LANGABEER, TULL & LEE, P.S.

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2 LANGABEER, TULL & LEE, P.S. Attorneys at Law Richard J. Langabeer Robert M. Tull Charles J. Tull MarkJ. Lee Heather A. Wolf ToddD.Gunn July 6, 2000 l\1r. James A. \Vynstra Homestead NW Development Co. Corporate Offices P.O. Box409 Lynden, Washington Re: June 29 Letter Dear Jim: I have spoken with Mr. Roland Signett regarding your letter requesting the reimbursement of $4, for the lots outlined in your letter. The amounts will be reimbursed to Homestead. There was a miscommunication amongst the staff regarding the settlement agreement of March 16, 2000, due to the fact that impact fees are normally split between developer and builder; in the case of Homestead, however, developer and builder are the same entity. This matter has been discussed with staff and has been resolved. On a related subject, it has been reported that some Homestead employees and/or representatives have been quite curt and terse with City staff, demanding that Homestead "sued" the City and "won" and is therefore entitled to credits. That is not the case. We would ask that the City Staff be treated with professional respect and courtesy. The settlement agreement with Homestead is unique in nature and therefore there may be some slight misunderstandings as to its implementation. If there are any difficulties, we would request that staff be treated courteously and respectfully. Either this office or Mr. Signett will be happy to work with you to resolve any discrepancies in implementation. We look forward to working with Homestead. An amicable agreement was reached because both parties worked together to solve an unclear legal issue. We request 709 Dupont Street, P.O. Box 1678, Bellingham, WA Phone: (360) Fax: (360)

3 Mr. James A. Wynstra July 6, 2000 Page2 that any concerns with the implementation of the agreement not be confrontational, but represent the spirit of the agreement in working together to find a solution. Thank you again for your understanding and cooperation. Very truly yours, LANGABEER, TULL & LEE, P.S. Todd D. Gunn cc: Mr. Roland Signett

4 Mr. Roland Signett City Administrator City offemdale Ferndale, WA Dear Roland, On Monday, June 4, 2001 I met with you and Mr. Loren Speny, City of Ferndale Public Works Director~ to discuss the expected costs for some ofthe improvements to Vista Drive. Homestead has been and will continue to perform the necessary work to complete the Vista Drive improvements project. We all agreed, however, that there were some costs associated with the project which should be the responsibility of the City of Ferndale. Specifically, these include the cost of procuring easements and installing some retaining wall for two of the property owners. We agreed that an amount of $5, would cover those costs. Homestead and the City have also agreed that this number will not change to be more than or less than this amount unless there is a change to the design as agreed upon June 4. The $5, will be due upon completion of the project Please sign this agreement below. Thank-you. Sincerely, Tim Wiersma Homestead NW Dev. Co. Infrastrucure Manager Tim Wiersma, Homestead NW Dev. Co. ~-4~ Roland Signett, City Xdministrator Homestead NW Dev. Co. Corporate Offices P.O. Box 409 Lynden, VVPL (360) toll free (877) (360) fax

5 EAD RECEIVED NOV October 25, 2005 BY MAIL CITY OF FERNDALe Honorable Mayor Landcastle & City Council City of Ferndale PO Box 936 Ferndale, W A Re: Construction permits in sewer moratorium zone Dear Mayor and Council, We are in receipt of the recent notice regarding the moratorium on building permits in the west side of Ferndale. While we completely understand the need to prohibit additional connections to the system until the capacity issues are adequately addressed, we request that you consider the following points. Item #1- Homestead was given no indication that this situation was looming thus we continued with our schedule of engineering and site design at great expense. Additionally, we issued an eviction notice to.the tenant of the existing house on t]j_e property.in preparation for the upcoming groundbrealdng of the final phase. Had we been advised that. this moratorium was being considered, we would have redirected additional expenses ori engineering.and.design to other projects and certainly would not have evicted the tenant paying us rent on the house until we were able to proceed. Item #2- Civil construction of the site improvements and the construction of the first large multifamily building will talce many, many months to construct and bring to the point of final occupancy. Our earliest expectation for completion on the first 6-plex building would be approximately August to September Item #3- There is a substantial need for senior housing in Ferndale as demonstrated in the rapid and complete sales of everything we've been able to construct in this Correll Park PRD. We have completely sold out all the other units thus far and have a waiting list for this final phase of this project as there are no other senior options in the area. We respectfully request that the city consider accepting a "hold harmless" - type agreement from Homestead NW which would allow us to proceed with the site construction and multi-family building permits(s) and construction prior to the completion of the sewer upgrade. We offer this cost-effective and reasonable approach as a win-win opportunity with the foreknowledge that we would not be able to obtain even temporary occupancy status on any completed units until the sewer capacity issues are resolved to city satisfaction. '. Homestead NW Dev. Co. Corporate Offices P.O. Box 409 Lynden,WA (360) toll free (877) (360) fax

6 This proposal would save our firm many thousands of dollars in lost revenue in rental income, engineering and design fees which have been paid in advance and would cause major manpower reductions in both Homestead staff and local subcontractors employed at our site, etc. This proposal would, in turn, use the City's proactive handling of the matter to generate instant city revenue on the day of the sewer completion rather than another six-nine months later, were we to wait to begin construction on sewer completion. With the building construction complete, units would be available for sale/closing the very day the city opened the new transmission lines for the challenged area. Our proposed prqject' s final approvals, installation of roads, curbs, gutter & utilities, site completion, and weather challenges will likely take us into springtime before we need the first building permit. We would work closely through the winter and spring with City of Ferndale Public Works Personnel to ascertain the sewer improvement progress and intend do our best to time the completion of the building(s) to coincide with the completion of the city's sewer project since it would be wasteful on our part to have units done any sooner than we could move folies in. We have another project currently in the application processes; Pioneer Terrace, on Seamount Drive located at the old Pioneer Nursing Home site. It is likely that we would request the same consideration in the spring/summer 2006 if the sewer improvements haven't been slated for completion by that time. Homestead respectfully requests that the council consider this proposal. We have attached a draft "Hold Harmless" agreement regarding the issuing of building permit(s) with no guarantee of occupancy for your review and consideration. Since the outcome of this proposal greatly affects the entire upcoming years expenses and projected manpower levels on all of our sites, we ask that this be considered at the first available agenda opening. Sincerely yours, HOMESTEAD NW DEV. CO. cc: Michelle Thompson Land Use and Permit Specialist

7 HOLD HARMLESS AGREEMENT THIS AGREEMENT is made and entered into this 26th day of October, 2005, by and between HOMESTEAD NW DEV. CO. and the CITY OF FERNDALE. WHEREAS, HOMESTEAD has begun engineering and site design at Correll Commons, Correll Park PRD Phase 3; and WHEREAS, HOMESTEAD has evicted the tenant living on the premises; and WHEREAS, the parties recognize that civil construction of the site improvements and construction of the first large multi-family building will not be completed until fall of 2006; NOW THEREFORE IN CONSIDERATION of the mutual benefits to them the parties agree as follows: 1. The CITY OF FERNDALE agrees to issue building permit(s) for the multi-plex buildings to be built on the Correll Commons - Correll Park PRD Phase 3 site following approval of engineering and design. THE CITY OF FERNDALE will withhold temporary and/or final occupancy of said units until such time as the sewer "interceptor" project is completed to the satisfaction of the Department of Works. HOMESTEAD agrees that the construction of the building(s) in advance of sewer availability and occupancy does not constitute permission to occupy units and therefore holds the CITY OF FERNDALE harmless for any costs incurred in the construction of units prior to ability to occupy. 2. HOMESTEAD agrees to pay all fees due for issuance of the multi-plex building permit( s) at the said site and commence construction at their own risk. 3. The foregoing represents the entire understanding of the parties with respect to the matters set forth hereinabove. IN WITNESS WHEREOF the parties hereto have executed this agreement at Ferndale, Washington, the day and year first above written. HOMESTEAD NW DEV. CO.: By:~ CITY OF FERNDALE: By: By:

8 DEVELOPER'S AGREEMENT BETWEEN CITY OF FERNDALE AND HOMESTEAD NQRT~'NEST, INC. NW Lll, C.O This Developer's Agreement ("Agreement") i~ between HOMESTEAD J(IW 4<>v. NORTHWEST, IN(;., a Washington corporation ("Homestead"), and the CITY OF FERNDALE, a ~ Washington municipal corporation ("City"), and shall be effective this day of April, Recitals: Whereas, the City Council of the City of Ferndale approved a Preliminary Plat for a 10-lot residential subdivision lmown as Pioneer Terrace on March 20, 2006; and Whereas, due to traffic impacts associated with the proposed development, the City Council approved the Preliminary Plat subject to a condition that standard road frontage improvements, including % street section, curbs, gutters, sidewalks, and streetlights, be extended off-site from the subject property to the intersection of Seamount Drive and Vista Drive; and Whereas, the physical condition of existing utilities within the roadway will require their relocation and reconstruction as part of the construction of the required road frontage improvements, NOW, THEREFORE, in consideration of the mutual promises herein, Homestead and the City agree as follows: 1. Homestead agrees to constructed full % street improvements, including necessary relocation of existing utilities, along the entire property frontage at their sole expense. 2. The City agrees to reimburse Homestead for the costs associated with the off-site portion of the relocation and reconstruction of the existing utilities in the roadway, in an amount not to exceed $95, The City agrees to reimburse Homestead for the cost of the required off-site road frontage improvements, in an amount not to exceed the total required traffic mitigation fee of $39, The calculated amount is based on 10 duplex lots (20 dwelling units). 4. This Agreement constitutes the entire agreement between the parties. There are no terms, obligations, covenants or conditions other than those contained herein. No modification or amendment of this Agreement shall be valid and effective unless evidenced by an agreement in writing signed by both parties. Page 1 of 2

9 ~ ;luw ~Co HOMESTEAD NeRTH'WES'f, lng., a Washington corporation r~ es A. Wynstra, Presi nt CITY OF FERNDALE, a Washington municipal corporation By~ K~ J ~~tie, Mayor Page 2 of 2