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Home My WebLink AboutFinal Agenda Packet AGENDA City Council Regular Meeting 7:00 PM - Monday, June 4, 2018 Council Chambers, 7th Floor, City Hall – 1055 S. Grady Way 1. CALL TO ORDER AND PLEDGE OF ALLEGIANCE 2. ROLL CALL 3. PROCLAMATION a) Secure Your Load Week - June 6 - 12, 2018 4. ADMINISTRATIVE REPORT 5. AUDIENCE COMMENTS • Speakers must sign-up prior to the Council meeting. • Each speaker is allowed five minutes. • When recognized, please state your name & city of residence for the record. NOTICE to all participants: Pursuant to state law, RCW 42.17A.555, campaigning for any ballot measure or candidate in City Hall and/or during any portion of the council meeting, including the audience comment portion of the meeting, is PROHIBITED. 6. CONSENT AGENDA The following items are distributed to Councilmembers in advance for study and review, and the recommended actions will be accepted in a single motion. Any item may be removed for further discussion if requested by a Councilmember. a) Approval of Council Meeting minutes of May 21, 2018. Council Concur b) AB - 2155 Mayor Law reappoints Al Dieckman to the Parks Commission for a term expiring June 1, 2022. Council Concur c) AB - 2158 City Clerk submits a 60% Direct Petition to Annex for the proposed Wolf Woods Annexation, and recommends a public hearing to consider the petition and potential zoning of the area be set for June 25, 2018; 8-acres bordered approximately by NE 20th St to the north, Nile Ave NE to the east, NE 18th St to the south, and Ilwaco Ave NE to the west. Council Concur; Set Public Hearing on 06/25/2018 d) AB - 2156 Transportation Systems Division recommends approval of Amendment No. 10 to lease agreement LAG-10-001, with the Boeing Company, for an automatic lease rate adjustment that will increase the annual leasehold amount by $165,181.85 and accounts for the collection of rent retroactive to June 1, 2016. Refer to Transportation (Aviation) Committee 7. UNFINISHED BUSINESS Topics listed below were discussed in Council committees during the past week. Those topics marked with an asterisk (*) may include legislation. Committee reports on any topics may be held by the Chair if further review is necessary. a) Planning & Development Committee: Multi-family Tax Exemptions 8. NEW BUSINESS (Includes Council Committee agenda topics; visit rentonwa.gov/cityclerk for more information.) 9. ADJOURNMENT COMMITTEE OF THE WHOLE MEETING AGENDA (Preceding Council Meeting) 5:30 p.m. - 7th Floor - Council Chambers Hearing assistance devices for use in the Council Chambers are available upon request to the City Clerk CITY COUNCIL MEETINGS ARE TELEVISED LIVE ON GOVERNMENT ACCESS CHANNEL 21 To view Council Meetings online, please visit rentonwa.gov/councilmeetings DenisLawMayorWfiereas,in2004,RobinAbel,aRentonresident,beganhercampaigntobringawarenesstothedangerofimproperlysecuredloadsinvehiclesafterherdaughterwasseverelyinjuredbydebrisfromanunsecuredload;andWfiereas,in2005,duetothetirelesseffortsofRobinAbel,Washingtonlegislatorsadoptedwhathasbeencalled“Maria’sLaw,”whichmakesitamisdemeanorandcriminalnegligenceifallorpartofaloadshiftsorfallsandcausessubstantialbodilyharmtoanother;andWfiereas,in2015,PresidentObamasignedafive-yearNationalTransportationbillthatincludedwhatAbelcalled“herparagraph,”whichpointedoutthedangersofunsecuredloadsandencouragementforstatestoaddresstheissue;andWfiereas,accordingtoarecentstudybytheAAAFoundationforSafety,morethan200,000crashesinthepastfouryearswerecausedbyroaddebris,plusroaddebrisresultedinapproximately39,000injuriesand500deathsbetween2011and2014;andWftereas,werecognizetheprofoundsufferingandlossofthoseharmedbyunsecuredloads,andstandwiththosecriticallyimpactedbysuchinstancesofavoidabletragedy;Wfiereas,alldriversmustrecognizetheirresponsibilitytomakesafeandconsideratechoiceswhiledriving,anddrivingwithanunsecuredloadpresentsdangertothetravellingpublic;andWhereas,thesimple,routineactofsecurelyaffixingeveryloadmakesourroadssaferforalldrivers,andtheseprecautionsshouldnotbeoverlooked;Wow,therefore,I,DenisLaw,MayoroftheCityofRenton,doherebyproclaimJune6-12,2018,tobeSecure‘YourLoac(WeekintheCityofRenton,andIencourageallcitizenstogiveseriousconsiderationtotheirsafetyandthesafetyofotherswhentransportingmaterialsintheirvehicleonourroadways.InwitnesswhereofIhavehereuntosetmyhandandcausedthesealoftheCityofRentontobeaffixedthis4thdayofJune,2018.DenisLaw,MayorCityofRenton,WashingtonProcCamationRentonCityHall,7thFloor1055SouthGradyWay,Renton,WA98057.AGENDA ITEM #3. a) May 21, 2018 REGULAR COUNCIL MEETING MINUTES MINUTES City Council Regular Meeting 7:00 PM ‐ Monday, May 21, 2018 Council Chambers, 7th Floor, City Hall – 1055 S. Grady Way CALL TO ORDER AND PLEDGE OF ALLEGIANCE Mayor Law called the meeting of the Renton City Council to order at 7:00 PM and led the Pledge of Allegiance. ROLL CALL Councilmembers Present: Ed Prince, Council President Randy Corman Ryan McIrvin Ruth Pérez Armondo Pavone Don Persson Councilmembers Absent: Carol Ann Witschi MOVED BY PRINCE, SECONDED BY CORMAN, COUNCIL EXCUSE ABSENT COUNCILMEMBER WITSCHI. CARRIED. ADMINISTRATIVE STAFF PRESENT Denis Law, Mayor Robert Harrison, Chief Administrative Officer Cheryl Beyer, Senior Assistant City Attorney Megan Gregor, Deputy City Clerk Gregg Zimmerman, Public Works Administrator Jan Hawn, Administrative Services Administrator Jennifer Henning, Planning Director Jamie Thomas, Fiscal Services Director Commander Kevin Keyes, Police Department PROCLAMATION a) Safe Boating and Paddling Week: A proclamation by Mayor Law was read declaring May 19 ‐ 25, 2018 to be "Safe Boating and Paddling Week" in the City of Renton, encouraging all citizens to dedicate themselves to learning about and practicing safe boating, including wearing life jackets. Mark Taeschner, Flotilla Commander Flotilla 25 (Renton) accepted the proclamation with thanks and informed Council and the public about how Flotilla 25 promotes safety. MOVED BY PRINCE, SECONDED BY CORMAN, COUNCIL CONCUR IN THE PROCLAMATION. CARRIED. AGENDA ITEM #6. a) May 21, 2018 REGULAR COUNCIL MEETING MINUTES b) National Public Works Week ‐ May 21 ‐ 27, 2017: A proclamation by Mayor Law was read proclaiming May 21 ‐ 27, 2017 to be "National Public Works Week" in the City of Renton, encouraging all citizens to recognize the contributions public works professionals make every day to our health, safety, comfort, and quality of life. Public Works Administrator Gregg Zimmerman accepted the proclamation. Additionally, Mr. Zimmerman provided a brief description of the work performed by Renton's public works employees. MOVED BY PRINCE, SECONDED BY CORMAN, COUNCIL CONCUR IN THE PROCLAMATION. CARRIED. PUBLIC HEARING a) Solicit public input on the proposed 2019/2020 Biennial Budget: This being the date set and proper notices having been posted and published in accordance with local and State laws, Mayor Law opened the public hearing to consider the proposed 2019/2020 Biennial Budget. Administrative Services Administrator, Jan Hawn, informed Council that this is the first of three public hearings regarding budget preparations. She shared that the intent of this hearing is to solicit early input before budget development, and its purpose is to serve as one of the many methods used to gather public input. There being no questions or discussion, it was MOVED BY PRINCE, SECONDED BY CORMAN, COUNCIL CLOSE THE PUBLIC HEARING. CARRIED. ADMINISTRATIVE REPORT Chief Administrative Officer Robert Harrison reviewed a written administrative report summarizing the City’s recent progress towards goals and work programs adopted as part of its business plan for 2018 and beyond. Items noted were:  There will be a Memorial Day ceremony at Veterans Memorial Park on Monday, May 28th at 1:00 p.m. The program is coordinated by VFW Post #1263 and includes an invocation by the chaplain of the Fred Hancock American Legion Post #19, presentation of colors, and a rendition of the National Anthem. A ceremonial wreath honoring the five branches of military service will be laid at the memorial and a ceremonial Honor Guard, playing of taps, and singing of a patriotic song will conclude the ceremony. Parking for the ceremony is available at the 200 Mill Avenue building.  Kids ages five to 14 can fish from the dock at Gene Coulon Park at the Fishing Kids Derby on June 2nd from 9:00 to 11:30 a.m. Each child will receive a t‐shirt and Zebco rod and reel.  Drop off items no longer needed, or find some you do need, at Stop and Swap, June 2nd from 10:00 a.m. to 2:00 p.m. at Renton Memorial Stadium. Stop and Swap is a free event designed to divert quality goods from the waste stream and make them available to neighbors and non‐profits. Find more information at rentonwa.gov/stopnswap.  The Solid Waste Utility is launching the “Bring Your Own Bag (BYOB)” campaign in efforts to reduce plastic bag use and litter throughout the city. The public is encouraged to bring reusable bags when shopping and complete an online survey about plastic bag use. The survey is available at rentonwa.gov/plasticbag through June 6th.  Preventative street maintenance will continue to impact traffic and result in occasional street closures. AGENDA ITEM #6. a) May 21, 2018 REGULAR COUNCIL MEETING MINUTES CONSENT AGENDA Items listed on the Consent Agenda were adopted with one motion, following the listing. a) Approval of Council Meeting minutes of May 14, 2018. Council Concur. b) AB ‐ 2121 Community & Economic Development Department recommended approval of a grant agreement with the Department of Ecology to accept $30,000 for the Shoreline Master Program (SMP) periodic review, and to amend the budget accordingly. Refer to Finance Committee. MOVED BY PRINCE, SECONDED BY CORMAN, COUNCIL CONCUR TO APPROVE THE CONSENT AGENDA, AS PRESENTED. CARRIED. UNFINISHED BUSINESS a) Transportation Committee Chair Corman presented a report concurring in the staff recommendation to authorize the Mayor and City Clerk to execute Supplemental Agreement No. 1 to CAG‐17‐149 with KPG, Inc. in the amount of $728,636 for the Williams Avenue South and Wells Avenue South Conversion Project (317.122908.016.595.11.63.000). The amount of this agreement is considered to be within the project budget of $2,856,236. MOVED BY CORMAN, SECONDED BY PERSSON, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. b) Transportation Committee Chair Corman presented a report concurring in the staff recommendation to authorize the Mayor and City Clerk to execute Supplemental Agreement No. 4 to CAG‐17‐082 with Perteet, Inc. in the amount of $392,389.00 for the preparation of construction documents up to 60% design for the Park Avenue North Extension Project. MOVED BY CORMAN, SECONDED BY PERSSON, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. c) Transportation Committee Chair Corman presented a report concurring in the staff recommendation to authorize the Mayor and City Clerk to: 1. Execute Interlocal Agreement GCB2890 with the Washington State Department of Transportation (WSDOT) for the mitigation of impacts to Section 4 (f) of City properties located along the WSDOT I‐405 Renton to Bellevue project corridor. 2. Execute a professional services agreement with Otak, Inc. for preliminary design and permitting work for the May Creek Trail project. 3. Adopt the resolution authorizing Interlocal Agreement GCB 2890 with WSDOT. MOVED BY CORMAN, SECONDED BY PERSSON, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. d) Transportation Committee Chair Corman presented a report concurring in the staff recommendation to adopt the resolution to authorize the temporary total closure of NE 31st Street starting from approximately 150 feet east of the intersection of NE 31st Street and Jones Avenue NE and ending at approximately 50 feet west of the driveway at 2100 NE 31st Street for up to 120 calendar days, between June 18 and December 31, 2018, to construct the NE 31st Street Bridge Replacement Project. MOVED BY CORMAN, SECONDED BY PERSSON, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. AGENDA ITEM #6. a) May 21, 2018 REGULAR COUNCIL MEETING MINUTES e) Transportation Committee Chair Corman presented a report concurring in the staff recommendation to adopt the resolution authorizing the temporary total closure of North 27th Place between 1140 North 27th Place and 1161 North 27th Place for up to 90 calendar days between June 18 and December 31, 2018 to construct the North 27th Place Bridge Replacement Project. MOVED BY CORMAN, SECONDED BY PERSSON, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. LEGISLATION Resolutions: a) Resolution No. 4342: A resolution was read authorizing the Mayor and City Clerk to enter into an Interlocal Agreement with the Washington State Department of Transportation (WSDOT) for mitigation of impacts to Section 4(f) properties located along the WSDOT I‐405 Renton to Bellevue Project corridor. MOVED BY CORMAN, SECONDED BY PERSSON, COUNCIL ADOPT THE RESOLUTION AS READ. CARRIED. b) Resolution No. 4343: A resolution was read authorizing the temporary total closure of NE 31st Street between 2100 NE 31st Street and 3133 Jones Ave NE. MOVED BY CORMAN, SECONDED BY PERSSON, COUNCIL ADOPT THE RESOLUTION AS READ. CARRIED. c) Resolution No. 4344: A resolution was read authorizing the temporary total closure of N 27th Place between 1140 N 27th Place and 1161 N 27th Place. MOVED BY CORMAN, SECONDED BY PERSSON, COUNCIL ADOPT THE RESOLUTION AS READ. CARRIED. NEW BUSINESS Please see the attached Council Committee Meeting Calendar. ADJOURNMENT MOVED BY PRINCE, SECONDED BY PAVONE, COUNCIL ADJOURN. CARRIED. TIME: 7:26 P.M. Jason A. Seth, CMC, City Clerk Megan Gregor, CMC, Recorder Monday, May 21, 2018 AGENDA ITEM #6. a) Council Committee Meeting Calendar May 21, 2018 May 24, 2018 Thursday CANCELLED Utilities Committee, Vice-chair McIrvin 4:00 PM Planning & Development Committee, Chair McIrvin – Council Conference Room 1. Multi-family Tax Exemptions May 28, 2018 Monday Memorial Day No Council Meetings June 4, 2018 Monday CANCELLED Transportation Committee, Chair Corman CANCELLED Community Services Committee, Chair Pérez 5:30 PM Committee of the Whole, Chair Prince – Council Chambers 1. Citizen Advisory Committee for Parks, Trails, and Community Facilities Report AGENDA ITEM #6. a) AB - 2155 City Council Regular Meeting - 04 Jun 2018 SUBJECT/TITLE: Reappointment to Parks Commission RECOMMENDED ACTION: Council Concur DEPARTMENT: Executive STAFF CONTACT: April Alexander, Executive Assistant EXT.: 6520 FISCAL IMPACT SUMMARY: None SUMMARY OF ACTION: Mayor Law reappoints Al Dieckman to the Parks Commission for a term expiring 6/1/22. EXHIBITS: A. Recommendation Memo STAFF RECOMMENDATION: Concur with Mayor Law's reappointment of Al Dieckman to the Parks Commission. AGENDA ITEM #6. b) COMMUNITY SERVICES DEPARTM ENT The term for Al Dieckman,Parks Commission Chair,expires on June 1,2018.Staff recommends his reappointment to serve an additional term. Al has been an active participant on sub-committees,including the Trail Rangers program and a member of the Parks,Trails and Community Facilities Advisory Board, and realizes the importance of parks and recreational opportunities in the community and serves as our advocate.His commitment to the community is an asset to the Commission,staff,and citizens of Renton. Should you need further clarification or additional information,please phone me at x6617. :\fr M EMORAN DUM DATE:May9,2018 TO:Denis Law,Mayor FROM:Kelly Beymer,Community Services Administrator SUBJECT:Reappointment —Parks Commission Thank you. ) Iv V h:\boards and commisslons\parks commisson\boardmembers\appointment memo5\reappointment 5.2018 a diekman.docx AGENDA ITEM #6. b) AB - 2158 City Council Regular Meeting - 04 Jun 2018 SUBJECT/TITLE: Proposed Annexation - Wolf Woods 60% Direct Petition to Annex & Zoning RECOMMENDED ACTION: Council Concur; Set Public Hearing on XX/XX/XXXX DEPARTMENT: City Clerk STAFF CONTACT: Jason Seth, City Clerk EXT.: 6502 FISCAL IMPACT SUMMARY: N/A SUMMARY OF ACTION: On September 18, 2017, Council authorized Ms. Bev Wolf, petitioner, to circulate a 60% Direct Petition to Annex specifying that property owners must accept City zoning and their proportional share of the City's existing bonded indebtedness. On November 30, 2017, Ms. Wolf submitted the 60% Direct Petition to Annex to the City. The petition was then forwarded to King County Department of Assessments to certify the petition's sufficiency per RCW 35A.01.040. King County certified the petition's sufficiency in a letter dated April 5, 2018 (attached). Therefore, staff recommends a Public Hearing to consider the 60% Direct Petition to Annex and Zoning for the proposed Wolf Woods Annexation be set for June 25, 2018. The proposed 8-acre Wolf Woods Annexation is located at the northeastern portion of City limits. It is bordered by NE 20th St to the north, Nile Ave NE to the east, a parcel line near NE 18th St (if extended) to the south, and Ilwaco Ave NE to the west. It is in the East Plateau Community Planning Area. EXHIBITS: A. Issue Paper B. King County Certification Letter C. Vicinity Map STAFF RECOMMENDATION: Set June 25, 2018 as a Public Hearing to consider the 60% Direct Petition to Annex and Zoning for the proposed Wolf Woods Annexation. AGENDA ITEM #6. c) DEPARTMENT OF COMMUNITY & ECONOMIC DEVELOPMENT M E M O R A N D U M DATE: May , 2018 TO: Ed Prince, Council President Members of the Renton City Council VIA: Denis Law, Mayor FROM: Chip Vincent, Administrator x6592 STAFF CONTACT: Angie Mathias, Long Range Planning Manger x6576 SUBJECT: Wolf Woods Annexation - Acceptance of 60% Direct Petition to Annex ISSUES: Should the City Council accept the 60% Direct Petition to Annex from the Wolf Woods II Annexation Area now that the petition has been certified by the King County Department of Assessments? If the City Council accepts the 60% Direct Petition, should the Administration be directed to forward the Notice of Intent package for this annexation to the Boundary Review Board? Finally, the area was pre-zoned in 1997 with R-1 and R-5 zoning. The R-5 zone no longer exists, how should the area be zoned? RECOMMENDATION: Council accept the 60% Direct Petition to Annex the approximately 8- acre Wolf Woods II Annexation site; Council authorize the Administration to forward the Notice of Intent for the Wolf Woods II Annexation to the Boundary Review Board for King County for their review. The annexation area should be zoned with Renton Residential Four Dwelling Units per Acre (R-4) zoning. BACKGROUND SUMMARY: At its September 18, 2017 public meeting, Council accepted the 10% Notice of Intent to Commence Annexation petition and authorized the circulation of a 60% Direct Petition to Annex. City of Renton departments reviewed the annexation proposal and all staff reported that the annexation represents a logical extension of their respective services and systems. There were no issues identified that would impede the annexation. A more detailed discussion of this proposed annexation and review comments are contained in the Department’s August 18, 2017, Wolf Woods II Annexation 10% Notice of Intent issue paper. AGENDA ITEM #6. c) Ed Prince, Council President Page 2 of 2 May 21, 2018 Page 2 of 3 On October 2 2017, the petitioner submitted the 60% Direct Petition to Annex. That petition was certified as sufficient, with signatures of property owners representing at least 60% of the taxable value of the annexation area, by King County on April 5, 2018. Zoning The existing King County zoning is R-4. The area was pre-zoned in 1997 with both R-5 and R-1 zoning. The R-1 zone was zoned on the parcels to the north. The City does not have an R-5 zone any more so, the area needs to be zoned concurrently with the annexation process. The Comprehensive Plan Land Use Map designation for the annexation area is Residential Low Density (RLD). There are three zones that implement this designation: RC - Resource Conservation (one dwelling unit per 10 net acres), R-1 - Residential One Dwelling Unit (one dwelling unit per net acre), and R-4 - Residential Four Dwelling Units (four dwelling units per net acre). The City’s Comprehensive Plan policies (LU-14) calls for land within the RLD designation to be zoned as follows: Resource Conservation Zone – Zone lands with significant environmental constraints, which are not appropriate for urban development, lands suitable for environmental conservation or restoration, and lands used for agriculture or natural resource extraction for Resource Conservation (RC). RC zoning is allowed in the Residential Low Density and Employment Area land use designations. This zone allows one dwelling unit per ten acres. Residential-1 Zone – Lands with significant environmental constraints, which may have the potential for development at a level of intensity that is compatible with that environment, or lands that provide urban separators should be zoned for Residential-1 (R-1). R-1 zoning is allowed in the Residential Low Density land use designation. This zone allows one dwelling unit per acre. Residential-4 Zone – Zone lands Residential-4 (R-4) that are suitable for housing with large lots and are compatible with the scale and density of the surrounding area. R-4 zoning is allowed in the Residential Low Density land use designation. This zone allows four dwelling units per acre. Renton Municipal Code 4-2-020 identifies the purpose and intent of zone. Relevant excerpts from the purpose for the implanting zones are as follows: Resource Conservation Zone (RC Zone) - A very low-density residential zone that provides some residential use of lands with extensive critical areas (floodplains, wetlands and streams, aquifers, wildlife habitat, steep slopes, and geologically hazardous areas) or with agricultural uses. This zone promotes uses that are compatible with critical areas and allows for continued production of food and agricultural products. It also provides separation between areas of more intense urban uses and critical lands or agricultural uses. AGENDA ITEM #6. c) Ed Prince, Council President Page 2 of 2 May 21, 2018 Page 3 of 3 Residential-1 Zone (R-1 Zone) – Provides for residential development of lands characterized by pervasive critical areas where limited residential development will not compromise critical areas. The zone allows large lot single family and clustered single family residential dwellings and allows for small scale farming associated with residential use. It protects critical areas, provides separation between neighboring jurisdictions, and prohibits the development of incompatible uses that may be detrimental to the residential or natural environment. Residential-4 Zone (R-4 Zone) - Promotes urban single family residential neighborhoods serviceable by urban utilities and containing open space amenities. The R-4 designation serves as a transition between rural designation zones and higher density residential zones. It is intended as an intermediate lower density residential zone. The natural features and critical areas present on the site and in close proximity include approximately 375 feet of Greenes Creek that runs through the site. Greenes Creek is a type Ns stream. Type Ns streams are waters that do not contain fish or fish habitat and have intermittent flows, they are seasonal non-habitat streams in which surface flow is not present for at least some portion of a year of normal rainfall. Ns Waters must be physically connected by an above-ground channel system to Type S, F, or Np Waters. Greenes Creek is physically connected to May Creek, which is a type F (or fish bearing) stream. Any future development would be required to comply with Critical areas regulations which require a 50 foot buffer from the stream and an additional 15 foot structure setback beyond the buffer. A wetland that is protected in a tract is approximately 200 feet south of the southern boundary of the annexation area. The category of the wetland is unknown and therefore the buffer is not known at this time. There does not appear to be protected slopes (40% or greater) or other critical areas within or in close proximity to the annexation area. The presence of a Type Ns stream and a wetland in close proximity does not constitute extensive or pervasive critical areas as characterized in the purpose and intent of the RC or R-1 zones. Therefore, R-4 zoning is appropriate for the area. CONCLUSION: The proposed Wolf Woods II Annexation has been certified as having sufficient signatures representing at least 60% of the area’s assessed value. It also has reasonable boundaries and appears to comply with Boundary Review Board objectives. Reviewing staff raised no objections to this annexation. The proposed Wolf Woods II Annexation furthers the City’s Business Plan goals and is in the general welfare and interest of the City. The Administration recommends the Council accept the 60% Direct Petition and authorize staff to forward the Notice of Intent package to the Boundary Review Board for King County. The Administration further recommends the annexation area be zoned with Renton R-4 zoning. AGENDA ITEM #6. c) <2/ML AGENDA ITEM #6. c) AGENDA ITEM #6. c) AB - 2156 City Council Regular Meeting - 04 Jun 2018 SUBJECT/TITLE: Amendment No. 10 to Boeing Lease Agreement LAG-10-001 RECOMMENDED ACTION: Refer to Transportation (Aviation) Committee DEPARTMENT: Transportation Systems Division STAFF CONTACT: Casey Boatman, Airport Business Coordinator EXT.: 7478 FISCAL IMPACT SUMMARY: Execution of the Boeing lease amendment will result in an Airport annual revenue increase of $165,181.85. The increase consists of a revenue increase of $76,368.26 for the building component, an increase of $73,252.34 for the land component and an increase of $15,561.25 for access by aircraft based on land adjacent to the Airport, otherwise known as the “through the fence component.” SUMMARY OF ACTION: The City and The Boeing Company are now in agreement with the rates for all elements of Lease Amendment No. 10. This contract accounts for the lease rate increases retroactive to June 1, 2016, for the land rental rate adjustment and the “through the fence” fee adjustment from revised appraisals for buildings 5-45 and 5-50. The land rate increase was determined by a CPI adjustment. The building rate increase was determined by a negotiated rate increase based on a compromise between the Airport’s apprais al and Boeing’s subsequent internal appraisal. The below listed building rate increases were agreed upon: Building 5-45 - $7.80 per square foot per year Building 5-50 - $6.50 per square foot per year Amendment No. 10 also accounts for collection of rent retroactive to June 1, 2016. EXHIBITS: A. Amendment No. 10 to Lease Agreement LAG-10-001 STAFF RECOMMENDATION: Authorize the Mayor and City Clerk to execute Amendment No. 10 to lease agreement LAG-10-001 with The Boeing Company for an automatic lease rate adjustment that will increase the annual leasehold amount by $165,181.85 and accounts for the collection of rent retroactive to June 1, 2016. AGENDA ITEM #6. d) LAG-10-001 Amendment No. 10 Page 1 AMENDMENT NO. 10 TO LEASE AGREEMENT LAG-10-001 Version: May 17, 2018 (City of Renton to The Boeing Company) THIS AMENDMENT No. 10 to Lease Agreement LAG-10-001 (“Amendment No. 10”) is entered into by the City of Renton, a Washington municipal corporation, and The Boeing Company, a Delaware corporation, with reference to that certain lease designated as LAG-10-001 as amended as of the date of entry of this Amendment No. 10, which is the ____ day of _____________, 2018 (the “Lease”). RECITALS: 1. WHEREAS, under the Lease, the City of Renton (“Landlord”) has leased to The Boeing Company (“Tenant”) certain land areas, facilities, and buildings (the “Premises”) on the Renton Municipal Airport, Renton, Washington (the “Airport”), until May 31, 2030; and 2. WHEREAS, Tenant is obligated to pay rental amounts as shown in the Lease’s table in Section 4.a., Minimum Monthly Rent; and 3. WHEREAS, Amendment 7-15 to the Lease amended the Minimum Monthly Rent to be $107,578.98, plus Leasehold Excise Tax, and continuing until the sixth (6th) anniversary of the Commencement Date of the Lease, which was determined to be June 1, 2016; and Land Rental Rate Adjustment 4. WHEREAS, on January 8, 2015, a new land rental rate was established through an arbitration process at $0.7252 per square foot per year; and 5. WHEREAS, as of June 1, 2016, the land rental rate was due for adjustment using the arbitrated lease rate of $0.7252 per square foot per year, and continuing until the next Adjustment Date, which is determined to be June 1, 2019; and 6. WHEREAS, Tenant is also responsible to Landlord for a land rental rate back-payment for the period between June 1, 2016 and the date of entry of this Amendment No. 10; and Through the Fence Access Fee Adjustment 7. WHEREAS, Landlord and Tenant have a Through the Fence Access Agreement under the Lease; and 8. WHEREAS, in Amendment No. 2 to the Lease, on June 1, 2013, the Through the Fence Access Fee was determined to be an annual amount of $288,171.35, and continuing until the sixth (6th) anniversary of the Commencement Date of the Lease, which was determined to be June 1, 2016; and AGENDA ITEM #6. d) LAG-10-001 Amendment No. 10 Page 2 9. WHEREAS, under section 4.A of Attachment A to the original lease LAG-10-001, the automatic adjustment to the Through the Fence Access Fee is to be calculated using the Consumer Price Index-Urban (CPI-U); and 10. WHEREAS, the CPI-U for April 2013 was 240.823 and the CPI-U for April 2016 is 253.815, and the difference between the CPI-U of April 2016, as compared to April 2013, is 5.4% (253.815 / 240.823 = 1.054 or 5.4%); and 11. WHEREAS, as of June 1, 2016, the Through the Fence Access fee was due for adjustment, and using the CPI-U such adjustment brought the annual amount to $303,732.60 ($288,171.35 X 1.054), and continuing until the next Adjustment Date, which is determined to be June 1, 2019; and 12. WHEREAS, Tenant is also responsible to Landlord for a Through the Fence Access Fee back- payment for the period between June 1, 2016 and the date of entry of this Amendment No. 10; and Building Rental Rate Adjustment 13. WHEREAS, as of June 1, 2016, the building rental amount was due for adjustment. In anticipation of that date and pursuant to the Lease section 4.b.2, in a letter dated March 10, 2016, Landlord notified Tenant by certified letter that the building rental rates would be readjusted using a means other than the Consumer Price Index-Urban; and 14. WHEREAS, in August 2016, Landlord contracted with McKee Appraisal to conduct an independent market appraisal of Airport buildings to determine fair market rent, and McKee Appraisal prepared an appraisal report dated September 12, 2016 (the “September 2016 appraisal”); and 15. WHEREAS, Tenant and Landlord disagreed as to September 2016 appraisal’s estimate of fair market rent for Tenant’s buildings 5-45 and 5-50, which ultimately led to additional appraisal work. Specifically, Tenant engaged Valbridge Property Advisors which prepared a September 25, 2017 appraisal report of the fair market rent of Tenant’s buildings 5-45 and 5-50 (the “September 2017 appraisal”), and Landlord engaged McKee Appraisal to review the September 2017 appraisal. In response, McKee Appraisal prepared a December 13, 2017 supplement (the “December 2017 appraisal”) to the September 2016 appraisal; and 16. WHEREAS, after review of the 2016 and 2017 appraisal work, Landlord and Tenant agree that the fair market rent for Tenant’s buildings 5-08 and 5-09 (building 5-08: $8.40 per square foot per year; building 5-09: $4.80 per square foot per year) was determined in the September 2016 appraisal, the fair market rent for Tenant’s building 5-45 ($7.80 per square foot per year) was determined by the income approach method in the September 2016 appraisal, and the fair market rent for Tenant’s building 5-50 ($6.50 per square foot per year) was determined in the December 2017 appraisal; Landlord and Tenant further agree that the adjusted building rent should be set using these values, plus Leasehold AGENDA ITEM #6. d) LAG-10-001 Amendment No. 10 Page 3 Excise Tax, and continuing until the next Adjustment Date, which is determined to be June 1, 2019; and 17. WHEREAS, Tenant is also responsible to Landlord for a building rental rate backpayment for the period between June 1, 2016 and the date of entry of this Amendment No. 10; and Utilities Beyond the Boundary of the Premises 18. WHEREAS, prior to the Lease Commencement Date of June 1, 2010, Tenant had installed subsurface utilities for power, communications, fire systems, and compressed air pipe improvements on Airport property beyond the boundary of the premises under LAG 877- 65 dated June 1, 1965, as amended (“Prior Lease”); and 19. WHEREAS, under the Prior Lease, off-premises utilities were not installed within areas established by recorded easements or assessed lease rental rates; and 20. WHEREAS, as a provision of the lease negotiations, the Parties agreed to continue their practice of not assessing lease rental rates for the off-premises utilities that were installed prior to June 1, 2010 ; and 21. WHEREAS, Tenant is authorized to maintain and repair these pre-existing off-premises utilities upon providing Landlord adequate notice and obtaining required construction permits, ; and 22. WHEREAS, Landlord and Tenant agree that off-premises utilities installed from the date of this Amendment forward shall be installed within easements and shall be subject to assessment of lease rental rates; and 23. WHEREAS, Landlord will allow installation of new off-premises utilities with the required easement to be provided within three months of completion of the installation of said utilities, and easement lease rates will be assessed retroactively to the date the installation is complete; and 24. WHEREAS, Landlord and Tenant agree that easement documents should be prepared, executed, and recorded that will, after legal descriptions for easement areas have been obtained pursuant to Section 9 of this Amendment No. 10, cover all of Tenant’s off- premises utility improvements (whether installed before or after June 10, 2010) (collectively, the “Off-Premises Utilities”); and 25. WHEREAS, easements created for pre-existing off-premises utilities shall not be subject to the assessment of an easement lease; and 26. WHEREAS, if a new utility is installed within an existing utility easement, there will not be an additional easement lease assessment; and AGENDA ITEM #6. d) LAG-10-001 Amendment No. 10 Page 4 27. WHEREAS, utility easements will measure a minimum of ten feet wide ; and Order of Amendments to the Master Lease 28. WHEREAS a draft rent adjustment amendment was previously circulated between the Parties as Amendment No. 8 to the Master Lease, but that document was not executed, and the Parties subsequently executed an Amendment No. 9 to the Master Lease. To avoid confusion, the Parties are proceeding with this amendment as Amendment No. “10,” and it is anticipated that there will be no amendment numbered “8” to the Master Lease; NOW, THEREFORE, IN CONSIDERATION OF THE TERMS AND CONDITIONS HEREIN CONTAINED AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, LANDLORD AND TENANT AGREE AS SET FORTH BELOW: WITNESSETH: Landlord and Tenant hereby amend the Lease (the Master Lease agreement, LAG-10-001, as subsequently amended), in the following respects. 1. Definitions. The “Master Lease” means lease LAG-10-001 but excludes the amendments to LAG- 10-001. “Lease” means the Master Lease and Amendment Nos. 1, 2, 3, 4, 5, 6, 7, 9, and 10 to the Master Lease. There is no Amendment No. 8 to the Master Lease. All terms used in this Amendment No. 10 that are defined in this Lease are used here as they are there defined. 2. Landlord and Tenant agree to a land rental rate of $0.7252 per square foot per year for the land areas subject to the Lease and the land rental rate for utility easement areas shall be 33% of the land rental rate; provided that the land rental rate shall not apply to land occupied by Off-Premises Utilities that existed outside of the leased Premises prior to the Lease Commencement Date of June 1, 2010. 3. Landlord and Tenant agree to the following building rental rates per square foot per year for the building areas subject to the Lease: 5-08: $8.40 5-09: $4.80 5-45: $7.80 5-50: $6.50 756/760: $9.12 4. Effective June 1, 2016, Section 4.a. Minimum Monthly Rent, of LAG 10-001 is amended to read as follows: 4. RENT AND FEES: 4.a. Minimum Monthly Rent: Tenant shall pay to Landlord a Minimum Monthly Rent in the sum of ONE HUNDRED TWENTY THOUSAND FORTY-SIX DOLLARS AND EIGHT CENTS ($120,046.08), which amount is one-twelfth of the Total Annual Rent shown in the chart AGENDA ITEM #6. d) LAG-10-001 Amendment No. 10 Page 5 below, PLUS Leasehold Excise Tax as described in Section 5 of the Lease, without deduction, offset, prior notice or demand, payable promptly in advance on the first day of each and every month during the Term. All such payments shall be made to the City of Renton, Airport Administration Office, Renton Municipal Airport, 616 West Perimeter Road, Unit A, Renton, Washington 98057. The Minimum Monthly Rent is computed as follows: Exhibit Parcel / Building Description Land SF Building SF Annual Rate per SF Annual Rent A Land Position A-1 and 5-08/5-09 124,489 - $0.7252 $90,279.42 A Building 5-08 - 27,297 $8.40 $229,294.80 A Building 5-09 - 11,200 $4.80 $53,760.00 B Land Positions A-2, A-3, and 5-50 132,896 - $0.7252 $96,376.18 B Building 5-50 - 38,394 $6.50 $249,561.00 C Land A-4 thru A-9 & Compass Rose 467,809 - $0.7252 $339,255.09 D North Bridge Access 16,778 - $0.7252 $12,167.41 E Apron B 174,073 - $0.7252 $126,237.74 F Substation B-1 (lease terminated)$0.00 $0.00 G Land 5-45 57,130 - $0.7252 $41,430.68 G Building 5-45 - 3,256 $7.80 $25,396.80 I Utility Installations Aprons A to B 22,148 $0.24 $5,315.52 J Land 760 56,923 - $0.7252 $41,280.56 J Building 756 - 325 $9.12 $2,965.68 J Building 760 - 1,174 $9.12 $10,710.00 K Land 770 86,848 - $0.7252 $62,982.17 L Land 820 73,849 - $0.7252 $53,555.29 Total Annual Rent (plus Leasehold Excise Tax) =$1,440,568.33 Note relating to Exhibit B: The Parties acknowledge that in 2009 and 2010, the Tenant made a substantial capital investment in improvements to the 5-50 Building, including numerous alterations to the structure as well as improvements within the building. Tenant’s financial investment as well as these improvements and Tenant’s use of the building as a paint hangar have made this a unique building. Pursuant to provisions in the prior lease, Renton will assume ownership of this building on June 1, 2010. So, while Landlord will charge Tenant rent for its use, the Parties have agreed to treat this building differently from other buildings in certain provisions of this Lease. The rental rate for the 5-50 Building shall adjust according to the terms set out in this Paragraph 4, EXCEPT that in those years when the Minimum Monthly Rent is adjusted to the “then current market rent”, pursuant to Paragraph 4.b.2, below, the parties agree that the appraisal (or other form of analysis to determine fair market rental) relating to the 5-50 Building shall evaluate the building as an aircraft hangar, and as if the improvements made by Tenant in 2009-2010, and described in Paragraph 4.d, below, had not been made. However, the Parties agree that the condition of the building, as it is maintained by Boeing, shall be considered in the appraisal (or other form of analysis) to determine the fair market rental. 5. The difference between the Total Annual Rent amount of $1,440,568.33 shown in Section 4 of this Amendment No. 10 and the Total Annual Rent amount of $1,290,947.73 shown in Section 2 of Amendment No. 7 to the Lease is One Hundred Forty-Nine Thousand Six Hundred Twenty Dollars AGENDA ITEM #6. d) LAG-10-001 Amendment No. 10 Page 6 and Sixty Cents ($149,620.60) OR $12,468.38 per month ($149,620.60/12) per month (the “Back- payment Monthly Rate for Rent Adjustment”), PLUS Leasehold Excise Tax. Within thirty (30) days of the date of entry of this Amendment No. 10, Tenant shall pay to Landlord a lump sum of the Back-payment Monthly Rate for Rent Adjustment for the period beginning June 1, 2016 and ending with the first day of the month AFTER this Amendment No. 10 is entered into, PLUS Leasehold Excise Tax. For example, if this Amendment No. 10 is entered into on April 2, 2018, the amount due from Tenant to Landlord shall be $286,772.74 (Calculation: Back-payment Monthly Rate for Rent Adjustment of $12,468.38 times 23 months (June 1, 2016 to May 1, 2018)), PLUS Leasehold Excise Tax. 6. Effective June 1, 2016, Section 4 of Attachment A to LAG-10-001 (Through The Fence Access Agreement) is amended to read as follows: 4. Payment of Access Fee: Boeing shall pay to City an annual Through the Fence Access Fee in the annual amount of Three Hundred Three Thousand Seven Hundred Thirty-Two Dollars and Sixty Cents ($303,732.60), payable in equal monthly installments on the first day of each month during the term of the Lease (including extensions thereof), subject to increases set out below. 7. The difference between the Through the Fence Access Fee established in Section 6 of this Amendment No. 10 and the Through the Fence Access Fee established in Section 3 of Amendment No. 2 to the Lease is One Thousand Two Hundred Ninety-Six Dollars and Seventy-Seven Cents ($1,296.77) per month (Calculation: ($303,732.60 - $288,171.35) / 12) (the “Through the Fence Monthly Back-payment”). Within thirty (30) days of the date of entry of this Amendment No. 10, Tenant shall pay to Landlord a lump sum of the Through the Fence Monthly Back-payment for the period beginning June 1, 2016 and ending with the first day of the month AFTER this Amendment No. 10 is entered into. For example, if this Amendment No. 10 is entered into on April 2, 2018, the amount due from Tenant to Landlord shall be $29,825.71 (Calculation: Through the Fence Monthly Back-payment of $1,296.77 times 23 months (June 1, 2016 to May 1, 2018)). 8. Off-Premises Utilities shall be treated differently depending on when and where they were installed. For this purpose, Off-Premises Utilities are divided into three categories as follows: (A) The first category comprises Off-Premises Utilities installed prior to June 1, 2010. These are referred to as “Type A Installations”. Landlord hereby grants to Tenant an easement for all Type A Installations. The easement area for each such easement is the area actually occupied by such installation and a five-foot wide corridor on either side of such installations. Such easement areas are referred to as “Type A Easement Areas.” (B) The second category comprises Off-Premises Utilities installed on or after June 1, 2010 within Type A Easement Areas. Such installations are referred to as Type B Installations. Since Type B Easements are co-terminus with Type A Easements, Landlord hereby grants to Tenant an easement for all Type B Installations, including those installed on, prior to, or after the effective date of this Amendment No. 10. Whenever a utility installed within a Type A Easement Area requires enlargement or expansion of the easement beyond the boundary of the Type A Easement, the added easement area will be treated as a Type C Easement Area. AGENDA ITEM #6. d) LAG-10-001 Amendment No. 10 Page 7 (C) The third category comprises Off-Premises Utilities installed on or after June 1, 2010 outside Type A Easement Areas. Such installations are referred to as Type C Installations. With respect to Type C Installations that were installed prior to the date of this Amendment No. 10, Landlord hereby grants Tenant an easement. With respect to any Type C Installation that Tenant wishes to install after the effective date of this Amendment No. 10, Tenant shall request the written consent of Landlord to install such Type C Installation. Landlord will not unreasonably withhold, condition, or delay its consent. The easement area for such Type C Installation easement (whether the Off-Premises Utilities were installed prior to or after the effective date of this Amendment No. 10) is the area actually occupied by such installation and a five-foot wide corridor on either side of such installations. Such easement areas are referred to as “Type C Easement Areas”. The easements granted to Tenant with respect to each Type A Installation, each Type B Installation, and each Type C Installation shall include the right to keep, maintain, install, renew, repair, and replace Off-Premises Utilities installed on the Airport property. Except to the extent in conflict with the terms of any utility easement, Tenant may from time to time access non-leased areas on the Airport property to maintain, upkeep, repair and replace its Off-Premises Utilities, subject to the terms of Section 10a of the Lease and accomplished in a manner so as to not interfere with or increase the maintenance activities of Landlord upon the public areas of the Airport. Tenant acknowledges that it will be Tenant’s responsibility to obtain any permits required to perform work in connection with any or all of the Off-Premises Utilities. Landlord acknowledges that Tenant will not be required to obtain any licenses or access agreements in order to access any Off-Premises Utilities. Tenant shall not be required to pay rent or any other charge for any easement areas containing Type A Installations or Type B Installations. Tenant shall pay rent for all Type C Installations at a rate equal to one-third (1/3) the land rental rate for the Type C Easement Areas, and shall comply with the provisions of Recital 23 herein. 9. Landlord and Tenant acknowledge that as of the effective date of this Amendment No. 10, Tenant does not have sufficient information on the location of the Off-Premises Utilities to permit Tenant to draft easement agreements to cover Type A Installations, Type B Installations, or Type C Installations. When Tenant becomes aware of the location of any Off-Premises Utilities, Tenant will cause a survey of such located Off-Premises Utilities to be prepared and will present such surveys to Landlord as Tenant gains information on the location of separately identifiable Off- Premises Utilities. Landlord and Tenant acknowledge that Tenant is paying rent for the Type C Installation identified in Exhibit I (as specified in the table in Section 4a of this Amendment No. 10). With respect to any other Type C Installation, Tenant shall make a retroactive lump sum payment back to the date of installation, consistent with the provisions of Recital 23 herein. The parties will negotiate two easement agreements, one that addresses the Type A Easement Area (“Type A Easement”), and one that addresses the Type C Easement Area (“Type C Easement”). Such easement agreements shall be amended from time to time as the Off-Premises Utilities are identified and surveyed. The parties will negotiate such easement agreements in good faith and will execute them in recordable form. Tenant will be responsible for recording such easement AGENDA ITEM #6. d) LAG-10-001 Amendment No. 10 Page 8 agreements in the records of King County. The Lease shall be amended from time to time to reflect changes in Minimum Monthly Rent resulting in changes to the Type C Easement. Lease amendments shall not be required for changes to the Type A Easement. 10. Miscellaneous provisions applicable to this Amendment No. 10. 10.a This Amendment No. 10 will be effective on the date of entry first made above. 10.b This Amendment No. 10 may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute but one and the same instrument. 10.c This Amendment No. 10 shall be governed by the laws of the State of Washington, without reference to its choice of law rules. 10.d As amended by this Amendment No. 10, the Lease continues in full force and effect in accordance with its terms. On and after the date of entry of this Amendment No. 10, the Lease shall be deemed amended by this Amendment No. 10 and all references in the Lease to “this Agreement,” “this Lease,” “herein,” “hereof,” and the like shall be deemed to be references to the Lease as amended by this Amendment No. 10. This Amendment No. 10 is executed by Landlord and Tenant as of the date first written above. THE BOEING COMPANY CITY OF RENTON a Delaware Corporation a Municipal Corporation ___________________________ ___________________________ Printed Name: ______________ Denis Law Title: ______________ Mayor Date signed: ______________ Date signed: ______________ Attest: _______________________ Jason A. Seth City Clerk Date attested: ______________ AGENDA ITEM #6. d) LAG-10-001 Amendment No. 10 Page 9 Approved as to legal form: ___________________ Shane Moloney City Attorney AGENDA ITEM #6. d)