HomeMy WebLinkAboutAdden 1 CAG-15-220, Adden #1-18
FIRST ADDENDUM TO FACADE IMPROVEMENT
AGREEMENT (CAG-15-220)
THIS ADDENDUM, dated July 30, 2018, is by and between the City of Renton (the "City"), a
Washington municipal corporation, and Cortona LLC, a Washington limited liability company
("Developer"). The City and Developer are referred to collectively in this Addendum as the
"Parties." Once fully executed by the Parties,this Addendum is effective as of the last date signed
by both parties.
Whereas, the City provided funding to Developer through the City's Facade Improvement Loan
Program (the "Program") under Façade Improvement Agreement, CAG-15-220, dated November
19, 2015 (referred to herein as the "Agreement"), to provide for the rehabilitation of the façade
of a building located at 724 S. 3rd Street, Renton, Washington (the "Property"); and
Whereas, the Parties wish to addend the Agreement to increase the scope of work, extend the
time for performance, and increase the amount of the conditional loan in order to complete
additional façade rehabilitation and improvements to facilitate the final lease-up of the building.
NOW THEREFORE, It is mutually agreed upon that CAG-15-220 is addended as follows:
IN CONSIDERATION OF DEVELOPER'S COMPLIANCE WITH THIS ADDENDUM, CITY
AGREES TO PROVIDE TO DEVELOPER THE FOLLOWING FUNDING FOR REHABILITATION OF
PROPERTY:
A conditional loan not to exceed Seventy-Two Thousand Dollars ($72,000) to accomplish
the work described in this Addendum (the "Addendum Project"). The Program funding will be
provided in the form of a loan that will be forgiven following a five (5)-year period, beginning
with the recordation of a deed of trust but subject to certain provisions within this Addendum,
and provided that Developer is in compliance with the terms below, the Developer remains the
owner of the Property, the Property and the façade continue to be maintained, and insurance
and property taxes are paid and current. The source of loan funds is the City of Renton
Community Development Block Grant ("CDBG") funds.
DEVELOPER AGREES TO THE FOLLOWING TERMS AND CONDITIONS:
1. Section 1 (Use of Loan Funds) of the Agreement applies to this Addendum.
2. Budget. Developer agrees to adhere to the project budget for this Addendum, which is
attached hereto as Exhibit A-1 and incorporated herein by reference in carrying out the
rehabilitation project described in this Addendum. Any line-item changes in the budget
require submission of a written budget amendment request to the City's Community &
Economic Development department ("CED").
3. Section 3 (Licensed Contractor Procurement) of the Agreement applies to this
Addendum.
4. Project Timetable. Developer shall complete the Addendum Project within the
timeframes established within the schedule listed below, unless the City approves an
alternative schedule at the City's sole discretion:
# Task Deadline Responsible Party(ies)
1 a. Funding approval provided a. August 2018 a. City
by the City's Mayor. b. August 2018 b. City
b. Funding commitment letter
provided to Developer.
4 Execute Agreement. Following approval City, Developer
of Agreement terms
by Developer and
City following
negotiations, and
approval of King
County HCD
following its review
of Agreement draft.
5 Submit loan package No less than seven City
(commitment letter and (7) business days
executed Agreement with Loan before loan closing.
Reimbursement Request Form
format and signed Promissory
Note and Deed of Trust)to King
County HCD.
6 Close loan. No earlier than City, Developer
seven (7) business
days following
submittal of loan
closing package to
King County HCD.
7 a. Complete quoting process Prior to start of a. Developer
and select general construction. b. Developer
contractor.
b. Submit procurement action
records to City.
8 Execute construction contract. Following selection Developer
of general
contractor.
9 Hold pre-construction meeting Following execution Developer (with
to review project schedule and of construction contractor team),
compliance with CDBG Program contract and prior City, King County
Regulations (including federal to issuance of HCD
labor standards). Notice to Proceed.
10 Issue Notice to Proceed. Following pre- City
construction
meeting and prior
to beginning
construction.
12 Begin building improvements Within 30 days Developer
included within project budget following execution
attached as Exhibit A. of Agreement by
City and Developer.
13 Submit a completed Loan No more often than Developer
Reimbursement Request Form every 30 days
with all supporting (unless approved in
documentation for: advance by CED),
costs claimed in the request and within 45 days
(purchase orders, subcontractor of start of
invoices, receipts), evidence of construction.
payment of costs by Developer,
evidence of City inspections as
related to the items included in
the request, federally compliant
certified weekly payrolls of
construction activity, and
supporting documents for the
request period.
14 a. Complete review of Loan a. Within 15 days of a. City, King
Reimbursement Request Form receipt of each County HCD (labor
and supporting documentation, monthly submittal compliance only)
including requesting any by Developer. b. City
missing or corrected b. Within 30 days
information needed to of receipt of each
complete review and approve monthly submittal
payment. from Developer.
b. Remit reimbursement
payment to Developer.
15 a. Complete construction. November 2018 a. Developer
b. Record Deed of Trust. b. City
16 a. Review and accept labor December 2018 a. King County
standards. HCD
b. Release retainage. b. City
17 Complete and submit project December 2018 City
funding report to King County
HCD.
18 Close project. No later than City, King County
December 2018 HCD
19 Submit annual reports on Once per year, Developer
leasing and occupancy status to starting six (6)
CED. months after start
of construction and
every one year
anniversary of the
first report
thereafter for five
(5) years.
5. Section 5 (Accomplishment of Work) of the Agreement applies to this Addendum.
6. Section 6 (Records) of the Agreement applies to this Addendum.
7. Security,Termination and Repayment.
A. Security/Termination. This Addendum's conditional loan shall be evidenced by a
Promissory Note executed by Borrower (Exhibit B-1), and secured by a Personal Guarantee
(Exhibit C-1)and a Deed of Trust(Exhibit D-1)on the Property.The Deed of Trust shall be recorded
in the Recorder's Office for King County, Washington when project construction is complete;the
final reimbursement request is submitted and approved by the City and HCD; and the final loan
amount has been determined based upon the approved loan expenditures. Developer agrees
that City shall have the right to cancel or terminate the loan, and that the full amount of any
monies included in the loan that has been paid out to the Developer by City shall be due and
payable by the Developer to City on demand if:
i. The rehabilitation construction is not carried out with reasonable diligence or is
discontinued at any time for any reason other than a Force Majeure event, not within the control
of either party, as described in Section 32(M) of the Agreement;
ii. Developer makes material changes in the scope of work or enters into another
contract or subcontract for work on the Property without the prior written approval of City;
iii. All Developer's principals die, become legally incapacitated, or otherwise
become legally unable to act before the completion of the construction;
iv. Developer abandons the Property; fails to keep insurance and taxes current;
fails to obtain permits; violates building code; or otherwise fails to maintain the façade;
v. The sale, lease, or other transfer of any kind or nature of the Property before
the completion of the construction without the prior written consent of City, excluding (a)
creation of a purchase-money security interest for household appliances, or (b) a transfer by
devise, descent, or operation of law upon the death of a joint tenant;
vi. Developer defaults on any covenant; agreement; term; or condition of the
Agreement, this Addendum, or any other agreement made between Developer and City; or
vii. Developer transfers ownership of the Property or discontinues the approved
use during the five (5)-year period after construction completion. However, Developer may
request City approval to use the Property for another eligible purpose.
Termination shall be accomplished by mailing by certified mail or by personally
delivering written notice of termination to Developer at Developer's business address, or to any
other address that Developer has made known to City either personally or by mail. Termination
shall be effective on the date the notice is mailed or personally delivered to Developer's address,
regardless of whether the notice is actually received by Developer.
B. Repayment. Any payments are deferred to the end of loan term. No repayment
will be required if all terms are met and a determination has been made regarding loan
forgiveness (see next section).
C. Loan Forgiveness. The loan amount will be forgiven at the end of the term,
provided all Agreement requirements have been completed; the Developer is in good standing;
and the property continues to be maintained in accordance with the Program and Agreement
requirements, including (a) the Developer remains the owner of the building and property, (b)
remains current on City and County property taxes and fees, (c) maintains insurance on the
property in accordance with the terms of this Agreement, and (d) maintains the façade
improvements funded through this Addendum and Developer's funds in good repair and free
from any accumulation of debris,graffiti,or waste materials, and takes all other actions necessary
to maintain and ensure the neat and clean appearance of the surrounding streetscape area.
i. In addition to the terms provided above regarding the loan amount being
forgiven at the end of the term, the Developer must also reach and maintain an acceptable level
of ground level occupancy of the Property. Upon completion of the façade improvements funded
through this Agreement and recordation of the Deed of Trust, Developer has one hundred eighty
(180) days to install tenants within at least eighty percent (80%) of the building's ground level
commercial space square footage, and within one (1) year to achieve one hundred percent
(100%) occupancy of the building's ground level commercial space square footage.
Should the ground level commercial space square footage not reach one hundred
percent (100%) occupancy within this one (1)-year period or not maintain one hundred percent
(100%) occupancy throughout the term of the Promissory Note, the Developer shall notify the
City immediately. The City, at its sole discretion, may then grant Developer a ninety (90)-day
grace period for Developer to show proof of active and aggressive efforts to obtain tenants for
the property to achieve one hundred percent(100%)occupancy, including but not limited to,the
engagement of a professional commercial brokerage firm. Proof of efforts to obtain tenants may
also include invoices for advertising, copies of advertisement runs, and any other proof of active
marketing of the Property. If the Developer has executed a lease(s)to reach one hundred percent
(100%) occupancy of the ground floor commercial space square footage during this grace period,
the City, at its sole discretion, may then grant Developer an additional ninety (90)-day grace
period to ensure that the tenant(s) occupy the space to achieve one hundred percent (100%)
occupancy. "Occupancy" refers to having an active business open to the public, or tenant in the
case of mixed use properties. Use of the building for storage does not qualify as occupancy.
After the initial one (1)-year period and expiration of any grace periods that have
been granted by the City during the term of the Promissory Note, if the ground floor commercial
space square footage is not one hundred percent (100%) occupied, or any of the other terms for
loan forgiveness under this section have not been met, Developer will be notified that the loan
shall become immediately due and payable.
ii. Developer shall submit a request to the CED for each identified tenant for an
acknowledgement that the tenant generally meets the intent of the Program Guidelines
subsection entitled "Project Impact & Public Benefit" under "Application Evaluation".
8. Term.
A. This Addendum shall be effective until Developer has well and truly performed all
the terms and conditions of the Agreement, this Addendum, and any other agreement made
between Developer and the City.
B. All activities specified in Section 4 of this Addendum shall begin and be completed
within the timeframes provided, unless the City approves any changes, at the City's sole
discretion.
C.The date of total forgiveness shall be five (5)years after the recordation of the Deed
of Trust, estimated to be March 31, 2021, provided Developer has paid all other sums, with
interest, advanced to protect the security of the Deed of Trust, and complied with all covenants
and agreements.
9. Architectural Drawings and Specifications/Design Standards.
The facade improvements associated with the Addendum Project shall be based upon the
exterior improvement concepts attached as Exhibit E-1.
A. As the Property is eligible for, and is being nominated for,the National Register, all
work must comply with the Secretary of Interior's Standards for Rehabilitation of Historic
Properties. In addition,the Developer is responsible for ensuring that all work complies with the
applicable provisions of Renton Municipal Code Section 4-1-260 (Landmark Designation and
Preservation).
B. Section 4.B. (regarding contractor qualifications) of the Agreement applies to this
Addendum.
C. Section 4.C. (regarding anti-graffiti coating) of the Agreement applies to this
Addendum.
D. Section 4.D. (regarding sign review) of the Agreement applies to this Addendum.
10. Environmental Review. King County HCD received a letter from HUD dated August 14, 2015,
indicating that the subject project has received satisfactory environmental clearance.
Attached to the letter was an "Authority to Use Grant Funds" form authorizing a release of
funds for the project. (Attached hereto as Exhibit F). Developer hereby agrees to the following
mitigation measures, as required by HUD in Exhibit F:
A. The Developer shall implement all of the following mitigation measures
included in the King County Environmental Review Compendium, Project
Number C14753-Cortona Building, Environmental Review Record, signed July
16, 2015, including:
i. Archaeology: Project ground-disturbing activities shall be monitored
by a professional archaeologist. Monitoring should be conducted
under a monitoring plan that specifies the procedures to follow should
any archaeological resources be discovered.
ii. ii. An Unanticipated Discovery Plan for unknown archaeological and
human remains shall be in effect during construction. In the event that
archaeological or historic materials are discovered during project
activities, work in the immediate vicinity shall stop, the area secured,
and the King County Project Manager, State Department of
Archaeology & Historic Preservation and concerned tribes notified,
and any related issues shall be resolved before construction work
continues.
11. Section 11 (Permitting) of the Agreement applies to this Addendum.
12. Section 12 (Financial Requirements) of the Agreement applies to this Addendum.
13. Section 13 (Fees and Closing Costs) of the Agreement applies to this Addendum.
14. Section 14 (Loan Closing) of the Agreement applies to this Addendum.
15. Section 15 (Disbursements) of the Agreement applies to this Addendum.
16. Section 16 (Default) of the Agreement applies to this Addendum.
17. Section 17 (Ethical Standards) of the Agreement applies to this Addendum.
18. Section 18 (Indemnification of City) of the Agreement applies to this Addendum.
19. Section 19 (Joint Agreement Provisions) of the Agreement applies to this Addendum.
20. Section 20 (Not-for-profit Corporations) of the Agreement applies to this Addendum.
21. Section 21 (Program Income) of the Agreement applies to this Addendum.
22. Section 22 (Hold Harmless And Indemnification) of the Agreement applies to this
Addendum.
23. Section 23 (Insurance Requirements-General) of the Agreement applies to this
Addendum.
24. Section 24 (Nondiscrimination and Equal Employment Opportunity) of the Agreement
applies to this Addendum.
25. Section 25 (Subcontracts and Purchases) of the Agreement applies to this Addendum.
26. Section 26 (Nondiscrimination in Subcontracting Policies)of the Agreement applies to this
Addendum.
27. Section 27 (No Conflict of Interest) of the Agreement applies to this Addendum.
28. Section 28 (Labor Standards) of the Agreement applies to this Addendum.
29. Section 29 (Employment Opportunities on Assisted Construction Projects) of the
Agreement applies to this addendum.
30. Section 30 (Other General Requirements)of the Agreement applies to this Addendum.
31. Section 31 (Property Maintenance)of the Agreement applies to this Addendum.
32. Section 32(Miscellaneous Provisions)of the Agreement applies to this Addendum.
IN WITNESS WHEREOF, the Parties have voluntarily entered into this Addendum as of the
date last signed by the Parties below.
CITYAF RENTON DEVELOPER
By. Q By. P.Ot �/��jy���..�.►zz�..�—
Denis Law Ge rge Brethauer
Mayor Owner
City of Renton Cortona,LLC
1055 South Grady Way 10232 63'd Ave S
Renton,Washington 98057 Seattle,WA 98178
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Date Date
Attest
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Shane Moloney
Renton City Attorney
EXHIBIT A-1 TO FIRST ADDENDUM TO FACADE IMPROVEMENT AGREEMENT
(PROJECT BUDGET)
SEE ATTACHED
Exhibit A-1
Cortona Building 2018
Project Budget
City Cortona
Consultant
Permits 1000
Financing
Sitework
Masonry
Metals/Awning 9400
Thermal and Moisture Protection
Doors and Windows 26000
Finishes
Mechanical 64,400
Electrical 5000
General Requirements
Signage 23000
Subtotal 64400 64400
Contingency on Subtotal (5%) 3220 3220
Contingent Subtotal 67620 67620
Profit and Overhead on Contingent Subtotal (15%) Contingent P&O Subtotal 10143 10143
Contingent P&O Subtotal 77763 77763
Sales Tax on Contingent P&O Subtotal (9.5%)Total Project Budget 7387.485 7387.485
Total Project Budget 85150.485 85150.485
Prevailing Wages
The City is utilizing CDBG monies to fund façade improvements for this project. Federal
prevailing wage rates are the minimum requirement whenver CDBG funds are used for
construction. Projects receiving federal funds are required to follow federal Davis Bacon wage
rate requirements. The Developer has certified that federal wage requirements are reflected in
the project budget above.
EXHIBIT B-1 TO FIRST ADDENDUM TO FACADE IMPROVEMENT AGREEMENT
(PROMISSORY NOTE)
SEE ATTACHED
PROMISSORY NOTE
$ 55,000
Date
Renton,WA
City, State
FOR VALUE RECEIVED, Cortona, LLC, hereinafter "Maker" promises to pay to the City of
Renton, a Washington municipal corporation, hereinafter"Holder"or order, at 1055 South Grady
Way, Renton, Washington 98057, or other such place as may be designated by the Holder from
time to time, the principal sum of Fifty-Five Thousand Dollars ($55,000), with interest on the
unpaid principal at the rate of zero percent (0%) per annum as follows:
1. INSTALLMENT PAYMENTS: During the term of this Note, Maker shall make no
payments of principal or interest provided, however, that if Maker shall be found in default of
any of the terms or conditions of this Note, then the full balance shall become immediately due
and payable. Payment of the principal amount of this Note will be forgiven five years following
the recorded date of the Deed of Trust attached as Exhibit A hereto as long as (a) the Maker
remains the owner of the building and property that is financed in full or in part by this Note and
secured by a Deed of Trust and a Personal Guarantee, (b) remains current on City and County
property taxes and fees, (c) maintains insurance on the property in accordance with the terms of
the Facade Improvement Agreement, and (d) maintains the facade improvement funded through
this loan and Maker's funds in good repair and free from any accumulation of debris, graffiti, or
waste materials, and takes all other actions necessary to maintain and ensure the neat and clean
appearance of the surrounding streetscape area. "Owner" means that the Maker owns the
property in fee simple and does not enter into a lease purchase, land sales contract, or other
similar property agreement.
2. DUE DATE:The entire balance of this Note together with any and all interest accrued
thereon shall be due and payable in full on March 31, 2021, subject to the terms of the First
Addendum to Façade Improvement Agreement (CAG-15-220).
3. ALLOCATION OF PAYMENTS: Each payment shall be credited first to any late charge
due, second to interest, and the remainder to principal.
4. PREPAYMENT: Maker may prepay all or part of the balance owed under this Note at
any time without penalty.
5. USE FOR FACADE IMPROVEMENT ONLY:This Note evidences a loan by the Holder to
the Maker for the exclusive purpose of façade improvements to real estate located at 724 South
NOTE—Page 1
Third Street, Renton, Washington (tax parcel ID # 7231502210) (hereafter referred to as the
"Property"), as described in the First Addendum to Façade Improvement Agreement (CAG-15-
220) between the Maker and the Holder, dated , 20 . Maker agrees to comply
with all provisions of the First Addendum to Façade Improvement Agreement in carrying out the
rehabilitation work. Proceeds of the loan not required for the rehabilitation shall be applied
against the principal balance of the Note.
6. INTEREST IN EVENT OF DEFAULT: Upon default of any of the terms and conditions of
this Note,this Note will accrue interest at a rate of four percent(4%) per annum until the principal
amount of this Note is paid.
7. LOAN FORGIVENESS: In addition to the terms provided under Section 1 above
regarding the principal amount of this Note being forgiven five (5) years following the recorded
date of the Deed of Trust,the Maker must also reach and maintain an acceptable level of ground
level occupancy of the Property. Upon completion of the façade improvements funded through
the Façade Improvement Agreement and recordation of the Deed of Trust, Maker has one
hundred eighty (180) days to install tenants within at least eighty percent (80%) of the building's
ground level commercial space square footage, and within one (1)year to achieve at one hundred
percent (100%) occupancy of the building's ground level commercial space square footage.
Should the ground level commercial space square footage not reach one hundred percent
(100%) occupancy within this one (1)-year period or not maintain one hundred percent (100%)
occupancy throughout the term of the Note, the Maker shall notify the Holder
immediately. Holder, at its sole discretion, may then grant Maker a ninety (90)-day grace period
for Maker to show proof of active and aggressive efforts to obtain tenants for the property to
achieve one hundred percent (100%) occupancy, including but not limited to,the engagement of
a professional commercial brokerage firm. Proof of efforts to obtain tenants may also include
invoices for advertising, copies of advertisement runs, and any other proof of active marketing
of the Property. If the Maker has executed a lease(s) to reach one hundred percent (100%)
occupancy of the ground floor commercial space square footage during this grace period, Holder,
at its sole discretion, may then grant Maker an additional ninety (90)-day grace period to ensure
that the tenant(s) occupy the space to achieve one hundred percent (100%) occupancy.
"Occupancy" refers to having an active business open to the public,or tenant in the case of mixed
use properties. Use of the building for storage does not qualify as occupancy.
After the initial one (1)-year period and expiration of any grace periods that have been
granted by the Holder during the term of the Note, if the ground floor commercial space square
footage is not one hundred percent (100%) occupied, or any of the other terms for loan
forgiveness under Section 1 have not been met, Maker will be notified that the loan shall become
immediately due and payable.
NOTE—Page 2
8. HOLDER'S RIGHTS IN EVENT OF DEFAULT:At the Holder's option, breach or default in
any of the above-described conditions in this Note or in the Deed of Trust shall cause this Note
to become due and payable without notice, and the principal will not be forgiven from and after
the date of the breach or default. Failure to exercise this option shall not constitute a waiver of
the right to exercise this option in the event of any subsequent default.
9. CURRENCY: All principal and interest payments shall be made in lawful money of the
United States.
10. DUE ON SALE: If this Note is secured by a Deed of Trust or any other instrument
securing repayment of this Note,the property described in such security instruments may not be
sold or transferred without the Holder's consent. Upon breach of this provision, Holder may
declare all sums due under this Note immediately due and payable, unless prohibited by
applicable law.
11.ACCELERATION: If Maker fails to abide by the terms of the Facade Improvement
Agreement, or if Maker defaults under any Deed of Trust or any other instruments securing
repayment of this Note, and such default is not cured within thirty (30) days after written notice
of such default, then Holder may, at its option, declare all outstanding sums owed on this Note
to be immediately due and payable, in addition to any other rights or remedies that Holder may
have under the Deed of Trust or other instruments securing repayment of this Note.
12.ATTORNEYS' FEES AND COSTS: Maker shall pay all costs incurred by Holder in
collecting sums due under this Note after a default, including reasonable attorneys'fees,whether
or not suit is brought. If Maker or Holder sues to enforce this Note or obtain a declaration of its
rights hereunder, the prevailing party in any such proceeding shall be entitled to recover its
reasonable attorneys' fees and costs incurred in the proceeding (including those incurred in any
bankruptcy proceeding or appeal) from the non-prevailing party.
13. WAIVER OF PRESENTMENTS: Maker waives presentment for payment, notice of
dishonor, protest and notice of protest.
14. NON-WAIVER: No failure or delay by Holder in exercising Holder's rights under this
Note shall be a waiver of such rights.
15. SEVERABILITY: If any clause or any other portion of this Note shall be determined to
be void or unenforceable for any reason, such determination shall not affect the validity or
enforceability of any other clause or portion of this Note, all of which shall remain in full force
and effect.
NOTE—Page 3
16. INTEGRATION: There are no verbal or other agreements which modify or affect the
terms of this Note. This Note may not be modified or amended except by written agreement
signed by Maker and Holder.
17. CONFLICTING TERMS: In the event of any conflict between the terms of this Note and
the terms of any Deed of Trust or other instruments securing payment of this Note, the terms of
this Note shall prevail.
18. EXECUTION: Each Maker executes this Note as a principal and not as a surety. If there
is more than one Maker, each such Maker shall be jointly and severally liable under this Note.
19. COMMERCIAL PROPERTY: Maker represents and warrants to Holder that the sums
represented by this Note are being used for business, investment or commercial purposes, and
not for personal, family or household purposes.
20.ORAL AGREEMENTS:ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,
TO EXTEND CREDIT, OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
21. DEFINITIONS: The word Maker shall be construed interchangeably with the words
Maker or Payer and the word Holder shall be construed interchangeably with the words Lender
or Payee. In this Note, singular and plural words shall be construed interchangeably as may be
appropriate in the context and circumstances to which such words apply.
22.ADDITIONAL TERMS AND CONDITIONS: (check one)
a. ( ) NONE
OR
b. (✓)As set forth on the First Addendum to Façade Improvement Agreement,
attached hereto as "Exhibit B" which is incorporated by this reference.
(Note: If neither a or b is checked, then option "a" applies)
23.THIS NOTE IS SECURED BY (✓) DEED OF TRUST, ( ) MORTGAGE, ( )
OF EVEN DATE.
NOTE—Page 4
Maker (signatures)
George Brethauer Monica Brethauer
Member, Cortona LLC Member, Cortona LLC
Maker's address for all notices given by Holder under this Note:
10232 63rd Avenue South
Seattle, WA 98178
DO NOT DESTROY THIS NOTE
WHEN PAID this original Note together with the Deed of Trust securing the same, must be
surrendered to the Trustee for cancellation and retention before any reconveyance can be
processed.
NOTE—Page 5
EXHIBIT C-1 TO FIRST ADDENDUM TO FACADE IMPROVEMENT AGREEMENT
(PERSONAL GUARANTEE)
SEE ATTACHED
PERSONAL GUARANTEE
THIS GUARANTEE dated this day of , 20 ,
From: George Brethauer and Monica Brethauer(The Guarantor)
To: City of Renton of 1055 South Grady Way, Renton, WA 98057 (The Lender)
Re: Cortona LLC of 10232 63rd Ave South, Seattle, WA 98178 (The Debtor)
IN CONSIDERATION OF the Lender extending a loan of fifty-five thousand dollars ($55,000)to the
Debtor plus other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Guarantor personally guarantees the prompt, full and complete performance of
any and all present and future duties, obligations and indebtedness (the "Debt") due to the Lender
by the Debtor, up to a limit of $55,000, under the terms of the Promissory Note dated
signed by Debtor (the "Agreement") and under the following terms
and conditions:
1. The Guarantor guarantees that Debtor will promptly pay the full amount of principal and
interest of the Debt as and when the same will, in any manner, be or become due, either
according to the terms and conditions provided by the Agreement or upon acceleration of
the payment under the Agreement by reason of a default;
2. The Guarantor agrees not to pledge, hypothecate, mortgage, sell or otherwise transfer all or
substantially all of Guarantor's assets without the prior written consent of the Lender;
3. To the extent permitted by law, the Guarantor waives all defenses, counterclaims or offsets
that are legally available to the Guarantor with respect to the payment of the Debt of Debtor;
and
4. If Guarantor is married, Guarantor hereby expressly agrees that Guarantor is acting on
behalf of Guarantor's marital community, that this Guarantee benefits or is expected to
benefit the community, and that recourse may be had against both Guarantor's separate
property and community property.
This Personal Guarantee shall be construed exclusively in accordance with, and governed by, the
laws of the State of Washington.Any dispute arising hereunder may only be brought within the King
County Superior Court, State of Washington.This Personal Guarantee embodies the entire promise
of Guarantor to personally guarantee Debtor's Debt and supersedes all prior agreements and
understandings relating to the subject matter here, whether oral or in writing. This Personal
Guarantee may not be assigned or transferred without a written document, signed by the
Guarantor, Debtor, and Lender, permitting such assignment or transfer.
Dated this day of , 20 .
George Brethauer—Guarantor Monica Brethauer—Guarantor
EXHIBIT D-1 TO FIRST ADDENDUM TO FACADE IMPROVEMENT AGREEMENT
(DEED OF TRUST)
SEE ATTACHED
When recorded return to:
City Clerk
City of Renton
1055 South Grady Way
Renton, WA 98057-3232
DEED OF TRUST Assessor's Property Parcel/Tax Account
Number: 7231502210
Reference Number(s) of Documents assigned or released: N/A
Grantor(s): Grantee(s):
1. Cortona LLC, a Washington Limited 1. City of Renton, a Washington Municipal
Liability Company Corporation
LEGAL DESCRIPTION: (Abbreviated or full legal must go here. Additional legal on Exhibit A)
Ptn. Lots 11 & 12, BIk 25 Town of Renton Vol 1 Pg 135
DEED OF TRUST
THIS DEED OF TRUST, made this day of ,
between Cortona LLC, a Washington corporation/limited liability company, having its office at
10232 63rd Avenue South,Seattle, WA 98178 ("Grantor"), First American Title Company, having
its office at 818 Stewart Street, Suite 800, Seattle, WA 98101 ("Trustee"), and the City of
Renton, a Washington municipal corporation, having its office at 1055 South Grady Way,
Renton, Washington 98057 ("Beneficiary").
WITNESSETH: Grantor hereby bargains, sells, and conveys to Trustee in trust, with power of
sale, the following described real property in King County, Washington:
See Exhibit A, attached hereto and incorporated herein by this reference.
King County Parcel Number(s): 7231502210, which real property is not used principally for
agricultural or farming purposes, together with all the tenements, hereditaments, and
DEED OF TRUST-Page 1
appurtenances now or hereafter thereunto belonging or in any wise appertaining, and the
rents, issues, and profits thereof.
This Deed of Trust is for the purpose of securing performance of each agreement of Grantor
contained in this Deed of Trust, and payment of the sum of Fifty-Five Thousand Dollars
($55,000) with interest, in accordance with the terms of a Promissory Note of even date
herewith, payable to Beneficiary or order, and made by Grantor, and all renewals,
modifications, and extensions thereof, and also such further sums as may be advanced or
loaned by Beneficiary to Grantor, together with interest thereon at such rate as shall be
agreed upon, and the performance of the covenants and agreements of the Grantor, which
follow. The Promissory Note is described as follows:
One Promissory Note, describing a Deferred Payment Loan in the principal amount of Fifty-
Five Thousand Dollars ($55,000). Upon default of any of the terms and conditions of the Note,
interest will accrue at the rate of four percent (4%) per annum and the principal balance will
become due and payable.
DUE DATE: The date of total forgiveness shall be five years after the recordation of this Deed
of Trust, estimated to be March 31, 2021, provided Grantor has paid all other sums, with
interest, advanced to protect the security of this Deed of Trust, and complied with all
covenants and agreements.
A. To protect the security of this Deed of Trust, Grantor covenants and agrees:
1. To keep the property in good condition and repair; to permit no accumulation of
debris, graffiti, or waste thereof;to take all actions necessary to maintain and ensure the neat
and clean appearance of the surrounding streetscape area; to complete any building,
structure, or improvement being built or about to be built thereon; to restore promptly any
building, structure, or improvement thereon which may be damaged or destroyed; and to
comply with all laws,ordinances, regulations, covenants, conditions, and restrictions affecting
the property.
2. To pay before delinquent all lawful taxes and assessments upon the property;to keep
the property free and clear of all other charges, liens, or encumbrances impairing the security
of this Deed of Trust.
3. To keep all buildings now or hereafter erected on the property described herein
continuously insured against loss by fire or other hazards in an amount not less than the total
debt secured by this Deed of Trust. All policies shall be held by the Beneficiary, and be in such
companies as the Beneficiary may approve and have loss payable first to the Beneficiary, as
its interest may appear, and then to the Grantor. The amount collected under any insurance
policy may be applied upon any indebtedness hereby secured in such order as the Beneficiary
DEED OF TRUST-Page 2
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shall determine. Such application by the Beneficiary shall not cause discontinuance of any
proceedings to foreclose this Deed of Trust. In the event of foreclosure, all rights of the
Grantor in insurance policies then in force shall pass to the purchaser at the foreclosure sale.
4. To defend any action or proceeding purporting to affect the security hereof or the
rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of
title search and attorney's fees in a reasonable amount, in any such action or proceeding, and
in any suit brought by Beneficiary to foreclose this Deed of Trust.
5. To pay all costs, fees, and expenses in connection with this Deed of Trust, including the
expenses of the Trustee incurred in enforcing the obligation secured hereby and Trustee's and
attorney's fees actually incurred, as provided by statute.
6. Should Grantor fail to pay when due any taxes, assessments, insurance premiums,
liens, encumbrances, or other charges against the property hereinabove described,
Beneficiary may pay the same, and the amount so paid, with interest at the rate set forth in
the note secured hereby,shall be added to and become a part of the debt secured in this Deed
of Trust.
7. This Deed of Trust and Promissory Note were executed and delivered to secure monies
advanced to the Grantor by the Beneficiary as or on account of a loan evidenced by the
Promissory Note, for the purpose of rehabilitating the property.
8. DUE ON SALE: The property described in this security instrument may not be sold or
transferred without the Beneficiary's consent. Upon breach of this provision, Beneficiary may
declare all sums due under the note and Deed of Trust immediately due and payable, unless
prohibited by applicable law.
9. NO FURTHER ENCUMBRANCES: As an express condition of Beneficiary making the
loan secured by this Deed of Trust, Grantor shall not further encumber, pledge, mortgage,
hypothecate, place any lien, charge or claim upon, or otherwise give as security the property
or any interest therein nor cause or allow by operation of law the encumbrance of the Trust
Estate or any interest therein without the written consent of a Beneficiary even though such
encumbrance may be junior to the encumbrance created by this Deed of Trust. Encumbrance
of the property contrary to the provisions of this provision shall constitute a default and
Beneficiary may, at Beneficiary's option, declare the entire balance of principal and interest
immediately due and payable,whether the same be created by Grantor or an unaffiliated third
party asserting a judgment lien, mechanic's or materialmen's lien or any other type of
encumbrance or title defect.
DEED OF TRUST-Page 3
B. IT IS MUTUALLY AGREED THAT:
1. In the event any portion of the property is taken or damaged in an eminent domain
proceeding, the entire amount of the award or such portion as may be necessary to fully
satisfy the obligation secured by this Deed of Trust shall be paid to Beneficiary to be applied
to said obligation.
2. By accepting payment of any sum secured by this Deed of Trust after its due date,
Beneficiary does not waive its right to require prompt payment when due of all other sums so
secured or to declare default for failure to so pay.
3. The Trustee shall reconvey, at the Grantor's sole expense, all or any part of the
property covered by this Deed of Trust to the person entitled thereto, on written request of
the Grantor and the Beneficiary, or upon satisfaction of the obligation secured and written
request for reconveyance made by the Beneficiary or the person entitled thereto.
4. Upon default by Grantor in the payment of any indebtedness secured by this Deed of
Trust or in the performance of any agreement contained in this Deed of Trust, all sums secured
hereby shall immediately become due and payable at the option of the Beneficiary subject to
any cure period provided in the note secured by this Deed of Trust. In such event and upon
written request of Beneficiary, Trustee shall sell the trust property, in accordance with the
Deed of Trust Act of the State of Washington, at public auction to the highest bidder. Any
person except Trustee may bid at Trustee's sale. Trustee shall apply the proceeds of the sale
as follows: (1) to the expense of the sale, including a reasonable Trustee's fee and attorney's
fee; (2) to the obligation secured by this Deed of Trust; and (3) the surplus, if any, shall be
distributed to the persons entitled thereto.
5. Trustee shall deliver to the purchaser at the sale its deed, without warranty, which
shall convey to the purchaser all right, title and interest in the real and personal property
which Grantor had or had the power to convey at the time of the execution of this Deed of
Trust, and such as Grantor may have acquired thereafter. Trustee's deed shall recite the facts
showing that the sale was conducted in compliance with all the requirements of law and of
this Deed of Trust, which recital shall be prima facie evidence of such compliance and
conclusive evidence thereof in favor of bona fide purchaser and encumbrancers for value.
6. The power of sale conferred by this Deed of Trust and by the Deed of Trust Act of the
State of Washington is not an exclusive remedy; Beneficiary may cause this Deed of Trust to
be foreclosed as a mortgage.
7. In the event of the death, incapacity, disability, or resignation of Trustee, or at the
discretion of the Beneficiary, Beneficiary may appoint in writing a successor trustee, and upon
the recording of such appointment in the mortgage records of the county in which this Deed
DEED OF TRUST-Page 4
of Trust is recorded, the successor trustee shall be vested with all powers of the original
trustee. The trustee is not obligated to notify any party hereto of pending sale under any
other Deed of Trust or of an action or proceeding in which Grantor, Trustee, or Beneficiary
shall be a party unless such action or proceeding is brought by the Trustee.
8. This Deed of Trust applies to, inures to the benefit of, and is binding not only on the
parties hereto, but on his/her/their heirs, devisees, legatees, administrators, executors, and
assigns. The term Beneficiary shall mean the holder and owner of the note secured hereby,
whether or not named as Beneficiary herein.
9. ADDITIONAL TERMS AND CONDITIONS: (check one)
a. ( ) None
b. (✓) As set forth on the First Addendum to Facade Improvement Agreement, attached
hereto as Exhibit B, which is incorporated by this reference.
(Note: If neither "a" nor "b" is checked, then option "a" applies.)
Grantor—Cortona LLC
By By
George Brethauer Monica Brethauer
Member, Cortona LLC Member, Cortona LLC
DEED OF TRUST-Page 5
LLC/CORPORATE FORM OF ACKNOWLEDGMENT
Notary Seal must be within STATE OF ) SS
box COUNTY OF
On this day of , 20 , before me
personally appeared: GEORGE BRETHAUER
to me known to be the
of , and acknowledged
the said instrument to be the free and voluntary act and deed
of said limited liability company/corporation, for the uses
and purposes therein mentioned, and each on oath stated
that he/she was authorized to execute said instrument and
that the seal affixed, if any, is the corporate seal of said
corporation.
Notary Public in and for the State of
Notary (Print)
My appointment expires:
Dated:
LLC/CORPORATE FORM OF ACKNOWLEDGMENT
Notary Seal must be within STATE OF ) SS
box COUNTY OF
On this day of , 20 , before me
personally appeared: MONICA BRETHAUER
to me known to be the
of , and acknowledged
the said instrument to be the free and voluntary act and deed
of said limited liability company/corporation, for the uses
and purposes therein mentioned, and each on oath stated
that he/she was authorized to execute said instrument and
that the seal affixed, if any, is the corporate seal of said
corporation.
Notary Public in and for the State of
Notary (Print)
My appointment expires:
Dated:
DEED OF TRUST-Page 6
REQUEST FOR FULL RECONVEYANCE- Do not record. To be used only when note has been
paid.
TO: TRUSTEE
The undersigned is the legal owner and holder of the note and all other indebtedness secured
by the within Deed of Trust. Said note, together with all other indebtedness secured by said
Deed of Trust, has been fully paid and satisfied; and you are hereby requested and directed,on
payment to you of any sums owing to you under the terms of said Deed of Trust,to cancel said
note above mentioned, and all other evidences of indebtedness secured by said Deed of Trust
delivered to you herewith, together with the said Deed of Trust, and to reconvey, without
warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held
by you thereunder.
Dated:
DEED OF TRUST-Page 7
4
EXHIBIT A TO DEED OF TRUST
LEGAL DESCRIPTION
Real property in the County of King, State of Washington, described as follows:
LOTS 11 AND 12, BLOCK 25,TOWN OF RENTON,ACCORDING TO THE PLAT THEREOF
RECORDED IN VOLUME 1 OF PLATS, PAGE 135, RECORDS OF KING COUNTY, WASHINGTON;
EXCEPT THE WEST 5 FEET THEREOF CONVEYED TO THE TOWN OF RENTON FOR ALLEY, BY
DEED RECORDED UNDER RECORDING NUMBER 4332679.
EXHIBIT E-1 TO FIRST ADDENDUM TO FACADE IMPROVEMENT AGREEMENT
(FACADE IMPROVEMENT PLANS)
SEE ATTACHED
*1010•1011.1.1....111Er'
Dave Brethauer
Cortona LLC
10232 63rd Avenue South
Seattle, WA 98178
City of Renton
Attn: Cliff Long
Renton City Hall
1055 South Grady Way
Renton, WA 98057-3232
June 21, 2018
Dear Mr. Long
I am writing to you to ask for an amendment to my original Façade Improvement
Agreement between my company, Cortona, LLC, and the City of Renton.
I have decided to do additional work to the building to accommodate a new tenant,
which will create a change of use at the property, and will then require the installation of a
sprinkler system. This tenant will complete my requirement to have the first full fully leased and
I have now leased out space to four separate businesses on the first floor of my property.
Currently, we have leased to Urban Sprouts, Ascendance Dance Studio, The Pencil Test and
Boob Boona Coffee Roaster and Bakery. This fall, we will complete the upper floor renovation
and operate Mindshare—a co-workspace offering flexible office space to entrepreneurs and
tech industry professionals.
The tenants that I have selected for the building have been specifically vetted to be of
benefit to the improvement and enrichment of a pedestrian-oriented environment that the
façade improvement loan program was created to accomplish.
I am amending my original agreement for a few reasons. First, the original project
budget ran out and I was unable to complete tenant signage and window replacement. This
was due to the nature of the approval process from the National Park Service during
construction. Specifically, our plans for a canopy and new door entries took 60 days to be
reviewed, at which time they were rejected. The reason for rejection was minor (canopies were
a little too big), but the evaluation at the National Park Service is subject to the opinion of a
single reviewer, so we quickly amended our plans and resubmitted. This took another 60 days
to get an answer and in the meantime our first GC quit. We had to complete another round of
public bidding for a new GC, to comply with the required bidding process—and the new
contractor cost more to complete the balance of the work. The National Park Service also held
up the window approval process and it ended up taking several revisions through the architect
to find a window that they would approve of. In the end, the window that they finally chose
had a 30 week turnaround for manufacturing and ended up being discontinued during the wait,
leading to another revision with the National Park Service. Increased costs from the new
General Contractor, extra architectural fees and change of scope fees to comply with the
National Park Service revisions amounted to an extra $70,000 worth of expenses.
Second, unfortunately the infrastructure needed to provide water to the sprinkler system is not
located on my block. It will be necessary to trench across Williams street to reach the water
source and bring the new water line into the building. The cost to make this happen is
approximately$55,000 and I am asking that the cost of trenching be assigned matching funds
from the City to finish improvement on the facade of my building. In order to ensure that all
tenants occupy the building, I need to complete the trenching work to connect to the sprinkler
system which will be mandated by code because of the new tenants in the building.
The matching funds will be used specifically as follows:
• New tenant signage on the canopy for corner Suite C and blade signage for Suite A
• Replacement windows for the second story of the building, using the specific model of
window required by the National Park Service
• Café partition system for an outdoor eating area underneath the canopy for corner Ste C
A rough schedule of work is as follows:
September 2018—
Connect fire line to interior fire sprinkler plumbing
Purchase of café partition
October 2018—
Installation of new tenant signage
November 2018—
Installation of second story replacement windows
I have worked diligently to select tenants that I believe will add economic value and energy
to the downtown area and I appreciate the city's help and cooperation to help me turn my
building into an active contributor to the downtown's revitalization. My investment in the
building, along with the City's through the original loan, can only be protected and fully
realized if I can complete the project through the proposed work and new tenants opening
up in the building.
For this amendment, I will conform to all of the original requirements in my original loan
agreement.
Thank you for your consideration.
Dave Brethauer
Cortona, LLC
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