO THE SOUTH LINE OF SAID SUBDIVISION; AND EXCEPT
THAT PORTION THEREOF LYING WESTERLY OF THE EAST LINE AND AIDE EAST
LINE EXTENDED, OF THE PLAT OF MOYERS ADDITION TO NORTH YAKIMA, AS
RECORDED IN VOLUME "B" OF PLATS, PAGE 73, RECORDS OF YAKIMA COUNTY,
WASHINGTON; AND EXCEPT THAT PORTION THEREOF LYING EASTERLY OF THE
FOLLOWING DESCRIBED TRAVERSE LINE; COMMENCING AT THE SOUTHWEST
CORNER, OF THE SOUTHWEST QUARTER OF SECTION 7, TOWNSHIP 13 NORTH,
RANGE 19 EAST, W.M.; THENCE SOUTH 88 31' 26", EAST, REFERENCE BEARING,
ALONG THE SOUTH LINE OF SAID SUBDIVISION, 1833.07 FEET TO THE POINT OF
BEGINNING OF SAID TRAVERSE LINE; THENCE NORTH 76" 50' EAST, 156.31 FEET;
THENCE NORTH 0 30" EAST, 145.77 FEET; THENCE NORTH 21' 23' EAST; 186.27 FEET;
THENCE NORTH 42" 48' EAST, 109.7 FEET TO THE SOUTHWESTERLY RIGHT OF
WAY OF SR 82 AND TERMINUS OF SAID TRAVERSE LINE.
26
J Al 73601oxorc iCOURDOC 12/1096 MR PM
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. )
For Meeting Of 1R/97
ITEM TITLE: Authorization to apply for Community Economic Revitalization Board
(CERB) funding to support public infrastructure developments associated with proposed Trail
Wagons/Chinook, Inc. expansion project.
SUBMITTED BY: Glenn J. Valenzuela, Director of Community & Economic Development
CONTACT PERSON/TELEPHONE: Vaughn McBride/576-6649
SUMMARY EXPLANATION:
Gary Lukehart,President/CEO, Trail Wagons/Chinook, Inc. has submitted a proposal to
expand his existing 60,000 square foot light manufacturing facility by constructing a new
103,200 square foot facility with associated employee and client parking. The expansion will
retain 89 existing jobs and create 40 full-time job positions over the next three years of
operation at wages exceeding the county average wage rate. The owner has committed $2
million of private investment for his capital project. Mr. Lukehart has asked the City of Yakima
for assistance in the provision of associated public utility infrastructure improvements. The
City of Yakima intends to apply for State CERB assistance to pay for the needed sewer and
water extension of public infrastructure in the amount of approximately $139.700. Mr.
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sewer and water extension of public infrastructure. The City of Yakima will use as its local
match requirement the City's previously planned construction of a new sewer lift station. The
City's wastewater division has experienced increasing problems with the existing equipment
on the lift station. A complete rebuild is needed to ease current access conditions and to
accommodate the future service of existing area residents. The budgeted cost of the new
sewer lift station is $303,700. The City's proposed match of $303,700 is well above the 10%
minimum match required by CERB. The application requires local government project and
funding request support and authorization. Application deadline is February 3, 1997.
0
Resolution _X_ Ordinance_ Contract _ Other (Specify)
Funding Source
APPROVAL FOR SUBMITTAL:
ity Manager
STAFF RECOMMENDATION: Council authorize City Manager to apply for CERB funding
and to execute a Development Agreement for repayment to the City of all CERB loan funds
received for public infrastructure improvements associated with the Lukehart expansion
project per the attached Development Agreement which is still in draft form.
BOARD RECOMMENDATION: Council Committee Economic Development has
recommended approval.
COUNCIL ACTION: Approve application submission