HomeMy WebLinkAbout09/29/2015 03 Proposed Aquatic Center Agreements with the YMCAITEM TITLE:
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 3.
For Meeting of: September 29, 2015
Proposed aquatic center agreements between the City and YMCA
Tony O'Rourke, City Manager
Attached for City Council review is a memo highlighting the key items from the proposed development
agreement, operations agreement, and ground lease for an aquatics center at Chesterley Park.
Resolution: Ordinance:
Other (Specify):
Contract: Contract Term:
Start Date: End Date:
Item Budgeted: Amount:
Funding Source/Fiscal Impact:
Strategic Priority:
Insurance Required? No
Mail to:
Phone:
APPROVED FOR
SUBMITTAL:
RECOMMENDATION:
City Manager
ATTACHMENTS:
Description Upload Date Type
DI CM Memo With attachments 9/25/2015 Corer Memo
fDIF IFF if Development Agreement 9/25/2015 Caner Memo
DI fDIF IFF if Olpeir<anliirng Agreement 9/25/2015 Corer (Memo
DI fDIF IFF if Ground Lease Agreement 9/25/2015 Corer Memo
MEMORANDUM
To: Honorable Mayor and Members of the Yakima City Council
CC: Parks and Recreation Commission
From: Tony O'Rourke, City Manager
Date: September 25, 2015
RE: YMCA Aquatics and Fitness Agreements
Attached for City Council review, in preparation of the September 29 study session, are
a series of draft agreements (Development, Ground Lease, and Operating) between the
City of Yakima and Yakima Family YMCA, a Washington non-profit corporation. These
draft documents represent an intent to collaborate in the design, development, and
operation of an Aquatics Center at Chesterley Park consisting of a lap pool, therapy
pool, and family/children's pool. Independently, the YMCA will also construct and
operate a $9 million dollar Fitness Center, which like the Aquatic Center will be open to
the entire community on a daily or monthly pass basis. The Yakima Family YMCA
Board tentatively approved these agreements on September 22, 2015, subject to final
revisions and review by the City Council. The final review and proposed execution of
these agreements is scheduled for the City Council's October 20, 2015 meeting.
The Yakima Family YMCA is a Yakima -based, non-profit that has been committed to
building a healthy spirit, mind, and body among individuals, families, and businesses of
Yakima since 1906. In collaboration with the City of Yakima, they have the experience,
ability, and resources to design, develop, maintain, and operate this proposed Aquatics
Center. The proposed agreements do not constitute a joint venture. Each party has
their own independent responsibilities and rights.
The agreements to design, build, and operate an Aquatic Center are subject to three
contingencies. The first is a due diligence contingency of 90 days to inspect and test
soils at Chesterley Park before entering into a ground lease. The second requires the
City to complete a land conversion process with the Washington Recreation and
Conservation Office and National Parks to replace approximately 7.5 acres at
Chesterley Park since it was paid for with state and federal grants. The third
requirement is that the YMCA has to raise approximately $15 million or 80% of the
construction cost of the aquatic and fitness center by December 31, 2017.
Currently the City has only one year-round pool at Lions Park and a summer outdoor
pool at Franklin Park. In addition, both pools are nearly 45 years old and are reaching
the end of their functional life unless significant capital investments are made to extend
their functionality.
Highlights of the proposed agreement include:
TERM
The initial term of the proposed ground lease for approximately 7.5 acres at Chesterley
Park for the YMCA Aquatics Center and Fitness Center is for a term of 40 years
commencing upon the opening of the facilities, with the option of the YMCA to extend
the initial 40 -year term for three (3) additional ten (10) year terms.
SITE
The proposed location of the Aquatics Center and Fitness Center is on approximately
7.5 acres of land in the northwest corner of Chesterley Park (see attached site plan).
This site is zoned R2 and recreational uses are a permitted use under a Class 2
Review. Because Chesterley Park was purchased with State of Washington Recreation
and Conservation Office (RCO) and National Parks Scenic (NPS) grants the City is
required to provide replacement property for the existing RCO/NPS Chesterley Park
property in order to use the approximately 7.5 acres for the proposed Aquatics/Fitness
Center. The replacement conversion process is lengthy. The attached RCO/NPS
property conversion requirements provide a summary of the process involved in gaining
RCO/NPS approval of a conversion. The City will be required to undergo a "yellow
book" appraisal of both the Chesterley Park site, the proposed replacement site, which
at this time is being considered on the second 60 -acre SOZO parcel. In addition to the
appraisals, NEPA environmental impact assessment, archeological assessment, and
recreational suitability analysis of each parcel must be completed. Successful
completion of this property conversion requirement is necessary to consummate this
YMCA -City Agreement.
FACILITY/FEATURES
The proposed Aquatic Center has a projected cost of $9 million and will be a joint City of
Yakima/YMCA facility.
The state-of-the-art facility will feature multi-level glass walls to make it highly visible
and attractive both inside and out. The facility will total approximately 72,000 square
feet of which 34,000 square feet will be dedicated to the Aquatic Center. The Aquatics
Center will feature three bodies of water: a lap pool, a family/children's recreation pool
and a warmer water therapy pool. Plans call for the family/children's recreation pool to
include a slide, spray and splash elements and a lazy river. The pool deck includes a
hot tub and steam rooms. The two facilities will share a common lobby space and locker
rooms. The YMCA Fitness Center includes group fitness studios, cardio equipment,
circuit weights, free weights, a gymnasium, child watch area, drop-in youth room,
community classrooms and a teaching kitchen.
If feasible, a future outdoor pool could be built adjacent to the Aquatic Center.
ACCESS
The facility will have shared access to the existing 185 Chesterley Park parking spaces,
as well as exclusive access to 120 additional spaces to be built. The facility is open to
the entire community. Day and monthly passes will be available for access to both
facilities for either the Aquatics Center or the YMCA Fitness Center. The YMCA will also
offer standard membership options. The YMCA provides opportunities for youth and
families with limited resources to have access to the YMCA facilities and programs. The
facility will be open seven days a week.
PROGRAMMING
Aquatics Center: programming for the Aquatics Center will include water aerobics
classes, swim lessons, masters swim instruction, private swim lessons, senior water
aerobics classes, arthritis and therapy group classes, birthday parties, lifeguard training
certification, swim meets, open lap swimming, aqua dance, water walking classes and
other group fitness, as well as recreational opportunities.
YMCA: Programming will include youth outreach programs, group fitness classes,
community health programming in diabetes and obesity prevention, aerobics classes,
personal training, cycling classes, basketball leagues, Zumba and a wide range of
personal fitness opportunities.
COST
The estimated cost of the Aquatic Center is $9 million, of which the City will contribute a
not to exceed amount of $4,500,000. The annual debt service on the City's contribution
of $4.5 million non -tax exempt debt is approximately $360,000 annually starting in 2018.
The YMCA will be responsible for all additional costs of completion. The City and YMCA
will equally share in the operating cost of the Aquatics Center. The Fitness Center will
also cost approximately $9 million, of which the YMCA will pay 100%.
Highlights of the proposed Aquatic Center Development Agreement, Operating
Agreement, and Ground Lease include:
YMCA Development Agreement
• YMCA shall construct an aquatics center consisting of lap pool, therapy pool, and
family/children's pool.
• The City shall contribute a total of $4,500,000 for design, engineering, and
construction costs related solely to the aquatics center upon satisfaction of the Due
Diligence Contingency. It is expressly confirmed that all costs paid by the City for
design and engineering shall be reimbursed to the City by the YMCA in the event the
Financing Contingency is not satisfied and the project fails to be developed.
• YMCA shall construct a fitness facility, exclusively at their cost
• The YMCA will solely own the aquatics center and fitness center. At the end of the
ground lease these facilities will revert to the City.
The YMCA shall have sole responsibility for the design, building plans, engineering,
site plan, and construction of the aquatics center, subject to review by the City
manager to confirm the aquatic center design is in compliance with required
specifications.
The City shall be reimbursed for its pro -rata design and engineering costs if the
Aquatics Center fails to be developed, provided the city successfully completes all
RCO requirements to make the Chesterley Park site available.
• The City shall conduct a complete public works project bidding process for
construction of the Aquatics Center development in accordance with Washington
Public Works requirements. The YMCA shall be responsible for selecting and
contracting the architects, and engineers that will be used to construct the aquatic
and fitness facilities.
• The YMCA is solely responsible for all costs necessary for development and
construction of the aquatics center, including any construction cost overruns and
change orders.
• Any off site traffic or other improvements outside of the YMCA's leased space
required by the City as a result of the aquatics center and other facilities on the
leased premises are the responsibility of the City and with no reduction to the City's
$4,500,000 aquatic center contribution.
• Any on site improvements within the leased space shall be shared equally between
the City and the YMCA. The City's share will come from its $4,500,000 contribution.
• The naming rights of the aquatics center will belong solely to the YMCA, provided,
however, the aquatics center name must include the word "Yakima".
YMCA Ground Lease
• The YMCA will lease from the City approximately 7.5 acres at Chesterley Park for
the YMCA aquatics center and fitness center (see attached site map) for an initial
term of forty (40) years commencing upon the opening date of the facilities. The
YMCA will have the option to extend the initial 40 -year term for three (3) additional
ten (10) year terms under the same terms and conditions.
• The YMCA's lease is contingent on satisfactory due diligence of the leased premises
on or before 90 days of the effective date of the lease.
• The YMCA's obligation to lease the Chesterley site and construct the Aquatic
Center, and the City's obligation to make a $4.5 million contribution, is contingent on
the YMCA securing 80% of the funding needed to construct the Aquatics Center and
fitness facility by December 31, 2017.
• The City's and YMCA's respective obligation to lease space in Chesterley Park is
financially contingent on the YMCA's ability to fund the construction and operation of
the aquatics center and fitness center, as well as successful completion of the RCO
conversion. If the financial contingency or RCO conversion is not satisfied on or
before December 31, 2017, either the City or YMCA may terminate this Lease
Agreement after 60 days written notice period for the YMCA to satisfy the financing
contingency.
The Lease Agreement is subject to the terms of the Development Agreement and
Operating Agreement.
• The YMCA may share the use of existing Chesterley Park parking areas, however,
they will have exclusive use of any additional parking they construct.
• The YMCA is permitted to sublease all or any portion of the leased premises with
City approval.
• The YMCA and City have 60 days to cure any defaults.
YMCA Operating Agreement
• The aquatics center will be managed, operated, and maintained by the YMCA in
accordance with operating standards consistent with industry and mutually agreed
upon standards.
Minimal operating hours:
o Monday through Friday
o Saturday
o Sunday
6:00 a.m. to 9:00 p.m.
7:00 a.m. to 7:00 p.m.
12:00 p.m. to 6:00 p.m.
• The YMCA will maintain commercial general liability insurance not less than
$2,000,000 per occurrence and $4,000,000 general aggregate.
• The aquatics center shall be available for use by the general public and fees
charged by the YMCA for public use will be set in consultation with the City and must
be commercially reasonable with fees charged by facilities of similar size and scope
in the State of Washington.
• Prior to April 1 of each calendar year, the City shall submit the City's requested
program schedule for general public use of the aquatics center to the YMCA. The
YMCA shall consider and address the City's requested program schedule while
preparing the annual aquatics center schedule. The YMCA shall manage the
aquatics center to ensure general public access and use is a primary objective in
program scheduling.
The City shall share equally with the YMCA all reasonable pre -opening, staffing, and
operational costs in preparing and organizing the aquatics center for its opening
date.
• The YMCA shall submit to the City Manager, at least 9 months before opening day,
a proposed initial budget for the period from opening day through July 31st of the
year of opening.
• The aquatics center budget year shall commence on September 1st annually. The
YMCA shall submit a proposed annual operating budget and annual capital budget
for the aquatics center for the upcoming fiscal year (September 1st through August
31St) to the City Manager by July 1st of each year. Review, reconciliation and
approval of the annual aquatics center budget shall be jointly approved at least 15
days prior to September 1st of each year. In the event the YMCA and City are
unable to approve the initial or annual budget the parties will submit to mediation to
resolve the budget impasse.
• The City is obligated to reimburse the YMCA for 50% of all annual aquatics center
operating deficits.
• The YMCA and City shall maintain an operating reserve fund to offset budget
variances and cash-flow timing.
• The City is obligated to reimburse the YMCA for 50% of all annual aquatics center
capital expenditures.
• A Capital Improvement Reserve Fund shall be established separately by the City
and YMCA for asset repairs and replacements. The City and YMCA shall each
deposit 1.00%, for an annual total deposit of 2.0% of the initial and on-going asset
value of the aquatics center into the capital improvement reserve fund to ensure
routinely scheduled funding and replacement of the aquatics center's capital assets.
• The YMCA shall submit quarterly written reports to the City Manager on the status of
the aquatics center financial performance, usage and programs.
• The City shall have the right to audit the YMCA's aquatics center finances annually.
• In the event the YMCA or City materially breach the terms of this agreement, the
YMCA or City shall provide notice of the specific default(s), and if not cured within 60
days, the YMCA or City shall seek equitable relief or terminate this agreement. If
either party wrongfully terminates the agreement, the offending party is obligated to
pay the other party's costs and attorney's fees and liquidated damages in the
amount of $1,000,000.
An unsuccessful "conversion process" will not constitute a breach of the terms of this
Agreement and/or cause for the YMCA to seek damages from the City.
SUMMARY
The approval of these agreements represents the City's willingness and ability to enter
into public/private partnerships to enhance the overall quality of life for Yakima citizens
while also reducing the public's capital and operating cost contributions by 50% to gain
a new aquatic center for the Yakima community.
The Aquatics Center addresses a significant need for another year-round pool in
Yakima and builds upon the City Council's recent decision with SOZO for the
development of a 19 field sports complex to enrich the recreational and economic
vitality of Yakima.
These agreements would not have been possible without the great cooperation and
efforts of the YMCA representatives, Bob Romero, Dustin Yeager, Mark Smith, and
Paul Larsen. In addition, City Attorney Jeff Cutter and Public Works Director Scott
Schafer were invaluable in representing the City and achieving this mutually beneficial
partnership.
Encl.
RCO Property Conversion Requirements
Aquatic photos
Draft Development Agreement
Draft Operating Agreement
Draft Ground Lease
RCO Property Conversion Requirements
RCO Requirements.
To seek approval for a conversion of property previously purchased or improved with RCO funds, the
sponsor must provide the following information to RCO in writing:
1. A detailed description of the original project proposal funded by RCO.
2. A detailed description of the proposed conversion (property submitted as "replacement"
property for the existing RCO-developed property).
3. A list and discussion of all potential alternative replacement and remediation options in lieu of
conversion, including avoidance. All practical alternatives to the conversion must be thoroughly
vetted and evaluated.
4. Evidence that the public had been given a reasonable opportunity to participate in the
identification, development, and evaluation of the potential alternatives. The minimum action
that must be demonstrated to meet this requirement is publication of public notice and a 30 -
day public comment period.
5. Justification that supports the proposed replacement site as a reasonable equivalent recreation
or habitat utility and location.
a. A fair market value of converted real property and the replacement property must be
established and the value of the proposed replacement must be of at least equal current
fair market value. The fair market values of each property must be established by
appraisal as provided in RCO's Manual 3, Acquisition Projects.
b. Property improvements will be excluded from all fair market value consideration for
replacement real property. Exceptions may be considered only in those cases where the
real property proposed for substitution contains improvements that directly enhance its
outdoor recreation or habitat conservation utility.
6. Additional documents for specific types of projects:
• Acquisition: Copies of any appraisal or appraisal review of the proposed
conversion; title reports for property proposed for replacement.
• Development or restoration of structures or facilities: A site plan that clearly
indicates the development and restoration proposed for conversion.
• For all projects: Submit maps, plans, graphics, a completed State Environmental
Protection Act (SEPA) check list, archeological or cultural resource reviews, and
any other documents requested by RCO staff.
Federal Land and Water Fund Requirements.
In addition to compliance with the rules found above, sponsors of property and facility conversions
previously acquired, developed, or restored with federal Land and Water Conservation Fund assistance
must provide:
1. A National Park Service Project Description/Environmental Screening Form, a complete
environmental assessment, environmental impact statement, or other requested
documentation.
a. NEPA environmental process and procedure, rather than SEPA process required when
only RCO funds involved, on both properties.
b. Archeological assessment and appraisal of BOTH properties submitted for review and
acceptance.
c. "Yellow Book" appraisal with independent appraisal review for each property,
performed by federally approved appraisers in accord with federal procedural
requirements.
d. Detailed description of "recreational utility" of replacement site.
2. Evidence of an appropriate intergovernmental review process. If the proposed conversion and
substitution are significant, this includes a formal notice of intent to all interested agencies that
contains:
3. A detailed description of the proposal.
i. An address where comments may be forwarded.
ii. The deadline for comment. At least 30 days before the end of the comment
period, the notice must be mailed to the State Historic Preservation Officer and
all affected state, area, regional agencies, and tribal historic preservation
offices.
4. Copies of all comments, including "no comment."
Director or board approval of proposed conversions under the Land and Water Conservation Fund is
interim, pending final approval from the National Park Service.
The proposed replacement property must:
• Be of equivalent or greater "recreational utility" and location as the conversion area
• Be at least of equal market value to the conversion area
• Be administered by the same project sponsor
• Fulfills a need in the State Comprehensive Outdoor Recreation Plan
• Satisfy a need in the project sponsor's adopted plan (Comprehensive Plan)
• Be eligible as a project in the respective grant program
• Present the public with sufficient opportunity to participate in alternative option analysis.
Project Sponsor Submittal Requirements to RCO for Land and Water Conservation Fund
Conversions'
For LWCR (federal) conversion requests, RCO makes a formal recommendation to the National Park
Service on whether to approve the conversion request. The NPS is the final approval authority. Their role
with regard to ultimate federal action taken is to decide whether to remove federal protection from the
conversion property and move it to the replacement property. The conversion sponsor must provide:
1. Cover letter to RCO Director with narrative addressing 36 CFR Part 59 of the LWCF Act.
2. Cultural Resources Review for Section 106 of the National Historic Preservation Act for the
conversion and replacement properties.
a. EZ1 form(s) for archeological review with identified Area of Potential Effect'.
b. Information needed for historic properties review, if appropriate.
• RCO submits information to Department of Archeological and Historic
Preservation.
• NPS submits information to Indian Tribes.
• May lead to additional survey work and a memorandum of agreement on any
identified impacts.
3. Environmental assessment3for National Environmental Policy Act (NEPA) compliance.
a. Draft EA per instructions in LWCF manual (pages 4-4 to 4-9 and 8-3 to 8-10)4.
b. Include site location maps as appropriate.
c. Include 6(f) boundary maps for current protected park area, park area protected after
conversion and new park protected at the replacement property.
d. Include optional alternatives analysis of conversion property (LWCF requirement) and
replacement property (RCO requirement).
e. Include discussion of how the proposed conversion and replacement are in accord with
the State Comprehensive Outdoor Recreation Plan.
• Provide draft to RCO and NPS for review.
• Once reviewed and approved, the project sponsor releases the EA for 30-day
public comment and intergovernmental review. Project sponsor summarizes
public and intergovernmental reviews comments in a final draft.
• Provide final draft EA to RCO.
4. Appraisal and review appraisals for conversion and replacement properties per LWCF manual
requirements (pages 4-19 to 4-22) to demonstrate at least equivalent fair market values'.
a. Exclude the value of structures or facilities that will not directly enhance the outdoor
recreation utility.
b. Value dates for both appraisals should reflect the date of acquisition of the replacement
property.
5. RCO acquisition documentation for replacement property.
a. Hazardous Substances Certification Form with RCO checklist or phase 1 environmental
site assessment.
b. Preliminary title report
c. Notice of voluntary transaction to landowner
d. Relocation plan, if eligible displaced parties on site.
6. Maps.
a. Location map showing relative location of conversion and replacement properties.
b. Location map for the conversion property.
c. Location map for the replacement property.
d. Detailed parcel map of the converted parcel (with legal description).
e. Detailed parcel map of the replacement property (with legal description).
f. Sign and dated 6(f) boundary maps for the remaining protected parkland and the
replacement property per LWCF manual requirements (page 6-3 to 6-5)7.
7. Site development plan and schedule for replacement property.
8. Revised site development plan and schedule for remaining parkland, if applicable.
9. Draft RCO deed of right for replacement property, if the original project was acquisition project.
10. Draft RCO release deed of right for conversion property, if the original project was an acquisition
project.
1 LWCF Manual (October 2008) and RCO Manual 7 (May2010)
2 The Area of Potential Effect (APE) is the footprint of the property being converted and the replacement property. The cultural
resources review ensures consideration of any cultural resources impacts resulting from removing protection from the converted
property and then identifying potential resources and impacts on the replacement property which may determine how the
replacement property will be developed.
3 Environmental assessments are required for all LWCF conversions unless the conversion meets the requirements of a "small
conversion" per the LWCF Manual, page 8-10.
4 Note that the EA instructions are very specific as to describing the federal action and what it needs to include. Read the manual
instructions.
5 Intergovernmental review of the proposal is required per Executive Order 12372 and is usually accomplished by sending the
draft EA to those state and federal agencies with jurisdictional oversight related to the conversion and replacement sites. See
LWCF manual (page 4-3)
6 Note that there are very specific appraisal instructions related to LWCF projects and conversions. Provide the LWCF manual
instructions to the appraiser and review appraiser.
7 If there is no existing approved 6(f) boundary map, then the project sponsor will need to first work with RCO and NPS to
determine what original 6(f) boundary was at the time of the grant agreement and any subsequent amendments. This can take
a substantial amount of time and should be started early.
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SAMPLE PLAN
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PARTIES:
DEVELOPMENT AGREEMENT
EFFECTIVE DATE: , 2015
CITY OF YAKIMA,
a Washington municipal corporation
129 North 2nd Street
Yakima, Washington 98901
(referred to in this Agreement as the "City")
YOUNG MEN'S CHRISTIAN ASSO
(d/b/a YAKIMA FAMILY YMCA
a Washington nonprofit corporati
5 North Naches Avenue
Yakima, Washington 98901
(referred to in this Agree the "YMCA")
BACKGROUND. [INSERT]
ON OF YAKIMA
AGREEMENT. FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT®®I' 1 ADEQUACY
ACKNOWLEDGED, THE UNDERSIGNED P E AS FOLL
1. Definitions. Unless the context clearly indicates another g and except for terms defined in
this Agreement, al apitalized terms used in this Agreement .ve e same meaning given to said
terms in the Operating Agreement and Ground Lease. The foil ing terms, when used in this
Agreement, have the following meanings, unless the context clearly indicates another meaning:
1.1 "Aquatic Center" has the meaning given to said words in Section 2 below.
1.2 "City's Financial Contribution" has the meaning
en to said words in Section 3 below.
"Construction Contracts" has the meaning given to said words in Section 5 below.
1.4® !ue Diligence Contingency" as the meaning given to said words in Section 2.1 of the
�s nd Lease.
1.5 "Funding Contin y" has the meaning given to said words in Section 2.2 of the
Ground Leap.
1.6 "Ground Lea means and refers to the Ground Lease dated even herewith by and
between the City as "Landlord" and the YMCA as "Tenant" for the YMCA's lease of the
Leased Premises.
1.7 "Leased Premises" has the meaning given to said words in Section 1.7 of the Ground
Lease.
1.8 "Operating Agreement" means and refers to the Operating Agreement dated even
herewith by and between the City and the YMCA in connection with the operations and
1
management of the aquatic facilities to be constructed on the Leased Premises under this
Agreement.
1.9 "Other Facility" has the meaning given to said words in Section 2 below.
1.10 "Possession Date" has the meaning given to said words in Section 3 of the Ground Lease.
1.11 "RCO Contingency" has the meaning given to said words in Section 2.3 of the Ground
Lease.
1.12 "Required Specifications" has the meaning given to sail words in Section 2 below.
2. Aquatic Center. Subject to the Due Diligence, Funding, and RCO Contingencies, the YMCA
will construct an aquatic center on the Leased Premises (the "Aquatic Center"). The Aquatic
Center will be connected to a separate facility alto constructed on the Leased Premises by the
YMCA for non -aquatic YMCA activities (the "Other Facility"). Both the Aquatic Center and the
Other Facility will be solely owned by the YMCA and will be subject to the terms and conditions
of this Agreement and the Ground Lease and Operating Agreement.
Unless the City and the YMCA agree otherwise in writing, the Aquatic Center will be constructed
in accordance with the mini required specifications set forth on attached Exhibit B (the
"Required Specifications").
3. City's Financial Contribution. 'Fhe City will contribute Four Million Five Hundred Thousand
and No/100 U.S. Dollars ($4,500,000.000) toward the construction of the Aquatic Center (the
"City's Financial Contribution"). The City's Financial Contribution will be paid out when and as
required under this Agreement. The YMCA will be responsible for procuring all other funds
needed to construct the Aquatic Center, as well as all funds needed to construct the Other Facility.
4. Design and Engineering Phase. Subject to the Required Specifications, the Aquatic Center's
design and engineering (including, without limitation, layout, building plans, specifications, and
site plan) will be determined by the YMCA in consultation with the architect(s), engineer(s),
contractor(s), an her construction consultant(s) hired in connection with the development of
the Aquatic Center. Notwithstanding the foregoing, before commencing construction on the
Aquatic Center, the Aquatic Center's layout, building plans, specifications, and site plan will be
presented the City Manager for the City to confirm the Aquatic Center's design is in
complian h the Required Specifications.
In the interest nitiating c struction of the Aquatic Center as soon as reasonably possible after
the satisfaction of the Due Diligence, Funding, and RCO Contingencies, it is expressly confirmed
that the Aquatic Center's design and engineering (including, without limitation, layout, building
plans, specifications, and site location) will commence and be prepared when and as determined
by the YMCA after the satisfaction of the Due Diligence Contingency. The YMCA and the City
will share equally in and timely pay when due all design and engineering costs in connection with
the development of the Aquatic Center; provided, however, it is expressly confirmed that all
amounts paid by the City under this paragraph for Aquatic Center design and engineering costs
will come from and be paid out of the City's Financial Contribution under Section 3 above. It is
further provided and expressly confirmed that all such costs paid by the City for design and
engineering shall be reimbursed to the City by the YMCA in the event the Funding Contingency
is not satisfied and the project fails to be developed as set forth herein.
2
5. Construction Contracts. Subject to the provisions of this Section 5, the City and the YMCA
will jointly conduct a standard RFP process to request proposals for the architectural and
engineering design of the Aquatic Center and Other Facility. Once proposals have been obtained
from prospective architects and engineers, the YMCA shall be responsible, in accordance with
applicable public contracting requirements, for interviewing and selecting the architects and
engineers that will be used in connection with the development and construction of the Aquatic
Center and the Other Facility. The YMCA shall cooperate with City's procurement professionals
to negotiate all construction and professional service agreements associated with the architectural
and engineering design that will be used for the development and construction of the Aquatic
Center and the Other Facility and that will be included in the RFP documents presented to
prospective proposers during the RFP process. It is expressly confirmed that all architects and
engineers hired in connection with the development and construction of the Aquatic Center and
the Other Facility shall be hired by and provide independent contractor services for the YMCA
(and not by or for the City) and that all construction and professional service agreements will be
by and between the third party professional se e providers and the YMCA (and not with the
City).
The contracts for the actual constructio fie Aquatic Center an e Other Facility shall be
performed as a public works project and all construction bid advertisements, bidding processes,
and contract awards and close-outs associated therewith shall be performed in accordance with
Washington public works bidding and performance requirements. The City and the YMCA will
jointly conduct the complete construction bidding process and shall prepare and award the
contracts in accord with these requirements and the Cit 's standard bidding and contracting
practices.
All construction and professional service agreements associated with the architectural and
engineering design and construction that will be used for the development and construction of the
Aquatic Center and the Other Facility are collectively referred to as the "Construction Contracts"
under this Agreement. The Parties agree that contract elements providing for adequate and
proper insurance coverage during the performance of the contracts, as well as those deemed
necessary to protect the City's interests as the owner of the property, shall be included in all of
the construction contracts and subcontracts and shall be reviewed and approved by the City prior
y to the contracts being executed.
Sub ect to the Required Specific all change orders to any Construction Contract must be
approved by the YMCA in writing. oreover, it is expressly confirmed that with exception to
the City's obligations under this Agreement, the Ground Lease, and the Operating Agreement, the
YMCA is solely responsible for all costs necessary for the development and construction of the
Aquatic Center, including, without limitation, all Construction Contract cost overruns and added
expense from any change orders thereto.
6. Construction Phase. The construction contracting processes described in Section 5 above', as
well as the actual construction of the Aquatic Center, will commence as soon as reasonably
possible after the satisfaction of each of the Due Diligence, RCO, and Funding Contingencies
' It is expressly acknowledged and confirmed that the architectural and engineering design contracting
process may commence after the satisfaction of the Due Diligence Contingency as set forth in Sections 4
and 5 above.
3
under Sections 2.1, 2.2, and 2.3 of the Ground Lease (unless the City and the YMCA mutually
agree in writing on some earlier or later date)).
Upon the Possession Date, the City will timely pay all costs incurred under the Aquatic Center
design, engineering, and construction performance contracts until the City's Financial
Contribution is exhausted (i.e., until the City has contributed a total of $4,500,000.00 under the
Construction Contracts for design/engineering costs under Section 4 above and construction
costs under this Section 6). Thereafter, the YMCA will be responsible for all additional costs
under the Construction Contracts necessary for the development and construction of the Aquatic
Center. It is expressly confirmed that aside from the design and engineering costs described in
Section 5 above, which will be paid in equal proportion byity and the YMCA as set forth in
Section 4 above, no construction costs will be incurred ith spect to the Aquatic Center until
the Possession Date.
During all phases of construction of the Facilities YMCA shall be responsible to provide security
fencing around the construction site to protect the safety of the public and the project. YMCA
shall be responsible to maintain a clean and workmanlike construction site throughout the
construction process and shall keep all construction debris waste and trash contained within the
site and properly managed and disposed of.
7. Zoning, Offsite Improvements, and Site Prepa"
7.1 Zoning. The City repr - .nd warrants te Leased Premises at the time of the
Possession Date and through the Term of the Ground Lease will be appropriately zoned
for the Aquatic Center described herein and the Permi Uses allowed under Section 6.2
of the Ground Lease. The City, at the City's expense ith no reduction to the City's
Financial Contribution under Section 3 above, will take all action necessary to ensure
compliance with the provisions of this paragraph prior to the Possession Date.
7.2
Offsite Improvements. o the extent any traffic or other improvements outside of the
Leased Premises are re red by the City or any other applicable government authority as
a result of the construction of the Aquatic Center and Other Facility on the Leased
Premises, the City, at the City's expense and with no reduction to the City's Financial
Contribution under Section 3 above, will make all such improvements, to the extent
practicable, within one hundrl twenty (120) days of the Possession Date.
8. Naming Rights. It is expressly confirmed that all naming rights with regard to the Aquatic
Center will belong solely to the YMCA and the discretion of the YMCA's Board of Directors;
provided, however, the Aquatic Center's name must include the word "Yakima".
9. Contingencies.
9.1 Contingencies. The YMCA's and the City's respective obligations under this Agreement
are each contingent on and subject to the satisfaction of the Due Diligence, RCO, and
Funding Contingencies. If the Ground Lease is terminated due to the non -satisfaction of
the Due Diligence, Funding, or RCO Contingency as permitted under Section 2.1, 2.2, or
Section 2.3 of the Ground Lease, this Agreement (subject to the reimbursement
obligations set forth in Section 4 above (if any)) will automatically terminate as well.
9.2 Ground Lease and Operating Agreement. This Agreement is subject to the terms of the
Ground Lease and Operating Agreement and the undersigned parties' respective
obligations thereunder.
4
9.3 Survival of Existing Obligations. In the event this Agreement is terminated under
Section 9.1 above, the YMCA will be responsible for all of the design and engineering
costs incurred under Section 4 above prior to the termination of this Agreement.
10. Miscellaneous Terms.
10.1 Amendments. This Agreement may not be modified or amended except by written
agreement signed and acknowledged each of the parties hereto.
10.2 No Joint Venture. Nothing contained in this Agreement creates the relationship of
principal and agent or of partnership or of j oint venture between the parties hereto.
10.3 Time is of the Essence. Time is of the essence as to all terms of this Agreement.
10.4 Notices. All notices under this Agreement must be in writing and will be deemed given
to the receiving party when (a) personally delivered to the City Manager for the City of
Yakima (for notices to the City) or personally delivered to the CEO or President of the
Yakima Family YMCA (for notices to the YMCA) or (b) three days after being deposited
in the United States Postal Service by certified mail (with return recei requested) to the
receiving party at the r • ing party's last known address(es).
10.5 Exhibits. There are no achments to this Agreement except for the Exhibits expressly
referenced in this Agreement, each of which constit s a part of this Agreement as if set
forth in full herein.
10.6 Headings. e n ptions and paragraph headin sed in this Agreement are inserted for
convenience of reference only and are not intended to define, limit, or affect the
interpretation or construction of any term or provision of this Agreement.
10 ning Law. This Agreement will be interpreted, construed, and governed by the
aws of thtate of Washington. •
Binding Subject to any limitations on assignments provided for in this
Agreement, al he provisions of this Agreement will inure to the benefit of and be
binding on the s essors and assigns of the City and the YMCA.
10.9 Waivers. The failure of either party to seek redress for violation of or to insist upon the
strict pernance of any covenant or condition of this Agreement will not prevent a
subsequent act, which would have originally constituted a violation, from having the
effect of an original violation.
10.10 Attorney's Fees; Venue. In the event of any dispute arising out of or relating to this
Agreement, whether or not suit or other proceedings is commenced, and whether in
mediation, arbitration, at trial, on appeal, in administrative proceedings, or in bankruptcy
(including, without limitation, any adversary proceeding or contested matter in any
bankruptcy case), the prevailing party will be entitled to its costs and expenses incurred,
including reasonable attorney fees. The sole venue for any dispute arising out of or
relating to this Agreement will be in a court of competent jurisdiction in Yakima County,
Washington.
5
10.11 Specific Performance. The subject matter of this Agreement is unique and, for this
reason, it is stipulated that in the event of a default of this Agreement, the non -defaulting
party will have the right to seek equitable relief in the form of specific performance of
this Agreement's provisions, in addition to all other remedies available to the non -
defaulting party in equity and law.
10.12 Counterparts and Copies. This Agreement may be executed in any number of identical
counterparts, with each counterpart having the same effect as if all parties to this
Agreement had signed the same document. All executed counterparts of this Agreement
will be construed as and constitute one and the same instrument. A facsimile or
electronic copy (e.g., a PDF copy) of an execute unterpart of this Agreement will
have the same effect as an original executed courerpa of this Agreement.
10.13 Severability. The invalidity or unenforcea ility of any provision of this Agreement will
not affect or impair any other provision f is Agreement.
10.14 Entire Agreement. This Agreement, gether with the ciated Ground Lease and
Operating Agreement, constitutes the entire understanding reement of the parties to
this Agreement with respect to its subject matter. 11 prior ag eements, understandings,
or representations with respect to this Agreement' bject matter are hereby canceled in
their entirety and are of no further force or effect. It is expressly acknowledged that there
are no oral or other agreements which modify or affect this Agreement.
EFFECTIVE as of the Effective Date f t written above.
YOUNG MEN'S CHRISTIA ' YAW/IA
ASSOCIATION OF AKIM
By:
Bob Romero, CEO Tony O'Rourke, City Manager
6
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that BOB ROMERO is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CEO for the YOUNG
MEN'S CHRISTIAN ASSOCIATION OF YAKIMA to be the free and voluntary act of such party for
the uses and purposes mentioned in the instrument.
DATED: , 2015.
STATE OF WASHINGT
COUNTY OF YAKI
NOTARY PUBLIC for the ate of Washington,
residing at
oin men x it
My app p es:
) ss.
I certify that I know or have satisfactory evidence that TONY O'ROURKE is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CITY MANAGER for the
CITY OF YAKIMA to be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
[PRINT NAME]
NOTARY PUBLIC for the State of Washington,
residing at
My appointment expires:
7
EXHIBIT A
Required Specifications
1. Minimum eight lane 25 meter lap pool
2. Therapy pool area
3. Multiuse pool area for water walking and family/youth recreation
EXHIBIT B
PARTIES:
OPERATING AGREEMENT
EFFECTIVE DATE: , 2015
CITY OF YAKIMA,
a Washington municipal corporation
129 North 2nd Street
Yakima, Washington 98901
(referred to in this Agreement as the "City")
YOUNG MEN'S CHRISTIAN ASSO
(d/b/a YAKIMA FAMILY YMCA
a Washington nonprofit corporati
5 North Naches Avenue
Yakima, Washington 98901
(referred to in this Agree the "YMCA")
ON OF YAKIMA
BACKGROUND. Subject to the Due Diligence, ing, and RCO Contin �' ! � s, the YMCA will
����
construct the Aquatic Center under the terms o the De lopment Agreement. The ��{����:�A is Center will e
connected to the Other Facility. Bothathe Aquatic Center and the Other Facility will °s° olely owned by
the YMCA and will be subject to the te. + onditions of thi Agreement and the Ground Lease and
Development Agreement.
AGREEMENT. FOR GOOD AND VAL CLE C• IDERATION, RECEIPT AND ADEQUACY
ACKNOWLEDGED, THE UNDERSIGNED PARTIES AGREE AS FOLLOWS:
1. Definitions. Unless the context clearly indicates another meaning and except for terms defined in
this Agreement, all capitalized terms used this Agreement have the same meaning given to said
terms in the Development Agreement and Ground Lease. The following terms, when used in this
Agreement, have the following meanings, unless the context clearly indicates another meaning:
"Annual ital Improvements Budget" means and refers to the annual Capital
Improvement udget jointly approved by the YMCA and the City under Section 7.2
low for the estimated annual Capital Improvement Expenditures for the Aquatic
r.
1.2 "Annual Operating Budget" means and refers to the annual operating budget jointly
approved by the YMCA and the City under Section 7.2 below for the estimated annual
Gross Operating Revenue and Gross Operating Expenses for the Aquatic Center.
1.3 "Applicable Laws" means and refers to all statutes, regulations, ordinances, and other
laws applicable to the operation of the Aquatic Center.
1.4 "Aquatic Center" means and refers to the "Aquatic Center" described in Section 2 of the
Development Agreement.
1.5 "Capital Improvements" means and refers to (a) all additions to and replacements of the
Aquatic Center's FF&E; (b) all repairs, restorations, and alterations to the Aquatic Center
facility and the Aquatic Center's FF&E that have a useful life equal to or greater than
1
three (3) years; (c) fifty percent (50%) of all additions to and replacements of the
Common Areas' FF&E; and (d) fifty percent (50%) of all repairs, restorations, and
alterations to the Common Area facilities and the Common Areas' FF&E that have a
useful life equal to or greater than three (3) years.
1.6 "Capital Improvement Expenditures" means and refers to the cost of all Capital
Improvements.
1.7 "Capital Improvement Reserve Funds" has the meaning given to said words in Section
7.4(c) below.
1.8 "Common Areas" means and refers to the Other Facility's public entryways (both interior
and exterior), reception desk, lobby area, public restrooms, and the locker rooms and
parking lot(s) (except for the Existing Parking Lot) that jointly serve the Aquatic Center
and Other Facility, all of which will be commonly used for access, reception services,
program registration/payments, locker room uses, gathering/waiting, and parking by
persons who use the Aquatic Cent and/or the Other Faci
1.9 "City Manager" means and refers to the duly appointed City Manager for the City of
Yakima.
1.10 "Development Agreement" means and refers to the Development Agreement dated even
herewith by and between the City and the YMCA under which the YMCA intends to
construct an Aquatic Center.
1.11 "Due Diligence Contingency the meaning given toid words in Section 2.1 of the
Grou s+ ease.
1.12 "Existin W i in • Lo as the me
Lease.
1.13
r® equipment, finishes, wall and floor coverings, and fixtures.
given to said words in Section 6.3 of the Ground
"FF&E" means and refers to furniture, furnishings, computer, entertainment, and other
1.1 "Funding Congency" has the meaning given to said words in Section 2.2 of the
round Lease.
1.15 "Fiscal Year" means and refers to the time period running from September 1st through
August 31st, which constitutes the YMCA's existing fiscal year time period.
1.16 "Gross Opercig Expenses" means and refers to all expenses incurred by the YMCA in
the management and operation of the Aquatic Center during the Term of this Agreement,
including, but not limited to, the following:
(a) Labor for the operation of the Aquatic Center, including, but not limited to,
salaries (including for the Aquatic Center's Aquatic Director), wages, employee
benefits, retirement plans, payroll taxes, training costs, and other reasonable
employment expenses;
(b) Labor needed to staff the Common Area reception area with an employee during
all hours of Aquatic Center operation, including, but not limited to, salaries,
2
wages, employee benefits, retirement plans, payroll taxes, training costs, and
other reasonable employment expenses;
(c) Inventories and supplies consumed in the operation of the Aquatic Center,
including, without limitation, chemicals and office supplies;
(d) Cleaning costs, whether by YMCA staff or third party contractors;
(e) Promotional costs, including, without limitation, brochures, printing costs, and
advertising;
(f) Utility charges for the Aquatic Center;
(g) Insurance costs for the coverage required under this Agreement;
(h) The cost of all applicable and required taxes, and licenses, permits;
(i) The cost of (a) maintaining the Aquatic Center and its FF&E and (b) all repairs
and alterations to the Aquatic Center and its FF&E that have a useful life less
than three (3) years;
(j) Technical consultants, operational experts, and professional services for
specialized services in connection with non -routine Aquatic Center work;
(k) A reasonable reserve for uncollectible accounts receivable;
(1) Fifty percent (50%)1 of the expenses incurred by the YMCA in the management
and operation of the Common Areas, including, but not limited to, costs incurred
by the YMCA in operating, maintaining, And repairing (i) the Common Areas'
publicly accessible parking lot(s) andAnterior entryway/walkway surfaces,
striping, lighting, security, signage, landscaping that jointly serve the Aquatic
Center and Other Facility and (ii) the locker rooms, interior entryways/walkways,
reception desk, lobby area, and public restrooms and that jointly serve the
Aquatic Center and Other Facility;
(m) Fifty percent (50%) of the cost of (a) maintaining the Common Areas and its
FF&E and (b) all repairs and alterations to the Common Areas and its FF&E that
have a useful life less than three (3) years; and
(n) An administrative charge equal to fifteen percent (15%) of all other Gross
Operating Expenses to cover the estimated cost of executive and other overhead
charges ssociated .th the operation and management of the Aquatic Center.
IIIIII
17 "Gross Operating Revenue" means and refers to all revenue received from the following
sources of income:
The fe charged YMCA for public use of the Aquatic Center;
The fees charged b e YMCA for public and/or YMCA member participation
in the Aquatic Center's programs (e.g., swim lessons, lifeguard trainings, aquatic
ercise classes, pool rentals, and birthday pool parties);
(c) O",percent (1%) of all YMCA member dues; and
(d) Proceeds from business interruption insurance.
The undersigned parties expressly confirm that the term "Gross Operating Revenue"
excludes all other revenue, including, without limitation, revenue from the sale of
concessions and merchandise in or about Common Areas, charitable donations to the
YMCA, YMCA membership dues, and rent from the sublease of any portions of the
1 The City and the YMCA intend for the City to be responsible for twenty-five percent (25%) of the costs associated
with the management and operation of the Common Areas. Accordingly, half of said costs are included as Gross
Operating Expenses, which in turn are split equally between the YMCA and the City under Section 7.3 below.
3
Other Facility. Moreover, "Gross Operating Revenue" shall be net of rebates, credits,
and/or refunds.
1.18 "Ground Lease" means and refers to the Ground Lease dated even herewith by and
between the City as "Landlord" and the YMCA as "Tenant" for the YMCA's lease of the
property on which the YMCA intends to construct Aquatic Center under the
Development Agreement.
1.19 "Initial Budget" means and refers to the initial budget jointly approved by the YMCA and
the City under Section 7.1 below for the estimated (a) Pre -Operating Expenses for the
Aquatic Center and (b) Gross Operating Revenue and Gross Operating Expenses for the
Aquatic Center from the Opening Date throw the first August 31st following the
Opening Date.
1.20 "Monthly CAPEX Reports" has the me
1.21 "Monthly Financial Reports" h
below.
1.22 "Opening Date" means and refers t
public use.
igiven to sail words in Section 7.4(b) below.
eaning given t:'® words in Section 7.3(b)
date �i �� ich the AqCenter opens for
1.23 "Operating Deficit" merefers to theunt of Gross Operating Expenses in
excess (if any) of Gross Operating Revenue for ,alendar month during the Term of
this Agreement after the Opening Date.
1.24 "Operating Surplusmeans and refers to th
excess (if any) of Gross Operating Expenses for ea
this Agreement after the Opening Date.
it of Gross Operating Revenue in
calendar month during the Term of
feting Stan rds" has the meaning given to said words in Section 5.2 below.
"Other Facility" means and refers to the "Other Facility" described in Section 2 of the
Development Agreement.
1.27 e -Opening Expenses" has the meaning given to said words in Section 7.1 below.
1.28 " d Budgets" has the meaning given to said words in Section 7.2(a) below.
1.29 "Purpose has the eaning given to said word in Section 3 below.
1.30 "RCO Contingency" has the meaning given to said words in Section 2.3 of the Ground
Lease.
1.31 "Term" has the meaning given to said word in Section 4 below.
2. Contingencies and Other Agreements.
2.1 Contingencies. The YMCA's and the City's respective obligations under this Agreement
are each contingent on and subject to the satisfaction of the Due Diligence, Funding, and
RCO Contingencies. If the Ground Lease is terminated due to the non -satisfaction of the
4
Due Diligence, Funding, or RCO Contingency as permitted under Section 2.1, 2.2, or 2.3
of the Ground Lease, this Agreement will automatically terminate as well.
2.2 Development Agreement and Ground Lease. This Agreement is subject to the terms of
the Development Agreement and Ground Lease and the undersigned parties' respective
obligations thereunder.
3. Purpose. During the Term of this Agreement, the YMCA and the City intend for the Aquatic
Center to serve as a safe, fun, and healthy destination for the entire Yakima community that
provides a host of recreational, fitness, and therapeutic opportunities and programs through new
aquatic facilities and programming that will be offered there he Aquatic Center's "Purpose").
4. Term. The undersigned parties intend for the relationsih'p®rights, and obligations established in
this Agreement to apply and be in effect during the entire "Term" under the Ground Lease,
including, without limitation, the "Initial Term" and each "Extended Term" under the Ground
Lease. Accordingly, subject to the Due Diligence, Funding, and RCO Contingencies, the "Term"
of this Agreement will be concurrent with and equal to the "Te the Ground Lease as set
forth in Sections 3.1, 3.2, and 3.3 of the Ground Lease.
4.1 Effect of Expiration. Unless the YMCA and the Ci agree oth in writing, upon
the expiration of the Term of this Agreement (i.e., the expiration o "Term" of the
Ground Lease), this Agreement will terminate and the improvements associated with the
Aquatic Center and the Other Facility shall revert to the City as described in the Ground
Lease.
4.2 Pre -Expiration Discussions. Notwithstanding the foregoing, but without committing
either party to any particular action, before the expiration of the Term of this Agreement
(Le., the expiration of the "Term" of the Ground Lease), the YMCA and the City will
discuss and consider their respective interests in and the possibility of extending the Term
of this Agreement and the Ground Lease for an additional period of time and/or entering
into new agreements for the continued lease of the premises and joint management and
operation of the Aquatic Center or some new similar facility.
5. Management and Operations. During the Term of this Agreement, the Aquatic Center will be
managed and operated by the YMCA in accordance with the following, and all other, provisions
of this Agreement:
5.1 Managerial Discretion. Except as otherwise provided in this Agreement (e.g., see
Sections 6.1 and 6.2 below), the YMCA will have discretion and control in all matters
relating to the management and operation of the Aquatic Center, including, without
limitation, staffing decisions, employment policies, procurement and payment for
inventories, supplies, services, repairs and maintenance decisions. The City and the
YMCA shall cooperatively coordinate and determine appropriate programming, and
facility use as more fully described in Sections 6.1 and 6.2, below.
5.2 Operating Standards. The YMCA will operate and maintain the Aquatic Center in
accordance with its Purpose and the following "Operating Standards:"
(a) In a commercially clean, attractive, first rate, safe, and habitable condition;
(b) In good repair and proper working order;
5
(c) In compliance with all Applicable Laws;
(d) In a manner intended to prevent and minimize closures;
(e)
In a manner consistent with industry standards for facilities of similar size and
scope to the Aquatic Center that are located elsewhere in Washington state;
provided, however, the YMCA, from time -to -time, may reasonably adjust the
Aquatic Center's manner of operations away from applicable industry standards
based on (i) the demand for services at the Aquatic Center and (ii) when needed
to promote the efficient use and operati f the Aquatic Center and/or the
Aquatic Center's Purpose; and
(f) Subject to holidays and closures necessary for repairs, maintenance, safety, acts
of God, emergencies, and other similar circumstances, the Aquatic Center will
maintain the following minimum normal hours of operation (subject to the
YMCA's right, in the YMCA's discretion, to expand to additional hours of
operation):
Monday through Fri i' 6:00 a.m. - 9:00
Saturd 7:00 a.m. - 7:00 p.
Sunda _ 12:00 p.m. - 6:00 p.m.
5.3 Maintenance, Repair, a Replacement. Du ing the Term of this Agreement, the
YMCA (subject to the YMCA's and City's obligations under this Agreement with regard
to Capital Improvement Expenditures and operating expenses) will maintain the Aquatic
Cente d Common Areas irk accordance with the Operating Standards set forth in
Secti .2 above and will make all maintenance and repairs thereto that are reasonably
necessary for said purpose in accordance with a written maintenance and repair schedule,
including, but not limited t the following:
Maintain the Common Areas' parking lot(s) and exterior entryway/walkway
surfaces, striping, lighting, security, signage, and landscaping, including, but not
limited to, snow removal;
Maintain the interior entryways/walkways, reception desk, lobby area, and public
restrooms;
Maintain the pools, public locker rooms, and other aquatic facilities; and
Maintain the Aquatic Center's and Common Areas' equipment and HVAC,
filtration, and other building systems.
Notwithstan the foregoing, when and as said equipment and other components and
FF&E of the Aquatics Center and Common Areas become worn out or obsolete, or if it is
not commercially reasonable to continue to maintain and/or repair said items, said
equipment and other components and FF&E will be replaced by the YMCA (subject to
the YMCA's and City's shared obligations under this Agreement with regard to Capital
Improvement Expenditures and operating expenses).
5.4 Insurance.
(a) Insurance Coverage. Subject to the YMCA's right to purchase and maintain
6
additional insurance coverage the YMCA reasonably deems necessary in
connection with the operation and management of the Aquatic Center, during the
Term of this Agreement, the YMCA will purchase and maintain the following
minimum insurance coverage:
• Commercial General Liability insurance that insures against claims for
bodily injury, personal injury, death, and property damage occurring in,
on, or about the Aquatic Center, with limits of not less than $2,000,000
per occurrence and $4,000,000 general aggregate. The insurance policy
required under this paragraph must be endorsed to name the City as an
additional insured on a primary bas ithout the right of contribution.
• "Special Form" property insurance on the Aquatic Center and its
contents for their full replacement value, together with business
interruption coverage. Unless the YMCA and the City agree otherwise
in writing, any proceeds from the insur e policy required under this
paragraph will be used to repair, resto d/or replace the Aquatic
Center.
• Business Auto Liabil surance covering all owned, hired, and non -
owned automobiles for bodily injury, personal injury, death, and property
damage with limits of liability not less than $1,000,000 Combined Single
Limit. The insurance polic quired under this paragraph must be
endorsed to name the City as an additional insured on a primary basis
without the right of contrib on.
C• ployer's Liability/Washington Stop Gap insurance with a limit of
liability not less than $1,000,000 each accident, each employee, and by
disease
(b) Policies and Certific4as of Insurance. The YMCA will furnish the City with
copies of the insurancelblicies required under this Section 5.4 and certificates of
insurance for said policies that evidence (i) said insurance has been purchased
and i in full force and effect as required hereunder and (ii) said insurance
policiel may not be 4 -welled or amended unless twenty (20) days prior written
notice of the propos cancellation or amendment has been given to the City at
the City's designated address for notices under this Agreement.
(c)
Waiver of Subrogation Rights. The YMCA and the City each waive any and
all rights of recovery against the other, or against the directors, officers,
employees, and agents of the other, for all losses of or damage to such waiving
party, property, or property of others under its control, where such loss or
damage is insured against under any insurance policy in force at the time of such
loss or damage. The YMCA will, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carriers of the mutual waiver of
subrogation contained in this paragraph.
7
(d) Gross Operating Expenses. During the Term of this Agreement, the cost of
insurance purchased and maintained for coverage on and in connection with the
Aquatic Center portion of the premises and any deductible the YMCA becomes
obligated to pay in connection therewith in the event of a claim, loss, or damage
associated with the Aquatic Center that triggers a defense and/or coverage under
such insurance, will constitute a Gross Operating Expense under this Agreement
and be included in and subject to the reimbursement obligations set forth in
Section 7.3 below.
5.5 Delegation. The YMCA is permitted to delegate to or subcontract with third parties for
the performance of duties that are ancillary to MCA's management obligations
under this Agreement.
5.6 Utility Meters. All utilities will be separ metered between the Aquatic Center and
the Other Facility.
6. Use and Programming.
6.1 Use of Aquatic Center. During th rm of this Agreement, the Aquatic Center during
all times of operation and for all programs conducted therein will be made available for
use and participation R e public on a fee -per -use basis in accordance with the same
rules, policies, and h• ofse as the Aquatic Center and its programs are made
available by the YMCA •r the YMCA's members. The fees charged by the YMCA for
public (i.e., non -YMCA member) use of the Aquatic Center and participation in the
Aquatic Center's programs will be set by the YMCA after consultation with the City and
must be mmercially reasonable in amount and generally consistent with the fees
charg by facilities of similar size and scope to the Aquatic Center that are located
elsewhere in Washington state for the corresponding use and program participation.
6.2 Programming. Prior to April 1st of each calendar year during the Term of this
Agreement, the City shall submit the City's requested program schedule dates for general
public use of the Aquatic Center, together with dates for any special City events the City
wishes be held at the Aquatic Center, to the YMCA for addition to the Aquatic Center's
program calendar for the following year. The YMCA shall consider and address the
City's requested Aquatic Center program use schedule when preparing the upcoming
year's program schedule. Th -.City shall have the opportunity to review and comment on
the final proposed annual program schedule to ensure public access and use of the
Aquatic Center is a primary objective and that public availability and participation
requirements under Section 6.1 above are met. The Aquatic Center shall be managed and
operated as a not-for-profit institution available to the general public without
discrimination as to age, race, creed, religion, sex, marital status, national origin, political
affiliation, physical handicap or ancestry.
7. Financial Terms.
7.1 Pre -Opening Expenses and the Initial Budget.
(a) Pre -Opening Expenses. The City acknowledges that in addition to the
construction costs incurred by the YMCA in the development and construction of
the Aquatic Center, the YMCA will also incur certain non -construction
operational expenses in preparing the Aquatic Center for the Opening Date. Said
8
expenses include, but are not necessarily limited to, salary and benefits for the
Aquatic Center's Aquatic Director (who will need to be hired up to one year in
advance of the Opening Date), recruitment, wages and training for Aquatic
Center staff, purchasing chemicals, supplies, and program equipment, calibrating
and testing the Aquatic Center's water, equipment, and systems, utility charges,
pre -opening promotional costs, and other costs incidental to the preparation and
organization of the Aquatic Center's operations prior to the Opening Date. The
City will share equally with the YMCA in all reasonable non -construction
operational expenses incurred in preparing and organizing the Aquatic Center for
the Opening Date (the "Pre -Opening Expenses") and will reimburse the YMCA
for fifty percent (50%) of the same in acc ce with procedures substantially
similar to the post -Opening Date reimburseme s under Section 7.3 below.
(b) Initial Budget. Within ninety (90) days of the satisfaction of the Due Diligence,
Funding, and RCO Contingencies, the YMCA will prepare and submit to the City
Manager a proposed Initial Budget. The proposed Initial Budget must (1) set
forth the YMCA's forecast of anticipated Pre -Opening Expenses and Gross
Operating Revenue, Gross Operating Expenses, and Capital Improvement
Expenditures for the Aquatic Center for the period running from the Opening
Date through the first July 31st after Opening Date and (2) be prepared in
accordance with (i) the YMCA's internal planning and budgeting process and (ii)
a commercially reasonable degree of detail and specificity.
Following the YMCA's su mission of the proposed Initial Budget to the City
Manager, representatives designated by the YMCA and the City Manager who
are familiar and involved with the YMCA's and the City's respective budgeting
processes will meet to discuss and review the proposed Initial Budgets when and
as needed to reach joint approval of final Initial Budget for the Aquatic Center at
least nine (9) months before the anticipated Opening Date. The YMCA and the
City will confer in good faith to reconcile all differences with regard to said
budgeting p cess.
Budgets.
(a) Annua udgeti ocess. With exception to the Initial Budget described in
Section 7.1 above, e year on or before July 1st, the YMCA will prepare and
submit to the City Manager a proposed Annual Operating Budget and a proposed
Annual Capital Improvements Budget for the Aquatic Center for the upcoming
Fiscal Year (i.e., September 1st through August 31st). (collectively the "Proposed
Budgets").
The Proposed Budgets must (1) set forth the YMCA's forecast of anticipated
Gross Operating Revenue, Gross Operating Expenses, and Capital Improvement
Expenditures for the Aquatic Center for the upcoming Fiscal Year and (2) be
prepared in accordance with (i) the YMCA's internal planning and budgeting
process and (ii) a commercially reasonable degree of detail and specificity.
Each year, following the YMCA's submission of the Proposed Budgets to the
City Manager, representatives designated by the YMCA and the City Manager
who are familiar and involved with the YMCA's and the City's respective
budgeting processes will meet to discuss and review the Proposed Budgets. The
9
City and YMCA will reach joint approval of final Annual Operating and Capital
Improvements Budgets for the Aquatic Center at least fifteen (15) days before
the commencement of each Fiscal Year. The YMCA and the City will confer in
good faith to reconcile all differences with regard to the annual budgeting
process.
It is acknowledged and confirmed that the Initial Budget and each Annual Budget
thereafter must include, contemplate, and provide for the payment of expenses,
including, without limitation, Capital Improvement Expenditures, sufficient to
cover and satisfy the Operating Standards and all other obligations for the
management and operation of the Aquatic Center under this Agreement in
accordance with the Aquatic Center's anticipated usage.
In the event the YMCA and the City are unable to timely approve the Initial
Budget or an Annual Operating Budget and/or an Annual Capital Improvements
Budget under this Section, eithedOarty may compel the other party to participate
in mediation for the purpose of esolving the budgetary impasse. The mediator
for any such mediation must be mutually agreed upon and jointly appointed by
the YMCA and the City, with the mediator's cost to be shared equally by the two
parties. The mediation will be held in Yakima, Washington and conducted as
soon as reasonably possible after mediation is compelled with attention given to
the time -sensitive nature of the budgetary impasse. In the event the parties are
unable to agree upon a mediator, a mediator will be appointed by the Presiding
Judge for the Superior Court of Yakima County.
Until a new Annual Budget is approved, the YMCA will continue to operate and
manage the Aquatic Center in its customary manner in keeping with the Aquatic
Center's historical and ordinary practices and activities, with use of the Aquatic
Center's most recently approved Annual Operating Budget as a guide until the
contested budget(s) is/are jointly approved by the YMCA and the City under this
Section. _
(b) Budget Variances. The CA and the City acknowledge that the Initial
Budget and each subsequent Annual Operating and Capital Improvement
Budgets will only represent estimates for the Aquatic Center's annual revenues
and expenses from year -to year and that the Aquatic Center's actual revenues and
expenses may vary from the Initial and Annual Operating and Capital
Improvement Budgets for reasons beyond the reasonable control of the YMCA.
Nevertheless, the YMCA will act in good faith at all times in the operation of the
Aquatic Center and shall use commercially reasonable efforts to operate the
Aquatic Center in accordance with the approved Initial and Annual Operating
and Capital Improvement Budgets and only stray from such budgets when
required by emergency, unexpected events, or to satisfy the YMCA's Operating
Standards and other obligations under this Agreement. Accordingly, while the
YMCA will use commercially reasonable efforts to adhere to the Initial and
Annual Operating and Capital Improvement Budgets, variances in the Aquatic
Center's estimated revenues and expenses are anticipated and the City will
remain obligated to participate in and contribute toward the City's obligations
when and as set forth in this Agreement even if said contributions are larger than
contemplated in the applicable budget.
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7.3 Operations.
(a) Generally. The City is obligated to reimburse the YMCA for fifty percent
(50%) of all annual Operating Deficits under this Agreement in connection with
the Aquatic Center incurred by the YMCA during each Fiscal Year during the
Term of this Agreement.
(b) Invoice and Payment Procedures. After the Opening Date, within thirty (30)
days after the end of each calendar month, the YMCA will submit financial
reports to the City that summarize the Gross Operating Revenue and Gross
Operating Expenses incurred by the YMCA in the operation and management of
the Aquatic Center during the preceding calendar month (the "Monthly Financial
Reports"). The Monthly Financial Reports will set forth and compare the
Aquatic Center's actual revenues and expenses with the budgeted revenues and
expenses for the applicable time period on both monthly and year-to-date bases.
The Monthly Financial Reports will be accompanied by an invoice from the
YMCA for 50% of any Operating Deficit incurred by the YMCA during the
applicable month. The City will remit full payment for all such invoices within
twenty (20) days of receipt.
In the event of an Operating Surplus for a particular month, 50% of the Operating
Surplus would applied to the YMCA's required operating reserve and 50%
would go to the City's operating reserve.
(d) Operating Reserve Fund. Throughout the Term of this Agreement the YMCA
and the City shall each separately maintain operating reserve funds to prepare for
and offset periods w operating expenditures exceed anticipated revenue for
the Aquatic Center.
7.4 Capital Improvements.
(a) Generally. The City is obligated to reimburse the YMCA for fifty percent
(50%) of all annual Capital Improvement Expenditures (as defined under Section
1.6 above) incurred by the YMCA during each Fiscal Year during the Term of
this Agreement. Except when needed to keep the Aquatic Center safe, habitable,
in good repair and proper working order, and in compliance with all Applicable
Laws, the City will not be obligated to reimburse the YMCA for any Capital
Improvement Expenditure not included in the Initial Budget or an Annual Budget
unless and until the Capital Improvement Expenditure is approved by the City.
(b) Invoice and Payment Procedures. After the Opening Date, within thirty (30)
days after the end of each calendar month, the YMCA will submit financial
11
reports to the City that summarize the Capital Improvement Expenditures
incurred by the YMCA in the operation and management of the Aquatic Center
during the preceding calendar month (the "Monthly CAPEX Reports"). The
Monthly CAPEX Reports will set forth and compare the Aquatic Center's actual
Capital Improvement Expenditures with the budgeted Capital Improvement
Expenditures for the applicable time period on both monthly and year-to-date
bases. The Monthly CAPEX Reports will be accompanied by an invoice from
the YMCA for 50% of all Capital Improvement Expenditures incurred by the
YMCA during the applicable month. The City will remit full payment for all
such invoices to the extent due and owing under this Agreement within twenty
(20) days of receipt.
(c) Capital Improvement Reserve Funds (2%/year-1% City and 1% YMCA,
annually). Through Asset Management the YMCA shall annually report the
value Aquatic Center assets to the City for the purpose of preparing an asset
repair and replacement reserve fund. The annual report shall include the
projected useful life of each asset. As new assets are incorporated in the Aquatic
Center each shall be added to the total asset value. Similarly, as assets are
replaced or fully depreciated their value shall be reduced and ultimately
eliminated from the total Aquatic Center asset value. The Capital Improvement
Reserve Fund shall be calculated based upon the asset values and useful life
considerations of each included asset.
(d) Capital Replacement Plan. The YMCA shall develop a capital replacement
plan for all equipment and major systems for the Aquatic Center and Common
Areas that will be subject to review and approval from time -to -time by the City
as part of the budgeting processes set forth in this Agreement
7.5 Quarterly Reports. No more frequently than four times per year (quarterly, unless the
YMCA agrees otherwise), on dates and at times mutually convenient for the YMCA and
the City Manager, the YMCA will meet with the City Manager and provide written report
summaries and in-person updates on the status of the Aquatic Center's financial
performance, usage, and programs. •
7.6 Books & Records; Audit Rights. The YMCA shall keep and maintain books and records
that reflect the YMCA's management and operation of the Aquatic Center under this
Agreement, including, without limitation, copies of purchase orders, invoices,
correspondence, receipts, vouchers, memoranda, and other documentation that
memorialize the Gross Operating Revenue, Gross Operating Expenses, and Capital
Improvement Expenditures incurred by the YMCA hereunder and used to calculate
Operating Surpluses and Deficits. All such books and records must be kept and be
available at YMCA's administrative offices, and may be kept in paper and/or electronic
form; provided, however, the YMCA is not required to keep or maintain any books or
records under this paragraph (either in paper or electronic form) for longer than six (6)
years after their respective creation.
The City, at the City's sole expense and at all times throughout the Term of this
Agreement and for the six (6) years following the termination of this Agreement, has the
right to audit, examine, and take copies during normal working hours at the YMCA's
administrative offices of all books and records the YMCA is obligated to keep and
maintain under the preceding paragraph.
12
7.7 Audited Financial Statements. Each year during the Term of this Agreement, within
one hundred eighty (180) days of the close of the YMCA's Fiscal Year, the YMCA will
prepare and submit to the City an annual financial statement. The annual financial
statement must be prepared in accordance with generally accepted accounting principles
and include a supplemental schedule, sufficient in detail to permit a reasonable
determination by the City of the annual Gross Operating Revenue, Gross Operating
Expenses, and Capital Improvement Expenditures of the Aquatic Center. The annual
financial statement, at the YMCA's sole expense, must be audited by a licensed or
certified public accountant selected by the YMCA. The scope of the audit, as it relates to
the Aquatic Center, must be sufficient for the acco t to issue the following opinion:
"The information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and is fairly state in all material respects in relation to the
basic financial statements taken as a whole '
8. Entry and Inspection. With reasonable prior notice to the YMCA, the City and the City's
authorized representatives may enter and inspect the Aquatic Center during the Aquatic Center's
hours of operation for the purpose of confirming the YMCA's compliance with this Agreement;
provided, however, when entering and inspecting the Aquatic Center, the City may not
unreasonably interfere with or disrupt the activities being conducted in the Aquatic Center. It is
expressly confirmed that the CA may keep 1 d desks and secure files at the Aquatic
Center.
9. Additional/Future Aquatic Facilities. This Agreement pertains to the Aquatic Center described
in Section 2 of the Development Agreement and no other facilities. Should the parties wish to
expand this Agreement to include additional facilities, including, without limitation, an outdoor
pool, the terms of said expansion would have to be Negotiated, agreed upon, and set forth in a
signed and acknowledged written amendment to this Agreement.
10. Trade Names. The names "Young Men's Christian Association of Yakima," "Young Men's
Christian Association," "Yakima Family YMCA," "YMCA," "The Y," and any other trade names
used by the YMCA may not be used by the City unless approved by the YMCA and when used
alone or in connection with another work or works and/or the YMCA trademarks, service marks,
symbols, logos, and designs will in all events remain the exclusive property of the YMCA and
nothing contained herein will confer on the City the right to use any of the same.
11. Defaults and Dispute Resolution.
YMC efault. In the event the YMCA materially breaches the terms of this Agreement
and said breach is not, in whole or in part, caused by the wrongful actions or omissions of
the City, the City may elect and proceed with one of the following exclusive remedies,
but only if the City has first given the YMCA written notice of the specific default(s)
alleged by the City and the default(s) is/are not cured by the YMCA within sixty (60)
days after said notice is given (provided, however, if the nature of default is such that
more than sixty (60) days are required for performance, the City may not act under this
Section 11.1 so long as the YMCA commences performance within said sixty (60) day
period and thereafter diligently prosecutes the same to completion):
(a) Specific Performance. The subject matter of this Agreement is unique and, for
this reason, it is stipulated that in the event of an actionable default of this
Agreement under Section 11.1 above, the City will have the right to seek
13
equitable relief in the form of specific performance of this Agreement's
provisions.
(b) Termination. In lieu of seeking specific performance under Section 11.1(a)
above, in the event of an actionable default of this Agreement under Section 11.1
above by the YMCA, the City, with an additional ninety (90) days prior written
notice to the YMCA of the termination after the expiration of the cure period
under Section 11.1 above, is permitted to terminate this Agreement, in which
event (1) the provisions of Section 4.1 will apply just the same as they would
upon the expiration of the Term and (2) the Ground Lease would also terminate
simultaneously with the termination of this Bement.
Notwithstanding the foregoing provisions of this Section 11.1(b), if the City
gives the YMCA written notice that this Agreement is terminated under this
Section 11.1(b), the City refuses to rescind the alleged termination within twenty
(20) days after written request by the YMCA, and it is later ruled by a court of
competent jurisdiction that the City was not entitled to terminate this Agreement
under this Section 11.1(b) (e.g., it is determined that the YMCA had not
materially breached the terms of this Agreement, it is determined that the YMCA
had cured the breach within the allowed cure period, etc.) (a "Wrongful City
Termination"), the YMCA will likely suffer damage to the YMCA's reputation
and other harms that will be difficult or impossible to quantify. Therefore, in the
event of a Wrongful City Termination, the City, in addition to paying the YMCA
all costs and attorney fees awarded to the YMCA in the proceeding, will also be
obligated to immediately pay the YMCA (as a fair approximation of the likely
harm the YMCA would suffer from the Wrongful City Termination) liquidated
damages in the amount of One Million and No/100 U.S. Dollars ($1,000,000.00)
plus an amount equal to the percentage increAse in the CPI from September 30,
2015, through the September 30th immediately preceding the date of termination
under this Section .1(b) multiplied by $1,000,000.00; provided, however, in no
event will an amou e under this paragraph in the event of a Wrongful City
Termination be less than $1,000,0000.00. For example, in the event of a
Wrongful City Termination under this paragraph, if the CPI percentage increase
between September 30, 2015, and the September 30th immediately preceding the
date of termination was 10%, the liquidated damages due under this paragraph
would be $1,100,000.00 (i.e., $1,000,000.00 plus $100,000 based on the 10%
CPI increase_
For purposes of this Section 11.1(b) and Section 11.2(b) below, the term "CPT'
means and refers to the Consumer Price Index for All Urban Consumers (West
Urban - Size B/C) published by the Bureau of Labor and Statistics of the United
States Department of Labor (Base is 1982-84=100). In the event said Index is
not published at the time it is needed under the terms of this paragraph, the
parties will mutually agree upon a substitute index which is comparable to the
Index referred to above. If the parties are unable to agree on a substitute,
comparable index, then the matter of an appropriate substitute and comparable
index to be used to implement the intent of this Agreement will be determined by
a court of competent jurisdiction.
11.2 City Default. In the event the City materially breaches the terms of this Agreement and
said breach is not, in whole or in part, caused by the wrongful actions or omissions of the
14
YMCA, the YMCA may elect and proceed with one of the following exclusive remedies,
but only if the YMCA has first given the City written notice of the specific default(s)
alleged by the YMCA and the default(s) is/are not cured by the City within sixty (60)
days after said notice is given (provided, however, if the nature of default is such that
more than sixty (60) days are required for performance, the YMCA may not act under
this Section 11.2 so long as the City commences performance within said sixty (60) day
period and thereafter diligently prosecutes the same to completion):
(a) Specific Performance. The subject matter of this Agreement is unique and, for
this reason, it is stipulated that in the event of an actionable default of this
Agreement under Section 11.2 above, the MCA will have the right to seek
equitable relief in the form of spec performance of this Agreement's
provisions.
(b) Termination. In lieu of seeking cific performance under Section 11.2(a)
above, in the event of an actionable default of this Agreement under Section 11.2
above by the City, the YMCA, with an additional ninety (90) days prior written
notice to the City of the termination after the expiration of the cure period under
Section 11.2 above, is permitted to terminate this Agreement, in which event (1)
the provisions of Section 4.1 will apply just the same as they would upon the
expiration of,",Term and (2) the Ground Lease would also terminate
simultaneously with the termination of this Agreement. In the event of
termination under this Section 11.2(b), the YMCA would have no obligation to
reimburse the City for any of the City's Fnancial Contribution made under
Section 3 of the Development Agreement.
Notwithstanding the foregoing provisions of this Section 11.2(b), if the YMCA
gives the City written notice that this Agre nt is terminated under this Section
11.2(b), the YMCA refuses to rescind the alleged termination within twenty (20)
days aft r written uuest by the City, and it is later ruled by a court of competent
jurisdictft that th MCA was not entitled to terminate this Agreement under
this Section 11.2(b) (e.g., it is determined that the City had not materially
breached the terms of this Agreement, it is determined that the City had cured the
breach within the allowed cure period, etc.) (a "Wrongful YMCA Termination"),
the City will likely suffer damage to the City's reputation and other harms that
will be difficult or impossible to quantify. Therefore, in the event of a Wrongful
YMCA Termination, the YMCA, in addition to paying the City all costs and
orney fees awarded to the City in the proceeding, will also be obligated to
immediately pay the City (as a fair approximation of the likely harm the City
would suffer from the Wrongful YMCA Termination) liquidated damages in the
amount of One Million and No/100 U.S. Dollars ($1,000,000.00) plus an
amount equal to the percentage increase in the CPI from September 30, 2015,
through the September 30th immediately preceding the date of termination under
this Section 11.2(b) multiplied by $1,000,000.00; provided, however, in no event
will an amount due under this paragraph in the event of a Wrongful YMCA
Termination be less than $1,000,0000.00.
11.3 Mediation. In the event of a dispute between the YMCA and the City with respect to the
interpretation, implementation, or performance of any obligation under this Agreement,
the YMCA and the City will attempt to resolve the dispute through a mediation process
before taking action under Section 11.1(a) -(b) or 11.2(a) -(b) above. The mediator for any
15
such mediation must be mutually agreed upon and jointly appointed by the YMCA and
the City, with the mediator's cost to be shared equally by the two parties. The mediation
will be held in Yakima, Washington and conducted as soon as reasonably possible after
mediation is compelled with attention given to the time -sensitive nature of the dispute. In
the event the parties are unable to agree upon a mediator, a mediator will be appointed by
the Presiding Judge for the Superior Court of Yakima County.
12. Miscellaneous Terms.
12.1 Amendments. This Agreement may not be modified or amended except by written
agreement signed and acknowledged each of the parties hereto.
12.2 No Joint Venture. Nothing contained in this Agreement creates the relationship of
principal and agent or of partnership or of j oint ventur between the parties hereto.
12.3 Time is of the Essence. Time is of the essence as to all to s of this Agreement.
12.4 Notices. All notices under this Ag ent must be in writi d will be deemed given
to the receiving party when (a) personally delivered to the Cit Manager for the City of
Yakima (for notices to the City) or personally delivered to the CEO or President of the
Yakima Family YMCA (for notices to the YMCA) or (b) three days after being deposited
in the United States Postal Service by certified mail (with return receipt requested) to the
receiving party at the receiving p 's last known address(es).
12.5 Exhibits. There are no attachments to this Agreement except for the Exhibits expressly
referenced in this Agreement, a of w ® _w_ _. A .titutes art of this Agreement as if set
forth in full herein.
12.6 Headin . The captions and para:. T headings used in this Agreement are inserted for
convenience of reference only and are not intended to define, limit, or affect the
ation or construction of an term provision of this Agreement.
Governing Law. This Agreement
be interpreted, construed, and governed by the
laws of the State of Washington.
12.8 Binding Effect. Subject to any limitations on assignments provided for in this
Agreement, all of the provisions of this Agreement will inure to the benefit of and be
binding the successors and assigns of the City and the YMCA.
rs. he
12.9 Waive failu e of either party to seek redress for violation of or to insist upon the
strict performance of any covenant or condition of this Agreement will not prevent a
subsequent act, which would have originally constituted a violation, from having the
effect of an original violation.
12.10 Attorney's Fees; Venue. In the event of any dispute arising out of or relating to this
Agreement, whether or not suit or other proceedings is commenced, and whether in
arbitration, at trial, on appeal, in administrative proceedings, or in bankruptcy (including,
without limitation, any adversary proceeding or contested matter in any bankruptcy
case), the prevailing party will be entitled to its costs and expenses incurred, including
reasonable attorney fees. The sole venue for any dispute arising out of or relating to this
Agreement will be in a court of competent jurisdiction in Yakima County, Washington.
16
12.11 Counterparts and Copies. This Agreement may be executed in any number of identical
counterparts, with each counterpart having the same effect as if all parties to this
Agreement had signed the same document. All executed counterparts of this Agreement
will be construed as and constitute one and the same instrument. A facsimile or
electronic copy (e.g., a PDF copy) of an executed counterpart of this Agreement will
have the same effect as an original executed counterpart of this Agreement.
12.12 Severability. The invalidity or unenforceability of any provision of this Agreement will
not affect or impair any other provision of this Agreement.
12.13 Entire Agreement. This Agreement, together with the associated Ground Lease and
Development Agreement, constitutes the entire understanding and agreement of the
parties to this Agreement with respect to its subject matter. All prior agreements,
understandings, or representations with respect to this Agreement's subject matter are
hereby canceled in their entirety an :re of no further force or effect. It is expressly
acknowledged that there are no r other agreements which modify or affect this
Agreement.
EFFECTIVE as of the Effective Date first written
YOUNG MEN'S CHRISTIAN YAKIMA
ASSOCIATION OF YAKIMA
By:
Bob Romero,* • ® O'Rourke, City Manager
17
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that BOB ROMERO is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CEO for the YOUNG
MEN'S CHRISTIAN ASSOCIATION OF YAKIMA to be the free and voluntary act of such party for
the uses and purposes mentioned in the instrument.
DATED: , 2015.
STATE OF WASHINGT
COUNTY OF YAKI
NOTARY PUBLIC for the ate of Washington,
residing at
oin men x it
My app p es:
) ss.
I certify that I know or have satisfactory evidence that TONY O'ROURKE is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CITY MANAGER for the
CITY OF YAKIMA to be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
[PRINT NAME]
NOTARY PUBLIC for the State of Washington,
residing at
My appointment expires:
18
PARTIES:
GROUND LEASE
EFFECTIVE DATE: , 2015
CITY OF YAKIMA,
a Washington municipal corporation
129 North 2nd Street
Yakima, Washington 98901
(referred to in this Lease as "Landlord")
YOUNG MEN'S CHRISTIAN ASSO
(d/b/a YAKIMA FAMILY YMCA
a Washington nonprofit corporati
5 North Naches Avenue
Yakima, Washington 98901
(referred to in this Lease "Tenant")
BACKGROUND. [INSERT]
ON OF YAKIMA
AGREEMENT. LANDLORD HEREBY LEASES TO TENANT A TENANT HE' gi LEASES FROM
LANDLORD THE LEASED PREMISES IN A P E WITH THE LOWING TERMS AND CONDITIONS:
1. Definitions. Unless the context clearly in. Q.tes another meaning and except for terms defined in
this Lease, all capitalized terms used in this Lease have the same meaning given to said terms in
the Development Agreement and Operating Agreement. The following terms, when used in this
Lease, have the following meanings, unless the context clearly indicates another meaning:
1.1 "Aquatic Center" means and refers to the "Aquatic Center" described in Section 2 of the
Development Agreement.
"Development Agreement" mean nd refers to the Development Agreement dated even
herewith b d between Landlord and Tenant in connection with the development of the
aquatics cent o be constructed on the Leased Premises.
1.3 -"Due Diligence Contingencyas the meaning given to said words in Section 2.1 below.
1.4 "Exte Term" has the meaning given to said words in Section 3.2 below.
1.5 "Funding Contingency" has the meaning given to said words in Section 2.2 below.
1.6 "Initial Term" has the meaning given to said words in Section 3.1 below.
1.7 "Leased Premises" means and refers to the Yakima County, Washington real property
described on attached Exhibit A-1, together with all utility and other improvements
located thereon. The Leased Premises, which is seven and one-half (7.5) acres in area
and constitutes a portion of the Parent Parcels, is generally depicted and labeled as the
"Leased Premises" on the drawing attached as Exhibit A-2.
1
1.8 "Opening Date" has the meaning given to said words in Section 1.22 of the Operating
Agreement.
1.9 "Operating Agreement" means and refers to the Operating Agreement dated even
herewith by and between Landlord and Tenant in connection with the operations and
management of the aquatics center to be constructed on the Leased Premises under the
Development Agreement.
1.10 "Other Facility" means and refers to the "Other Facility" described in Section 2 of the
Development Agreement.
1.11 "Parent Parcels" means and refers to the Yakima County, Washington real property
commonly referred to as Yakima County Assessor Parcel Nos. 181315-13002 and
181315-31003.
1.12 "Possession Date" has the meaning given to said worction 3 below.
1.13 "RCO Contingency" has the meiven to said words in n 2.3 below.
1.14 "Term" has the meaning given to said S 3.3 below.
2. Contingencies and Other Agreements.
2.1 Due Diligence Contingency. Tenant's obligatio "I o lease the Leased Premises under this
Lease is contingent on and subject to Tenant's determination, in Tenant's discretion, that
the Leased Premises' conditions and features are acceptable to Tenant (the "Due
Diligence Contingency"). In making said detZnnination, Tenant is permitted, at Tenant's
expense, to inspect, review, and investigate the Leased Premises and its conditions and
features. Said inspection, review, and investigation may include, without limitation, (a)
hazardous waste inspection. b) engineering and soil studies; (c) utility, zoning, and other
development studies; (d) omic feasibility of operating facilities on the Leased
Premises for Tenant's intended uses; (e) a survey of the Leased Premises; (f) title review;
(g) contacting any or all state, county, and city agencies, as well as all water, sewer, and
other special districts, in which the Leased Premises is located (if any); and (h) such other
ue diligence as may be deemed reasonably necessary by Tenant in determining whether
ase the Leased Premises for Tenant's intended uses.
The Due Diligence Contingency will be deemed satisfied unless Tenant gives written
notice to Landlord of Tenant's termination of this Lease under this Section 2.1 on or
before one h twenty (120) days after the Effective Date of this Lease.
Tenant and authorized agents, contractors, and invitees of the Tenant may, at reasonable
times, enter upon the Leased Premises for the purpose of conducting the due diligence
review described in this Section; provided, however, Tenant may cause no liens to be
recorded against the title to the Leased Premises by Tenant or any of Tenant's agents,
contractors, or invitees and Tenant agrees to indemnify, defend, and hold harmless
Landlord and Landlord's agents, employees, and representatives from all injuries, deaths,
claims, losses, damages, and/or other liabilities caused by acts, omissions, faults, or
negligence of Tenant or Tenant's agent(s), employee(s), or representative(s) while
present on the Leased Premises under this Section 2.1.
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2.2 Funding Contingency. Landlord's and Tenant's respective obligations to lease the
Leased Premises under this Lease are each contingent on and subject to Tenant securing
at least eighty percent (80%) of the funding needed to construct the aquatic center and
other facilities Tenant intends to construct and operate on the Leased Premises (the
"Funding Contingency"), which may include Tenant's cash holdings, donation pledges
made to Tenants for said project, Landlord's Financial Contribution under Section 3 of
the Development Agreement, and financing secured by Tenant.
If the Funding Contingency is not satisfied by Tenant giving Landlord written notice of
the satisfaction of the Funding Contingency (and reasonable evidence confirming the
satisfaction thereof) on or before December 31, 2(the "Funding Deadline"), either
Landlord or Tenant may thereafter terminate this Lease with at least sixty (60) days
written notice given to the other party; provided, however, in the event Landlord gives
Tenant written notice of termination under this paragraph, Tenant will have the
opportunity during said 60 -day notice period to satisfy the Funding Contingency and
prevent Landlord's termination of this Lease under this paragraph.
2.3 RCO Contingency. Landlord's tion to lease the Leas remises under this Lease
is contingent on and subject to L d and the Washington Recreation Conservation
Office ("RCO") mutually agreeing on a reasonable land exchange for replacement
property to substitute for the property being removed from Chesterley Park by the terms
of this Lease (i.e., the1Leased Premises) (the "RCO Contingency"). Landlord will act in
good faith and use reasonable efforts and due diligence to meet the replacement property
requirements established by RCO and the National Park Service; provided, however, in
the event a reasonable property exchange cannot be mutually agreed upon between
Landlord and RCO on or before April 30, 2016 (the "RCO Deadline"), either Landlord or
Tenant may thereafter terminate this Lease with at least sixty (60) days written notice
given to the other party.
2.4 Development Agreement and Operating Agreement. This Lease is subject to the terms
of the Development Agreement and Operating Agreement and the undersigned parties'
respective obligations thereunder.
3.1 Initial Term. The "Initial Term" of this Lease will commence ninety (90) days after the
satisfaction of each of the Due Diligence, Funding, and RCO Contingencies under
Sections 2.1, 2.2, and 2.3 above (unless Landlord and Tenant mutually agree in writing
on some earlier or later date) (the "Possession Date") and will expire exactly forty (40)
years after the Opening Date under the Operating Agreement. Upon the determination of
the Opening Date under the Operating Agreement, Landlord and Tenant will execute a
written and acknowledged memorandum for the purpose of confirming the expiration
date for the Initial Term of this Agreement. Subject to the terms of this Lease, Tenant
will take possession of the Leased Premises on the Possession Date free of all other
leases and tenancies.
3.2 Extended Terms. The Initial Term will automatically extend for three (3) separate and
additional ten (10) year periods (each an "Extended Term") on the same terms and
conditions set forth in this Lease unless Tenant, at least six (6) months before the
commencement of an Extended Term, gives Landlord written notice of Tenant's election
to not extend the term of this Lease for the next Extended Term.
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3.3 Term (Defined). The word "Term," when used in this Lease, means and refers to the
Initial Term set forth in Section 3.1 above and the Extended Terms provided for under
Section 3.2 above when and if the term of this Lease is extended under said Section. In
the event the Term is extended for each of the three (3) Extended Terms described in
Section 3.2 above, the total Term of this Lease would be for seventy (70) years.
4. INTENTIONALLY OMITTED.
5. Rent.
5.1 Base Rent. During the Term, Tenant will pay Landlord "Base Rent" in the
amount of One and No/100 U.S. Dollars ($1.00) per year for Tenant's rental and
use of the Leased Premises. It has been determined by Landlord that the nominal
rental set forth in this paragraph is reasonable considering the benefits to be
derived by Landlord and the public from the deopment and operation of the
Aquatic Center to be constructed on the Leased Premises.®
5.2 Additional Rent. In addition to the Base Rent described in Sections 5.1 and 5.2 above,
Tenant will also pay those other charges and expenses this Lease provides are to be paid
by Tenant. All payments required to be paid by Tena t under this Lease, other than Base
Rent, will constitute "Additional Rent."
6. Use.
6.1
Easeme , Restricti , Etc. Thi ase is together with all rights of and appurtenances
to the Leased Premises (including, but not limited to, all water and water rights) and is
subject to and together with those easements (including, but not limited to, all rights of
ingress and egress), restrictions, agreements of record, zoning, and building laws
applicable to the Lease remises (the "Restrictions"). Landlord represents and warrants
that the Restrictions t prevent nor unreasonably interfere with Tenant's use and
occupancy of the Leased ses as set forth in this Lease.
6.2 Permitted Uses. Tenant may use the Leased Premises for not-for-profit enterprises that
include the construction and operation of (a) an aquatic center (including both the initial
facilities and any expansion facilities), (b) a YMCA facility (including both the initial
facilities and any expansion facilities) and YMCA programming, (c) community center,
(d) nonprofit office, program, service, and/or meeting space, (e) health, fitness, medical,
and/or wellness facility, and (f) all reasonably related business and/or incidental
operations/activities and for no other use unless and until Landlord consents in writing to
the other use, which consent may not be unreasonably withheld (the "Permitted Uses").
It is expressly acknowledged and confirmed that the following activities (whether
conducted in a non-profit or for-profit capacity) constitute Permitted Uses under this
Lease: (a) Tenant's operation and/or sublease of a portion of Tenant's facilities on the
Leased Premises (including the Other Facility and Common Areas, but excluding the
Aquatic Center) to one or more third parties for the operation of a cafe, coffee cart,
concession stand, and/or a similar food/beverage-related businesses, (b) Tenant's
sublease of a portion of Tenant's facilities on the Leased Premises (including the Other
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Facility and Common Areas, but excluding the Aquatic Center) to one or more third
parties for the operation of onsite healthcare services, including, without limitation,
physical therapy in the Aquatic Center and/or Other Facility operated by Tenant on the
Leased Premises, and (c) Tenant's sublease of a portion of Tenant's facilities on the
Leased Premises(including the Other Facility and Common Areas, but excluding the
Aquatic Center) to one or more nonprofit entities for non-profit purposes.
6.3 Parking. The parking lot, entryway, sidewalks, curbs, lighting, landscaping, and other
improvements generally depicted and labeled as the "Existing Parking Lot" on the
drawing attached as Exhibit A-2 (the "Existing Parking Lot") are included within the
Leased Premises; provided, however, the Existing qarking Lot will remain under
Landlord's control for general public use (e.g., Chesterley Park users). Notwithstanding
the forgoing, during the entire Term of this Lease, Tenant and Tenant's agents,
independent contractors, employees, customers, suppliers, representatives, and invitees
will at all times (a) have access to and from the Leased Premises over the Existing
Parking Lot and (b) be permitted the shared use of the Existing Parking Lot in connection
with their use of the facilities operated on the Leased Pr es; provided, however, said
use, during periods of construction on the Leased Premises, 11 not include Tenant's
contractors utilizing part or all of the Existing Parking Lot ocating construction
trailers, storing construction materials, staging equipment or s plies, or in any way
substantially impactin the public access to and use of the Existing Parkg Lots (instead,
said uses activities must be confined to the remainder of the Leased Premises).
During the Term, Landlord, at Landlord's ex (but subject to the terms of the
Operating Agreement), will operate and keep and in ain the Existing Parking Lot and
each of its existing amenities (e.g., parking lot spaces, entryway to River Road, sidewalks
(if any), landscaping, lighting, etc.) in good c4lition and in the customary manner as
other paved and lighted public parking lots are maintained by Landlord. Furthermore,
Landlord, at Landlord's sole expense, is responsible for all ice and snow removal from
the Existing Parking Lot's driveways, walkways, and parking area.
Except when caused by the act, omission, fault, or negligence of Tenant or Tenant's
agent(s), employee(s), invitees or representative(s), Landlord will indemnify, defend, and
hold harmless Tenant d Tenant's directors, officers, employees, agents, and
representatives from and . • st any and all injuries, deaths, claims, losses, damages,
and/or other liabilities occ .ting on or about the Existing Parking Lot incurred in
conne tion with or as a result of the public's presence on or use of the Existing Parking
Lot.
During the Term, with an insurer and in form and substance reasonably satisfactory to
Tenant, Landlord, at Landlord's sole expense, will procure and maintain Commercial
General Liability insurance over the Existing Parking Lot that covers Bodily Injury,
Property Damage and Personal Injury with limits of not less than $2,000,000 Each
Occurrence; $4,000,000 General Aggregate. The insurance policy/policies required under
this paragraph will be endorsed to name Tenant as an additional insured on a primary and
non-contributory basis. The insurance coverage values shall be subject to review and
revision, to be consistent with current costs and values, no less than once every ten years
from the beginning of the Lease Term until the Lease terminates.
When requested by Tenant, Landlord will furnish Tenant with complete copies of the
insurance policy/policies required under this Section 6.3 and certificates of insurance
5
from the insurer(s) for said policy/policies that evidence the insurance required under this
Section 6.3 is in full force and effect, Tenant has been and continues to be named as an
additional insured thereon, and that the policy/policies may not be cancelled unless at
least twenty (20) days prior written notice of a contemplated cancellation has been given
to Tenant at Tenant's above -written address.
Notwithstanding the foregoing, it is acknowledged and confirmed that Tenant will have
the exclusive use, responsibility for and control of any additional parking lot constructed
by Tenant on the Leased Premises.
6.4 Compliance with Laws. Tenant's use of the Leased Premises will comply, at Tenant's
expense (but subject to the terms of the Operating Agreement), with all applicable laws,
regulations, and requirements.
6.5 Nuisance. Aside from the Permitted Uses allowed under Section 3.2 above, Tenant will
not conduct nor permit any other activities on the Leased Premises that will create a
public or private nuisance.
6.6 Supervision. Tenant will supervise Tenant's employees and use reasonable efforts to
cause Tenant's agents, independent contractors, employees, customers, suppliers,
representatives, and invitees to conduct their activities in such a manner as to comply
with the requirements of this Lease.
6.7 Violations of Law. Landl represents and warrants that Landlord is not aware of any
violations of law that exi with regard to the Leased Premises, including, without
limitation, laws pertaining to occupational hazards, environment violations (e.g.,
hazardous materials or substances, leaking underground storage tanks, etc.), or violations
of the Americans With Disabilities Act (or any similar federal, state, and local law).
Landlord wil indemnify, efend, and hold harmless Tenant and Tenant's directors,
officers, employees, agents, nd representatives from any costs, expenses, attorneys' fees,
or liabilities relating to any violation of law that existed with regard to the Leased
Premises on the Possession Date.
7. Utilities and Taxes.
7.1 Utilities. Except as set forth in Section 6.3 above, Tenant will pay, prior to delinquency,
all charges for utilities and services supplied to the Leased Premises during the Term,
including, without limitation, service charges for electricity, gas, telephone, internet,
water, sewer, irrigation, and garbage collection. Landlord will not be liable for any
failure or intption of utilities or services to the Leased Premises, unless caused by the
act, omission, fault, or negligence of Landlord or Landlord's agent(s), employee(s), or
representative(s). Tenant shall also be responsible for payment of all stormwater fees
assessed by the City for stormwater costs resulting from the new parking facility
constructed by Tenant on the Leased Premises.
7.2 Real Property Taxes. Landlord will pay, prior to delinquency, all real property taxes and
other assessments assessed against and/or levied during the Term on the Leased Premises
(to the extent the Leased Premises are not exempt from said taxation); provided, however,
Tenant will pay, prior to delinquency all real property taxes and other assessments
assessed against and/or levied during the Term on real property improvements
6
constructed on the Leased Premises by Tenant (to the extent said improvements are not
exempt from said taxation).
7.3 Personal Property Taxes. Tenant will pay, prior to delinquency, all personal property
taxes and other assessments assessed against and/or levied during the Term on
machinery, equipment, trade fixtures, furnishings, and other personal property kept on the
Leased Premises by Tenant (to the extent said property is not exempt from said taxation).
When possible, Tenant will cause said machinery, equipment, trade fixtures, furnishings
and all other personal property to be assessed and billed separately from the Leased
Premises.
8. Insurance and Indemnification.
8.1 Tenant's Insurance Obligations. During the Term, with an insurer and in form and
substance reasonably satisfactory to Landlord, Tenant, at Tenant's expense (but subject to
the terms of the Operating Agreement), will procure and maintain Commercial General
Liability insurance over the Lease remises that covers Bodily Injury, Property Damage
and Personal Injury with limits o not less than $2,000,000 Each Occurrence; $4,000,000
General Aggregate. The insurance policy/policies required under this paragraph will be
endorsed to name Landlord as an additional insured on a primary and non-contributory
basis. The insurance erage values shall be subject to review and revision, to be
consistent with current costs and values, no less than once every ten years from the
beginning of the Lease Term until the Lease terminates.
When requested by Landlord, Tenant A furnish Landlord with complete copies of the
insurance policy/policies required under this Section 8.1 and certificates of insurance
from the insurer(s) for said policy/policies that evidence the insurance required under this
Section 8.1 is in full force and effect, Landlord has been and continues to be named as an
additional insured thereon, and that the policy/policies may not be cancelled unless at
least twenty (20) days prior written notice of a contemplated cancellation has been given
ord at Landlord's above -written address.
During t e Term, Tenant, at Tenant's expense (but subject to the terms of the Operating
Agreement), will be solely responsible for insuring any and all personal property that is
of part of the Leased Premises that is stored or otherwise kept in or on the Leased
remises by Tenant, whether said personal property is owned by Tenant or any other
third party, and on all tenant improvements and betterments Tenant incorporates into the
Lease emises.
8.2 Waiver o ubrogTtion Rights. Tenant and Landlord each waive any and all rights of
recovery against the other, or against the agents, independent contractors, employees,
customers, suppliers, representatives, and invitees of each other for loss of or damage to
such waiving party, property, or property of others under its or their control, where such
loss or damage is insured against under any insurance policy in force at the time of such
loss or damage. Further, Landlord and Tenant will cause their respective insurers to
waive said insurers' respective rights of subrogation/recovery against the other party
pursuant to this provision and to provide one another, at their respective requests, with
written notice of said waivers.
8.3 Indemnification by Tenant. Except for any act, omission, fault, or negligence of
Landlord or Landlord's agent(s), employee(s), or representative(s), but subject to the
7
provisions of Section 8.2 above, Tenant will indemnify, defend, and hold harmless
Landlord and Landlord's elected and appointed officials, employees, agents, and
representatives from and against any and all claims of third parties arising from Tenant's
use of the Leased Premises, or from the conduct of Tenant's business, or from any
activity, work, or things done, permitted or suffered by Tenant in or about the Leased
Premises; and, further, subject to the provisions of Section 8.2 above, Tenant will
indemnify, defend, and hold harmless Landlord and Landlord's elected and appointed
officials, employees, agents, and representatives from and against any and all other
injuries, deaths, claims, losses, damages, and/or other liabilities on or about the Leased
Premises caused by acts, omissions, faults, or negligence of Tenant or Tenant's agent(s),
employee(s), or representative(s). The liability of Tenant, and any indemnities provided
by Tenant under this paragraph, will not extend to hazardous materials that were not
placed in, on, or about the Leased Premises by Tenant, or by any of Tenant's agents,
employees, representatives, or invitees.
8.4 Indemnification by Landlord Except for any act, omission, fault, or negligence of
Tenant or Tenant's agent(s), employee(s), or representative(s), but subject to the
provisions of Section 8.2 above, Landlord will indemnify, defend, and hold harmless
Tenant and Tenant's directors, officers, employees, agents, and representatives from and
against any and all claims arising from any breach of or default in the performance of any
obligation of Landlord's part to be performed under the terms of this Lease; and, further,
subject to the provisions of Section 8.2 above, Landlord will indemnify, defend, and hold
harmless Tenant and Tenant's directors, officers, employees, agents, and representatives
from and against any all other injuries, deaths, claims, losses, damages, and/or other
liabilities on or about the Leased Premises caused by acts, omissions, faults, or
negligence of Landlord or Landlord's agent(s), employes), or representative(s). The
liability of Landlord, and any indemnities provided by Landlord under this paragraph,
will not extend to hazardous materials that were not placed in, on, or about the Leased
Premises by Landlord, or by any of Landlord's elected or appointed officials, agents,
employees, representatives, or invitees.
9. Condition, aintenance, Repairs, and Alterations.
Condition of Leased ises. Landlord represents and warrants to Tenant that on the
pening Date (or within thirty (30) days after the Opening Date for activities that due to
struction on the Leased Pr ises cannot reasonably be completed before the Opening
e), (a) the Leased Premises will be free of structures, debris, and improvements, aside
from those that exist as of the Effective Date of this Lease (e.g., existing utilities) and (b)
the Existing Parking Lot will be in good repair and proper working order, including,
without limitation, all cracks being filled, curbs repaired, and pavement having been
sealcoated within the twelve (12) month period prior to the Opening Date, to the extent
said structures and improvements will not otherwise be removed, rebuilt or destroyed by
Tenant during the development of the Leased Premises. If any warranty made in this
paragraph is violated, then it will be the obligation of Landlord, after notice from Tenant
setting forth the nature of the violation, to promptly, at Landlord's expense, rectify such
violation. Except as otherwise provided in this Lease, Tenant accepts the Leased
Premises "AS IS" and in their condition existing as of the Possession Date.
9.2 Tenant's Obligations. Subject to the provisions of Sections 6.3 and 9.1 above and except
for ordinary wear and tear and damage caused by acts, omissions, fault, or negligence of
Landlord or Landlord's agent(s), employee(s), or representative(s), during the Term,
8
Tenant, at Tenant's expense (but subject to the terms of the Operating Agreement), will
keep the Leased Premises in good repair and proper working order. Furthermore, Tenant,
at Tenant's expense (but subject to the terms of the Operating Agreement and Section 6.3
above), is responsible for all ice and snow removal from the Leased Premises' driveways,
walkways, and parking area.
9.3 Alterations. Tenant is permitted to construct facilities, conduct renovations, and make
alterations to improvements located on the Leased Premises when and as determined by
Tenant, provided said construction, renovations, and alterations (a) are not in violation of
the Development Agreement, (b) are for Permitted Uses under this Lease, (c) do not
impair the public use of the Aquatic Center in accordance with the terms of the Operating
Agreement and (d) are in compliance with all applicable laws, regulations, and
requirements, including, without limitation, all zoning and construction permit
requirements.
Tenant will pay when due all claims for labor and materials furnished for or to Tenant for
use in or on the Leased Premises. Except as expressly set forth in this Section 9.3,
Tenant will not permit any mechanics' or materialmen's liens to be levied against the
Leased Premises for any labor or material furnished to Tenant or claimed to have been
furnished to Tenant or Tenant's agents or contractors in connection with work of any
character performed or claimed to have been performed on the Leased Premises by or at
the direction of Tenant; provided, however; Tenant may, in good faith, contest any claim
of lien so long as Tenant prevents foreclosure and, in such event, Tenant will defend and
hold Landlord harmless from any Consequences of such action, including, without
limitation, costs and reasonable attorney feiE incurred. If Tenant fails to pay any such
claim or to discharge any such lien, LandMd may dob and collect such amount as
Additional Rent. Amounts paid by Landlord will bear interest and be repaid by Tenant as
provided in Section 12.2 below.
9.4 Signage. Tenant, at Tenant's expense (but subject to the terms of the Operating
Agreement), may install and maintain signs on the Leased Premises, provided such signs
are installed and maintained in compliance with all applicable laws, regulations, and
requirements.
9.5 Surrender of Leased ises. On the last day of the Term, Tenant will surrender
possession of the Leased Premises (and all improvements, renovations, and alterations
constructed on the Leased Premises) to Landlord in their "AS IS" condition at said time.
All improvements, renovations, and alterations constructed on the Leased Premises by or
on behalf of Tenant will be and remain Tenant's property until the expiration of the
Term, at which time Landlord will become the owner of said items. Notwithstanding the
foregoing, at the end of the Term, Tenant's machinery, trade fixtures, furnishings, and
equipment will remain the property of the Tenant and may be removed by Tenant from
the Leased Premises, subject to Tenant's obligation to repair any damage to the Leased
Premises caused by the removal of Tenant's machinery, trade fixtures, furnishings, and
equipment, which repair will include the patching and filling of holes and repair of any
structural damage.
9.6 Entry and Inspection. With reasonable prior notice to Tenant, Landlord and Landlord's
authorized representatives may enter the Leased Premises and the aquatic center placed
thereon (but not the non -aquatic center improvements placed on the Leased Premises) at
any reasonable time for the purpose of confirming Tenant's compliance with this Lease;
9
provided, however, when entering and inspecting the Leased Premises and aquatic center,
Landlord may not unreasonably interfere with or disrupt any activities being conducted
on the Leased Premises.
10. Assignment and Subletting. Tenant is permitted to sublease all or any portion of the Leased
Premises with Landlord's prior written consent, which consent may not be unreasonably
withheld, so long as the subtenants' use of said areas is within the Permitted Uses allowed under
Section 6.2 above; provided, however, no such sublease will operate to release or otherwise alter
any of Tenant's obligations under this Lease. Moreover, in the event Tenant subleases all or any
portion of the Leased Property, unless Landlord agrees otherwise in writing, the expiration of this
Lease or any permitted termination hereof will entitle Lan.$ its to terminate any or all subleases
of the Leased Property by Tenant and/or to assume any or all such subleases as the landlord with
the subtenant(s) thereunder.
11. Other Rights and Obligations.
Priority of Lease. This Lease will be subject and subordinate at all times to the lien of all
mortgages and deeds of trust subsequently placed upon the Leased Premises, specifically
subject to the necessity of having all terms in said instruments reviewed and approved in
writing by Landlord prior to being executed on the part of Tenant to effectuate such
subordination; provided, however, the subordination of this Lease and Tenant's rights
hereunder are conditioned upon (and shall not become effective until) the mortgagee or
beneficiary under any deed of trust agreeing in writing that Tenant's peaceable
possession of the Leased Premises and its rights under this Lease will not be disturbed so
long as Tenant is not in default under this Lease (subject to the notice and cure rights set
forth herein). If any party providing financing or funding to Landlord requires, as a
condition of such financing or funding, that Tenant send such party written notice of any
default by Landlord under this Lease, giving such part the right to cure such default until
it has completed foreclosure and prevent Tenant from terminating this Lease unless such
default remains uncured after foreclosure has been completed, Tenant will execute and
liver any reasonable agreement required by such party in order to accomplish this
purpose. Within ten (10) days after Landlord's written request, Tenant will deliver a
written statement to Landlord stating whether Landlord is in compliance will all of
Landlord's obligations under this Lease, the date to which the rent and other charges have
been paid, whether this Lease has been modified and is in full force and effect, and any
other matters that may reasonably be requested by Landlord concerning this Lease to the
ext true and wi h t waiving any rights of Tenant.
Tenant is permitted to grant mortgages and/or deeds of trust in Tenant's right, title, and
interests in, to, and under this Lease (i.e., leasehold mortgages and/or leasehold deeds of
trust) and in connection with said mortgage(s) and/or deed(s) of trust, Landlord will
consent to and execute documentation reasonably requested by Tenant and Tenant's
lender(s) in connection therewith, which may include, but not necessarily be limited to,
agreements that include non -disturbance provisions, lender notice requirements before
termination, and lender cure opportunity provisions. Moreover, within ten (10) days after
Tenant's written request, Landlord will deliver a written statement to Tenant stating
whether Tenant is in compliance will all of Tenant's obligations under this Lease, the
date to which the rent and other charges have been paid, whether this Lease has been
modified and is in full force and effect, and any other matters that may reasonably be
requested by Tenant concerning this Lease to the extent true and without waiving any
rights of Landlord.
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11.2 Landlord's Liability; Sale. In the event the original Landlord hereunder, or any
successor owner of the Leased Premises, sells or conveys the Leased Premises, all
liabilities and obligations on the part of the original Landlord, or such successor owner,
under this Lease accruing thereafter will terminate, and thereupon all such liabilities and
obligations will be binding upon the new owner. Tenant agrees to attorn to such new
owner. Notwithstanding the foregoing, it is expressly confirmed that no sale or
conveyance of the Leased Premises will affect, eliminate, or otherwise reduce Landlord's
obligations under the Development Agreement or Operating Agreement.
11.3 Eminent Domain. Any award for taking of all or any part of the Leased Premises under
the power of eminent domain will be the property of Landlord; provided, however,
nothing precludes Tenant from seeking and o taining any award for (a) Tenant's lost use
of the Leased Premises under this Lease, (b y improvements owned by Tenant that are
taken, (c) any loss of, damage to, or cost of removal of Tenant's improvements, trade
fixtures, and removable personal property, and/or ( damages for cessation or
interruption of Tenant's business. Tenant shall have the right to negotiate directly with
the condemnor for the portion of the award Tenant is entitled to hereunder. A sale by
Landlord to any authority with power of eminent main that adversely affects Tenant's
use of the Leased Premises, either under threat demnation or while condemnation
proceedings are pendi ill be deemed king under the power of eminent domain
under this Section 11.
12. Defaults and Remedies.
12.1 Default and Opportunity to Cure. No default of this Lease will be actionable by the
other ly until and unless the defaulting party fails to cure the default within sixty (60)
days r being given written notice of the default by the other party, which notice must
specify ture of the default with reasonable particularity; provided, however, if the
nature of default is such that more than sixty (60) days will be required for
ce, the default will not be actionable so long as the defaulting party commences
Pe within such sixty- (60-) day period and thereafter diligently prosecutes the
same to ® s letion.
12Right to Cure' Without ice to any other remedy for default, Landlord or Tenant,
with at least sixty (60) day nor written notice to the other party, may perform any
obligation or make any payment required to cure a default by the other. The cost of
performance, including attorney's fees and all disbursements, will immediately be repaid
by the responsible party upon demand, together with interest from the date of expenditure
until fully paid at the rate of twelve percent (12%) per annum, but not in any event at a
rate greater than the maximum rate of interest permitted by law.
12.3 Cumulative Remedies. Subject to the provisions of Section 12.1 above, in the event of
default by one party, the other party will have all remedies allowed by law or in equity
that are consistent with the express terms and conditions of this Lease, the Operating
Agreement, and the Development Agreement. Accordingly, each party's remedies under
this Lease are cumulative and the exercise of any right or remedy hereunder will not be
deemed a waiver of nor alter, affect, or prejudice any right or remedy a party may have
under this Lease or by law or in equity.
13. Miscellaneous Terms.
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13.1 Amendments. This Lease may not be modified or amended except by written agreement
signed and acknowledged by each of the parties hereto.
13.2 No Joint Venture. Nothing contained in this Lease creates the relationship of principal
and agent or of partnership or of joint venture between the parties hereto and no
provisions contained herein will be deemed to create any relationship other than that of
landlord and tenant.
13.3 Time is of the Essence. Time is of the essence as to all terms of this Lease.
13.4 Notices. All notices under this Lease must be in write g and will be deemed given to the
receiving party when (a) personally delivered to the City Manager for the City of Yakima
(for notices to Landlord) or personally delivered to the CEO or President of the Yakima
Family YMCA (for notices to Tenant) or (b) three days after being deposited in the
United States Postal Service by certified mail (with return receipt requested) to the
receiving party at the receiving party's last known address(es)
13.5 Exhibits. There are no attachments to this Lease except for the Exhibits expressly
referenced in this Lease, each of which constit part of this L as if set forth in
full herein.
13.6 Headings. The captio drparagraph hea mgs used in this Lease are inserted for
convenience of reference only and are not intended to define, limit, or affect the
interpretation or construction of any term or provision ofhis Lease.
13.7 Governing Law d Venue. This Lease will be interpreted, construed, and governed by
the laws of the State of Washington. The exclusive venue for any legal action to interpret
or enforce this Lease will be Yakima County, Washington.
13 Binding Effect. Subject to any limitations on assignments provided for in this Lease, all
of the provisions of this Lease will inure to the benefit of and be binding on the
successors and assigns of Landlord and Tenant.
13. Waivers. The ai ure of e er party to seek redress for violation of or to insist upon the
strict performance of any covenant or condition of this Lease will not prevent a
subse uent act, which would have originally constituted a violation, from having the
effec original violation.
13.10 Attorney's Fees; Venue. In the event of any dispute arising out of or relating to this
Lease, whether or not suit or other proceedings is commenced, and whether in mediation,
arbitration, at trial, on appeal, in administrative proceedings, or in bankruptcy (including,
without limitation, any adversary proceeding or contested matter in any bankruptcy
case), the prevailing party will be entitled to its costs and expenses incurred, including
reasonable attorney fees. The sole venue for any dispute arising out of or relating to this
Lease will be in Yakima County, Washington.
13.11 Quiet Enjoyment. Provided Tenant is not in default, Tenant will peaceably and quietly
hold and enjoy the Leased Premises for the Term without interruption by Landlord or any
of Landlord's assignees or any person or persons lawfully or equitably claiming by,
through, or under Landlord or any of Landlord's assignees.
12
13.12 Counterparts and Copies. This Lease may be executed in any number of identical
counterparts, with each counterpart having the same effect as if all parties to this Lease
had signed the same document. All executed counterparts of this Lease will be construed
as and constitute one and the same instrument. A facsimile or electronic copy (e.g., a
PDF copy) of an executed counterpart of this Lease will have the same effect as an
original executed counterpart of this Lease.
13.13 Severability. The invalidity or unenforceability of any provision of this Lease will not
affect or impair any other provision of this Lease.
13.14 Recording. Neither Landlord nor Tenant will record this Lease. However, following the
execution of this Lease, the parties, at Tenant's request, will execute a Memorandum of
Lease that will be recorded by Tenant in the Yakima County Auditor's Office for the
purpose of providing constructive notice to the public of the existence of this Lease, the
length of the Term, and the Purchase Option granted herein (if any). Said Memorandum
of Lease will not disclose any of the financial or other economic terms contained in this
Lease.
13.15 Entire Agreement. This Lease, together with the associated Development Agreement
and Operating Agree ent, constitutes the entire understanding and agreement of the
parties to this Leas with respect to its subject matter. All prior agreements,
understandings, or representations with respect to this Lease's subject matter are hereby
canceled in their entirety and are no further force or effect. It is expressly
acknowledged that there are no ora er agreements which modify or affect this
Lease.
EFFECTIVE as o' re Effective first written above.
YOUNG MEN'S CHRISTI CITY OF YAKIMA
ASSOCIKI
By:
Bob R
By:
Tony O'Rourke, City Manager
13
STATE OF WASHINGTON )
) ss.
COUNTY OF YAKIMA )
I certify that I know or have satisfactory evidence that BOB ROMERO is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CEO for the YOUNG
MEN'S CHRISTIAN ASSOCIATION OF YAKIMA to be the free and voluntary act of such party for
the uses and purposes mentioned in the instrument.
DATED: , 2015.
STATE OF WASHINGT
COUNTY OF YAKI
RY PUBLIC for the f Washington,
resat
My appoi en xpires:
) ss.
I certify that I know or have satisfactory evidence that TONY O'ROURKE is the person who
appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the CITY MANAGER for the
CITY OF YAKIMA to be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
[PRINT NAME]
NOTARY PUBLIC for the State of Washington,
residing at
My appointment expires:
14
[insert legal description]
EXHIBIT A-1
Legal Description of the Leased Premises
EXHIBIT A-1
EXHIBIT A-2
General Depiction of the Leased Premises
[See Attached]