HomeMy WebLinkAboutA 20140116000605 AFTER RECORDING RETURN TO:
Eric C. Frimodt
Inslee, Best, Doezie & Ryder, P.S. 111 111 I
777 - 108th Avenue N.E., Ste. 1900
P.O. Box 90016 20140116000605
Bellevue, WA 98009-9016 INSLEE BEST DO AG-RER 79.00
PAGE-001 OF 008
01/16/2014 14:16
KING COUNTY, WA
PRIORITY AND SUBORDINATION AGREEMENT
(Kirkland Avenue Townhomes)
Grantors: 1. City of Renton
2. United States of America, Department of Housing and Urban
Development
3. Housing Authority of the City of Renton
Grantees: 1. City of Renton
2. United States of America, Department of Housing and Urban
Development
3. Housing Authority of the City of Renton
Legal Description: Lots 1, 2 and 4, Block 7, Corrected Plat of Renton Highlands No. 2,
according to the plat thereof recorded in Volume 57 of Plats, Pages 92
through 98, inclusive, records of King County, Washington;
Situate in the City of Renton, County of King, state of Washington.
Assessor's Property Tax 722780-0185-02, 722780-0190-05 and 722780-0200-03
Parcel/Account
Number(s):
This Priority and Subordination Agreement (the "Agreement") is made and entered
into this /6 day of January, 2014, by and among the CITY OF RENTON, a Washington
municipal corporation ("City"), the UNITED STATES OF AMERICA, acting by and
through the Secretary of the Department of Housing and Urban Development ("HUD"), and
the HOUSING AUTHORITY OF THE CITY OF RENTON, a public body corporate and
politic, organized and existing under the laws of the State of Washington ("RHA") (referred
Priority and Subordination Agreement
449045.3 I 358187 10002 -1-
•
to herein collectively as the "Parties" or individually as a "Party"), for the purposes
described herein.
RECITALS
The Housing Authority of the City of Renton was the owner of certain real property
located in Renton, Washington in an area commonly known as Sunset Terrace consisting of
portions of King County tax parcel numbers 7227801055 and 7227801085, which property
is now legally described as Lots A and B of the City of Renton Lot Line Adjustment No.
LUA 13-001114, as recorded in Volume 302 of Surveys, Pages 162 & 163 under recording
number 20131002900011, records of King County, Washington (the "Disposition
Property").
As a part of the redevelopment efforts of the Disposition Property and other RHA-
owned property, RHA sought the approval of the U.S. Department of Housing and Urban
Development to dispose of four (4) buildings containing sixteen (16) dwelling units and to
sell the Disposition Property that was encumbered by a HUD Declaration of Trust.
By letter dated February 1, 2012 from Ainars Rodins, P.E., Director, Special
Application Center (the "Disposition Letter"), HUD approved the disposition of the
referenced dwelling units and the Disposition Property and agreed that upon such
disposition the Disposition Property would no longer be subject to the Annual Contributions
Contract between HUD and RHA, subject to the conditions of the Disposition Letter.
A condition of the Disposition Letter requires RHA to use the proceeds of the sale of
the Disposition Property to develop and construct a minimum of 18 affordable housing units
which will be operated exclusively as project-based or tenant-based Section 8 units for a
period of twenty (20) years from the date of first occupancy ("HUD Covenant"). In
addition, HUD required that the HUD Covenant be in a first priority position as it relates to
other affordable housing restrictive covenants and other encumbrances relating to the
financing of the contemplated improvements.
RHA plans to use the proceeds from the sale of the Disposition Property to construct
eighteen (18) affordable housing units on certain real property located on Kirkland Avenue
in Renton, Washington as legally described in Exhibit A attached hereto and made a part
hereof (the "KAT Property"). The project is generally referred to as the Kirkland Avenue
Townhomes project (the "KAT Project").
Priority and Subordination Agreement
449045.3 358187 0002 -2-
In connection with the KAT Project, RHA applied to the City for a waiver of certain
development and mitigation fees applicable to rental housing projects in accordance with the
Renton Municipal Code. RHA's request was granted by the City on the condition that RHA
recorded against the KAT Property an affordable housing restrictive covenant.
On February 14, 2013, RHA executed an Affordable Housing Restrictive Covenant
in favor of the City which was subsequently recorded against the KAT Property on
February 22, 2013 under King County Recording No. 20130222000005 ("City Covenant").
On May 13, 2013, RHA and Sunset Terrace Development, LLC, a Washington
limited liability company, entered into a Purchase and Sale Agreement for the sale of the
Disposition Property for $987,000 ("Proceeds"), which agreement was subsequently
assigned to Colpitts Sunset LLC, as part of the contemplated development activities.
On October 31, 2013, RHA sold the Disposition Property to Colpitts Sunset LLC
and the Proceeds were deposited in an Escrow Account with U.S. Bank National
Association pending the execution and recording of a Use Agreement between RHA and
HUD that would impose the required HUD Covenant against the KAT Property.
On January 8, 2014, in accordance with the Disposition Letter, the HUD Covenant
was recorded against the KAT Property under King County Recording No.
20140108001352.
The City has agreed to subordinate the City Covenant to the HUD Covenant in
accordance with the terms of this Agreement.
AGREEMENT
In consideration of the mutual promises set forth herein, and to facilitate the
contemplated redevelopment efforts, the Parties hereby agree as follows:
1. Incorporation of Recitals. The Recitals set forth above are incorporated into
the body of this Agreement by this reference.
2. Document Priority. The Parties agree that regardless of the time each
Party's interest or encumbrance in the KAT Property was or shall be created or recorded,
such interests or encumbrances shall have the following priorities:
First Priority HUD Covenant
Second Priority City Covenant
Priority and Subordination Agreement
449045.3 I 358187 I 0002 -3-
3. City Covenant Expressly Subordinated to HUD Covenant. Notwithstanding
anything in the City Covenant to the contrary, the provisions of the City Covenant are
expressly subordinate to the HUD Covenant. RHA covenants that it will not take or permit
any action that would result in a violation of the HUD Covenant. In the event of any
conflict between the provisions of the City Covenant and the provisions of the HUD
Covenant, HUD shall be and remains entitled to enforce the HUD Covenant.
Notwithstanding the foregoing, nothing herein limits the City's ability to enforce the terms
of the City Covenant, provided such terms do not conflict with the HUD Covenant. RHA
represents and warrants that to the best of RNA's knowledge the City Covenant imposes no
terms or requirements that conflict with the HUD Covenant.
4. Conflict. In the event of any conflict between any provision contained in the
City Covenant and any provision contained in this Agreement, the provision contained in
this Agreement shall govern and be controlling in all respects as set forth more fully
herein.
5. Further Instruments. Each Party hereto agrees to execute such further
instruments and documents, including a detailed subordination agreement in recordable
form, as may be necessary from time to time to effectuate and confirm the described
relative priorities.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the day and year first above written.
[Signatures on following pages.]
Priority and Subordination Agreement
449045.3 I 358187 I 0002 -4-
"CITY" ,, ,,,,,,,
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CITY OF RENTON, a Washington municipal corporation C .
A- • 41 •f
By: Al. ' ,- Y - = ;•. �• ��;'
Name: Denis Law p��..,.
Attest: �,,,'' .,,,o'`.
'`,
Its: Mayor '
� /. [.(J�tie -,
Bonnie I . Walton, City Clerk
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that N.5 Lrc.M.j is the
person who appeared before me, and said person acknowledged tha he%she-signed this instrument,
on oath stated thatlies/ -was authorized to execute the instrument, and acknowledged it as the
c.A1 uv-- of City of Renton to be the free and voluntary act of such entity for
the uses and purposes mentioned in the instrument.
1
�‘ U:��0sIclvF`.�A•.�. � DATED:
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.:oNOTA&y1, ?'int ;
1:1
0.:. PUBLIC
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9.c..e......' .•• X01,` c:\(\_
M t<` pi � �1 NAME: ,,�`��;� Q. r'�
------4445., , ►��� (Print Name)
Notary Public in and for the State of pashington
Commission Expires: 2--1 (300-A
Priority and Subordination Agreement
449045.3 I 358187 I 0002 -5-
"HUD"
UNITED STATES OF AMERICA,
ACTING BY AND THROUGH THE
SECRETARY OF THE DEPARTMENT
OF HOUSING AND URBAN DEVELOPMENT
By 5414, 10,./4-
Harlan Stewart
Director, Office of Public Housing,
HUD Seattle Field Office
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Harlan Stewart is the person who
appeared before me, and said person acknowledged that he signed this instrument, on oath stated
that he was authorized to execute the instrument, and acknowledged it as the Director, Office of
Public Housing of Secretary of Housing and Urban Development, known or proved to me to be the
designated representative of the United States of America, to be the free and voluntary act of such
entity for the uses and purposes mentioned in the instrument.
►AAAAAAAAAAAAAAAAA'A,
DATED:' (w--. *V- 2��t��
RYAN E.MIELCAREK
NOTARY PUBLIC 5
STATE OF WASHINGTON 5 /:
< COMMISSION EXPIRES
MAY 9 2017 NAME:
w (Print Name)
Notary Public in and for the State of Washington
Commission Expires: A�‘c ' 2c-A-2
Priority and Subordination Agreement
449045.3 1358187 I 0002 -6-
"RHA"
HOUSING AUTHORITY OF THE CITY OF RENTON
BY: Alt Al 4(11,41L/L/_P
Mark R. Go�pp•r, "v-/ii ctor
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Mark R. Gropper is the person who
appeared before me, and said person acknowledged that he signed this instrument, on oath stated
that he was authorized to execute the instrument, and acknowledged it as the Executive Director of
the Housing Authority of the City of Renton, to be the free and voluntary act of such entity for the
uses and purposes mentioned in the instrument.
A.
rikt \ON�{-,�, 7lll DATED: ✓rua zd i; 20/er
41403��AR�Yi 9co•
1 11 y. /
/4��sy;•..Q?/oll;�°:' = NAME: as�asda.
OFW _r (Print Name)
Notary Public in and for the State of Washington
Commission Expires: oz./01/4,0/6
Priority and Subordination Agreement
449045.3 I 358187 I 0002 -7-
Exhibit A
Legal Description of KAT Property
Lots 1, 2 and 4, Block 7, Corrected Plat of Renton Highlands No. 2, according to
the plat thereof recorded in Volume 57 of Plats, Pages 92 through 98, inclusive,
records of King County, Washington;
Situate in the City of Renton, County of King, state of Washington.
Priority and Subordination Agreement
449045.3 I 358187 I 0002 -8-