Finance & Asset Management Committee Meeting Agenda

Transcription

1 Finance & Asset Management Committee Meeting Agenda Date: Tuesday, December 12 th, 2017 Time: 4:00p.m. 6:00p.m. Location: Classroom (Economy Building) Committee Members: Ray Ishii (Chair), Gloria Skouge (Vice-Chair), Patrice Barrentine, Jim Savitt, David Ghoddousi, Paul Neal, Devin McComb 4:00pm I. Administrative: A. Approval of Agenda B. Approval of the Finance & Asset Management Committee November 14 th, 2017 Meeting Minutes Chair 4:05pm II. Announcements and/or Community Comments 4:10pm III. Reports and Discussion Items A. Review of the PDA Financial Statements for October 2017 i. Checking Account Activity Report B. Sammamish Farm Discussion Sabina Proto John Turnbull and Leigh Newman-Bell 5:20pm IV. Property Management Report A. Residential Property Management Report John Turnbull 5:25pm V. Public Comment Chair 5:30pm 5:45pm VI. Closed Session A. Property Management Report - RCW [c] B. Review of Lease Proposals New Tenant Taproom at Pike Place, st Avenue #16 New Tenant Robot vs Sloth, 1535 First Avenue #8 Lease Renewal Madam Lazonga s Tattoo, 1527 Western Ave Lease Renewal Miniature Car Dealer, 1501 Pike Place #525 Lease Renewal Rings N Things, 87 Pike Street Lease Renewal Ugly Baby, 1430 Western Ave Vacancy Report i. Current Lease Negotiations VII. Open Session A. Action Item: Proposed Resolution 17-63: Lease Proposals December 2017 Chair Jennifer Maietta Chair Jennifer Maietta 5:50pm VIII. Resolutions to be added to the Consent Agenda Chair 5:55pm IX. Concerns of Committee Members Chair 6:00pm X. Adjournment Chair Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

2 z Finance & Asset Management Committee Meeting Minutes Tuesday, November 14 th, :00 p.m. to 6:00 p.m. Classroom Committee Members Present: Ray Ishii, Devin McComb, Paul Neal Other Council Members Present: Staff/ Consultants Present: John Turnbull, Joshua Curtis, Jay Schalow, Jennifer Maietta, Sabina Proto, Karin Moughamer Others Present: Howard Aller, Chris Scott, Wren McNally, Nick Setten The meeting was called to order at 4:07 pm by Ray Ishii, Chair. I. Administration A. Approval of the Agenda The agenda was not approved as there was not a quorum. Paul Neal entered the meeting at 4:10 pm. B. Approval of the Finance & Asset Management Committee October 17 th, 2017 Minutes The October 17 th, 2017 meeting minutes were not approved as there was not a quorum. II. III. Announcements and Community Comments None. Reports & Discussion Items A. Waterfront Local Improvement District (LID) Update Joshua Curtis, Partnerships Manager for the Office of the Waterfront, began his presentation by showing a map of the Waterfront Seattle Program and reviewed the funding plan for the entire project: Philanthropy (Friends of the Waterfront) $100M, State Funding $193M, City funding $195M and Local Improvement District (LID) est $200M for a total of $688M. He continued by defining Local Improvement District to be: Funding tool by which property owners financially contribute to a project that will increase the value of their property. This is a highly regulated process that utilizes an independent property appraiser, in this case Valbridge Property Advisors, and Office of the Waterfront realizes the Market is a unique entity and can t be treated the same as other commercial tenants in the downtown core. Used to fund public projects in State of Washington Governed by specific state and local laws (including special benefit study) Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

3 The LID Formation Process includes a feasibility study, which has already been completed, and can be found on their website. Currently the project is conducting a special benefit study where the appraiser is doing a property by property appraisal to estimate what property values will be worth once the viaduct comes down and the road rebuilt as well as what the property will be worth with the park enhancements, Overlook Walk and Pike Pine Renaissance. So two evaluations. Those numbers are estimated to be available in early to mid-2018 and will be shared on the LID web portal. Joshua reviewed the concept of Special Benefit, the estimated increase in a property s fair market value as a result of public improvements Overlook Walk, Waterfront Park, Promenade, Pike Pine Corridor and a few other projects. In addition, property value will increase due to appreciation as well as other improvements that are not part of the LID, such as the tunnel, viaduct removal, Alaskan Way improvement, and seawall replacement. The City will take a portion, roughly 40-60%, of the Special Benefit, called the LID Assessment. Joshua talked briefly about the Proximate Principle which says that when a park is built, within three blocks of that park is 75% of real estate value generated, within 3-8 blocks the remaining 25% of the value is spread. He continued by defining several terms, including: Special Benefit Study: Conducted by an independent appraisal firm to determine the LID boundary and the difference between the fair market value of each property before and immediately after the improvement. Assessment: Portion of the special benefit each property owner will pay. Cannot exceed the amount of the special benefit. Assessment ratio: Portion of the special benefit each property will pay. Same ratio will apply to all assessed properties (determined by City Council.) Total assessments will not be more than special benefits and not more than total cost. Assessments are roughly proportionate to each other. The Feasibility Study was concluded at the end of the summer and the appraiser looked at the entire downtown area and divided the properties into groups, assessed that increase, and the appraiser determined the total economic benefit of the study area to be $ million. The LID area was revised after the feasibility study to remove properties that would probably not see economic benefit. Joshua Curtis noted the Pike Place Market is a unique entity. The appraiser sat down with Ben Franz-Knight to learn about the Market, which is of course unique in that it is a historic district with limitations on rents and property development. The appraiser has also reached out to John Turnbull and Jennifer Maietta to really understand the nature of the Market. The LID is an assessment for property owners, not tenants, unless written into a lease. Joshua Curtis continued to review the Formation Process. Once the assessment numbers are in the City will begin the legislative process. In summer of 2018 the City council will pass a resolution with intent to form the LID and all property owners in the LID will receive notification with estimated assessment amount and public hearing dates. Council then takes feedback and sets the ordinance to form the LID. If within 30 days property owners that represent 60% of total

4 assessment come forward and say they don t want it, the Council has to stop. If the LID continues past that then there is a legal appeal period of 30-days. Confirmation of assessment amount is the last step and property owners have the opportunity to protest the assessment amount. Devin McComb asked for clarification on when the boundaries will be set and how might the Council be able to forecast into the future on what the assessment might be. Joshua Curtis answered that the boundary will be set in 2018 however, it s difficult to estimate the assessment given its unique structure and purpose. The Market should expect an assessment in spring of 2018 and should not expect a large assessment. Ray Ishii asked what happens if Friends of the Waterfront can t raise the $100M or there are other shortfalls, will the LID make up the rest. Joshua responded that once the LID amount is set it cannot be reassigned. However, once the LID is formed, the City is obligated to deliver the projects that will increase the value. John Turnbull asked if questions could be asked from the floor. Ray Ishii said yes. John Turnbull asked what the timeframe is for collecting the 40%. Joshua Curtis responded that property owners will have the option to pay everything up front or finance through the City for a period of 20 years with a nominal finance fee. Howard Aller asked why the Pike Place Market, a corporation not-for-profit is being included in the assessment. Joshua Curtis stated that the way the state statute is written there are only three entities that are exempt Housing Authorities, timber lands, and the Government. Properties within the LID that are limited in their use, such as low income housing, will likely see no assessment as they will not see increased values out of the improvements. The Market will be in a similar situation but there will still be an assessment. John Turnbull stated the PDA properties, by and large, are tax exempt and while there is an assessed value on the books, the Market cannot turn around and sell the properties at fair market value. For the purposes of the assessment would the Market be able to broker an income based approach. Joshua is anticipating that the appraiser will consider an income based approach but he can t say for sure. John Turnbull inquired once the improvements are made, what will fund the operating costs. Joshua Curtis stated that LIDs are only for capital and the City has allocated $3.5 million to the waterfront for operations and Friends of the Waterfront is raising additional monies with the goal of getting to an annual operating budget of $5 million. B. Review of the Financial Statements for October 2017 Sabina Proto started by saying October was a good month overall. The PDA is in good financial standing with expenses continuing to trend at or below budget projections. Commercial revenue is trending above budget. Daystall revenue is under budget mainly because of the reduced attendance which was impacted by the cold weather during the first half of the year and some attrition. Parking revenue continues to be below 2017 budget projections, though following mid-year adjustments in July is trending positively compared to actual revenue during the same period for We are up to date on all payment obligations, debt services, pension fund contributions and are on track to meet the 2017 budget contribution to the CRRF.

5 Sabina continued by reviewing the balance sheet notes, which are included in the packet. Sabina noted utilities expenses are under budget by $247,858, but that number may change as billings are received. Overall at this point the PDA is $413,839 over budget for total reserves and contributions but a lot of expenses are incurred during the holidays so that number may change. Paul Neal asked Sabina why she believes the trend for the parking garage is heading in the right direction. Sabina Proto provided a summary of parking garage performance throughout 2017 noting that performance increased starting in July 2017, exceeding previous years, so while it is performing better she does not believe it is over performing, rather it s trending in the right direction. A conversations continued on parking garage 2018 projections. Ray Ishii asked if there are any capital projects anticipated for Sabina responded she can check with Steve Nelson. John Turnbull noted the Term Architect has been hired but they will not be engaged in Ray Ishii asked for information on daystall vendor attrition and where the numbers are at currently. John Turnbull responded that craft and farm vendors are just slightly down from last year. There is a good group of new vendors but they are not at the Market every day. There is more space available but it seems to be the same number of vendors utilizing the space and therefore getting to use more space and are selling more. Extra table space will be a topic of discussion during Daystall rules and regulation negotiating in i. Checking Account Activity Report Sabina Proto handed the Checking Account Activity Report to Karin Moughamer. C. Financial Statements for Discrete Component Units and Compliance Reports for 3 rd Quarter 2017 Ray Ishii started by providing a definition on the discrete component units. Sabina Proto began by noting that LaSalle Senior Housing LLC, Western Avenue Senior Housing LLC, Pike Place Market QB2 and Pike Place Market QB3 are independent organizations, but the PDA manages all of them. The reason that PDA is called primary government unit and these four organizations are considered discrete component units has to do with the control the PDA imposes on these organizations, and are reflected in three criteria: The economic resources of the Discrete Component Units (DCU) are directly to benefit the primary unit The primary government unit is entitled and able to access the DCU economic sources The DCU economic resources are substantial to the primary government unit If all three criteria are satisfied, then their Financial Statements should be tracked separately, and presented in a separate column from the primary units. If any of these criteria is not satisfied, then their financials will be blended with the PDA s. Sabina continued by stating the PDA manages their operating and financial activities and we also prepare their financial statements and reply to the compliance questioners and covenants, which are sent to the respective investors, NEF, US Bank and Morgan Stanley. Because the PDA

6 is financially accountable for all four organizations, it serves as the guarantor, all financial related documents and issues are reviewed and discussed by our council members during several FAM meetings. In this packet are the reporting requirement for the 3 rd quarter of The PDA is in charge of their annual budgets, tax returns and annual audits. For the QB2 and QB3, the annual budgets and audits are also presented in their respective board meetings. The recapture pay period for the QB s is seven years. At the end of that period they are closed. QB2 will close in February QB3 will close February The LLC s exist for 15 years. LaSalle will end in 2021 and WASH will close Sabina is exploring closing LaSalle early. D Operating Budgets for Discrete Component Units Sabina Proto noted the packet includes the budgets for each organization for year The QB2 and QB3 budgets follow the financial models built within the NMTC agreements. The LaSalle and WASH, also have pro formas built, but the amounts are adjusted based on the actuals of the prior periods. The budget for LaSalle is fairly sophisticated at this point since it has been in place for nearly seven years. The WASH budget is still settling down. Sabina offered to meet with any Councilmember that would like to learn more about QB3. Ray Ishii asked if the Council needs to approve these budgets. Sabina Proto responded that it s not a resolution but the Finance and Asset Committee does need to review and suggest adjustments if needed. Ray Ishii asked if the replacement reserve for La Salle is adequate. Sabina Proto responded it is quite high, roughly $900-$1 million. There are current conversations on the best way to spend down that money. John Turnbull added the current conversations with the investor include how to fund a capital account. Sabina them provided the backstory regarding the reason for the surplus. John Turnbull suggested the money could be pushed into renovating 40 units in La Salle. IV. Property Management A. Residential Property Management Report John Turnbull reviewed the residential property management report noting that overall occupancy rate is heading in the right direction, and is at 98%. There are a few vacancies in WASH, but those are stabilizing. There are a number of residential events over the holidays. Pest control is going ok and there aren t as many problems as there have been recently. The QB2 budget is only for two months as it will close in February 2018 and the financial models are strictly set. V. Public Comment None. VI. Closed Session The Closed Session did not occur as there was not a quorum.

7 VII. VIII. IX. Open Session Proposed Resolution 17-60: Lease Proposals November 2017 was not reviewed as there was not a quorum. Resolutions to be added to the Consent Agenda None. Concerns of Committee Members None. X. Adjournment The meeting was adjourned at 5:23 p.m. by Ray Ishii, Chair Meeting minutes submitted by: Karin Moughamer, Executive Administrator

8 Date: December 12, 2017 To: From: Subject: PPM PDA Council Sabina Proto, Director of Finance November 30, 2017 Financial Statements Summary The PDA is in good financial standing with expenses continuing to trend at or below budget projections. Commercial revenue is trending above budget. Daystall revenue is under budget mainly because of the reduced attendance which was impacted by the cold weather during the first half of the year and some attritions. Parking revenue continues to be below 2017 budget projections, though following mid-year adjustments in July is trending positively compared to actual revenue during the same period for We are up to date on all payment obligations, debt services, pension fund contributions and are on track to meet the 2017 budget contribution to the CRRF. Balance Sheet Notes: Page 1: Current assets Reduced mostly in Unrestricted Cash and Misc. Accounts Receivable. Designated Cash Increase is related to monthly budgeted contribution to CRRF. Restricted Cash Increase reflects the monthly contribution to the Debt Service Accounts for 2015 PDA Bonds. Fixed Assets Reflects a modest increase from the construction costs of ongoing PDA Capital Projects and MarketFront project closeout efforts. Current Liabilities Decreased mostly in Accounts Payable. Long Term Debt Decrease is due to monthly payment of 2009 PDA bond. Net Position Current Year Operating Result $3,591,302 Non-Operating Revenue related to MarketFront transactions $4,528,993

9 Page 2: Accounts Receivable Activity Report Decreased overall slightly from the prior month. None of our AR is of any concern regarding delinquencies. Page 3: PDA Operating Statement Notes: Total Revenue YTD through November 30, 2017 was $17,410,474, under budget by 0.6% ($97,612). Total Operating Expense YTD was $12,793,683, under budget by 3.6% ($483,313). Net Result after Debt Service and Reserves was $2,505,524, which is $580,906 over budget. We are up to date with the all debt payments and annual contributions to Pension Plan. We are on track for 2017 budgeted contribution to CRRF. Page 4: Footnotes on the Operating Statement Commercial Revenue is over budget by $150,096; it s up in Base Rent Retail, Common Area and Percent Rent. Residential Revenue is over budget; Rent revenue is over budget, Laundry and Other are under budget. Daystall Revenue is under budget in all categories. Page 5: Surface Revenue net of City Share is over budget. We anticipated that Lenora and Blanchard would be operational for a portion of 2017, in reality it will continue to operate until 3 rd quarter of Garage Revenue is under budget by $88,192. We believe that the trend is in the right direction. Miscellaneous Revenue is over budget in Security Contracts, investment income, and under budget in filming revenue. Page 6: Operating Expenses: over budget (1) Commercial due to some bad debt, and increase on MID Fees, Property Tax(surcharge fees), (2)Garage due to Salaries, (3)Security due to new pay rates after the renewal of Union Contract, (4) Insurance due to trending; it will be reduced considerably after the allocation of a portion to LAS LLC.

10 Page 7: Percent Rent spreadsheet- Percent Rent was $124,746 over budget. Page 8: Section 1 states that the balance of the Capital Replacement Reserve, which was $10.1 MM for the end of November 31, Section 2 provides a reconciliation of Operating Result on Operating Statement and Current Year Result on the Balance Sheet. Page 9: Capital Projects Report provides the status and YTD spending on different Capital Projects we are working on (excluding MarketFront and Levy.)

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20 Briefing to Finance and Asset Management Management proposal - Sammamish River Farmland County December 6, 2017 SUMMARY The proposal to be discussed is the merits of the PDA entering an agreement with King County to assist with on site management and tenant coordination of rented farm plots on the Sammamish River. The site is known as the Sammamish River Farm, in Woodinville and is owned by King County Department of Natural Resources and Parks who manages the leased plots to individual farmers. The PDA has worked with farmers growing produce on the property since the 1980 s, beginning with the immigrant Indo- Chinese Farm Project. 1

21 In recent years the County Agricultural program staff concluded that the property and related program activity would benefit from more direct attention than could be provided by the County alone. The County has a Use Agreement with Tilth Alliance which provides for general management of a 25 acre Green River Farm. The County has requested the Pike Place Market PDA to enter into a similar arrangement regarding the Sammamish River Farm. The approach to the PDA was in part based on the existing connections between site farmers and the Pike Place Market most of whom sell at the Market and are involved in agricultural support and educational programs currently sponsored by the PDA. The financial obligations would be minimal, and covered by rents collected from farmers. Little additional staff time would be involved as farm programs currently include a variety of technical, business development and marketing services. The proximity of the site to Seattle would provide a convenient field location for PDA sponsored training sessions that would likely be more accessible to farmers. PURPOSE The goals of the Use Agreement are generally programmatic in nature providing for continued technical assistance to farmers, education in farming and marketing practices, support a transition to organic practices and land stewardship. The goals that will be met through this work support the mission of the farm program to ensure that small farms are more successful, profitable, sustainable, and stable TERM The initial Use Agreement would be set for two years, providing individual farmers with a two year commitment to their planting plots. This would be in the form of a Land Use agreement similar in form to that used by the County with Tilth. OPERATING COSTS There is no rent cost charged. Anticipated operating costs assume land assessments, PDA insurance costs and common use equipment (i.e. a 2

22 portalet). These expenses would be covered with plot fees at $100 to $150 per acre for the season. Farmers would also pay for their own insurance. PROGRAMMING Staff time applied to providing educational and training activities on the Sammamish farm would be no different than currently provided in PDA Farm Programs, merely a change in location. A summary of projected hours is shown on the table below. Farm visits and farmer workshops are already part of the farm program objectives each year. Multiple Pike Place farmers would benefit from workshops on the Sammamish Farm, not only those who lease land there. Having a farm to host workshops on allows us to demonstrate farming practices and skills that would be more difficult to learn in a classroom. For example, the scope of work for Tilth at the Green River Farm was: Visit the farm about 2x/month Serve as the Security Point if there s a break-in to help with the police report (Kent site is in a more problematic site than Sammamish). ¼ acre educational test plot Coordination and dispute resolution (charging for added staff time) JURISDICTION The Pike Place Market PDA is chartered to operate within the Historic District and its environs within the limits of the City of Seattle. The PDA s charter may need to be amended to allow us to undertake this project. Although the charter can be amended with the approval of the Mayor (without City Council assent), the internal (to the Market) charter amendment process takes time. Permission to provide these services might require approval of other governmental agencies The City of Seattle to operate outside of City Limits, and King County to operate in unincorporated King County. These are expected to be non-controversial pro-forma requests as limited to this project site but they do require City and County Council action which also would take time. 3

23 SCHEDULE A practical timeline would be to have the terms of the agreement worked out in January and approval, including authorization from other jurisdictions, in February This would provide a reasonable transition period for the PDA to work with the tenants prior to the start of the planting season. 4

24 Cost Projection Sammamish Farm Draft prepared by PDA Staff Rent Expenses Surface Water $ Storm Water Management Bond $11.41 Noxious Weed Assessment $7.31 Conservation Assessment $7.70 Field Portalet contract $1, Total Rent paid by farmers: $1,400 ( approximately $90 per acre) Programming/Staff Time: Year Activity Time (for PDA Staff) Cost to PDA Responsible Party Transfer Water right 0 $0 King County Office administration 8 hours $ PDA Irrigation infrastructure set 15 hours $ King up Volunteer Work Party (clean up infrastructure and storage area) 10 hours $0 *Paid through Farm to Go Specialty Crop Block Grant County/PDA PDA Staff 4 Farmer Meetings 15 hours $ PDA Staff 2 Workshops 20 hours $ PDA Staff 1) WSDA Food Safety Workshop: Materials and presenter fees covered in WSDA budget 2) Organic production practices and recordkeeping Mileage (8 Farm visits for 16 hours $ PDA Staff listed activities) Year Activity Time (For PDA staff) Cost to PDA Responsible Party Office administration 8 hours $ PDA 2 Farmer Meetings 7.5 hours $ PDA Staff 2 Workshops (TBD) 20 hours $ PDA Staff Succession Planning 20 hours $ PDA Staff Meetings (4) Mileage (8 Farm Visits for 16 hours $ PDA Staff listed activities ) About 90 hours a year Total Cost: approx. $3,500 Note: Staff time at Sammamish farm corresponds to that currently provided at other locations 5

25 SAMPLE USE AGREEMENT This Use Agreement (the Agreement ) is made and entered into as of, 2017 (the Effective Date ), by KING COUNTY, a political subdivision of the State of Washington ( Owner ) and a Washington nonprofit corporation ( Occupant ). In consideration of the mutual covenants in this Agreement, Owner and Occupant agree as follows: BASIC TERMS Recitals: King County enters into this agreement pursuant to King County Code Section E.1-E.2. King County can enter into use agreements with nonprofit organizations that will use the property to provide services that will benefit the public, and such agreements are exempt from the County s fair market value, appraisal, and notice requirements that apply to other real property agreements. Tilth Alliance and King County are entering into this Use Agreement for the Green River Farm to help achieve the goal of the Local Food Initiative to increase food production. Tilth Alliance, received a King County Water Works grant, with the following goals: Ensure that farmers leasing King Countyowned land have more security in the form of long-term leases. Contribute to the farming and financial success of the Hmong farming community by providing culturally and linguistically appropriate technical assistance and education in farming and marketing practices. Help support the farm s transition from conventional to organic practices through educational workshops on organic soil fertility, pest management and weed management. Provide organic soil amendments and pest management inputs. Remove invasive blackberry along the Green River. 6

26 Plant native plants that enhance pollinator habitat along the Green River. Tilth Alliance s King County Water Works grant will expire on December 31, After this grant period is completed, Tilth Alliance will continue to support the farmers at Green River by: Providing leases to farmers will continue to ensure that farmers leasing King Countyowned land have more security in the form of two-year leases. Providing technical assistance in researching business/liability insurance options that may help contribute to the financial success of the Hmong farming community King County is entering into this use agreement with Tilth Alliance to achieve progress toward these goals. Premises: Twenty five (25) acre(s), more or less, of a Farmland Preservation Program property located in Kent, WA, known as the Green River Farm, as depicted in Exhibit A, attached hereto and incorporated herein, the legal description of which is set forth in Exhibit B, attached hereto and incorporated herein, and subject to the easements of record as set forth in Exhibit C, attached hereto and incorporated herein. Term: Commencing on June 1, This Agreement term shall be for twenty four (24) months, and shall begin on the 1st day of June, 2017, and end on the 31st day of May, Rent: No rent, but Occupant must pay surface water, noxious weed and conservation fees each year. 7

27 AGREEMENT 1. Premises. Owner hereby authorizes the Premises, as defined in the Basic Terms, to Occupant and Occupant hereby agrees to use the Premises upon and subject to the terms, covenants and conditions set forth herein. 2. Term. The term of this Agreement shall be for twenty four (24) months, and shall begin on the 1st day of June, 2017, and end on the 31st day of May, Rent. 3.1 The parties agree that Occupant shall pay no Rent. In lieu of Rent, the consideration for this Agreement is Occupant s provision of the following services that will benefit the public: Occupant will sublease the Premises to the farmers who have leased the Premises in recent years; Occupant, in cooperation with Owner, will work to improve the agricultural productivity on the Premises, and share the costs of those improvements with Owner; And Occupant will use any lease revenue collected from sub-leasing to: improve the property. 3.2 To the extent applicable, Occupant shall pay to Owner any leasehold excise tax due and owing to the State of Washington in connection with this Agreement as provided in the General Terms and Conditions attached hereto as Exhibit E. In addition, Occupant shall also pay any taxes levied against the personal property of Occupant, including trade fixtures, should any such personal property be taxed with the Premises. If any such taxes on Lessee s personal property or trade fixtures are levied against Owner or Owner s property, and if Owner pays the taxes based upon such increased assessment, Occupant shall, upon demand, repay to Owner the taxes so levied. 3.3 To the extent applicable, Occupant shall pay all fees and assessments for the Premises during the term of this Agreement. 3.4 Notwithstanding any contrary term or provision of this Agreement, Occupant s covenant and obligation to pay any amounts pursuant to this Agreement is independent from any of Owner s covenants, obligations, warranties, or representations in this Agreement. 8 P a g e

28 4. Permitted Use. Occupant shall use the Premises for the following purposes and for no others without prior written consent of King County: The Premises will be utilized only for growing and/or raising crops. Occupant may only raise livestock on the Premises with Owner s prior written permission, and subject to an amended farm plan which requires Owner s approval. All uses shall be in accordance with the limitations specified in the Special Terms and Conditions, attached hereto respectively as Exhibit D and incorporated herein. 5. General Terms and Conditions. Attached to this Agreement as Exhibit E and incorporated herein by reference are King County s General Terms and Conditions. 6. Terminology. The terms Owner, Lessor, and Landlord are used interchangeably in this Agreement and the attached exhibits. The terms Occupant, Lessee, and Tenant are used interchangeably in this Agreement and the attached exhibits. The terms Lease, Agreement, and Use Agreement are used interchangeably in this Agreement and the attached exhibits. 7. Entire Agreement. This Agreement, including the attached General Terms and Conditions, Special Terms and Conditions, and any and all exhibits expressly incorporated herein by reference attached hereto shall constitute the whole agreement between Owner and Occupant. There are no terms, current or past representations, obligations, covenants or conditions other than those contained herein. No modification or amendment of this Agreement shall be valid or effective unless evidenced by an agreement in writing and signed by both Owner and Occupant. King County King Street Center 201 South Jackson Street, Suite 600 Seattle, WA Attn: Megan Kim Owner Notice Address: King County Farmland Preservation Program King County King Street Center 201 South Jackson Street, Suite 600 Seattle, WA Attn: Megan Kim Occupant Notice Address: 9 P a g e

29 1. Property Update o Overall Occupancy rate: 98 % Residential Property Update Report December 7, 2017

30 Page 2 2. Notices o Move-ins rlel 76, rste /1/2017 o Move-out notice rlel 82 ( last week - rste 310 & 435, rsan 213) o Unit transfers rlel 82 to rlel Fair Housing/Reasonable Accommodation/Special Request or Issues o No new ones. One open request in Market House for a transfer 4. Residential Staffing o Temporary help from People s Ready as needed for housekeeping assistance for some elderly tenants of Stewart House and Livingston Baker. 5. Staff Training o Legal Issues Webinar 11/29/ Done o TRENDS Conference and Trade Show 12/05/ Done 6. Residents Events o Holiday party for residents Tuesday, 12/11 o Active Aging Health on site Wednesday and Saturday 7. Other compliance and contract issues o Waiting for final compliance paperwork for Western Avenue Senior Housing o Market House Funding Renewal and rent increase initial docs sent o Western Avenue 1st Annual recertification project 11/ Done 8. Building Maintenance and Unit Turn-over o Stairwell walk-through deep cleaning needed o Hot water system in Livingston Baker was out of operation 4 days for repairs. 9. Pest Control o Ongoing done as scheduled; no big issues for now; will assess progress per building next month o Rste K-9 inspection December Per Building Update La Salle o Water intrusion from Place Pigalle bathroom to unit 55; Repairs needed in both spaces. Work started in apartment on 12/6/17. Resident temporarily relocated to Livingston Baker. o Special Claims for damages/vacancy 12/17 filing Stewart House o Water leak into commercial space tracked and fixed

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32 PROPOSED RESOLUTION Lease Proposals DECEMBER 2017 Tenant Term Start Date Robot vs. Sloth / La Ru Creative, LLC Two (2) Years January 1, 2018 Lauren Rudeck Taproom at Pike Place / Taproom at Pike Place, LLC. Five (5) Years January 1, 2018 Brian Stan Madam Lazonga s Tattoo Three (3) Years November 1, 2017 Vyvyn Lazonga Miniature Car Dealer Five (5) Years December 1, 2017 Jaime Huizar Rings N Things Three (3) Years January 1, 2018 Chad Trichler Ugly Baby / Craftinimicon, LLC Two (2) Years January 1, 2018 Rosalie Gale Gloria Skouge, Secretary/Treasurer Date Date Approved by Council: For: Against: Abstained: Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

33 Lease Summary Date: December 12, 2017 Business Name/Owner: Address/Building/Square feet: Tenant Since: Primary Term: Options: Use Description: Robot vs. Sloth / La Ru Creative, LLC (Lauren Rudeck) 1535 First Avenue #8 / First & Pine / 1,050 sf Since 2012 (under Ugly Baby & La Ru) Two (2) Years Three (3) Years Retail specializing in the sale of artwork and handmade items by Lauren Rudeck (80%) and other local artists (20%) Business Name/Owner: Address/Building/Square feet: Tenant Since: Primary Term: Options: Use Description: Taproom at Pike Place / Taproom at Pike Place, LLC (Brian Stan) st Avenue #16 / First & Pine / 1,483 sf New Tenant Five (5) Years Five (5) Years Taproom and kitchen, specializing in seasonally rotating local craft beer, cider, wine and food Business Name/Owner: Madam Lazonga s Tattoo / Vyvyn Lazonga Address/Building/Square feet: 1527 Western Avenue / Heritage House / 580 sf Tenant Since: Since 1992 Primary Term: Three (3) Years Options: Two (2) Years Use Description: Service / Retail specializing in high-end custom tattoo skin art Business Name/Owner: Miniature Car Dealer / Jaime Huizar Address/Building/Square feet: 1501 Pike Place #525 / Fairley / 327sf Tenant Since: Since 2009 Primary Term: Five (5) Years Options: N/A Use Description: Metal die cast cars, airplanes, motorcycles, trucks and related auto industry collectables and memorabilia Business Name/Owner: Rings N Things / Chad Trichler Address/Building/Square feet: 87 Pike Street / LaSalle / 168 sf Tenant Since: Since 2013 Primary Term: Three (3) Years Options: Two (2) Years Use Description: Souvenirs, jewelry and novelties

34 Page 2 Business Name/Owner: Ugly Baby / Craftinomicon, LLC (Rosalie Gale) Address/Building/Square feet: 1430 Western Ave / La Salle / 656 sf Tenant Since: Since 2012 Primary Term: Two (2) Years Options: Three (3) Years Use Description: Artist studio and retail sale of local art, primarily created by the owner