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HomeMy WebLinkAboutExh.04_Amendment_No.3_to_Standstill_Amendment.pdf AMENDMENT NO. 3 TO STANDSTILL AGREEMENT THIS AMENDMENT NO. 3 TO STANDSTILL AGREEMENT (“Third Amendment”), dated for reference purposes only as October 8, 2020, is by and between the City of Renton (the “City”), a Washington municipal corporation, and Solera, LLC, DevCo, LLC, and Solera Manager, LLC, each a Washington limited liability company (collectively, “DevCo” or the “Applicant”). The City and DevCo are each a “Party,” and are collectively the “Parties” to this Third Amendment. Once fully executed by the Parties, this Third Amendment is effective as of the last date signed by the Parties. Whereas, the City and DevCo entered into a Standstill Agreement dated June 24, 2020 (referred to herein as the “Agreement”); and Whereas, the Standstill Period set forth in the Agreement’s Section 1.1 was originally scheduled to expire on August 31, 2020; and Whereas, via Amendment No. 1 to the Agreement (“First Amendment”), the Parties extended the Standstill Period from August 31, 2020 to October 1, 2020, for the purpose of attempting to negotiate, in good faith, a longer extension of the Standstill Period and substantive modifications to the Agreement, to the mutual benefit of the Parties; and Whereas, the Parties subsequently extended the Standstill Period to October 8, 2020 in Amendment No. 2 to the Agreement (“Second Amendment”), and Whereas, the Parties have used the Standstill Period to negotiate in good faith, and the Parties have made significant progress to develop a joint vision for the Solera site. DevCo has prepared conceptual designs and floorplans for the City’s review, resulting in a concept design package (“Concept Design”) and renderings (“Renderings”) received by the City on September 24, 2020, and DevCo received detailed comment from City staff on October 2, 2020 (“October 2 Response”). The Concept Design, Renderings, and October 2 Response constitute Exhibit A and are on file with the City’s Community and Economic Development Department (“CED”); and Whereas, this Third Amendment incorporates the Parties’ negotiations, setting forth substantive modifications to the Agreement that the Parties believe are of benefit to DevCo, the City, and the public. NOW THEREFORE, it is mutually agreed upon that the Agreement is amended as follows: Extension of and Modification to Standstill Period DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 PAGE 2 OF 13 1. Section 1.1 of the Agreement is amended to extend the Standstill Period to end on March 19, 2021, or the date of the Final Decision (defined in Section 5.D.1), whichever occurs first. The extended Standstill Period is intended to provide sufficient time to accomplish the relevant permit processes described in this Third Amendment. 2. Section 1.3 of the Agreement is amended to allow City staff to seek a recommendation from the City Council Planning & Development Committee regarding the Sunset Development Changes during the Standstill Period. The Parties retain the Agreement’s restriction on enacting the Sunset Development Changes during the Standstill Period. 3. Section 1.5 of the Agreement is amended to read as follows: “DevCo shall file no permit or other land use applications with respect to Solera until the Moratorium (as may be extended) is lifted, except as (1) described under this Third Amendment, (2) allowed pursuant to any entitlements predating the Moratorium, or (3) agreed to in writing by the Parties. This provision shall (1) survive the expiration or termination of the Standstill Period and the Agreement and (2) control over any potentially conflicting term elsewhere in the Agreement.” 4. Within 5 business days after mutual execution of this Third Amendment, the Parties shall jointly request an extension of the stay of the Appeal through March 19, 2021. If the Hearing Examiner denies that request in whole or in part for any reason, then this Third Amendment, the Second Amendment, the First Amendment, and the Agreement will automatically terminate with no liability or further obligation arising on the pa rt of any Party. Solera Permitting 5. Land Use Permit Types and Processing. A. Permit Types. Within the Milestones set forth in Section 5.B, DevCo shall apply for and pursue (1) an RMC 4-9-200 “master plan major modification” approval for the entirety of the Solera site; (2) a single RMC 4-9-200 “site plan review” approval for at least Block A and Block B of the Solera site; and (3) a modification to the Solera preliminary plat. Furthermore, if DevCo seeks an exception from the Renton Municipal Code for aspects of the major modification permit or the site plan review permit, DevCo shall concurrently apply for and pursue, “modification(s)” to the Renton Municipal Code as set forth in RMC 4- 9-250. Collectively, the master plan major modification, site plan review, modification to preliminary plat, and potential modification(s) permits are hereinafter the “Solera Site Plan Permits.” At its own risk, on or after the date that the Hearing Examiner issues the decision on the Solera Site Plan Permits, DevCo may submit civil construction permit applications and building permit applications, provided that such applications are consistent with the Hearing Examiner’s decision on the Solera Site Plan Permits and subject to correction for any inconsistencies with the Final Decision (defined below). DevCo may submit the civil DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 PAGE 3 OF 13 construction permit applications and building permit applications prior to the Hearing Examiner’s decision on the Solera Site Plan Permits if the Parties mutually and in writing determine that the project scope is fully defined and that there are no disagreements between the Parties regarding project design elements. B. Milestones. DevCo and the City shall meet the following Milestones for the Solera Site Plan Permits: (1) October 20, 2020: Date by which DevCo shall hold a neighborhood meeting pursuant to RMC 4-8-090.A. (2) November 3, 2020: Date by which DevCo shall submit its first pre-screening application materials to City staff. City staff shall provide written feedback to DevCo on or before November 12, 2020. (3) November 24, 2020: Date by which DevCo shall submit its second and final pre- screening application materials to City staff. City staff shall provide written feedback to DevCo on or before December 4, 2020. (4) December 16, 2020: Date by which DevCo shall submit complete applications to the City for the Solera Site Plan Permits. DevCo shall submit its complete applications to the City via a sharefile platform such as Dropbox (or similar submittal method agreed to by the Parties) to Matt Herrera, Senior Planner. (5) Seven (7) calendar days: After the December 16, 2020 date of application submittal, this is the maximum time interval between (a) CED sending to DevCo a written request for additional information or corrections or both and (b) DevCo sending to CED a complete response. (6) February 2, 2021: Date by which the public hearing shall be held before the City’s Hearing Examiner, if all Milestones are met without the extensions permitted below. The Parties agree to work in good faith to meet each of the Milestones set forth herein. To allow for moderate flexibility while still achieving the Parties’ mutual and primary goal of expediently processing the Solera Site Plan Permits, each Party has a cumulative total grace period of seven (7) calendar days that it can allocate in one-day or multiple- day intervals toward meeting that Party’s Milestones, provided, however, that December 24 and 25 and January 1 shall be exempt from counting against either Party’s grace period days. A Party’s use of one or more of its seven grace period days shall extend the other Party’s subsequent Milestone by the same number of days. C. CED’s Permit Processing. For as long as DevCo meets its deadlines set forth in Section 5.B, as may be extended in accordance with that Section, City staff shall timely, diligently, and in good faith process and move forward the Solera Site Plan Permits toward readiness for public hearing. The Solera Site Plan Permit applications are deemed to vest to the provisions of the Renton Municipal Code in effect on the Solera Approvals vesting date of August 7, 2018, notwithstanding the agreement of the Parties to meet or apply certain standards expressly provided herein that may exceed or vary from the vested development DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 PAGE 4 OF 13 standards. The Parties acknowledge that this Agreement is intended to result in a successful master plan project at Solera for the benefit of the public, including the Applicant. D. Existing Approvals. (1) For the avoidance of doubt, the Parties acknowledge that this Standstill Agreement has no effect on the validity of the existing Solera approvals issued by the City’s Hearing Examiner on December 11, 2018 (original decision) and January 30, 2019 (decision on reconsideration) (collectively, the “Solera Approvals”). In addition, the Solera Site Plan Permit applications have no effect on the Solera Approvals until the City’s final decision on the Solera Site Plan Permits is issued, with (a) no appeals filed during the appeal period; or (b) any appeals filed being resolved in a manner acceptable to DevCo in its sole discretion, provided, however, that DevCo agrees that it will not appeal any aspect of the Solera Site Plan Permits that DevCo agreed to in the Agreement or its amendments, including this Third Amendment (“Final Decision”). Until such Final Decision is achieved, DevCo may withdraw the applications for Solera Site Plan Permits without any resulting effect on the existing Solera Approvals. On the date of the Final Decision, the Solera Site Plan Permits shall replace the Solera Approvals as entitlements for the Solera site, and within three (3) business days thereof DevCo shall withdraw the Appeal. (2) Conditions of approval as set forth in the Solera Approvals shall remain in effect unless the Parties agree or the Hearing Examiner determines to modify them. The Parties acknowledge that certain conditions of the Solera Approvals require actions to be undertaken prior to the submittal of a site plan application (for example, removal of the Renton Housing Authority’s adjacent parcel known as the Piha parcel from the Renton Sunset Redevelopment Master Plan, LUA14- 001475); the Parties agree to address in good faith whether such Solera Approval conditions can be timely met, or should be modified, to facilitate the timely submittal of the Solera Site Plan Permits, subject to later performance. If the Parties are unable to agree as to whether and/or how to modi fy a condition of approval in the Solera Approvals, each Party may present its respective view to the Hearing Examiner as an element of the Solera Site Plan Permits decision. E. Shift of NE 11th Street Alignment (Street Vacation / Dedication). Solera Approvals require a shifted alignment of NE 11th Street. This alignment shift requires DevCo to dedicate right-of-way along NE 11th Street. This alignment shift also requires the City to vacate a portion of NE 11th Street. Although the petition for the street vacation will be processed separately from the Solera Site Plan Permits, City staff will support approval of the street vacation, including a land trade (in lieu of payment) for the NE 11th dedication and the NE 11th street vacation, if an appraisal determines that the dedication area and vacation area land values are comparable. DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 PAGE 5 OF 13 6. Design Concept. This Section 6 describes key components of DevCo’s design concept. The size would increase over what was approved in the Solera Approvals for the two mixed-use buildings (“MU Buildings”), one on Block A and one on Block B, to allow larger residential units in the MU Buildings. MU Building B would incorporate townhome-style apartments along Jefferson, and MU Building A would incorporate them along Jefferson and NE 12th Street. Each MU Building would have a shared podium for commercial uses, residential amenities, parking and mechanical spaces, and other spaces accessory to the uses. Commercial use spaces would front NE Sunset Boulevard and wrap the corner at Sunset and NE 11th Street. Building heights of not to exceed 75-feet for Block A and 85-feet for Block B are within the CUP heights approved by the Solera Approvals. The City reviewed the Design Concept and Renderings in depth and provided comment to DevCo on October 2, 2020; those comments will be addressed in DevCo’s November 3, 2020 Milestone deadline. 7. Design Elements. DevCo agrees to incorporate the following design elements in the Solera Site Plan Permits; provided that, if public comment is received on any of these design elements, such design elements will be further discussed between DevCo and City staff and potentially subject to change based on the public comments received . This Section 7 is not meant to exclusively describe project design; this section captures agreements between the Parties made as a result of regular meetings to investigate the proposed modifications to the Solera Approvals as of the date of this Third Amendment. As additional design topics are identified by City staff or the Applicant, the Parties agree to address the same in good faith during the Standstill Period. A. Parking and Parking Structures. (1) DevCo will provide parallel parking on both sides of Jefferson Lane NE and NE 11th St. (2) DevCo will provide on-street angled parking within the Solera site along the Sunset Boulevard frontage road. In exchange, City staff will support a credit toward required commercial parking for the Solera site at a rate of one cre dit for every one parking space gained over the twenty-six (26) parking spaces that would have resulted from providing on-street parallel parking. (3) Residential and commercial uses shall wrap the parking structures with active uses, with the exception of areas of vehicular and pedestrian access to parking structures and with the exception of necessary utility and mechanical features, which will require screening. For the purposes of this provision, active uses include residential units, lobby, leasing, amenity, and commercial spaces. B. Commercial Design. (1) At least one ground floor commercial space in each of Blocks A and B shall provide grease traps and ventilation shafts for a commercial kitchen hood/exhaust; a central plumbing drain line; and ADA compliant bathrooms shall DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 PAGE 6 OF 13 be provided for all commercial ground floor space which may be provided through use of common facilities. (2) Commercial frontage entries shall be at grade along Sunset Boulevard, which may be achieved by stepping the floor plates to provide entries to the commercial spaces at grade. C. Construction Phasing. DevCo will propose a new phasing plan, as a part of the Solera Site Plan Permits application, to allow construction of both mixed-use buildings (Blocks A and B) to precede the unit lot subdivision townhomes (Blocks C and D). The sequencing of constructing the mixed-use buildings before the unit lot subdivision townhomes is acceptable to the City. Market Rate and Affordable Housing. 8. Income Balanced Development. Within each of mixed-use Blocks A and B, at least fifty percent of the residential units will be Unrestricted Market Rate Units* and no more than fifty percent of units will be affordable for households with income below eighty percent (80%) of median income, and the average rent for all affordable units will not exceed the rate affordable for households with income below sixty percent (60%) of median income. CED accepts the Unit Distribution Chart attached as Exhibit B for market/affordable unit distribution, sizing, and number of bedrooms. Unit sizes and number of bedrooms may be adjusted by no more than 10% during design development for the Solera Site Plan Permits application, subject to City approval. The unit lot subdivision townhomes on Blocks C and D would be market rate unless otherwise approved by the City. * “Unrestricted Market Rate Units” means units for which homeowners (and renters, if rented) do not have income eligibility restrictions and the sale price (or rent, if applicable) is not artificially restricted in any manner. 9. Multi-Family Tax Exemption (MFTE). The Solera site is within the qualified area for application to the City’s current MFTE program, which is governed by RMC 4-1-220. For application of the MFTE program at Solera, where the Applicant expects to seek 12-year MFTE approvals, the Parties agree on the interpretations set forth at Exhibit C. Acknowledging that enrollment in the MFTE Program is a key component of the Applicant’s proposal, the Parties agree to further define the MFTE application and approva l requirements during the Standstill Period . In DevCo’s discretion, but no sooner than on or after the date that City staff issues its staff report to the Hearing Examiner (seven days before the Hearing Examiner public hearing), DevCo may submit its MFTE application, which the City will process and act on within 90 days. 10. Affordable Housing Fee Waiver Application. The Renton Municipal Code allows for waiver of impact fees for affordable housing at RMC 4-1-210, which City staff intend to present to City Council for updating during the Standstill Period. Nothing in this Agreement is intended to DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 PAGE 7 OF 13 limit DevCo’s ability to approach the City Council for consideration of an affordable housing fee waiver proposal for Solera. Miscellaneous 11. Ratification. The Parties agree that this Third Amendment responds to a time-sensitive situation due to the Agreement’s second extended expiration of the Standstill Period on October 8, 2020, causing the Parties to need to execute this Third Amendment prior to review by the City Council. Accordingly, this Third Amendment is subject to City Council consideration, and City staff will present the Third Amendment to the City Council at its first availability after the City’s date of execution. If the City Council considers the Third Amendment and does not ratify it, then the Third Amendment and the Agreement and its Second Amendment and First Amendment will automatically terminate with no liability or further obligation arising on the part of any Party. 12. Entire Agreement. This Third Amendment, together with the Agreement and Second Amendment and First Amendment, constitutes the entire agreement of the Parties with respect to its subject matter. All terms of the Agreement, as modified by the First Amendment, not explicitly modified herein shall remain in full force and effect. 13. Counterparts. This Third Amendment may be executed in counterparts, and facsimile or electronic signatures (including signatures scanned and transmitted by email) shall be considered valid and binding as if original signatures. IN WITNESS WHEREOF, the Parties have voluntarily entered into this Third Amendment as of the date last signed by the Parties below. DEVCO, LLC By:____________________________ David Ratliff Vice President/Managing Member _______________________________ Date SOLERA, LLC By:____________________________ David Ratliff Managing Member _______________________________ Date 10/12/2020 10/12/2020 DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 PAGE 8 OF 13 SOLERA MANAGER, LLC By:____________________________ David Ratliff Managing Member _______________________________ Date CITY By:____________________________ C.E. “Chip” Vincent Community & Economic Development Administrator _______________________________ Date Approved as to Legal Form: By:__________________________ Shane Moloney, City Attorney Contract Template Updated 01-15-2020 10/12/2020 DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 10/13/2020 | 8:38 AM PDT PAGE 9 OF 13 EXHIBIT A DevCo’s Concept Design and Renderings The remainder of this page intentionally left blank DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 PAGE 10 OF 13 EXHIBIT B DevCo’s August 9, 2020 Market Rate Unit / Affordable Unit Matrix for Blocks A and B [See next page] DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 Exhibit C Multi-Family Tax Exemption (MFTE) Considering that the Project will potentially develop up to fifty percent (50%) of the mixed-use multi-family units as affordable housing units, DevCo intends to apply to the City for MFTE approval for some or all of the Project. The following criteria and standards will apply to the Project for MFTE application purposes. 1. For purposes of the application of the multi-building distribution requirement of RMC 4-1- 220.C.1.c.ii(e): 1.1 if an MFTE application includes only one of the Mixed-Use Blocks (Block A or Block B), then there is only one building, and RMC 4-1-220.C.1.c.ii(e) does not apply. 1.2 if an MFTE application includes both Mixed-Use Blocks (Block A and Block B), then there are two buildings, and RMC 4-1-220.C.1.c.ii(e) shall be satisfied if Block A’s mixed-use building and Block B’s mixed-use building each includes one or more affordable housing units, provided that between the two mixed-use buildings (Block A and Block B) the 20% affordable housing unit requirement of RMC 4-1-220.C.1.c.ii must be met. 2. If one or both of the unit lot subdivision townhome blocks (Block C or Block D or both) are included in the MFTE application for one or both of Blocks A and B, then the provision of RMC 4-1-220.D.2.b(iv), excluding market rate townhome projects from the MFTE program, does not apply; provided, however, that to the extent that the unit lot subdivision townhome blocks (Blocks C and D) are included in an application, they will be considered part of the project that is the subject of the MFTE application and subject to the same completion deadline of RMC 4-1- 220.D.5 for all the blocks included in the MFTE application. If one or both of the unit lot subdivision blocks are included in the MFTE application for one or both of Blocks A and B, the following shall apply regardless of the number of phases and buildings, the number of ownership entities, and/or the structure of the financing: (1) There shall be a single initial MFTE application, a single staff review and application approval process, a single MFTE contract with City Council approval, a single conditional certificate of tax exemption, a single final MFTE application, a single final certificate of tax exemption, and a single tax exemption period; (2) The single MFTE contract shall be signed by all of the ownership entities and recorded against all of the Solera parcels. All of the Solera ownership parties shall be individually and collectively responsible for ensuring compliance with the terms and conditions of the MFTE contract, including but not limited to the affordable housing requirements that qualify the project for a 12-year MFTE; and (3) There shall be a single annual report and certification (addressing all phases and buildings). The report shall be prepared by a qualified professional and paid for by the applicant. DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63 PAGE 2 OF 13 3. For the avoidance of doubt, even if the Project comes under multiple ownership or is constructed in more than one phase, or both, all of the requirements of RMC 4-1-220 must still be met. 4. The City’s MFTE program currently sunsets on December 31, 2021, unless extended by City Council action, which extension could include modifications. DocuSign Envelope ID: 5EF3ED0A-BA39-4F24-92C7-AAC31E712F63