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03/19/2019 08 Lease/Purchase Option Agreement with Y Hotel LLC for Property at 1808 North 1st Street
BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT 1 Item No. 8. For Meeting of: March 19, 2019 ITEM TITLE: Resolution authorizing the award to and execution of a Lease/Purchase Option Agreement with Y HOTEL LLC for City property located at 1808 North 1st Street SUBMITTED BY: Sue Ownby, Purchasing Manager -576-6695 SUMMARY EXPLANATION: The City previously purchased four separate properties that had been owned by the Tiger Oil Company and were the subject of environmental cleanup orders to address the contamination issues. The City's plan has always been to resell the property for productive development. One of the properties acquired, located at 1808 North 1st Street, remains subject to environmental investigation by the Department of Ecology and not yet amenable to a No FurtherAction finding; however, this property has been determined by Ecology to be viable for development subject to certain restrictions. The City posted and published notice on December 22 and 23, 2018, in the Yakima Herald Republic and on the City's webpage, that RFP No. 11901P was available for competitive proposals from parties interested in the lease and ultimate purchase of the City property located at 1808 North 1st Street. Responsive proposals were due to the City on February 8, 2019 at 11:00 a.m. and opened in City Hall Council Chambers. An analysis Committee was formed and met on February 8, 2019 to review, analyze and score the two proposals using the criteria specified in the RFP. Applying scores to the several criteria that were established in the RFP, the Analysis Committee's final combined scores are as follows: Vaibhav Laxmi LLC and Assignee 143 Y HOTEL LLC 265 Y HOTEL LLC received the highest overall score from the Analysis Committee and qualified as the successful proponent selected to finalize a Lease/Purchase Option Agreement for the lease and ultimate purchase of the property located at 1808 No 1st Street. Please authorize the City Manager to award and execute the Lease/Purchase Option Agreement, with Y HOTEL LLC., providing for a lease in the amount of $1,000.00 per month and an ultimate 2 sale, at such time as the property is subject to a No FurtherAction letter from the Department of Ecology, in the amount of Three Hundred Thousand Dollars ($300,000.00), all in accordance with the specific terms of the Agreement. ITEM BUDGETED: NA STRATEGIC PRIORITY: Economic Development APPROVED FOR SUBMITTAL: STAFF RECOMMENDATION: Adopt resolution. BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date o resolution 3/7/2019 o RFP 3/7/2019 o Addundum 1 3/7/2019 o Y Hotel LLC Proposal Response 3/7/2019 o Y Hotel written proposal 3/7/2019 o Y Hotel Plans 3/7/2019 o Agreement 3/8/2019 City Manager Type Cover Memo Cowl- Memo Cover Memo Cower Memo Cower Memo Cower Memo Cower Memo A RESOLUTION 3 RESOLUTION NO. R -2019 - authorizing the award to and execution of a Lease/Purchase Option Agreement with Y HOTEL LLC for City property located at 1808 North 1st Street. WHEREAS, the City previously purchased four separate properties that had been owned by the Tiger Oil Company and were the subject of environmental cleanup orders to address the contamination issues and resell the property for productive development; and WHEREAS, one of the properties acquired, located at 1808 North 1st Street, remains subject to environmental investigation by the Department of Ecology and not yet amenable to a No Further Action finding but has been determined by Ecology to be viable for development subject to certain restrictions; and WHEREAS, the City posted and published notice on December 22 and 23, 2018, in the Yakima Herald Republic and on the City's webpage, that RFP No. 11901P was available for competitive proposals from parties interested in the lease and ultimate purchase of the City property located at 1808 North 1' Street; and WHEREAS, responsive proposals were due to the City on February 8, 2019 at 11:00 a.m.; proposals that were timely received were opened in City Hall Council Chambers in Yakima, Washington; and WHEREAS, competitive proposals were received from the following two proponents: Vaibhav Laxmi LLC and Assignee, Yakima and Y HOTEL LLC, YAKIMA; and WHEREAS, in accordance with the RFP process an Analysis Committee was formed and met on February 8, 2019 to review, analyze and score the two proposals using the criteria specified in the RFP; and WHEREAS, applying scores to the several criteria that were established in the RFP, the Analysis Committee's final combined scores are as follows: Vaibhav Laxmi LLC and Assignee 143 and Y HOTEL LLC 265; and WHEREAS, Y HOTEL LLC received the highest overall score from the Analysis Committee and qualified as the successful proponent selected to finalize a Lease/Purchase Option Agreement for the lease and ultimate purchase of the property located at 1808 No 1st Street; and WHEREAS, the City Council has determined that the proposal submitted by Y HOTEL LLC meets the needs and requirements of the City of Yakima and will provide a productive use of the subject property; and WHEREAS, the Analysis Committee recommends the Award be made and the Lease/Purchase Option Agreement, attached hereto and incorporated herein by this reference, be finally negotiated with Y HOTEL LLC in a form substantially consistent with the attached Agreement; and WHEREAS, the City Council has determined that it is in the best interest of the City and for the improvement of the North First Street corridor to approve the lease and ultimate purchase of the property at 1808 North 1st Street by Y HOTEL LLC; now, therefore, 4 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The Lease/Purchase Option Agreement, attached hereto and incorporated herein by this reference, is awarded to Y HOTEL LLC; the City Manager is hereby authorized and directed to execute the Agreement with Y HOTEL LLC in substantial consistency with the terms therein, specifically providing for a lease in the amount of $1,000.00 per month and an ultimate sale, at such time as the property is subject to a No Further Action letter from the Department of Ecology, in the amount of Three Hundred Thousand Dollars ($300,000.00), all in accordance with the specific terms of the Agreement. ADOPTED BY THE CITY COUNCIL this 19th day of March, 2019. Kathy Coffey, Mayor ATTEST: Sonya Claar Tee, City Clerk RFP Release Date: December 21, 2018 CITY OF YAKIMA REQUEST FOR PROPOSAL # 11901P Lease of 1808 No. 1st St., Yakima, WA COVER SHEET — THIS IS NOT AN ORDER Proposal Receipt: Proposal envelope must be sealed and plainly marked with due date, time, and Request for Proposal (RFP) Number 11901P, and the words "DO NOT OPEN" and delivered to the address listed below. Late proposals will be rejected. Proposals MUST be date and time stamped on or before the date and time listed below that the proposal is due. Proposal openings are public. Proposals shall be firm for acceptance for ninety (90) days from date of proposal opening, unless otherwise noted. Deliver to: City of Yakima Clerk's Office 129 North 2nd Street Yakima, WA 98901 Do not bring your proposal in to the opening room. Proposal must be received and date stamped by the Clerk's Office Proposals Must be in the office no later than January 25, 2018 at 11:00 AM PST Public Opening PROPOSER'S Name & Address (to be filled out by proposer): Purchasing For: City of Yakima City Manager's Office 129 No. 2nd St. Yakima, WA 98901 Buyer in charge of this procurement (Contact for further information): Sue Ownby, Procurement Manager Phone E -Mail Address (509) 576-6695 Sue.Ownby(c�yakimawa.gov PROJECT DESCRIPTION SUMMARY LEASE, OCCUPY, DEVELOP, USE AND ULTIMATELY PURCHASE 1808 NO. IST ST, YAKIMA, WA ❑ Check if you are a WMBE or DBE Vendor and list certification Number: ❑ I hereby acknowledge receiving addendum(a) , , (use as many spaces as addenda received) In signing this proposal we also certify that we have not, either directly or indirectly, entered into any agreement or participated in any collusion or otherwise taken any action in restraint of free competition; that no attempt has been made to induce any other person or firm to submit or not to submit a proposal; that this proposal has been independently arrived at without collusion with any other Proposer, competitor or potential competitor; that this proposal has not been knowingly disclosed prior to the opening of proposals to any other Proposer or competitor; that the above statement is accurate under penalty of perjury. We will comply with all terms, conditions and specifications required by the City of Yakima in this Request for Proposal and all terms of our proposal. Name of Authorized Company Representative (Type or Print) Phone ( ) Title Fax ( ) Signature of Above Date Email Address RFP 11901P /Page 1 of 26 6 City of Yakima REQUEST FOR PROPOSALS (RFP) NO. 11901P for Lease of 1808 No. 1st St., Yakima, WA 1. PURPOSE: The City of Yakima is inviting Proposals from qualified firms interested in the lease, and ultimate purchase, of a prime real estate parcel currently owned by the City of Yakima and located at 1808 No. 1st St., Yakima, WA (the vacated Tiger Mart). 2. CITY GOALS: The City of Yakima's City Council has outlined a number of priorities; the introduction of new economic development engines is a core strategic goal. This RFP requests proposals that demonstrate a vision of community improvement, economic development and quality of life enhancements. Being at a main entry point to the City of Yakima, and due to the constraints of the parcel relating to size, the city would like to see a development oriented toward general merchandising, restaurant, office or community and customer service establishments. However, any proposal will be considered on its own merits. 3. NORTH 1ST STREET IMPROVEMENTS: The City is currently out to bid to reconstruct N. 1st Street from 200 feet S. of "N". St. to SR12. Improvements include replacing the existing roadway infrastructure, including the curb, gutter and sidewalk, constructing median islands, replacing the old water main, installing sanitary sewer, reconstructing the stormwater collection system, upgrading the street illumination system, installing pedestrian lighting, planting street -friendly trees and other landscaping, and installing benches, trash receptacles and bike racks. The new roadway section, will consist of two 11 -foot lanes each way, an 11 -foot two-way left -turn center lane, 5 - foot bike lanes and 8.5 -foot sidewalks. The City is out to bid on the revitalization project at this writing, and bids open January 3, 2019. Construction should begin approximately in March and wrap up by late 2019. The City will be installing sewer to this parcel as part of Phase 1 of the North St Street Revitalization Project. 4. SITE DESCRIPTION AND REMEDIATION ACTIVITIES: See attached Lease/Purchase Option Agreement for Legal Description. The site is located at 1808 North 1st Street in Yakima, Washington, and is zoned "Light RFP 1 l 901P /Page 2 of 26 7 Industrial". The site is bordered by arterial roadway North 1st Street to the east and Sun Country Inn to the south and west of the site. A paved entrance to the All Star Motel and Ron Nehl's Auto Sales is located to the north. The parcel has a store that operated as a retail gasoline station and convenience store until closure in 2001 and has been empty since. In 1982, a release of approximately 12,000 to 22,000 gallons of leaded and unleaded gasoline from delivery lines occurred between the tanks and dispensers. In 2005, four UST's were decommissioned and removed. Groundwater monitoring activities were conducted March 10, 2015 at the site by GeoEngineers from Spokane, WA, as indicated in the attached site map. The report concluded that "Site contaminants of concern were not detected at concentrations exceeding MTCA Method A cleanup criteria in groundwater samples obtained during the March 2015 groundwater monitoring event." The full report can be reviewed HERE. The City seeks to contract with a partner to develop the property for commercial purposes permitted by the City and by the current zoning requirements, and to purchase the property at such time as the Washington State Department of Ecology (DOE) issues a "No Further Action" (NFA) letter to the City releasing the Property from future environmental remediation obligations or mitigation measures. Based upon the most current information derived from the most recent sited investigation efforts, it is not anticipated that any substantive active remediation efforts will be required for the site. It is likely that continued well monitoring shall be required on the site until such time as an NFA is issued by DOE. At that time it is expected that the Property shall remain subject to certain Restrictive Covenants that will remain attached to the Property after the issuance of the NFA; the restrictive covenants will not interfere with the continued commercial use of the property consistent with the commercial development accomplished during the Lease Term. At all times during the Term of the Lease partner shall maintain the property and the building structures constructed thereon in a clean and attractive condition. The City shall retain the right of final approval and authorization of the structure and the commercial use constructed on the Lease property during the term of the Lease. 5. RFP ADMINISTRATION: Upon release of this RFP, all applicant communications should be directed in writing to the RFP Coordinator listed below (email preferred). Any oral communications will be considered unofficial and non-binding on the City. RFP 11901P /Page 3 of 26 8 A. RFP Coordinator: Sue Ownby, CPPO Purchasing Manager City of Yakima 129 No. 2nd Street Yakima, WA 98901 Ph: 509-576-6695 Email: sue.ownby@yakimawa.gov B. Preliminary RFP Schedule: Date RFP Release Dec 21, 2018 RFP Due Date 11:OOAM, Jan 25, 2019 Evaluation of Proposals Week of Jan 28, 2019 Contract Award Week of Feb 5, 2019 The City Manager reserves the right to accept or reject any or all proposals. 6. DUE DATE: One original proposal, with three (3) complete copies and one (1) electronic copy (CD or flashdrive), shall be sealed and must be delivered no later than 11:OOAM, January 25, 2019 to: City of Yakima Clerks Office 129 No. 2nd St. Yakima, WA 98901 Proposal packages must be marked: RFP No. 11901P Lease of 1808 No. 1St St. 7. PROPOSAL SUBMITTAL REQUIREMENTS By submitting a proposal, you represent that you have (1) thoroughly examined and become familiar with the scope of services outlined in this RFP and (2) are capable of performing quality work to achieve the City's objectives. Mandatory Proposer Qualifications 1) Development Concept. A detailed narrative description and conceptual graphic depictions of the proposed development and use of the lease property (the project). This narrative should include any anticipated or RFP 11901P /Page 4 of 26 9 proposed phasing including the type(s) of uses, proposed square footages and if applicable, any types of commercial tenants that are anticipated to occupy the project (retail/office/ commercial). 2) Financing. Provide a letter/s and/or other evidence from your lender/s, financial partners, and/or other established financial source(s) attesting to your firm's capacity to complete the proposed project in a timely manner. 3) Relevant Portfolio. A comprehensive portfolio of projects the proponent has completed that are similar to the one proposed. This information should demonstrate the proponent's track record implementing similar projects and provide a brief history and organizational structure of your firm. Identify who will be responsible for servicing the project. 4) Lease to Purchase Terms and Cost Proposal. Proponent is required to complete the Lease to Purchase Agreement and fill in the blanks which describe the financial terms representing the proponent's best offer to the City. 5) Project Timeline 6) Environmental Remediation. A statement asserting that the person/firm understands the environmental remediation activities that will continue to occur on the property and the commitment to allow remediation to continue uninterrupted until the City receives a "No Further Action (NFA) letter from the Washington State Department of Ecology. Any proposal not meeting the above mandatory qualifications will not receive any further consideration. 8. EVALUATION AND CONTRACT AWARD A. Preliminary Evaluation All Proposals shall be evaluated against the same standards. The Proposals will first be reviewed to determine if they contain the required forms, follow the submittal instructions and meet all mandatory requirements. Failure to meet mandatory requirements will result in the proposal being rejected as non-responsive. In the event that NO Proposer meets specified requirement(s), the Owner reserves the sole and unilateral right to continue the evaluation of the proposals and to 1) select the proposal most closely meets the requirements specified in this RFP, or 2) to not select any proposal. RFP 11901P /Page 5 of 26 10 B. Proposer Presentations Based on the Evaluation Team's evaluation of the written proposals on the stated criteria, an identification of up to four top scoring proposals may be short-listed. Short-listed Proposers may be required to participate in interviews and to support and clarify their Proposals, if requested to do so by the Evaluation Team. The Evaluation Team will make every reasonable effort to schedule each presentation at a time and location agreeable to the Proposer. Failure of a Proposer to interview on the date scheduled may result in rejection of the Proposer's Proposal. C. Evaluation Criteria The proposals will be scored using the following criteria. The cost proposal section shall receive a weighted score, based upon the ratio of the lowest proposal to the highest proposal. The lowest cost Proposal will receive the maximum number of points available for the cost category and other proposals will be scored accordingly. Results of reference checks will be used to clarify and substantiate information in the written proposals. The reference results shall then be considered when scoring the responses to the general and technical requirements in the RFP. The points stated above are the maximum amount awarded for each category. The evaluation process is designed to recommend award of this Lease opportunity to the proposal that best meets the overall needs of the Owner, not necessarily the lowest cost Proposal. Right to Reject Proposals and Negotiate Contract Terms The Owner reserves the right to negotiate the terms of the Lease Agreement with the selected Proposer prior to entering into a Lease. If substantial progress is not made in negotiations with the highest scoring Proposer, the RFP 11901P /Page 6 of 26 ITEM POINTS 1 Development Concepts 30 2 Project Financing 25 2 Project Team, Experience and Qualifications 20 2 Lease to Purchase Agreement/Cost Proposal 15 3 Project Milestones and Timeline 10 TOTAL 100 The cost proposal section shall receive a weighted score, based upon the ratio of the lowest proposal to the highest proposal. The lowest cost Proposal will receive the maximum number of points available for the cost category and other proposals will be scored accordingly. Results of reference checks will be used to clarify and substantiate information in the written proposals. The reference results shall then be considered when scoring the responses to the general and technical requirements in the RFP. The points stated above are the maximum amount awarded for each category. The evaluation process is designed to recommend award of this Lease opportunity to the proposal that best meets the overall needs of the Owner, not necessarily the lowest cost Proposal. Right to Reject Proposals and Negotiate Contract Terms The Owner reserves the right to negotiate the terms of the Lease Agreement with the selected Proposer prior to entering into a Lease. If substantial progress is not made in negotiations with the highest scoring Proposer, the RFP 11901P /Page 6 of 26 11 Owner may choose to cancel the first Intent to Negotiate and commence negotiations with the next highest scoring Proposer. 9. OTHER INFORMATION: Other Approvals. Proposer shall be solely responsible for obtaining approvals for any uses or required licenses (rezonings, liquor permits, etc). Protests Any protest of this RFP process shall be made in writing, signed by the protestor, and state that the Proposer is submitting a formal protest. The protest shall be filed with the City of Yakima Purchasing Manager at 129 No. 2nd St., Yakima, WA 98901, or by fax: 509-576-6394 or email to: sue.ownby@yakimawa.gov. The protest shall clearly state the specific factual and legal ground(s) for the protest, and a description of the relief or corrective action being requested. Protests based on terms in the RFP shall be filed at least five (5) calendar days before the solicitations due date, and protests based on award or after the award shall be filed no more than five (5) calendar days after Award Announcement (see below for details). The following steps shall be taken in an attempt to resolve the issues of protest with the Proposer: Step 1. Purchasing Manager and Owner Representative selected by Owner shall try to resolve the matter with protester. All available facts will be considered and the Purchasing Manager shall issue a written decision. Step II. If unresolved, within three (3) business days after receipt of written decision, the protest may be appealed to the Owner Representative by the Proposer. Owner Representative shall make a good faith effort to resolve the protest through issuance of a written determination within three (3) business days of receiving the appeal. Step III. If still unresolved within three (3) business days after Owner Representative's receipt of the appeal, the protest may be appealed to the City Manager (or his designee). The City Manager, or his designee, shall present a final written determination to the Protester. The final written determination shall not be appealable. Award Announcement Purchasing shall announce the successful Proposer via Website, e-mail, fax, regular mail, or by any other appropriate means. Once the Intent to Negotiate is released by Purchasing, the protest time frame begins. The timeframe is RFP 11901P /Page 7 of 26 12 not based upon when the Proposer received the information, but rather when the announcement is issued by Purchasing. Award Regardless of Protest When a written protest against making an award is received, the award shall not be made until the matter is resolved, unless the Owner determines that a prompt award will otherwise be advantageous to the Owner. If the award is made, regardless of a protest, the award must be documented in the file, explaining the basis for the award. Written notice of the decision to proceed shall be sent to the protester and others who may be concerned. The Owner retains the right to enter into any Lease Agreement and nothing herein shall be construed to limit that authority in any manner. Proprietary Information Any requested restrictions on the use of data contained within a proposal, must be clearly stated in the proposal itself. Proprietary information submitted in response to a request will be handled in accordance with applicable Owner procurement regulations and the Washington State Public Records Act (RCW 42.56 et seq.). Proprietary restrictions normally are not accepted. However, when accepted, it is the Proposer's responsibility to defend the determination in the event of an appeal or litigation. Unless otherwise noted, data contained in a proposal, all documentation provided therein, and innovations developed as a result of the contracted commodities or services cannot be copyrighted or patented. All data, documentation, and innovations become the property of the Owner. Proprietary Confidential Design Information Washington State Public Disclosure Act (RCW 42.56 et seq.) requires public agencies in Washington to promptly make public records available for inspection and copying unless they fall within the specified exemptions contained in the Act, or are otherwise privileged. Documents submitted under this Specification shall be considered public records and, with limited exceptions, will be made available for inspection and copying by the public. It is the intent of the Owner to post all RFP responses online and available to the public after the contract is signed. If the Proposer considers any submittal document to be protected from disclosure under the law, the Proposer shall clearly identify on the page(s) affected such words as "CONFIDENTIAL," "PROPRIETARY" or BUSINESS SECRET." The Proposer shall also submit an index with its RFP 11901P /Page 8 of 26 13 submittal identifying the affected page number(s) and location(s) of all such identified material. Marking the entire submittal as "confidential" or "proprietary" is not acceptable and is grounds to reject such submittal. In addition, the required electronic copy shall have any perceived confidential materials segregated into a separate electronic file, as the main RFP response may be automatically released upon contract signing without notification. If a request is made for disclosure of such identified documents or portions thereof, the Owner will determine whether the material is exempt from public disclosure. If, in the Owner opinion, the material is subject to disclosure, the Owner will notify Proposer of the request and impending release and allow the Proposer 10 days to take whatever action it deems necessary to protect its interests. All expense of such action shall be borne solely by the Proposer, including any damages, attorney's fees or costs awarded by reason of having opposed disclosure and Proposer shall indemnify Owner against same. If the Proposer fails or neglects to take such action within said period, the Owner will release all materials deemed subject to disclosure. Submission of materials in response to this solicitation shall constitute assent by the Proposer to the foregoing procedure and the Proposer shall have no claim against the Owner on account of actions taken pursuant to such procedure. RFP 11901P /Page 9 of 26 14 10.SAMPLE CONTRACT (Fill in BLANKS and return with RFP response) LEASE / PURCHASE OPTION AGREEMENT CITY OF YAKIMA TO This lease/purchase option agreement (hereinafter the "Lease"), made and entered into January , 2019, by and between the CITY OF YAKIMA, WASHINGTON, a municipal corporation, ( the "City") and (""), d/b/a WITNESETH: WHEREAS, City owns certain real property, identified as Yakima County Accessor Parcel Number 181312-44412, located at 1808 North 1st St, Yakima, WA, including several buildings located thereon (collectively referred to herein as the "Property"), available for limited use as more specifically provided by this Lease, and legally described as: That part of Gordon's Highway Tracts, recorded in Volume "I" of Plats, page 22, and that part of the South 870.00 feet of the West 1/2 of the Southeast 1/4 of the Southeast 1/4 of Section 12, Township 13 North, Range 18 East, W.M., bounded as follows: Beginning at the Northeast corner of Lot 15 of said Plat of Gordon's Highway Tracts, 24 feet West reference bearing, along the Easterly line of said Plat of Gordon's Highway Tracts, also being the Westerly right of way line of North First Street, 170.00 feet to a point which is 5.00 feet South 0° 24' West of the Northeast corner of Lot 12 of said Plat; thence North 89° 40' West, parallel with the Northerly line of said Plat, 155.00 feet; thence North 0° 24' East 170.00 feet to the Easterly extension of the Northeast line of Lot 15 of said Plat; thence South 89°40' East 155.00 feet to the point of beginning.; and WHEREAS, desires to lease, occupy, develop, use and ultimately purchase the Property in accordance with the specific terms and conditions set forth in this Lease / Purchase Option Agreement, NOW THEREFORE, in consideration of the mutual covenants contained herein and the benefit to be derived by each party, the parties agree as follows: RFP 11901P /Page 1.0 of 26 15 1. INTENT OF AGREEMENT: The intent of this Lease is to Lease the Property to so that can develop the property for commercial purposes permitted by the City and by the current zoning requirements, and to purchase the property at such time as the Washington State Department of Ecology (DOE) issues a "No Further Action" (NFA) letter to the City releasing the Property from future environmental remediation obligations or mitigation measures. City and agree that it is likely the Property shall remain subject to certain Restrictive Covenants that will remain attached to the Property after the issuance of the NFA and understand the restrictive covenants will not interfere with the continued commercial use of the property consistent with the commercial development accomplished thereon during the Lease Term. At all times during the Term of the Lease shall maintain the property and the building structures constructed thereon in a clean and attractive condition. The City shall retain the right of final approval and authorization of the structure and the commercial use constructed on the Lease property during the term of the Lease. 2. DEMISE OF PROPERTY: City hereby leases to and leases from City the Property, together with all rights of ingress, egress, public road access and use of utility connections to the Property. shall clean up, develop and maintain the Property, including the parking area and building(s) constructed thereon, in a neat, professional, attractive condition and appearance suitable for commercial purposes within months of taking possession of the Property under the terms of this Lease. 's failure to commercially develop and maintain the Property as described herein shall constitute a material breach of the Lease, in which event the City, at its option, may terminate the Lease for cause. 3. TERM — EFFECTIVE DATE: The tenancy provided by this Lease shall be for an initial five (5) year Lease Term commencing on January , 2019 and ending on December 31, 2023, unless earlier terminated as provided in this Lease. shall have the option to extend its tenancy under this Lease for additional five (5) year terms if the City has not received an NFA letter from DOE before the time for a Lease renewal notice opportunity arises as provided herein. may renew the Lease by providing written notice to City at least six (6) months prior to the end of the preceding Lease term of intent to extend the Lease. The initial five year Lease, together with any extension(s) thereof, shall be the Lease term (the "Term"). RFP 11901P /Page 11 of 26 16 4. MORTGAGE: shall not have the right, authority or permission to mortgage the leasehold created by this Lease or any sublease hereunder or assignment hereof, in whole or in part, for the entire Term. 5. RENT AND PURCHASE OPTION: In consideration of the demise of the Property, and the terms and conditions stated herein, agrees to pay the City to lease the property as follows: per month, payable on the first day of each month, every month during the full Term, beginning on the first day of the tenancy, pro -rated for the days left in the month tenancy begins if tenancy does not begin on the first day of a month. Five Hundred Dollars ($500.00) of each monthly payment shall be retained by the City in an interest-bearing account that will be applied to the purchase price of the property at such time the Purchase option is exercised. In the event fails to complete the Property purchase after City's receipt of the NFA from Department of Ecology as set forth herein the funds the City retained from the rental payments, together with all accrued interest thereon, shall become the property of the City upon termination of the Lease. The purchase price agreed upon by the parties to fulfill the Purchase Option provided herein shall be ), the unpaid balance of which shall be paid in full by upon exercising the purchase option. Rent payments shall be made to the City of Yakima at the City Finance Office or at such other place as shall be directed by CITY. In the event exercises the option to extend this Lease, monthly payments during the extended Lease term shall likewise be paid on the first day of each month during the extension(s). 6. DEPOSIT: shall deposit with the City upon the effective date of the Lease. The deposit funds shall be retained by the City during the period of the Lease Term in an interest-bearing account. The deposit shall be retained by the City in the event initiates demolition of the buildings and parking lot existing on the Property at the initiation of the Lease but fails to complete development of the parcel prior to terminating the Lease agreement. In the event completes commercial development of the Property and fully exercises the purchase RFP 11901P /Page 12 of 26 17 option provided herein the deposit funds, together with interest accrued thereon, shall be applied to the unpaid purchase value of the Property. 7. TAXES AND LIENS: In addition to the monthly rent as it comes due, promises and agrees to pay, as the same become due and payable, all governmental fees and taxes, if any, payable by reason of this Lease, the use of the Property, or the construction or ownership of improvements thereto, specifically to include leasehold excise tax. shall neither suffer nor permit the attachment of any lien or other encumbrance on the Property. agrees to defend, indemnify and hold harmless City from any such fees, taxes or liens that are permitted to accrue against the Property. 8. USE: Neither nor any of 's sub -tenants shall release hazardous substances into the soil or groundwater on the Property. They shall use the Property only for commercial purposes acceptable to and approved by the City as otherwise described in the Lease. 's use of the Property shall be subject to the following additional limitations: A. Use, together with any development, restorative construction and maintenance performed on the Property by or 's subtenants, shall be compatible with the Property's zoning in effect at the commencement of the Term and shall not include or allow any excavation or disruption of the surface of the Property or in any way alter the Property surface from the condition it is in at the initiation of the Lease Term without the specific approval of CITY, which approval may include consultation with the Department of Ecology. All Department of Ecology sampling wells on the Property shall be protected and preserved from damage during construction and upon completion thereof, during the Lease Term and thereafter as required by DOE. shall be responsible for all cost of repair or replacement of said sampling wells for any damage that occurs to them during the Lease Term. The sampling wells shall remain accessible to DOE at all times in a manner sufficient to allow continued sampling as DOE deems necessary and appropriate. B. The Property shall be used only for lawful commercial purposes appropriate for the location and the layout of the Property as approved and permitted by the City, such approval not to be unreasonably withheld or delayed. During the Lease Term the property shall not be permitted to be used for any purposes related to marijuana production, processing or sale. RFP 11901P /Page 13 of 26 18 C. During the entire term of the Lease, and until a No Further Action letter is received from the Department of Ecology for the property, the property shall remain subject to continued well monitoring and oversight by the Department of Ecology. That oversight will not prevent development of the property, but shall require that the Lessee allow DOE staff and their contractors access to the site as necessary to continue the monitoring. This monitoring will not prohibit property use and development as approved by the City, as set forth herein. It is not expected that any active exploration or excavation shall be necessary on the property during the course of the DOE monitoring work. 9. UTILITIES: shall be responsible for any necessary installation and operational service costs for all utility services used by or 's subtenants, from the exterior edge of the Property to the points of connection or use on the Property, including, but not limited to, power, natural gas, water, sewer, garbage and communication. 10. PREMISES CONDITION: accepts the Property AS -IS. Nothing contained in the preceding sentence shall affect 's right to indemnification from the City as provided in Section 19 hereof. 11. MAINTENANCE: agrees, at its sole cost and expense, to keep the Property, including the asphalt lot and any buildings constructed thereon, clean, neat and in good repair and shall provide all necessary building structure and landscaping maintenance services, fertilizing, irrigation, sweeping, cleaning, parking lot cleanup and trash and litter collection, such that the Property remains attractive, safe, clean and well-maintained. shall also be responsible for all necessary snow removal and pavement maintenance to keep the property safe and publicly accessible. 12. SIGNS: may be permitted to erect commercial signage so long as all necessary permits are acquired and all applicable codes are complied with for the installation and maintenance thereof. Billboard signage shall not be permitted. RFP 11901P /Page 14 of 26 19 13. IMPROVEMENTS: All development, construction, trade fixtures and other improvements existing on the Property or those that may be installed thereon by or 's subtenants during the Lease Term shall be made to conform to applicable land use, zoning and building regulations and codes. shall be responsible for procuring all building and operational permits required for work performed upon the Property. All new improvements to the grounds or the building structures that may be provided by shall first be presented to the City for consideration and prior approval before being constructed on the Property, which approval shall not be unreasonably withheld. Approval of any such additional improvements or modifications shall be deemed granted forty-five (45) days after submitting the proposal in writing to City if no specific response has been provided by City to within that time. City shall not impose a condition upon the approval of such improvements or modifications thereto that violate any applicable law, or which would violate any insurance policy required to be maintained by 14. REVERSION OF IMPROVEMENTS AND FIXTURES UPON EXPIRATION OR TERMINATION OF LEASE: Upon expiration or termination of this Lease for any reason, unless otherwise agreed to in writing between City and , all improvements to the Property shall revert to the City without requirement of payment of any type by City to Upon termination or expiration of this Lease, shall remove all its trade fixtures and repair any damage to the Property caused by removal of said trade fixtures to the reasonable satisfaction of the City Manager. Fixtures not removed on or before the effective date of termination or expiration shall become the property of the City unless other arrangements have been previously approved in writing by the City Manager. shall, as additional consideration for grant of this Lease, insure that all liens, security interest and other encumbrances against said improvements and structures, except those created or suffered by City, whether consensual or involuntary, shall be paid, discharged or satisfied prior to time for reversion thereof to City; and, in any event, the parties acknowledge that City shall not, by virtue of termination of the leasehold interest nor reversion of the structures or other improvements, be liable for any debt or encumbrance associated therewith, whether now existing or hereafter incurred, levied or attached. RFP 11901P /Page 15 of 26 20 15. REGULATIONS: agrees to comply with all applicable laws, ordinances, rules, regulations and policies of all governmental authorities having jurisdiction over the Property, including policies adopted by City, as such laws, ordinances, rules, regulations and policies apply to the demolition, development, use and operation of the Property. 16. SUBLETTING: Subject to the agreement to perform and the performance of the terms hereof by subtenant, City's written consent is required for any sublease of the Property by . City agrees that in accordance with the terms of City's prior written approval and consent set forth in this Lease may be authorized to enter into space leases and subtenant rental agreements within the Property for individual facility operations. No sublease shall relieve or any subtenants thereof of the obligation to perform this Lease in accordance with the terms herein. 17. ASSIGNMENT: shall not assign its interest in this Lease to another party without the express written consent of the City. City may withhold consent to 's request for an assignment in City's sole discretion. If approved by City in writing, any assignee of this Lease and/or 's rights hereunder shall assume all of 's obligations under this Lease. However, said assignment shall not relieve of its obligation to perform this Lease in every respect. Such assignment shall be in conformance with all City, local, state and federal laws, ordinances, rules, regulations and policies and the assignee shall comply with all laws, ordinances, rules, regulations and policies applicable to the use and operation of the Property, facilities and operations as those laws, ordinances, rules, regulations and policies now exist or may hereafter become effective. City's consent to assignment shall not be construed to be consent to any subsequent assignment. 18. MISCELLANEOUS PROVISIONS: A. City may further develop or improve adjacent City property, infrastructure and facilities regardless of the desire or views of with respect to any such development or improvement, and without interference or hindrance on the part of and without liability to. B. shall be responsible for weed control on the Property, including but not limited (where appropriate) to: mowing; spraying; removal of noxious weeds, etc. RFP 11901P /Page 16 of 26 21 C. shall post unused portions of the Property against trespass by unauthorized individuals and shall prevent illegal dumping of debris on the property. 19. INDEMNITY/DUTY TO DEFEND: A. Except as provided in Paragraph 19(E), shall defend, indemnify and hold harmless City and its elected and appointed officials, employees and agents, from any and all losses directly suffered by City and from any and all liability, damages, suits, claims, actions, judgments or decrees, including attorney fees and costs, made against the City or its elected and appointed officials, employees and agents based on the use or occupancy of the Property during the Term or from default by or any assignee or subtenant hereunder, in any term or condition of this Lease. B. Except as provided in Paragraph 19(E), City shall defend, indemnify and hold harmless from any and all losses directly suffered by and from any and all liability, damages, suits, claims, actions, judgments or decrees, including attorney fees and costs, made against based on the use or occupancy of the Property for any time other than during the Term or as a result of City's default in any term or condition of this Lease, excepting any liability, damage, suit, or claim arising from the occupancy or use of the Property by or as a result of 's operations on the Property or from any other act or omission of , its servants, employees, agents, invitees, independent contractors, assignees, subtenants or any other entity, person, firm or corporation acting on behalf of or under its direction, whether such claim shall be by or a third party; provided, however, that shall not be liable for any injury, damage or loss occasioned solely by the sole negligence of City, its agents or employees. City shall give prompt and reasonable notice of any such claims or actions and shall have the right to investigate, compromise and defend the same to the extent of its interest. C. City shall defend, indemnify, and hold harmless from any and all claims and actions, loss, damage, expense or cost, resulting from, arising out of, or caused by City and which leads to any liability under the Federal Comprehensive Environmental Response Compensation Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.; Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq.; Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.; the Clean Water Act, 42 U.S.C. 1251 et seq.; the Washington Environmental Policy Act, RCW Ch. 43.21C; the Washington Water Pollution Control Act, RCW Ch. 90.48; the Washington Hazardous Waste Management Act, RCW Ch. 70.105; the Washington Model Toxic Control Act, RCW Ch. 70.105D, and the regulations promulgated thereunder, or under any applicable local or state RFP 11901P /Page 17 of 26 22 environmental ordinance, statute, law, rule or regulation, for all claims, actions, loss, damage, expense or cost associated with environmental conditions that pre-existed the initiation of this Lease and that arise during the Term. The City shall not be liable for or indemnify for any claims of environmental liability that may arise after exercises the Purchase Option provided herein. PROVIDED, that during the Lease Term the City shall have a continuing right of entry upon the Property, upon providing with a one (1) week notice of said entry (excepting emergency occurrences where no notice is necessary and excepting occurrences for which one weeks' notice is impractical, wherein the City will provide notice as the occurrence allows) to conduct necessary tests and actions required for compliance with the Washington State Department of Ecology (Ecology) with respect to the continuing environmental investigation and mitigation of hazardous substances on the Property. City reserves the right to take whatever actions are required by Ecology to resolve the environmental conditions on the Property, even if the actions taken result in a temporary or permanent effect upon 's use of the Lease Property. City and agree that any resultant diminishment of the Lease Property shall be addressed in a negotiation of the Lease terms and conditions, up to and including termination of the Lease. The provisions of this Paragraph 19(C) shall survive the termination of this Lease. D. shall defend, indemnify, and hold harmless City, its elected and appointed officials, agents and employees, free and harmless from any and all claims and actions, loss, damage, expense or cost, resulting from, arising out of, or caused by , its assignees and/or subtenants, or arising after exercises the Purchase Option provided in this Agreement and that result in any liability under the Federal Comprehensive Environmental Response Compensation Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.; Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq.; Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.; the Clean Water Act, 42 U.S.C. 1251 et seq.; the Washington Environmental Policy Act, RCW Ch. 43.21C; the Washington Water Pollution Control Act, RCW Ch. 90.48; the Washington Hazardous Waste Management Act, RCW Ch. 70.105; the Washington Model Toxic Control Act, RCW Ch. 70.105D, and the regulations promulgated thereunder, or under any applicable local or state environmental ordinance, statute, law, rule or regulation. The provisions of this Paragraph 19(D) shall survive the termination of this Lease. E. The defense, indemnity, and hold harmless provisions provided in Paragraphs 19(A) through 19(D) hereof shall apply only to the extent the party claiming same is not at fault with respect to the event giving rise thereto. If both parties are at fault, such defense, indemnity, and hold harmless shall be applied under principles of comparative fault. RFP 11901P /Page 18 of 26 23 20. INSURANCE: agrees that, at all times during the full Lease Term, it shall, at its own expense, maintain in full force and effect adequate fire and other casualty coverage for the Property and structures, buildings, infrastructure and contents, including all 's personal property, fixtures and improvements. Such policy shall include a replacement cost endorsement. shall obtain and file with the City's Risk Manager a Certificate of Insurance evidencing such coverage. shall provide the City with a thirty (30) day cancellation notice prior to any policy cancellation. Adequacy of coverage is defined as insurance sufficient to restore the Property to its pre -casualty condition. Prior to execution of this Lease, , at its expense, shall obtain and file with the City's Risk Manager a Certificate of Insurance evidencing commercial general liability insurance coverage ("CGL") providing coverage of at least $2,000,000 per occurrence and $2,000,000 general aggregate. This Certificate of Insurance shall be subject to approval by the City's Risk Manager as to company, terms and coverage and said approval shall not be unreasonably withheld. The CGL shall name the City, its elected officials, officers, agents, employees, and volunteers as additional named insureds and must protect the City from any and all claims and risks and losses in connection with 's activities or omissions by virtue of this Lease. The CGL policy shall remain in full force and effect at 's sole expense for liability for property damage or personal injury that may occur in connection with activities or omissions by , and provide continuous coverage for the full Term of this Lease and the Agreement. shall ensure that the City's Risk Manager is given thirty (30) calendar days prior written notice, by certified mail, of any cancellation, lapse, reduction or modification of such insurance. 21. DEFAULT; TERMINATION; AND FORFEITURE: A. 's failure to comply with any material term, provision or condition of this Lease shall constitute grounds for termination of this Lease. This Lease and tenancy shall terminate for cause as specified above on written notice by City to stating in detail the manner in which fails or has failed to comply with this Lease. shall comply with this Lease in the manner specified in the notice within sixty (60) days (except twenty days with respect to default regarding payment of rent or other monetary obligation) from 's receipt of such notice, provided, however, that if the nature of 's default (other than for monetary defaults) is such that more than sixty (60) days are reasonably required for its cure, then shall not be deemed to be in default if commences such cure within said sixty (60) day period and thereafter diligently prosecutes RFP 11901P /Page 19 of 26 24 such cure to completion; otherwise this Lease and tenancy shall be terminated. Such notice shall be given in writing and served on by personal delivery or mailed by certified mail with return receipt requested addressed to at its address stated below or such other address as the parties may hereafter advise each other in writing. Notices shall be deemed received three (3) days after mailing. In addition to the provisions hereinabove, and/or as an alternative or cumulative remedy, City may, at its sole election, pursue any other action, redress, or remedy now or hereafter available to City under the laws of the State of Washington, including state Landlord -Tenant laws. B. As respects land, land improvements and the buildings and structures thereon, as additional and not alternative remedy, optional with City and upon sixty (60) days written notice to , should be in default hereunder, City may cure or correct the same and the cost of such action by City shall immediately become due and payable to the City by together with late fees on said sum at a rate of ten percent (10%) per annum, and the non-payment of said sum by shall be adequate grounds for City to invoke the other remedies as provided in this Lease. C. The failure by City to comply with any material term, provision or condition of this Lease shall constitute grounds for termination of this Lease. This Lease and tenancy shall terminate for cause as specified above on written notice by to City stating in detail the manner in which City fails or has failed to comply with this Lease. City shall comply with this Lease in the manner specified in the notice within sixty (60) days from City's receipt of such notice, provided, however, that if the nature of City's default is such that more than sixty (60) days are reasonably required for its cure, then City shall not be deemed to be in default if City commences such cure within said sixty (60) day period and thereafter diligently prosecutes such cure to completion, otherwise this Lease and tenancy shall be terminated. Such notice shall be given in writing and served on City by personal delivery or mailed by certified mail with return receipt requested addressed to City at its address stated below or such other address as the parties may advise each other in writing. Notices shall be deemed received three (3) days after mailing. In addition to the provisions hereinabove, and/or as an alternative or cumulate remedy, may, at its sole election, pursue any other action, redress, or remedy now or hereafter available to it under the laws of the State of Washington, including state Landlord -Tenant laws. 22. DISPUTE RESOLUTION: In the event that any dispute shall arise as to the interpretation of this Lease, or in the event of a notice of default as to whether such default does constitute a breach of the Lease terms, and if the parties hereto RFP 11901P /Page 20 of 26 25 cannot mutually settle such differences, then the parties shall first pursue mediation as a means to resolve the dispute. If both parties consent in writing, other available means of dispute resolution may be implemented. 23. VENUE, ATTORNEY FEES: In the event dispute resolution is not successful and litigation is initiated to enforce the rights and obligations hereunder, venue shall lie in a court of competent jurisdiction in Yakima County, Washington. The prevailing party shall be entitled to its reasonable attorney fees in addition to court costs. 24. NON-DISCRIMINATION CLAUSE: To the extent required by law, , for itself, its personal representatives, successors in interest and assigns, as a part of the consideration hereof, does hereby covenant and agree as follows: A. No person, on the grounds of race, color, religion, sex, age, marital status, handicap or national origin, shall be unreasonably excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in 's personnel policies and practices or in the use or operation of 's services or facilities. B. agrees that in the construction of any improvements on, over or under City land and the furnishing of services thereon, no person, on the grounds of race, color, religion, sex, marital status, handicap, age or national origin, shall be unreasonably excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination. 26. OPTION TO PURCHASE: As a further condition of the Lease, and in consideration of the terms and conditions set forth herein, including but not limited to the requirement to maintain the property in a good condition and consistent with the value added by the improvements makes to the property, that at such time as the City receives a No Further Action (NFA) letter from the Department of Ecology regarding the environmental remediation work that has been occurring on the property for several years, the City shall forward a copy of the NFA letter to . Within forty five (45) days from receipt of said letter shall present the City with an offer to purchase the property (PSA) for less credit for the of each monthly rent payment that has been applied to partial payments of said purchase price, and less the Deposit amount of plus accrued interest that the City has held during RFP 11901P /Page 21 of 26 27. the Term. The PSA shall contain the following language regarding the obligation to comply with the conditions mandated by DOE under the Consent Decree that concerns this property: Seller warrants and represents that the property is subject to an Environmental Covenant granted to the Washington State Department of Ecology by the City of Yakima on the 11th day of December, 2015 and recorded with the Yakima County Auditor. The parties specifically understand and agree that alt uses and activities occurring on the property must comply with the terms of the referenced Covenant. Initial: (City) Initial: CONTRACT DOCUMENTS: Exhibit A (to be attached to final agreement) will contain the Proposer's Response, project concept, plans, renderings and other relevant documentation. 28. INTEGRATION: Exhibits and Recitals are incorporated herein by this reference. This Lease and the Agreement incorporated herein embody the entire agreement between the parties with respect to the subject matter herein contained. No amendments or modifications hereof shall be enforceable unless in writing, signed by the party to be charged. 29. THIRD PARTY BENEFICIARY: Nothing in this Agreement is intended to create any rights in any entity not a party to this Agreement nor is any person or entity not named a party herein a third party beneficiary to this Agreement. 30. NOTICE: All notices allowed or required hereunder shall be effective if given in writing and served by personal delivery or delivered by certified mail, return receipt requested, at the address shown below unless a different address is designated by a party in writing: If to City: If to RFP 11901P /Page 22 of 26 YAKIMA CITY MANAGER 129 N. 2nd Street Yakima, Washington 98901 26 27 31. BINDING EFFECT AND BENEFIT: This Lease shall be binding upon and inure to the benefit of the parties hereto, their successors, assigns and subtenants. 32. AMENDMENTS: Any Amendment to the Lease shall be made in writing and signed by both parties to the Lease. 33. SEVERABILITY: If any term or provision of this Agreement is found invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be enforceable and effective to the fullest extent permitted by law. Further, the parties shall negotiate in good faith regarding amendments to this Agreement that would effectuate the intent of any provision held invalid or not enforceable. CITY: CITY OF YAKIMA, WASHINGTON By: Cliff Moore, City Manager Date STATE OF WASHINGTON ) ) ss County of Yakima ) I certify that I know or have satisfactory evidence that Cliff Moore signed this instrument, on oath stated that they were authorized to execute the instrument and acknowledged it as the City Manager of the City of Yakima, Washington to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Date: By: RFP 11901P /Page 23 of 26 28 Notary Public Appointment Expires L By: By: STATE OF WASHINGTON ) ) ss County of Yakima ) Date Date I certify that I know or have satisfactory evidence that and signed this instrument, on oath stated that he/they were authorized to execute the instrument and acknowledged it to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Date By: Notary Public Appointment Expires RFP 11901P /Page 24 of 26 29 EXHIBIT A Respondents RFP response will be attached, as well as project concept, plans, renderings and other relevant documentation. RFP 11901P /Page 25 of 26 Ron Nehl Auto Sales All Star Motel,n. Fuel Dispenser islands Former. Convenience Store. Data Sourc Aerial base fromArOGIS Online. Parcel and u T.y cad base data provided by City of Yakima Engineering Department. January 2015. Projection. NAD 1983 StatePlane Washington South PIPS 4602 Feet Notes' 1. The locations 0186 feat, res shown are approximate. 2. This drawing 's for information purposes. I intended to assist in showing features discussed in an t ached document GeoEnginee sInc. cannot guarantee the accuracy and content of electronic files. The master file is stored by GeoEngineers. Inc and will serve as the official record of 1nis communication. 9 egend N1 DB -6 9 NIMW-1 Boring Number and Approximate Location Monitoring Well Number and Approximate Location GRPH, BTEX, or Naphthalene Concentrations in Soil Greater Than MTCA Method A Cleanup Levels r —' Approximate Former Tank ( I Pit Location Approximate Parcel Boundary 50 0 50 Feet Site Plan and Sample Locations Tiger Oil North 1st Yakima, Washington GE©ENGINEERS Figure 2 RFP 11901P /Page 26 of 26 31 129 North 2"° Street . Yakima, Washington . 98901 Addendum No. 1 BID 11901P to Lease 1808 No. 2st St, Yakima, WA PLEASE MAKE THE FOLLOWING CHANGES TO YOUR SPECIFICATIONS The due date of this Bid has been extended to 11:00 AM, February 8, 2019 Please acknowledge receipt of this addendum on the Signature Sheet (page 1) of the Bid document in the space provided. If you have any questions please call me at (509) 576-6695. Sincerely, Sue Ownby, CPP©, CPPB Procurement Manager Phone (509) 575-6095 Fax- (509) 576-6394 Email: Susan,Knot?s©Yakima WA. Gov Web. 32 10.8AMPLE CONTRACT (Fi I in BLANKS and return with BBB esponse) LEASE PURCHASE OPTION AGREEMENT CITY OF YAKIMA TO Y HOTEL lic This lease/purchase option agreement (hereinafter the "Lease"), made and entered into February 8, 2019, by and between the CITY OF YAKIMA, VVASH1NGTON, a municipal corporation, ( the "City") and Y Hotel llc ("YHR„ d/b/a Hotel Y. WITNESETH: WHEREAS, City owns certain real property, identified as Yakima County Accessor Parcel Number 18131244412, located at 1808 North 1st St, Yakima, WA, including several buildings located thereon (collectively referred to herein as the "Property"), available for limited use as more specifically provided by this Lease, and legally described as: That part of Gordon's Highway Tracts, recorded in Volume 1' of Plats, page 22, and that part of the South 870,00 feet of the West % of the Southeast 1/4 of the Southeast % of Section 12, Township 13 North, Range 18 East, VV,M., bounded as follows: Beginning at the Northeast corner of Lot 15 of said Plat of Gordon's Highway Tracts, 24 feet West reference bearing, along the Easterly line of said Plat of Gordon's Highway Tracts, also being the Westerly right of way line of North First Street, 170.00 feet to a point which is 5,00 feet South 0° 24West of the Northeast corner of Lot 12 of said Plat; thence North 89° 40' West, parallel with the Northerly line of said Plat, 155.00 feet; thence North 0" 24' East 170,00 feet to the Easterly extension of the Northeast line of Lot 15 of said Plat; thence South 89°40' East 155,00 feet to the point of beginning.; and WHEREAS, Y1 -I desires to lease, occupy, develop, use and ultimately purchase the Property in accordance with the specific terms and conditions set forth in this Lease / Purchase Option Agreement, NOW THEREFORE, in consideration of the mutual covenants contained herein and the benefit to be derived by each party, the parties agree as follows: RFP 11901P /Page 10 of 26 33 1. INTENT OF AGREEMENT: The intent of this Lease is to Lease the Property to YH so that YH can develop the property for commercial purposes permitted by the City and by the current zoning requirements, and to purchase the property at such time as the Washington State Department of Ecology (DOE) issues a "No Further Action" (NFA) letter to the City releasing the Property from future environmental remediation obligations or mitigation measures. City and YH agree that it is likely the Property shall remain subject to certain Restrictive Covenants that will remain attached to the Property after the issuance of the NFA and understand the restrictive covenants will not interfere with the continued commercial use of the property consistent with the commercial developme t YH accomplished thereon during the Lease Term, At all times during the Term of the Lease YH shall maintain the property and the building structures constructed thereon in a clean arid attractive condition. The City shall retain the right of final approval and authorization of the structure and the commercial use constructed on the Lease property during the term of the Lease. 2. DEMISE OF PROPERTY: City hereby leases to YH and YH leases from City the Property, together with all rights of ingress, egress, public road access and use of utility connections to the Property. YH shall clean up, develop and maintain the Property, including the parking area and building(s) constructed thereon, in a neat, professional, attractive condition and appearance suitable for commercial purposes within 2 months of taking possession of the Property under the terms of this Lease. YH's failure to commercially develop and maintain the Property as described herein shall constitute a material breach of the Lease, in which event the City, at its option, may terminate the Lease for cause. 3. TERM — EFFECTIVE DATE: The tenancy provided by this Lease shall be for an initial five (5) year Lease Term commencing on February 8, 2019 and ending on December 31, 2023, unless earlier terminated as provided in this Lease. YH shall have the option to extend its tenancy under this Lease for additional five (5) year terms if the City has not received an NFA letter from DOE before the time for a Lease renewal notice opportunity arises as provided herein. YH may renew the Lease by providing written notice to City at least six (6) months prior to the end of the preceding Lease term of intent to extend the Lease. The initial five year Lease, together with any extension(s) thereof, shall be the Lease term (the "Term"). RFP 11901P /Page 11 of 26 4. MORTGAGE: YH shall not have the right, authority or permission to mortgage the leasehold created by this Lease or any sublease hereunder or assignment hereof, in whole or in part, for the entire Term. RENT AND PURCHASE OPTION: In consideration of the demise of the Property, and the terms and conditions stated herein, YH agrees to pay the City to lease the property as follows: /000 per month, payable on the first day of each month, every month during the full Term, beginning on the first day of the tenancy, pro -rated for the days left in the month tenancy begins if tenancy does not begin on the first day of a month. Five Hundred Dollars ($500.00) of each monthly payment shall be retained by the City in an interest-bearing account that will be applied to the purchase price of the property at such time the Purchase option is exercised. In the event YH fails to complete the Property purchase after City's receipt of the NFA from Department of Ecology as set forth herein the funds the City retained from the rental payments, together with all accrued interest thereon, shall become the property of the City upon termination of the Lease. The purchase price agreed upon by the parties to fulfill the Purchase Option provided herein shall be 0'300 000 ), the unpaid balance of which shall be paid in full by upon exercising the purchase option. Rent payments shall be made to the City of Yakima at the City Finance Office or at such other place as shall be directed by CITY. In the event YH exercises the option to extend this Lease, monthly payments during the extended Lease term shall likewise be paid on the first day of each month during the extension(s). 6. DEPOSIT: YH shall deposit 4.0 (7d0 with the City upon the effective date of the Lease. The deposit funds shall be retained by the City during the period of the Lease Term in an interest-bearing account. The deposit shall be retained by the City in the event YH initiates demolition of the buildings and parking lot existing on the Property at the initiation of the Lease but fails to complete development of the parcel prior to terminatirig the Lease agreement. In the event YH completes commercial development of the Property and fully exercises the purchase option provided herein the deposit funds, together with interest accrued thereon, shall be applied to the unpaid purchase value of the Property. RFP 11901P /Page 12 of 26 34 35 7, TAXES AND LIENS: In addition to the monthly rent as it comes due, YH promises and agrees to pay, as the same become due and payable, all governmental fees and taxes, if any, payable by reason of this Lease, the use of the Property, or the construction or ownership of improvements thereto, specifically to include leasehold excise tax. YH shall neither suffer nor permit the attachment of any hen or other encumbrance on the Property. YH agrees to defend, indemnify and hold harmless City from any such fees, taxes or liens that are permitted to accrue against the Property. 8. USE: Neither YH nor any of YH's sub -tenants shall release hazardous substances into the soil or groundwater on the Property. They shall use the Property only for commercial purposes acceptable to and approved by the City as othenvise described in the Lease. YH's use of the Property shall be subject to the following additional limitations: A. Use, together with any development, restorative construction and maintenance performed on the Property by YH or YH's subtenants, shall be compatible with the Property's zoning in effect at the commencement of the Term and shall not include or allow any excavation or disruption of the surface of the Property or in any way alter the Property surface from the condition it is in at the initiation of the Lease Term without the specific approval of CITY, which approval may include consultation with the Department of Ecology. All Department of Ecology sampling wells on the Property shall be protected and preserved from damage during construction and upon completion thereof, during the Lease Term and thereafter as required by DOE. YH shall be responsible for all cost of repair or replacement of said sampling wells for any damage that occurs to them during the Lease Term. The sampling wells shall remain accessible to DOE at all times in a manner sufficient to allow continued sampling as DOE deems necessary and appropriate, B. The Property shall be used only for lawful commercial purposes appropriate for the location and the layout of the Property as approved and permitted by the City, such approval not to be unreasonably withheld or delayed. During the Lease Term the property shall not be permitted to be used for any purposes related to marijuana production, processing or sale. C. During the entire term of the Lease, and until a No Further Action letter is received from the Department of Ecology for the property, the property shall remain subject to continued well monitoring and oversight by the RFP 11901P /Page 13 of 26 36 Department of Ecology. That oversight will not prevent development of the property, but shall require that the Lessee allow DOE staff and their contractors access to the site as necessary to continue the monitoring. This monitoring will not prohibit property use and development as approved by the City, as set forth herein. It is not expected that any active exploration or excavation shall be necessary on the property during the course of the DOE monitoring work. 9. UTILITIES: YH shall be responsible for any necessary installation and operational service costs for all utility services used by YH or YH's subtenants, from the exterior edge of the Property to the points of connection or use on the Property, including, but not limited to, power, natural gas, water, sewer, garbage and communication. 10. PREMISES CONDITION: YH accepts the Property AS -IS. Nothing contained in the preceding sentence shall affect YH's right to indemnification from the City as provided in Section 19 hereof. 11. MAINTENANCE: YH agrees, at its sole cost and expense, to keep the Property, including the asphalt lot and any buildings constructed thereon, clean, neat and in good repair and shall provide all necessary building structure and landscaping maintenance services, fertilizing, irrigation, sweeping, cleaning, parking lot cleanup and trash and litter collection, such that the Property remains attractive, safe, dean and well-maintained„ YH shall also be responsible for all necessary snow removal and pavement maintenance to keep the property safe and publicly accessible. 12. SIGNS: YH may be permitted to erect commercial signage so long as all necessary permits are acquired and all applicable codes are complied with for the installation and maintenance thereof. Billboard signage shall not be permitted, 13. IMPROVEMENTS: All development, construction, trade fixtures and other improvements existing on the Property or those that may be installed thereon by YH or RFP 11901P /Page 14 of 26 37 YH's subtenants during the Lease Term shall be made to conform to applicable land use, zoning and building regulations and codes. YH shall be responsible for procuring all building and operational permits required for work performed upon the Property. All new improvements to the grounds or the building structures that may be provided by YH shall first be presented to the City for consideration and prior approval before being constructed on the Property, which approval shall not be unreasonably withheld. Approval of any such additional improvements or modifications shall be deemed granted forty-five (45) days after submitting the proposal in writing to City if no specific response has been provided by City to YH within that time. City shall not impose a condition upon the approval of such improvements or modifications thereto that violate any applicable law, or which would violate any insurance policy required to be maintained by YH. 14. REVERSION OF IMPROVEMENTS AND FIXTURES UPON EXPIRATION OR TERMINATION OF LEASE: Upon expiration or termination of this Lease for any reason, unless otherwise agreed to in writing between City and YH_, all improvements to the Property shall revert to the City without requirement of payment of any type by City to Upon termination or expiration of this Lease, YH shall remove ail its trade fixtures and repair any damage to the Property caused by removal of said trade fixtures to the reasonable satisfaction of the City Manager. Fixtures not removed on or before the effective date of termination or expiration shall become the property of the City unless other arrangements have been previously approved in writing by the City Manager. YH shall, as additional consideration for grant of this Lease, insure that all liens, security interest and other encumbrances against said improvements and structures, except those created or suffered by City, whether consensual or involuntary, shall be paid, discharged or satisfied prior to time for reversion thereof to City; and, in any event, the parties acknowledge that City shall not, by virtue of termination of the leasehold interest nor reversion of the structures or other improvements, be liable for any debt or encumbrance associated therewith, whether now existing or hereafter incurred, levied or attached. 15. REGULATIONS: YH agrees to comply with all applicable laws, ordinances, rules, regulations and policies of all governmental authorities having jurisdiction over the Property, including policies adopted by City, as such laws, RFP 11901P /Page 15 of 26 38 ordinances, rules, regulations and policies apply to the demolition, development, use and operation of the Property. 16. SUBLETTING: Subject to the agreement to perform and the performance of the terms hereof by YH subtenant, City's written consent is required for any sublease of the Property by YH. City agrees that in accordance with the terms of City's prior written approval and consent set forth in this Lease _YH may be authorized to enter into space leases and subtenant rental agreements within the Property for individual facility operations, No sublease shall relieve YH or any subtenants thereof of the obligation to perform this Lease in accordance with the terms herein, 17. ASSIGNMENT: YH shall not assign its interest in this Lease to another party without the express written consent of the City. City may withhold consent to YRS request for an assignment in Cityls sole discretion. lf approved by City in writing, any assignee of this Lease and/or YHs rights hereunder shall assume all of YH's obligations under this Lease. However, said assignment shall not relieve YH_ of its obligation to perform this Lease in every respect. Such assignment shall be in conformance with all City, local, state and federal laws, ordinances, rules, regulations and policies and the assignee shall comply with all laws, ordinances, rules, regulations and policies applicable to the use and operation of the Property, facilities and operations as those laws, 'ordinances, rules, regulations and policies now exist or may hereafter become effective. Cityls consent to assignment shall not be construed to be consent to any s bsequent assignment 18. MISCELLANEOUS PROVISIONS: A. City may further develop or improve adjacent City property, infrastructure and facilities regardless of the desire or views of YH with respect to any such developrrient or improvement, and without interference or hindrance on the part of YH and without liability to. B. YH shall be responsible for weed control on the Property, including but not limited (where appropriate) to: movving; spraying; removal of noxious weeds, etc. C. VH shall post unused portions of the Property against trespass by unauthorized individuals and shall prevent illegal dumping of debris on the property. RFP 11901P /Page 16 of 26 39 19. INDEMNITY/DUTY TO DEFEND: A. Except as provided in Paragraph 19(E), YH shall defend, indemnify and hold harmless City and its elected and appointed officials, employees and agents, from any and all losses directly suffered by City and from any and all liability, damages, suits, claims, actions, judgments or decrees, including attorney fees and costs, made against the City or its elected and appointed officials, employees and agents based on the use or occupancy of the Property during the Term or from default by YH or any assignee or subtenant hereunder, in any term or condition of this Lease. B. Except as provided in Paragraph 19(E), City shall defend, indemnify and hold harmless YH from any and all losses directly suffered by YH and from any and all liability, damages, suits, claims, actions, judgments or decrees, including attorney fees and costs, made against _YH based on the use or occupancy of the Property for any time other than during the Term or as a result of City's default in any term or condition of this Lease, excepting any liability, damage, suit, or claim arising from the occupancy or use of the Property by _YH or as a result of _YH's operations on the Property or from any other act or omission of YH, its servants, employees, agents, invitees, independent contractors, assignees, subtenants or any other entity, person, firm or corporation acting on behalf of YH or under its direction, whether such claim shall be by YH or a third party; provided, however, that _YH shall not be liable for any injury, damage or loss occasioned solely by the sole negligence of City, its agents or employees. City shall give YH prompt and reasonable notice of any such claims or actions and YH shall have the right to investigate, compromise and defend the same to the extent of its interest. C. City shall defend, indemnify, and hold harmless _YH from any and all claims and actions, loss, damage, expense or cost, resulting from, arising out of, or caused by City and which leads to any liability under the Federal Comprehensive Environmental Response Compensation Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.; Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq.; Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.; the Clean Water Act, 42 U.S.C. 1251 et seq.; the Washington Environmental Policy Act, RCW Ch. 4311C; the Washington Water Pollution Control Act, RCVV Ch. 90.48; the Washington Hazardous Waste Management Act, RCVV Ch. 70.105; the Washington Model Toxic Control Act, RCVV Ch. 70.1050, and the regulations promulgated thereunder, or under any applicable local or state environmental ordinance, statute, law, rule or regulation., for all claims, actions, loss, damage, expense or cost associated with environmental conditions that pre-existed the initiation of this Lease and that arise during the Term. The City shall not be liable for or indemnify _YH for any claims of environmental liability that may arise after _YH exercises the Purchase RFP 11901P /Page 1 "7 of 26 40 Option provided herein. PROVIDED, that during the Lease Term the City shall have a continuing right of entry upon the Property, upon providing YH with a one (1) week notice of said entry (excepting emergency occurrences where no notice is necessary and excepting occurrences for which one weeksnotice is impractical, wherein the City will provide notice as the occurrence allows) to conduct necessary tests and actions required for compliance with the Washington State Department of Ecology (Ecology) with respect to the continuing environmental investigation and mitigation of hazardous substances on the Property. City reserves the right to take whatever actions are required by Ecology to resolve the environmental conditions on the Property, even if the actions taken result in a temporary or permanent effect upon YH_ts use of the Lease Property, City and _YH agree that any resultant diminishment of the Lease Property shall be addressed in a negotiation of the Lease terms and conditions, up to and including termination of the Lease, The provisions of this Paragraph 19(C) shall survive the termination of this Lease. D. YH shall defend, indemnify, and hod harmless City, its elected and appointed officials, agents and employees, free and harmless from any and all claims and actions, loss, damage, expense or cost, resulting from, arising out of, or caused by YH, its assignees and/or subtenants, or arising after _YH exercises the Purchase Option provided in this Agreement and that result in any liability under the Federal Comprehensive Environmental Response Compensation Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.; Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq.; Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.; the Clean Water Act, 42 U.S.C. 1251 et seq.; the Washington Environmental Policy Act, RCVV Ch. 43.21C; the Washington Water Pollution Control Act, FRCVV Ch. 90.48, the Washington Hazardous Waste Management Act, RCW Ch. 70.105; the Washington Mod& Toxic Control Act, RCW Ch. 70,105D, and the regulations !Promulgated thereunder, or under any applicable local or state environmental ordinance, statute, law, rule or regulation. The provisions of this Paragraph 19(0) shall survive the termination of this Lease. E. The defense, indemnity, and hold harmless provisions provided in Paragraphs 19(A) through 19(D) hereof shall apply only to the extent the party claiming same is not at fault with respect to the event giving rise thereto. If both parties are at fault, such defense, indemnity, and hold harmless shall be applied under principles of comparative fault. 20. INSURANCE: _YH agrees that, at all times during the full Lease Term, it shall, at its own expense, maintain in full force and effect adequate fire and other casualty coverage for the Property and structures, buildings, infrastructure and RFP 11901P /Page 18 of 26 41 contents, includirig all _YI-rs personal property, fixtures and improvements. Such policy shall include a replacement cost endorsement. _YH shall obtain and file with the City's Risk Manager a Certificate of Insurance evidencing such coverage. _Y11 shall provide the City with a thirty (30) day cancellation notice prior to any policy cancellation. Adequacy of coverage is defined as insurance sufficient to restore the Property to its pre -casualty condition. Prior to execution of this Lease, YH, at its expense, shall obtain and file with the City's Risk Manager a Certificate of Insurance evidencing commercial general liability insurance coverage ("CGL") providing coverage of at least $2,000,000 per occurrence and $2,000,000 general aggregate, This Certificate of Insurance shall be subject to approval by the City's Risk Manager as to company, terms and coverage and said approval shall riot be unreasonably withheld. The CGL shall name the City, its elected officials, officers, agents, employees, and volunteers as additional named insureds and must protect the City from any and all claims and risks and losses in connection with YH's activities or omissions by virtue of this Lease. The CGL policy shall remain in full force and effect at YH_'s sole expense for liability for property damage or personal injury that may occur in connection with activities or omissions by _YH, and provide continuous coverage for the full Term of this Lease and the Agreement. _YH shall ensure that the City's Risk Manager is given thirty (30) calendar days prior written notice, by certified mail, of any cancellation, lapse, reduction or modification of such insurance. 21. DEFAULT; TERMINATION; AND FORFEITURE: A. _YFI:s failure to comply with any material term, provision or condition of this Lease shall constitute grounds for termination of this Lease. This Lease and tenancy shall terminate for cause as specified above on written notice by City to YH stating in detail the manner in which _YH fails or has failed to comply with this Lease. YH shall comply with this Lease in the manner specified in the notice within sixty (60) days (except twenty days with respect to default regarding payment of rent or other monetary obligation) from YH's receipt of such notice, provided, however, that if the nature of YH:s default (other than for monetary defaults) is such that more than sixty (60) days are reasonably required for its cure, then YH shall not be deemed to be in default if YH commences such cure within said sixty (60) day period and thereafter diligently prosecutes such cure to completion; otherwise this Lease and tenancy shall be terminated. Such notice shall be given in writing and served on YH by personal delivery or mailed by certified mail with return receipt requested addressed to YH at its address stated below or such other address as the parties may hereafter advise each other in writing. Notices shall be deemed received three (3) days after mailing. In addition to the provisions hereinabove, RFP 11901P /Page 19 of 26 42 and/or as an alternative or cumulative remedy, City may, at its sole election, pursue any other action, redress, or remedy now or hereafter available to City under the laws of the State of Washington, hicluding state Landlord -Tenant laws. B As respects land, land improvements and the buildings and structures thereon, as additional and not alternative remedy, optional with City and upon sixty (60) days written notice to YH_, should _YH be in default hereunder, City may cure or correct the same and the cost of such action by City shall immediately become due and payable to the City by YFI_, together with late fees on said sum at a rate of ten percent (10%) per annum, and the non-payment of said sum by YH shall be adequate grounds for City to invoke the other remedies as provided in this Lease, C. The failure by City to comply with any material term, provision or condition of this Lease shall constitute grounds for termination of this Lease. This Lease and tenancy shall terminate for cause as specified above on written notice by YH to City stating in detail the manner in which City fails or has failed to comply with this Lease. City shall comply with this Lease in the manner specified in the notice within sixty (60) days from City's receipt of such notice, provided, however, that if the nature of City's default is such that more than sixty (60) days are reasonably required for its cure, then City shall not be deemed to be in default if City commences such cure within said sixty (60) day period and thereafter diligently prosecutes such cure to completion, otherwise this Lease and tenancy shall be terminated. Such notice shall be given in writing and served on City by personal delivery or mailed by certified mail with return receipt requested addressed to City at its address stated below or such other address as the parties may advise each other in writing Notices shall be deemed received three (3) days after mailing. In addition to the provisions hereinabove, and/or as an alternative or cumulate remedy, _YH may, at its sole election, pursue any other action, redress, or remedy now or hereafter available to it under the laws of the State of Washington, including state Landlord -Tenant laws. 22. DISPUTE RESOLUTION: In the event that any dispute shall arise as to the interpretation of this Lease, or in the event of a notice of default as to whether such default does constitute a breach of the Lease terms, and if the parties hereto cannot mutually settle such differences, then the parties shall first pursue mediation as a means to resolve the dispute. If both parties consent in writing, other available means of dispute resolution may be implemented. 23. VENUE, ATTORNEY FEES: RFP 11901P /Page 20 of 26 In the event dispute resolution is not successful and litigation is initiated to enforce the rights and obligations hereunder, venue shall lie in a court of competent jurisdiction in Yakima County, Washington. The prevailing party shall be entitled to its reasonable attorney fees in addition to court costs. 24. NON-DISCRIMINATION CLAUSE: To the extent required by law, YH_, for itself, its personal representatives, successors in interest and assigns, as a part of the consideration hereof, does hereby covenant and agree as follows: A. No person, on the grounds of race, color, religion, sex, age, marital status, handicap or national origin, shall be unreasonably excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in YH_ls personnel policies and practices or in the use or operation ofls services or facilities, 8. _YFI agrees that in the construction of any improvements on, over or under City land and the furnishing of services thereon, no person, on the grounds of race, color, religion, sex, marital status, handicap, age or national origin, shall be unreasonably excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination. 26. OPTION TO PURCHASE: As a further condition of the Lease, and in consideration of the terms and conditions set forth herein, including but not limited to the requirement to maintain the property in a good condition and consistent with the value added by the improvements YH makes to the property, that at such time as the City receives a No Further Action (NFA) letter from the Department of Ecology regarding the environmental remediation work that has been occurring on the property for several years, the City shall forward a copy of the NFA letter to Yki_„ Within forty five (45) days from receipt of said letter _Yki shallipresent the City with an offer to purchase the property (PSA) for 3001 °do » less credit for the _$500 of each monthly rent payment that has been applied to partialt payments of said purchase price, and less the Deposit amount of 124,000'-- plus accrued interest that the City has held during the Term, The PSA shall contain the following language regarding the obligation to comply with the conditions mandated by DOE under the Consent Decree that concerns this property: Seller warrants and represents that the property is subject to an Environmental Covenant granted to the Washington State Department of RFP 11901P /Page 21 of 26 43 44 Ecology by the City of Yakima on the 11th day of December, 2015 and recorded with the Yakima County Auditor. The parties specifically understand and agree that all uses and activities occurring on the property must comply with the terms of the referenced Covenant. Initial: (City) Initial: 27. CONTRACT DOCUMENTS: E)thibit A (to be attached to final agreement) will contain the Proposer's Response, project concept, plans, renderings and other relevant documentation. 28. INTEGRATION: Exhibits and Recitals are incorporated herein by this reference, This Lease and the Agreement incorporated herein embody the entire agreement between the parties with respect to the subject matter herein contained, No amendments or modifications hereof shall be enforceable unless in writing, signed by the party to be charged. 29„ THIRD PARTY BENEFICIARY: Nothing in this Agreement is intended to create any rights in any entity not a party to this Agreement nor is any person or entity not named a party herein a third party beneficiary to this Agreement. 30. NOTICE: All notices allowed or required hereunder shall be effective if given in writing and served by personal delivery or delivered by certified mail, return receipt requested, at the address shown below unless a different address is designated by a party in writing: If to City: If to _Y YAKIMA CITY MANAGER 129 N. 2nd Street Yakima, Washington 98901 Y Hotel Ile 61547 Tam McArthur Loop Bend, OR 97702 31. BINDING EFFECT AND BENEFIT; RFP 11901P /Page 22 of 26 45 This Lease shall be binding upon and inure to the benefit of the parties hereto, their successors, assigns and subtenants, 32. AMENDMENTS: Any Amendment to the Lease shall be made in writing and signed by both parties to the Lease. 33. SEVERABILITY: If any term or provision of this Agreement is found invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be enforceable and effective to the fullest extent permitted by law. Further, the parties shall negotiate in good faith regarding amendments to this Agreement that would effectuate the intent of any provision held invalid or not enforceable. CITY: CITY OF YAKIMA, VVASHINGTON By: Cliff Moore, City Manager Date STATE OF WASHINGTON ) ss County of Yakima certify that I know or have satisfactory evidence that Cliff Moore signed this instrument, on oath stated that they were authorized to execute the instrument and acknowledged it as the City Manager of the City of Yakima, Washington to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Date: By: Notary Public Appointment Expires RFP 11901P /Page 23 of 26 By: By: STATE OF WASHINGTON ) ss County of Yakima 46 Date I certify that I know or have satisfactory evidence that477-X'Ci I1169, --L' and signed this instrument, on oath stated that (bre/they were authorized to execute the instrument and acknowledged it to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument, Date B' - Notary Public Appointment Expires RFP 1 19011) /Page 24 of 26 47 EXHIBIT A Respondents ondents RFPresponse will be attached, as :ell asprojectconcept, tans renderings n other relevant documenta on. RFP 1901P /Page 25cif 2 fJ Yakima County G - Washington Land, Information .Porta Yatiue, a Cewrnry Ass&,:arJ Yaktra Cos:nn COS Firs s American title www:irrstam.com 50.:4:; T Ass FAQ Help Legend Search Tools Overview ht i You lay; Valley Title Guarantee Ti1C9 lrtsur rce & Escrow Service (5019) 248-4442 k Map RLRTY PHO ROPERTY INFORM:ATI PRINTING 47 N 154 ST, YAKIMA ,' U SEOK 8. HYUNG S L gparrel Number: "1513U4401S yPrape 1y Use: 6 FlateI1Maatel TAX AN4:2A'SSESS13REN'TINFCtRAT1ON tTax Code Area (ICA) 1333 FpravernenCV-able:5857400 _ t. �CamenlUse Value .. $� New' Carratnxxlon; RESIDENTIAL tNFC:-i .ATION Yeat r SgFt Bs t. }-t1Bedroflm r BurDnes n F! ,Upper ,HaaSq No Resadarrce lntacaltatian Foatnd. SALE 1NPORl^rhAToUN_.... Sale Dale Sem Prce Grantor in ds intended to Acre(s) Printer - Friendly Page Tax Year 2019 Land Value$2131, Curri ar4Use Irn¢aaroraerr nt s'S0 TataD Assessed Value 51080 Print Oetaile MAP Qtr SECTION MAPS EU 'IrEMA 100 Year: rod subject to ctamedJor 74xl 100 or (80t11572- AT'd0N Y (Urban Area Zanrn9 Ordinaruce) Future LanOuse Des gnaltc n: AC Arted i Ca�rnntercial _ . .._ _.1 ......._ _.. t l $Yalrinta Urtran Area Plan FIRM Panel Number. 5Ct , D+Srrnlaad 1CJIap� LL"tL:AT&ON..Fca IATIt,TN :461 3T 24.237 _O Longitude 12tl°30 d5.#15"" Rar .16., T ave tshap:13 Secbsral2 FNarvalave Description:N 275 FT OF S 8.70 FT OF TH PT WI E114 SE1J4 LY W OF W LN OFCaORL1t dN� M'WYTFt E OF IN PAR va1iHFT W O LN EX E 20 FT OF N 170 FT, AND->GORDON HIGHWAY TRS. LOT 11 AS 50 FTLOT 12 LNO DISCLAIMER 0 PARCEL DATA ARE t3ELIEVED TO BE ACCURATE, IBUT ACCURACY IS NOT GUAFtANTTEEO; THIS IS NOT A LEGAL DOGUGatENT AND SHOULU SLBSTITUTED FOP A TITLE SEARCH, AP#'RFaSAL, SCSPVEY, Fi 0Os3F LAIN lR ZONING RI ON 49 50 To Whom it may Concern Re: RFP, Yakima Tiger Oil Site am honored an excited to be involved in remodeling and repurposing the Sun Country Hotel on Street and looking forward to meeting the objectives of our investment and the city while revitalizing the North end of this corridor. The Tiger Mart site provides a great opportunity to blend, engage and expand this property into the future. Scott Mary with his background in Hotel and Retail development is an excellent manager arid operator to ensure a well thought out redevelopment of this proper1y, have been working as a partner both with Sullivan Rowell Homes and Properties sime 2004, and now have continued to invest in various subdivsions in Yakima with Hayden Homes.. We hope you will consider our proposal and can assure you that you will be proud of the end product, Sincerely, Hayden Watson partner Hotel LLC 51 To Whom it may Concern Re: RFP, Yakima Tiger Oil Site am honored an excited to be involved in remodeling and repurposing the Sun Country Hotel on N. 1.5l Street arid looking forward tip meeting the objectives of our investment and the city while revitalizing the North end of this corridor, The Tiger Mart site provides a great opportunity to blend, engage and expand this property into the future. Scott Mary with his background in Hotel and Retail development is an excellent manager and operator to ensure a well thought out redevelopment of this property. have been working as a partner both with Sullivan Rowell Homes and Properties since 2004, and now have continued to invest in various subdivsions in Yakima with Hayden Homes. We hope you will consider our proposal and cart assure, you that you will be proud of the end prod U C Sincerely, Hayden Watson partner Y Hotel 1 52 February 6, 2019 RE: REP No. 11901P lease of 1808 No. 1s) St Attn: Sue Owrihy Proposer: lf Hotel lic Scott Mary & Hayden Watson The REP relating to the north 1 st Tiger Mart and redevelop -It -tent corridor. The Tiger Mart is critically located and sets the tone for the north entrance to the city of Yakima, V Hotel lic recently purchased the Sun Country lnn and currently in process of plan submittals for exterior and interior renovation. The Y Hotel lic owned by Scott Mary and Hayden Watson, is excited to propose and work with the city to create an interesting, Mviting, and safe development of which the city of Yakima will be proud. In the hospitality and tourism business, first impressions are critical and we intend to help Yakima initiate more investment and positive impressions in the redevelopment corridor. As owners of the Best Western Plus Yakima Hotel and recently purchased Sun Country Inn (soon to be renamed Hotel Y), we have a vested interest in the marketplace. Pre App meetings have occurred and positive feedback received from all departments at the city level. Mandatory *roposer Qualifications 1. As the owner of the first two hotels at the entrance, a concerted effort, vision and investment is necessary. As of January 4, 2019 the Sun Country (Hotel Y) is under our ownership and management and currently in the process of planning and permit submittals. The attached exterior plans for Hotel Y are representative of the commitment. The new lodge style exterior will include parking lot lighting, accent lighting, new landscape and new and improved pool area with fire pits. If we are awarded the RFP, the theme would continue throughout the combined properties. Within the first 45 days of award, the existing fence will be improved, site cleanup and new paint added on exterior of building. A site plan similar to the ane attached would be submitted to include lighting and landscape plan. The North 1s) st project begins this spring and is the perfect time to improve the site. Within 60 days one of the two Options below will be initialized. We have three potential "'highest and best use" for the Tiger Mart, Option 1. Renovate the existing Tiger Mart store and convert into !obey for Hotel Y. The improved and repurposed budding would have lodge style exterior similar to Hotel Y (see hotel renovation plans) with new gables, etc . It would include lobby/check in area, guest breakfast area and seating, game area with pool table and other. The exterior would have seating area with fire pits, comfortable seating, and lighting. The parking area would Mclude car charging station, beautiful landscaping with lighting, pet area and new asphalt. See attached drawings and photo examples. Hotel Y would have a cross parking easement for additional parking requirements. 53 Option 2. Build new lobby with similar features as Option 1, This could depend on current condition of existing building. Based on current demand, meeting spare would be added to accommodate market, Option 3: New building. A commercial building to encourage Starbucks, Mod Pizza, and retail. The area under development undoubtedly needs investment and attention to change habits and opinions. In both cases, we would want to improve the quality and safety in the area by development, lighting, security, and increased attention. We are comrriittedi 2. Financing. The two partners involved in the project have the financial where -with -all to complete both options above with all cash thereby a mortgage or lien would not be placed on the property during the lease period. See attached "comfort" letter and resumes. 3. Relevant Portfolio. The two partners include Hayden Watson and Scott Mary, Hayden Watson is the owner of home building company Hayden Homes. The company has built homes in Yakima and other Washington cities for 25 years. Extremely well respected, socially responsible, and committed to each and every market where Hayden Home communities are built. Scott Mary has a vested interest in Central Washington, hospitality and tourism. Recent projects include development and ownership of the Best Western Pius Ellensburg Hotel, purchase of the Best Western Pius Yakima Hotel on North 1st. st. in 2015. Recent improvements include new name Best Western Plus Yakima Hotel, new parking lot and landscaping, complete guestroom renovation, breakfast room, fitness center, and hallways. As of Jan 4, 2019, the Y Hotel Ilc partnership (Watson and Mary) purchased the Sun Country inn, The MAJOR renovation will include exterior, interior and pool. The hotel has been mistreated and admittedly mismanaged for 15 years. We own the adjacent est Western hotel and will afford economies of scale, management, employees, and marketing will encourage room stay and therefore, increased tax revenue for city and state. 4. Lease: see attached 5, Project Timeline: The Tiger Mart site has been a 15 year eyesore affectin the north entrance to Yakima. Project timeline is important and improvements need to start now as soon as possible. The street improvement project is on schedule to begin spring 2019. Perfect timing for hotel and Tiger Mart renovation to occur as the area as a whole will be disrupted for the summer of 2019. The immediate project Option 1 — convert Tiger Mart to Hotel Y lobby, a. 45-60 day improvements straighten or remove existing fence while Tiger Mart is under renovation. Paint exterior of building to remove graffiti. Remove all interior material and dispose. Submit parking lot lighting plan and electric car charging station plan. b. 60-120 day. Install new fence, landscape, interior building renovation plans and submittals, parking lot repair and seal coat and striping. Submit and install outside fire pits and seating area. c. If building is deemed uninhabitable, a new building plan presented to city within 6rno (based on architect and builder schedules) 54 6. Environmental Remediation: After multiple meetings with the city of Yakima and Phase 1 reporting, we are aware Of the site contamination. Our proposed Option 1 will allow immediate improvement to the building, landscape and parking let Testing and access will be welcomed as part of the remediation rocess. SCOtt Mani 61547 Tam McArthur Loop Bend, OR 97702 541.948.0227 smarv@541softisrare.corri February 6, 2019 55 Successful Investor and Entrepreneur 1989-2002 President of US Contract Managed year over year growth in the interior furnishings business. Company provided turnkey furnishings specifically marketing to the hotel industry provi Mg design, supply and furnishings for all interior products. Worked with all hotel brands tocomply with design specifications including new build and renovations. 2002-2003 Hotel property management Worked closely with General Managers to create and meet monthly sales and expense budgets. Hire appropriate talent, oversee renovation projects and acquisitions 2003-2016 Founder and Chairman Global Business Center dba Ascension Software Company formation, capital raise and new product launch. Created proprietary kiosk software to power public area pc's and pririters servicing high end pay per use and free to guest use. Successful liquidity event March 2016 by selling company to private equity firm. Present Partner in 541 Software. Purchased eco platform and real estate app from private equity firm. Current ecomm customers include Starwood, Onmi and Hyatt. Cash flow positive day 1. New Life and Legacy web application co-founder, LifeExec.com Various hotel and commercial projects Consultant: Consult to private equity firm after company sale, 56 Consult agreements specific to hospitality new and refurb hotels. ?r rt IocaD, brand negotiation, third party management company oversight, design and Drnishing negotiation, contractor oversight, budgeting, bank reporting, repairs, capital, improvements, property inspections, et New buDness sDrbups including company formation, capital raise, executive search Developer and owner Purchase of Sun Country Inn Yakima, WA Complete renovation under way with rebrand to Hotel Y independent boutique style hotel Built new Best Western Ur iv In and Suites Forest Grove, OR 1999, Complete pmpertiv renovation 2017-2018 Built new Best Western Plus Ellensburg Hotel WA 2000, Complete renovation 2017 lurch Best Western Plus YakinD Hotel 201,5, Complete renovation 201&201S Built new Marriott Fairfield Inn and Suites Redding, CA 2( Renovation 2017 Previous hotel brands affiliations- Marriott, Holiday Inn Express, Comfort Suites, Camfort inn & Suttes„ and Quality Inn Various commercial and industrial buildings purchased and owned with successful renovation with third party management oversight Married 29 years Two wonderful girls recently graduated from Loyola Maryinount University and University of San Francisco BS Portland State University. Bus Admin/Marketing Activities include bevel, golf, hunting, fishing, boating, and real estate 57 Kind Regards ori Mari Hayden Watson Northwest business owner & philanthropist 2464 SW Glacier Place Redmond, OR 97756 (541) 923-6607 Imalson '111avilen-hoines corn EXPERIENCE Hayden Homes, Redmond, OR - Owner & Chairman ofihe Board 1992 - PRESENT" 58 The largest privately held home builder in the Northwest, Hayden Homes has been building homes for hardworking families for nearly 30 years. Since joining the company founded by his father, Robert Watson, Hayden Watson has led all aspects of company functions, including sales, customer service, construction, land acquisition and finance. As president and later CEO, Hayden Watson, was responsible for the company's direction, strategic planning and systems development, while successfully increasing revenue to 435 M annually while keeping a constant focus on controlling costs. The organization supports local communities by employing :local contractors and vendors and contributing annually to philanthropic efforts in the communities in which they build. Since 1989, Hayden Homes has built more 12,000 homes in 200 communities in 50 cities and towns throughout Washington, Oregon, and Idaho. Simplicity by Hayden Homes, Redmond, OR - Owner 2009 - PRESENT In 2009, Simplicity by Hayden Homes was launched, a Turn -Key Solution that offers landowners an affordable solution for constructing a custom home while dramatically simplifying the complex building process in remote areas. Simplicity has become the largest builder in Washington State for fannworker housing and provides an array of investor building solutions ranging from ADUs and Tiny Homes to single-family and multi -family subdivisions, Simplicity has built over 750 homes throughout Washington, Oregon and Idaho since its inception equating to 58M in revenue annually. First Story, Redmond, OR --- Trustee & Board Member 1998 - PRESENT First Story is a 501(c)(3) non-profit organization founded by Hayden Watson and Hayden Homes. Since 1998, First Story has served over 10,000 families through new home construction, homeownership opportunities and community giving. Additionally, First Story has donated more than Si million to other non -profits helping to break the cycle of poverty and homelessness. Its mission is to promote giving and inspire communities through the creation of home ownership opportunities and financial support. Hayden Watson Northwest business o 2464 SW Glacier Place Redmond, OR 97756 (541) 923-6607 EDUCATIONph an hropist 'University of the,P eifle Stockton,' alif. - Real Estat Finance o 1988-1992 Harvard i e i t rrr 'Noir n onagemern Program, Erer iir.> Training 2008 PROFESSIONAL National Association of l omebuilders President (2002), Member (1994 -Present) Inter°nationa.l Homebuilders Council, President (2002), Member (1994 -Present) Rapport Leadership International - Master Graduate (1999 ffi 2004) Urban Land Institute, Member (1995 -Present) Alpha Kappa Phi-Arehania-I iterazy Society, Ainay SPECIAL, INTERESTS E ar ied, with three children Enjoys skiing, hunting, fishing and traveling` nr Hayden Watson Northwest business owner & philanthropist 2464 SW Glacier Place Redmond, 0R97756 (541) 923-6607 hwatsokiihNycjeytholleh,coth 60 HAYDEN WATSON BIO For the past three decades, Hayden Watson has led Hayden Homes, the largest privately held home building company in the Northwest The Company's humble beginnings began nearly 30 years ago in the then small rural town of Redmond, Oregon by Hayden's father -- Bob Watson. After graduating from the University of Pacific with a degree in real estate finance, Hayden joined the .family business in 1992, holding positions in sales customer service, construction, finance and land acquisition and development before leading the company as CEO in 1999, and later as chairman, In 2009, Simplicity by Hayden Homes was launched, a Turn -Key Solution that offers an affordable alternative to building a custom home while dramatically simplifying the complex process of building on ,our own land. As respected as Hayden is for sustaining and growing Hayden Homes and Simplicity through changing economic climates, it is his personal and professional commitment to community giving for which he's best known. Hayden founded First Story, a nonprofit that since 1998 has helped more than 71 working families achieve the dream of home ownership. Additionally, First Story has donated more than $1 !Milian to other nonprofits throughout the Northwest that support affordable housing, Hayden's commitment to philanthropy is reflected in the community -first cul re that thrives at Hayden Homes, which encourages and rewards the generosity of its 250 team members by matching 100 percent of their contributions to First Story and supports the causes they are about. Hayden resides in Bend NS ith his wife, Kristin, and their three daughters, When not working, Hayden can be found playing In the outdoors or traveling, +� i FII TEL. LL 51541 TAM MEARTWU L BEND, OR - 51102 T CTT MARY, 541-94.; APPLICANT: CHAEMICK BUILS 4503 ARRAN YAKIMA, A, ISA, TACT. I✓IA ATI ; (FTI E NOTES TO A _ A EIAL IAL IT+ ST ST ET Y 881A ISA Sa FAA EL NO, I COSMET1 U E TO EXISTI GEST S A E TE I AN IES EXISTING PARCEL SIZE: I A EXISTING I.I A CYJUSE: IC = L0 Y, TEL ` S TALLY: 2 t1LE5 I SI LSF ICITI•ENETT 5, I APA DENT e IT EASING ST TI TTS : T' ISI - E EXISTING LOT - ALL• " I I EXISTI BUILDING SIE. MAIN FLOC)=1244 5 UPPER FL 88,451 TOTAL . EX TING PARKINGSTALLS. EXISTING ADA STALLS: IILIIIE IN A 'E TOTAL U E OR UFAN Y. TEL RO LOB "C/ FIDE CONTRACTOR SMALL VERIFY AND BE RESPONSIBLE FOR ALL DIMENSIONS AT JOB SITE ETT1 +►STI ST p NE TI h E 5T I�1ALL FRET AI~! P TI ANSA T E EI N SiIALL OPT ST IE. INSTALL NEW SI"IAL L ST i8 SER L AN DETAIL. INSTALL NE A E OPYST TJ ALAN CETAIL. EAL COAT EXISTING A I AREA AND RESTRI ISE SITE PL I ES EX1STIN6 STALLS F ° IDE TO SCOMPACT STALLS GAINII~I (2 STALLS TO REPLACE STALLS A45 SFI IFIKEY NOTE 5. REMOVE EXIST TALL RELOCATE T KEYNOTE 4 AREA, E_ 3, E NE IJ TIRE SI ACE OVE ER PLAN AND DETAIL: EXTEND . FOOL E E LINE PER SITE L L I FI IT I DOVE EXISTI L FENCE ANS E ACE EL DETAIL, VE GLACE EXIST I LE E I .SLAB EMOVE E EXISTI 1EN0 ATE. I ' E 42" WIDE INSTALL SELF' LSI FII ES Ii!IT I4 L LE ATCR ASA OVEB REMOVE AND REFLASE TE I,UIT I I L EK AI TO F GL NEW FENCE LOCATION Er' TES I LINE FOR PHASE I F ASE 11 LcT° TE DETERMINE ATA LATER DATE. EXIST! - #L EXISTM Bu1L TOTAL EXISTI3 TOTAL EXISTRI EXISTING GC GC 18 -OTHER 55—RETAIL - AUTO, RESIDENTIAL L 'IA NE, AIRCRAFT ° TEL LL ISAT TA 1 L - 102 TA T. . STTA 41- - CHADWICK BUIL I° 4503 AHT Y 1114, WA, -o TACT:. CHA 100 I1ST T T 'YAKIMA, PARCEL N0,186IS_121 1~I TE T A AL rE Ia ETC U-1 TO A EX RI IES E1ST A I 1 ISTI '. L Y., _1 , 0L TA"LL"Y: 2 L I L ITS NETT S, 1 APA T 10 T I TI • T;: TI T16 I I STIN6 LOT .z L0 1 ><IST1166 BUILEI ISE. SIN FL :124S FL = I !,ASI TOTAL - 2 1S1I ,4 1 T LS; 1 TI A A TALL . 1U N A TOTAL 55,00° GC FIVE FLUS LIMITS NOTES:KEY CONTRACTOR SHALL ° E IF" AND S FEASIBLE FOR ALL DINIENSIONS AT JOB SITE I TI +�# . ,,.T T TI ST IiL A A TO IECE 1 IT !- NE SMALLC TU ET,41L T L NE A C T TU R N ETAIL 1 SAL COAT EXIST A A TI R 51TE EXISIM ILLS ' II IETO 8" T STAL 2 STALLS TO PLACE STALL A IN KEY DOTE S. " E T ST OCATE TO 0T A A{ A, 6TI ER E R AI~l TIL. r t L E F IN 1 L GC I SILE HOME PARK GC -HOTEL TEL INEA AC ER L. M0 X TI L 1= •q ;o LA )41ST POO LENCLOSU A M, 42 T` L ELF L FII S LJ TFi L BLE LAT A A L TE ITFI —•,L E K AI T OLL NEIL N EL TI EMOTES S 1 L FIA I I I L - T NE1 ATA L R AT DRAVV CHECKED BY: DATE. 2/6 2019 SKEET -tF PROJECT SHEET NLIta BER 16 EXISTING SIGN 4 COLUMN IN BACKGROUND 9 NEW TIMBER FRAME TRUSS FEATURE — OPEN THROUGH TRUSS NEW TIMBER FRAME TRUSS FEATURE HO I , METAL SIDING we - Lu Q METAL PARA ET CAP FLASHING OvER METAL FASCIA AIND TRIM PLATE STEEL METAL SId�PNCx WITH EXPOSE FAWNERS NEW PARAPET EXTENTION IN ENTRY DOOR N C<GROUND CULTURE STONE vENEER EXISTI EXISTING P.TAC I-1VAC ALL EXISTING RAILING, BALCONY, AND STAIRS TO REM'AIN INTACT. E a cp D E c X77' �.E o� w • fe U t U c CJi Qk nam �Xo. _c © cn "E c 0.. ®3c C w X .E > rn ct w (13. wet' • "32 2=�Ua. 4 CONTRACTOR SHALL VERIFY AND BE RESPONSIBLE FOR ALL DIMENSIONS AT JOB SITE Q LL 0 Gr) ▪ W1— Q 0 D 1- D c z 0 Li) 0 W SUN COUNTRY IN DRAWN BY: CDN CHECKED BY: DATE: 2/6/2019 SHEET -OF- PROJECT 18-16 SHEET NUMBER A2.0 IN XISTING MAMBA ONTRACTOR SHALL VERIFY AND RESPONSIBLE FOR ALL DIMENSIONS AT JOB, SITE WITH INF ALL I. I 5ALCONY, 4x TI TO AIN INTACT. N TE AN T 3 I I I I ►L I T RATE: 2/6/201 SHEETF SHEET NUF lo 3/4" -TOP TCI -I TO MAIN EsUFLt IN NEW TIMBER FRAME TRUSS FEATURE METAL PARAPET CAP AND DECORATIVE TRIM EXISTING SIGN COLUMN IN FOREGROUND VAULTED CEILING / ROOF FEATURE. ABOVE FIREPLACE AREA NEW TIMBER FRAME. TRUSS FEATURE I-10RZ. METAL SII PERIMETER METAL FLASHINGS SLOPE ROOFING 1/4"/FOOT TO WEST EDGE 3/4" - TOP OF 2x6 WOOD CENTER MATCH DECKING OVER 6x8 TUBE STEEL RAFTERS 6"x16" WIDE FLANGE STEEL BEAMS 2" WI FLANGE STEEL BEAM (t) TQP OFF OOR 65 CULTURE STONE VENEER EXISTING $IGN t COLUMN IN BACKGROUND NEW TIMBER FRAME TRUSS FEATURE - OPEN THROUGH TRUSS -1Of Z. METAL SIDING AIN ENTRY AUTO SLIDING: DOORS c CONTRACTOR SHALL VERIFY AND BE RESPONSIBLE FOR ALL DIMENSIONS AT JOB SITE DESIGN STUDY - SCOTT MARY 0 1 DRAWN BY: CDN CHECKED BY: DATE: 2/6/2019 SHEET - OF - PROJECT 18-16 SHEET NUMBER A2.2 LEAS / PURCHASE OPTION AGREEMENT 1808 NORTH 1St STREET CITY OF YA IMA TO Y HOTEL LLC This lease/purchase option agreement (hereinafter the "Lease"), made and entered into March g , 2019, by and between the CiTY OF YAKIMA, WASHINGTON, a municipal corporation, (the "City") and Y HOTEL LLC ("YH"), d/bla Hotel Y. WITNESETH: WHEREAS, City owns certain real property, identified as Yakima County Accessor Parcel Number 181312-44412, located at 1808 North 1st St, Yakima, WA, including several buildings located thereon (collectively referred to herein as the "Property") available for limited use as more specifically provided by this Lease, and legally described as: That part of Gordon's Highway Tracts, recorded in Volume "I" of Plats, page 22; and that part of the South 870.00 feet of the West '/2 of the Southeast % of the Southeast 1/ of Section 12, Township 13 North, Range 18 East, W.M., bounded as follows: Beginning at the Northeast corner of Lot 15 of said Plat of Gordon's Highway Tracts, 24 feet West reference bearing, along the Easterly line of said Plat of Gordon's Highway Tracts, also being the Westerly right of way line of North First Street, 170.00 fleet to a point which is 5.00 feet South 0° 24' West of the Northeast corner of Lot 12 of said Plat; thence North 89° 40' West, parallel with the Northerly Aline.of said Plat, 155.00 feet; thence North 0° 4' East170.00 feet to the Easterly extension of the Northeast line of Lot 15 of said Plat; thence South 89°40' East 155.00 feet to the point of beginning; and WHEREAS, YH desires to lease, occupy, develop, use and ultimately purchase the Property in accordance, with the specific terms and conditions set forth in this Lease / Purchase Option Agreement; NOW THEREFORE, in consideration of the mutual covenants contained herein and the benefit to be derived by each party, the parties agree as follows; 1, INTENT OF A REEME T The intent of this Lease is to Lease the Property to YH so that YH can develop the property for ccrnmerciai,'purposes permitted y the City and by the current zoning requirements; and to purchase the property at such time as the Washington State Department of Ecology (DOE) issues a "No Further Action" (NFA) letter to the City releasing the Property from future environmental 1808 N 1st St. Lease / Purchase Option Agreement -Y HOTEL LLC Page 11 67 remediation obligations or mitigation measures. City and YH agree that it is likely the Property shall remain subject to certain Restrictive Covenants that will remain attached to the Property after the issuance of the NFA and understand the restrictive covenants will not interfere with the continued commercial use of the property consistent with the commercial development YH accomplished thereon during the Lease Term, At all times during the Term of the Lease YH shall maintain the property and the building structures constructed thereon in a clean and attractive condition. The City shall retain the right of final approval and authorization of the structure and the commercial use constructed on the Lease property during the term of the Lease. DEMISE OF PROPERTY: City hereby leases to YH and YH leases from City the Property, together with all rights of ingress, egress, public road access and use of utility connections to the Property. YH shall clean up, develop and maintain the Property, including the parking area and building(s) constructed thereon, in a neat, professional, attractive condition and appearance suitable for commercial purposes within two (2) months of taking possession of the Property under the terms of this Lease. YH's failure to commercially develop and maintain the Property as described herein shall constitute a material breach of the Lease, in which event the City, at its option, may terminate the Lease for cause. 3. TERM — EFFECTIVE DATE: The tenancy provided by this Lease shall be for an initial five (5) year Lease Term commencing on April '1, ,?019 and ending on March 31, 2024, unless earlier terminated as provided in this t ease.. YH+ shall have the option to extend its tenancy under this Lease for additional five (5) year terms if the, City has not received an NFA letter from DOE before the time for a Lease renewal notice opportunity arises as provided herein. YH may renew the Lease by providing written notice to city at Zest six (6) months prior to the end of the preceding Lease term of YH's intent to extend the Lease. ,The initial five year Lease, together with any extension(s) thereof, shall be the Lease term (the "Term"). 4. MORTGAGE: YH shall not have the right, authority or permission to mortgage the leasehold created by this Lease or any sublease hereunder or assignment hereof, in whole or in part, for the entire Term. RENT AND PURCHASE OPTION: consideration of the demise of the Property, and the terms and conditions stated herein, YH ees to pay. the City to lease the property as follows: One Thousand Dollars ($1,000.00) per month, payable on the first day of each month, every month during the full Term, beginning on the first day of the tenancy, pro -rated for the days left in the month tenancy begins if tenancy does not begin on the first day of a month. Five Hundred Dollars ($500.00) of each monthly payment shall be retained by the City in an interest-bearing account that will be applied to the purchase price of the property at such time the Purchase option is exercised. In the event YH fails to complete the Property purchase after City's receipt of the NFA from Department of Ecology as set forth herein the funds the City retained from the rental payments, together with all accrued interest thereon, shall become the property of the City upon termination of the Lease. 08 N 18t St. Lease / Purchase Option Agreement -Y HOTEL LLC Page 12 ;. 68 The purchase price agreed upon by the parties to fulfill the Purchase Option provided herein shall be -Three Hundred Thousand Dollars ($300,000.00), the unpaid balance of which shall be paid in full by YH upon exercising the purchase option. Rent payments shall be made to the City of Yakima at the City Finance Office or at such other place as shall be directed by City. In the event YH exercises the option to extend this Lease, monthly payments during the extended Lease term shall likewise be paid on the first day of each month during the extension(s). 6. DEPOSIT: YH shall deposit Twenty Thousand Dollars ($20,000.00) with the City upon the effective date of the Lease. The deposit funds shall be retained by the City during the period of the Lease Term in an interest-bearing account. The deposit shall be retained by the City in the event YH initiates demolition of the buildings and parking lot existing on the Property at the initiation of the Lease but fails to complete development of the parcel prior to terminating the Lease agreement, In the event YH completes commercial development of the Property and fully exercises the purchase option provided herein the deposit funds, together with interest accrued thereon, shall be applied to the unpaid purchase value of the Property. 7. TAXES AND LIENS: In addition to the monthly rent as it comes due, YH promises and agrees to pay, as the same become due and payable, all governmental fees and taxes, if any, payable by reason of this Lease, the use of the Property, or the construction or ownership of improvements thereto, specifically ,to include leasehold excise tax. YH shall neither suffer nor permit the attachment of 1-ty lien or other encumbrance on the Property. YH agrees to defend, indemnify and hold armless City from any such fees, taxes or liens that are permitted to accrue against the Property, 2 USE: Neither YI-1, nor any of YH's sub -tenants shall release hazardous substances into the soil or groundwater on the Property. They shall use the Property only for commercial purposes acceptable to and approved by the City as otherwise described in the Lease. YH's use of the Property shall be subject to the following additional limitations: A. Use, together with any development, restorative construction and maintenance performed on the Property by YH or YH's subtenants, shall be compatible with the Property's zoning in effect at the commencement of the Term and shall not include or allow any excavation or disruption of the surface of the Property or in any way alter the Property surface from the condition it is in at the initiation of the Lease Term without the specific approval of CITY, which approval may include consultation with the Department of Ecology. All Department of Ecology Sampling wells on the Property shall be protected and preserved from damage during construction and upon completion thereof, during the Lease Term and thereafter as required by DOE. YH shalt be responsible for all cost of repair or replacement of said sampling wells for any damage that occurs to Ahem during the Lease Term, The sampling wells shall remain accessible to DOE at all times in a manner sufficient to allow continued sampling as DOE deems necessary and appropriate. B. The Property shall be used only for lawful commercial purposes appropriate for the location and the layout of the Property as approved and permitted by the City, such approval not -1p.98(11 1' St. Lease / Purchase Option Agreement -Y HOTEL LLC 4age 69 to be unreasonably withheld or delayed. During the Lease Term the property shall not be permitted to be used for any purposes related to marijuana production, processing or sale. C. During the entire term of the Lease, and until a No Further Action letter is received from the Department of Ecology for the property, the property shall remain subject to continued well monitoring and oversight by the Department of Ecology. That oversight will not prevent development of the property, but shall require that the Lessee allow DOE staff and their contractors access to the site as necessary to continue the monitoring. This monitoring will not prohibit property use and development as approved by the City, as set forth herein. It is not expected that any active exploration or excavation shall be necessary on the property during the course of the DOE monitoring work., 9. UTILITIES: YH shall be responsible for any necessary installation and operational service costs for all utility services used by YH or YH's subtenants, from the exterior edge of the Property to the points of connection or use on the Property, including, but not limited to, power, natural gas, water, sewer, garbage and communication. PREMISES CONDITION: Yint accepts the Property AS -IS. Nothing contained in the preceding sentence shall affect YH's right to indemnification from the City as provided in Section 19 hereof. 11,, „MAINTENANCE: YH agrees, at its sole cost and expense, to keep the Property, including the asphalt lot and any buildings constructed thereon, clean, neat and in good repair and shall provide all necessary budding structure and landscaping maintenance services, fertilizing, irrigation, sweeping, cleaning, parking lot cleanup and trash and litter collection, such that the Property remains attractive, safe, clean and well-maintained. YH shall also be responsible for all necessary snow removal and pavement maintenance to keep the property safe and publicly accessible. tee , 12. SIGNS: YH may be permitted to erect commercial signage so long as all necessary permits are acquired and ell applicable codes are complied with for the installation and maintenance thereof. Billboard signage shall not be permitted. 13. IMPROVEMENTS: All development, construction, trade fixtures and other improvements existing on the Property or those that may be installed thereon by YH or subtenants during the Lease Term shall be made to conform to applicable land use, zoning and building regulations and codes. YH shall be responsible for procuring all building and operational permits required for work performed upon the Property. All new improvements to the grounds or the building structures that may be provided r, YH shalt first be presented to the City for consideration and prior approval before being Constructed on the Property, which approval shall not be unreasonably withheld. Approval of any such additional improvements or modifications shall be deemed granted forty-five (45) days after submitting the proposal in writing to City if no specific response has been provided by City to YH Within that time. City shall not impose a condition upon the approval of such improvements or modifications thereto that violate any applicable law, or which would violate any insurance policy required to be maintained by YH. 1808 N 1st St. Lease Purchase Option Agreement -Y HOTEL LLC Page I 4 70 14. REVERSION OF IMPROVEMENTS AND FIXTURES UPON EXPIRATION OR TERMINATION OF LEASE: Upon expiration or termination of this Lease for any reason, unless otherwise agreed to in writing between City and YH, all improvements to the Property shall revert to the City without requirement of payment of any type by City to YH. Upon termination or expiration of this Lease, YH shall remove all its trade fixtures and repair any damage to the Property caused by removal of said trade fixtures to the reasonable satisfaction of the City Manager. Fixtures not removed on or before the effective date of termination or expiration shall become the property of the City unless other arrangements have been previously approved in writing by the City Manager. YH shall, as additional consideration for grant of this Lease, insure that all liens, security interest and other encumbrances against said improvements and structures, except those created or suffered by City, whether consensual or involuntary, shall be paid, discharged or satisfied prior to time for reversion thereof to City, and, in any event, the parties acknowledge that City shall not, by virtue of termination of the leasehold interest or reversion of the structures or other improvements, be liable for any debt or encumbrance associated therewith, whether now existing or hereafter incurred, levied or attached. _ REOULATIONS: YH agrees to comply with all applicable laws, ordinances, rules, regulations and policies of all governmental authorities having jurisdiction over the Property, including policies adopted by City, as such laws, ordinances, rules, regulations and policies apply to the demolition, development, use and operation of the Property, 16. SUBLETTING: Subject to the agreement to perform and the performance of the terms hereof by YH's subtenant, City's written consent is required for any sublease of the Property by YH. City agrees that in accordance with the terms of City's prior written approval and consent set forth in this Lease YH may be authorized to enter into space leases and subtenant rental agreements within the Property for individual facility operations. No sublease shall relieve YH or any subtenants thereof of the obligation to perform this Lease in accordance with the terms herein. 17'i ASSIGNMENT: yFi., shall not assign its interest in this Lease to another party without the express written consent ofthe City. ,,City maywithhold consent to YH's request for an assignment in City's sole discretion. If approved by City in writing, any assignee of this Lease and/or YH's rights hereunder shall assume all of YH's obligations under this Lease. However, said assignment shall not relieve YH of its obligation to perform this Lease in every respect. Such assignment shall be in conformance with all City, local, state and federal laws, ordinances, rules, regulations and policies and the assignee shall comply with all laws, ordinances, rules, regulations and policies applicable to the use and operation of the Property, facilities and operations as those laws, ordinances, rules, regulations and policies now exist or may hereafter become effective. City's consent to esignrrient shall not be construed to be consent to any subsequent assignment. r 4 ) 1808 N 1st St. Lease / Purchase Option Agreement -Y HOTEL LLC Page I 5 71 18. MISCELLANEOUS PROVISIONS: A. City may further develop or improve adjacent City property, infrastructure and facilities regardless of the desire or views of YH with respect to any such development or improvement, and without interference or hindrance on the part of YH and without liability to City. B. YH shall be responsible for weed control on the Property, including but not limited (where appropriate) to: mowing; spraying; removal of noxious and invasive weeds. C. YH shall post unused portions of the Property against trespass by unauthorized individuals and shall prevent illegal dumping of debris on the property. 19. INDEMNITY/DUTY TO DEFEND: A. Except as provided in Paragraph 19(E), YH shall defend, indemnify and hold harmless City and its,elected and appointed officials, employees and agents, from any and all losses directly suffered by City and from any and all liability, damages, suits, claims, actions, judgments or decrees, including attorney fees and costs, made against the City or its elected and appointed officials, employees and agents based on the use or occupancy of the Property during the Term or from default by YH or any assignee or subtenant hereunder, in any term or condition of this Lease. B. Except as provided in Paragraph 19(E), City shall defend, indemnify and hold harmless YH from any and all losses directly suffered by YH and from any and all liability, damages, suits, piaimsuactions, judgments or decrees, including attorney fees and costs, made against YH based on the use or occupancy of the Property for any time other than during the Term or as a result of City's defauit in any term or condition of this Lease, excepting any liability, damage, suit, or claim arising from the occupancy or use of the Property by YH or as a result of YH's operations on the Property or: from any other act or omission of YH, its servants, employees, agents, invitees, independent contractors, assignees, subtenants or any other entity, person, firm or corporation acting on behalf of YH or under its direction, whether such claim shall be by YH or a third party; provided, however, that YH shall not be liable for any injury, damage or loss occasioned solely by the sole negligence of City, its agents or employees. City shall give YH prompt and reasonable notice of any such claims or actions and YH shall have the right to investigate, compromise and defend the same to the extent of its interest, C. City shall defend, indemnify, and hold harmless YH from any and all claims and actions, loss ,dama9e, expense or cost, resulting from, arising out of, or caused by City and which leads tg any liability under the Federal Comprehensive Environmental Response Compensation Liability Act of 1980, as amended, 42 U.S.C, 9601 et seq.; Hazardous Materials Transportation Act, ,49 U.S.C. 1801 et seq.:, Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.; the Clean Water Act, 42 U.S.0 1251 et seq.; the Washington Environmental Policy Act, RCW Ch. 43.21o; the Washington Water Pollution Control Act, RCW Ch. 90.48; the Washington Hazardous Waste Management Act, RCW Ch. 70.105; the Washington Model Toxic Control Act, RCW Ch. 70.105D, and the regulations promulgated thereunder, or under any applicable local or state environmental ordinance, statute, law, rule or regulation, for all claims, actions, loss, damage, expense or cost associated with environmental conditions that pre-existed the initiation of this Lease and become known during the Term. The City shall not be liable for or indemnify YH for any claims of environmental liability that may arise after YH exercises the Purchase Option provided herein. PROVIDED, that during the Lease Term the City shall have a continuing right of,entry upon, the Property, upon providing YH with a one (1) week notice of said entry (excepting 1808 N 1st St. Lease / Purchase Option Agreement -Y HOTEL LLC Page 16 72 emergency occurrences where no notice is necessary and excepting occurrences for which one weeks' notice is impractical, wherein the City will provide notice as the occurrence allows) to cdhduct necessary tests and actions required for compliance with the Washington State Department of Ecology (Ecology) with respect to the continuing environmental investigation and mitigation of hazardous substances on the Property; City reserves the right to take whatever actions are required by Ecology to resolve the environmental conditions on the Property, even if the actions taken result in a temporary or permanent effect upon YH's use of the Lease Property, City and YH agree that any resultant diminishment of the Lease Property shall be addressed in a negotiation of the Lease terms and conditions, up to and including termination of the Lease. The provisions of this Paragraph 19(C) shall survive the termination of this Lease, D. YH shall defend, indemnify, and hold harmless City, its elected and appointed officials, agents and employees, free and harmless from any and all claims and actions, loss, damage, expense or cost, resulting from, arising out of, or caused by YH, its assignees and/or subtenants, orl,arising after YH exercises the Purchase Option provided in this Agreement and that result in any liability under the Federal Comprehensive Environmental Response Compensation Liability At of 1980, as amended, 42 U.S.C. 9601 et seq.; Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq.; Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.; the Clean Water Act, 42 U.S.C. 1251 et seq.; the Washington Environmental Policy Act, RCW Ch, 43.210; the Washington Water Pollution Control Act, RCW Ch, 90.48; the Washington Hazardous Waste Management Act, RCW Ch. 70.105; the Washington Model Toxic Control Act, RCW Ch. 70.105D and the regulations promulgated thereunder, or under any applicable local or state environmental ordinance, statute, law, rule or regulation. The provisions of this Paragraph 19(D) shall survive the termination of this Lease. The defense, indemnity, and hold harmless ,provisions provided in Paragraphs 19(A) 19(D) hereof shall apply only to the extent the party claiming same is not at fault with aspect to t -ie event giving rise thereto. If both parties are at fault, such defense, indemnity, and glci,harmless shall be applied under principles of comparative fault, 203'. INSURANCE: YH agrees that, at all times during the full Lease Term, it shall, at its own expense, maintain in full force and effect adequate fire and other casualty coverage for the Property and structures, buildings, infrastructure and contents, including all YH's personal property, fixtures and improvements. Such policy shall include a replacement cost endorsement, YH shall obtain and file with the City's Risk Manager a Certificate of Insurance evidencing such coverage, YH shall provide the City with a thirty (30) day cancellation notice prior to any policy cancellation. Adequacy of coverage is defined as insurance sufficient to restore the Property to its pre -casualty condition. to execution of this Lease, YH, at its expense, shall obtain and file with the City's Risk Manager aiCertificate of Insurance evidencing commercial general liability insurance coverage ("CGL") providing coverage of at least $2,000,000 per occurrence and $2,000,000 general aggregate. This Certificate of Insurance shall be subject to approval by the City's Risk Manager as to company, terms and coverage and said approval shall not be unreasonably withheld. The CGL shall name the City, its elected officials, officers, agents, employees, and volunteers as additional named insureds and must protect the City from any and all claims and risks and losses in connection with YH's activities or omissions by virtue of this Lease. The CGL policy shall remain in full force and effect at YH's sole expense for liability for property damage or personal 1808,N 1st, St. Lease f Purchase Option Agreement -Y HOTEL LLC Pagel? injury that may occur in connection with activit coverage fcr the full Term of this Lease and the Manager is' given thirty (30) calendar days cancellation, lapse, reduction or modification of 73 es or omissions by YH, and provide continuous Agreement. YH shall ensure that the City's Risk prior written notice, by certified mail, of any such insurance. 2. DEFAULT; TERMINATION; AND FORFEITURE: A. YH's failure to comply with any material term, provision or condition of this Lease shall constitute grounds for termination of this Lease. This Lease and tenancy shall terminate for cause as specified above on written notice by City to YH stating in detail the manner in which YH fails or has failed to comply with this Lease. YH shall comply with this Lease in the manner specified in the notice within sixty (60) days (except twenty days with respect to default regarding payment of rent or other monetary obligation) from YH's receipt of such notice, provided, however, that if the nature of YH's default (other than for monetary defaults) is such that more than sixty (60) days are reasonably required for its cure, then YH shall not be deemed to be in default if YH commences such cure within said sixty (60) day period and thereafter diligently prosecutes such cure to completion; otherwise this Lease and tenancy shall be terminated. Such notice shall be given in writing and served on YH by personal delivery or mailed by certified mail with return receipt requested addressed to YH at its address stated below or such other address as the parties may hereafter advise each other in writing. Notices shall be deemed received three (3) days after mailing. In addition to the provisions hereinabove, and/or as an alternative or cumulative remedy, City may, at its sole election, pursue any other action, redress, or remedy now or hereafter available to City under the laws of the State of Washington,including state Landlord -Tenant laws, B. As respects land, land improvements and the buildings and structures thereon, as additional and not alternative remedy, optional with City and upon sixty (60) days written notice to YH, should YH be in default hereunder, City may cure or correct the same and the cost of such cion by City shall immediately become due and payable to the City by YH, together with late fee on. said sum at a rate of ten percent (10%) per annum, and the non-payment of said sum by ( sh lI be adequate grounds for City to invoke the other remedies as provided in this Lease. . The failure by City to comply with any material term, provision or condition of this Lease shall constitute grounds for termination of this Lease. This Lease and tenancy shall terminate for cause as specified above on written notice by YH to City stating in detail the manner in which City fails or has failed to comply with this Lease. City shall comply with this Lease in the manner specified in the notice within sixty (60) days from City's receipt of such notice, provided, however, that if the nature of City's default is such that more than sixty (60) days are reasonably required for its cure, then City shall not be deemed to be in default if City commences such cure within said sixty (60) day period and thereafter diligently prosecutes such cure to completion, otherwise this Lease and tenancy shall be terminated. Such notice shall be given in writing and served on City by personal delivery or mailed by certified mail with return receipt requested addressed to y atkits address stated below or such other address as the parties may advise each other in g. Notices shall be deemed received three (3) days after mailing. In addition to the provisions hereinabove, and/or as an alternative or cumulate remedy, YH may, at its sole election, pursue any; other action, redress, or remedy now or hereafter available to it under the laws of the State of Washington, including state Landlord -Tenant laws. 1808 N 1st St, Lease / Purchase Option Agreement -Y HOTEL LLC Page 18 74 22. DISPUTE RESOLUTION: In the event that any dispute shall arise as to the interpretation of this Lease, or in the event of a notice of default as to whether such default does constitute a breach of the Lease terms, and if the parties hereto cannot mutually settle such differences, then the parties shall first pursue mediation as a means to resolve the dispute. If both parties consent in writing, other available Means of dispute resolution may be implemented. 23. VENUE, ATTORNEY FEES: In the event dispute resolution is not successful and litigation is initiated to enforce the rights and obligations hereunder, venue shall lie in a court of competent jurisdiction in Yakima County, Washington. The prevailing party shall be entitled to its reasonable attorney fees in addition to court costs. 24. NON-DISCRIMINATION CLAUSE: To the extent required by law, YH, for itself, its personal representatives, successors in interest and assigns, as a part of the consideration hereof, does hereby covenant and agree as follows: „ A. No person, on the grounds of race, color, religion, sex, age, marital status, handicap prnationalprigin, shall be unreasonably excluded from participation in, denied the benefits of, or A A be otherwise subjected to discrimination in YH's personnel policies and practices or in the use or operation ot YH's services or facilities. B. YH agrees that in the construction of any improvements on, over or under City land and the furnishing of services thereon, no person, on the grounds of race, color, religion, sex, marital status, handicap, age or national origin, shall be unreasonably excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination. 25. OPTION TO PURCHASE: As a further condition of the Lease, and in consideration of the terms and conditions set forth herein, including but not limited to the requirement to maintain the property in a good condition and consistent with the value added by the improvements YH makes to the property, that at such ti,nlas the, City receives a No Further Action (NFA) letter from the Department of Ecology regarding the environmental remediation work that has been occurring on the property for several years, the City shall forward a copy of the NFA letter to YH. Within forty five (45) days from receipt of said letter YH shall present the City with an offer to purchase the property (PSA) for Three Hundred Thousand Dollars ($300,000.00) less credit for the Five Hundred Dollars ($500.00) of each monthly rent payment that has been applied to partial payments of said purchase price, and less the Deposit amount of Twenty Thousand Dollars ($20,000.00) plus accrued interest that the City has held during the Lease Term. The PSA shall contain the following language regarding the obligation to comply with the conditions mandated by DOE under the Consent Decree that concerns this property: Seller warrants and represents that the property is subject to an Environmental Covenant granted to the Washington State Department of Ecology by the City of Yakima on the 11th day of December, 2015 and recorded with the Yakima County ,Auctitor. The parties specifically understand and agree that all uses and activities occurring on the property must comply with the terms of the referenced Covenant, (City) Initial: (YH) 1808 N 1s, St, Lease / Purchase Option Agreement -Y HOTEL LLC Page 19 75 26. CONTRACT DOCUMENTS: Exhibit A, attached hereto and incorporated herein by this reference shall include YH's RFQ Response, project design concept, plans and renderings depicting YH's development plan for the subject property. 27. INTEGRATION: Exhibits and Recitals are incorporated herein by this reference. This Lease and the Agreement incorporated herein embody the entire agreement between the parties with respect to the subject Matter herein contained. No amendments or modifications hereof shall be enforceable unless in writing, signed by the parties hereto. 28. THIRD PARTY BENEFICIARY: Nothing in this Agreement is intended to create any rights in any entity not a party to this Agreement nor is any person or entity not named a party herein a third party beneficiary to this Agreement. 29. NOTICE: All notices allowed or required hereunder shall be effective if given in writing and served by personal delivery or delivered by certified mail, return receipt requested, at the address shown below, unless a different address is designated by a party in writing: if to City. If to YH: YAKIMA CITY MANAGER 129 N. 2nd Street Yakima, Washington 98901 Y HOTEL LLC 61547 Tam McArthur Loop Bend, OR 97702 30. BINDING EFFECT AND BENEFIT: This Lease shall be binding upon and inure to the benefit of the parties hereto, their successors, assigns and subtenants. 31. AMENDMENTS: Any Amendment to the Lease shall be made in writing and signed by both parties to the Lease. 32. SEVERABILITY: If any term or provision of this Agreement is found invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be enforceable and effective to the fullest extent permitted by law. Further, the parties shall negotiate in good faith regarding amendments to this Agreement that would effectuate the intent of any provision held invalid or not enforceable. 1808 N 1st St. Lease Purchase Option Agreament-Y HOTEL LLC Page 110 76 CITY: CITY OF YAKIMA, WASHINGTON By: Cliff Moore, City Manager Date STATE OF WASHINGTON ) ) ss County of Yakima C L I certify that I know or have satisfactory evidence that Cliff Moore signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the City Manager of»the City of Yakima, Washington to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. WITNESS my hand and official seal this day of March, 2019. YH: • YLHOTEL By PRINT NAME: NOTARY PUBLIC in and for the State of Washington, residing at My commission expires: STATE OF WASHINGTON ) ) ss County of Yakima I certify that I know or have satisfactory evidence that Scott Mary signed this instrument, 99 oath stated that he was authorized to execute the instrument on behalf of Y HOTEL LLC and acknowledged it to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. WItNESS my hand and official seal this day of March, 2019. \‘`‘Ij •o" •>`' *up-. 1808 N lt St, Lease / PA? Option Agreement -Y HOTE /-011%%\%‘` Page I 11 • **a • PINTNAME: "c:` tui Cow -yo. NOTARY PUBLIC in and for the State of Washington, residing at \io..:VA'onrA kA/ My commission expires: -1)A, ,)-71 77 GEOENG NEE.IiS 1808 N 1St St. Lease / Purchase Option Agreement -Y HOTEL LLC Page 113 EXHIBIT;A RFP No. 11901P Addendum No. 1 Y Hotel LLC Cost Proposal Y Hotel Written Proposal Y Hotel Plans