HomeMy WebLinkAbout10/19/2017 00 Aquatics Center Materials from Study Session of 10-27-17Aquatics Center
Materials from
Study Session of
10-27-15
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MEMORANDUM
To: Honorable Mayor and Members of the Yakima City Council
cc: Parks and Recreation Commission
From: Tony O'Rourke, City Manager
Date: September 25, 2015
RE: YMCA Aquatics and Fitness Agreements
Attached for City Council review, in preparation of the October 27 study session, is a Master
Aquatic Center Agreement that incorporates a Ground Lease, a Development Agreement and
an Operating Agreement between the City of Yakima and Yakima Family YMCA, a Washington
non-profit corporation. These documents represent an intent to collaborate in the design,
development, and operation of an Aquatics Center at Chesterley Park consisting of a lap pool,
therapy pool, and family/children's pool. Independently, the YMCA will also construct and
operate a $9 million dollar Fitness Center, which like the Aquatic Center will be open to the
entire community on a daily or monthly pass basis. The Yakima Family YMCA Board tentatively
approved these agreements on September 22, 2015, subject to final review by the City Council.
The final review and proposed execution of these agreements is scheduled for the City
Council's October 27, 2015 study session.
The Yakima Family YMCA is a Yakima -based, non-profit that has been committed to building a
healthy spirit, mind, and body among individuals, families, and businesses of Yakima since
1906. In collaboration with the City of Yakima, they have the experience, ability, and resources
to design, develop, maintain, and operate this proposed Aquatics Center. The proposed
agreements do not constitute a joint venture. Each party has their own independent
responsibilities and rights.
The agreements to design, build, and operate an Aquatic Center are subject to three
contingencies. The first is a due diligence contingency of 90 days to inspect and test soils at
Chesterley Park before entering into a ground lease. The second requires the City to complete
a land conversion process with the Washington Recreation and Conservation Office and
National Parks to replace approximately 7.5 acres at Chesterley Park since it was paid for with
state and federal grants. The third requirement is that the YMCA has to raise approximately
$15 million or 80% of the construction cost of the aquatic and fitness center by December 31,
2017.
Currently the City has only one year-round pool at Lions Park and a summer outdoor pool at
Franklin Park. In addition, both pools are nearly 45 years old and are reaching the end of their
functional life unless significant capital investments are made to extend their functionality.
Highlights of the proposed agreement include:
TERM
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The initial term of the proposed ground lease for approximately 7.5 acres at Chesterley Park for
the YMCA Aquatics Center and Fitness Center is for a term of 40 years commencing upon the
opening of the facilities, with the option of the YMCA to extend the initial 40 -year term for three
(3) additional ten (10) year terms.
SITE
The proposed location of the Aquatics Center and Fitness Center is on approximately 7.5 acres
of land in the northwest corner of Chesterley Park (see site plan attached to the Ground Lease
as Exhibits A-1 and A-2). This site is zoned R2 and recreational uses are a permitted use under
a Class 2 Review. Because Chesterley Park was purchased with State of Washington
Recreation and Conservation Office (RCO) and National Parks Scenic (NPS) grants the City is
required to provide replacement property for the existing RCO/NPS Chesterley Park property in
order to use the approximately 7.5 acres for the proposed Aquatics/Fitness Center. The
replacement conversion process is lengthy. The RCO/NPS property conversion requirements
provide a summary of the process involved in gaining RCO/NPS approval of a conversion. The
City will be required to undergo a "yellow book" appraisal of both the Chesterley Park site, the
proposed replacement site, which at this time is being considered on the second 60 -acre SOZO
parcel. In addition to the appraisals, NEPA environmental impact assessment, archeological
assessment, and recreational suitability analysis of each parcel must be completed. Successful
completion of this property conversion requirement is necessary to consummate this YMCA -City
Agreement.
FACILITY/FEATURES
The proposed Aquatic Center has a projected cost of $9 million and will be a joint City of
Yakima/YMCA facility.
The state-of-the-art facility will feature multi-level glass walls to make it highly visible and
attractive both inside and out. The facility will total approximately 72,000 square feet of which
34,000 square feet will be dedicated to the Aquatic Center. The Aquatics Center will feature
three bodies of water: a lap pool, a family/children's recreation pool and a warm water therapy
pool. Plans call for the family/children's recreation pool to include a slide, spray and splash
elements and a lazy river. The pool deck includes a hot tub and steam rooms. The two facilities
will share a common lobby space and locker rooms. The YMCA Fitness Center includes group
fitness studios, cardio equipment, circuit weights, free weights, a gymnasium, child watch area,
drop-in youth room, community classrooms and a teaching kitchen.
If feasible, a future outdoor pool could be built adjacent to the Aquatic Center.
ACCESS
The facility will have shared access to the existing 185 Chesterley Park parking spaces, as well
as exclusive access to 120 additional spaces to be built. The facility is open to the entire
community. Day and monthly passes will be available for access to both facilities for either the
Aquatics Center or the YMCA Fitness Center. The YMCA will also offer standard membership
options. The YMCA provides opportunities for youth and families with limited resources to have
access to the YMCA facilities and programs. The facility will be open seven days a week.
PROGRAMMING
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Aquatics Center: programming for the Aquatics Center will include water aerobics classes, swim
lessons, masters swim instruction, private swim lessons, senior water aerobics classes, arthritis
and therapy group classes, birthday parties, lifeguard training certification, swim meets, open
lap swimming, aqua dance, water walking classes and other group fitness, as well as
recreational opportunities.
YMCA: Programming will include youth outreach programs, group fitness classes, community
health programming in diabetes and obesity prevention, aerobics classes, personal training,
cycling classes, basketball leagues, Zumba and a wide range of personal fitness opportunities.
COST
The estimated cost of the Aquatic Center is $9 million, of which the City will contribute a not to
exceed amount of $4,500,000. The annual debt service on the City's contribution of $4.5 million
non -tax exempt debt is approximately $360,000 annually starting in 2018. The YMCA will be
responsible for all additional costs of completion. The City and YMCA will equally share in the
operating cost of the Aquatics Center. The Fitness Center will also cost approximately $9
million, of which the YMCA will pay 100%.
Highlights of the proposed Aquatic Center Development Agreement, Operating Agreement, and
Ground Lease include:
YMCA Development Agreement
• YMCA shall construct an aquatics center consisting of lap pool, therapy pool, and
family/children's pool.
• The City shall contribute a total of $4,500,000 for design, engineering, and construction
costs related solely to the aquatics center upon satisfaction of the Due Diligence
Contingency. It is expressly confirmed that all costs paid by the City for design and
engineering shall be reimbursed to the City by the YMCA in the event the Financing
Contingency is not satisfied and the project fails to be developed.
• YMCA shall construct a fitness facility, exclusively at their cost
• The YMCA will solely own the aquatics center and fitness center. At the end of the ground
lease these facilities will revert to the City.
• The YMCA shall have sole responsibility for the design, building plans, engineering, site
plan, and construction of the aquatics center, subject to review by the City manager to
confirm the aquatic center design is in compliance with required specifications.
• The City shall be reimbursed for its pro -rata design and engineering costs if the Aquatics
Center fails to be developed, provided the city successfully completes all RCO requirements
to make the Chesterley Park site available.
• The City shall conduct a complete public works project bidding process for construction of
the Aquatics Center development in accordance with Washington Public Works
requirements. The YMCA shall be responsible for selecting and contracting the architects,
and engineers that will be used to construct the aquatic and fitness facilities.
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• The YMCA is solely responsible for all costs necessary for development and construction of
the aquatics center, including any construction cost overruns and change orders.
• Any off site traffic or other improvements outside of the YMCA's leased space required by
the City as a result of the aquatics center and other facilities on the leased premises are the
responsibility of the City and with no reduction to the City's $4,500,000 aquatic center
contribution.
• Any on site improvements within the leased space shall be shared equally between the City
and the YMCA. The City's share will come from its $4,500,000 contribution.
• The naming rights of the aquatics center will belong solely to the YMCA, provided, however,
the aquatics center name must include the word "Yakima".
YMCA Ground Lease
• The YMCA will lease from the City approximately 7.5 acres at Chesterley Park for the YMCA
aquatics center and fitness center (see Ground Lease Exhibits) for an initial term of forty
(40) years commencing upon the opening date of the facilities. The YMCA will have the
option to extend the initial 40 -year term for three (3) additional ten (10) year terms under the
same terms and conditions.
• The YMCA's lease is contingent on satisfactory due diligence of the leased premises on or
before 90 days of the effective date of the lease.
• The YMCA's obligation to lease the Chesterley site and construct the Aquatic Center, and
the City's obligation to make a $4.5 million contribution, is contingent on the YMCA securing
80% of the funding needed to construct the Aquatics Center and fitness facility by December
31, 2017.
• The City's and YMCA's respective obligation to lease space in Chesterley Park is financially
contingent on the YMCA's ability to fund the construction and operation of the aquatics
center and fitness center, as well as successful completion of the RCO conversion. If the
financial contingency or RCO conversion is not satisfied on or before December 31, 2017,
either the City or YMCA may terminate this entire Agreement after 60 days written notice
period for the Parties to satisfy the contingencies.
• The Lease Agreement is subject to the terms of the Development Agreement and Operating
Agreement.
• The YMCA may share the use of existing Chesterley Park parking areas, however, they will
have exclusive use of any additional parking they construct.
• The YMCA is permitted to sublease all or any portion of the leased premises with City
approval.
• The YMCA and City have 60 days to cure any defaults.
YMCA Operatinq Aqreement
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• The aquatics center will be managed, operated, and maintained by the YMCA in accordance
with operating standards consistent with industry and mutually agreed upon standards.
• Minimal operating hours:
o Monday through Friday 6:00 a.m. to 9:00 p.m.
o Saturday 7:00 a.m. to 7:00 p.m.
o Sunday 12:00 p.m. to 6:00 p.m.
• The YMCA will maintain commercial general liability insurance not less than $2,000,000 per
occurrence and $4,000,000 general aggregate.
• The aquatics center shall be available for use by the general public and fees charged by the
YMCA for public use will be set in consultation with the City and must be commercially
reasonable with fees charged by facilities of similar size and scope in the State of
Washington.
• Prior to April 1 of each calendar year, the City shall submit the City's requested program
schedule for general public use of the aquatics center to the YMCA. The YMCA shall
consider and address the City's requested program schedule while preparing the annual
aquatics center schedule. The YMCA shall manage the aquatics center to ensure general
public access and use is a primary objective in program scheduling.
• The City shall share equally with the YMCA all reasonable pre -opening, staffing, and
operational costs in preparing and organizing the aquatics center for its opening date.
• The YMCA shall submit to the City Manager, at least 9 months before opening day, a
proposed initial budget for the period from opening day through July 31St of the year of
opening.
• The aquatics center budget year shall commence on September 1St annually. The YMCA
shall submit a proposed annual operating budget and annual capital budget for the aquatics
center for the upcoming fiscal year (September 1St through August 31St) to the City Manager
by July 1St of each year. Review, reconciliation and approval of the annual aquatics center
budget shall be jointly approved at least 15 days prior to September 1St of each year. In the
event the YMCA and City are unable to approve the initial or annual budget the parties will
submit to mediation to resolve the budget impasse.
• The City is obligated to reimburse the YMCA for 50% of all annual aquatics center operating
deficits.
• The YMCA and City shall maintain an operating reserve fund to offset budget variances and
cash-flow timing.
• The City is obligated to reimburse the YMCA for 50% of all annual aquatics center capital
expenditures.
• A Capital Improvement Reserve Fund shall be established separately by the City and YMCA
for asset repairs and replacements. Beginning on the first anniversary of the facility opening
date the City and YMCA shall each deposit $40,000 annually into the capital improvement
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reserve fund until each reserve fund reaches a value of $1,000,000 to ensure routinely
scheduled funding and replacement of the aquatics center's capital assets. As expenditures
are deducted from the total balance of the reserve funds, the Parties shall make additional
deposits to restore and maintain the $1,000,000 reserve fund balance.
• The YMCA shall submit quarterly written reports to the City Manager on the status of the
aquatics center financial performance, usage and programs.
• The City shall have the right to audit the YMCA's aquatics center finances annually.
• In the event the YMCA or City materially breach the terms of this agreement, the YMCA or
City shall provide notice of the specific default(s), and if not cured within 60 days, the YMCA
or City shall seek equitable relief or terminate this agreement. If either party wrongfully
terminates the agreement, the offending party is obligated to pay the other party's costs and
attorney's fees and liquidated damages in the amount of $1,000,000.
• An unsuccessful "conversion process" will not constitute a breach of the terms of this
Agreement and/or cause for the YMCA to seek damages from the City.
SUMMARY
The approval of these agreements represents the City's willingness and ability to enter into
public/private partnerships to enhance the overall quality of life for Yakima citizens while also
reducing the public's capital and operating cost contributions by 50% to gain a new aquatic
center for the Yakima community.
The Aquatics Center addresses a significant need for another year-round pool in Yakima and
builds upon the City Council's recent decision with SOZO for the development of a 19 field
sports complex to enrich the recreational and economic vitality of Yakima.
These agreements would not have been possible without the great cooperation and efforts of
the YMCA representatives, Bob Romero, Dustin Yeager, Mark Smith, and Paul Larsen. In
addition, City Attorney Jeff Cutter and Public Works Director Scott Schafer were invaluable in
representing the City and achieving this mutually beneficial partnership.
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
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Item No. 4.
For Meeting of: October 27, 2015
ITEM TITLE: Resolution authorizing Aquatic Center, associated Ground Lease,
Development and Operating Agreements with the Yakima Family
YMCA at Chesterley Park
SUBMITTED BY: Jeff Cutter, City Attorney
SUMMARY EXPLANATION:
The City and the YMCA have been cooperatively working together to reach agreement on the construction of
an Aquatic Center on a portion of the Chesterley Park property. The Aquatic Center proposed in the
attached Agreements would provide beneficial use of a premier aquatic facility to all of the citizens of the City
of Yakima. The attached and incorporated Agreements provide the specific terms and conditions under
which the City would participate financially and with the provision of property for the location of such a
facility. The City's participation in this development would be funded by a portion of the general funds that
were reserved by voters through an amendment to the City Charter for the express purpose of developing
capital improvements and rehabilitating existing park and recreation improvements for the provision of park
and recreation activities to the citizens of Yakima.
Resolution: X Ordinance:
Other (Specify):
Contract: X Contract Term:
Start Date: End Date:
Item Budgeted: Yes Amount:
Funding Source/Fiscal Impact:
Strategic Priority: Improve the Built Environment
Insurance Required? No
Mail to:
Phone:
APPROVED FOR
SUBMITTAL:
City Manager
RECOMMENDATION:
City Council requested final documents be provided.
ATTACHMENTS:
Description Upload Date
D Aquatic (:nter Summery Memo 10/23/2015
D Resgutnon-Master Aquatic C.:enter Agreement 10/23/2015
D Master Aquatic (:nter Agreement 10/23/2015
D ground °ease 10/23/2015
D map 10/23/2015
D Aquatic Center -Development Agreement 10/23/2015
D
Aquatic Center -Operating Agreement 10/23/2015
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Type
Cover Memo
Resgution
Contract
Cover Memo
Cover Memo
IBack up Materna°
IBack up Materna°
A RESOLUTION
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RESOLUTION NO. R-2015-128
authorizing the execution of a Master Aquatic Center Agreement and
associated Ground Lease, Development Agreement and Operating
Agreement providing for the City's participation in the construction of an
Aquatic Center in cooperation with the Young Men's Christian Association
of Yakima, d/b/a the Yakima Family YMCA, all in accordance with the
specific terms and conditions set forth in said Agreements
WHEREAS, the residents of the City voted to amend the City Charter to set aside certain
general funds for the specific purpose of creating capital improvements to and refurbishment of
pubic parks and recreational facilities within the City; and
WHEREAS, the City, with one indoor public pool and one outdoor public pool owned and
operated by the City pursuant to RCW 35.21.020, has inadequate public aquatic facilities to meet
the diverse needs of its population, which is approaching 100,000 people; and
WHEREAS, the City's only existing indoor public pool consists of a six (6) lane, single
body of water housed in a worn and aging facility; and
WHEREAS, the City's only existing indoor public pool is frequently unavailable for public
use due to school district needs and competitive swimming uses, and
WHEREAS, there is no warm water therapy pool or dedicated youth/family indoor pool in
the Yakima area, either public or private; and
WHEREAS, a citizens pool advisory committee established recommendations for desired
elements of a new aquatic center, and the now proposed Aquatic Center plan incorporates those
recommendations, and
WHEREAS, Yakima has been ranked as one of the most obese cities in America, pointing
out the need for more recreation and exercise opportunities for youth and adults in our community;
and
WHEREAS, access to aquatic facilities is a valuable community resource because it
provides the City's residents with low-cost recreation options, encourages residents to learn how
to swim, discourages dangerous swimming conditions in rivers and irrigation canals, and provides
access to therapeutic activities; and
WHEREAS, in an effort to promote the overall health, safety, and welfare of Yakima's
residents, the City and the YMCA desire to enter into this Agreement in order to construct and
operate new aquatic facilities that will be open to the public for recreation, instruction, fitness, and
therapeutic uses; and
WHEREAS, the Aquatic Center that is the subject of the incorporated agreements and all
programs conducted therein will remain open for public use at reasonable costs with no required
YMCA membership; and
WHEREAS, the Aquatic Center will more than double the existing indoor public aquatic
facilities located in Yakima and increase public access to additional and diverse indoor aquatic
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offerings by adding at least three (3) separate bodies of water for public use and programming,
including (a) an eight (8) lane 25 -yard lap pool, (b) a warm water therapy pool, and (c) a multiuse
pool area for family and youth recreation; and
WHEREAS, the Aquatic Center's multi -pool configuration, unlike the City's current pool
offerings (both public and private), will be suitable for offering multiple programming options at
the same time and not be limited to single use options (e.g , it will be possible to simultaneously
offer lap swimming, water walking, youth/family recreation activities, and warm water
therapy/fitness classes), and
WHEREAS, the siting, construction, and operation of the Aquatic Center will have
expanded days and hours of operation compared to current public offerings, will create substantial
benefits to and improve the quality of life of the City's residents by providing valuable and much
needed indoor aquatic opportunities for all ages, and particularly for youth in the youth/family
portions of the facility and seniors in the increased water walking areas and warm water therapy
pool; and
WHEREAS, the siting, construction, and operation of the Aquatic Center in the City will
generate new jobs, promote commerce, generate new sales tax revenue to the City (both from
construction and operations), and result in additional related economic benefits to the City and its
residents; and
WHEREAS, the Aquatic Center's location at Chesterley Park will be (a) centrally located
within the City, (b) located within a fifteen minute drive of almost all of the City's residents, (c)
easily accessed from several major thoroughfares and a major highway interchange, (d) served
by frequent and regular public transit service, (e) connected to the Yakima Greenway and
Powerhouse Canal Pathway, and (f) in close proximity to several public schools; and
WHEREAS, the YMCA has been operating and offering quality youth and family
programming in Yakima for over 100 years, including aquatic programming at the YMCA's
downtown pool for over 50 years, and
WHEREAS, the YMCA offers financial assistance in connection with the YMCA's
membership and programming fees for the purpose of increasing public access to YMCA
programs and facilities for low income individuals and families, and
WHEREAS, the YMCA has the professional experience and capability to manage and
operate the Aquatic Center, and thereby limit the City's day-to-day operation obligations and risk
in connection therewith; and
WHEREAS, the Ground Lease, Development Agreement, and Operating Agreement will
establish a public/private partnership under which (a) the City's financial contribution to the
Aquatic Center's construction costs are capped, with the YMCA assuming the obligation for
construction cost overruns and (b) the YMCA and City share equally in the long-term operational,
maintenance, repair, and capital needs of the Aquatic Facility; and
WHEREAS, without the public/private partnership established under the Ground Lease,
Development Agreement, and Operating Agreement the City (a) would not be able, due to cost
constraints, to construct and operate a new indoor aquatic facility of the size and scope required
under the Development Agreement, (b) would have to pay the full cost of constructing a new
indoor aquatic facility (or forego doing so), and (c) would be solely responsible for managing and
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operating a new indoor aquatic facility and be solely responsible for all of its operational,
maintenance, repair, and capital needs; and
WHEREAS, the YMCA's ability to participate in the construction and operation of the
Aquatic Center, from both mission and sustainability standpoints, is dependent on the YMCA's
ability to offer additional non -aquatic programs and services on the Leased Property in connection
with the aquatic programs and services that will be offered by the YMCA at the Aquatic Center;
and
WHEREAS, the YMCA's construction and operation of additional non -aquatic facilities on
the Leased Premises in connection with the Aquatic Center will increase the amount, scope, and
diversity of youth, family, and community outreach the YMCA currently offers in Yakima, and
specifically in the North Central portion of Yakima, which is a federally designated economically
distressed area and severely underserved by youth programs and facilities; and
WHEREAS, the non -aquatic facilities constructed on the Leased Premises will be fully
funded by the YMCA, but will become City owned facilities (at no cost to the City) at the expiration
of the Ground Lease; and
WHEREAS, the non -aquatic programs offered in the non -aquatic facilities constructed on
the Leased Premises, like the aquatic programs and facilities, will be open to the public for
participation and use for reasonable fees and serve a wide range of community interests,
including, community meeting space, health and wellness programs, youth outreach, and youth
sports and other programming; and
WHEREAS, the YMCA offers financial assistance in connection with the YMCA's
membership and programming fees for the purpose of increasing public access to YMCA
programs and facilities for low income individuals and families; and
WHEREAS, the long term nature, reliability, and terms of the Master Aquatic Center
Agreement, Ground Lease, Development Agreement, and Operating Agreement, attached hereto
and incorporated herein by this reference, will be relied upon by both parties and are necessary
for the YMCA's ability to procure the additional private funds and community investments needed
to cover the YMCA's portion of the Aquatic Center's construction costs and other funds needed
for the non -aquatic facilities to be constructed by the YMCA on the Leased Premises; and
WHEREAS, the City Council determines that the City, its residents, and the public in
general will derive innumerable long-term recreation, safety, health, youth, family, outreach,
social, economic, and other benefits from the YMCA's construction and operation of the Aquatic
Center and other facilities on the Leased Premises under the Ground Lease, Development
Agreement, and Operating Agreement, and as such the City Council finds that it is in the City's
best interests to enter into the Agreements attached hereto; Now, Therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager of the City of Yakima is hereby authorized and directed to execute the
attached and incorporated Master Aquatic Center Agreement, the Ground Lease, the
Development Agreement and the Operating Agreement attached hereto and incorporated herein
by this reference to provide for the City's participation in the construction of an aquatic center that
will benefit the citizens of Yakima and provide for badly needed additional recreational
opportunities.
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ADOPTED BY THE CITY COUNCIL this 27th day of October, 2015
ATTEST:
Sonya Claar Tee, City
4
Micah Cawley ayor
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PARTIES:
MASTER AQUATIC CENTER AGREEMENT
EFFECTIVE DATE:
01-41
, 2015
CITY OF YAKIMA,
a Washington municipal corporation
129 North 2nd Street
Yakima, Washington 98901
(referred to in this Agreement as the "City")
YOUNG MEN'S CHRISTIAN ASSOCIATION OF YAKIMA
(d/b/a YAKIMA FAMILY YMCA),
a Washington nonprofit corporation
5 North Naches Avenue
Yakima, Washington 98901
(referred to in this Agreement as the "YMCA")
RECITALS
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WHEREAS: The City, with one indoor public pool and one outdoor public pool owned and operated
by the City pursuant to RCW 35.21.020, has inadequate public aquatic facilities to meet the diverse needs
of its population, which is approaching 100,000 people; and
WHEREAS: The City's only existing indoor public pool consists of a six (6) lane, single body of water
housed in a worn and aging facility; and
WHEREAS: The City's only existing indoor public pool is frequently unavailable for public use due to
school district needs and competitive swimming uses; and
WHEREAS: There is no warm water therapy pool or dedicated youth/family indoor pool in the
Yakima area, either public or private; and
WHEREAS: A citizens pool advisory committee established recommendations for desired elements of
a new aquatic center, and the now proposed Aquatic Center plan incorporates those recommendations;
and
WHEREAS: Yakima has been ranked as one of the most obese cities in America, pointing out the need
for more recreation and exercise opportunities for youth and adults in our community; and
WHEREAS: Access to aquatic facilities is a valuable community resource because it provides the
City's residents with low-cost recreation options, encourages residents to learn how to swim, discourages
dangerous swimming conditions in rivers and irrigation canals, and provides access to therapeutic
activities; and
WHEREAS: In an effort to promote the overall health, safety, and welfare of Yakima's residents, the
City and the YMCA desire to enter into this Agreement in order to construct and operate new aquatic
facilities that will be open to the public for recreation, instruction, fitness, and therapeutic uses; and
Master Aquatic Center Agreement 1
18
WHEREAS: The Aquatic Center that is the subject of the incorporated agreements and all programs
conducted therein will remain open for public use at reasonable costs with no required YMCA
membership; and
WHEREAS: The Aquatic Center will more than double the existing indoor public aquatic facilities
located in Yakima and increase public access to additional and diverse indoor aquatic offerings by adding
at least three (3) separate bodies of water for public use and programming, including (a) an eight (8) lane
25 yard lap pool, (b) a warm water therapy pool, and (c) a multiuse pool area for family and youth
recreation; and
WHEREAS: The Aquatic Center's multi -pool configuration, unlike the City's current pool offerings
(both public and private), will be suitable for offering multiple programming options at the same time and
not be limited to single use options (e.g., it will be possible to simultaneously offer lap swimming, water
walking, youth/family recreation activities, and warm water therapy/fitness classes); and
WHEREAS: The siting, construction, and operation of the Aquatic Center will have expanded days
and hours of operation compared to current public offerings, will create substantial benefits to and
improve the quality of life of the City's residents by providing valuable and much needed indoor aquatic
opportunities for all ages, and particularly for youth in the youth/family portions of the facility and
seniors in the increased water walking areas and warm water therapy pool; and
WHEREAS: The Aquatic Center will promote_ public safety by offering additional lifeguard
supervised facilities for water activities and increasing public opportunities for swim lessons; and
WHEREAS: The siting, construction, and operation of the Aquatic Center in the City will generate
new jobs, promote commerce, generate new sales tax revenue to the City (both from construction and
operations), and result in additional related economic benefits to the City and its residents; and
WHEREAS: The Aquatic Center's location at Chesterley Park will be (a) centrally located within the
City, (b) located within a fifteen minute drive of almost all of the City's residents, (c) easily accessed
from several major thoroughfares and a major highway interchange, (d) served by frequent and regular
public transit service, (e) connected to the Yakima Greenway and Powerhouse Canal Pathway, and (f) in
close proximity to several public schools; and
WHEREAS: The YMCA has been operating and offering quality youth and family programming in
Yakima for over 100 years, including aquatic programming at the YMCA's downtown pool for over 50
years; and
WHEREAS: The YMCA offers financial assistance in connection with the YMCA's membership and
programming fees for the purpose of increasing public access to YMCA programs and facilities for low
income individuals and families; and
WHEREAS: The YMCA has the professional experience and capability to manage and operate the
Aquatic Center, and thereby limit the City's day-to-day operation obligations and risk in connection
therewith; and
WHEREAS: The Ground Lease, Development Agreement, and Operating Agreement will establish a
public/private partnership under which (a) the City's financial contribution to the Aquatic Center's
construction costs are capped, with the YMCA assuming the obligation for construction cost overruns and
(b) the YMCA and City share equally in the long-term operational, maintenance, repair, and capital needs
of the Aquatic Facility; and
Master Aquatic Center Agreement 2
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WHEREAS: Without the public/private partnership established under the Ground Lease, Development
Agreement, and Operating Agreement the City (a) would not be able, due to cost constraints, to construct
and operate a new indoor aquatic facility of the size and scope required under the Development
Agreement, (b) would have to pay the full cost of constructing a new indoor aquatic facility (or forego
doing so), and (c) would be solely responsible for managing and operating a new indoor aquatic facility
and be solely responsible for all of its operational, maintenance, repair, and capital needs; and
WHEREAS: The YMCA's ability to participate in the construction and operation of the Aquatic
Center, from both mission and sustainability standpoints, is dependent on the YMCA's ability to offer
additional non -aquatic programs and services on the Leased Property in connection with the aquatic
programs and services that will be offered by the YMCA at the Aquatic Center; and
WHEREAS: The YMCA's construction and operation of additional non -aquatic facilities on the
Leased Premises in connection with the Aquatic Center will increase the amount, scope, and diversity of
youth, family, and community outreach the YMCA currently offers in Yakima, and specifically in the
North Central portion of Yakima, which is a federally designated economically distressed area and
severely underserved by youth programs and facilities; and
WHEREAS: The non -aquatic facilities constructed on the Leased Premises will be fully funded by the
YMCA, but will become City owned facilities (at no cost to the City) at the expiration of the Ground
Lease; and
WHEREAS: The non -aquatic programs offered in the non -aquatic facilities constructed on the Leased
Premises, like the aquatic programs and facilities, will be open to the public for participation and use for
reasonable fees and serve a wide range of community interests, including, community meeting space,
health and wellness programs, youth outreach, and youth sports and other programming; and
WHEREAS: The YMCA offers financial assistance in connection with the YMCA's membership and
programming fees for the purpose of increasing public access to YMCA programs and facilities for low
income individuals and families; and
WHEREAS: The long term nature, reliability, and terms of the Ground Lease, Development
Agreement, and Operating Agreement will be relied upon by both parties and are necessary for the
YMCA's ability to procure the additional private funds and community investments needed to cover the
YMCA's portion of the Aquatic Center's construction costs and other funds needed for the non -aquatic
facilities to be constructed by the YMCA on the Leased Premises; and
WHEREAS: The Operating Agreement includes important requirements for continued investment by
the YMCA and the City in the upkeep, repair, and capital needs of the Aquatic Center and associated
common areas in order to maintain said facilities in accordance with the Operating Standards set forth
therein; and
WHEREAS: Because the City, its residents, and the public in general will derive innumerable long-
term recreation, safety, health, youth, family, outreach, social, economic, and other benefits from the
YMCA's construction and operation of the Aquatic Center and other facilities on the Leased Premises
under the Ground Lease, Development Agreement, and Operating Agreement, and as such it is hereby
determined by the parties hereto that the City's and the YMCA's contributions and participation under the
Ground Lease, Development Agreement, and Operating Agreement are warranted and a good and proper
use of City and YMCA resources.
Master Aquatic Center Agreement 3
20
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY
ACKNOWLEDGED, AND IN LIGHT OF THE ABOVE -STATED RECITALS AND THE BENEFITS TO BE DERIVED
HEREUNDER, THE UNDERSIGNED PARTIES AGREE AS FOLLOWS:
AGREEMENT
1. Definitions. Unless the context clearly indicates another meaning and except for terms defined in
this Agreement, all capitalized terms used in this Agreement have the same meaning given to said
terms in the Operating Agreement, Development Agreement, and Ground Lease. The following
terms, when used in this Agreement, have the following meanings, unless the context clearly
indicates another meaning:
1.1 "Aquatic Center" has the meaning given to said words in Section 2 of the Development
Agreement.
1.2 "Development Agreement" means and refers to the Development Agreement dated even
herewith by and between the City and the YMCA in connection with the development of
the Aquatic Center to be constructed by the YMCA on a portion of the Leased Premises
and all future amendments to said Development Agreement (if any).
1.3 "Ground Lease" means and refers to the Ground Lease dated even herewith by and
between the City as "Landlord" and the YMCA as "Tenant" for the YMCA's lease of the
Leased Premises and all future amendments to said Ground Lease (if any).
1.4 "Leased Premises" has the meaning given to said words in Section 1.7 of the Ground
Lease.
1.5 "Operating Agreement" means and refers to the Operating Agreement dated even
herewith by and between the City and the YMCA in connection with the operations and
management of the Aquatic Center to be constructed by the YMCA on a portion of the
Leased Premises and all future amendments to said Operating Agreement (if any).
2. Recitals Incorporated. The above -stated Recitals are part of, incorporated into, and constitute
part of this Agreement.
3. Other Agreements. Subject to the Due Diligence, Funding, and RCO Contingencies set forth
therein and in anticipation of the benefits to be derived thereunder as described in the above -
stated Recitals, the undersigned parties agree to enter into and execute the Ground Lease attached
as Exhibit 1, the Development Agreement attached as Exhibit 2, and the Operating Agreement
attached as Exhibit 3 simultaneously with the execution of this Agreement.
4. Miscellaneous Terms.
4.1 Amendments. This Agreement may not be modified or amended except by written
agreement signed and acknowledged by each of the parties hereto.
4.2 No Agency Relationship. Nothing contained in this Agreement creates the relationship
of principal and agent between the parties hereto.
4.3 Exhibits. There are no attachments to this Agreement except for the Exhibits expressly
referenced in this Agreement and those separately attached to the agreements attached as
Master Aquatic Center Agreement 4
21
exhibits hereto, each of which constitutes a part of this Agreement as if set forth in full
herein.
4.4 Headings; Construction. The captions and paragraph headings used in this Agreement
are inserted for convenience of reference only and are not intended to define, limit, or
affect the interpretation or construction of any term or provision of this Agreement. This
Agreement shall not be construed more strictly against one party than the other by virtue
of the fact that one party drafted this Agreement and/or certain clauses contained herein.
It is hereby recognized that both parties to this Agreement and their respective counsel
have had a full and fair opportunity to negotiate and review all terms and provisions of
hereof and to fully contribute to this Agreement's substance and form.
4.5 Governing Law. This Agreement will be interpreted, construed, and governed by the
laws of the State of Washington.
4.6 Binding Effect. Subject to any limitations on assignments provided for in this
Agreement, all of the provisions of this Agreement will inure to the benefit of and be
binding on the successors and assigns of the City and the YMCA.
4.7 Counterparts and Copies. This Agreement may be executed in any number of identical
counterparts, with each counterpart having the same effect as if all parties to this
Agreement had signed the same document. All executed counterparts of this Agreement
will be construed as and constitute one and the same instrument. A facsimile or
electronic copy (e.g., a PDF copy) of an executed counterpart of this Agreement will
have the same effect as an original executed counterpart of this Agreement.
4.8 Severability. If any provision of this Agreement or the application thereof to any person
or circumstances shall to any extent be held to be invalid or unenforceable, such
provision shall not affect or invalidate the remainder of this Agreement, and to this end
the provisions of this Agreement are declared to be severable. If such invalidity becomes
known or apparent to the parties, the parties agree to negotiate promptly in good faith in
an attempt to amend such provision as nearly as possible to be consistent with the intent
of this Agreement.
4.9 Entire Agreement. This Agreement, together with the associated Ground Lease,
Development Agreement, and Operating Agreement, constitutes the entire understanding
and agreement of the parties to this Agreement with respect to its subject matter. All
prior agreements, understandings, or representations with respect to this Agreement's
subject matter are hereby canceled in their entirety and are of no further force or effect. It
is expressly acknowledged that there are no oral or other agreements which modify or
affect this Agreement.
4.10 Authority. The execution, delivery, and performance by each party of this Agreement
has been duly authorized by their respective governing bodies (i.e., the YMCA's Board
of Directors and the City Council for the City of Yakima) in accordance with their
respective governing documents and applicable law, and no further action is necessary on
the part of either party to this Agreement or their respective governing bodies to make the
execution, delivery, and performance of this Agreement by the undersigned persons valid
and binding upon the parties to this Agreement.
[Signatures on Following Page]
Master Aquatic Center Agreement 5
EFFECTIVE as of the Effective Date first written above.
YOUNG MEN'S CHRISTIAN
ASSOCIATION OF YAKIMA
By:
Bob Romero, CEO
Master Aquatic Center Agreement
CITY OF YA
22
Tony O'Rourk: City Manager
CITY CONTRAC r No: a 0 j 5 - Co
RESOLUTION N0: - a0 ' 5 - 12-8
6
STATE OF WASHINGTON
) ss.
COUNTY OF YAKIMA
23
I certify that I know or have satisfactory evidence that BOB ROMERO is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CEO for the YOUNG
MEN'S CHRISTIAN ASSOCIATION OF YAKIMA to be the free and voluntary act of such party for
the uses and purposes mentioned in the instrument.
DATED: ®hp Ar" e?" --1) , 2015.
Notary Public
State of Washington
JODI L STEPHENS
MY COMMISSION EXPIRES
August 11, 2018
STATE OF WASHINGTON
) ss.
COUNTY OF YAKIMA
T NAMSlee/e �r
NOTARY PUBLIC fori‘tc State of Was n to ,
residing at /.2e, a'11 i G ft4C.
My appointment expires
I certify that I know or have satisfactory evidence that TONY O'ROURKE is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CITY MANAGER for the
CITY OF YAKIMA to be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument. �
DATED: Oa- Y` (/
, 2015.
Notary Public
State of Washington
SONYA R CLAAR TEE
MY COMMISSION EXPIRES
OCTOBER 25, 2018
Master Aquatic Center Agreement
tee
[PRINT NAME] •-•..vr1
NOTARY PUBLIC for the State of Washington,
residing at
My appointment expires:
7
24
EXHIBIT 1
Ground Lease
[See Attached]
EXHIBIT 1
25
PARTIES:
GROUND LEASE
EFFECTIVE DATE:
CITY OF YAKIMA,
a Washington municipal corporation
129 North 2nd Street
Yakima, Washington 98901
(referred to in this Lease as "Landlord")
, 2015
YOUNG MEN'S CHRISTIAN ASSOCIATION OF YAKIMA
(d/b/a YAKIMA FAMILY YMCA),
a Washington nonprofit corporation
5 North Naches Avenue
Yakima, Washington 98901
(referred to in this Lease as "Tenant")
BACKGROUND. See the Recitals set forth in the Master Agreement.
AGREEMENT. LANDLORD HEREBY LEASES TO TENANT AND TENANT HEREBY LEASES FROM
LANDLORD THE LEASED PREMISES IN ACCORDANCE WITH THE FOLLOWING TERMS AND CONDITIONS:
1. Definitions. Unless the context clearly indicates another meaning and except for terms defined in
this Lease, all capitalized terms used in this Lease have the same meaning given to said terms in
the Development Agreement and Operating Agreement. The following terms, when used in this
Lease, have the following meanings, unless the context clearly indicates another meaning:
1.1 "Aquatic Center" means and refers to the "Aquatic Center" described in Section 2 of the
Development Agreement.
1.2 "Development Agreement" means and refers to the Development Agreement dated even
herewith by and between Landlord and Tenant in connection with the development of the
Aquatic Center to be constructed by Tenant on a portion of the Leased Premises and all
future amendments to said Development Agreement (if any).
"Due Diligence Contingency" has the meaning given to said words in Section 2.1 below.
"Extended Term" has the meaning given to said words in Section 3.2 below.
"Funding Contingency" has the meaning given to said words in Section 2.2 below.
"Initial Term" has the meaning given to said words in Section 3.1 below.
"Leased Premises" means and refers to the Yakima County, Washington real property
described on attached Exhibit A-1, together with all utility and other improvements
located thereon. The Leased Premises, which is approximately seven and one-half (7.5)
acres in area and constitutes a portion of the Parent Parcels, is generally depicted and
labeled as the "Leased Premises" on the drawing attached as ExhibitA-2.
Ground Lease 1
26
1.8 "Master Agreement" means and refers to the Master Agreement dated even herewith by
and between Landlord and Tenant and all future amendments to said Master Agreement
(if any). This Lease is entered into pursuant to the Master Agreement and the recitals and
all other terms set forth in the Master Agreement are part of, incorporated into, and
constitute a part of this Lease as if set forth in full herein.
1.9 "Opening Date" has the meaning given to said words in Section 1.22 of the Operating
Agreement.
1.10 "Operating Agreement" means and refers to the Operating Agreement dated even
herewith by and between Landlord and Tenant in connection with the operations and
management of the Aquatic Center to be constructed by Tenant on a portion of the
Leased Premises under the Development Agreement and all future amendments to said
Operating Agreement (if any).
1.11 "Other Facility" means and refers to the "Other Facility" described in Section 2 of the
Development Agreement.
1.12 "Parent Parcels" means and refers to the Yakima County, Washington real property
commonly referred to as Yakima County Assessor Parcel Nos. 181315-13002, 181315-
31003, 181315-13005, and 181315-13006.
1.13 "Possession Date" has the meaning given to said words in Section 3 below.
1.14 "RCO Contingency" has the meaning given to said words in Section 2.3 below.
1.15 "Term" has the meaning given to said word in Section 3.3 below.
2. Contingencies and Other Agreements.
2.1 Due Diligence Contingency. Tenant's obligation to lease the Leased Premises under this
Lease is contingent on and subject to Tenant's determination that the conditions and
features of the Leased Premises are acceptable to Tenant, in Tenant's sole and absolute
discretion (the "Due Diligence Contingency"). In making said determination, Tenant
shall have the right, at Tenant's expense, to inspect, review, and investigate the Leased
Premises and its conditions and features. Said inspection, review, and investigation may
include, without limitation, (a) hazardous waste inspection (including borings for water
and soil sampling); (b) engineering, geotechnical, and soil studies; (c) utility, zoning, and
other development studies; (d) economic feasibility of operating facilities on the Leased
Premises for Tenant's intended uses; (e) a survey of the Leased Premises; (f) title review;
(g) contacting any or all state, county, and city agencies, as well as all water, sewer, and
other special districts, in which the Leased Premises is located (if any); and (h) such other
due diligence as may be deemed reasonably necessary by Tenant in determining whether
the Leased Premises is suitable for Tenant's intended uses.
Tenant intends to obtain a Phase I Environmental Site Assessment (a "Phase 1 ESA") for
the Leased Premises. If the Phase I ESA indicates that hazardous substances may be
located on the Leased Premises or if the Phase I ESA recommends further environmental
testing, Tenant may, at Tenant's expense, obtain a Phase II Environmental Site
Assessment (a "Phase H ESA") for the Leased Premises as recommended by the Phase I
ESA.
Ground Lease 2
27
Tenant will provide Landlord with complete copies of any and all Phase I and Phase II
ESAs (and amendments and supplements thereto) obtained or otherwise received by
Tenant that pertain to the Leased Premises within ten (10) business days of Tenant's
receipt of the same. Tenant makes no representation or warranty as to the accuracy,
correctness or otherwise of any Phase I or Phase II ESA (and amendments and
supplements thereto). Tenant provides copies to Landlord and such copies are not
intended to be relied upon by Landlord or any third parties.
The Due Diligence Contingency will be deemed satisfied unless Tenant gives written
notice to Landlord of Tenant's termination of this Lease under this Section 2.1 on or
before April 30, 2016.
From and after the Effective Date of this Lease, Tenant and Tenant's authorized agents,
employees, contractors, and invitees shall have the right at reasonable times to enter upon
the Leased Premises for the purpose of conducting the due diligence review described in
this Section 2.1; provided, however, Tenant shall keep the Leased Premises free and clear
of any liens resulting from such investigation and inspection by Tenant or any of
Tenant's agents, employees, contractors, or invitees, and Tenant agrees to indemnify,
defend, and hold harmless Landlord from all injuries, deaths, claims, losses, damages,
and/or other liabilities (collectively "Claims") caused by the negligent acts or omissions
or intentional misconduct of Tenant or Tenant's agent(s), employee(s), or
representative(s) while present on the Leased Premises under this Section 2.1; provided,
however, that in no event shall such indemnity extend to any (a) release of pre-existing
hazardous substances present on the Leased Premises as of the Effective Date; (b) any
pre-existing conditions on or about the Leased Premises, or (c) any Claims to the extent
said claims result from the negligent act or omission or intentional misconduct of
Landlord or any agent, contractor, employee, representative, or invitee of Landlord.
2.2 Funding Contingency. Landlord's and Tenant's respective obligations to lease the
Leased Premises under this Lease are each contingent on and subject to Tenant securing
at least eighty percent (80%) of the funding needed to construct the Aquatic Center, the
Other Facility, and such other improvements (collectively the "Project") Tenant intends
to construct and operate on the Leased Premises (the "Funding Contingency"), which
may include Tenant's cash holdings, donation pledges made to Tenant for the Project (as
evidenced by bona fide written pledges), Landlord's Financial Contribution under
Section 3 of the Development Agreement, and financing secured by Tenant (as evidenced
by one or more bona fide financing commitment letter(s)).
If the Funding Contingency is not satisfied by Tenant giving Landlord written notice of
the satisfaction of the Funding Contingency (and reasonable evidence confirming the
satisfaction thereof) on or before December 31, 2017 (the "Funding Deadline"), either
Landlord or Tenant may thereafter terminate this Lease upon at least sixty (60) days'
prior written notice given to the other party; provided, however, in the event Landlord
gives Tenant written notice of termination under this Section 2.2, Tenant will have the
opportunity during said 60 -day notice period to satisfy the Funding Contingency and
prevent Landlord's termination of this Lease under this Section 2.2.
2.3 RCO Contingency. Landlord's and Tenant's respective obligations to lease the Leased
Premises under this Lease are contingent on and subject to the Interagency Committee for
Outdoor Recreation for Washington State or its successor(s) (which are believed to be the
Ground Lease 3
28
National Park Service and/or Washington Recreation Conservation Office) (collectively
"RCO"), permitting the Leased Property to be removed from the existing outdoor
recreational use restriction that applies to the Leased Premises ("RCO Consent") and
thereby consenting to Tenant's use of the Leased Premises under this Lease (the "RCO
Contingency"). It is understood that RCO Consent will be granted (and the RCO
Contingency satisfied) if Landlord provides and places a comparable outdoor recreational
use restriction on separate property of comparable value and use (the "Replacement
Property").
Landlord will act in good faith and use its best efforts and due diligence to promptly (a)
meet the Replacement Property requirements established by RCO, (b) obtain the RCO
Consent in recordable form, and (c) satisfy the RCO Contingency. In doing so, Landlord
will, at a minimum, offer as Replacement Property certain property now owned or under
contract for purchase by the City that is located adjacent to the new SOZO soccer
development that is of equal (or greater) size and of equal (or greater) fair market value to
the Leased Premises (the "SOZO-Adjacent Property"). In the event the SOZO-Adjacent
Property, in spite of the City's due diligence and good faith and best efforts, is rejected as
Replacement Property by RCO, the City will identify and offer different property as
Replacement Property for the purpose of obtaining RCO Consent and satisfying the RCO
Contingency; provided, however, in the event RCO Consent cannot be obtained and the
RCO Contingency satisfied by December 31, 2017 (the "RCO Deadline"), either
Landlord or Tenant may thereafter terminate this Lease upon at least ninety (90) days'
prior written notice given to the other party.
2.4 Effect of Termination. Subject to the provisions of Section 13.16 below (i.e., the
"Survival" clause) and except as otherwise expressly provided in the Development
Agreement and/or Operating Agreement, in the event this Lease is terminated as
permitted under Section 2.1, 2.2, or 2.3 above as a result of the non -satisfaction of the
Due Diligence Contingency, Funding Contingency, or RCO Contingency, the
Development Agreement and Operating Agreement will automatically terminate when
this Lease terminates, and neither party to said agreements will have any further rights,
duties, or obligations under the Lease, the Development Agreement or the Operating
Agreement.
2.5 Development Agreement and Operating Agreement. This Lease is subject to and
together with the terms of the Development Agreement and Operating Agreement and the
undersigned parties' respective rights and obligations thereunder. In the event of a
conflict between the provisions of said three documents, the terms of the Operating
Agreement shall prevail.
2.6 Boundary Adjustments. On or before the Possession Date, Landlord, at Landlord's
expense, will cause the boundary lines for the Parent Parcels to be reconfigured such that
the Leased Premises will become and exist as a separate standalone Yakima County
parcel.
3. Term.
3.1 Initial Term. The "Initial Term" of this Lease will commence ninety (90) days after the
satisfaction of each of the Due Diligence, Funding, and RCO Contingencies under
Sections 2.1, 2.2, and 2.3 above (unless Landlord and Tenant mutually agree in writing
on some earlier or later date) (the "Possession Date") and will expire exactly forty (40)
Ground Lease 4
29
years after the Opening Date under the Operating Agreement. Upon the determination of
the Opening Date under the Operating Agreement, Landlord and Tenant will execute a
written and acknowledged memorandum for the purpose of confirming the expiration
date for the Initial Term of this Agreement. Subject to the terms of this Lease, Tenant
will take possession of the Leased Premises on the Possession Date free of all other
leases and tenancies.
3.2 Extended Terms. The Initial Term will automatically extend for three (3) separate and
additional ten (10) year periods (each an "Extended Term") on the same terms and
conditions set forth in this Lease unless Tenant, at least six (6) months before the
commencement of an Extended Term, gives Landlord written notice of Tenant's election
to not extend the term of this Lease for the next Extended Term.
3.3 Term (Defined). The word "Term," when used in this Lease, means and refers to the
Initial Term set forth in Section 3.1 above and the Extended Terms provided for under
Section 3.2 above when and if the term of this Lease is extended under said Section 3.2.
In the event the Term is extended for each of the three (3) Extended Terms described in
Section 3.2 above, the total Term of this Lease would be seventy (70) years from the
Opening Date.
4. INTENTIONALLY OMITTED.
5. Rent.
5.1 Base Rent. During the Term, Tenant will pay Landlord "Base Rent" in the amount of
One and No/100 U.S. Dollars ($1.00) per year for Tenant's rental and use of the Leased
Premises. It has been determined by Landlord that the nominal rent set forth in this
paragraph is reasonable considering the benefits to be derived by Landlord and the public
from the development and operation by Tenant of the Aquatic Center to be constructed
by Tenant on a portion of the Leased Premises.
5.2 Additional Rent. In addition to the Base Rent described in Section 5.1 above, Tenant
will also pay those other charges and expenses this Lease provides are to be paid by
Tenant. All payments required to be paid by Tenant under this Lease, other than Base
Rent, will constitute "Additional Rent"
6. Use.
6.1 Easements, Restrictions, Etc. Tenant's lease of the Leased Premises under this Lease is
together with all rights of and appurtenances to the Leased Premises (including, but not
limited to, all water and water rights and all access, utility, and other easements that
benefit the Leased Premises) and is subject to the following (collectively the
"Restrictions"): (a) all easements, covenants, restrictions, and other agreements of record
as of the Effective Date of this Lease; and (b) all zoning and building laws applicable to
the Leased Premises. Landlord represents and warrants that the Restrictions will not
prevent nor unreasonably interfere with Tenant's use and occupancy of the Leased
Premises for the Permitted Uses as set forth in this Lease. Moreover, from the Effective
Date of this Lease and until the conclusion of Tenant's rights hereunder, Landlord
covenants that Landlord will not encumber the Leased Premises with any new easement,
covenant, restriction, agreement, or other encumbrance that limits or otherwise affects the
title to or use of the Leased Premises after the Effective Date of this Lease unless and
Ground Lease 5
30
until Tenant consents thereto in a signed and acknowledged writing recorded in the
records of Yakima County, Washington. Moreover, subject to satisfaction of the RCO
Contingency and Landlord's obligations under Section 2.3 above, Landlord will cause the
instrument recorded on or about August 12, 1976, under Yakima County Auditor's File
No. 2431304 to be released from the Leased Premises so that it no longer encumbers the
Leased Premises.
To accommodate Tenant's construction on and/or use of the Leased Premises, Tenant, at
Tenant's expense, is permitted to relocate any City utilities that run over, under, or
otherwise across the Leased Premises to new locations within the Leased Premises (or the
areas located within fifty (50) feet south and fifty (50) feet east of the Leased Premises) so
long as said work is completed in a workmanlike manner and in accordance with the City
of Yakima Public Works Department's reasonable design and construction specifications
for the relocated location of the utilities. In the course of relocating any utilities under
this paragraph, Tenant will be permitted to abandon existing portions of utilities that are
replaced with new utility improvements under this paragraph. Landlord and Tenant
specifically acknowledge Tenant's anticipated need to relocate the City wastewater
pipeline that runs east -west across the center of the Leased Premises.
6.2 Permitted Uses. Tenant shall have the right to use the Leased Premises for not-for-profit
purposes that include the construction and operation of (a) an aquatic center (including
both the Aquatic Center and any additions, modifications, expansions, or improvements
thereto made by Tenant from time to time); (b) a YMCA facility (including both the
Other Facility and any additions, modifications, expansions or improvements thereto
made by Tenant from time to time) initial facilities and any expansion facilities) and
YMCA programming; (c) community center; (d) nonprofit office, program, service,
and/or meeting space; (e) health, fitness, medical, and/or wellness facility; and (f) all
reasonably related business and/or incidental operations/activities, and for no other use,
unless and until Landlord consents in writing to the other use, which consent may not be
unreasonably withheld (the "Permitted Uses"). It is expressly acknowledged and agreed
that the following activities (whether conducted in a non-profit or for-profit capacity)
constitute Permitted Uses under this Lease: (a) Tenant's operation and/or sublease of a
portion of Tenant's facilities on the Leased Premises (including the Other Facility and
Common Areas, but excluding the Aquatic Center) to one or more third parties for the
operation of a cafe, coffee cart, concession stand, and/or a similar food/beverage-related
businesses; (b) Tenant's sublease of a portion of Tenant's facilities on the Leased
Premises (including the Other Facility and Common Areas, but excluding the Aquatic
Center) to one or more third parties for the operation of onsite healthcare services,
including, without limitation, physical therapy in the Aquatic Center and/or Other
Facility operated by Tenant on the Leased Premises; and (c) Tenant's sublease of a
portion of Tenant's facilities on the Leased Premises (including the Other Facility and
Common Areas, but excluding the Aquatic Center) to one or more nonprofit entities for
non-profit purposes.
6.3 Parking. The parking lot, entryway, sidewalks, curbs, lighting, landscaping, and other
improvements generally depicted and labeled as the "Existing Parking Lot" on the
drawing attached as Exhibit A-2 (the "Existing Parking Lot") are included within the
Leased Premises; provided, however, the Existing Parking Lot will remain under
Landlord's control for general public use (e g., Chesterley Park users). Notwithstanding
the foregoing, during the entire Term of this Lease, Tenant and Tenant's agents,
independent contractors, employees, customers, suppliers, representatives, and invitees
Ground Lease 6
31
will at all times (a) have access to and from the Leased Premises over the Existing
Parking Lot and (b) be permitted the shared use of the Existing Parking Lot on a "first
come/first served/non-reserved basis" in connection with their use of the facilities
operated on the Leased Premises; provided, however, said use, during periods of
construction on the Leased Premises shall not include Tenant's contractors utilizing part
or all of the Existing Parking Lot for locating construction trailers, storing construction
materials, and staging equipment or supplies, , or in any way substantially impacting the
public access to and use of the Existing Parking Lots (instead, said uses activities must be
confined to the remainder of the Leased Premises).
During the Term, Landlord, at Landlord's expense (but subject to the terms of the
Operating Agreement), will operate and keep and maintain the Existing Parking Lot and
each of its existing amenities (e g , parking lot spaces, entryway to and from River Road,
sidewalks (if any), landscaping, lighting, etc.) in good condition and in the customary
manner as other paved and lighted public parking lots are maintained by Landlord, and in
doing so, Landlord covenants to maintain the same number of parking spaces now
contained within the Existing Parking Lot and at least half of the number of handicapped
parking spaces needed to meet all legal requirements in connection with the Existing
Parking Lot's use in connection with the Aquatic Center. Furthermore, Landlord, at
Landlord's sole expense, is responsible for all ice and snow removal from the Existing
Parking Lot's driveways, walkways, and parking area.
Except when caused by the negligent act or omission or intentional misconduct of Tenant
or Tenant's agent(s), employee(s), invitee(s), or representative(s), Landlord will
indemnify, defend, and hold harmless Tenant and Tenant's directors, officers, employees,
agents, and representatives from and against any and all injuries, deaths, claims, losses,
damages, and/or other liabilities occurring on or about the Existing Parking Lot incurred
in connection with or as a result of the public's presence on or use of the Existing Parking
Lot.
During the Term, with an insurer and in form and substance reasonably satisfactory to
Tenant, Landlord, at Landlord's sole expense, will procure and maintain Commercial
General Liability insurance covering the Existing Parking Lot that covers Bodily Injury,
Property Damage and Personal Injury with limits of not less than $2,000,000 Each
Occurrence; $4,000,000 General Aggregate. The insurance policy/policies required under
this Section 6.3 will be endorsed to name Tenant as an additional insured on a primary
and non-contributory basis. The insurance coverage values shall be subject to review and
revision, to be consistent with current costs and values, no less than once every ten years
from the beginning of the Lease Term until the Lease terminates.
When requested by Tenant, Landlord will furnish Tenant with complete copies of the
insurance policy/policies required under this Section 6.3 and certificates of insurance
from the insurer(s) for said policy/policies that evidence that the insurance required under
this Section 6.3 is in full force and effect, that Tenant has been and continues to be named
as an additional insured thereon, and that the policy/policies may not be cancelled unless
at least twenty (20) days' prior written notice of a contemplated cancellation has been
given to Tenant at Tenant's above -written address.
Notwithstanding the foregoing, it is acknowledged and confirmed that Tenant will have
the exclusive use, responsibility for, and control of any additional parking lot constructed
by Tenant on the remainder of the Leased Premises.
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6.4 Compliance with Laws. Tenant's use of the Leased Premises will comply, at Tenant's
expense (but subject to the terms of the Operating Agreement), with all applicable laws,
regulations, and requirements.
6.5 Nuisance. Aside from the Permitted Uses allowed under Section 3.2 above, Tenant will
not conduct nor permit any other activities on the Leased Premises that will create a
public or private nuisance.
6.6 Supervision. Tenant will supervise Tenant's employees and use reasonable efforts to
cause Tenant's agents, independent contractors, employees, customers, suppliers,
representatives, and invitees to conduct their activities in such a manner as to comply
with the requirements of this Lease.
6.7 Violations of Law. Landlord represents and warrants that Landlord is not aware of any
violations of law that exist with regard to the Leased Premises, including, without
limitation, laws pertaining to occupational hazards, environment violations (e.g.,
hazardous materials or substances, leaking underground storage tanks, etc.), or violations
of the Americans With Disabilities Act (or any similar federal, state, or local law).
Landlord will indemnify, defend, and hold harmless Tenant and Tenant's directors,
officers, employees, agents, and representatives from any costs, expenses, attorneys' fees,
or liabilities relating to any violation of law that existed with regard to the Leased
Premises on the Possession Date and will be responsible for all expenses needed to
correct or remedy the violation of law.
7. Utilities and Taxes.
7.1 Utilities. Except as set forth in Section 6.3 above, Tenant will pay, prior to delinquency,
all charges for utilities and services supplied to the Leased Premises during the Term,
including, without limitation, service charges for electricity, gas, telephone, internet,
water, sewer, irrigation, and garbage collection. Landlord will not be liable for any
failure or interruption of utilities or services to the Leased Premises, unless caused by the
negligent act or omission or intentional misconduct of Landlord or Landlord's agent(s),
employee(s), or representative(s). Tenant shall also be responsible for payment of all
stormwater fees assessed by the City for stormwater costs resulting from any new parking
facility constructed by Tenant on the Leased Premises.
7.2 Real Property Taxes. Landlord will pay, prior to delinquency, all real property taxes and
other assessments assessed against and/or levied during the Term on the Leased Premises
(to the extent the Leased Premises are not exempt from said taxation); provided, however,
Tenant will pay, prior to delinquency, all real property taxes and other assessments
assessed against and/or levied during the Term on real property improvements
constructed on the Leased Premises by Tenant (to the extent said improvements are not
exempt from said taxation).
7.3 Personal Property Taxes. Tenant will pay, prior to delinquency, all personal property
taxes and other assessments assessed against and/or levied during the Term on
machinery, equipment, trade fixtures, furnishings, and other personal property kept on the
Leased Premises by Tenant (to the extent said property is not exempt from said taxation).
When possible, Tenant will cause said machinery, equipment, trade fixtures, furnishings
Ground Lease 8
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and all other personal property to be assessed and billed separately from the Leased
Premises.
8. Insurance and Indemnification.
8.1 Tenant's Insurance Obligations. During the Term, with an insurer and in form and
substance reasonably satisfactory to Landlord, Tenant, at Tenant's expense (but subject to
the terms of the Operating Agreement), will procure and maintain Commercial General
Liability insurance over the Leased Premises that covers Bodily Injury, Property Damage
and Personal Injury with limits of not less than $2,000,000 Each Occurrence; $4,000,000
General Aggregate. The insurance policy/policies required under this paragraph will be
endorsed to name Landlord as an additional insured on a primary and non-contributory
basis. The insurance coverage values shall be subject to review and revision, to be
consistent with current costs and values, no less than once every ten years from the
beginning of the Lease Term until the Lease terminates.
When requested by Landlord, Tenant will furnish Landlord with complete copies of the
insurance policy/policies required under this Section 8.1 and certificates of insurance
from the insurer(s) for said policy/policies that evidence the insurance required under this
Section 8.1 is in full force and effect, Landlord has been and continues to be named as an
additional insured thereon, and that the policy/policies may not be cancelled unless at
least twenty (20) days' prior written notice of a contemplated cancellation has been given
to Landlord at Landlord's above -written address.
During the Term, Tenant, at Tenant's expense (but subject to the terms of the Operating
Agreement), will be solely responsible for insuring any and all personal property that is
not part of the Leased Premises that is stored or otherwise kept in or on the Leased
Premises by Tenant, whether said personal property is owned by Tenant or any other
third party, and on all tenant improvements and betterments Tenant incorporates into the
Leased Premises.
8.2 Waiver of Subrogation Rights. Tenant and Landlord each waive any and all rights of
recovery against the other, or against the agents, independent contractors, employees,
customers, suppliers, representatives, and invitees of each other, for loss of or damage to
such waiving party, property, or property of others under its or their control, where such
loss or damage is insured against under any insurance policy in force at the time of such
loss or damage. Further, Landlord and Tenant will cause their respective insurers to
waive said insurers' respective rights of subrogation/recovery against the other party
pursuant to this provision and to provide one another, at their respective requests, with
written notice of said waivers.
8.3 Indemnification by Tenant. Except when caused by the negligent act or omission or
intentional misconduct of Landlord or Landlord's agent(s), employee(s), or
representative(s), but subject to the provisions of Section 8.2 above, Tenant will
indemnify, defend, and hold harmless Landlord and Landlord's elected and appointed
officials, employees, agents, and representatives from and against any and all claims of
third parties arising from Tenant's use of the Leased Premises, or from the conduct of
Tenant's business, or from any activity, work, or things done, permitted, or suffered by
Tenant in or about the Leased Premises; and, further, subject to the provisions of Section
8.2 above, Tenant will indemnify, defend, and hold harmless Landlord and Landlord's
elected and appointed officials, employees, agents, and representatives from and against
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any and all other injuries, deaths, claims, losses, damages, and/or other liabilities on or
about the Leased Premises caused by the negligent act or omission or intentional
misconduct of Tenant or Tenant's agent(s), employee(s), or representative(s). The
liability of Tenant, and any indemnities provided by Tenant under this paragraph, will not
extend to hazardous materials that were not placed in, on, or about the Leased Premises
by Tenant, or by any of Tenant's agents, employees, representatives, or invitees.
8.4 Indemnification by Landlord Except when caused by the negligent act or omission or
intentional misconduct of Tenant or Tenant's agent(s), employee(s), or representative(s),
but subject to the provisions of Section 8.2 above, Landlord will be responsible for and
indemnify, defend, and hold harmless Tenant and Tenant's directors, officers, employees,
agents, and representatives from and against any and all claims arising from any breach
of or default in the performance of any obligation of Landlord's part to be performed
under the terms of this Lease; and, further, subject to the provisions of Section 8.2 above,
Landlord will be responsible for and will indemnify, defend, and hold harmless Tenant
and Tenant's directors, officers, employees, agents, and representatives from and against
any all other injuries, deaths, claims, losses, damages, and/or other liabilities on or about
the Leased Premises caused by the negligent act or omission or intentional misconduct of
Landlord or Landlord's agent(s), employee(s), or representative(s). The liability of
Landlord, and any indemnities provided by Landlord under this paragraph, will not
extend to hazardous materials that were not placed in, on, or about the Leased Premises
by Landlord, or by any of Landlord's elected or appointed officials, agents, employees,
representatives, or invitees.
8.5 Additional Indemnification Provisions. Each party to this Lease ("Indemnfing Party")
shall indemnify, defend, and hold harmless the other party to this Lease (the "Indemnified
Party") from and against all claims asserted by persons not parties to this Lease arising
from or relating to the Indemnifying Party's breach of this Lease, negligence, intentional
misconduct, or violation of law.
Notwithstanding the foregoing provisions of Sections 8.3, 8.4, and 8.5 above, in
compliance with RCW 4.24.115 as in effect on the date of this Lease, in the event of the
concurrent negligence of Landlord or Landlord's agent(s), employee(s), or
representative(s), on the one hand, and that of Tenant or Tenant's agent(s), employee(s),
or representative(s), on the other hand, which concurrent negligence results in claims
occurring on or about the Leased Premises, either party's obligation to indemnify the
other party as set forth in Sections 8.3, 8.4, and 8.5 above shall be limited to the extent of
the negligence of such party or its agent(s), employee(s), or representative(s), including
such party's proportional share of costs and attorneys' fees incurred in connection with
such claims. In no event shall Landlord or Tenant be indemnified for its sole negligence
or that of its agent(s), employee(s), or representative(s).
9. Condition, Maintenance, Repairs, and Alterations.
9.1 Condition of Leased Premises. Landlord represents and warrants to Tenant that on the
Possession Date the Leased Premises will be free of structures, debris, and improvements
aside from those that exist as of the Effective Date of this Lease (e.g., existing utilities
and Existing Parking Lot improvements). Landlord represents and warrants to Tenant
that on Opening Day the Exhibit Parking Lot will be in a condition suitable for public use
in connection with the Aquatic Center and Other Facility and that within a reasonable
period of time after Operating Day (but in no event longer than six months after Opening
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Day) the City will fill all cracks, repair all curbs, and sealcoat all pavement within the
Existing Parking Lot. If any warranty made in this Section 9.1 is violated, then it will be
the obligation of Landlord, after notice from Tenant setting forth the nature of the
violation, to promptly, at Landlord's expense, rectify such violation. Except as otherwise
provided in this Lease, Tenant accepts the Leased Premises "AS IS" and in their
condition existing as of the Possession Date.
9.2 Tenant's Obligations. Subject to the provisions of Sections 6.3 and 9.1 above and except
for ordinary wear and tear, damage by fire or other casualty, and damage caused by the
negligent acts or omissions or intentional misconduct of Landlord or Landlord's agent(s),
employee(s), or representative(s), during the Term, Tenant, at Tenant's expense (but
subject to the terms of the Operating Agreement), will keep the Leased Premises in good
repair and proper working order. Furthermore, Tenant, at Tenant's expense (but subject
to the terms of the Operating Agreement and Section 6.3 above), is responsible for all ice
and snow removal from the Leased Premises' driveways, walkways, and parking area.
9.3 Alterations. Tenant shall have the right, without further consent or approval from
Landlord, to construct facilities, conduct renovations, and make alterations to
improvements located on the Leased Premises when and as determined by Tenant,
provided said construction, renovations, and alterations (a) are not in violation of the
Development Agreement or the Operating Agreement; (b) are for Permitted Uses under
this Lease; (c) do not unreasonably impair the public use of the Aquatic Center in
accordance with the terms of the Operating Agreement; and (d) are in compliance with all
applicable laws, regulations, and requirements, including, without limitation, all zoning
and construction permit requirements.
Tenant will pay when due all claims for labor and materials furnished for or to Tenant for
use in or on the Leased Premises. Except as expressly set forth in this Section 9.3,
Tenant will not permit any mechanics' or materialmen's liens to be levied against the
Leased Premises for any labor or materials furnished to Tenant or claimed to have been
furnished to Tenant or Tenant's agents or contractors in connection with work of any
character performed or claimed to have been performed on the Leased Premises by or at
the direction of Tenant; provided, however, Tenant may, in good faith, contest any claim
of lien so long as Tenant prevents foreclosure and, in such event, Tenant will defend and
hold Landlord and the Leased Premises harmless from any consequences of such action,
including, without limitation, costs and reasonable attorneys' fees incurred. Except as
provided in the immediately preceding sentence, if Tenant fails to pay any such lien
claim or to discharge any such lien within one hundred eighty (180) days following the
filing of such lien, Landlord may do so and collect such amount as Additional Rent.
Amounts paid by Landlord will bear interest and be repaid by Tenant as provided in
Section 12.2 below.
9.4 Signage. Tenant, at Tenant's expense (but subject to the terms of the Operating
Agreement), may install and maintain signs on the Leased Premises, provided such signs
are installed and maintained in compliance with all applicable laws, regulations, and
requirements.
9.5 Surrender of Leased Premises. On the last day of the Term, Tenant will surrender
possession of the Leased Premises (and all improvements, renovations, and alterations
constructed on the Leased Premises) to Landlord in their "AS IS" condition at said time.
All improvements, renovations, and alterations constructed on the Leased Premises by or
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on behalf of Tenant, including, but not limited to, the Aquatic Center and the Other
Facility, shall be and remain Tenant's property until the expiration of the Term, at which
time such improvements shall be surrendered by Tenant as part of the Leased Premises
and Landlord will become the owner of said items. Notwithstanding the foregoing, at the
end of the Term, Tenant's machinery, trade fixtures, furnishings, and equipment will
remain the property of the Tenant and may be removed by Tenant from the Leased
Premises, subject to Tenant's obligation to repair any damage to the Leased Premises
caused by the removal of Tenant's machinery, trade fixtures, furnishings, and equipment,
which repair will include the patching and filling of holes and repair of any structural
damage; provided, however, it is hereby acknowledged Tenant may not remove any
building or aquatic systems (e.g., HVAC, electrical, plumbing, filtration, heating, etc.)
from the facilities constructed on the property.
9.6 Entry and Inspection. With reasonable prior notice to Tenant, Landlord and Landlord's
authorized representatives may enter the Leased Premises and the Aquatic Center placed
thereon (but not the non -aquatic center improvements placed on the Leased Premises) at
any reasonable time for the purpose of confirming Tenant's compliance with this Lease;
provided, however, when entering and inspecting the Leased Premises and Aquatic
Center, Landlord may not unreasonably interfere with or disrupt any activities being
conducted on the Leased Premises.
10. Assignment and Subletting. Tenant is permitted to sublease all or any portion of the Leased
Premises with Landlord's prior written consent, which consent may not be unreasonably
withheld, so long as the subtenants' use of said areas is within the Permitted Uses allowed under
Section 6.2 above; provided, however, no such sublease will operate to release or otherwise alter
any of Tenant's obligations under this Lease. Moreover, in the event Tenant subleases all or any
portion of the Leased Property, unless Landlord agrees otherwise in writing, the expiration of this
Lease or any permitted termination hereof will entitle Landlord to terminate any or all subleases
of the Leased Property by Tenant and/or to assume any or all such subleases as the landlord with
the subtenant(s) thereunder.
11. Other Rights and Obligations.
11.1 Mortgages and Estoppel Certificates. Landlord is not permitted to mortgage, grant a
deed of trust in, or otherwise grant a security interest in the Leased Premises.
Tenant shall have the right to grant mortgages and/or deeds of trust in Tenant's right,
title, and interest in, to, and under this Lease (i.e., leasehold mortgages and/or leasehold
deeds of trust) (each a "Leasehold Mortgage") and in connection with said leasehold
mortgage(s) and/or deed(s) of trust, Landlord will consent to and execute documentation
reasonably requested by Tenant and Tenant's lender(s) in connection therewith, which
may include, but not necessarily be limited to, agreements that include standard leasehold
mortgagee protection provisions, including non -disturbance provisions, lender notice
requirements before exercise of remedies, bankruptcy protection, and lender cure
opportunity provisions. In the event Tenant seeks to obtain or modify a Leasehold
Mortgage, and the mortgagee for the Leasehold Mortgage requires amendments to this
Section 11.1 or other parts of this Lease for the purpose of defining the mortgagee's
rights in connection with the Leasehold Mortgage, then Landlord agrees to amend this
Section 11.1 or other sections of this Lease to the extent requested by Tenant and the
mortgagee, provided that the form and content of such amendments are reasonable and
Ground Lease 12
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that such proposed amendments do not materially or adversely affect the rights of
Landlord hereunder or its interest in the Leased Premises.
Moreover, within ten (10) days after Landlord's or Tenant's written request, the other
party will deliver a written statement to the requesting party stating whether the
requesting party is in compliance will all of said party's obligations under this Lease, the
date to which the rent and other charges owed under this Lease have been paid, whether
this Lease has been modified and is in full force and effect, and any other matters that
may reasonably be requested by the requesting party concerning this Lease to the extent
true and without waiving any rights of the answering party.
11.2 Landlord's Liability; Sale. In the event the original Landlord hereunder, or any
successor owner of the Leased Premises, sells or conveys the Leased Premises, then from
and after the date of such sale, transfer, or conveyance, the original Landlord, or such
successor owner, shall have no liability to Tenant for liabilities or obligations arising or
accruing under this Lease after the date of such sale, transfer, or conveyance, provided
the assignee expressly assumes all liabilities and obligations under this Lease. Tenant
agrees to attorn to such new owner. Notwithstanding the foregoing, Landlord and Tenant
expressly acknowledge and agree that no sale, transfer, or conveyance of the Leased
Premises will affect, eliminate, terminate, or otherwise reduce Landlord's obligations
under the Development Agreement or Operating Agreement.
11.3 Eminent Domain. Any award for taking of all or any part of the Leased Premises under
the power of eminent domain will be the property of Landlord; provided, however,
nothing precludes Tenant from seeking and obtaining any award for (a) Tenant's lost use
of the Leased Premises under this Lease; (b) any improvements owned by Tenant that are
taken; (c) any loss of, damage to, or cost of removal of Tenant's improvements, trade
fixtures, and removable personal property; and/or (d) damages for cessation or
interruption of Tenant's business. Tenant shall have the right to negotiate directly with
the condemnor for the portion of the award Tenant is entitled to hereunder. A sale by
Landlord to any authority with power of eminent domain that adversely affects Tenant's
use of the Leased Premises, either under threat of condemnation or while condemnation
proceedings are pending, will be deemed a taking under the power of eminent domain
under this Section 11.3.
12. Defaults, Remedies, and Dispute Resolution. This Lease is subject to the default, remedy,
dispute resolution, and other provisions set forth in Sections 11.1, 11.2, and 11.3 of the Operating
Agreement. In the event of a default of this Lease, said provisions of the Operating Agreement
will control and should be consulted.
13. Miscellaneous Terms.
13.1 Amendments. This Lease may not be modified or amended except by written agreement
signed and acknowledged by each of the parties hereto.
13.2 No Agency Relationship. Nothing contained in this Lease creates the relationship of
principal and agent between the parties hereto and no provisions contained herein will be
deemed to create any relationship other than that of landlord and tenant.
13.3 Time is of the Essence. Time is of the essence as to all terms of this Lease.
Ground Lease 13
38
13.4 Notices. All notices under this Lease must be in writing and will be deemed given to the
receiving party when (a) personally delivered to the City Manager for the City of Yakima
(for notices to Landlord) or personally delivered to the CEO or President of the Yakima
Family YMCA (for notices to Tenant) or (b) three days after being deposited in the
United States Postal Service by certified mail (with return receipt requested) to the
receiving party at the receiving party's last known address(es).
13.5 Exhibits. There are no attachments to this Lease except for the Exhibits expressly
referenced in this Lease, each of which constitutes a part of this Lease as if set forth in
full herein.
13.6 Headings; Construction. The captions and paragraph headings used in this Lease are
inserted for convenience of reference only and are not intended to define, limit, or affect
the interpretation or construction of any term or provision of this Lease. This Lease shall
not be construed more strictly against one party than the other by virtue of the fact that
one party drafted this Lease and/or certain clauses contained herein. It is hereby
recognized that both parties to this Lease and their respective counsel have had a full and
fair opportunity to negotiate and review all terms and provisions of hereof and to fully
contribute to this Lease's substance and form.
13.7 Governing Law and Venue. This Lease will be interpreted, construed, and governed by
the laws of the State of Washington. The exclusive venue for any legal action to interpret
or enforce this Lease will be Yakima County, Washington.
13.8 Assignment; Binding Effect. Except as expressly provided otherwise herein, neither
party hereto may assign any of its rights or obligations under this Lease unless the other
party consents thereto in writing, which consent may be withheld for any reason. Subject
to any limitations on assignments provided for in this Lease, all of the provisions of this
Lease will inure to the benefit of and be binding on the successors and assigns of
Landlord and Tenant.
13.9 Waivers. The failure of either party to seek redress for violation of or to insist upon the
strict performance of any covenant or condition of this Lease will not prevent a
subsequent act, which would have originally constituted a violation, from having the
effect of an original violation.
13.10 Attorneys' Fees; Venue. In the event of any dispute arising out of or relating to this
Lease, whether or not suit or other proceedings is commenced, and whether in mediation,
in arbitration, at trial, on appeal, in administrative proceedings, or in bankruptcy
(including, without limitation, any adversary proceeding or contested matter in any
bankruptcy case), the prevailing party will be entitled to its costs and expenses incurred,
including reasonable attorneys' fees. The sole venue for any dispute arising out of or
relating to this Lease will be in Yakima County, Washington.
13.11 Quiet Enjoyment. Provided Tenant is not in default, Tenant will peaceably and quietly
hold and enjoy the Leased Premises for the Term without interruption by Landlord or any
of Landlord's assignees or any person or persons lawfully or equitably claiming by,
through, or under Landlord or any of Landlord's assignees.
13.12 Counterparts and Copies. This Lease may be executed in any number of identical
counterparts, with each counterpart having the same effect as if all parties to this Lease
Ground Lease 14
39
had signed the same document. All executed counterparts of this Lease will be construed
as and constitute one and the same instrument. A facsimile or electronic copy (e.g., a
PDF copy) of an executed counterpart of this Lease will have the same effect as an
original executed counterpart of this Lease.
13.13 Severability. If any provision of this Lease or the application thereof to any person or
circumstances shall to any extent be held to be invalid or unenforceable, such provision
shall not affect or invalidate the remainder of this Lease, and to this end the provisions of
this Lease are declared to be severable. If such invalidity becomes known or apparent to
the parties, the parties agree to negotiate promptly in good faith in an attempt to amend
such provision as nearly as possible to be consistent with the intent of this Lease.
13.14 Recording. Neither Landlord nor Tenant will record this Lease. However, following the
execution of this Lease, the parties, at Tenant's request, will execute a Memorandum of
Lease that will be recorded by Tenant in the Yakima County Auditor's Office for the
purpose of providing constructive notice to the public of the existence of this Lease and
the length of the Term. Said Memorandum of Lease will not disclose any of the financial
or other economic terms contained in this Lease.
13.15 Entire Agreement. This Lease, together with the associated Master Agreement,
Development Agreement, and Operating Agreement, constitutes the entire understanding
and agreement of the parties to this Lease with respect to its subject matter. All prior
agreements, understandings, or representations with respect to this Lease's subject matter
are hereby canceled in their entirety and are of no further force or effect. It is expressly
acknowledged that there are no oral or other agreements which modify or affect this
Lease.
13.16 Survival All representations, warranties, and indemnities set forth in or otherwise made
pursuant to this Agreement shall survive and remain in effect following the expiration or
earlier termination of this Lease; provided, however, that nothing herein is intended to
extend the survival beyond any applicable statute of limitations period.
13.17 Authority. The execution, delivery, and performance by each party of this Lease has
been duly authorized by their respective governing bodies (i.e., the YMCA's Board of
Directors and the City Council for the City of Yakima) in accordance with their
respective governing documents and applicable law, and no further action is necessary on
the part of either party to this Lease or their respective governing bodies to make the
execution, delivery, and performance of this Lease by the undersigned persons valid and
binding upon the parties to this Lease.
[Signatures on Following Page]
Ground Lease 15
40
EFFECTIVE as of the Effective Date first written above.
YOUNG MEN'S CHRISTIAN
ASSOCIATION OF YAKIMA
Bob Romero, CEO
CITY OF YAKIMA
urke, City Manager
� o ) 5 -a2.5
CITY CONTRAC r
RESOLUTION NO. R- oZ 0 (5 - 1 2 a 8
Ground Lease 16
STATE OF WASHINGTON
) ss.
COUNTY OF YAKIMA
41
I certify that I know or have satisfactory evidence that BOB ROMERO is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CEO for the YOUNG
MEN'S CHRISTIAN ASSOCIATION OF YAKIMA to be the free and voluntary act of such party for
the uses and purposes mentioned in the instrument.
DATED: (Vr/4 , - o2-] , 2015.
Notary Public
State of Washlogtos
JOD11. STEPHENS
MY COMMISSION EXPIRES
August 11, 201S
STATE OF WASHINGTON
) ss.
COUNTY OF YAKIMA
[PRINT NAME] Jc/
NOTARY PUBLIC for the....Stalf of Washin ton
residing at /off- 1 �i va
My appointment expires: ./g .
I certify that I know or have satisfactory evidence that TONY O'ROURKE is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CITY MANAGER for the
CITY OF YAKIMA to be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
DATED: ON- / , 2015.
Notary Public
State of Washington
SONYA R CLAAR TEE
MY COMMISSION EXPIRES
OCTOBER 25, 2018
\.J
[PRINT NAME] cci Y
NOTARY PUBLIC for the State of Washington,
residing at V- 04
My appointment expires:
Ict<
Ground Lease 17
EXHIBIT A-1
Leta] Description of the Leased Premises
That portion of the Southwest quarter of the Northeast quarter of Section 15, Township 13 North,
Range 18 East, W.M. described as follows: Beginning at the Northwest corner of said Subdivision;
thence South 89°42'45" East, along the North line thereof, 75.00 feet to the Easterly right of way
line of the Pacific Power and Light Company's canal; thence continuing South 89°42'45" East
104.00 feet to the True Point of Beginning; thence South 0°17'15" West 310.45 feet; thence South
30°52' West 4.06 feet; thence along the arc of a curve to the left having a radius of 145.00 feet, a
central angle of 54°39' and a length of 138.30 feet; thence South 23°47' East 165.63 feet; thence
North 66°13' East 13.05 feet; thence along the arc of a curve to the right having a radius of 4.00
feet, a central angle of 83°03' and a length of 5.80 feet; thence South 30°44' East 11.24 feet; thence
along the arc of a curve to the left having a radius of 53.00 feet, a central angle of 167°26' and a
length of 154.89 feet; thence North 18°10' West 12.40 feet; thence along the arc of a curve to the
right having a radius of 4.00 feet, a central angle of 84°23' and a length of 5.89 feet; thence North
66°13' East 13.19 feet; thence North 89°26'10" East 265.00 feet; thence North 56°04' East 80.00
feet; thence North 89°26' 10" East 170.00 feet; thence North 0°33'50" West 486.42 feet to the
North line of said Subdivision; thence North 89°42'45" West, along said North line, 680.56 feet
to the True Point of Beginning;
EXCEPT that portion lying Northerly of the following described line:
Beginning at the Northwest corner of said Subdivision; thence South 89°42'45" East, along the
North line thereof, 75.00 feet to the Easterly right of way line of the Pacific Power and Light
Company's canal; thence continuing South 89°42'45" East 104.00 feet; thence South 0°17'15"
West 78.18 feet to the True Point of Beginning; thence North 89°26' 10" East 165.00 feet; thence
North 0°33'50" West 15.00 feet; thence North 89°26'10" East to the East line of said Subdivision
and the terminus point of the herein described line.
Situated in Yakima County, Washington.
Parcel contains 326,692 SQ. FT./7.50 acres
EXHIBIT A-1
42
43
EXHIBIT A-2
General Depiction of the Leased Premises
[See Attached]
EXHIBIT A-2
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EXHIBIT 2
Development Agreement
[See Attached]
EXHIBIT 2
46
PARTIES:
DEVELOPMENT AGREEMENT
EFFECTIVE DATE: _a 7 52015
CITY OF YAKIMA,
a Washington municipal corporation
129 North 2nd Street
Yakima, Washington 98901
(referred to in this Agreement as the "City")
YOUNG MEN'S CHRISTIAN ASSOCIATION OF YAKIMA
(d/b/a YAKIMA FAMILY YMCA),
a Washington nonprofit corporation
5 North Naches Avenue
Yakima, Washington 98901
(referred to in this Agreement as the "YMCA")
BACKGROUND. See the Recitals set forth in the Master Agreement.
AGREEMENT. FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY
ACKNOWLEDGED, THE UNDERSIGNED PARTIES AGREE AS FOLLOWS:
1. Definitions. Unless the context clearly indicates another meaning and except for terms defined in
this Agreement, all capitalized terms used in this Agreement have the same meaning given to said
terms in the Operating Agreement and Ground Lease. The following terms, when used in this
Agreement, have the following meanings, unless the context clearly indicates another meaning:
1.1 "Aquatic Center" has the meaning given to said words in Section 2 below.
1.2 "City's Financial Contribution" has the meaning given to said words in Section 3 below.
1.3 "Construction Contracts" has the meaning given to said words in Section 5 below.
1.4 "Due Diligence Contingency" has the meaning given to said words in Section 2.1 of the
Ground Lease.
1.5 "Funding Contingency" has the meaning given to said words in Section 2.2 of the
Ground Lease.
1.6 "Ground Lease" means and refers to the Ground Lease dated even herewith by and
between the City as "Landlord" and the YMCA as "Tenant" for the YMCA's lease of the
Leased Premises and all future amendments to said Ground Lease (if any).
1.7 "Leased Premises" has the meaning given to said words in Section 1.7 of the Ground
Lease.
1.8 "Master Agreement" means and refers to the Master Agreement dated even herewith by
and between the City and the YMCA and all future amendments to said Master
Agreement (if any). This Lease is entered into pursuant to the Master Agreement and the
Development Agreement 1
47
recitals and all other terms set forth in the Master Agreement are part of, incorporated
into, and constitute a part of this Agreement as if set forth in full herein.
1.9 "Operating Agreement" means and refers to the Operating Agreement dated even
herewith by and between the City and the YMCA in connection with the operations and
management of the Aquatic Center to be constructed by Tenant on a portion of the
Leased Premises under this Agreement and all future amendments to said Operating
Agreement (if any).
1.10 "Other Facility" has the meaning given to said words in Section 2 below.
1.11 "Possession Date" has the meaning given to said words in Section 3 of the Ground Lease.
1.12 "RCO Contingency" has the meaning given to said words in Section 2.3 of the Ground
Lease.
1.13 "Required Specifications" has the meaning given to said words in Section 2 below.
2. Aquatic Center. Subject to the Due Diligence, Funding, and RCO Contingencies, the YMCA
will construct an aquatic center on the Leased Premises (the "Aquatic Center"). The Aquatic
Center will be connected to a separate facility (including additions/expansions) also constructed
on the Leased Premises by the YMCA for non -aquatic YMCA activities (the "Other Facility").
Both the Aquatic Center and the Other Facility will be solely owned by the YMCA and will be
subject to the terms and conditions of this Agreement and the Ground Lease and Operating
Agreement.
Unless the City and the YMCA agree otherwise in writing, the Aquatic Center will be constructed
in accordance with the minimum required specifications set forth on attached Exhibit B (the
"Required Specifications").
3. City's Financial Contribution. The City will contribute Four Million Five Hundred Thousand
and No/100 U.S. Dollars ($4,500,000.000) toward the construction of the Aquatic Center (the
"City's Financial Contribution"). The City's Financial Contribution will be paid out when and as
required under this Agreement. The YMCA will be responsible for procuring all other funds
needed to construct the Aquatic Center, as well as all funds needed to construct the Other Facility.
4. Design and Engineering Phase. Subject to the Required Specifications, the Aquatic Center's
design and engineering (including, without limitation, layout, building plans, specifications, and
site plan) will be determined by the YMCA in consultation with the architect(s), engineer(s),
contractor(s), and other construction consultant(s) hired in connection with the development of
the Aquatic Center. Notwithstanding the foregoing, before commencing construction on the
Aquatic Center, the Aquatic Center's layout, building plans, specifications, and site plan will be
presented to the City Manager for the City to confirm the Aquatic Center's design is in
compliance with the Required Specifications.
In the interest of initiating construction of the Aquatic Center as soon as reasonably possible after
the satisfaction of the Due Diligence, Funding, and RCO Contingencies, it is expressly confirmed
that the Aquatic Center's design and engineering (including, without limitation, layout, building
plans, specifications, and site location) will commence and be prepared when and as determined
by the YMCA after the satisfaction of the Due Diligence Contingency. The YMCA and the City
will share equally in and timely pay when due all design and engineering costs in connection with
Development Agreement 2
48
the development of the Aquatic Center; provided, however, it is expressly confirmed that all
amounts paid by the City under this paragraph for Aquatic Center design and engineering costs
will come from and be paid out of the City's Financial Contribution under Section 3 above. It is
further provided and expressly confirmed that all such costs paid by the City for design and
engineering shall be reimbursed to the City by the YMCA in the event the Funding Contingency
is not satisfied and the project fails to be developed as set forth herein.
5. Construction Contracts. Subject to the provisions of this Section 5, the City and the YMCA
will jointly conduct a standard RFP process to request proposals for the architectural and
engineering design of the Aquatic Center and Other Facility. Once proposals have been obtained
from prospective architects and engineers, the YMCA shall be responsible, in accordance with
applicable public contracting requirements, for interviewing and selecting the architects and
engineers that will be used in connection with the development and construction of the Aquatic
Center and the Other Facility. The YMCA shall cooperate with the City's procurement
professionals to negotiate all construction and professional service agreements associated with the
architectural and engineering design that will be used for the development and construction of the
Aquatic Center and the Other Facility and that will be included in the RFP documents presented
to prospective proposers during the RFP process. It is expressly confirmed that all architects and
engineers hired in connection with the development and construction of the Aquatic Center and
the Other Facility shall be hired by and provide independent contractor services for the YMCA
(and not by or for the City) and that all construction and professional service agreements will be
by and between the third party professional service providers and the YMCA (and not with the
City).
The contracts for the actual construction of the Aquatic Center and the Other Facility shall be
performed as a public works project and all construction bid advertisements, bidding processes,
and contract awards and close-outs associated therewith shall be performed in accordance with
Washington public works bidding and performance requirements. The City and the YMCA will
jointly conduct the complete construction bidding process and shall prepare and award the
contracts in accord with these requirements and the City's standard bidding and contracting
practices.
All construction and professional service agreements associated with the architectural and
engineering design and construction that will be used for the development and construction of the
Aquatic Center and the Other Facility are collectively referred to as the "Construction Contracts"
under this Agreement. The Parties agree that contract elements providing for adequate and
proper insurance coverage during the performance of the contracts, as well as those deemed
necessary to protect the City's interests as the owner of the property, shall be included in all of
the construction contracts and subcontracts and shall be reviewed and approved by the City prior
to the contracts being executed.
Subject to the Required Specifications, all change orders to any Construction Contract must be
approved by the YMCA in writing. Moreover, it is expressly confirmed that with exception to
the City's obligations under this Agreement, the Ground Lease, and the Operating Agreement, the
YMCA is solely responsible for all costs necessary for the development and construction of the
Aquatic Center, including, without limitation, all Construction Contract cost overruns and added
expense from any change orders thereto.
Development Agreement 3
49
6. Construction Phase. The construction contracting processes described in Section 5 above', as
well as the actual construction of the Aquatic Center, will commence as soon as reasonably
possible after the satisfaction of each of the Due Diligence, RCO, and Funding Contingencies
under Sections 2.1, 2.2, and 2.3 of the Ground Lease (unless the City and the YMCA mutually
agree in writing on some earlier or later date).
Upon the Possession Date, the City will timely pay all costs incurred under the Aquatic Center
design, engineering, and construction performance contracts until the City's Financial
Contribution is exhausted (i.e., until the City has contributed a total of $4,500,000.00 under the
Construction Contracts for design/engineering costs under Section 4 above and construction
costs under this Section 6). Thereafter, the YMCA will be responsible for all additional costs
under the Construction Contracts necessary for the development and construction of the Aquatic
Center. It is expressly confirmed that aside from the design and engineering costs described in
Section 5 above, which will be paid in equal proportion by the City and the YMCA as set forth in
Section 4 above, no construction costs will be incurred with respect to the Aquatic Center until
the Possession Date.
During all phases of construction of the Facilities, the YMCA shall be responsible to provide
security fencing around the construction site to protect the safety of the public and the project.
The YMCA shall be responsible for maintaining a clean and workmanlike construction site
throughout the construction process and shall keep all construction debris, waste and trash
contained and properly disposed of within the site.
7. Zoning, Offsite Improvements, and Site Preparation.
7.1 Zoning. The City represents and warrants that the Leased Premises at the time of the
Possession Date and through the Term of the Ground Lease will be appropriately zoned
for the Aquatic Center described herein and the Permitted Uses allowed under Section 6.2
of the Ground Lease. The City, at the City's expense and with no reduction to the City's
Financial Contribution under Section 3 above, will take all action necessary to ensure
compliance with the provisions of this paragraph prior to the Possession Date.
7.2 Offsite Improvements. To the extent any traffic or other improvements outside of the
Leased Premises are required by the City or any other applicable government authority as
a result of the construction of the Aquatic Center and Other Facility on the Leased
Premises, the City, at the City's expense and with no reduction to the City's Financial
Contribution under Section 3 above, will make all such improvements, to the extent
practicable, within one hundred twenty (120) days of the Possession Date.
8. Naming Rights. It is expressly confirmed that all naming rights with regard to the Aquatic
Center will belong solely to the YMCA and the discretion of the YMCA's Board of Directors;
provided, however, the Aquatic Center's name must include the word "Yakima."
9. Contingencies.
9.1 Contingencies. The YMCA's and the City's respective obligations under this Agreement
are each contingent on and subject to the satisfaction of the Due Diligence, RCO, and
' It is expressly acknowledged and confirmed that the architectural and engineering design contracting
process may commence after the satisfaction of the Due Diligence Contingency as set forth in Sections 4
and 5 above.
Development Agreement 4
50
Funding Contingencies. Subject to the provisions of Section 10.16 below (i.e., the
"Survival" clause) and the reimbursement obligations set forth in Section 4 above (if
any), and except as otherwise expressly provided in this Agreement, in the event the
Ground Lease is terminated as permitted under Section 2.1, 2.2, or 2.3 of the Ground
Lease as a result of the non -satisfaction of the Due Diligence Contingency, Funding
Contingency, or RCO Contingency, this Agreement will automatically terminate when
the Ground Lease terminates, and neither party to this Agreement will have any further
rights, duties, and obligations hereunder.
9.2 Ground Lease and Operating Agreement. This Agreement is subject to and together
with the terms of the Ground Lease and Operating Agreement and the undersigned
parties' respective rights and obligations thereunder. In the event of a conflict between
the provisions of said three documents, the terms of the Operating Agreement shall
prevail.
9.3 Survival of Existing Obligations. In the event this Agreement is terminated under
Section 9.1 above, the YMCA will be responsible for all of the design and engineering
costs incurred under Section 4 above prior to the termination of this Agreement.
10. Miscellaneous Terms.
10.1 Amendments. This Agreement may not be modified or amended except by written
agreement signed and acknowledged by each of the parties hereto.
10.2 No Agency Relationship. Nothing contained in this Agreement creates the relationship
of principal and agent between the parties hereto.
10.3 Time is of the Essence. Time is of the essence as to all terms of this Agreement.
10.4 Notices. All notices under this Agreement must be in writing and will be deemed given
to the receiving party when (a) personally delivered to the City Manager for the City of
Yakima (for notices to the City) or personally delivered to the CEO or President of the
Yakima Family YMCA (for notices to the YMCA) or (b) three days after being deposited
in the United States Postal Service by certified mail (with return receipt requested) to the
receiving party at the receiving party's last known address(es).
10.5 Points of Contact. The City and the YMCA shall each provide a dedicated contact
person to be the point of contact for their respective party hereto for any communication
or contact that is necessary between the Parties. The City's initial contact person shall be
Scott Schafer, Director of Public Works, and the YMCA's contact person shall be Bob
Romero, YMCA Executive Director. Either party may change its contract person under
this Section 10.5 by giving the other party notice of the change.
10.6 Exhibits. There are no attachments to this Agreement except for the Exhibits expressly
referenced in this Agreement, each of which constitutes a part of this Agreement as if set
forth in full herein.
10.7 Headings; Construction. The captions and paragraph headings used in this Agreement
are inserted for convenience of reference only and are not intended to define, limit, or
affect the interpretation or construction of any term or provision of this Agreement. This
Agreement shall not be construed more strictly against one party than the other by virtue
Development Agreement 5
51
of the fact that one party drafted this Agreement and/or certain clauses contained herein.
It is hereby recognized that both parties to this Agreement and their respective counsel
have had a full and fair opportunity to negotiate and review all terms and provisions of
hereof and to fully contribute to this Agreement's substance and form.
10.8 Governing Law. This Agreement will be interpreted, construed, and governed by the
laws of the State of Washington.
10.9 Assignment; Binding Effect. Except as expressly provided otherwise herein, neither
party hereto may assign any of its rights or obligations under this Agreement unless the
other party consents thereto in writing, which consent may be withheld for any reason.
Subject to any limitations on assignments provided for in this Agreement, all of the
provisions of this Agreement will inure to the benefit of and be binding on the successors
and assigns of the City and the YMCA.
10.10 Waivers. The failure of either party to seek redress for violation of or to insist upon the
strict performance of any covenant or condition of this Agreement will not prevent a
subsequent act, which would have originally constituted a violation, from having the
effect of an original violation.
10.11 Attorneys' Fees; Venue. In the event of any dispute arising out of or relating to this
Agreement, whether or not suit or other proceedings is commenced, and whether in
mediation, in arbitration, at trial, on appeal, in administrative proceedings, or in
bankruptcy (including, without limitation, any adversary proceeding or contested matter
in any bankruptcy case), the prevailing party will be entitled to its costs and expenses
incurred, including reasonable attorneys' fees. The sole venue for any dispute arising out
of or relating to this Agreement will be in a court of competent jurisdiction in Yakima
County, Washington.
10.12 Defaults, Remedies, and Dispute Resolution. This Agreement is subject to the default,
remedy, dispute resolution, and other provisions set forth in Sections 11.1, 11.2, and 11.3
of the Operating Agreement. In the event of a default of this Agreement, said provisions
of the Operating Agreement will control and should be consulted.
10.13 Counterparts and Copies. This Agreement may be executed in any number of identical
counterparts, with each counterpart having the same effect as if all parties to this
Agreement had signed the same document. All executed counterparts of this Agreement
will be construed as and constitute one and the same instrument. A facsimile or
electronic copy (e.g., a PDF copy) of an executed counterpart of this Agreement will
have the same effect as an original executed counterpart of this Agreement.
10.14 Severability. If any provision of this Agreement or the application thereof to any person
or circumstances shall to any extent be held to be invalid or unenforceable, such
provision shall not affect or invalidate the remainder of this Agreement, and to this end
the provisions of this Agreement are declared to be severable. If such invalidity becomes
known or apparent to the parties, the parties agree to negotiate promptly in good faith in
an attempt to amend such provision as nearly as possible to be consistent with the intent
of this Agreement.
10.15 Entire Agreement. This Agreement, together with the associated Master Lease, Ground
Lease, and Operating Agreement, constitutes the entire understanding and agreement of
Development Agreement 6
52
the parties to this Agreement with respect to its subject matter. All prior agreements,
understandings, or representations with respect to this Agreement's subject matter are
hereby canceled in their entirety and are of no further force or effect. It is expressly
acknowledged that there are no oral or other agreements which modify or affect this
Agreement.
10.16 Survival. All representations, warranties, and indemnities set forth in or otherwise made
pursuant to this Agreement shall survive and remain in effect following the expiration or
earlier termination of this Lease; provided, however, that nothing herein is intended to
extend the survival beyond any applicable statute of limitations period.
10.17 Authority. The execution, delivery, and performance by each party of this Agreement
has been duly authorized by their respective governing bodies (i.e , the YMCA's Board
of Directors and the City Council for the City of Yakima) in accordance with their
respective governing documents and applicable law, and no further action is necessary on
the part of either party to this Agreement or their respective governing bodies to make the
execution, delivery, and performance of this Agreement by the undersigned persons valid
and binding upon the parties to this Agreement.
[Signatures on Following Page]
Development Agreement 7
EFFECTIVE as of the Effective Date first written above.
YOUNG MEN'S CHRISTIAN CITY OF YAKIMA
ASSOCIATION OF YAKIMA
Bob Romero, CEO
53
Tony O'R
urke, City Manager
CITY C •' TRACT NO:
RESOLUTION N0: '' Z2l5-128
Development Agreement 8
STATE OF WASHINGTON
) ss.
COUNTY OF YAKIMA
54
I certify that I know or have satisfactory evidence that BOB ROMERO is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CEO for the YOUNG
MEN'S CHRISTIAN ASSOCIATION OF YAKIMA to be the free and voluntary act of such party for
the uses and purposes mentioned/in the instrument.
en
DATED: VG4 &— 4=9-7 , 2015.
Notary Public
State off Washington
JODI L STEPHENS
MY COMMISSION EXPIRES
August 11, 2018
STATE OF WASHINGTON
) ss.
COUNTY OF YAKIMA
NOTARY PUBLIC for the State of Was ington,
residing at /?
//
My appointment expires:
I certify that I know or have satisfactory evidence that TONY O'ROURKE is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CITY MANAGER for the
CITY OF YAKIMA to be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
DATED:
Notary Public
State of Washington
SONYA R CLAAR TEE
MY COMMISSION EXPIRES
OCTOBER 25, 2018
, 2015.
Dionti
_gyp
[PRINT NAME] �U itL{,{ %`� P /i -70Q
NOTARY PUBLIC1for the State of Washington,
residing at Uhlx/1,CZ(
My appointment expires:
Development Agreement 9
55
EXHIBIT A
Required Specifications
1. Minimum eight lane 25 yard lap pool
2. Therapy pool area
3. Multiuse pool area for water walking and family/youth recreation
EXHIBIT A
56
EXHIBIT 3
Operating Agreement
[See Attached]
EXHIBIT 3
57
PARTIES:
OPERATING AGREEMENT
EFFECTIVE DATE: 00 �7 , 2015
CITY OF YAKIMA,
a Washington municipal corporation
129 North 2nd Street
Yakima, Washington 98901
(referred to in this Agreement as the "City")
YOUNG MEN'S CHRISTIAN ASSOCIATION OF YAKIMA
(d/b/a YAKIMA FAMILY YMCA),
a Washington nonprofit corporation
5 North Naches Avenue
Yakima, Washington 98901
(referred to in this Agreement as the "YMCA")
BACKGROUND. See the Recitals set forth in the Master Agreement.
AGREEMENT. FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY
ACKNOWLEDGED, THE UNDERSIGNED PARTIES AGREE AS FOLLOWS:
1. Definitions. Unless the context clearly indicates another meaning and except for terms defined in
this Agreement, all capitalized terms used in this Agreement have the same meaning given to said
terms in the Development Agreement and Ground Lease. The following terms, when used in this
Agreement, have the following meanings, unless the context clearly indicates another meaning:
1.1 "Annual Capital Improvements Budget" means and refers to the annual Capital
Improvement budget jointly approved by the YMCA and the City under Section 7.2
below for the estimated annual Capital Improvement Expenditures for the Aquatic
Center.
1.2 "Annual Operating Budget" means and refers to the annual operating budget jointly
approved by the YMCA and the City under Section 7.2 below for the estimated annual
Gross Operating Revenue and Gross Operating Expenses for the Aquatic Center.
1.3 "Applicable Laws" means and refers to all statutes, regulations, ordinances, and other
laws applicable to the operation of the Aquatic Center.
1.4 "Aquatic Center" means and refers to the "Aquatic Center" described in Section 2 of the
Development Agreement.
1.5 "Capital Improvements" means and refers to (a) all additions to and replacements of the
Aquatic Center's FF&E; (b) all repairs, restorations, and alterations to the Aquatic Center
facility and the Aquatic Center's FF&E that have a useful life equal to or greater than
three (3) years; (c) fifty percent (50%) of all additions to and replacements of the
Common Areas' FF&E; and (d) fifty percent (50%) of all repairs, restorations, and
alterations to the Common Area facilities and the Common Areas' FF&E that have a
useful life equal to or greater than three (3) years.
Operating Agreement 1
58
1.6 "Capital Improvement Expenditures" means and refers to the cost of all Capital
1 mprovements.
1.7 "Capital Improvement Reserve Funds" has the meaning given to said words in Section
7.4(c) below.
1.8 "Common Areas" means and refers to the Other Facility's public entryways (both interior
and exterior), reception desk, lobby area, public restrooms, and the locker rooms and
parking lot(s) (except for the Existing Parking Lot) that jointly serve the Aquatic Center
and Other Facility, all of which will be commonly used for access, reception services,
program registration/payments, locker room uses, gathering/waiting, and parking by
persons who use the Aquatic Center and/or the Other Facility.
1.9 "City Manager" means and refers to the duly appointed City Manager for the City of
Yakima.
1.10 "Development Agreement" means and refers to the Development Agreement dated even
herewith by and between the City and the YMCA in connection with the development of
the Aquatic Center to be constructed by Tenant on a portion of the property leased under
the Ground Lease and all future amendments to said Development Agreement (if any).
1.11 "Due Diligence Contingency" has the meaning given to said words in Section 2.1 of the
Ground Lease.
1.12 "Existing Parking Lot" has the meaning given to said words in Section 6.3 of the Ground
Lease.
1.13 "FF&E" means and refers to furniture; furnishings; computer, entertainment, and other
equipment; finishes; wall and floor coverings; tiling, piping; and fixtures.
1.14 "Funding Contingency" has the meaning given to said words in Section 2.2 of the
Ground Lease.
1.15 "Fiscal Year" means and refers to the time period running from September 1st through
August 31st, which constitutes the YMCA 's existing fiscal year time period.
1.16 "Gross Operating Expenses" means and refers to all expenses incurred by the YMCA in
the management and operation of the Aquatic Center during the Term of this Agreement,
including, but not limited to, the following:
(a) Labor for the operation of the Aquatic Center, including, but not limited to,
salaries (including for the Aquatic Center's Aquatic Director), wages, employee
benefits, retirement plans, payroll taxes, training costs, and other reasonable
employment expenses;
(b) Labor needed to staff the Common Area reception area with an employee during
all hours of Aquatic Center operation, including, but not limited to, salaries,
wages, employee benefits, retirement plans, payroll taxes, training costs, and
other reasonable employment expenses;
(c) Inventories and supplies consumed in the operation of the Aquatic Center,
including, without limitation, chemicals and office supplies;
Operating Agreement 2
59
(d) Cleaning costs, whether by YMCA staff or third party contractors;
(e) Promotional costs for the Aquatic Center, including, without limitation,
brochures, printing costs, and advertising;
(0 Utility charges for the Aquatic Center;
(g) Insurance costs for the coverage required under this Agreement;
(h) The cost of all applicable and required taxes, and licenses, permits;
(i) The cost of (a) maintaining the Aquatic Center and its FF&E and (b) all repairs
and alterations to the Aquatic Center and its FF&E that have a useful life less
than three (3) years;
(j) Technical consultants, operational experts, and professional services for
specialized services in connection with non -routine Aquatic Center work;
(k) A reasonable reserve for uncollectible accounts receivable;
(1) Fifty percent (50%)' of the expenses incurred by the YMCA in the management
and operation of the Common Areas, including, but not limited to, costs incurred
by the YMCA in operating, maintaining, and repairing (i) the Common Areas'
publicly accessible parking lot(s) and exterior entryway/walkway surfaces,
striping, lighting, security, signage, and landscaping that jointly serve the Aquatic
Center and Other Facility; and (ii) the locker rooms, interior
entryways/walkways, reception desk, lobby area, and public restrooms and that
jointly serve the Aquatic Center and Other Facility;
(m) Fifty percent (50%) of the cost of (a) maintaining the Common Areas and its
FF&E and (b) all repairs and alterations to the Common Areas and its FF&E that
have a useful life less than three (3) years; and
(n) An administrative charge equal to fifteen percent (15%) of all other Gross
Operating Expenses to cover the estimated cost of executive and other overhead
charges associated with the operation and management of the Aquatic Center.
1.17 "Gross Operating Revenue" means and refers to all revenue received from the following
sources of income:
(a) The fees charged by the YMCA for public use of the Aquatic Center;
(b) The fees charged by the YMCA for public and/or YMCA member participation
in the Aquatic Center's programs (e.g., swim lessons, lifeguard trainings, aquatic
exercise classes, pool rentals, and birthday pool parties);
(c) One percent (1%) of all YMCA member dues; and
(d) Proceeds from business interruption insurance.
The undersigned parties expressly confirm that the term "Gross Operating Revenue"
excludes all other revenue, including, without limitation, revenue from the sale of
concessions and merchandise in or about Common Areas, charitable donations to the
YMCA, YMCA membership dues, and rent from the sublease of any portions of the
Other Facility. Moreover, "Gross Operating Revenue" shall be net of rebates, credits,
and/or refunds.
1.18 "Ground Lease" means and refers to the Ground Lease dated even herewith by and
between the City as "Landlord" and the YMCA as "Tenant" for the YMCA's lease of the
' The City and the YMCA intend for the City to be responsible for twenty-five percent (25%) of the costs associated
with the management and operation of the Common Areas. Accordingly, half of said costs are included as Gross
Operating Expenses, which in turn are split equally between the YMCA and the City under Section 7.3 below.
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property on which the YMCA intends to construct the Aquatic Center under the
Development Agreement and all future amendments to said Ground Lease (if any).
1.19 "Initial Budget" means and refers to the initial budget jointly approved by the YMCA and
the City under Section 7.1 below for the estimated (a) Pre -Operating Expenses for the
Aquatic Center and (b) Gross Operating Revenue and Gross Operating Expenses for the
Aquatic Center from the Opening Date through the first occurring August 31st following
the Opening Date.
1.20 "Master Agreement" means and refers to the Master Agreement dated even herewith by
and between the City and the YMCA and all future amendments to said Master
Agreement (if any). This Lease is entered into pursuant to the Master Agreement and the
recitals and all other terms set forth in the Master Agreement are part of, incorporated
into, and constitute a part of this Agreement as if set forth in full herein.
1.21 "Monthly CAPEX Reports" has the meaning given to said words in Section 7.4(b) below.
1.22 "Monthly Financial Reports" has the meaning given to said words in Section 7.3(b)
below.
1.23 "Opening Date" means and refers to the date on which the Aquatic Center opens for
public use.
1.24 "Operating Deficit" means and refers to the amount of Gross Operating Expenses in
excess (if any) of Gross Operating Revenue for each calendar month during the Term of
this Agreement after the Opening Date.
1.25 "Operating Surplus" means and refers to the amount of Gross Operating Revenue in
excess (if any) of Gross Operating Expenses for each calendar month during the Term of
this Agreement after the Opening Date.
1.26 "Operating Standards" has the meaning given to said words in Section 5.2 below.
1.27 "Other Facility" means and refers to the "Other Facility" described in Section 2 of the
Development Agreement.
1.28 "Pre -Opening Expenses" has the meaning given to said words in Section 7.1 below.
1.29 "Proposed Budgets" has the meaning given to said words in Section 7.2(a) below.
1.30 "Purpose" has the meaning given to said word in Section 3 below.
1.31 "RCO Contingency" has the meaning given to said words in Section 2.3 of the Ground
Lease.
1.32 "Term" has the meaning given to said word in Section 4 below.
1.33 "YMCA/City Agreement" means and refers to this Agreement (i.e., the Operating
Agreement), the Development Agreement, the Ground Lease, and the Master Lease.
2. Contingencies and Other Agreements.
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2.1 Contingencies. The YMCA's and the City's respective obligations under this Agreement
are each contingent on and subject to the satisfaction of the Due Diligence, Funding, and
RCO Contingencies. Subject to the provisions of Section 12.14 below (i.e., the
"Survival" clause), and except as otherwise expressly provided in this Agreement, in the
event the Ground Lease is terminated as permitted under Section 2.1, 2.2, or 2.3 of the
Ground Lease as a result of the non -satisfaction of the Due Diligence Contingency,
Funding Contingency, or RCO Contingency, this Agreement will automatically terminate
when the Ground Lease terminates, and neither party to this Agreement will have any
further rights, duties, and obligations hereunder.
2.2 Development Agreement and Ground Lease. This Agreement is subject to and together
with the terms of the Development Agreement and Ground Lease and the undersigned
parties' respective rights and obligations thereunder. In the event of a conflict between
the provisions of said three documents, the terms of this Operating Agreement shall
prevail.
3. Purpose. During the Term of this Agreement, the YMCA and the City intend for the Aquatic
Center to serve as a safe, fun, and healthy destination for the entire Yakima community that
provides a host of recreational, fitness, and therapeutic opportunities and programs through new
aquatic facilities and programming that will be offered therein (the Aquatic Center's "Purpose").
4. Term. The undersigned parties intend for the relationship, rights, and obligations established in
this Agreement to apply and be in effect during the entire "Term" under the Ground Lease,
including, without limitation, the "Initial Term" and each "Extended Term" under the Ground
Lease. Accordingly, subject to the Due Diligence, Funding, and RCO Contingencies, the "Term"
of this Agreement will be concurrent with and equal to the "Term" of the Ground Lease as set
forth in Sections 3.1, 3.2, and 3.3 of the Ground Lease.
4.1 Effect of Expiration. Unless the YMCA and the City agree otherwise in writing, upon
the expiration of the Term of this Agreement (i.e., the expiration of the "Term" of the
Ground Lease), this Agreement will terminate and the improvements associated with the
Aquatic Center and the Other Facility shall revert to the City as described in the Ground
Lease.
4.2 Pre -Expiration Discussions. Notwithstanding the foregoing, but without committing
either party to any particular action, before the expiration of the Term of this Agreement
(i.e., the expiration of the "Term" of the Ground Lease), the YMCA and the City will
discuss and consider their respective interests in and the possibility of extending the Term
of this Agreement and the Ground Lease for an additional period of time and/or entering
into new agreements for the continued lease of the premises and joint management and
operation of the Aquatic Center or some new similar facility.
5. Management and Operations. During the Term of this Agreement, the Aquatic Center will be
managed and operated by the YMCA in accordance with the following, and all other, provisions
of this Agreement:
5.1 Managerial Discretion. Except as otherwise provided in this Agreement (e.g., see
Sections 6.1 and 6.2 below), the YMCA will have discretion and control in all matters
relating to the management and operation of the Aquatic Center, including, without
limitation, staffing decisions, employment policies, procurement of and payment for
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inventories, supplies, services, repairs, and maintenance decisions. The City and the
YMCA shall cooperatively coordinate and determine appropriate Aquatic Center
programming and use as more fully described in Sections 6.1 and 6.2, below.
5.2 Operating Standards. The YMCA will operate and maintain the Aquatic Center in
accordance with its Purpose and the following "Operating Standards":
(a) In a commercially clean, attractive, first rate, safe, and habitable condition;
(b) In good repair and proper working order;
(c) In compliance with all Applicable Laws;
(d) In a manner intended to prevent and minimize closures;
(e) In a manner consistent with industry standards for facilities of similar size and
scope to the Aquatic Center that are located elsewhere in Washington state;
provided, however, the YMCA, from time -to -time, may reasonably adjust the
Aquatic Center's manner of operations away from applicable industry standards
based on (i) the demand for services at the Aquatic Center and (ii) when needed
to promote the efficient use and operation of the Aquatic Center and/or the
Aquatic Center's Purpose; and
(f) Subject to holidays and closures necessary for repairs, maintenance, safety, acts
of God, emergencies, and other similar circumstances, the Aquatic Center will
maintain the following minimum normal hours of operation (subject to the
YMCA's right, in the YMCA's discretion, to expand to additional hours of
operation):
Monday through Friday 6.00 a.m. - 9.00 p in.
Saturday 7.00 a.m. - 7.00 p m.
Sunday 12.00 p m. - 6:00 p.m.
5.3 Maintenance, Repair, and Replacement. During the Term of this Agreement, the
YMCA (subject to the YMCA's and the City's obligations under this Agreement with
regard to Capital Improvement Expenditures and operating expenses and the City's
obligations under the Ground Lease with regard to the Existing Parking Lot) will
maintain the Aquatic Center and Common Areas in accordance with the Operating
Standards set forth in Section 5.2 above and will make all maintenance and repairs
thereto that are reasonably necessary for said purpose in accordance with a written
maintenance and repair schedule, including, but not limited to, the following:
• Maintain the Common Areas' parking lot(s) and exterior entryway/walkway
surfaces, striping, lighting, security, signage, and landscaping;
• Maintain the interior entryways/walkways, reception desk, lobby area, and public
restrooms;
• Maintain the pools, public locker rooms, and other aquatic facilities; and
• Maintain the Aquatic Center's and Common Areas' equipment and HVAC,
filtration, and other building systems.
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Notwithstanding the foregoing, when and as said equipment and other components and
FF&E of the Aquatic Center and Common Areas become worn out or obsolete, or if it is
not commercially reasonable to continue to maintain and/or repair said items, said
equipment and other components and FF&E will be replaced by the YMCA (subject to
the YMCA's and the City's shared obligations under this Agreement with regard to
Capital Improvement Expenditures and operating expenses).
5.4 Insurance.
(a) Insurance Coverage. Subject to the YMCA's right to purchase and maintain
additional insurance coverage the YMCA reasonably deems necessary in
connection with the operation and management of the Aquatic Center, during the
Term of this Agreement, the YMCA will purchase and maintain the following
minimum insurance coverage:
• Commercial General Liability insurance that insures against claims for
bodily injury, personal injury, death, and property damage occurring in,
on, or about the Aquatic Center, with limits of not less than $2,000,000
per occurrence and $4,000,000 general aggregate. The insurance policy
required under this paragraph must be endorsed to name the City as an
additional insured on a primary basis without the right of contribution.
• "Special Form" property insurance on the Aquatic Center and its
contents for their full replacement value, together with business
interruption coverage. Unless the YMCA and the City agree otherwise
in writing, any proceeds from the insurance policy required under this
paragraph will be used to repair, restore, and/or replace the Aquatic
Center and its contents.
• Business Auto Liability insurance covering all owned, hired, and non -
owned automobiles for bodily injury, personal injury, death, and property
damage with limits of liability not less than $1,000,000 Combined Single
Limit. The insurance policy required under this paragraph must be
endorsed to name the City as an additional insured on a primary basis
without the right of contribution.
• Employer's Liability/Washington Stop Gap insurance with a limit of
liability not less than $1,000,000 each accident, each employee, and by
disease.
(b) Policies and Certificates of Insurance. The YMCA will furnish the City with
copies of the insurance policies required under this Section 5.4 and certificates of
insurance for said policies that evidence (i) said insurance has been purchased
and is in full force and effect as required hereunder and (ii) said insurance
policies may not be cancelled or amended unless twenty (20) days' prior written
notice of the proposed cancellation or amendment has been given to the City at
the City's designated address for notices under this Agreement.
(c) Waiver of Subrogation Rights. The YMCA and the City each waive any and
all rights of recovery against the other, or against the directors, officers,
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employees, and agents of the other, for all losses of or damage to such waiving
party, property, or property of others under its control, where such Toss or
damage is insured against under any insurance policy in force at the time of such
loss or damage. The YMCA will, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carriers of the mutual waiver of
subrogation contained in this paragraph.
(d) Gross Operating Expenses. During the Term of this Agreement, the cost of
insurance purchased and maintained for coverage on and in connection with the
Aquatic Center portion of the premises and any deductible the YMCA becomes
obligated to pay in connection therewith in the event of a claim, loss, or damage
associated with the Aquatic Center that triggers a defense and/or coverage under
such insurance will constitute a Gross Operating Expense under this Agreement
and be included in and subject to the reimbursement obligations set forth in
Section 7.3 below.
5.5 Delegation. The YMCA is permitted to delegate to or subcontract with third parties for
the performance of duties that are ancillary to the YMCA's management obligations
under this Agreement.
5.6 Utility Meters. All utilities will be separately metered between the Aquatic Center and
the Other Facility.
6. Use and Programming.
6.1 Use of Aquatic Center. During the Term of this Agreement, the Aquatic Center during
all times of operation and for all programs conducted therein will be made available for
use and participation by the public on a fee -per -use basis in accordance with the same
rules, policies, and hours of use as the Aquatic Center and its programs are made
available by the YMCA for the YMCA's members. The fees charged by the YMCA for
public (i.e , non -YMCA member) use of the Aquatic Center and participation in the
Aquatic Center's programs will be set by the YMCA after consultation with the City and
must be commercially reasonable in amount and generally consistent with the fees for
public use charged by facilities of similar size and scope to the Aquatic Center that are
located elsewhere in Washington state for the corresponding use and program
participation.
6.2 Programming. Prior to April 1st of each calendar year during the Term of this
Agreement, the City shall submit to the YMCA the City's reasonably requested
programs, special events, and schedule dates for general public use of the Aquatic Center
for addition to the Aquatic Center's program calendar for the following calendar year.
The YMCA shall consider and address the City's requested Aquatic Center program use
schedule when preparing the upcoming calendar year's program schedule. The City shall
have the opportunity to review and comment on the final proposed annual program
schedule to ensure public access and use of the Aquatic Center is a primary objective and
that public availability and participation requirements under Section 6.1 above are met.
The Aquatic Center shall be managed and operated as a not-for-profit institution available
to the general public without discrimination as to age, race, creed, religion, sex, marital
status, national origin, political affiliation, physical handicap, or ancestry.
7. Financial Terms.
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7.1 Pre -Opening Expenses and the Initial Budget.
(a) Pre -Opening Expenses. The City acknowledges that in addition to the
construction costs incurred by the YMCA in the development and construction of
the Aquatic Center, the YMCA will also incur certain non -construction
operational expenses in preparing the Aquatic Center for the Opening Date. Said
expenses include, but are not necessarily limited to, salary and benefits for the
Aquatic Center's Aquatic Director (who will need to be hired at a reasonable
period of time in advance of the Opening Date); recruitment, wages and training
for Aquatic Center staff; purchasing chemicals, supplies, and program
equipment; calibrating and testing the Aquatic Center's water, equipment, and
systems; utility charges; pre -opening promotional costs; and other costs
incidental to the preparation and organization of the Aquatic Center's operations
prior to the Opening Date. The City will share equally with the YMCA in all
reasonable non -construction operational expenses incurred in preparing and
organizing the Aquatic Center for the Opening Date (the "Pre -Opening
Expenses") and will reimburse the YMCA for fifty percent (50%) of the same in
accordance with procedures substantially similar to the post -Opening Date
reimbursements under Section 7.3 below.
(b) Initial Budget. Within ninety (90) days of the satisfaction of the Due Diligence,
Funding, and RCO Contingencies, the YMCA will prepare and submit to the City
Manager a proposed Initial Budget. The proposed Initial Budget must (1) set
forth the YMCA's forecast of anticipated Pre -Opening Expenses and Gross
Operating Revenue, Gross Operating Expenses, and Capital Improvement
Expenditures for the Aquatic Center for the period running from the Opening
Date through the first occurring July 31st after Opening Date; and (2) be
prepared in accordance with (i) the YMCA's internal planning and budgeting
process and (ii) a commercially reasonable degree of detail and specificity.
Following the YMCA's submission of the proposed Initial Budget to the City
Manager, representatives designated by the YMCA and the City Manager who
are familiar and involved with the YMCA's and the City's respective budgeting
processes will meet to discuss and review the proposed Initial Budgets when and
as needed to reach joint approval of final Initial Budget for the Aquatic Center at
least nine (9) months before the anticipated Opening Date. The YMCA and the
City will confer in good faith to reconcile all differences with regard to said
budgeting process.
7.2 Budgets.
(a) Annual Budgeting Process. With exception to the Initial Budget described in
Section 7.1 above, each year on or before July 1st, the YMCA will prepare and
submit to the City Manager a proposed Annual Operating Budget and a proposed
Annual Capital Improvements Budget for the Aquatic Center for the upcoming
Fiscal Year (i.e., September 1st through August 31st) (collectively the "Proposed
Budgets").
The Proposed Budgets must (1) set forth the YMCA's forecast of anticipated
Gross Operating Revenue, Gross Operating Expenses, and Capital Improvement
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Expenditures for the Aquatic Center for the upcoming Fiscal Year; and (2) be
prepared in accordance with (i) the YMCA's internal planning and budgeting
process and (ii) a commercially reasonable degree of detail and specificity.
Each year, following the YMCA's submission of the Proposed Budgets to the
City Manager, representatives designated by the YMCA and the City Manager
who are familiar and involved with the YMCA's and the City's respective
budgeting processes will meet to discuss and review the Proposed Budgets. The
City and the YMCA will reach joint approval of final Annual Operating and
Capital Improvements Budgets for the Aquatic Center at least fifteen (15) days
before the commencement of each Fiscal Year. The YMCA and the City will
confer in good faith to reconcile all differences with regard to the annual
budgeting process.
It is acknowledged and confirmed that the Initial Budget and each Annual Budget
thereafter must include, contemplate, and provide for the payment of expenses,
including, without limitation, Capital Improvement Expenditures, sufficient to
cover and satisfy the Operating Standards and all other obligations for the
management and operation of the Aquatic Center under this Agreement in
accordance with the Aquatic Center's anticipated usage.
In the event the YMCA and the City are unable to timely approve the Initial
Budget or an Annual Operating Budget and/or an Annual Capital Improvements
Budget under this Section, either party may compel the other party to participate
in mediation for the purpose of resolving the budgetary impasse. The mediator
for any such mediation must be mutually agreed upon and jointly appointed by
the YMCA and the City, with the mediator's cost to be shared equally by the two
parties. The mediation will be held in Yakima, Washington and conducted as
soon as reasonably possible after mediation is compelled with attention given to
the time -sensitive nature of the budgetary impasse. In the event the parties are
unable to agree upon a mediator, a mediator will be appointed by the Presiding
Judge for the Superior Court of Yakima County.
Until a new Annual Budget is approved, the YMCA will continue to operate and
manage the Aquatic Center in its customary manner in keeping with the Aquatic
Center's historical and ordinary practices and activities, with use of the Aquatic
Center's most recently approved Annual Operating Budget as a guide until the
contested budget(s) is/are jointly approved by the YMCA and the City under this
Section.
(b) Budget Variances. The YMCA and the City acknowledge that the Initial
Budget and each subsequent Annual Operating and Capital Improvement Budget
will only represent estimates for the Aquatic Center's annual revenues and
expenses from year -to year and that the Aquatic Center's actual revenues and
expenses may vary from the Initial and Annual Operating and Capital
Improvement Budgets for reasons beyond the reasonable control of the YMCA.
Nevertheless, the YMCA will act in good faith at all times in the operation of the
Aquatic Center and shall use commercially reasonable efforts to operate the
Aquatic Center in accordance with the approved Initial and Annual Operating
and Capital Improvement Budgets, and shall only stray from such budgets when
required by emergency, unexpected events, or to satisfy the YMCA's Operating
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Standards and other obligations under this Agreement. Accordingly, while the
YMCA will use commercially reasonable efforts to adhere to the Initial and
Annual Operating and Capital Improvement Budgets, variances in the Aquatic
Center's estimated revenues and expenses are anticipated and the City will
remain obligated to participate in and contribute toward the City's obligations
when and as set forth in this Agreement even if said contributions are larger than
contemplated in the applicable budget.
7.3 Operations.
(a) Generally. The YMCA is obligated to operate the Aquatic Center in accordance
with the terms and conditions set forth in this Operating Agreement. The City is
obligated to reimburse the YMCA for fifty percent (50%) of all annual Operating
Deficits under this Agreement in connection with the Aquatic Center incurred by
the YMCA during each Fiscal Year during the Term of this Agreement.
(b) Invoice and Payment Procedures. After the Opening Date, within thirty (30)
days after the end of each calendar month, the YMCA will submit financial
reports to the City that summarize the Gross Operating Revenue and Gross
Operating Expenses incurred by the YMCA in the operation and management of
the Aquatic Center during the preceding calendar month (the "Monthly Financial
Reports"). The Monthly Financial Reports will set forth and compare the
Aquatic Center's actual revenues and expenses with the budgeted revenues and
expenses for the applicable time period on both monthly and year-to-date bases.
The Monthly Financial Reports will be accompanied by an invoice from the
YMCA for 50% of any Operating Deficit incurred by the YMCA during the
applicable month. The City will remit full payment for all such invoices within
twenty (20) days of receipt.
In the event of an Operating Surplus for a particular month, 50% of the Operating
Surplus would be credited to the YMCA's required operating reserve and 50%
would be credited to the City's required operating reserve.
(d) Operating Reserve Fund. Throughout the Term of this Agreement, the YMCA
and the City shall each separately maintain operating reserve funds to prepare for
and offset periods when operating expenditures exceed anticipated revenue for
the Aquatic Center.
7.4 Capital Improvements.
(a) Generally. The City is obligated to reimburse the YMCA for fifty percent
(50%) of all annual Capital Improvement Expenditures (as defined under Section
1.6 above) incurred by the YMCA during each Fiscal Year during the Term of
this Agreement. Except when needed to keep the Aquatic Center safe, habitable,
in good repair and proper working order, and in compliance with all Applicable
Laws, the City will not be obligated to reimburse the YMCA for any Capital
Improvement Expenditure not included in the Initial Budget or an Annual Budget
unless and until the Capital Improvement Expenditure is approved by the City.
(b) Invoice and Payment Procedures. After the Opening Date, within thirty (30)
days after the end of each calendar month, the YMCA will submit financial
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reports to the City that summarize the Capital Improvement Expenditures
incurred by the YMCA in the operation and management of the Aquatic Center
during the preceding calendar month (the "Monthly CAPEX Reports"). The
Monthly CAPEX Reports will set forth and compare the Aquatic Center's actual
Capital Improvement Expenditures with the budgeted Capital Improvement
Expenditures for the applicable time period on both monthly and year-to-date
bases. The Monthly CAPEX Reports will be accompanied by an invoice from
the YMCA for 50% of all Capital Improvement Expenditures incurred by the
YMCA during the applicable month. The City will remit full payment for all
such invoices to the extent due and owing under this Agreement within twenty
(20) days of receipt.
(c) Capital Replacement/Refurbishing Plan. The YMCA shall develop a capital
replacement and refurbishing plan for all FF&E and major systems for the
Aquatic Center and Common Areas that will be subject to review and approval
from time to time by the City as part of the budgeting processes set forth in this
Agreement. The capital replacement and refurbishing plan will outline the
YMCA's and the City's joint priorities and plans for Capital Improvements over
the upcoming years, serve as guide during the Annual Capital Improvements
Budgeting process, and aid the City and the YMCA in making timely Capital
Improvements to ensure the Aquatic Center and Common Areas remain in
compliance with the Operating Standards set forth in Section 5.2 above.
Commencing in the fifth (5th) year after the Opening Date and again on a
periodic basis no less frequently than every five (5) years, the YMCA, as a Gross
Operating Expense, will hire a professional consultant experienced in inspecting
and assessing aquatic center facility FF&E and major systems to produce a report
in which the consultant will make recommendations concerning the Aquatic
Center and Common Areas' then -current and anticipated upcoming Capital
Improvement needs in order to remain in compliance with the Operating
Standards set forth in Section 5.2 above. Said report will guide the YMCA and
the City in the preparation and maintenance of the above-described replacement
and refurbishing plan.
(d) Capital Improvement Reserve Funds. In anticipation of Capital Improvements
that will be needed to maintain the Aquatic Center and Common Areas in
compliance with the Operating Standards set forth in Section 5.2 above and to
ensure both the YMCA and the City have a source of readily available funds to
pay Capital Improvement obligations as they become needed, the YMCA and the
City will each create and maintain separate Capital Improvement Reserve Funds
into which they will each annually contribute $40,000.00 until such time as their
respective Funds hold $1,000,000.00 (in which event additional funds will not
have to be placed in the respective Capital Improvement Reserve Funds except to
fill the funds back up to the $1,000,000.00 cap when and as money is drawn out
of the Funds to cover Capital Improvement costs). The money held in the
separate Capital Improvement Reserve Funds will remain owned and controlled
by the separate parties; provided, however, each party may withdraw money from
said Funds only when and as needed to meet and pay for Capital Improvement
obligations under this Agreement. Upon request, each party will provide the
other party with reasonable written evidence of the establishment of said party's
Capital Improvement Reserve Fund and compliance with the requirements of this
paragraph (e.g., the annual deposit of $40,000.00 into the Fund and the
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withdrawal of money from the Fund only when and as needed to pay for Capital
Improvement obligations under this Agreement). Eachparty will deposit its first
$40,000.00 into its separate Capital Improvement Reserve Fund on or before the
first annual anniversary of the Opening Date and again annually on or before
each subsequent annual anniversary of the Opening Date. It is expressly
acknowledged and agreed that each party's obligation to pay its share of Capital
Improvements under this Agreement is in no way limited by the amount of
money held in said party's Capital Improvement Reserve Funds, but instead that
the Capital Improvement Reserve Funds required under this paragraph are merely
intended to serve as a planning tool to aid the parties in preparing for their
Capital Improvement obligations as they arise under this Agreement.
7.5 Quarterly Reports. No more frequently than four times per year (quarterly, unless the
YMCA agrees otherwise), on dates and at times mutually convenient for the YMCA and
the City Manager, the YMCA will meet with the City Manager and provide written report
summaries and in-person updates on the status of the Aquatic Center's financial
performance, usage, and programs.
7.6 Books & Records; Audit Rights. The YMCA shall keep and maintain books and records
that reflect the YMCA's management and operation of the Aquatic Center under this
Agreement, including, without limitation, copies of purchase orders, invoices,
correspondence, receipts, vouchers, memoranda, and other documentation that
memorialize the Gross Operating Revenue, Gross Operating Expenses, and Capital
Improvement Expenditures incurred by the YMCA hereunder and used to calculate
Operating Surpluses and Deficits. All such books and records must be kept and be
available at the YMCA's administrative offices, and may be kept in paper and/or
electronic form; provided, however, the YMCA is not required to keep or maintain any
books or records under this paragraph (either in paper or electronic form) for longer than
six (6) years after their respective creation.
The City, at the City's sole expense and at all times throughout the Term of this
Agreement and for the six (6) years following the termination of this Agreement, has the
right to audit, examine, and take copies during normal working hours at the YMCA's
administrative offices of all books and records the YMCA is obligated to keep and
maintain under the preceding paragraph.
7.7 Audited Financial Statements. Each year during the Term of this Agreement, within
one hundred eighty (180) days of the close of the YMCA's Fiscal Year, the YMCA will
prepare and submit to the City an annual financial statement. The annual financial
statement must be prepared in accordance with generally accepted accounting principles
and include a supplemental schedule, sufficient in detail to permit a reasonable
determination by the City of the annual Gross Operating Revenue, Gross Operating
Expenses, and Capital Improvement Expenditures of the Aquatic Center. The annual
financial statement, at the YMCA's sole expense, must be audited by a licensed or
certified public accountant selected by the YMCA. The scope of the audit, as it relates to
the Aquatic Center, must be sufficient for the accountant to issue the following opinion:
"The information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and is fairly stated in all material respects in relation to the
basic financial statements taken as a whole."
Operating Agreement 13
70
8. Entry and Inspection. With reasonable prior notice to the YMCA, the City and the City's
authorized representatives may enter and inspect the Aquatic Center during the Aquatic Center's
hours of operation for the purpose of confirming the YMCA's compliance with this Agreement;
provided, however, when entering and inspecting the Aquatic Center, the City may not
unreasonably interfere with or disrupt the activities being conducted in the Aquatic Center. It is
expressly confirmed that the YMCA may keep locked desks and secure files at the Aquatic
Center.
9. Additional/Future Aquatic Facilities. This Agreement pertains to the Aquatic Center described
in Section 2 of the Development Agreement and no other facilities. Should the parties wish to
expand this Agreement to include additional facilities, including, without limitation, an outdoor
pool, the terms of said expansion would have to be negotiated, agreed upon, and set forth in a
signed and acknowledged written amendment to this Agreement.
10. Trade Names. The names "Young Men's Christian Association of Yakima," "Young Men's
Christian Association," "Yakima Family YMCA," "YMCA," "The Y," and any other trade names
used by the YMCA may not be used by the City unless approved by the YMCA and when used
alone or in connection with another work or works and/or the YMCA trademarks, service marks,
symbols, logos, and designs will in all events remain the exclusive property of the YMCA and
nothing contained herein will confer on the City the right to use any of the same.
11. Defaults, Remedies, and Dispute Resolution.
11.1 YMCA Default. In the event the YMCA materially breaches the terms of this
Agreement, the Development Agreement, and/or the Ground Lease and said breach is
not, in whole or in part, caused by the wrongful actions or omissions of the City, the City
may elect and proceed with one of the following EXCLUSIVE remedies, but only if the
City has first given the YMCA written notice of the specific default(s) alleged by the City
and the default(s) is/are not cured by the YMCA within sixty (60) days after said notice is
given (provided, however, if the nature of the default is such that more than sixty (60)
days are required for performance, the City may not act under this Section 11.1 so long as
the YMCA commences performance within said sixty (60) day period and thereafter
diligently prosecutes the same to completion):
(a) Specific Performance. The subject matters of this Agreement, the Development
Agreement, and/or the Ground Lease are unique and, for this reason, it is
stipulated that in the event of an actionable default of this Agreement, the
Development Agreement, and/or the Ground Lease under Section 11.1 above, the
City will have the right to seek equitable relief in the form of specific
performance of this Agreement's, the Development Agreement's, and/or the
Ground Lease's provisions.
(b) Termination. In lieu of seeking specific performance under Section 11.1(a)
above, in the event of an actionable default of this Agreement, the Development
Agreement, and/or the Ground Lease under Section 11.1 above by the YMCA,
the City, with an additional ninety (90) days' prior written notice to the YMCA
of the termination after the expiration of the cure period under Section 11.1
above, is permitted to terminate all (but not less than all) of the YMCA/City
Agreements to the extent any obligations remain owed thereunder. It is
acknowledged and agreed that the City may not terminate one or two of the
YMCA/City Agreements and leave one or two of the YMCA/City Agreements in
Operating Agreement 14
71
effect (i.e., if one YMCA/City Agreement is terminated, all of the YMCA/City
Agreements must be terminated), in which event the provisions of Section 4.1
above will apply just the same as they would upon the expiration of the Term and
the YMCA would have no obligation to reimburse the City for any of the City's
Financial Contribution made under Section 3 of the Development Agreement.
Notwithstanding the foregoing provisions of this Section 11.1(b), if the City
gives the YMCA written notice that this Agreement, the Development
Agreement, and the Ground Lease are terminated under this Section 11.1(b), the
City refuses to rescind the alleged termination within twenty (20) days after
written request by the YMCA, and it is later ruled by a court of competent
jurisdiction that the City was not entitled to terminate this Agreement, the
Development Agreement, and the Ground Lease under this Section 11.1(b) (e.g.,
it is determined that the YMCA had not materially breached the terms of this
Agreement, the Development Agreement, and/or the Ground Lease; it is
determined that the YMCA had cured the breach within the allowed cure period;
etc.) (a "Wrongful City Termination"), the YMCA will likely suffer damage to
the YMCA's reputation and other harms that will be difficult or impossible to
quantify. Therefore, in the event of a Wrongful City Termination, the City, in
addition to paying the YMCA all costs and attorneys' fees awarded to the YMCA
in the proceeding, will also be obligated to immediately pay the YMCA (as a fair
approximation of the likely harm the YMCA would suffer from the Wrongful City
Termination) liquidated damages in the amount of One Million and No/100 U.S.
Dollars ($1,000,000.00) plus an amount equal to the percentage increase in the
CPI from September 30, 2015, through the September 30th immediately
preceding the date of termination under this Section 11.1(b) multiplied by
$1,000,000.00; provided, however, in no event will an amount due under this
paragraph in the event of a Wrongful City Termination be less than
$1,000,000.00. For example, in the event of a Wrongful City Termination under
this paragraph, if the CPI percentage increase between September 30, 2015, and
the September 30th immediately preceding the date of termination was 10%, the
liquidated damages due under this paragraph would be $1,100,000.00 (i.e.,
$1,000,000.00 plus $100,000 based on the 10% CPI increase).
For purposes of this Section 11.1(b) and Section 11.2(b) below, the term "CPI"
means and refers to the Consumer Price Index for All Urban Consumers (West
Urban - Size B/C) published by the Bureau of Labor and Statistics of the United
States Department of Labor (Base is 1982-84=100). In the event said Index is
not published at the time it is needed under the terms of this paragraph, the
parties will mutually agree upon a substitute index which is comparable to the
Index referred to above. If the parties are unable to agree on a substitute,
comparable index, then the matter of an appropriate substitute and comparable
index to be used to implement the intent of this Section 11.1(b) will be
determined by a court of competent jurisdiction.
11.2 City Default. In the event the City materially breaches the terms of this Agreement, the
Development Agreement, and/or the Ground Lease and said breach is not, in whole or in
part, caused by the wrongful actions or omissions of the YMCA, the YMCA may elect
and proceed with one of the following EXCLUSIVE remedies, but only if the YMCA has
first given the City written notice of the specific default(s) alleged by the YMCA and the
default(s) is/are not cured by the City within sixty (60) days after said notice is given
Operating Agreement 15
72
(provided, however, if the nature of the default is such that more than sixty (60) days are
required for performance, the YMCA may not act under this Section 11.2 so long as the
City commences performance within said sixty (60) day period and thereafter diligently
prosecutes the same to completion):
(a) Specific Performance. The subject matters of this Agreement the Development
Agreement, and/or the Ground Lease are unique and, for this reason, it is
stipulated that in the event of an actionable default of this Agreement, the
Development Agreement, and/or the Ground Lease under Section 11.2 above, the
YMCA will have the right to seek equitable relief in the form of specific
performance of this Agreement's, the Development Agreement's, and/or the
Ground Lease's provisions.
(b) Termination. In lieu of seeking specific performance under Section 11.2(a)
above, in the event of an actionable default of this Agreement, the Development
Agreement, and/or the Ground Lease under Section 11.2 above by the City, the
YMCA, with an additional ninety (90) days' prior written notice to the City of
the termination after the expiration of the cure period under Section 11.2 above,
is permitted to terminate all (but not less than all) of the YMCA/City Agreements
to the extent any obligations remain owed thereunder. It is acknowledged and
agreed that the YMCA may not terminate one or two of the YMCA/City
Agreements and leave one or two of the YMCA/City Agreements in effect (i.e.,
if one YMCA/City Agreement is terminated, all of the YMCA/City Agreements
must be terminated), in which event the provisions of Section 4.1 above will
apply just the same as they would upon the expiration of the Term; provided,
however, the City would be obligated to pay the YMCA an amount equal to the
fair market value of the Other Facility and other facilities constructed on the
Leased Premises under the Ground Lease and fifty percent (50%) of the Aquatic
Center to compensate the YMCA for the loss of said assets as a result of the early
termination of this Section 11.2(b). Said amounts will be due and owing by the
City to the YMCA within ninety (90) days of the date of termination under this
paragraph. In the event of termination under this Section 11.2(b), the YMCA
would have no obligation to reimburse the City for any of the City's Financial
Contribution made under Section 3 of the Development Agreement.
Notwithstanding the foregoing provisions of this Section 11.2(b), if the YMCA
gives the City written notice that this Agreement, the Development Agreement,
and the Ground Lease are terminated under this Section 11.2(b), the YMCA
refuses to rescind the alleged termination within twenty (20) days after written
request by the City, and it is later ruled by a court of competent jurisdiction that
the YMCA was not entitled to terminate this Agreement, the Development
Agreement, and the Ground Lease under this Section 11.2(b) (e.g., it is
determined that the City had not materially breached the terms of this
Agreement, the Development Agreement, and the Ground Lease; it is determined
that the City had cured the breach within the allowed cure period; etc.) (a
"Wrongful YMCA Termination"), the City will likely suffer damage to the City's
reputation and other harms that will be difficult or impossible to quantify.
Therefore, in the event of a Wrongful YMCA Termination, the YMCA, in
addition to paying the City all costs and attorneys' fees awarded to the City in the
proceeding, will also be obligated to immediately pay the City (as a fair
approximation of the likely harm the City would suffer from the Wrongful YMCA
Operating Agreement 16
73
Termination) liquidated damages in the amount of One Million and No/100 U.S.
Dollars ($1,000,000.00) plus an amount equal to the percentage increase in the
CPI from September 30, 2015, through the September 30th immediately
preceding the date of termination under this Section 11.2(b) multiplied by
$1,000,000.00; provided, however, in no event will an amount due under this
paragraph in the event of a Wrongful YMCA Termination be Less than
$1,000,000.00.
11.3 Mediation. In the event of a dispute between the YMCA and the City with respect to the
interpretation, implementation, or performance of any obligation under this Agreement,
the Development Agreement, and/or the Ground Lease, the YMCA and the City will
attempt to resolve the dispute through a mediation process before taking action under
Section 11.1(a) -(b) or 11.2(a) -(b) above. The mediator for any such mediation must be
mutually agreed upon and jointly appointed by the YMCA and the City, with the
mediator's cost to be shared equally by the two parties. The mediation will be held in
Yakima, Washington and conducted as soon as reasonably possible after mediation is
compelled, with attention given to the time -sensitive nature of the dispute. In the event
the parties are unable to agree upon a mediator, a mediator will be appointed by the
Presiding Judge for the Superior Court of Yakima County.
12. Miscellaneous Terms.
12.1 Amendments. This Agreement may not be modified or amended except by written
agreement signed and acknowledged by each of the parties hereto.
12.2 No Joint Venture. Nothing contained in this Agreement creates the relationship of
principal and agent or of joint venture between the parties hereto.
12.3 Time is of the Essence. Time is of the essence as to all terms of this Agreement.
12.4 Notices. All notices under this Agreement must be in writing and will be deemed given
to the receiving party when (a) personally delivered to the City Manager for the City of
Yakima (for notices to the City) or personally delivered to the CEO or President of the
Yakima Family YMCA (for notices to the YMCA) or (b) three days after being deposited
in the United States Postal Service by certified mail (with return receipt requested) to the
receiving party at the receiving party's last known address(es).
12.5 Exhibits. There are no attachments to this Agreement except for the Exhibits expressly
referenced in this Agreement, each of which constitutes a part of this Agreement as if set
forth in full herein.
12.6 Headings; Construction. The captions and paragraph headings used in this Agreement
are inserted for convenience of reference only and are not intended to define, limit, or
affect the interpretation or construction of any term or provision of this Agreement. This
Agreement shall not be construed more strictly against one party than the other by virtue
of the fact that one party drafted this Agreement and/or certain clauses contained herein.
It is hereby recognized that both parties to this Agreement and their respective counsel
have had a full and fair opportunity to negotiate and review all terms and provisions of
hereof and to fully contribute to this Agreement's substance and form.
Operating Agreement 17
74
12.7 Governing Law. This Agreement will be interpreted, construed, and governed by the
laws of the State of Washington.
12.8 Assignment; Binding Effect. Except as expressly provided otherwise herein, neither
party hereto may assign any of its rights or obligations under this Agreement unless the
other party consents thereto in writing, which consent may be withheld for any reason.
Subject to any limitations on assignments provided for in this Agreement, all of the
provisions of this Agreement will inure to the benefit of and be binding on the successors
and assigns of the City and the YMCA.
12.9 Waivers. The failure of either party to seek redress for violation of or to insist upon the
strict performance of any covenant or condition of this Agreement will not prevent a
subsequent act, which would have originally constituted a violation, from having the
effect of an original violation.
12.10 Attorneys' Fees; Venue. In the event of any dispute arising out of or relating to this
Agreement, whether or not suit or other proceedings is commenced, and whether in
mediation, in arbitration, at trial, on appeal, in administrative proceedings, or in
bankruptcy (including, without limitation, any adversary proceeding or contested matter
in any bankruptcy case), the prevailing party will be entitled to its costs and expenses
incurred, including reasonable attorneys' fees. The sole venue for any dispute arising out
of or relating to this Agreement will be in a court of competent jurisdiction in Yakima
County, Washington.
12.11 Counterparts and Copies. This Agreement may be executed in any number of identical
counterparts, with each counterpart having the same effect as if all parties to this
Agreement had signed the same document. All executed counterparts of this Agreement
will be construed as and constitute one and the same instrument. A facsimile or
electronic copy (e.g., a PDF copy) of an executed counterpart of this Agreement will
have the same effect as an original executed counterpart of this Agreement.
12.12 Severability. If any provision of this Agreement or the application thereof to any person
or circumstances shall to any extent be held to be invalid or unenforceable, such
provision shall not affect or invalidate the remainder of this Agreement, and to this end
the provisions of this Agreement are declared to be severable. If such invalidity becomes
known or apparent to the parties, the parties agree to negotiate promptly in good faith in
an attempt to amend such provision as nearly as possible to be consistent with the intent
of this Agreement.
12.13 Entire Agreement. This Agreement, together with the associated Master Agreement,
Ground Lease, and Development Agreement, constitutes the entire understanding and
agreement of the parties to this Agreement with respect to its subject matter. All prior
agreements, understandings, or representations with respect to this Agreement's subject
matter are hereby canceled in their entirety and are of no further force or effect. It is
expressly acknowledged that there are no oral or other agreements which modify or affect
this Agreement.
12.14 Survival. All representations, warranties, covenants, agreements, and indemnities set
forth in or otherwise made pursuant to this Agreement shall survive and remain in effect
following the expiration or earlier termination of this Agreement; provided, however, that
Operating Agreement 18
75
nothing herein is intended to extend the survival beyond any applicable statute of
limitations period.
12.15 Authority. The execution, delivery, and performance by each party of this Agreement
has been duly authorized by their respective governing bodies (i.e., the YMCA's Board
of Directors and the City Council for the City of Yakima) in accordance with their
respective governing documents and applicable law, and no further action is necessary on
the part of either party to this Agreement or their respective governing bodies to make the
execution, delivery, and performance of this Agreement by the undersigned persons valid
and binding upon the parties to this Agreement.
[Signatures on Following Page]
Operating Agreement 19
EFFECTIVE as of the Effective Date first written above.
YOUNG MEN'S CHRISTIAN CITY OF YAKI A
ASSOCIATION OF YAKIMA
By:
o Romero, CEO
Operating Agreement
76
ourke, City Manager
CITY CONTRAC r N0: 2°15 - 2. 13
RESOLUTION NO: R LO 15- 128
20
STATE OF WASHINGTON
COUNTY OF YAKIMA
1 certify that I know or have satisfactory evidence that BOB ROMERO is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CEO for the YOUNG
MEN'S CHRISTIAN ASSOCIATION OF YAKIMA to be the free and voluntary act of such party for
the uses and purposes mentioned in the instrument. -
DATED: 7c7< 2 / 7 , 2015.
Notary Public
State of Washington
JODI L STEPHENS
MY COMMISSION EXPIRES
August 11, 2018
STATE OF WASHINGTON
COUNTY OF YAKIMA
NOTARY P BLIC for the State o Washingto
residing at /2-i?
My appointment expires:
77
rnjn
l/; z'
I certify that I know or have satisfactory evidence that TONY O'ROURKE is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CITY MANAGER for the
CITY OF YAKIMA to be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument. f n �]
DATED: 1 V )``/
Notary Public
State of Washington
SONYA R CLAAR TEE
MY COMMISSION EXPIRES
OCTOBER 25, 2018
, 2015.
iceioV
[PRINT NAME] u 4 -(110 -
NOTARY
-V IV I
NOTARY PUBLIC or the State of Washington,
residing at i,Q O
My appointor ne t expires: I C / �( .
Operating Agreement 21