AGENDA Council Land & Shore Committee

Transcription

1 AGENDA Council Land & Shore Committee 6:00 PM - Tuesday, August 12, 2014 Council Chambers, 135 E. Sunset Way, Issaquah WA Page COMMITTEE MEMBERS Tola Marts, Chair Stacy Goodman Mary Lou Pauly Staff Liaison: Charlie Bush, Development Services Director 1. CALL TO ORDER 2. AGENDA ITEMS 3-59 a) AB Costco Corporate Headquarters Development Agreement, (AN) Presented by: Keith Niven, Economic Development Director b) AB Lake Sammamish State Park Annexation, (AN) Presented by: Trish Heinonen, Policy Planning Manager c) Traffic Concurrency, (D) Presented by: Dave Favour, Deputy Director d) Land & Shore Work Plan, (I) Presented by: Jennifer R. Woods, Associate Planner 6:00 PM [60 min.] 7:00 PM [30 min.] 7:30 PM [60 min.] 8:30 PM [5 min.] 3. ADJOURNMENT The next meeting is currently scheduled for September 9, 2014 / Council Chambers. INQUIRIES Page 1 of 74

2 Please contact Jennifer A. Woods at or Meeting room is wheelchair accessible. American Disability Act (ADA) accommodations available upon request. Please phone at least two business days in advance. Note: Times listed for meetings topics are approximate and items are subject to being shifted from the original order. (I) Informational, (A) Action Needed, (D) Discussion Page 2 of 74

3 CITY COUNCIL AGENDA BILL City Council Regular Meeting - 21 Jul 2014 NEW AB Consent Calendar Costco Corporate Headquarters Development Agreement and Sunset of a Portion of the Pickering Place Master Site Plan Proposed Council Action: Refer to Council Land & Shore Committee DEPARTMENT OF COUNCIL COMMITTEE LIAISON OTHER COUNCIL MEETINGS EXHIBITS Economic Development, Keith Niven n/a n/a A. Draft Development Agreement w/ Costco B. Proposed Resolution (approving development agreement - to be provided) C. Proposed Resolution (removing Costco Property from Master Site Plan - to be provided) D. Development Commission Recommendation (to be provided) POLICY & BUDGET INFO Comp Plan Policy Nos. GMAT-1, GMAT-2, L-1.2, L- 2.1, EV-2.1, EV-2.2, EV7.1, EV-7.3 Consistent: Yes Other Policies UC-A.4, UC-A.8, UC-B.4, UC-C.1 Expenditure Required $ 0 Amount Budgeted $ 0 SUMMARY STATEMENT Costco's corporate headquarters is part of Pickering Place, located north of I-90. It was permitted under the provisions of the Pickering Place Master Site Plan (PPMSP), file MS 84-01, approved by the City Council in Per the terms of that approval, building heights were limited and the amount of Commercial square footage was limited. In 2012, the City Council approved the Central Issaquah Plan (CIP). The vision includes the intensification of land use within the CIP area to accommodate the City's planned growth over the next 30+ years. The Urban Core zoning that was subsequently adopted by the City Council provide development regulations (e.g. building height, FAR, etc.) that far exceed the standards set by the PPMSP. DEVELOPMENT AGREEMENT Authorization - RCW 36.70B.170 authorizes a city to enter into a development agreement to establish the development standards and other provisions that will apply to, govern and vest the use, development and related mitigation of the property for the duration specified in the agreement. State law also requires that the development agreement be consistent with the jurisdiction's applicable development regulations. Purpose and Intent - The Parties are considering removing the Pickering Place Master Site Plan from the Costco property and replacing it with a development agreement. The development agreement would ensure Costco would have the ability to grow its corporate office in the City of Issaquah over the next 30 years in exchange for partnering with the City to construct a number of street improvements. The new development agreement would be approved by the City Council after a public hearing. No change to the Comprehensive Plan or zoning code is required. Page 3 of 74

4 Review Process - The draft development agreement will be reviewed by the Council Land & Shore and Infrastructure Committees. The Development Commission will provide a recommendation on the Land Plan to the Land & Shore Committee for consideration. Public Notice - Public Notice of the scheduled hearing will be provided consistent with the requirements of the City Code. Signs will be placed on the Property; notice will be sent to owners of property within 300 feet of the Project; and, notice will be placed in the Issaquah Press. Consistency With Comprehensive Plan: GMAT-1....reduce the inappropriate conversion of undeveloped land into sprawling, low-density development. GMAT-2....encourage development in urban areas where adequate public facilities and services exist or can be provided in an efficient manner Goal L-1.2. Creating a diversity of high quality places to live, work, shop and recreate; Goal L-2.1. Incorporate sustainable community development as an integral part of all City and Community functions to ensure Issaquah's ability to meet future needs; Goal EV-2.1. Develop Community Benefits. Encourage businesses and real estate development that address local demand for employment, shopping, business, and medical services while sustaining the existing quality of life. Consider incentives such as density bonuses, administrative review and/or parking credits for businesses that provide community benefits EV-2.2. Adequate Land Supply. Provide adequate land within the City through zoning and within the potential annexation areas through interlocal or preannexation agreements to accommodate planned growth. EV-7.1. Infill and Redevelopment. Develop subarea plans with design guidelines, infrastructure plans and financing strategies that are in compliance with the Comprehensive Plan while being consistent with each specific community's character in existing City subareas such as Old Towne, Newport, and Gilman where redevelopment is encouraged. EV-7.3. Resource Efficiency and Environmental Protection. Encourage infill, redevelopment and PAA development to design, develop, construct and maintain projects in a resource efficient and sustainable manner, which minimizes impacts to and improves the quality of the environment, community and economy. UC Policy A4. Allow increased building height over the existing allowed maximums up to 125 feet in certain areas of Central Issaquah in exchange for public amenities such as page 25 parks and connected green corridors, affordable housing, community plazas, creekside parcels and/or open space. Require 110 feet spacing between High Rise Structures UC Policy A8. Support redevelopment of approved master site plans with new urban development consistent with the Central Issaquah Plan and related development and design standards. UC Policy B4. Promote the development of Green Streets throughout Central Issaquah with the integration of open space and landscaping, including street trees to improve and reduce the amount of stormwater runoff, be aesthetically pleasing and provide an attractive pedestrian experience. UC Policy C1. Allow densities that make under building and/or structured parking economically feasible. Page 4 of 74

5 Administration's Recommendation: The Administration recommends approving a resolution authorizing the Development Agreement following a Public Hearing; and, approving a resolution to remove the Costco property from the Pickering Place Master Site Plan. Update: n/a Alternative(s): 1) Select another Council date for the Public Hearing. 2) Refer this Agenda Bill to another Council Committee for consideration. 3) Refer back to the Administration for clarification or revision. RECOMMENDATION Administration/Economic Development Department: MOVE TO: Refer AB 6780 to the August 12, 2014 Council Land & Shore Committee for review and recommendation, and set the Public Hearing for September 15, 2014, returning to the full Council on September 15, Page 5 of 74

6 DRAFT - July 7, 2014 COSTCO/ISSAQUAH CORPORATE CAMPUS DEVELOPMENT AGREEMENT THIS AGREEMENT is entered into this day of, 2014 by and between Costco Wholesale Corporation ( Costco ) and the City of Issaquah, a Washington municipality ( City ), collectively the Parties. RECITALS A. The City is a noncharter Optional Municipal Code city incorporated under the laws of the State of Washington. The City has authority to enact laws and enter into agreements to promote the health, safety and welfare of its citizens and thereby to control the use and development of the Costco Property (as hereafter defined) and specify zoning and land use regulatory controls, including the Central Issaquah Development and Design Standards ( CIDDS ) for areas within the City. B. The City has the authority to enter into development agreements with those who own or control property within its jurisdiction, pursuant to the Development Agreement Statutes, RCW 36.70B.170 through 36.70B.210. This Agreement is intended to constitute a development agreement governed by the terms and conditions of the Development Agreement Statute. It is also entered into under the City s general contracting authority and the City s State Environmental Policy Act ( SEPA ) mitigation agreement authority. C. Costco owns approximately 47 acres of real property in the City of Issaquah ( Costco Property ), which is located in Pickering Place and which is currently governed by the Pickering Place Master Plan ( PPMP (MS 84-01)). The Costco Property is legally described on Exhibit A and depicted on Exhibit B, both of which are attached hereto and incorporated herein by this reference. For purposes of this Agreement, the Property shall be defined as any property described or depicted on Exhibits A and B and any potential expansion parcels, as illustrated on Exhibit C ( Potential Expansion Area ). D. Costco s corporate home office ( Home Office ) is located on the Costco Property. Both the City and Costco find it desirable to enter into this Agreement to plan for the orderly development and expansion of Costco s Home Office that is consistent with the Central Issaquah Plan ( CIP ) and associated enabling development regulations ( Issaquah Municipal Code or IMC ), particularly IMC Ch A. E. Costco proposes construction of up to an additional 1,500,000 square feet of development on the Property, phased over the next thirty (30) years, as desired by Costco ( Future Development ). A site plan ( Land Plan ) depicting the proposed buildout of the Future Development is attached as Exhibit D. Formatted: Font: 6 pt, All caps of 21 Page 6 of 74

7 DRAFT - July 7, 2014 F. The City and Costco agree that Costco s presence in the community provides economic and community benefit to the City and its residents. The public benefits of entering into this Agreement for the Home Office and Future Development include, but are not limited to, Costco s participation in construction of roads and other public infrastructure, increased property taxes, and creation of non-service employment opportunities for the City of Issaquah. G. The Parties intend that neither shall unreasonably withhold requests for information, approvals or consents provided for in this Agreement. The Parties intend that they shall take further actions and execute further documents, either jointly or within their respective powers and authority, necessary or appropriate to implement the intent of this Agreement. The Parties intend to work to achieve the mutual goals of this Agreement, subject to the City s and Costco s independent exercise of judgment. H. The PPMP that currently governs development in Pickering Place was enacted in As evidenced by the CIP and newly adopted Urban Core ( UC ) CIDDS, the City s vision for this area has changed considerably in the 27 years since the creation of the PPMP. Both the City and Costco recognize the benefits that will derive from long-term facilities planning, movement toward the standards and vision contained in the CIP, and coordinated development of the Costco Property. I. The Parties recognize that the land use controls adopted to implement the CIP are broad and apply to approximately 840 developable acres. The Parties agree that interpretation of some CIDDS is appropriate for the continued development of the existing Home Office, consistent with the intent of the CIP. J. The mutual goals that will be achieved through implementation of this Agreement include: 1. Facilitating Growth of the City s Employment Base: The Agreement allows the Parties to provide greater certainty for the continued presence of the Costco Home Office and expansion of employment opportunities associated with it; 2. Continuity: The Agreement provides an opportunity for a public/private partnership that allows the City to develop an identifiable neighborhood that is consistent with the CIP; 3. Resource Efficiency: The Agreement will maximize the effectiveness of public and private planning and financial resources and will further certainty and predictability; 4. Quality Development: The Agreement will allow the City and Costco to expand the existing Home Office and add additional quality development that implements the policies of the CIP; Formatted: Font: 6 pt, All caps of 21 Page 7 of 74

8 DRAFT - July 7, Reduce Uncertainty: The Agreement will reduce the risk to Costco due to the changes in development regulations and processes and reduce uncertainty for the City as the Agreement contains a unified development vision as well as providing that this Agreement will run through 2034; 6. Costco and City Relationship: The Agreement allows Costco and the City to establish a mutually supportive relationship that enables them to work directly with one another to implement this Agreement; 7. Implement the Central Issaquah Plan and Central Issaquah Development and Design Standards: The Agreement will allow the Costco Home Office Campus to be developed consistent with the CIP and the CIDDS. K. It is the intention of the Parties that this Agreement identify and address all known significant regulatory fees and mitigation that will be required for Costco to construct the Future Development contemplated herein. Nothing in this Agreement is intended to limit Costco s right to construct additional development that is not covered by this Agreement, so long as such additional development is consistent with the City s land use regulations and comprehensive plan policies that are in place at the time that Costco provides the City with a complete application for such development. L. This Agreement is based upon the City s police power, contracting power and other authority, including those provisions codified as RCW 36.70B.170 through 36.70B.210, and general law. M. All Recitals and Exhibits referenced in this Agreement are hereby incorporated by reference and shall be considered as material terms of this Agreement. A definition of terms used in this Agreement is attached as Exhibit E. NOW THEREFORE, in consideration of the mutual benefits and agreements contained herein, as well as other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: Formatted: Font: 6 pt, All caps of 21 Page 8 of 74

9 DRAFT - July 7, 2014 AGREEMENT 1. Approval of Future Development. Costco shall have the right to develop the Costco Property with up to 1,500,000 square feet of additional development. Allowable square footage shall be calculated based upon Gross Floor Area as defined in the CIDDS. Any additional development beyond 1,500,000 square feet shall be considered a major modification to this Agreement. At its sole discretion, Costco may allocate a portion of the Future Development square footage, up to a maximum of 250,000 square feet, (i) to the expansion and/or redevelopment of the existing Costco warehouse store; and/or (ii) to the development, redevelopment, or expansion of residential or other nonoffice use allowed in the UC zone at the time that this Agreement is executed, subject to Costco s rights under Paragraph of this Agreement. Parking structures may be constructed without counting against the allowed Future Development. Nothing in the foregoing is intended to limit Costco s ability to propose additional development beyond the Future Development addressed in this Agreement, on either Costco s existing property or any property that it may subsequently lease or acquire; provided that such additional development shall be consistent with the then-applicable City land use regulations and comprehensive plan policies. a. Floor Area Ratio. The Parties agree that the existing development on the Costco Property and the Future Development on the Property, which includes any subsequently added Expansion Parcels, meets the FAR requirements of the CIP, regardless of whether or not Costco builds the entire Entitlement approved by this Agreement. The existing development square footage and property are illustrated in Exhibit F. b. Satisfaction of Building Height and Bonus Density Fees. The Future Development may be constructed up to the maximum height currently allowed in the UC zone, which is 125 feet. As outlined on Exhibit G, Costco has complied with the requirements of the CIDDS Chapter 5. No further building height fees or bonus density fees will be required for the Future Development. Costco may use the height and density bonuses on any portion of the Property and the bonuses may be used in any phase, phases, or locations on the Property. c. No Phasing Required. Any amount of the Future Development may be built on any parcel within the Property so long as the total net new square feet of gross floor area (i) for the Property does not exceed 1,500,000 square feet; and (ii) is consistent with the UC CIDDS that exist at the time of adoption of this Agreement, as interpreted by this Agreement. 2. Flexibility and Modification of Project Elements, CIDDS, and Other Mitigations. The provisions of this Paragraph shall be construed to effectuate the purpose Formatted: Font: 6 pt, All caps of 21 Page 9 of 74

10 DRAFT - July 7, 2014 of harmonizing and integrating the Future Development with the existing Home Office Campus in a manner that is consistent with the City s CIDDS and CIP. The Future Development shall be consistent with the terms of this Agreement and the CIDDS in existence at the time this Agreement is executed by the Parties. Council approval of this Agreement evidences its consistency with the CIDDS and the CIP vision, goals and policies. If there is a conflict between the terms of the IMC and this Agreement, the terms of this Agreement shall control. a. Intent of the Parties. This Agreement is intended to run for a period of thirty (30) years. The Parties recognize that neither Party is prescient enough to anticipate all of the potential changes in Costco s business needs, construction techniques, or architectural design that may occur during that time period. The Parties agree that future interpretations of, and adjustments to, the CIDDS are appropriate to address specific design and land use elements of the Future Development so long as the interpretation or adjustment results in a project that is consistent with the intent of the CIP and CIDDS. Therefore, through the adoption of this Agreement, it is the intent of the Parties to create a development framework inside of which future City staff and Costco s development team members shall have flexibility to respond to evolutions in workplace design and development. b. Specific Interpretations of City CIDDS. The City s UC CIDDS were adopted to address a wide range of land uses and development proposals. Some of the City s UC CIDDS require interpretation and adjustment to ensure consistent application to Costco s existing Home Office Campus and Future Development as depicted on the Land Plan. The below-listed CIDDS shall be interpreted as follows: i. Building setbacks [for discussion]; Formatted: Highlight ii. iii. discussion] iv. Architectural elements [for discussion] Clustering of landscaping and other amenities [for Core Street Standards [for discussion] Formatted: Highlight Formatted: Highlight Formatted: Highlight SECTION UNDER DISCUSSION c. Interpretation of Non-listed CIDDS. The Parties understand that further CIDDS interpretations and adjustments may be required to guide the buildout of the Future Development. To achieve this integration, in preparing and reviewing any application submitted under this Agreement, the Parties are directed to use the CIDDS Interpretation and Administrative Adjustment of Standards as necessary to provide flexibility in modifying the CIDDS to accommodate Costco s Formatted: Highlight Formatted: Font: 6 pt, All caps of 21 Page 10 of 74

11 DRAFT - July 7, 2014 proposed Future Development design while maintaining consistency with the CIP visions, goals and policies. (CIDDS Ch. 1, Paragraph D(1), and Paragraph E(1-4)). 3. Role of, and Alterations to, the Land Plan. The Land Plan attached as Exhibit D represents the Parties current vision of how the Future Development might be constructed on the Costco property. Costco shall have the right to propose major alterations ( Major Alteration ) to the Land Plan, without limitation. A Major Alteration shall consist of the following: DEFINITION UNDER DISCUSSION. If Costco proposes a Major Alteration, the City will use a Level III procedure to process the Major Alteration, unless Costco and the City Designated Official agree otherwise. All other proposed alterations shall be considered Minor Alterations. Minor Alterations shall be approved by staff the Designated Official through a Level I administrative process. (The numerical designations on the Land Plan building envelopes are for convenience only and are not intended to evidence construction sequencing of the Future Development). Formatted: Highlight 4. Use of Future or Amended CIDDS. Should the City adopt new or amended CIDDS applicable to the Future Development during the life of this Agreement, Costco shall have the option, but not the requirement, to incorporate the new CIDDS, at its sole discretion, so long as the election is consistent with the then-current CIP. Costco s election of such new CIDDS shall require City confirmation by the Designated Official that the election is consistent with the then-current CIP as applied to the remaining un-built portion of Costco s Future Development. Costco s election of new or amended CIDDS can be made on a regulation-specific basis and will not affect Costco s vesting to all other existing CIDDS as set forth in Paragraph. 5. Removal of the Pickering Place Master Plan. The Parties intend to eliminate all or a portion of the Property from the provisions and limitations of the PPMP and replace it with the City s recently-adopted CIDDS, as interpreted by this Agreement. The removal of the Property from the PPMP may be accomplished by either alternative method by providing written notice to the City of Costco s election. a. At any time during the term of this Agreement, without further action, the Council s adoption of this Agreement shall constitute the City s removal of the PPMP for the Costco Property. The PPMP provisions shall be replaced and the Future Development shall be regulated by this Agreement and the applicable provisions of the City s CIDDS. Prior to the City s removal of the PPMP under this provision, Costco shall demonstrate to the City s satisfaction that the future use and maintenance of Shared Facilities within Pickering Place are adequately addressed through private covenants, conditions and restrictions ( CC&Rs ) that will govern these Shared Facilities once the PPMP has been removed. b. In the alternative, at Costco s sole discretion during the Term of this Agreement, Costco may provide the City with a petition from the requisite number of Pickering Place landowners requesting that the City lift the PPMP for some or Formatted: Font: 6 pt, All caps of 21 Page 11 of 74

12 DRAFT - July 7, 2014 all of the properties covered by the PPMP. In that case, without further action, the Council vote approving this Agreement shall serve to remove and void the PPMP for the land that is identified in the petition. Prior to the City s removal of the PPMP under this provision, Costco shall demonstrate to the City s satisfaction that the future use and maintenance of the Shared Facilities within Pickering Place are adequately addressed through private CC&Rs that will govern these Shared Facilities once the PPMP has been removed. 6. Right to Rebuild, Remodel and Expand Home Office. a. Buildings. Through the term of this Agreement, Costco shall retain the right to alter, expand, rebuild, or remodel the interiors and exteriors of its existing Home Office buildings without requiring compliance with new CIDDS and CIP so long as (i) the buildings remain in substantially the same footprint; and (ii) expansions of existing buildings are limited to no more than 50% of the gross square footage of the building and interior remodels or alterations requiring a City permit covering no more than 50% of the existing square footage ( Minor Expansions ). Expansions of existing Home Office buildings in excess of 50% of each building s gross square footage ( Major Expansions ) are permissible, but will require compliance with the CIDDS and CIP in effect at the time of the proposed Major Expansion. The foregoing compliance requirement does not eliminate Costco s right to apply for an Administrative Adjustment of Standards. Minor Expansions shall be limited to one per building in any two year period. This Section replaces the definition of Redevelopment in CIDDS Chapter 2. b. Site Alteration, Rebuilding, Remodeling and Expansion. Through the term of this Agreement, as Costco redevelops the currently existing buildings on the Home Office Campus with building alterations, rebuildings, remodels and expansions that require a City land use permit, Costco shall move toward bringing the Home Office site into compliance with the CIDDS and CIP to the extent practicable, given the fact that the Parties are dealing with application of the CIDDS and CIP to an existing development. 7. Warehouse Light Pole Heights for Warehouse Store Parking Lot. During the term of this Agreement, Costco shall be permitted to continue to use the existing 40- foot light standards to light the consumer warehouse store parking lot. Any replacement of the existing light standards shall have full cut-off fixtures and be more energy efficient than the existing light standards. 8. Signage. Costco shall be permitted to use corporate identification signage consistent with the CIDDS on buildings of five (5) or more stories. 9. Allowed Land Uses. The Future Development may include: Formatted: Font: 6 pt, All caps of 21 Page 12 of 74

13 DRAFT - July 7, 2014 a. All office uses currently allowed under the UC CIDDS including, without limitation, office, residential, commercial, consumer warehouse, wholesale, retail or manufacturing uses; b. Any other uses that may be allowed under future versions of the City s UC CIDDS or under any new zone that covers the Property; and c. Up to 250,000 square feet of Future Development may be utilized for non-office uses. Nothing in the foregoing is intended to limit Costco s ability to propose additional development beyond the Future Development addressed in this Agreement, on either Costco s Property or any property that it may subsequently lease or acquire; provided that such additional development shall be consistent with the then-applicable City land use regulations and comprehensive plan policies. 10. Parking. Costco shall provide parking consistent with the range identified in the CIP (CIDDS Chapter 8.0, Parking Standards ). The City will evaluate parking at a project scale and not on a parcel-by-parcel basis. However, at no time may the total number of Costco spaces fall below the minimum number of spaces required by the IMC. Costco shall be permitted to exceed the City s maximum parking stall size for the portion of the Property that is associated with its non-office uses, including Major Expansions of the existing warehouse store. Such parking shall be permitted up to a maximum stall size of 10 ft. x 20 ft. Costco, at its discretion, may elect to increase non-officeshall parking the non-office portion consistent with IMC (1 space per 200 sf GFA). to a maximum of 5 spaces per 1,000 sq. ft.; however, such stalls shall be at the City s standard size of 9 ft. x 18.5 ft. Costco shall be allowed to propose a mix of stall sizes (up to a maximum size of 10 ft. x 20 ft.) so long as the total parking impervious surface is not increased beyond what would be allowed with a layout of 4 stalls per 1,000 sq. ft. sized at 10 ft. x 20 ft. 11. Parking Structure Height and Square Footage Not Subject to Bonus Height and Density Requirements. During the term of this Agreement, existing and future parking structures on the Property shall not be subject to Bonus Height or Density fees. SECTION UNDER DISCUSSION 12. Skybridge. Without limiting the location or number of other skybridges in the Future Development, Costco shall have the right to construct two Sky Bridges that will cross the future public right-of-way on the proposed extension of Lake Drive and the City will grant the street use and air rights necessary to facilitate construction of the skybridges across the public right-of-way. SECTION UNDER DISCUSSION 13. Expansion Parcels. Costco may extend the provisions of this Agreement to property not currently owned by Costco within the Potential Expansion Area that is Formatted: Font: 6 pt, All caps of 21 Page 13 of 74

14 DRAFT - July 7, 2014 illustrated on Exhibit C. At Costco s election, and upon Costco s notification to the City, the benefits and burdens of this Agreement shall automatically extend to any property within the Potential Expansion Area that Costco acquires or leases ( Expansion Parcels ), without further action of the Parties. 14. Transportation SEPA Mitigation, Impact Fees and Concurrency. Costco s participation in traffic improvements identified on the Master Transportation Financing Agreement ( MTFA ), which is attached as Exhibit H, is intended to fully mitigate all SEPA, Traffic Impact Fee and Traffic Concurrency requirements for the Future Development. No additional traffic fees or traffic mitigation will be required to entitle the Future Development. 15. Costco Concurrency Reservation. The City has determined that Costco s participation in the MTFA fully mitigates the traffic impacts of the Future Development. As such, within thirty (30) days after the execution of this Agreement by the Parties, the Designated Official shall issue a Certificate of Concurrency for Costco s Future Development with an expiration date that is the same as the expiration date of this Agreement. 16. Non-Traffic Impact Fees. For non-traffic impact fees, Costco shall be vested to the impact types and amounts that are in effect at the time of execution of this Agreement by the City. The Non-Traffic Impact Fees applicable to the Future Development are set forth on Exhibit I Future Property Valuation. For purposes of valuing Costco s property for inclusion into future local improvement districts or other mitigation or infrastructure improvement programs, the Parties agree that valuation of the Costco Property, including any subsequently acquired Expansion Parcels, shall be based on the value added to the Costco Property by said improvements ( Additional Benefit ) that is above the Future Development rights granted in this Agreement. In other words, any assessment based upon Additional Benefit to Costco s Property purportedly resulting from the construction of new City infrastructure shall be limited to any Additional Benefit to Costco s Property that is above and beyond the full buildout of the 1,500,000 square feet of Future Development granted by this Agreement Early Termination, Sale of Unused Vehicular Trips. At Costco s sole discretion, following written notice to the City, Costco shall have the right to waive its right to construct some or all of the remaining Future Development. In that case, the number of remaining vehicle trips ( Unused Trips ) associated with the foregone development will be determined by calculating the amount of foregone development as a percentage of the Future Development and multiplying that number by the number of vehicle trips generated by the MTFA traffic improvements that will be utilized by the full buildout of the Future Development, which is pm/peak hour trips. For example, if Costco decided to forego 500,000 sq. ft. of the Future Development, the trip calculation Formatted: Font: 6 pt, All caps of 21 Page 14 of 74

15 DRAFT - July 7, 2014 would be: 500,000 sq. ft./1,500,000 sq. ft. x pm/peak hour trips =.33 x = PM peak hour trips. Costco shall have the right to sell the Unused Trips to future developers within the City and the City agrees to allow said developers to offset the traffic impacts of their proposed developments on a 1:1 basis for each acquired Unused Trip. SECTION UNDER DISCUSSION Stormwater Detention and Treatment. a. General Standards. The Future Development shall comply with the stormwater flow and quality controls that are in effect on the date of this Agreement unless the City is required to subsequently modify its standards due to State and/or Federal requirements that require the City to enforce newer standards on previously vested projects. Unless otherwise required by changes in State or Federal law, the standards for stormwater flow and quality controls in effect at the time of permitting the Future Development will be the City of Issaquah 2011 Addendum to the 2009 King County, Washington Surface Water Design Manual. b. Use of Future Technologies. The Parties recognize that stormwater treatment science is evolving. Costco shall have the option, but not the requirement, to use any treatment options contained in current or future Washington Department of Ecology stormwater manuals and corresponding City of Issaquah stormwater technical manuals that are approved for general use by the City so long as the resulting use of technology would lead to stormwater treatment that was equivalent to, or better than, other authorized stormwater treatment technologies Acknowledgement of Sufficient Stormwater Capacity. It is anticipated that Costco s stormwater will discharge off-site to the natural environment. The City acknowledges that there are no known constraints in the natural conveyance system. Provided that the City is not in the midst of an unforeseen and unavoidable stormwater management crisis that is out of the City s control, the City Designated Official shall not withhold any Entitlement for the Future Development, or any portion thereof, and Costco s discharge will be permitted into the natural environment in the appropriate location Acknowledgement of Sufficient Water Supply and Capacity to Serve Future Development. The City has analyzed its existing and future water supply, capacity, and infrastructure. Based on its review, the City Designated Official acknowledges that there is sufficient water supply, capacity, and infrastructure to serve the Future Development, other than what Costco will have to construct on-site to address Costco s development needs. Provided that the City is not in the midst of an unforeseen and unavoidable water supply crisis which is out of the City s control, the City shall not withhold any Entitlement for the Future Development, or any portion thereof, on account of insufficient water supply, capacity, or infrastructure. Formatted: Font: 6 pt, All caps of 21 Page 15 of 74

16 DRAFT - July 7, Acknowledgement of Sufficient Sanitary Sewer. Other than potential capacity issues and minor improvements at the Pickering Lift Station and associated force main to the City s gravity system, the City has analyzed its existing and future sanitary sewer capacity and infrastructure. Based on its review, the City Designated Official acknowledges that there is sufficient sanitary sewer capacity and infrastructure to serve the Future Development. Provided that the City is not in the midst of an unforeseen and unavoidable sanitary sewer capacity crisis which is out of the City s control, the City Designated Official shall not withhold any Entitlement for the Future Development, or any portion thereof, on account of insufficient sanitary sewer capacity or infrastructure Utility Charges. Costco will pay standard connection charges to the City s utilities, including all local general facility charges and regional connection charges. Excepting minor changes to the Pickering Lift Station and associated force main to the City s gravity system, the City shall not impose any additional fees, charges or requirements to construct off-site utility infrastructure on the Future Development METRO Regional Wastewater Treatment Capacity. This Agreement does not ensure regional capacity by METRO for conveyance and treatment. The City will continue to coordinate with METRO to ensure adequate sewer conveyance and treatment for the City as a whole, including the Future Development. The City designated Official shall not withhold entitlement for the Future Development based on limitations in the METRO system, unless METRO imposes a moratorium on new sewer connections in Issaquah State Environmental Policy Act ( SEPA ) Compliance. State Environmental Policy Act ( SEPA ) compliance for the Development shall occur in accordance with the provisions of this Section. a. Adoption of Existing Environmental Documents. The Parties acknowledge that Future Development contemplated on the Costco Property has been analyzed in prior environmental documents including the Central Issaquah Plan EIS, the SEPA DNS for the Costco Parking Garage; and the SEPA DNS for the reconfiguration of the Costco fuel station. The City agrees to utilize the provisions of WAC (Adoption) and, to the extent consistent with that Section, adopt these environmental documents to satisfy the requirements of SEPA for the Development. The Property is also located within a Planned Action Area (CITE TO WAC and CITY PLANNED ACTION ORDINANCE) and no additional SEPA review is required for development that is consistent with the elements reviewed for CIP adoption. A copy of the City s SEPA Planned Action Ordinance is attached as Exhibit J. b. Scope of SEPA Review and Mitigation. Pursuant to RCW 36.70B.170(3)(c), this Agreement addresses the mitigation measures, development conditions, and other requirements under 43.21C RCW that are Formatted: Font: 6 pt, All caps of 21 Page 16 of 74

17 DRAFT - July 7, 2014 applicable to the Development. The Parties intend that the MDNS (file # ) analyzing this Development Agreement and the impacts of the Future Development shall constitute compliance to the fullest possible extent under SEPA for all Entitlements and requested modifications under Paragraph. c. Adequacy of Mitigation. Pursuant to RCW 43.21C.240(2) & (3), the City finds that the mitigation measures proposed in this Agreement, MDNS (file # ), and the analyses and mitigation required by other local, state, and federal laws and regulations provide adequate analysis of, and mitigation for, the specific adverse environmental impacts of the Future Development. The City agrees that the impacts of the Future Development are adequately mitigated through this Agreement, MDNS (file # ), and the application of RCW 43.21C.240. The City Designated Official may require further SEPA review and mitigation only to the extent that an implementing approval or requested modification meets the following conditions: i. The City concludes that a requested Entitlement application includes a request that exceeds the Future Development defined by this Agreement, and that the request is likely to cause unmitigated, significant, adverse environmental impacts that have not been previously analyzed in a SEPA environmental document; ii. The City concludes, pursuant to WAC (3)(B), that substantial changes have been made to the Future Development that are likely to have significant, adverse impacts that have not been previously analyzed in a SEPA environmental document; or iii. The City concludes, pursuant to WAC (3)(b), that there is new information indicating probable significant, adverse environmental impacts that have not previously analyzed in a SEPA environmental document. Except as provided above, no additional mitigation conditions or environmental analysis shall be imposed on the Future Development during the term of this Agreement unless required due to a serious threat to public health and safety pursuant to RCW 36.70B.170 and RCW 36.70B.180. d. Submission of Future Checklists to Determine Development Consistency. For each future Entitlement application, Costco shall submit a completed SEPA checklist to confirm consistency of the proposed development with this Agreement and the existing SEPA determinations. Submission of the future SEPA checklist is for informational purposes to confirm consistency of the proposed Future Development and mitigations established in this Agreement and shall not be a basis for additional SEPA process or mitigation so long as the Formatted: Font: 6 pt, All caps of 21 Page 17 of 74

18 DRAFT - July 7, 2014 proposed development conforms to the terms of this Agreement and no additional significant, adverse environmental impacts are identified using the criteria established in Paragraph (c) (i-iii) Vested Rights. The Future Development shall be governed by this Agreement and applicable provisions of the CIDDS in effect as of the date of this Agreement. All Future Development shall be implemented through plats, short plats, site development permits, building permits and other permits and approvals (i.e.-entitlements) issued by the Designated Official. As authorized in RCW 36.70B.170(3)(i), the term of this Agreement is thirty (30) years to commence on the date the Agreement is executed by the Parties. All Entitlements for the Future Development must be applied for within this thirty (30) year time period. a. Limitation on Imposition of New or Modified CIDDS. In accordance with RCW 36.70B.180, during the term of this Agreement the City shall not modify or impose new or additional development standards except as set forth in this Agreement. To the extent this Agreement does not establish development standards, process, procedures, or similar elements covering a certain subject, element or condition, then the Future Development shall be governed by the CIDDS in effect upon the date of this Agreement, except as follows: b. Serious Threat to Public Health or Safety. The City Council or Designated Official may modify one or more CIDDS during the term of this Agreement to the extent required to avoid a serious threat to the public health or safety. Any serious threat must be believed to be imminent and permanent. The modification must be the minimum necessary to address the serious threat to public health and safety and shall be removed if the serious threat is alleviated and the modification is no longer necessary. c. Updated Uniform Codes Apply. Notwithstanding the foregoing, the International Building Code, International Fire Code, and other construction codes in effect in the State of Washington, and as adopted by the City of Issaquah on the date of filing a complete building permit application or other construction application for a building in the Future Development, shall apply, except that no changes to such codes taking effect after the date of this Agreement shall require redesign or modification of then-existing utilities, facilities, buildings or other infrastructure that were installed in accordance with this Agreement unless redesign or modification are required to avoid a serious threat to the public health or safety Design Review and Permitting Process. The Future Development shall be subject to a Level II administrative permitting process for future Entitlements, so long as it is consistent with Exhibit D, as determined by the Designated Officiale. If future design review is required, it is the Parties intent that design review will be administrative and will be limited to achieving architectural integration between the Future Development and the Formatted: Font: 6 pt, All caps of 21 Page 18 of 74

19 DRAFT - July 7, 2014 existing Corporate Campus development, while simultaneously implementing the CIP and CIDDS. Land use permit approvals shall be in effect for the term of this Agreement Fees. Costco agrees to pay all permitting/review fees as established by the Permit Center. Fees will adjust over time and Costco agrees to pay the fees in place at the time of application and/or permitting Agreement to Run With the Land. For the term of this Agreement, the benefits and obligations of this Agreement shall run with the land and continue following the subdivision, leasing, or transfer of ownership to Costco s successors and assigns Term. The term of this Agreement shall be thirty (30) years from the date of execution by the last Party to execute this Agreement. The City and Costco may agree to extend the term of the Agreement, provided that such extension is approved by the City Council Amendment of Agreement. Any major amendment to this Agreement shall require review authorization by the City Council. A Major Amendment is defined as: a. Changing the 30-year term of the Agreement; b. Increasing the amount of Future Development beyond 1,500,000 additional square feet; c. Proposing a land use that is not allowed in the UC zone; d. Proposing to add property beyond the properties designated as Expansion Parcels; e. Increasing Building Height above 125 feet; f. Proposing impervious surface ratio above the limits established in the CIDDS; or g. Request to substantially revise the MTFA. All other proposed revisions will be considered Minor Amendments and shall be reviewed and approved decided by the Designated Official Indemnification. Except as otherwise specifically provided elsewhere in this Agreement and any exhibits hereto, each Party shall protect, defend, indemnify and hold harmless the other Party and their officers, agents, and employees, or any of them, from and against any and all claims, actions, suits liability, loss, costs, expenses, and damages of any nature whatsoever, which are caused by or result from any negligent act or omission of the Party s own officers, agents, and employees in performing services Formatted: Font: 6 pt, All caps of 21 Page 19 of 74

20 DRAFT - July 7, 2014 pursuant to this agreement. In the event that any suit based upon such a claim, action, loss, or damage is brought against a Party, the Party whose sole negligent actions or omissions gave rise to the claim shall defend the other Party at the indemnifying Party s sole cost and expense; and if final judgment be rendered against the other Party and its officers, agents, and employees or jointly the Parties and their respective officers, agents, and employees, the Parties whose sole negligent actions or omissions gave rise to the claim shall satisfy the same; provided that, in the event of concurrent negligence, each Party shall indemnify and hold the other Parties harmless only to the extent of that Party s negligence. The indemnification to the City hereunder shall be for the benefit of the City as an entity, and not for members of the general public Recording. This Agreement shall be recorded in the records of King County, Washington Binding Effect; Assignability. This Agreement shall bind and inure to the benefit of the Parties hereto and their respective successors, heirs, legatees, representatives, receivers, trustees, successors, transferees and assigns Interpretation. This Agreement has been reviewed and revised by legal counsel for both Parties, and no presumption or rule construing ambiguity against the drafter of the document shall apply to the interpretation or enforcement of this Agreement. Nothing herein shall be construed as a waiver of the City s constitutional and statutory powers. Nothing herein shall be construed or implied that the City is contracting away its constitutional and statutory powers, except as otherwise authorized by law Authority. Each signatory to this Agreement represents and warrants that he or she has full power and authority to execute and deliver this Agreement on behalf of the Party for which he or she is signing, and that he or she will defend and hold harmless the other Parties and signatories from any claim that he or she was not fully authorized to execute this Agreement on behalf of the person or entity for whom he or she signed. Upon proper execution and delivery, this Agreement will have been duly entered into by the Parties, will constitute as against each Party a valid, legal and binding obligation that shall run with the land, and will be enforceable against each Party in accordance with the terms herein Notice of Default and Enforcement. In the event any Party, acting in good faith, believes that the other Party has violated the terms of this Agreement, the aggrieved Party shall give the believed offending Party notice of the alleged violation by sending a detailed written notice of the same to the offending Party as provided in Paragraph below. This notice is intended to invite a resolution by the Parties of any dispute prior to the institution of arbitration. If a mutually agreed resolution is not reached within twentyone (21) days after the offending Party has received the written notice, the aggrieved Party may commence arbitration proceedings pursuant to Paragraph 38 below. For purposes of this Paragraph, the identities and addresses of the Parties are as set out in the following Formatted: Font: 6 pt, All caps of 21 Page 20 of 74

21 DRAFT - July 7, 2014 Paragraph. The identity or address of any Party may be changed for purposes of this Paragraph by written notice to the representative for the other Party Notices. All notices, requests, demands, and other communications called for or contemplated by this Agreement shall be in writing, and shall be duly given by mailing the same by certified mail, return receipt requested; or by delivering the same by hand, to the following addresses, or to such other addresses as the Parties may designate by written notice in the manner aforesaid: Costco Wholesale Corporation c/o Richard Olin 999 Lake Drive Issaquah, WA And to its Attorney: Foster Pepper, PLLC Attn: Patrick Mullaney 1111 Third Avenue, Suite 3400 Seattle, WA City of Issaquah: Development Services Director City Hall Northwest th Avenue NW Issaquah, WA Dispute Resolution. Any disputes regarding the interpretation of this Agreement shall be submitted to binding arbitration before a member of the Seattle Judicial Arbitrators and Mediators Service ( JAMS Seattle Neutral ). The Parties shall jointly select the JAMS Seattle Neutral. If the Parties cannot agree on an arbitrator, the Parties shall each select a JAMS Seattle Neutral who shall confer and pick a third JAMS Seattle Neutral to serve as the arbitrator. The arbitrator shall be free to choose between the Parties positions or fashion an alternative remedy. The prevailing Party in any dispute shall be awarded reasonable attorneys fees and costs as provided for in Paragraph Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. Venue for any action arising out of or relating to this Agreement shall lie in King County Superior Court Specific Performance and Enforcement. The Parties specifically agree that damages are not an adequate remedy for breach of this Agreement and that the Parties are entitled to compel specific performance of all material terms of this Agreement by any Party in default hereof. All terms and provisions of this Agreement are material. Formatted: Font: 6 pt, All caps of 21 Page 21 of 74

22 DRAFT - July 7, Attorneys Fees. Should it be necessary for any Party to this Agreement to initiate legal proceedings to adjudicate any issues arising hereunder, the Party or Parties to such legal proceedings who substantially prevail shall be entitled to reimbursement of their attorneys fees, costs, expenses, and disbursements (including the fees and expenses of expert and fact witnesses) reasonably incurred or made by the substantially prevailing Parties in preparing to participate in mediation or arbitration, to bring suit, during suit, on appeal, on petition for review, and in enforcing any judgment or award, from the other Party or Parties No Third Party Beneficiary. This Agreement is made and entered into for the sole protection and benefit of the parties hereto and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement Severability. This Agreement does not violate any federal or state statute, rule, regulation or common law known; but any provision which is found to be invalid or in violation of any statute, rule, regulation or common law shall be considered null and void, with the remaining provisions remaining viable and in effect Cooperation in Execution of Documents. The Parties agree to properly and promptly execute and deliver any and all additional documents that may be necessary to render this Agreement practically effective. This Paragraph shall not require the execution of any document that expands, alters or in any way changes the terms of this Agreement Exhibits. This Agreement includes the following exhibits: a. Exhibit A Legal Description of Costco Property b. Exhibit B Sketch of the Costco Property c. Exhibit C Potential Expansion Area d. Exhibit D Land Plan e. Exhibit E Definitions f. Exhibit F FAR Calculations g. Exhibit G Bonus Height and Density Worksheet h. Exhibit H Master Transportation Financing Agreement i. Exhibit I Non-Traffic Impact Fees Full Understanding. The Parties each acknowledge, represent and agree that they have read this Agreement; that they fully understand the terms thereof; that they Formatted: Font: 6 pt, All caps of 21 Page 22 of 74

23 DRAFT - July 7, 2014 have had the opportunity to be fully advised by their legal counsel and any other advisors with respect thereto; and that they are executing this Agreement after sufficient review and understanding of its contents Final and Complete Agreement. This Agreement constitutes the final and complete expression of the Parties on all subjects relating to the development of the Costco Property and the Potential Expansion Area. This Agreement may not be modified, interpreted, amended, waived or revoked orally, but only by a writing signed by all Parties. This Agreement supersedes and replaces all prior agreements, discussions and representations on all subjects discussed herein, without limitation. No Party is entering into this Agreement in reliance on any oral or written promises, inducements, representations, understandings, interpretations or agreements other than those contained in this Agreement and the exhibits hereto. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above. Costco Wholesale Corporation, By: Its: City of Issaquah, A Washington optional municipal code city ATTEST: By: Its: City Clerk APPROVED AS TO FORM: Issaquah City Attorney Formatted: Font: 6 pt, All caps of 21 Page 23 of 74

24 DRAFT - July 7, 2014 STATE OF WASHINGTON COUNTY OF KING ss. On this day personally appeared before me, to me known to be of COSTCO WHOLESALE CORPORATION that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that is authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN under my hand and official seal this day of, (Signature of Notary) (Legibly Print or Stamp Name of Notary) Notary public in and for the State of Washington, residing at My appointment expires Formatted: Font: 6 pt, All caps of 21 Page 24 of 74

25 DRAFT - July 7, 2014 STATE OF WASHINGTON COUNTY OF KING ss. On this day personally appeared before me, to me known to be of the CITY OF ISSAQUAH, a Washington optional municipal code city that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that is authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN under my hand and official seal this day of, (Signature of Notary) (Legibly Print or Stamp Name of Notary) Notary public in and for the State of Washington, residing at My appointment expires Formatted: Font: 6 pt, All caps of 21 Page 25 of 74

26 DRAFT - July 7, 2014 Formatted: Font: 6 pt, All caps of 21 Page 26 of 74

27 Exhibit A Legal Description Warehouse Parcel 1-90 CORPORATE CENTER LESS POR FOR RD PER REC NO TGW TR X ISS LLAft! REC # BEING POR VAC LAKE DR ADJ SLY TO LOTS 10 THRU 12 SO PLAT. Buildings 1, 2 & 3 Parcel 1-90 CORPORATE CENTER LOTS 1 &4& 5 & REV LOTS 28 & 29 & 30 PER ISSAQUAH LLA# PLN REC# TGW LOT A ISSAQUAH LLA #LLA REC # ALL IN SD PLAT LESS LOTS 4 & 5 PER LOT A ISS LLA #PLN REC# Trading Building Parcel 1-90 CORPORATE CENTER LOT A ISSAQUAH LLA # PLN REC # BEING LOTS 2 & 3 SD PLAT TGW FOR VAC ST ADJ PER ISSORD# Garage Parcel 1-90 CORPORATE CENTER LOT A ISSAQUAH LLA #PLN REC # SD LLA DAF- LOTS 4 & 5 TGW LOT B ISS LLA #PLN REC# BEING LOTS 2 & 3 ALL IN SD PLAT. Page 27 of 74

28 Exhibit B Pickering Place and Costco Property Development Agreement Boundary '\..-, \. V, Costco Corporate' Headquarters^ I- J Current Pickering Place Boundary Costco Corporate Campus Property Costco Warehouse Property PPOA Common Space Page 28 of 74

29 Exhibit C Potential Expansion Area Page 29 of 74

30 CORPORATE CAMPUS 11TH AVE 7 RETAIL AND RETAIL SUPPORT 10TH AVE CONCEPTUAL SITE DEVELOPMENT PLAN Revised June 2014 LEGEND LAKE DRIVE PROPERTY LINE LAKE DRIVE EXPANSION / DEVELOPMENT AREA 200 SHORELINE BOUNDARY STREAM BUFFER WEST EDGE OF STREAM PPOA OPEN AREA 1 G Building numbers do not imply the order of construction. 1 BUILDING 1 EXISTING 3 STORY OFFICE AND OFFICE SUPPORT USES AND SERVICES PPOA OPEN AREA 2 BUILDING 2 EXISTING 3 STORY 3 3 BUILDING 3 EXISTING 3 STORY T T PROPOSED BUILDING AREA 4 PROPOSED 3-10 STORY BUILDING PROPOSED BUILDING AREA 5 PROPOSED 3-10 STORY BUILDING PROPOSED BUILDING AREA 6 PROPOSED 3-10 STORY BUILDING TRADING BUILDING EXISTING 2 STORY 5 LAKE DRIVE OFFICE AND OFFICE SUPPORT USES AND SERVICES 4 Page 30 of 74 G 7 PARKING GARAGE EXISTING 5 LEVELS EXPANDABLE TO 7 COSTCO WAREHOUSE EXISTING 1 LEVEL

31 CORPORATE CAMPUS DEVELOPMENT AND AMENITIES PLAN PROPOSED BUILDING 4 AND 5 Revised June 2014 RIDGE SKY B EXISTING OFFICE BUILDING UNDER BUILDING PARKING GARAGE ENTRANCE SEMIPUBLIC PLAZA UNDER BUILDING PARKING GARAGE ENTRANCE PUBLIC ENTRY PLAZA LEGEND PROPERTY LINE POTENTIAL BUILDING LOCATION 5 BUILDING 5 STORIES: 3-10 SQ FT: 400K-800K UNDER BUILDING PARKING: STALLS STORES: 3-10 SQ FT: 250K-700K UNDER BUILDING PARKING: STALLS IDGE SEMI-PUBLIC PLAZA BUILDING 4 SEMIPUBLIC PLAZA SKY B 5 RIDGE LAKE DRIVE 4 SKY BR AREA OF UNDERGROUND PARKING SE M I PL -PU AZ BL A IC PUBLIC PLAZA AND PRIMARY PEDESTRIAN ENTRANCE 4 Notes: - Building footprints are conceptual and intended to indicate Costco s commitment to complying with the City s codes and CIP guidelines. - The building numbers do not imply the order of construction. - Semi-public spaces, although adjacent to public paths and spaces, are designed in a manor to indicate that they are for the use of the adjacent building s tenants and their guests. UNDER BUILDING PARKING GARAGE ENTRANCE UNDER BUILDING PARKING GARAGE ENTRANCE INCLUDING SERVICE ACCESS Page 31 of 74

32 CORPORATE CAMPUS CIRCULATION PLAN PROPOSED BUILDING 4 AND 5 Revised June 2014 LEGEND FIRE ACCESS BIKE LANES PROPERTY LINE PEDESTRIAN Also, the building numbers do not imply the order of construction. 5 LAKE DRIVE Note: Building footprints are conceptual and intended to indicate Costco s commitment to complying with the City s codes and CIP guidelines. 4 Page 32 of 74

33 10TH AVE LEGEND LA KE PROPERTY LINE 6 BUILDING 6 EXISTING 5 LEVEL PARKING GARAGE PROVIDES 1,000 ADDITIONAL PARKING STALLS. POTENTIALLY EXPANDABLE TO 7 STORIES AND 1,700 STALLS. STORES: 3-10 SQ FT: 150K-400K UNDER BUILDING PARKING: STALLS SKY BRID EXISTING OFFICE BUILDING 6 PO T EN EN TR TIA AN L C E PE AN SK Y B R ID N IA ZA TR LA ES P D D EXISTING PARKING GARAGE GE AREA OF UNDERGROUND PARKING G G E SKY GE BRID Note: Building footprint is conceptual and intended to indicate Costco s commitment to complying with the City s codes and CIP guidelines. Also the building number does not imply the order of construction. DR I VE POTENTIAL BUILDING LOCATION AX TIA UNDER BUILDING PARKING GARAGE ENTRANCE INCLUDES SERVICE ACCESS PO TE N DEVELOPMENT AND AMENITIES PLAN PROPOSED BUILDING 6 Revised June 2014 LA R IS /FO CHIT EC T CA URA LP L OIN T CORPORATE CAMPUS G UNDER BUILDING PARKING GARAGE ENTRANCE EXISTING OFFICE BUILDING SK Y B R ID G E Page 33 of 74

34 10TH AVE CORPORATE CAMPUS CIRCULATION PLAN PROPOSED BUILDING 6 Revised June 2014 LEGEND LA KE FIRE ACCESS VE DR I PROPERTY LINE PEDESTRIAN 6 Note: Building footprint is conceptual and intended to indicate Costco s commitment to complying with the City s codes and CIP guidelines. Also, the building numbers do not imply the order of construction. G Page 34 of 74

35 11TH AVE CORPORATE CAMPUS 10TH DEVELOPMENT AND AMENITIES PLAN EXISTING COSTCO WAREHOUSE Revised June 2014 AVE 7 LEGEND PROPERTY LINE EXPANSION / DEVELOPMENT AREA 7 COSTCO WAREHOUSE STORIES: 1 SQ FT: 150K-250K PARKING: 700+ STALLS Note: Building footprint is conceptual and intended to indicate Costco s commitment to complying with the City s codes and CIP guidelines. Also, the building numbers do not imply the order of construction. CONC EPTU AL C LAYO AR WASH UT LA KE DR IV E Page 35 of 74

36 10TH 7 AVE CIRCULATION PLAN EXISTING COSTCO WAREHOUSE Revised June TH AVE CORPORATE CAMPUS LEGEND FIRE ACCESS PROPERTY LINE PEDESTRIAN Note: Building footprint is conceptual and intended to indicate Costco s commitment to complying with the City s codes and CIP guidelines. Also, the building numbers do not imply the order of construction. LA KE DR IV E Page 36 of 74

37 11 July 2014 Exhibit E Defined Terms 1. Additional Benefit: For purposes of valuing Costco s property for inclusion into local improvement districts or other mitigation or infrastructure improvement programs, the Parties agree that valuation of the Costco Property, including any subsequently acquired Expansion Parcels, shall be based on the value added to the Costco Property by said improvements that is above the Future Development rights granted in this Agreement. 2. Allowed Land Uses: The Future Development may include: (i) All uses currently allowed under the UC CIDDS including, without limitation, office, residential, commercial, consumer warehouse, wholesale, retail or manufacturing uses; (ii) Any other uses that may be allowed under future versions of the City s UC CIDDS or under any new zone that covers the Costco Property; and (iii) Up to 250,000 square feet of Future Development may be utilized for non-office uses. 3. CC&Rs: The 1993 Amended and Restated Declaration of Covenants, Conditions & Restrictions Applicable to Pickering Place (recording number ). 4. CIDDS: City regulations to control the use and development of the Costco Property and specify zoning and land use regulatory controls that will govern the future development. 5. CIP: Central Issaquah Plan. 6. Costco Property: Approximately 47 acres of real property in the City of Issaquah owned by Costco, which is located in Pickering Place and which is currently governed by the Pickering Place Master Plan (MS 84-01). 7. Designated Official: The person, or persons, appointed by the Mayor, empowered, authorized and charged with the duty to administer, interpret, process and approved plans and permits as required by this Agreement. 8. Entitlement: Refers to the land use regulatory permits and approvals required to construct the Future Development. 9. Entitlement Process: Refers to the City s procedures for procuring the regulatory Entitlements. 10. Expansion Parcels: Parcels within the Potential Expansion Area that are not currently owned or leased by Costco but that are subsequently leased or acquired by Costco during the term of this Agreement. 11. Flexibility Objectives: Interpretation of CIDDS to address unforeseen changes and Page 37 of 74

38 to encourage creativity and innovation. During the Entitlement Process, staff shall employ Type I review of proposed Flexibility Objectives and shall approve requested Flexibility Objectives that provide comparable benefit or functional equivalence to the applicable IMC CIDDS without significant reduction in public benefit or environmental protection. 12. Future Development: Development of the Property with up to an additional 1,500,000 square feet of development, phased over the next thirty (30) years, as desired by Costco. 13. Home Office: Costco s corporate home office campus. 14. IMC: Issaquah Municipal Code. 15. Land Plan: Plan depicting the possible configuration of the Future Development that is attached as Exhibit D to this Agreement. The Land Plan attached as Exhibit D represents the Parties current vision of how the Future Development might be constructed on the Costco property. The Parties acknowledge that the proposed Future Development and Land Plan may change and will undergo further refinement during the Entitlement Process. 16. Major Alteration to the Land Plan: A Major Alteration to the Land Plan is defined as a substantial and material change to the Land Plan that creates additional significant impacts on surrounding properties or City resources beyond those that would occur with the development as depicted in the Land Plan. If Costco proposes a Major Alteration, the City will use a Type III procedure to process the Major Alteration, unless Costco and the City agree otherwise. 17. Minor Alteration to the Land Plan: Alterations to the Land Plan that do not meet the definition of a Major Alteration shall be considered Minor Alterations that may be approved by staff through a Type I administrative process. 18. Major Amendment: DEFINITION UNDER DISCUSSION 19. Major Expansions: Expansions of existing Home Office buildings in excess of 50% of each building s gross square footage which are permissible under this Agreement, but will require compliance with the IMC CIDDS and comprehensive plan policies in effect at the time of the proposed Major Expansion. 20. Minor Amendment: DEFINITION UNDER DISCUSSION 21. Minor Expansions: Through the term of this Agreement, Costco shall retain the right to alter, expand, rebuild, or remodel the interiors and exteriors of its existing Home Office buildings without requiring compliance with new IMC CIDDS or comprehensive plan policies so long as (i) the buildings remain in substantially the same footprint; and (ii) expansions of existing buildings are limited to no more than 50% of the gross square footage of the building. 22. MTFA: Master Transportation Financing Agreement, which is attached as Exhibit H to this Agreement. Page 38 of 74

39 23. Pickering Place Master Plan ( PPMP ) (MS 84-01, as amended): The 1987 land use regulatory scheme that governs the Costco Property and other properties in the Pickering Place development. 24. Property: For purposes of this Agreement, Property shall be defined as any property described or depicted on Exhibits A and B and any potential expansion parcels, as illustrated on Exhibit C (Potential Expansion Area). 25. Potential Expansion Area: Property that is not currently owned or leased by Costco but that may be owned or leased in the future that Costco designates as being subject to the terms of this Agreement. The benefits and burdens of this Agreement shall automatically extend to any property within the Potential Expansion Area that Costco acquires or leases ( Expansion Parcels ), without further action of the Parties. 26. Shared Facilities: Parking, stormwater, common areas and other jointly held or used amenities within Pickering Place that are established and maintained as conditions of the PPMP and private covenants, conditions and restrictions. 27. Unused Trips: PM Peak Hour vehicle trips for that portion of the Future Development that Costco determines not to construct. Unused Trips are calculated by multiplying the fractional percentage of the forgone development from the 1,500,000 sq. ft. of allowed Future Development by 1350 PM Peak Hour trips that would have been generated by the full buildout of the Future Development. 28. Urban Core ( UC ): The CIDDS zoning designation for the Costco property. Page 39 of 74

40 Exhibit F FAR Calculations Co'stco Warehouse Tf AX~~^'" ^postco Corporate'! 1 Headquarters '< r/ Costco FAR Analysis The City's new Central Issaquah Plan has a maximum FAR allowed of 5 and a minimum FAR required of.55. The following Table demonstrates Costco's intention to comply with this requirement. Costco Lot Area (sf) Costco Current Bldg SF Costco's Current FAR Costco DA Allowed Bldg SF (Current SF + 1,500,000 SF) Costco's FAR with Allowed Development Additional property Costco can add to their campus before the FAR of the DA allowed development drops below the minimum FAR of,55. 2,069, , , ,926,554 (44.23 Acres) Page 40 of 74

41 11 July 2014 Exhibit G Density Bonus Calculation Code Provisions Per the Central Issaquah Development & Design Standards (18.19A.5), the purpose of the CIP Density Bonus Program is to: - Allow additional square footage of development in exchange for community benefit; - Facilitate development of affordable housing units; - Create connected system of open space & parks; - Encourage infill & redevelopment; Central Issaquah Development & Design Standards: 18.19A.4.4 Maximum Building Height in Urban Core = 48, 125 with Density Bonus A.5.4: Public Benefit Requirement Mandatory and Elective 1/3 of density $15/sf 2/3 of density bonus as: 1) $15/sf; 2) Affordable Housing; or, 3) Non-critical area sf of open space or TDR acquisition 1 Base Height may also be exceeded through the purchase of TDRs. Background & Assumptions 1. Costco does not know whether company growth will necessitate the construction of the entire 1,500,000 sf expansion during the term of this agreement. 2. Costco has requested the flexibility to utilize the Density Bonus provisions of the City Code to allow a portion of their project to exceed the 48-foot Base Height limit. 3. Since a portion of the Entitlement (250,000 sf) may be used for non-office development, it is assumed the non-office portion will trigger the density bonus provisions. 4. Although the Land Plan contained in the DA identifies only 3 new Commercial buildings, the buildout of the Costco entitlement will likely include other commercial buildings not depicted on the Land Plan. These additional buildings may be located on current Costco-owned property; or, on any of the Expansion properties shown in Exhibit C. 5. If 20% of the total Commercial entitlement is constructed above the 4 th floor, then 250,000 sf will be subject to the Density Bonus provisions. Given the height of Costco s current corporate offices (3-4 Stories), 20% of the total office entitlement seems likely. 6. Parking garages are encouraged as part of the vision for the CIP properties. The amount of building square footage allowed through this agreement is exclusive of parking garages. Therefore, parking garages will be allowed to exceed the base height, without limitation. Staff Evaluation Costco has requested the ability to take advantage of the Density Bonus provision of the CIP, not to allow for more Entitlement as the amount of development is capped through the development agreement, but to construct a portion of the Entitlement above 4 stories. The Density Bonus Program was included in the CIP to offer developers an advantage by trading public benefit for additional property development capacity. As the Development Agreement caps the Entitlement given to Costco, Costco s benefit for constructing fewer, taller buildings is limited to lower per square foot building and operating costs; efficiencies of land use; and, the potential for additional open space on their campus for the enjoyment of their employees. The Development Agreement also offers Costco an advantage Page 41 of 74

42 for efficient use of Public-Private resources in acquiring open space and TDRs, options for meeting the elective requirements of the Density Bonus Program. Most probable Development Scenario Although Costco does not know what height buildings or how big the floor plates will be, the new development will need to be in scale with the current 3-story buildings on the Property. The existing buildings (including the retail store) total approximately 750,000 sf. Costco believes the new buildings will be approximately 60,000 sf floor plates.. At 60,000 sf, 1,250,000 sf = 21 floors. This could be: Number of Buildings (60,000 sf plate) Stories # Floors above 4 th Floor Amount of Square Feet in Bonus Area (3) 7-story buildings ,000 sf 4 [(1) 4-story, (1) ,000 sf story, (2) 6-story] buildings 6 [(1) 3-story, (2) ,000 sf story, (3) 6-story] buildings 5 [(1) 3-story, (2) ,000 sf story, (2) 5-story] 5 [(1) 5-story, (4) 4- story] buildings ,000 sf Conclusion Although it is possible that Costco will pursue a more urban vision for their campus (as is allowed under the Urban Core designation), it is more likely, given the scale of the existing Pickering buildings within the campus area, the buildout of the campus will be a combination of 4-story, 5-story, and 6-story buildings. For the purpose of this Agreement, for the Term of the Agreement, and for the rationale provided above, the City will agree that Costco will be consistent with the Density Bonus Program if it compensates for 250,000 sf of Entitlement. The Administration believes this a reasonable approach given 1) Costco s request for surety regarding how the Density Bonus Program will be applied; 2) as the Costco campus grows, Costco will need to keep their existing buildings relevant with the new development which likely will result in at least a portion of their Entitlement mirroring or providing a transition from their existing 3-story buildings; and 3) Costco may not build all of their Entitlement within the 30-year Term of this Agreement. Calculation Mandatory: $15/sf x (250,000/3) = $1.25M Elective: TDRs + Open Space (250,000(2/3)) = 166,667 sf Property: Parcel # TDRs Total Parcel size (sf) Estimated Non-Critical Area sf ,298 45,000 Page 42 of 74

43 ,264 18, ,169 49, ,173 5, ,223 43, Total 160,860 TDR/Open Space Calculation: TDRs Open Space Required 44 (1,200 sf) 160, ,667 52, ,860 = 213, ,667 Page 43 of 74

44 Exhibit H - Master Transportation Funding Agreement DRAFT FOR DISCUSSION PURPOSES July 14, 2014 DEVELOPMENT AGREEMENT EXHIBIT H MASTER TRANSPORTATION FUNDING AGREEMENT This Master Transportation Funding Agreement (this MTFA ) is entered into this day of, 2014 by and between Costco Wholesale Corporation, a Washington corporation ( Costco ) and the City of Issaquah, a Washington municipality ( City ), collectively the Parties. RECITALS A. The City is a noncharter Optional Municipal Code city incorporated under the laws of the State of Washington. Pursuant to that certain Costco/Issaquah Corporate Campus Development Agreement dated on or about the date hereof (the Development Agreement ), the City and Costco have entered into a plan for the development and expansion of Costco s corporate home office that is consistent with the Central Issaquah Plan and associated enabling development regulations, particularly the Central Issaquah Development and Design Standards ( CIDDS ) and IMC Ch A. All capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Development Agreement. B. In connection with the Development Agreement, Costco and the City agreed to enter into this MTFA to confirm Costco s participation in traffic improvements identified herein and to fully mitigate traffic impacts of the Future Development on the Property as provided under the Development Agreement. (Discussion continuing to identify mitigations) C. The Parties have performed a traffic analysis to identify the transportation improvements identified under this MTFA (the Transportation Improvements ), including, but not limited to, a concurrency analysis, a SEPA analysis, and a fair share traffic analysis to determine the City s and Costco s obligations to fund such improvements. D. Both the City and Costco recognize and acknowledge the following: (i) the improvements contemplated by this MTFA will provide substantial public benefits for both existing and future populations and commerce, (ii) the identified improvements create transportation capacity beyond that which will be utilized by Costco, and (iii) the planning, design and construction of the transportation improvements will commence with the adoption of the Development Agreement, but will likely take five (5) or more years to complete. Page 44 of 74

45 E. All Recitals and Exhibits referenced in this MTFA are hereby incorporated by reference and shall be considered as material terms of this MTFA and the Development Agreement. AGREEMENT NOW THEREFORE, in consideration of the mutual agreements contained herein, as well as other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. No Additional Requirements. Except as provided in this MTFA or the Development Agreement, the City and Costco agree and acknowledge that this MTFA shall satisfy all traffic and mitigation requirements to entitle the Future Development as provided under the Development Agreement and that there will be no additional traffic fees or traffic mitigation required from Costco in connection with the partial or full buildout of the Future Development, as set forth in the Development Agreement, except as otherwise expressly provided therein. 2. Approved Projects. The Transportation Improvements shall consist of those certain projects identified on Exhibit A attached hereto and incorporated herein (the Approved Projects ). Substitutions for, or alterations of, the Approved Projects may be added to the Transportation Improvements as agreed upon by the City and Costco pursuant to the approval requirements provided hereunder. 3. Funding Allocation Shares. The City and Costco agree and acknowledge that they shall share in the costs of completing the Approved Projects according to the following schedule (the Funding Allocation ): All costs up to the first $49,479, shall be allocated at a ratio of responsibility of fifty-two percent (52%) for the City and fortyeight (48%) for Costco. All costs from $49,479, up to $52,500, shall be the responsibility of the City. All costs from $52,500, up to $55,000, shall be the responsibility of Costco. All costs above $55,000, shall the responsibility of the City. 4. City Use of Grant Money Rolling Allocation. The City anticipates that it will obtain transportation grants from a variety of sources. Typically, these grant funds are project-specific. Thus, it is possible that the City could obtain grants in excess of its Funding Allocation share for some of the Approved Projects. If this situation occurs, the Page 45 of 74

46 City shall be entitled to use the full amount of obtained grant funds for the applicable Approved Project, even if the amount exceeds the City s Funding Allocation of the Approved Project s costs. In that case, the City will apply the remaining grant funds to Costco s allocated share of the Approved Project costs (the Grant Overage ); provided however that the amount of the Grant Overage that the City has paid toward Costco s proportionate share will then carry down or roll over to the next Approved Project and be added to, and increase the amount of, Costco s Funding Allocation of the next Approved Project s costs. For example, assume Approved Project 1 costs a total of $7.5 million. The City s 52% Funding Allocation would be $3.9 million and Costco s 48% Funding Allocation would be $3.6 million. Assume further that the City obtains a $6 million grant for Approved Project 1. In that case, the City would use the grant to pay its $3.9 million Funding Allocation for Approved Project 1 and apply the remaining $2.1 million of its grant (the Grant Overage) toward Costco s Funding Allocation. As a result, Costco would be out-of-pocket for only $1.5 million of its $3.6 million Approved Project 1 Funding Allocation. The $2.1 million Grant Overage i.e. the amount of grant money that the City applied to Approved Project 1 that would otherwise have been Costco s obligation would then roll forward and be added to Costco s Funding Allocation for Approved Project Cost Savings. Upon completion of all Approved Projects, the City and Costco agree and acknowledge that they shall share in any cost savings in accordance with the respective Funding Allocations provided above. Should the City be successful in obtaining grants or other funding that is greater than its total share of Approved Project costs ( Excess Funding ), the City will reduce Costco s share of the Approved Project costs or reimburse Costco for amounts previously paid based upon a 48% allocation of the Excess Funding. 6. City Invoice Timing and Approved Project Funding Guarantee. Except as provided below regarding Grant Overages, the City will not invoice Costco for any portion of an Approved Project without the City guaranteeing that it has the City s allocated share of that Approved Project s costs in hand. The City s guarantee shall consist of an identified source of funding and funding authorization from the City Council for the City staff to proceed with and expend funds on a particular Approved Project or such other guarantee deemed suitable by Costco, in its sole discretion. 7. City Ability to Draw Against Grant Overages. Notwithstanding the foregoing, the City may draw on Grant Overage credit from a previous Approved Project to fund soft costs related to future Approved Projects (e.g. permit fees, design costs, and/or consultant or professional fees) without having first provided Costco with the City s Paragraph 6 funding guarantee for those Approved Projects. For example, assume the Page 46 of 74

47 City s grant funding for Approved Project 1 resulted in a $2.1 million Grant Overage that rolled forward into Costco s share of Approved Project 2 costs. Assume also that the City was working on design of Approved Projects 2, 3, and 4 but had not yet obtained its funding share for those Approved Projects. The City could invoice Costco for up to a maximum of $2.1 million for soft costs incurred on Approved Project 2, 3, and 4 without having first provided Costco with the City s funding guarantee for those Approved Projects. Approved Project Scheduling and Funding Approval Process. Absent a compelling reason not to do so, the City shall implement the Approved Projects in accordance with Exhibit A and as otherwise necessary to support Costco s Future Development as provided in the Development Agreement. For each Approved Project, the City will develop a budget ( Project Budget ) and a schedule ( Project Schedule ) that includes the scope of work. (Timing of delivery of these items is under discussion) 8. Payment of Employee Costs. The City and Costco shall each pay for the salaries and benefits of its respective employees charged with oversight and construction of the Approved Projects. These costs shall be added to the Approved Project budgets and allocated pursuant to the Parties Funding Allocation shares up to a maximum salary/benefit cost of $ for City employees and a maximum salary/benefit cost of $ for Costco employees. 9. City Construction Oversight Responsibilities. The City shall select the vendors and contractors for an Approved Project in accordance with the City s procedures, state and federal laws concerning Public Works Contracts, and any requirements imposed by grant funding agreements. For each Approved Project, the City shall be responsible for all necessary engineering design work, obtaining governmental approvals and permits, administering each Approved Project in accordance with its procedures for public projects, and providing Costco with reasonably detailed monthly or periodic invoices for the services, labor and materials contracted for as part of an Approved Project. 10. Costco Consent to Approved Project Budgets, Schedules, and Construction Contracts. Prior to advertising an Approved Project for bid, the City shall consult with Costco regarding the Project Budget, Project Schedule, and the Project Construction Contracts and obtain Costco s consent to these items. Costco s consent shall not be unreasonably withheld, conditioned, or delayed. (Language and terminology to be refined to be consistent with Public Works Contracting) 11. Costco Consent to Final Engineering Design Drawings, Budgets, and Schedules. The City shall obtain Costco s consent to the Approved Project final engineering design drawings ( Final EDDs ), Final Project Budget, and Final Project Schedule prior to preparing the Final EDDs, Final Project Budget, and Final Project Page 47 of 74

48 Schedule for construction. Final EDDs shall be prepared consistent with the Parties agreed upon coordination; be compliant with engineering standards; and be consistent with state and federal regulations and grant requirements. Costco s consent to an Approved Project s Final EDDs, Final Budget, and Final Schedule shall not be unreasonably withheld, conditioned, or delayed. Any dispute between the Parties shall be resolved pursuant to the Development Agreement arbitration provision, which is found at Development Agreement Paragraph.(Language and terminology to be refined to be consistent with Public Works Contracting) 12. Pre-Construction Meeting. Prior to the commencement of an Approved Project, the City shall notify Costco of its intent to proceed with the construction. The City shall schedule a meeting with Costco and the general contractor to discuss the construction scheduling, accounting, invoicing, billing practices, and particular issues applicable to that Approved Project. 13. City Invoicing to Costco. The City will invoice Costco monthly for Costco s share of any Approved Project costs for which the City is permitted to invoice Costco pursuant to Paragraph. The City s invoice shall contain supporting documents, such as documentation from outside vendors or construction contractor payment requests. The City shall provide Costco with reasonable evidence that both the City s and Costco s portions of the Funding Allocation were remitted to the vendors and/or contractors that provided materials for, or performed work on, the Approved Project. Such evidence shall include periodic confirmation of the City s payment to such vendors and/or contractors. Costco s Payment of Approved Project Invoices. Costco s payment of an Approved Project invoice shall be due within thirty (30) calendar days of Costco s receipt of a properly supported invoice. 14. Invoice Disputes. Should Costco dispute any portion of an invoice, Costco shall pay the undisputed portion of the invoice within thirty (30) days of receipt and provide the City with written notice of the dispute and Costco s basis for the dispute. As soon as practicable, but in no event later than 60 days after Costco s receipt of a disputed invoice, the City and Costco shall then meet to discuss and work in good faith to resolve the dispute. If the parties are unable to resolve the dispute, they shall submit it to arbitration under the process outlined in Paragraph of the Development Agreement. 15. Change Orders. Prior to implementing amendments or modifications to the Final EDDs, Final Budget, or Final Schedule ( Change Order ) that could result in a material change to an Approved Project s scope, schedule, or that could cause a cumulative increase of five percent (5%) or more in the cost of the Final Budget, the City shall notify Costco of the proposed Change Order as soon as practicable and provide the Change Order for Costco s review and comment together with a detailed explanation of the need for the Change Order. Absent a compelling reason not to do so, the City shall implement any reasonable comments that Costco may provide with respect to such amendments or Page 48 of 74

49 modifications. Any dispute between the Parties shall be resolved pursuant to the Development Agreement arbitration provision, which is found at Development Agreement Paragraph. 16. Costco s Right to Ongoing Inspections of Approved Project Construction. Costco shall have the right from time to time to inspect any part of an Approved Project. For any work that Costco believes in good faith is not in compliance with the Final EDDs, the City agrees to use reasonable efforts to have such work inspected or tested. If the inspection or testing reveals that the work is not substantially in compliance with the Final EDDs, the City shall use commercially reasonable efforts to cause the applicable contractors or vendors to correct such work in accordance with the Final EDDs. Costco s inspection under this Paragraph is solely for Costco s benefit and Costco shall have no liability to the City or any other party for failing to identify and/or notify the City or any other party of such non-conforming work. 17. City Performance of Approved Project. The City shall diligently perform and complete the Approved Projects within the schedule shown in Exhibit A subject to issues that may arise outside of its control or through the Parties mutual agreement to an extension. Such issues that are outside of the City s control and that may affect Approved Project timing include, without limitation, outside agency permitting, permit appeals, or court decisions, but not the City s inability to fund its Funding Allocation share. If issues arise that impact Approved Project construction, the Parties shall consult with one another to mutually determine how best to move forward. 18. Failure of City Performance. If the City is unable to commence or complete an Approved Project due to lack of the City s funding for its Funding Allocation share, then the City and Costco shall consult with one another to mutually determine how best to move forward. Costco may, in its sole discretion, elect to fund more than its share of the Funding Allocation for such Approved Project in order to facilitate its completion. If Costco elects to fund such additional share of its Funding Allocation with respect to an Approved Project, then such additional share shall be treated as a loan from Costco to the City, shall be repaid with a Bond Rate over a period not to exceed five years, and such loan shall be secured by [TBD]. Bond Rate means the interest rate on municipal bonds that would be equal to the rate/yield published in the MMD Municipal Bond Index on the date of advance of the loan for municipal bonds with a rating comparable to the rating on general obligation bonds of the City with a maturity of five years. MMD Municipal Bond Index means the municipal bond index of general obligation yields, which is published daily in the Bond Buyer and is compiled daily from general obligation municipal issues included in a database maintained by the publisher of the Municipal Market Data, or the successor to that index. 19. Dedication of Costco Property. Should Costco dedicate a portion of its real property to facilitate the new road from East Sammamish Parkway to Lake Drive as Page 49 of 74

50 identified on Exhibit A ( Road Property shown on Exhibit B), the City shall either pay Costco the fair market value for the Road Property or credit that fair market value against Costco s Funding Allocation of Approved Project costs. To determine the fair market value of the Road Property, the City shall obtain an appraisal of the Road Property from a qualified MAI appraiser. If Costco disagrees with the City s valuation of the Road Property, Costco shall have the right to obtain its own appraisal from a qualified MAI appraiser. The Parties shall then meet to try to agree upon a value for the Road Property. If the Parties are unable to agree upon a value for the Road Property, they shall submit the dispute to arbitration under the process outlined in Paragraph of the Development Agreement and the arbitrator shall determine a fair market value that is binding on both Parties. 20. Amendment of Agreement. Any request to substantially revise this Agreement may require review by the City Council. All other proposed revisions will be considered Minor Amendments and shall be reviewed and approved by the Designated Official as defined in the Development Agreement. 21. Indemnification. Except as otherwise specifically provided elsewhere in this Agreement and any exhibits hereto, each Party shall protect, defend, indemnify and hold harmless the other Party and their officers, agents, and employees, or any of them, from and against any and all claims, actions, suits liability, loss, costs, expenses, and damages of any nature whatsoever, which are caused by or result from any negligent act or omission of the Party s own officers, agents, and employees in performing services pursuant to this Agreement. In the event that any suit based upon such a claim, action, loss, or damage is brought against a Party, the Party whose sole negligent action or omissions gave rise to the claim shall defend the other Party at the indemnifying Party s sole cost and expense; and if final judgment be rendered against the other Party and its officers, agents, and employees or jointly the Parties and their respective officers, agents, and employees, the Parties whose sole actions or omissions gave rise to the claim shall satisfy the same; provided that, in the event of concurrent negligence, each Party shall indemnify and hold the other Parties harmless only to the extent of that Party s negligence. The indemnification to the City hereunder shall be for the benefit of the City as an entity, and not for members of the general public. 22. Binding Effect; Assignability. This Agreement shall bind and inure to the benefit of the Parties hereto and their respective successors, heirs, legatees, representatives, receivers, trustees, successors, transferees and assigns. 23. Interpretation. This Agreement has been reviewed and revised by legal counsel for both Parties, and no presumption or rule construing ambiguity against the drafter of the document shall apply to the interpretation or enforcement of this Agreement. Nothing herein shall be construed as a waiver of the City s constitutional and statutory Page 50 of 74

51 powers. Nothing herein shall be construed or implied that the City is contracting away its constitutional and statutory powers, except as otherwise authorized by law. 24. Authority. Each signatory to this Agreement represents and warrants that he or she has full power and authority to execute and deliver this Agreement on behalf of the Party for which he or she is signing, and that he or she will defend and hold harmless the other Parties and signatories from any claim that he or she was not fully authorized to execute this Agreement on behalf of the person or entity for whom he or she signed. Upon proper execution and delivery, this Agreement will have been duly entered into by the Parties, will constitute as against each Party a valid, legal and binding obligation that shall run with the land, and will be enforceable against each Party in accordance with the terms herein. 25. Notice of Default and Enforcement. In the event any Party, acting in good faith, believes that the other Party has violated the terms of this Agreement, the aggrieved Party shall give the believed offending Party notice of the alleged violation by sending a detailed written notice of the same to the offending Party as provided in Paragraph below. This notice is intended to invite a resolution by the Parties of any dispute prior to the institution of arbitration. If a mutually agreed resolution is not reached within twentyone (21) days after the offending Party has received the written notice, the aggrieved Party may commence arbitration proceedings pursuant to Paragraph below. For purposes of this Paragraph, the identities and addresses of the Parties are as set out in the following Paragraph. The identity or address of any Party may be changed for purposes of this Paragraph by written notice to the representative for the other Party. 26. Notices. All notices, requests, demands, and other communications called for or contemplated by this Agreement shall be in writing, and shall be duly given by mailing the same by certified mail, return receipt requested; or by delivering the same by hand, to the following addresses, or to such other addresses as the Parties may designate by written notice in the manner aforesaid: Costco Wholesale Corporation c/o Richard Olin 999 Lake Drive Issaquah, WA Page 51 of 74

52 And to its Attorney: Foster Pepper, PLLC Attn: Gary Fluhrer Suite Third Avenue Seattle, WA City of Issaquah: Development Services Director City Hall Northwest Avenue NW Issaquah, WA Dispute Resolution. Any disputes regarding the interpretation of this Agreement shall be submitted to binding arbitration using the procedures set forth in the Development Agreement. 28. Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. Venue for any action arising out of or relating to this Agreement shall lie in King County Superior Court. 29. Specific Performance and Enforcement. The Parties specifically agree that damages are not an adequate remedy for breach of this Agreement and that the Parties are entitled to compel specific performance of all material terms of this Agreement by any Party in default hereof. All terms and provisions of this Agreement are material. 30. Attorneys Fees. Should it be necessary for any Party to this Agreement to initiate legal proceedings to adjudicate any issues arising hereunder, the Party or Parties to such legal proceedings who substantially prevail shall be entitled to reimbursement of their attorneys fees, costs, expenses, and disbursements (including the fees and expenses of expert and fact witnesses) reasonably incurred or made by the substantially prevailing Parties in preparing to participate in mediation or arbitration, to bring suit, during suit, on appeal, on petition for review, and in enforcing any judgment or award, from the other Party or Parties. 31. No Third Party Beneficiary. This Agreement is made and entered into for the sole protection and benefit of the Parties hereto and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 32. Severability. This Agreement does not violate any federal or state statute, rule, regulation or common law known; but any provision which is found to be invalid or in violation of any statute, rule, regulation or common law shall be considered null and void, with the remaining provisions remaining viable and in effect Page 52 of 74

53 33. Cooperation in Execution of Documents. The Parties agree to properly and promptly execute and deliver any and all additional documents that may be necessary to render this Agreement practically effective. This Paragraph shall not require the execution of any document that expands, alters or in any way changes the terms of this Agreement. 34. Exhibits. This Agreement includes the following exhibits: Exhibit A Approved Projects Exhibit B Road Property 35. Full Understanding. The Parties each acknowledge, represent and agree that they have read this Agreement; that they fully understand the terms thereof; that they have had the opportunity to be fully advised by their legal counsel and any other advisors with respect thereto; and that they are executing this Agreement after sufficient review and understanding of its contents. 36. Final and Complete Agreement. This Agreement and the Development Agreement constitute the final and complete expression of the Parties on all subjects relating to the development of the Costco Property and the Potential Expansion Area. This Agreement may not be modified, interpreted, amended, waived or revoked orally, but only by a writing signed by all Parties. Except for the Development Agreement, this Agreement supersedes and replaces all prior agreements, discussions and representations on all subjects discussed herein. No Party is entering into this Agreement in reliance on any oral or written promises, inducements, representations, understandings, interpretations or agreements other than those contained in this Agreement and the exhibits hereto. 37. Counterparts. This Agreement may be executed and delivered in any number of counterparts and by the different Parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which shall together constitute one and the same agreement. [Signatures Follow.] Page 53 of 74

54 IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above. Costco Wholesale Corporation, a Washington corporation By: Its: City of Issaquah, a Washington optional municipal code city By: Its: ATTEST: City Clerk APPROVED AS TO FORM: Issaquah City Attorney Page 54 of 74

55 STATE OF WASHINGTON COUNTY OF KING ss. On this day personally appeared before me, to me known to be of COSTCO WHOLESALE CORPORATION that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that is authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN under my hand and official seal this day of, (Signature of Notary) (Legibly Print or Stamp Name of Notary) Notary public in and for the State of Washington, residing at My appointment expires Page 55 of 74

56 STATE OF WASHINGTON COUNTY OF KING ss. On this day personally appeared before me, to me known to be of the CITY OF ISSAQUAH, a Washington optional municipal code city that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that is authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN under my hand and official seal this day of, (Signature of Notary) (Legibly Print or Stamp Name of Notary) Notary public in and for the State of Washington, residing at My appointment expires Page 56 of 74

57 EXHIBIT A (to MTFA) APPROVED PROJECTS Complete design, right-of-way acquisition Construction 06/01/ East Lake Sammamish Parkway: just north of Black Nugget Rd to south of SE 62nd Along west side of existing roadway an additional southbound travel lane, bicycle lane, curb gutter and sidewalk with landscaping will be constructed. $ 7,566,296 New Road: East Lake Sammamish Parkway to Lake Drive Assume start final design in October 2014: Completed by December 2016 April Realign and widen SE 62nd: 3 to 5 lanes wide, on north side of new alignment a two-way bicycle facility, multiuse trail/sidewalk, and landscaping are planned. Curb SE 62nd: E. Lake Sammamish Parkway to 4th/221st Ave and gutter on south side of new alignment. Reconstruct crossing of Regional Trail with a trail undercrossing and connections to the facilities along north side of new alignment. $ 38,817,674 Roundabout with slip lane from north bound 4th to east 4th/221st/62nd Intersection bound SE 62nd Aproximately 1700 ft of new roadway (includes approx 1000 ft of bridge & purchase of environmentally sensitive New Road: 4th/221st to Lake Drive lands); sidewalk on north side; Enhance Pickering Trail east of Issaquah Creek 12th Avenue NW/SR-900 Intersection Assume start final design in 1st quarter 2017; complete final design and right of way acquisition in Construct a double left turn westbound to southbound SR- Westbound leg of intersection $ 900; add bicycle lanes both directions; reconstruct 6 foot 3,095,196 wide sidewalks on either side; no landscaping Northbound leg of intersection Add northbound to east bound right turn lane Exhibit A Page 57 of 74

58 EXHIBIT B (to MTFA) ROAD PROPERTY Exhibit B Page 58 of 74

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61 CITY COUNCIL AGENDA BILL City Council Regular Meeting - 04 Aug 2014 NEW AB Regular Business Intent to Proceed with Annexation of Lake Sammamish State Park and Setting Annexation Boundaries Proposed Council Action: Approve Resolution DEPARTMENT OF COUNCIL COMMITTEE LIAISON OTHER COUNCIL MEETINGS EXHIBITS Development Services, Trish Heinonen n/a n/a A. Proposed Resolution B. RCW 35A Direct Petition Method C. IMC Community Facilities POLICY & BUDGET INFO Comp Plan Policy Nos. Objective L-5; Policy L-5.4.2; Policy L-5.4.6; L-5.6 Consistent: Yes Expenditure Required $ Amount Budgeted 50 (BRB Application Fee) Other Policies n/a $ 0 SUMMARY STATEMENT The City and the Washington State Parks and Recreation Commission have expressed interest to jointly pursue annexation of those portions of Lake Sammamish State Park, currently in unincorporated King County, to the City of Issaquah. Some portions, such as the Hans Jensen youth group camping area, are already in the City limits. Proposed Resolution: The proposed Resolution (Exhibit A) authorizes the Administration to continue the annexation process with the Washington State Parks and Recreation Commission. The Resolution describes the boundaries of the annexation area, states the annexation area will assume its proportional share of the City's indebtedness existing as of the effective date, and sets the expectation for comparable zoning, as allowed by RCW 35A (Exhibit B). Comparable zoning for the remainder of the State Park is expected to be Community Facilities - Facilities (Exhibit C) that recognizes existing structures and high traffic use. Annexation Area: The annexation area includes approximately 380 acres and includes the Lake Sammamish State Park and boat launch area. A small portion of the State Park (17.44 acres) is currently in the City limits, adjacent to part of the western annexation boundary and zoned Community Facilities - Recreation. Another portion of the State Park, known as Hans Jensen, is on the east side of East Lake Sammamish Parkway and zoned Community Facilities - Facilities. The purpose of the annexation at this time is to allow the City to better address a number of issues in the park, including the permitting of projects. The City is working with the Washington State Parks and Recreation Commission to craft an Interlocal Agreement (ILA) to confirm how the City and State will address common issues and continue the City/State partnership established years ago. It is the intention of the City to have this ILA near completion before submitting the Notice of Intent to Annex to the Boundary Review Board by the end of August. The Washington State Parks and Recreation Commission has executed and signed a Petition for Annexation, Page 61 of 74

62 and presented it to the City. Upon annexation, the park would continue to be owned and managed by Washington State Parks. Annexation would establish the City as the park's underlying regulatory and permitting jurisdiction. Next Steps if the Council approves the proposed Resolution: 1. The City and Washington State Parks and Recreation Commission will complete the ILA and move forward toward adoption; 2. The Mayor is authorized and directed to submit the required Notice of Intent to Annex to the Washington State Boundary Review Board for King County (BRB); 3. The City and Washington State Parks and Recreation Commission will adopt the ILA; 4. If the BRB's review is favorable, the City Council will host a public hearing to take public comment on the proposed annexation; and 5. After closing the public hearing, the Council will take action on the proposed annexation. Consistency With Comprehensive Plan: Several annexation policies adopted in the City s Comprehensive Plan are applicable to this decision: Objective L-5 Use the Countywide Planning Policies as a basis for regional coordination and land use decisions. Policy L The annexation area should be able to pay its determined fair share of required services and should not have a negative financial impact on the City. Policy L The annexation should provide mutual benefits to City residents and the annexation area. Policy L The City should be able to extend urban services to the annexation area while maintaining the existing LOS for City residents. Policy L-5.6 Foster cooperation with all affected parties during the annexation process. Administration's Recommendation: The Administration recommends approval of the Resolution authorizing the Administration to move forward with a Notice of Intent to Annex the Lake Sammamish State Park with the Washington State Boundary Review Board for King County at such time as the Interlocal Agreement is moving forward toward adoption. Update: n/a Alternative(s): 1) Do not proceed with annexation of Lake Sammamish State Park at this time. [Impact: If the State Park is not annexed into the City, we would be unable to address a number of issues in the park, including the permitting of projects.] 2) Refer AB 6802 to the September 9, 2014 Council Land & Shore Committee for review and recommendation, returning to the full Council on October 6, [Impact: This alternative would add several months to this process for the State Park Commission, possibly impacting their schedule for land use permits and construction.] RECOMMENDATION Administration/Development Services Department: MOVE TO: Approve Resolution No., accepting the Washington State Parks and Recreation Commission s notice of intent to petition for annexation for the area known as the Lake Sammamish State Park, providing for the assumption of indebtedness and payment of taxes, establishing zoning for the property to be Page 62 of 74

63 annexed, and authorizing the Mayor to submit a Notice of Intent to Annex to the Washington State Boundary Review Board of King County. Page 63 of 74

64 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ISSAQUAH, WASHINGTON, ACCEPTING THE WASHINGTON STATE PARKS AND RECREATION COMMISSION S NOTICE OF INTENT TO PETITION FOR ANNEXATION FOR THE AREA KNOWN AS THE LAKE SAMMAMISH STATE PARK, PROVIDING FOR THE ASSUMPTION OF INDEBTEDNESS AND PAYMENT OF TAXES, ESTABLISHING ZONING FOR THE PROPERTY TO BE ANNEXED, AND AUTHORIZING THE MAYOR TO SUBMIT A NOTICE OF INTENT TO ANNEX TO THE WASHINGTON STATE BOUNDARY REVIEW BOARD OF KING COUNTY. WHEREAS, the City of Issaquah, Washington, received from Washington State Parks and Recreation Commission a notice of intent to petition for annexation pursuant to RCW 35A for the area generally known as the Lake Sammamish State Park and described and identified in the site map in Exhibit A, attached hereto and incorporated by this reference as if set forth in full; and WHEREAS, the City Council has decided and advised petitioner that the City will accept the proposed annexation, that the annexing area will be liable for any of the outstanding indebtedness of the City of Issaquah, and that the area depicted on the map attached hereto as Exhibit B and incorporated herein by this reference as if set forth in full, will be designated upon annexation by the City s Zoning Ordinance as the comparable zoning of Community Facilities Facilities established in IMC Community Facilities; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ISSAQUAH, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. That the City Council accepts the proposed annexation as generally described in Exhibit B for purposes of the Washington State Parks and Recreation Commission BFP DOC;1\ \ Page 64 of 74

65 to submit a petition for annexation pursuant to RCW 35A Section 2. All property within the territory hereby sought to be annexed shall assume its proportionate share of the City s indebtedness existing as of the date of annexation and as modified in the future, and shall be assessed and taxed at the same rate and at the same basis as property within the City of Issaquah. Section 3. The proposed zoning designation for the annexation area, as depicted on the map attached hereto as Exhibit B and incorporated herein by this reference as if set forth in full, shall be expected to be the comparable zoning of Community Facilities Facilities in accordance with IMC Annexation Classification. Section 4. The Mayor is hereby authorized and directed to submit the required Notice of Intent to Annex to the Washington State Boundary Review Board for King County. The Notice of Intent shall be filed as soon as may be practicable (but not longer than 180 days) after the City receives the petition for annexation referenced in Section 1 from the Washington State Parks and Recreation Commission. PASSED by the City Council of the City of Issaquah the day of, APPROVED: PAUL WINTERSTEIN, COUNCIL PRESIDENT APPROVED by the Mayor of the City of Issaquah the day of, FRED BUTLER, MAYOR BFP DOC;1\ \ Page 65 of 74

66 ATTEST/AUTHENTICATED: CHRISTINE EGGERS, CITY CLERK APPROVED AS TO FORM OFFICE OF THE CITY ATTORNEY: By RESOLUTION NO. BFP DOC;1\ \ Page 66 of 74

67 Exhibit A: Notice of Intent to Petition for Annexation BFP DOC;1\ \ Page 67 of 74

68 BFP DOC;1\ \ Page 68 of 74

69 Exhibit B: Vicinity Map and Legal Description BFP DOC;1\ \ Page 69 of 74