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Home My WebLink About5.612 Original Contract 5. LP I:L LETTER OF INTENT This letter of intent memorializes the mutual intent of the parties to undertake specified actions in furtherance of the development ofa motel, restaurant and convention center complex (the "project") on the property hereafter identified. All exhibits referenced herein are incorporated by such reference. 1. Parties. The parties to this letter of intent are: Pier Group L.L.c. or its assigns ("Developer"); The Port of Port Angeles ("Port"); The City of Port Angeles ("City"); and the State of Washington Department of Natural Resources ("DNR"). 2. Property. The property proposed as the project site and the current ownership thereof is described in Exhibit 1 and depicted on Exhibit 2. 3. Proiect. The project to be undertaken by Developer is generally described in Exhibit 3 and the accompanying site plans and elevations (Exhibits 3A through~. It is acknowledged the final design of the proposal is likely to be modified during environmental review and permit processing, but that the principal components of the project as narratively described in Exhibit 3 will not be modified without the consent of all parties hereto. 4. Land excham!e and boundary adiustment. The Port and DNR will pursue approval ofa land exchange by the Board of Natural Resources (pursuant to RCW 79.90.457, WAC 332-30-170 and other applicable laws) whereby all right, title and interest of the DNR in Parcel C as depicted and described in Exhibit 4 will be transferred to the Port in exchange for transfer by the Port to DNR of all of its right, title and interest in Parcel D as depicted and described in Exhibit 4. The Port and DNR also agree, contingent upon approval of the land exchange by the Board of Natural Resources, to jointly seek a boundary adjustment from the City for the land exchange herein described. The Port shall bear all survey and appraisal costs, recording fees and all other expenses associated with the land exchange process and boundary adjustment. An appraisal submitted by the port and reviewed for completeness by DNR may be acceptable for determining values for this land exchange. 5. Port conveyance. The Port will grant and convey to Developer good and marketable title to Parcels A and C as depicted and described in Exhibit 4, together with a quit claim of any interest the Port may have in improvements, including fill, situate on Parcels Band E as depicted and described on Exhibit 4, for the total sum of One Million and No/lOO ($1,000,000.00), all cash at closing. - 1 - 6. DNR lease Parcels Band D. DNR will enter into a new 55-year tidelands lease with Developer for Parcels Band D as depicted and described in Exhibit 4. The rent to be charged by DNR for Parcel B will be based upon the ultimate usage of the parcel in accordance with formulas and examples set forth in Exhibit 5. The parties understand and acknowledge that the rent to be paid for Parcel D shall at all times be non-water dependent rent as that term is defined in applicable state laws and shall be in the initial amount specified in Exhibit 5 and shall be subject to adjustment over time based upon changes in assessed value of the adjoining upland parcel as more specifically described in Exhibit 5. The parties further acknowledge that the rent to be paid by Developer for Parcel B is anticipated to be a combination of non- water dependent and public access rentals. The formulas and examples set forth in Exhibit 5 are acknowledged to not necessarily represent the ultimate design and usage for Parcel B. The parties acknowledge that final negotiation of usages and rents for Parcel B will be conducted in conjunction with or at the conclusion of permit processes for the development of the project. Use classifications for the state owned parcels leased to the Port or the Developer shall be determined by DNR. The portions of Parcel B developed for public access to the shorelines will be dedicated by Developer to such use and may be subleased to the City for park purposes. Those areas so dedicated shall not be subject to payment of any rentals to DNR so long as authorized under RCW 79.90.470. Said leases shall reserve to the Port an easement for access for Port purposes to the harbor area lying north of Parcel B and the dock located in the harbor area identified as Parcel F. The leases shall also reserve an easement for public trail purposes in favor of the City in the area depicted on Exhibit 3 and Exhibit 4. / 7. Conthwous harbor area leases. Harbor areas abut Parcel B on the north and include an area of filled harbor area and riprap approximately 75 feet in width (parcel E on Exhibit 4) and an existing pier depicted on Exhibit 4. The rent for the footprint of the riprap bulkhead will be calculated at non water-dependent rates. The subject harbor area leases are legally described in Exhibit 6. The Port will relinquish management of these harbor areas to DNR. Thereafter DNR will lease the harbor areas depicted on Exhibit 4 as area F to the Port for mixed uses, including water dependent, non water-dependent and public access uses, for a new 3D-year term. It is anticipated the Port may sublease portions of this harbor area and portions of the pier as depicted in Exhibit 4 to Developer for the 3D-year term. The Port shall pay rentals for said harbor area lease from time to time as described in Exhibit 7. The harbor area identified as Area E shall be leased by DNR to Developer for a new 3D-year term and shall be dedicated to public access uses, subject also to easements reserved to the City and the Port as identified in Section 6 above. A copy of the form for the proposed leases between the Developer and DNR for Parcels B, D and E are attached as Exhibit 8. - 2 - 8. City trail/park. Portions of Parcel B and Parcel E as depicted in Exhibit 4 may be subleased by Developer to the City for public park and trail purposes. The areas anticipated to be subleased to the City are depicted and described in Exhibit 3. Neither the City nor Developer shall pay any rent to DNR for these public access areas as ultimately determined by DNR and specified in the subject lease as being dedicated to public use. 9. Convention center. The City shall lease the convention center facilities described in Exhibit 3 from the Developer for the sum of One Hundred Thousand Dollars ($100,000.00) per year, to be paid from city lodging tax revenues. The City shall lease back the convention center to Developer in consideration of the Developer's agreement to operate, maintain and market the convention center in accordance with the terms of the business plan document and marketing plan budget and implementation strategy previously submitted by Developer to the City and dated the ~ day of f,{/fi( , 2002, and the terms of a convention center sublease which remains to be negotiated prior to closing. 10. SEPA compliance. The City shall act as lead agency for State Environmental Policy Act review and compliance associated with all governmental actions contemplated herein. 11. Due dili1~ence / ~wod faith. The parties acknowledge Developer has: made "substantial progress" on pre-design of the building structure and site improvements~ submitted a business plan document acceptable to the City~ submitted a preliminary marketing plan budget and implementation strategy acceptable at this stage to the City~ provided satisfactory evidence that project financing is available and provided project development schedule all as contemplated by the letter of intent between the City and Ehm Architecture and dated January 30,2002 ("due diligence phase requirement letter"). The parties hereto further acknowledge that execution of this letter of intent by all parties satisfies the remaining terms of said due diligence phase requirement letter. The parties mutually agree to pursue with good faith and due diligence the closing of this transaction through signing of definitive agreements consistent herewith. The parties hereto acknowledge that a number of matters pertinent to the finalization of this transaction remain to be negotiated. Those items include, but are not limited to, the following: (a) establishing a schedule for permit processing and closing of the real estate transactions identified above; (b) final approval of the Developer's marketing plan, budget and implementation strategy by the City~ - 3 - (c) development of final documents consistent with this letter of intent, to be utilized at closing; (d) development of mutually acceptable definitive plans to provide adequate parking for the project; (e) allocation of closing costs; (f) approval by all parties of final design and acceptance by Developer of permits as issued. 12. Not a bindin2 contract. Neither this document nor anything contained herein shall be construed as an actual agreement or contract. This letter is not intended to have legally binding effect, but is an expression of intent. By signing this letter the parties declare they will deal in good faith towards the goal of reaching the future agreements discussed herein. 13. Counterpart si2natures. This Letter oflntent may be signed by the parties in counterpart. PIER GROUP L.L.C. PORT OF PORT ANGELES By: Date: (0.(12-. oz. By: CD~~~ Its: E.~~'{e. }\Ili.~~ Date: ~ 0'2.... Its: CITY OF PORT ANGELES STA TE OF WASHINGTON DEPARTMENT OF NATURAL RESOURCES By: ~cz2<...~ -" J Its: Lb ~Z/.... Date: ;;/U~2- . / BYp~~ ttmW:c.-- Its: Af(Joi"\r$.. ~LJ..~ Date: G~ I J.. \ lOL - 4 - OAK STREET PROJECT Letter of Intent Exhibit List 1. Legal description(s) of site (present Port and DNR ownerships) 2. Site map (present Port and DNR ownership harbor line, etc.) 3. Project description, site plans and elevations (3A - 3C) 4. Site map and legal descriptions for Parcels A-F (include trail) 5. Rent formulas for parcels B, D and E 6. Legal description of Parcel F 7. Harbor area rent formulas for Parcel F 8. Form oflease for parcels B, D and E EXHIBIT 1 Legal Descriptions of site F or the Present Port of Port Angeles and State of Washington Department of N amral Resources Ownerships Letter of Intent For State of Washington Department of Natural Resources and Port of Port Angeles Exchange Agreement LETTER OF INTENT Port Angeles Oak Street EXHIBIT 1 Parcel(s) A + D (as referenced on LOI Map in Exhibit 4) LEGAL DESCRIPTION Port of Port Angeles Ownership before Boundary Line Adjustment (Tideland Block 2) TIDE LAND BLOCK 2 OF PORT ANGELES TIDE LANDS WEST OF LAUREL STREET, AS SHOWN ON THE SUPPLEMENTAL MAP OF FIRST CLASS TIDE LANDS FILED IN THE OFFICE OF THE BOARD OF STATE LAND COMMISSIONERS ON THE 9TH DAY OF MARCH, 1894 TOGETHER WITH VACATED CHERRY STREET. Prepared June 21, 2002 by: Rob Johnston, PLS, CertIficate Number 37537 Land Surveyor for the Northwest Terntories, Inc. J IAQRIDA T AISUPPORTIProgram DevelopmentlPORTS\PMA PORT F1LES\Pt Angeles 200800131Letter oflntent ExhibIt I A+D TldelandsBlock 2-beforeBLA doc LETTER OF INTENT Port Angeles Oak Street EXHIBIT 1 Parcel(s) B+C (as referenced on LOI Map in Exhibit 4) LEGAL DESCRIPTION State of Washington Ownership Before Boundary Line Adjustment (Tideland Block A) TIDE LAND BLOCK A OF PORT ANGELES TIDE LANDS WEST OF LAUREL STREET, AS RECORDED IN VOLUME 12 OF PLATS, PAGE 76, RECORDS OF CLALLAM COUNTY, WASHINGTON. Prepared June 21, 2002 by: Rob Johnston, PLS, CertIficate Number 37537 Land Surveyor for the Northwest Terntories, Inc. J IAQRIOATAISUPPORTlProgram OevelopmentlPORTSIPMA PORT FILESIPt Angeles 200800131Letter of Intent Exhibit 1 Parcel B +C Tidelands Block A-before BLA doc EXHIBIT 2 Site Map F or the Present Port of Port Angeles and State of Washington Department of Natural Resources Ownerships Letter of Intent For State of Washington Department of Natural Resources and Port of Port Angeles Exchange Agreement H ~ IIMC8 Mil,. . JIAAFtT JO PSDtIDRS 0If OFHEII ~ tnHf1J ~ QIf LfWIIIIIDIDfD NOr $HD/IWII1<<Jt(ClN. TI<<$,JUM"r HU IIDr ~ IPff t;IIS7DllQ' OF AU. $IJCI4 lASDtIDIJS 0/1 ~ till lMJt Dnt'T 0#It THE ~ -..en or::D'f AS ~r ..,.,. MJIfDM DG III:'CQIID OF ~ 1M" l/JIl7ft.T CJlJSTM RJI(% UNB MID tI1HDI ClCQ.flMftI:lNiIl .fIlIlllOUPtI' .. ~ .P'H .Ac:. 0W'r'lJf .D1IJQ IHDI'~"'" ~ Mil" N:JItOtIl' A II01DitFMI. 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AND HU <<eN MXCPrED AS _ING THe C~ ~ or -.1i04D AlofMA!' AND OAK SI1ICEr. o !lO /00 v......_ I SCALE IN FrET {j (;1Q o SUIMl'Ot'i'"S CER1lF7CATF: THIS _ CORIICC:Il.I' fl!PRCSENTS A S/IfNCI' MADE BY AIC 011 I./NOE:R VI' OiREr:rlON IN ~ WITH THE' 5UIMY RCr:oROINC loCI AI THe I/ffIUESI OF THE' pORI OF' POJf'T ANGaES IN .-.MY. ZOO2. ,'lA ~; I ,<i>~ :rw"1 S>1'>\ HOIl .xJHlOlON ~~/~};", ..........-.. ....~Mr'\> 1'Pr.....--... 0--- ~ ,-.. OAlL ."In,tW DAA_..,. I/IIHJ PUT ca:acm.... IHI ...... -- .., staT , OT , -- O NORTHWESTERN TERRITORIES, INC. _.~_.- --.-- 111"1 m......_._-....._......IttIoI*-_- EXHIBIT 2 LEGEND AFH Cl.VJAM CCUNII' AIJDfTOR'S fIL - . SET il,l8-1NCH RaIAR IIITH IllAS!X: !lUftID' CAP $1'_ "Nn-.JOHNSIDN Pl.S :175:11' AND PlAS7lC Gl.WiD STAKF: o FOIJND 2-lNCH MUS CAP flUSH _ _ !IIJIIFACE Ii:. FOIJND crrr OF PORT ANIiE1D t:nlIlE7Ie awIIIllt __ NO. FI:1-:1-1 PCR .aUW M OF ~ PACE 22 (SEE N07I: 2) . SET lEAD AND TACK FlUSH _ t:tJNt:IIDC SIJOIIIlK RCCORDING cnmF7CATF: mED fDR RCCORO AI THe IlCOUE:ST or ~ JIliIIIIlIIJD. tNC.. THIS....Jz.. Ool[ ~~h""'~" 2002 AD. AI td1 ~ flIAST ..3.. O'Cl.OCIt II NiP I/Et'OII06) /JNOOf AIOIDf'S nc - ..:I DIU -I D 7 Sq ~ . REr:OROS? ClJ\UAol/ CDIMTY. ~ ;(qn;~ ~,f~ DENf'f --ciiiih AIJDfTOR - Record of Survey Tidelands Blocks 2 ct A in front of Port Angeles Townsite EE M' EXHIBIT 3 Project Description 3A Site Plans 3B Elevations 3C Letter of Intent For State of Washington Department of Natural Resources and Port of Port Angeles Exchange Agreement J ] ] J :J '] J :J J J : i , 1 J - i - -' J :-s '-~ . . EHM 'r A R c E c H I T E T u R Development Program and Narrative of Proposed Project , This proposal is presented by Holiday at the Pier LLC, a pending limited liability Corporation hereinafter referred $ to as "Developer" or "Holiday at the Pier." The City of Port Angeles and Washington State Department of Natural Resources, hereinafter referred to collectively as .Owners," are Owners of a 3 75 acre parcel of land located at the northwest comer of Front and Oak streets in Port Angeles, Washington. The Owners desire to have a public conference facility bUilt, In order to attract conferences and travelers to the CIty of Port Angeles Holiday Inn at the LLC proposes to construct conference facilities in conjunction with a hotel and restaurant, In order to offset costs of building and operating a conference center alone and to further support the conference facility. Accordingly, the Developer submits the following negotiable proposal for due conSideration The Developer is aware of the Gateway Project and of the Multi-Modal Transportation Center Pre-Desion and Downtown ReVitalization Master Plan. We commit to furthenng the ideals of these efforts, and offer our support and cooperation In strrvlng to Integrate thiS project into current and long-range planning for the waterfront area of the Central Business Distrrct. Land and Facility Ownership Land Ownership Holiday at the Pier LLC deSires to purchase the subject property from the City and the Port of Port Angeles, subject to a trade of tidelands between the City and the Department of Natural Resources. Holiday Inn at the Pier now consists only of Randal Jay Ehm AlA, With other partners to be named publicly and specifically as negotiations ensue and as Due Diligence services are performed We propose to either purchase or ground lease of the property, subject to negotiations during the Due Diligence phase of the project. Lease term, if any, is anticipated to range from 40 to 50 years Purchase price, If the City agrees to sell the land, is to be negotiated based upon current appraisals of the property, with possible subsidy on the City-owned parcel (through reduction in value) if the City successfully trades tidelands with the Department of Natural Resources Lease terms, if the City prefers to lease the land, are to be negotiated based upon current market rates for like property With consideration for benefit to the City. The City shall Indemnify Holiday at the Pier LLC from liability for eXisting environmental conditions, as none have been Identified at this stage In the process. Randal J4.1Y Ehm AlA PrinCipal 'ZT01 C.ltfomlll A'IMftW 8W NO? Vancouver Mall Drtve, Iu.. C1 ......11 .......I@eIl...rcI1.com _. WA 18111 V._. WA ~ 1_ www.oh...rcI1 com _14-1783 _14-1111 FAX ___ Toll Free 100 ~ 2110 East Homml Rood IeIUnghllm, WA 18221 _14-1111 101& Wool W_lnglDn _ aon DIogo. CA 121~11Oll 111~ '.0.....2121 I'nco, WA _-2121 _ M5-2101 Project Description 3A l J Port Angeles September 12, 2001 1 .. -, I .. I .. ] 1 II 1 11 I q ] ] i . 1 . 1 . ] 1 . ] 1 . 1 . Facility Ownership The FacIlIty will be wholly owned by Holiday at the Pier LLC HolIday at the Pier LLC Intends to retain ownership of the facIlIty, with anticipated partial ownership of the FacIlIty by Ehm Architecture, Its Subsidiary MMP Inc, Interbank Brener, and SIX Continents Hotels as a minor partner Venture capital Investors known directly by Holiday at the Pier LLC (to be named pnor to contract execution) Intend to retain ownership of the remaining portion with a maximum of three partners being allowed " HolIday at the Pier LLC Intends to lease the Conference Center to the City of Port Angeles HolIday at the Pier LLC Intends to lease the restaurant to a well-known restaurant management company, to be named dunng the Due DIlIgence, but retains the nght to own and operate the restaurant Itself Holiday at the Pier LLC IS willing to lease property from adjacent property owners to secure additional parking, If required as a condition of successful negotiations. HolIday at the Pier LLC Intends to make excess parking available for the public use at a market rate, subject to availabilIty dunng peak season Holiday at the Pier LLC Intends to secure full nghts to utilIze the eXisting pier for related bUSiness or access, and IS Interested In the pOSSibilIty of extending the pier - subject to Junsdlctlonal approval and under separate process Economic Deal Structure The economics of thiS project require the finanCial partiCipation of the City, In the form of $100,000 annual cash subSidy to offset conference faCIlIty development expenses HolIday at the Pier LLC reserves the nght to request additional subSidy from the City If necessary, as determined dunng the Due DIlIgence phase of the project, although no further subSidy IS requested at thiS time Holiday at the Pier LLC Intends to take advantage of the availability of property tax Increment finanCing for street Improvements, waterfront pedestnan path and dock extension If any It IS anticipated that the City may deSire to take advantage of this program as well, to finance expenses necessary to manage and promote the conference faCIlIty and to help fund other publIc Improvements Holiday at the Pier llC IS Interested In negotiating speCific terms With the City, including but not limited to use of the Clallam County Opportunity Fund and the pOSSible estab;,shment of a PublIc Facilities Dlstnct It IS pOSSible that the Conference Center could be constructed as a separate structure, If necessary to meet cnterla for the protection of publIc Investment. Cost Estimate The project as currently deSigned IS expected to cost approximately $ 14 millIon Please see the Included Pro Forma for detailed cost Information J Port Angeles September 12. 2001 J ] J J J J ] ] ] i .. j ] ] ] ] ] 1 . ] l" Partnership Financial Plan As previously stated, the FacIlity will be wholly owned by Holiday at the Pier LLC (working title) a limited Liability Corporation Holiday at the Pier LLC Intends to retain an estimated ten percent ownership of the ' facIlity Interbank Brener Intends to retain an estimated forty-one percent ownership of the FaCility. Venture capital Investors known directly by Holiday at the Pier LLC (to be named pnor to contract execution) intend to retain the remaining fortY-nine percent With a maximum of three partners being allowed Holiday at the Pier LLC Intends to lease the Conference Center to the City of Port Angeles at a reasonable rate as mutually agreed upon dunng the Due DIligence phase Holiday at the Pier LLC Intends to lease the restaurant to a well-known restaurant management company to be named dunng the Due Diligence at a market rate, but reserves the nght to own and operate the restaurant Itself Holiday at the Pier LLC IS willing to lease property from adjacent property owners to secure additional parking, If required as a condition of successful negotiations. Holiday at the Pier LLC Intends to make excess parking available for the public use at a market rate, subject to availability dunng peak season Holiday at the Pier LLC requests that the City place a moratonum on construction of new hotel or motel rooms until such time as a minimum average occupancy of 60% IS attained, which is anticipated to be at 2 or 3 years from start up Scope of Construction with Time Frame The conference center and restaurant Will be bUilt as an Integral part of the hotel facIlity Ehm Architecture will serVe as Architect of the facIlity MMP Inc Will prOVIde construction management services In association With Bntco Structures of Vancouver BC and Taylor-Ball General Contractors Bntco Intends to engage subcontractors and specialty tradespeople who worked With them In construction of the QUlnault Beach Resort In Ocean Shores, In preparation and Installation of modular hotel guest rooms These partiCipants are, Without exception, residents and business owners In the OlympiC Peninsula Taylor-Ball Construction Intends to utilize the services of local subcontractors, suppliers, tradespeople and other support businesses to perform site Improvements, construct the bUIlding foundation, and perform finish work as necessary to complete the facIlity It IS anticipated that thiS facIlity could be under construction by the thIrd quarter of 2002. Construction IS expected to be completed Within SIX months, due to the modular approach to construction of the guest rooms ThiS same process was used successfully on the QUlnault Beach Resort In Ocean Shores, which was bUIlt by our team member Bntco Structures of Vancouver We antiCipate that the faCIlity could be open by the second quarter of 2003 Operations Plan The proposed conference hotel IS well SUited to the Port Angeles market, due to the tremendous demand the market expenences from May through October Economic projections for thiS market are favorable for the next three to fIve years I I I t Port Angeles September 12, 2001 l I J ~ The Conference Center will be developed on the Front and Oak Street Site, a 3 75-acre waterfront lot In Port Angeles, WashIngton The lot fronts onto the Central Business Dlstnct, It IS a short walk from the Victona Ferry Terminal, and It affords sweeping views of the StraIt of Juan deFuca, the San Juan Islands and Vancouver Island. A semi-public golf course In Sequlm has earned a reputation as a good course and enhances the site's . destination appeal. We are pursuing the POSSIbility of purchasing a limited number of memberships at Dungeness Golf & Country Club, within minutes of the site. to further strengthen appeal to bUSiness and recreational travelers The proposed project IS envIsioned to be a resort conference center, taking advantage of the site's attrrbutes and ItS easy access to both Vlctona and the Olympic Mountains In addition, because of ItS proximity to Seattle and Vancouver BC, the project should be effective In captunng ItS fair share of business groups for corporate meetings and Incentive packages Holiday at the 'Pler IS Intended to be flagged, or branded, as a Holiday Inn Select or Holiday Inn Resort SIX Continents Hotels will provide franchise support In operation and marketing of the facility, through Its worldwide network of companies Interbank Brener WIll operate the facility, the conference center and the restaurant to the extent that they are not operated by tenants or by the City Competitive Market - Hotel I Conference Center Hotel Rooms Year Estimated Estimated Opened Occupancy Average Daily Rate Port Ludlow Resort 151 1966 55% $ 85 Skamama Lodge 195 1993 80% $130 Salish Lodge 91 1988 75% $140 Salishan Lodge 205 1968 68% $140 Seml-ah-moo 198 1987 65% $135 Source Ernst & ASSOCiates, Inc Projected Performance Year ( Occuoancv Feaslbllitv ADR 1 55% $100 2 60% $102 3 60% $104 4 60% $106 5 60% $110 Source Smith Travel Research Site Summary The subject site offers relatively good access and good vIsibility It IS under two hours from Seattle by car and by ferry, where hundreds of firms could generate demand and millions of weekend VIsitors could be tapped. Market Overview The market for conference resorts In the PacIfic Northwest remains unproven Occupancy dunng November through April has been problematic due to climatiC conditions ThiS puts an effective average occupancy cap of 55-60 percent The aforementioned competitive supply does not have a full "conference resort" In the set. The market demand for properties of thiS type IS very strong for SIX months, May to October. Port Angeles September 12, 2001 , ! . i I . i . i ! i . i . , i II i I II II II \I II II JJ 1I II [I Overall Summary While there are no real competitors In the market, It IS critical that InterBank Brener proceed with caution and provide only deal structure, management and partial financial participation There IS a need for some capital Other capital sources Include City/Port or DNR land equity, SIX Continents Hotels, Ehm Architecture/MMP and local private equity Following IS the summary return on Investment Year 1 Year 2 Year 3 Net Operating Income $932K $1.3m $17m Debt Service ($14m) $871K $1 18m $15m Cash On Cash Return 7% 97% 125% Based on the above numbers, the only concern IS the ramp-up penod In light of that fact, Interviews In the market Indicate that these numbers are aggressive given the seasonality of the Olympic Peninsula market In addition, we have confirmed that fractional ownership IS difficult In thiS market The role that InterBank should proceed With IS one of adVisor to place the debt, developer/operator and equity participant Total equity reqUired IS $ 3 million of the $14 million "all-In" cost It IS suggested that the City and Port sell or partially contnbute the land. On behalf of Holiday at the Pier LLC, Ehm Architecture/MMP should provide $ 500,000, capital Investors should provide $1 2 million and InterBank should conSider $ 800,000, all of which would be recouped With fees over time Attached IS the Holiday Inn Pro Forma and other financial data 'l' ] EHM A R c H I T E c T u R E l ] Description of Proposer Resources Proposer I Authorized Coordination Representative Randal Jay Ehm AlA Ehm Architecture I MMP Inc. 2707 California Avenue SW Seattle, WA 98116 (206) 545 1783 (206) 933 6099 fax randalaD.ehmarch.com " ] ] J Experience of the Project Team Please see attached resume and brochure materials for details on our qualifications and experience. ] Ehm Architecture This Project Team has been assembled expressly based upon the qualifications of each firm or entity, as they relate to the Port Angeles Conference Center Facility. Ehm Architecture's extensive architectural background, as well as our regionally local presence and planned local residence on Oreas Island, are the strength on which we base our pursuit of this project. ] ] MMP Inc. I Britco Structures Randal Ehm's construction management company, MMP Inc., will participate throughout the entire project in providing turn-key construction services. The firm will utilize the services of manufacturer Britco Structures in providing quality-built, modular guest rooms to save both time and money. Britco has been in business since 1982, and recently completed the Quinault Beach Resort in less than eight months in the harsh Ocean Shores environment. MMP sees this facility as a potential flagship waterfront conference facility with both hotel and restaurant, and through ownership participation of President / CEO Randal Ehm assures the City that the high quality of the facility will be properly maintained well into the future. ] ] ] Six Continents Hotels Formerly Bass Hotels, Six Continents is a well-respected and quite successful hotel company with significant brand name recognition. The company's Holiday Inn brand has been in operation since 1953. and has long been recognized as a familiar and comfortable hotel product nationwide. The company's computerized management and reservation system enables the facility to maintain direct contact with SIX Continents, rather than being left to its own devices in an "out of sight, out of mindB scenario as often occurs with franchise operations. ] ] Interbank Brener Hospitality This investment company is very strong in the hospitality industry. Headquartered in Washington DC and New YorK, IBH offers its services through Robert Rauch, Director of Western Region. Mr. Rauch, a Certified Hotel Administrator with a Master's Degree and 25 years of experience in the industry, is widely recognized as a leader in hotel management, operations and development. He has established the HotelGuru.com website to offer his extensive line of services in hotel management, operations, staff training and start-up to hotel developers nationwide. Robert also continues to support the industry by teaching hotel administration though extension courses at UC San Diego. ] J J Taylor Ball General Contractors Taylor Ball is a reputable and well-known general contractor with offices located across the United States. They have been invited to participate in the MMP process due to their strong abilities and their extensive experience on hospitality projects. J Fl3ndal Jay Ehm AlA '-1ndpel 101' West Washington 8trMt ......11 ..nd.~march.com San DIogo, CA ~03-1_ 1_ hlII'./_....march.com '1'_ 'AJ. '1' -.-r Toll'''' 800 2ItI-I4I3 8101 SW ....... _,WA.ll' 2011146-1713 ~V.nc_ Mall_, Bulta B V.ncOUftf, WA ~ * ....1811 21IOEntHemmIRood 1_R1__ Belllnghom. WA 18221 _. WA - _ ....1811 101-.:2101 J ~ ! ~ 5 ~ I ~ s ~ ~ il g ~ a ~ 0 B ~ * 6 i ~ Ii ~ 6 !i ~ I ~ I ! ~ I ~ i ~ ~ ~ ; I ~ i ;; ~ a . ~ i i ~ I ~ ~ ! ~ PORT ANGElES HARBOR -...--------... ...--- 'FN<lOW ..-.. ...-~~~~.~.- .... ,. .".'r1:~(.'- ..' "'~G PIER .,~ _---1 I I =RE1 I I ---1----, I , I , I 1 , I ::r~r:. I INCLR 1 , I I I , I _ _L _ _..J IW.ROAIJ'I{NUE ! I ! ! I i I I i~ I~ PR[l>ERlYlYl\!ER: ""'/00." 1IE51IlfM. IRIJSlEE5 ~ ~ ~ ~ -""''''''' ElUCKSOM flMLY l'ROPOllD '"'" _____ 12T-' &5'-6" ~~:-snt TOrN.. AOOlTJONAI.. ----------"--.---------____._.l2L""''' ,,,,,,,,,. f1IOHTSJRED ~~~D=WWATtRUIlUTI[$NlE --r----------------9.1-SPACtS-_- UT I I I ~ I ~ I i I : - - -: - - - ~ - - - T - - - ~ - - -:- - - ~ - - - ~ - - - ~ - - -:8- - - i1 I I I I I t I I r I t EXISTING t I, I I : : I I STRuCTURE I I I PROPERTY I I I I EXISflI..c IPORTor~ I I I I I I : ~Rt I ANCEW I I I I I I I I I :: I I t I:=TY1 I I I I I I rrMr [/ I L _ _ I I I I I I :~T I - - - L - - _1_ _ _ .J _ _ _ .L _ _ _ L _ _ _1_ _ _ .J - - - 1 I PROPtRlY I PROPERTY ':rc '::WE5T I UCIUHTAIH IPROPElrrES I PRllPOOlES I I 'EXISTING r - - ..., 5l1WCl1JR( ,-"'" I OlINEIt ,,"GEE ,........u HlNPTOH EXlSTlNC STRUCT\JR[ , , , , ,=TY, I=~I I - _ _1- _ _ .J _ _ _ J VICINITY MAP J /""'~It 1t~"1t ..,,+ .~. """" ~..I'" ~""'" A B N LATITUDE 48 07 15571 N LONGITUDE. 123. 26 0823 W DIRECTIONS TO SITE FROM US-lOT US-IOl BECOMES E FRONT ST E FRONT ST BECOMES W FRONT ST PROJECT ADDRESS 201 W FRONT ST PORT ANGELES, WA 98362 ~ 1 NO DREDGING OR FILL MATERIAL ARE REQUIRED OR UTILIZED ON THIS PROJECT 2 NO PROPOSED OR REQUIRED WORK HAS BEEN COMPLETED FOR THIS PROJECT 3 THE SUBJECT SITE IS PRONE TO PONDING THEREFORE, NO EROSION CONTROL IS PROPOSED ITS) lE ~ lE ~ \Yl lE lIT MAY 1 0 2002 CITY Of PORT ANGELES COMMUNITY DEVELOPMENT V@ ""r:fI-w SCAlE. ,..... SITE PLAN .. I .' ~:!!13~~ !i~~~ J~~I~ ~l!IlNi d ~B Ii ~11 t J !; '1 ~ ~ ~ U) ~ ro ........ ~ (]) ...... ...... ifJ. E 8 1 i I ! fi ~N 1 i~ ~~ H~h ~"~~~ ~h~w <( ~ D U) ...W 1:1:.... OW D"C Z C 0:: W I- Z OW zO <(w ...JO wz I-w 00:: :cw I.L. z o o ....,." CTM R.lE 1 I I ~ 8 ~ ~ ~ ~ i I ~ a ~ a 5 < ~ * ~ i ! ~ ~ ~ ~ ~ ~ ~ ~ fi ~ g . ~ E I ~ ~ ~ ~ . ~ i ~ ~ ;; 3 ~ ~ . ~ ~ i --- ffi ---- i 'Z. ":: j $L7"- I ~..~ ~ . EXISTING OVERLQOK LAWN BERM- 18" HT SlONE WALL. l:1 CONNECT TO EXISTING WATERFRONT TRAIL i i I :;;1 ~i I VINE lAmeE PANas, TYP VINE LAmeE W FRONT ST ----------------I--------~~~~~-----------.----------------------------r------------.-.- PLANTING SCHEDULE SYM 0"'" SCIENTIFIC/COMMON NAME SIZE/REMARKS SYM ON SCIENnflC/COhO.lON NAME SIZE/REMARKS (j) IllEEI GROUNDCDVEA8 15 Acer ,"brum 'Red Sunlct'/ 2" Col, 8&8, Full, nil branchod . Fragorla chdollnsl:l/ 1 Cell Cont, full well RED SUNSET RED UAPLE '" woll rocted Straight control BEACH STRAWBERRY branched << ....U tooted leader ok lingle trunk Triangular Spacing 0 18- 0 C () Symmetrical bronchlng habit 10 Cornus kou:lo/ 8'-10 . Hebc:totnc:hon IlmpeNlfen./ 1 Gal Conl ruu. we" HI B&:8/Cont, Multi-trunk BLUE OAT GRASS branched de well rooted KOUSA DOGWOOD w/ 3 mom trunk, Triangular Spacing 0 lS~ 0 C OR Styrall Jopomc.us/ . Arctostaphyllu. uva-Ufll 'VancauYtr 1 Gal Cant, full, w.n t2f JAPANESE SNOW BEll TREE Jade'/ branched 6: w.11 rooted Pinus contorto/ .'-6 HI a6:S/Cont, Multi-trunk, Not VANCOUVER JADE KINNII<INICK Triangular Spoclnll 0 18" 0 C 10 SHORE PINE sheared A3ymmotncal Wind blown 4: l.ggy In appeorance Owne,', . NoueUa tenul'llma/ , Gal Cont, full, willi ropreuntatl\le to I18I.ct tre.s 4: MEXICAN FEATHER GRASS branched &. ....U roat.d pOlltlon tr"t b.far, planbng Triangular Spacing 0 IS" 0 C mtIIl!U . Vinca minor 'BowleaIl'/ 1 Gal Cant, full, wall VINCA BOWLES branched'" WIU roottd . Rhododendron 'Ramopo'/ 3 Gill Cont, Full well TnoOllulor Spacing . 18- 0 C RAMAPO RHODODENDRON branched A: well !'Qoted . Cornua stolonlfero 'Kelseyl'/ J Gal Cant, full, w.U . EJymu. momll 1 Gal Cont. full, well aUNEGRASS branched &: WIll rootld KELSEY! DOGWOOD branched &: weU rooted Trlongular SpacIng 0 18" 0 C . Viburnum tlnus 'Spnng Bouquet'/ 5 Gal Cont. full, w.U . Ence cornea 'Sprlngwood Plnk'/ 1 Gal Cant, furl, Willi SPRING BOUaUET VIBURNUM branch lid &; wen rooted SPRINGWOOO PINK HEATHER branched 6: well rooted . Arbutus unendo/ 5 Gol Cant, Full, well Triangular SpacIng 0 18" OC STRAWBERRY TREE branchad & well rooted . Hemeroco!bs 'Stella d'Orv'/ 1 Gal Cant, Full, well . Rasa rUQoso/ 1 Col Cant, full, well STElLA DORa OAYULLY branched It WIU fOOttJd RUGOSA ROSE branched &: "'Ill rootld TnanQulor Spacing 0 18~ 0 C . Ue. crenoto 'Hellen'/ 1 Gal Cant, Full well HELLER! HOUY branchlld 6: well root.d Triangular Spllclng 0 la~ 0 C SYM QTY SCIENTIFIC/COMMON NAAlE QROUNDCQVERa I . Cracasmlo hybridsl CRQCOS..1A. . Calamagrolltla arundlnaClla 'Karl foerster'1 KARL FOERSTER'S FEATHER REED GRASS CJ . Lown Slid Mill ~ . "Perched Sand Booch. Area - Be<lch Sand - BIIQch La;1 - Beach Grolllls - Rock Outcrops ~ . Grall Rood Paverl SIZE/REMARKS 1 Gg' Cont, filII, well branched .&: .elt rooltd TTlonglllQr Sp,QC1l\9 0 18" 0 C 1 Gal Cant, full weU branched .&: Will rooted Triangular Spac.lng 0 18" 0 C Set SpeCt S.e Specs 9:1 . ~ D . Where quanlltl.s are not .tIhown tn the Planl Schedllle the Contractor shall be responsible for determining plant quantltlel to be uled rBJ" IE ~ IE ~ WI Ul) MAY 1 0 20U2 LEGEND @ DErAIL IOENTIFlCAT10N SHEET IDENTIFICATION - - - - - PROPERTY LINE o CONTNNER PlANTING .. TOTEM POLES ------------- VINE l.AmCE PANELS, TYP o 20 40 80 ~ LANDSCAPE PLAN CITY OF PORT ANGELES COMMUNITY OEVELOPMEN @ ,,~w. ii!U d ~J " ! ~ ~ ~ 1 I ILl lX: ;:l f-o U ILl l-< :x:: u lX: <( J ~ ma ~ j~ !iii pll :/" HU! ~J~~! II) ...w a=..1 OW a.~ C a:: ~ z OW zO <Cw ..JO wz 13M:! J:W u.. Z o o ."''''''' GFW JH 3 ~ I ~ ~ ~ i ~ ~ I * ~ ~ S 8 ~ . o S ~ ~ ~ ; i ~ i . ~ o !!i ~ ~ ~ ~ i3 ~ ~ ~ ~ 5 i ~ ~ ~ ~ ~ i ~ ~ ~ S 5 I i i i I ~ ~ I ~ liWOMlM tUHrTO BE DEJDlMINEDSYnt:~ llEVEl.OI'MEHTPERlIfJPIlDCESS ~I I I _._-~--" AR!ITflOI SCALE. ,'..v SOUTH ELEVATION lIWUWUliIHfJCHJTOlI( tetR.IlINEDBY'MSHClIUH: DE'Ie..OPII[HTPfll6l(I'PKOCtSS SCALE. '"..v NORTH ELEVATION ItAllIIILUtfIGHl'lOBEDEl'ERNWfDfr1M -----~~~~~ '~l-~" -~i-l1l =--~--~-:--11 .---- -H-- ~ ~~ .OO>T__~ _ . "C~...: SCAl.E ,....v EAST ELEVATION MAXlMlJlliIOOHTTO lIE IIElERMIEO BY n( SHOREUNEDtl'El.ClPUEHr'ERltII'PIlOCESS Ill'''' .,.... [5)rEr.c;rE~WrE lnl'l MAY 1 0 "" I CITY Of PORT ANGELES COMMUNITY DEVELOPMENT .fLUlltllMM) ...,,""'" """'(1lP) SCALE ,....... WEST ELEVATION . I I III . ~:<!ll~~ · ~i~~ tIl !~nl ~ j! ~r => ~ ~ E-o ~ ~ ~ u i tIl I E-o I ::c . u L i i~ ~. ~ !idf <( C1C""IO~ ~ . S!:~~l&l p ~ I w en !z ...WOW 0=..1 zU W <Cw o .....U D.c,,~z Z O~ c:c :t: ~ Z 0 U 04Ill... cr. RJE 2 A.LL BEFORE YOU 01 CAll 2 WORK DAYS IN ADVANCE BEFORE YOU DIG A.LL 1- 800- 424- SEE NO TF: 2 55 \ ~ ~'" III~ Ii 8~ ~' ~~ ~~ ~ ......---..... ......---..... ......---..... o JO 60 ~... ---i I ~ <t' f ~ e SCALE: IN FFEr :,j -, , ""\. ' I ~:~ -, '" ,~ '" ,~ , , INNeR HARBOR LlN[ I -~------ S55 J7'OJ"[ " ff TB :3 tr:l ........ (I) -< ~ .-+- ,.... o ::i en W (') AN LUWtR lOW WATER TIDAL PlANES r-O ON NOS PUBLlSH[D Bf:NCH MARl( SHEa FOR STATION fD 4090 PO~r ..wen CS SfRAIr or JUAN Of: FUCA. WASHINGTON tlSHEO APRIl.. 0 I /99:/ COWVERTfO TO NAVD 8fJ AS rouows N HIGHER HIGH WA, reR (MHHW) . 6 49 nIT /oJ HIGH WAU"R (MHW) .. 591 rur N LOW WArE'R (All""" .. 1 ~2 Fa;r ~ LO~R LOW WArEN (AlLLIl') ... -054 Ff'ET -o~Rr ro ULLW DATUU ADO 054 TO TJ./E VALU~S uSrEO ....SOVE , , I , ~: .;:;, "" "" . , ~I , , """-I , , , 1 , , "'" ~ EHM Architects 2002 Topographic Survey of Flfst Class Tidelands Block 2 & 2A, West of Laurel Street in front of the Townsite of Port Angeles, Clallam County, Washington ......---..... Port An ~ ......---..... geles Harb ~ ~ ,," ,.):~ E1 t )..___-------------1"". C .L - ,/"""""'" to': cc':' 0 'C ,', "",'C', 'c" ' cc "',"c"t~' ~,~"c.,.1.-------- 1.-- ','" , ','" 0 ,','" ,;:;' - - - --.. -:: ",.;:;':::- _-:. .~ ~~.:::. ,_ -=-,:. ---.~~: :: :. '__ ~~:.,:-:..: ~ _.:::. :::/ ~ ~ .~f'~ Y ~. "'" ltl.- ",~IIJATtTOl'OT/l"'RJJ'ISNII- ----~~------------- '"'- '"'- ~ ---- ",,-, _---- _ . ,_,_, _----- r- __--------- __ ------T-- _"'------''''f -,--=-'-~ "',,,,,,C------- - - ~ ---;;;-;:;-- --- - ~,--- -- ~ --,",",.. """ "" -'- - --- ~,--- "' CITY OF PORT ANGEl~S "(' COMMUNITY OEVElOPMlN~ C'-J C~ (J] :::.J ,"" '- V)'~ ~ ~'::: (jll-C: '_ 0 II ..c:-"'" QCCl "l: 2{l~ C))c:(S 0..2 Q{i '- ~h:-2 u ~ i I' -...'" -""11 f--<<.<. U1-i~! , ,~. ~i., Q; t:!~~! , TB 0:::: 1 - "" ~: ~, C/IfflAlJfNTrllCCIN ~ill ~ ~ i i : SlUt Ql,lJl" (1W>J ..... ~ ~ ,. ~ ( ,. ~!. i U1 ~ j ~ ~ ~, II, ~ ~ ~ ~ ~' !Ii! -6 ~ ~ ~ ~ .' ."tD W ij ~ _ I' , l --' ~i. I 0 tn f l:! ~ I: d ~ ~ ~ ~ :~ ' INfIGA000W"(m') '. Ii I ' ~ I ~. I ~ s ~ I I I. ' , , jl~ "" ~ , , o - :z " I ....'" pu.NTCRJK('of"1JC . I ' O~ , /IARIfCD'.~1f1t ..=t:/'=J ij! P# IP"l'MCNTl/OJt Tt1MYPWII<INC$I(;N '" .1. I . ~rCR lffmt (m>JI _l__._.~.!:!'~ ._~~.lL._.'f!g_"!'/~~._~-=-==._._._.~:_._.__.::::._~_==~~~.~=__._._._._._.-;._._._._._._. -. /p"';miR":;""-.;;JIJ-.-.-.-----.-__._.___._._.___._._._._._._. -.-------r.-~7f- ~' .7-.-.-;r~;;---r--.----~~~r--.-.-.-._.7--.--------7----=:;::~R~ II / I ~l II .. ~ ...." QI9'tINHIRJWlIlOl' ~ ~ .-. ?"- r-NOtlH li\O ux; S ~ ... e "" r Bk-llIIONrroR wtu , RIIIn_"jJ (fl.l.sH) , I c ~ (. 1 t I , ,0' o, TIDELANDS BLOCK 2A ~ , o, ~ lIOWCHOLC W1TU ASSICNCOI(1'rP) -----~---~---~--------~-------~- t VOL 28 OF SURVEYS PC 42 VOL 48 OF SURVEYS, PG 80 VOL 49 OF SURVEYS, PC SO o, TIDELANDS BLOCK 2 .lU.\, o, ! ,;= ~ ~ ~ CBRIII'." ? fttrAMNG WALL I'"'- .c:......- RCTMNtNG1MU, ',"P\ot" I/W"'~IJO N56 J7'OJ'!-V__ _____ ....,"''''.. ~ I FOR 8OUNOA~r INFORJ./ATlON SIT SURVCYS RECORiJED IN VOl/JU( 4~ PACE' 90 AND VDL/IJIE 49 PACE 50 Rf'C~OS OF' ClALl.AAI COUNTY, WASHWCTDN 2 EXISTlNC unLmEs SHOWN H~roN ARE BAsro ON ABove CROUND OBSfINArTQNS ANa/OR THE CITY OF PORr ANcnes 1995 AER/.I,L ItIAPPlNC AND SHOULD Be CONSIDE:Ra) APPROXlUATr AND POSSISLY INCOIJPLErE ~ -- NORrH AJ./ERlCAN OATUM OF' Ig~J (ADJUsrED IN '9tH) 'IUIK;& - - NORTH AIIER/CAN VCRT1CAL aATUIJ OF 1966 SURVFYnR'S CFRTJFfCATE I tiCRa;r comFY TkAr { AI/ A PKOFESSIONAL LANO SURVCrOR LlCCNSED TO PRACTICE IN THe STATE OF WASHlNCTON AND OCC/.ME THAT THIS MAP CORRECTL r RCPRESENTS A TOPOCRAPHIC SURvCY PERFORMED UNDER ItIY SUPERVISION AND /JEETS OR EXCEFJ)S WDUSrRY srANDARDS FOR rDPOGRAPHIC SURVEYS OF Irs CLASS PERFORIJED AT THE REO/JE:ST OF EHII ARCHITECTS IN APRIL. 2002 J)MJ1M PER VOI..UIJ~ J4 PAce 22 OF SURVEYS RCJa JCJHNSfCHV #"t~ ..U:J,JI ~I I~ g EXHIBIT 4 Site Plan and Legal Descriptions For Parcels A - F Letter of Intent For State of Washington Department of Natural Resources and Port of Port Angeles Exchange Agreement . .. Letter of Intent (LOI) Map HaMnDlIIIIilIlIICa ..r. ~ ftll'AlDllD"'lOt ",..""... - 'CD""".aIlIDfD 0/1 ........-: t<<1T ~ IIPIDJI& ... ....." ... ,." ..,..... H IJ;III1I1tIa Of" M.I. AOf .....-m fill ~ - Oil 1HIIt_00 ...---., -,-- ". ~ . ...... ,,"1JDIC'f .... mCI Uta -----..-.... .,Aa._.Dl,a--- ..., IDOl'" . MIIrma ,., ...... . ,.,."""a ImL .,....---_.....~- """ ..,. ..... II' .. ...,. Record of Survey of First Class Tidelands Block 2A and Block 2B. West of Laurel Street. in front of Porl Angeles Townsite. Clallam County, Washington --.-....-- =--= :r-..."'t-:-,:t::: == ~ t.. :.: =--=:r:=.: - --. ----.,~ - ........ ..., . ,.........-- ........ ------- ----_._~ II1I :/111 111./ .111 JOD2 ,..... = Parcel F -~ Port ""pia Hartl<< -~ -~ - .---";;. . . ~. --- .:-- -- ..:t {., D[PM1W[NT OF NA~ IlL5OUIlCI3 (DNA) 0: : ~;:.:L ,.\!,~~):..: :;~. c<;~ :~:; ,..' ,;"' /,r IO~ s.T, (GMUlOI 6 .;: ,~ "r3T'IUT 457.M I :~ Parcel C ~ -. --'- -;.n;v,- ','lI. 28 OF s:?,~~. ~ U ','Q. .e ~ s:.Y..\' ~. PC 80 3' to ; ; ,....... ""'" , 'A I'D .. ... ... fA'" u.""'" ;: ~ parcel 0 PORT f1F PORT NOGEUS -: : DE~. i..:"~~;~"~ :;;. O(;i~ es._ IS, (GMUlDI -~ --- ------------------------- .. --.- ,_.~-----_. II ---- ~"",""'ID' "..~/-- 6'''- SF. 0 I ~ I' I ~ ~ I 0 I 0 I Iii .' - IS III _ OIl. t '6 ! 0 I I' I ~ 6 0 I 0 J$ I ~ I o L Parcel B _ h . ,. 2/\ Parcel A I ----_:_-----------------~-=-----~=----------_:._~------- I s#PVT -.. : II ' -, I LEr;t;ND ~~ ~ I:!.. !~ ~~ il t [-- ......... I . . -..... ~ ~ IMC (Sa IIOIC J) ~~IMC a.DCIC IMC _ HAMDIt IMC 'II_....~~- POt NlI ZOOO-,Cl5MZO (~'o.400 Sf.) Rtt> _ (~Z5._ SF.) L o ~ D 50 'DD L,w.... - j $&AU IN FEET ~ -Q ~'S a1mF7CATC ~ VI o THIS tIAP ~,. ~ II ~ ~ ffY Me OR /JNDCJ> Ih ~ IN ~ /I1f7H THE SlJRIon" fICC()Ift)INf; IICT liT THI: RCDUaT OF THI: PONT or _ IIN<<US IN -. :KJQ:. ~~~ ;~ - . .. .... ... ..... 4&- --... c----- a:AI.Il: ,-.!If' oaR. -..- lIlA' D<<OlD'" ~ ~ NORTHWESTERN TERRITORIES. INC, -- . ..... ....... . ......... c.- ____......- ,.... NOTES , THe ~ OF fHC ~ II ro UUSlMII'II - ~ UNC II/J.AJSTI<IOIT IICf'IIEZN fHC STIlII' -- · -- ~ IIND IHr KJIfr f1F - IIHGIQA ;. 1Hr..- _ UtE AS .... _ II - 011 - .,,,; $lJPA.DIDflJlL _ f1F _ NIGIJ.D IIlf' &IINDr -- - '" ~~~ ~ II OF ltAlS _ 71. J. sa_lJII(HOF~ _41____._ _., FOR SUM\" ~_IIND ltAT --- Ff'(Y1RDINC cnmncATC nr.LD FOR M:CDRD liT TI!I' /fCQIJCST OF -~,-- ~ INC. THIS...:L 04Y A" 1r1Cl.'I 200z ...0. AT iU)_.urr;s NST ' .a!. D'aoar ~ III MID _ IN .a.Ul4' -!it.!/- OF - PACe ~ tfrC'J(1III1S OF CUlJ.W CD.MT'f. --- ~~ ~A1,Lu~ DC1'II1Y CD/IHT'f IILIDf/'OIf - Record of Survey Tidelands Blocks 2A de 28 ,~ f,.,.,,,t nf Port AnaeJes Townsite EEi -, LETTER OF INTENT Port Angeles Oak Street EXHIBIT 4 Parcel A (as referenced on LOI Map) LEGAL DESCRIPTION Port Ownership after Boundary Line Adjustment THAT PORTION OF BLOCK 2 AND BLOCK A, TIDE LANDS WEST OF LAUREL STREET, CLALLAM COUNTY, WASHINGTON DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEASTERLY CORNER OF SAID BLOCK 2, SAID CORNER BEING MARKED BY A LEAD AND TACK AS SHOWN ON SURVEY RECORDED FEBRUARY 6,2002 UNDER AUDITOR'S FILE NUMBER 2002-1078598 AND FILED IN VOLUME 48 OF SURVEYS, PAGE 80, RECORDS OF CLALLAM COUNTY, WASHINGTON; THENCE NORTH 56037'03" WEST, ALONG THE SOUTHERLY LINE OF SAID BLOCK 2, A DISTANCE OF 457.62 FEET; THENCE NORTH 33022'23" EAST, PARALLEL WITH THE WESTERLY LINE OF SAID BLOCK 2, A DISTANCE OF 186.81 FEET; THENCE SOUTH 56037'03" EAST, PARALLEL WITH SAID SOUTHERLY LINE, A DISTANCE OF 457.56 FEET TO THE EASTERLY LINE OF SAID BLOCK A; THENCE SOUTH 33021'23" WEST, ALONG SAID EASTERLY LINE, A DISTANCE OF 186.81 FEET TO THE TRUE POINT OF BEGINNING. ALL BEARINGS AND DISTANCES ARE BASED ON THE WASHINGTON COORDINATE SYSTEM, NORTH ZONE, NAD 83(91) AS SHOWN ON SURVEY RECORDED MAY 3,2002 UNDER CLALLAM COUNTY AUDITOR'S FILE NUMBER 2002-1084452 AND FILED IN VOLUME 49 OF SURVEYS, PAGE 50. Prepared June 21, 2002 by: Rob Johnston, PLS, Certificate Number 37537 Land Surveyor for the Northwest Territories, Inc. J IAQRIDATAISUPPORTlProgram DevelopmenllPORTSIPMA PORT FILESIPI Angeles 200800131Revlsed surveys Parcels A TldelandsBlock 2-BLA_narrallve doc G \Gen\Rob\Descnptlons\2002\TldelandsBlock 2-BLA_narratlVe wpd LETTER OF INTENT Port Angeles Oak Street EXHIBIT 4 Parcel(s) B + D (as referenced on LOI Map) LEGAL DESCRIPTION State of Washington after Boundary Line Adjustment THAT PORTION OF VACATED CHERRY STREET AND BLOCK 2 AND BLOCK A OF TIDE LANDS WEST OF LAUREL STREET DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWESTERLY CORNER OF SAID VACATED CHERRY STREET, SAID CORNER BEING MARKED BY A LEAD AND TACK AS SHOWN ON SURVEY RECORDED FEBRUARY 6, 2002 UNDER AUDITOR=S FILE NUMBER 2002-1078598 AND FILED IN VOLUME 48 OF SURVEYS, PAGE 80, RECORDS OF CLALLAM COUNTY, WASHINGTON; THENCE NORTH 33E22'23" EAST, ALONG THE WESTERLY LINE OF SAID VACATED STREET, A DISTANCE OF 251.98 FEET TO AN ANGLE POINT IN THE 1992 INNER HARBOR LINE, SAID POINT BEING THE NORTHWESTERLY CORNER OF SAID BLOCK A AND IS MARKED BY A 5/8-INCH REBAR WITH RED PLASTIC SURVEY CAP STAMPED ANTI JOHNSTON PLS 37531" AS SHOWN ON SAID SURVEY; THENCE SOUTH 64E24'09" EAST, ALONG SAID 1992 INNER HARBOR LINE, A DISTANCE OF 575.13 FEET TO AN ANGLE POINT IN THE 1992 INNER HARBOR LINE, SAID POINT BEING THE NORTHEASTERLY CORNER OF SAID BLOCK A AND IS MARKED BY A SIMILAR REBAR AND CAP; THENCE SOUTH 33E21 '23" WEST, ALONG THE EASTERLY LINE OF SAID BLOCK A, A DISTANCE OF 143.08 FEET; THENCE NORTH 56E37'03 WEST, PARALLEL WITH THE SOUTHERLY LINE OF SAID BLOCK A, A DISTANCE OF 457.56 FEET; THENCE SOUTH 33E22'23" WEST, PARALLEL WITH SAID WESTERLY LINE, A DISTANCE OF 186.81 FEET TO THE SOUTHERLY LINE OF SAID BLOCK 2; THENCE NORTH 56E37'03" WEST, ALONG SAID SOUTHERLY LINE, A DISTANCE OF 112.32 FEET TO THE TRUE POINT OF BEGINNING. ALL BEARINGS AND DISTANCES ARE BASED ON THE WASHINGTON COORDINATE SYSTEM, NORTH ZONE, NAD 83(91) AS SHOWN ON SURVEY RECORDED MAY 3, 2002 UNDER CLALLAM COUNTY AUDITOR=S FILE NUMBER 2002-1084452 AND FILED IN VOLUME 49 OF SURVEYS, PAGE 50. Prepared June 21, 2002 by: Rob Johnston, PLS, CertIficate Number 37537 Land Surveyor for the Northwest Terntories, Inc. J \AQR\DATA\SUPPORTIProgram Development\PORTS\PMA PORT FILES\Pt Angeles 20080013\Letter of Intent Exhibit 4 Parcel B+D TldelandsBlock A-SLA_narratlve doc G \Gen\Rob\Descriptlons\2D02\T.delandsBlock A-BLA_narratlve wpd LETTER OF INTENT Port Angeles Oak Street EXHIBIT 4 Parcel C (as referenced on LOI Map) LEGAL DESCRIPTION State of Washington Parcel to become Port of Port Angeles Property THAT PORTION OF FIRST CLASS TIDELANDS BLOCK A OF TIDE LANDS WEST OF LAUREL STREET DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEASTERLY CORNER OF TIDELANDS BLOCK 2, SAID CORNER BEING MARKED BY A LEAD AND TACK AS SHOWN ON SURVEY RECORDED FEBRUARY 6, 2002 UNDER AUDITOR=S FILE NUMBER 2002-1078598 AND FILED IN VOLUME 48 OF SURVEYS, PAGE 80, RECORDS OF CLALLAM COUNTY, WASHINGTON; THENCE NORTH 33E21 '23" EAST, ALONG THE EASTERLY LINE OF SAID BLOCK 2, A DISTANCE OF 149.99 FEET TO THE SOUTHEASTERLY CORNER OF SAID BLOCK A AND THE TRUE POINT OF BEGINNING; THENCE NORTH 56E37'03" WEST, ALONG THE SOUTHERLY LINE OF SAID BLOCK A, A DISTANCE OF 457.57 FEET; THENCE NORTH 33E22'23" EAST, PARALLEL WITH THE WESTERLY LINE SAID BLOCK A, A DISTANCE OF 36.82 FEET; THENCE SOUTH 56E37'03" EAST, PARALLEL TO SAID SOUTHERLY LINE, A DISTANCE OF 457.56 FEET TO THE EASTERLY LINE OF SAID BLOCK A; THENCE SOUTH 33E21 '23" WEST, ALONG SAID EASTERLY LINE, A DISTANCE OF 36.82 FEET TO THE TRUE POINT OF BEGINNING. ALL BEARINGS AND DISTANCES ARE RELATIVE TO THE WASHINGTON COORDINATE SYSTEM, NORTH ZONE, NAD 83(91), AS SHOWN ON SURVEYS RECORDED IN VOLUME 48 OF SURVEYS, PAGE 80, AND VOLUME 49 OF SURVEYS, PAGE 50, RECORDS OF CLALLAM COUNTY, WASHINGTON. Prepared June 21, 2002 bY' Rob Johnston, PLS, CertIficate Number 37537 Land Surveyor for the Northwest Terntories, Inc. J IAQRIDATAISUPPORT\Program DevelopmentlPORTSIPMA PORT FILESIPt Angeles 200800131Letter of Intent Exhibit 4 Parcel C TldelandsBlock A WA to PORT doc G \Gen\Rob\Desenptlons\2002\TuJelandsBlock A WA to PORT wpd LETTER OF INTENT Port Angeles Oak Street EXHIBIT 4 Parcel D (as referenced on LOI Map) LEGAL DESCRIPTION Port of Port Angeles Parcel to Become State of Washington Property THAT PORTION OF VACATED CHERRY STREET, BLOCK 2 AND BLOCK A OF TIDE LANDS WEST OF LAUREL STREET DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWESTERLY CORNER OF SAID VACATED CHERRY STREET, SAID CORNER BEING MARKED BY A LEAD AND TACK AS SHOWN ON SURVEY RECORDED FEBRUARY 6, 2002 UNDER AUDITOR=S FILE NUMBER 2002-1078598 AND FILED IN VOLUME 48 OF SURVEYS, PAGE 80, RECORDS OF CLALLAM COUNTY, WASHINGTON; THENCE NORTH 33E22'23" EAST, ALONG THE WESTERLY LINE OF SAID VACATED STREET, A DISTANCE OF 149.99 FEET TO THE NORTHERLY LINE OF SAID BLOCK 2; THENCE SOUTH 56E37'03" EAST, ALONG SAID NORTHERLY LINE, A DISTANCE OF 112.32 FEET; THENCE SOUTH 33E22'23" WEST, PARALLEL WITH SAID WESTERLY LINE, A DISTANCE OF 149.99 FEET TO THE SOUTHERLY LINE OF SAID BLOCK 2; THENCE NORTH 56E37'03" WEST, ALONG SAID SOUTHERLY LINE, A DISTANCE OF 112.32 FEET TO THE TRUE POINT OF BEGINNING. ALL BEARINGS AND DISTANCES ARE RELATIVE TO THE WASHINGTON COORDINATE SYSTEM, NORTH ZONE, NAD 83(91), AS SHOWN ON SURVEYS RECORDED IN VOLUME 48 OF SURVEYS, PAGE 80, AND VOLUME 49 OF SURVEYS, PAGE 50, RECORDS OF CLALLAM COUNTY, WASHINGTON. . Prepared June 21, 2002 by: Rob Johnston, PLS, CertIficate Number 37537 Land Surveyor for the Northwest Terntones, Inc. J IAQRIOA T AISUPPORnProgram OevelopmentlPORTSIPMA PORT FILESIPt Angeles 200800131Leller of Intent Exhibit 4 Parcel D T,delandsBlock 2 PORT to WA doc J IAQRIDATAlsuPPORnPROGRAM DEVELOPMENnpORTSIPMA PORT FILESIPT ANGELES 200800131REVISED SURVEYS TIDELANDSBLOCK 2 PORT TO WA.WPD LETTER OF INTENT Port Angeles Oak Street EXHIBIT 4 Parcel E (as referenced on LOI Map) Rip Rap And Fill THAT PORTION OF THE PORT ANGELES HARBOR AREA IN FRONT OF VACATED CHERRY STREET AND BLOCK 2 OF PORT ANGELES TIDELANDS WEST OF LAUREL STREET DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF BLOCK A OF SAID PORT ANGELES TIDELANDS, SAID CORNER BEING MARKED BY A 5/8-INCH REBAR WITH RED PLASTIC SURVEY CAP STAMPED "NTI JOHNSTON PLS 37531" AS SHOWN ON SURVEY RECORDED FEBRUARY 6, 2002, UNDER AUDITOR'S FILE NUMBER 2002-1078598 AND FILED IN VOLUME 48 OF SURVEYS, PAGE 80, FROM WHICH THE CITY OF PORT ANGELES GEODETIC CONTROL POINT F13-3-1 AS SHOWN ON VOLUME 34 OF SURVEYS, PAGE 22 BEARS SOUTH 64046'53" EAST, A DISTANCE OF 35.35 FEET; THENCE NORTH 64024'09" WEST, ALONG THE 1992 INNER HARBOR LINE, A DISTANCE OF 575.13 FEET TO THE NORTHWESTERLY CORNER OF SAID BLOCK 2A; THENCE NORTH 33022'23" EAST, A DISTANCE OF 71.10 FEET; . THENCE SOUTH 64045'52" EAST, A DISTANCE OF 575.62 FEET; THENCE SOUTH 33021'23" WEST, A DISTANCE OF 74.76 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING 0.95 ACRES, MORE OR LESS. CONTAINING 22,700 SQUARE FEET OF RIP RAP, MORE OR LESS. Prepared June 21, 2002 by: Rob Johnston, PLS, Certificate Number 37537 Land Surveyor for the Northwest Territories, Inc. J IAQRIDATAISUPPORT\Program DevelopmenllPORTSIPMA PORT FILESIPI Angeles 200B00131Letter of Intent Exhibit 4 Parcel E doc G \Gen\Rob\Descnptlons\20Q2\POPA0203.HA2507 A.wpd LETTER OF INTENT Port Angeles Oak Street EXHIBIT 4 Parcel F (as referenced on LOI Map) 2002 Port of Port Angeles Lease #22-074157 THAT PORTION OF THE PORT ANGELES HARBOR AREA IN FRONT OF LOTS 3, 4, 5, AND 6, BLOCK 2 PORT ANGELES TIDELANDS WEST OF LAUREL STREET DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHEASTL Y CORNER OF BLOCK A OF SAID PORT ANGELES TIDELANDS, SAID CORNER BEING MARKED BY A 5/8-INCH REBAR WITH RED PLASTIC SURVEY CAP STAMPED "NTI JOHNSTON PLS 37531" AS SHOWN ON SURVEY RECORDED FEBRUARY 6, 2002, UNDER AUDITOR'S FILE NUMBER 2002-1078598 AND FILED IN VOLUME 48 OF SURVEYS, PAGE 80, FROM WHICH THE CITY OF PORT ANGELES GEODETIC CONTROL POINT F13-3-1 AS SHOWN ON VOLUME 34 OF SURVEYS, PAGE 22 BEARS SOUTH 64046'53" EAST, A DISTANCE OF 35.35 FEET; THENCE NORTH 33021'23" EAST, A DISTANCE OF 74.76 FEET; THENCE NORTH 64045'52" EAST, A DISTANCE OF 100.98 FEET; TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING NORTH 64045'52" WEST, A DISTANCE OF 201.96 FEET; THENCE NORTH 33021'59" EAST, A DISTANCE OF 199.99 FEET; THENCE SOUTH 64045'55" EAST, A DISTANCE OF 201.94 FEET; THENCE SOUTH 33021'35" WEST, A DISTANCE OF 199.99 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING 0.92 ACRES, MORE OR LESS. CONTAINING 240 SQUARE FEET OF RIP RAP, MORE OR LESS. Prepared June 21,2002 by: Rob Johnston, PLS, Certificate Number 37537 Land Surveyor for the Northwest Territories, Inc. J IAQRIDATAISUPPORTlProgram DevelopmentlPORTSIPMA PORT FILESIPt Angeles 200800131Lelter of Intent ExhibIt 4 Parcel F and 22'()74157 doc G \Gen\Rob\Descnptlons\2002\POPA0203.HA25078 wpd EXHIBIT 5 Rent Formulas For Parcels B, D, E Letter of Intent For State of Washington Department of Natural Resources and Port of Port Angeles Exchange Agreement EXHIBIT 5 Letter of Intent Port Angeles Oak Street Property Rent for State-owned parcel to be leased to Pier Group L.L.c. will be based the 2002 sale price of the adjacent upland, adjusted as indicated below, for the entire term of the lease. Initial Rent for Non Water-Dependent Uses The initial rent for Parcels B, D and E for the areas of filled state owned tidelands categorized by DNR, as being non water-dependent will be determined as follows: 1. The Sale Value of the Adjacent Upland, sold by the Port to Ehm Architecture ("Index Parcel"), is divided by the number of square feet in the Adjacent Upland to calculate the value per square-foot. (The 2002 sale price of the Index Parcel = $1,000,000.00, value per square foot = $11.70) 2. This value per square- foot will be multiplied by the number of square feet, classified by DNR, as non water-dependent use within the Lease Area to determine the Lease Area Value. 3. The Lease Area Value shall be multiplied by the use rate percentage as specified by WAC 332-30-125(1) and (2) (Currently 9.5%). 4. The resulting number is the total amount of non water-dependent rent remitted to DNR. Four-Year Revaluations DNR shall adjust the land value every four years. In order to adjust the initial land value, the Parties have agreed to create an index based on county property assessment for the Index Parcel. The parcel has not as yet been assigned an assessor's parcel number. The 2002 real property sale value for the Index Parcel is $510,204 per acre or $11.70 per ft2. Starting in 2006 and every four years thereafter, DNR shall utilize the current assessed real property value of the Index Parcel and calculate the percentage of value increase or decrease of that parcel over the last four year period. The land value for the property from the prior four-year period will be multiplied by the percentage of value change from the Index Parcel to calculate the new current land value for the next four-year period. Interim Year CPI Adjustments The rent will be adjusted for inflation on an annual basis except for the years where the land is revalued as described above. DNR shall use the CPI to adjust for inflation. The lease is attached to this Letter of Intent as Exhibit 7. J \AQR\DA T A \SUPPORT\Program Development\PORTS\PMA PORT FILES\Pt Angeles 2008001 3\Leller of mtent EXHIBIT 5 doc Exhibit 5 Rent Calculations Parcels B,D,E Lease Parcel Upland value per Aquatic lease Lease area value Real rate of Annual Rent # acre acres or sq ft. return The parcel Divide the Upland Size of the Multiply the Upland Annual Real Multiply the used to Value by Acres or actual aquatic Value/Acre by the Rate of Lease Area calculate SqFt lease area Aquatic Lease Return Value by the annual rent Area Real Rate of Return B $11.70 80,330 $939,861.00 0.095 $89,286.80 D $11.70 16,848 $197,121.60 0.095 $18,726.55 E T11.70 41,382 $484,169 40 0.095 $45,996.09 138,560 $1,621,152.00 $154,009.44 J IAQR\DA T AISUPPORT\Program DevelopmentlPORTSIPMA PORT FILES\Pt Angeles 200B0013I[Letter of Intent PA Ex 5 Lease RentCalc 6-19 xls]Sheet1 EXHIBIT 6 Harbor Area Rent Formulas For Parcel F Letter of Intent For State of Washington Department of Natural Resources and Port of Port Angeles Exchange Agreement Exhibit 6 Harbor Area Lease Rent Formula Parcel F Upland value per Aquatic lease Lease area value Aquatic Value per Real rate of Annual Rent acre acres or sq ft. acre 30% retu rn Divide the Upland Size of the actual Multiply the Upland Multiply the Aquatic Annual Real Multiply the Lease Value by Acres or aquatic lease Value/Acre by the Lease Area value by Rate of Return Area Value by the SqFt area Aquatic Lease Area .30 Real Rate of Return $11.70 40,075 $468,877.50 $140,663.25 0.095 $13,36301 40,075 $468,877.50 $13,363.01 Exhibit 7 Form of Lease For Parcels B, D, and E Letter of Intent For State of Washington Department of Natural Resources and Port of Port Angeles Exchange Agreement STATE OF WASHINGTON DEPARTMENT OF NATURAL RESOURCES DOUG SUTHERLAND, Commissioner of Public Lands AQUATIC LANDS LEASE (Commercial) Lease No. 20-074165 TABLE OF CONTENTS SECTION PAGE BACKGROUND ............................................................................................................................ 1 1. PROPERTy................................. .... .................. .................. .... ........... ................................ 1 1.1 Property Defined... .................... .............................................................................. 1 1.2 Survey, Maps, and Plans ......................................................................................... 1 1.3 Inspection..... ................................... ......................................... ............ ................... 2 2. USE................................... .............. ........ .............. ...................... ........................................ 2 2.1 Permitted Use..................... ............... ............................................... ....................... 2 2.2 Restrictions on Use.......... ................ ......... .... .......................................................... 2 2.3 Conformance with Laws... ...................................................................................... 2 2.4 Liens and Encumbrances................... ...... ......... ...................................................... 2 3. TERM ................................................................................................................................. 2 3.1 Term Defined........ ............. ......................................... ............................................ 2 3.2 Renewal of the Lease.............................................................................................. 2 3.3 Delay in Delivery of Possession .............................................................................3 3.4 End of Term................................. ...................... ......... ............................................ 3 3.5 Hold Over....... ..... ................................. ................................................................... 3 4. RENT .................................................................................................................................. 3 4.1 Annual Rent..... ...... ........ ....... ...... ... ........ ................................. ................................ 3 4.2 Payment Place................... ................... .......... ........................... .............................. 3 4.3 Adjustment Based on Use ....................................................................................... 3 4.4 Rent Adjustment for Water Dependent Uses. .........................................................4 4.5 Rent Adjustment for Non Water Dependent Uses. .................................................4 4.6 Rent Adjustment Procedures....... ............................................................................ 4 5. OTHER EXPENSES .......................................................................................................... 5 5.1 Utilities............................. ............. ...................................... .................................... 5 5.2 Taxes and Assessments..... .................... .................................................................. 5 5.3 Right to Contest ........................... .............................................. ............................. 5 5.4 Proof of Payment.................................................................................................... 5 5.5 Failure to Pay.......................................................................................................... 5 6. LATE PAYMENTS AND OTHER CHARGES ................................................................ 5 6.1 Late Charge............................................................................................................. 5 6.2 Interest Penalty for Past Due Rent and Other Sums Owed..................................... 5 6.3 No Accord and Satisfaction.. .................................................................................. 6 Lease No 20-074]65 CommerCial Lease 6.4 No Counterclaim, Setoff, or Abatement of Rent .................................................... 6 7. IMPROVEMENTS ........... ................................. ................................................................. 6 7.1 Existing Improvements.................................................................. ............. ............ 6 7 .2 Tenant-Owned Improvements............................................... .......... ....... ................ 6 7.3 Construction....................................... ..................................... ................................ 6 7.4 Removal............................................................. ....................... .................... .......... 7 7.5 Unauthorized Improvements................................................. ................ .... ...... ....... 7 8. ENVIRONMENTAL LlABILlTYIRISK ALLOCATION ................................................7 8.1 Definition................... ....................................................... ....... ............... ...... .......... 7 8.2 Use of Hazardous Substances...... .............. ......... .............. .................. ............. ....... 7 8.3 Current Conditions, Duty of Utmost Care, and Duty to Investigate....................... 7 8.4 Notification and Reporting ............................................................ ....... .................. 8 8.5 Indemnification ...... ................. ... ............... .................................................. ..... ....... 9 8.6 Cleanup.............................................................................. ..... ................................ 9 8.7 Sampling by State, Reimbursement, and Split Samples....................................... 10 8.8 Reservation of Rights................................................... .................... ..... ................ 10 9. ASSIGNMENT AND SUBLETTING ............................................................................. 11 9.1 State Consent Required... ....... ........ ........................ ....... ..... .... ............ .............. ..... 11 9.2 Event of Assignment........ ...... ............................................................. .................. 11 9.3 Rent Payments Following Assignment................................................................. 11 9.4 Terms of Subleases................... ......... ............ ........................ ........ ........ ........ ....... 11 1 O. INDEMNITY, FINANCIAL SECURITY, INSURANCE................ ............................... 12 10.1 Indemnity................. ............... .............................................................................. 12 10.2 Financial Security................................................................................ ................. 12 10.3 Insurance ................................................................................... ............. ....... ........ 13 10.4 State's Acquisition of Insurance.... .... ... ......... .......... ..... ........... .............................. 14 11. MAINTENANCE AND REPAIR .................................................................................... 15 11.1 State's Repairs ....................................................................................................... 15 11.2 Tenant's Repairs, Alteration, Maintenance and Replacement ..............................15 12. DAMAGE OR DESTRUCTION ...................................................................................... 15 13. CONDEMNATION .......................................................................................................... 15 13.1 Definitions............................................................................ ............ ............ ......... 15 13.2 Effect of Taking................................................ ........... .......... ......................... ...... 16 13.3 Allocation of Award .... ......................................... ....... ...... ............... ........... ......... 16 14. DEFAULT AND REMEDIES.... ............................................. ......................................... 16 15 . ENTRY BY STATE........................... ...................... ........................ ........ ..... ....... ... ......... 17 16. DISCLAIMER OF QUIET ENJOYMENT ...................................................................... 17 17. NOTICE.. ...... .................................................................................................................... 17 18. MISCELLANEOUS .. .......................................... .............;........................... .................... 17 18.1 Authority.................................................................................. ............................. 18 18.2 Successors and Assigns.................................................. ........... ............................ 18 18.3 Headings.......................... ..................................................................................... 18 18.4 Entire Agreement ................................................................. .................. .... ........... 18 18.5 Waiver................................................................................................ ................... 18 18.6 Cumulative Remedies.............................................................................. ............. 18 18.7 Time is of the Essence .......................................................................................... 18 Lease No 20-074165 11 CommercIal Lease 18.8 Language.. ...................................... ..... ...... ....... ........... ...................................... .... 18 18.9 Invalidity.......... ...................................................... ................... .......... .................. 19 18.10 Applicable Law and V enue................................................................................... 19 18.11 Recordation. ............................. ............ ... ............. .................................... .... ......... 19 18.12 Modification............... ...................... ............. ............... ........ .... ................... ....... ... 19 Lease No 20-074165 III CommercIal Lease STATE OF WASHINGTON DEPARTMENT OF NATURAL RESOURCES DOUG SUTHERLAND, Commissioner of Public Lands AQUATIC LANDS LEASE (Commercial) AQUATIC LANDS LEASE NO. 20-074165 THIS LEASE is made by and between the STATE OF WASHINGTON, acting through the Department of Natural Resources ("State"), and Pier Group L.L.c., a pending corporation ("Tenant"). BACKGROUND Tenant desires to lease the aquatic lands in what is commonly known as the Strait of Juan de Fuca, which are tidelands and harbor area located in Clallam County, Washington, from State, and State desires to lease the property to Tenant pursuant to the terms and conditions of this Lease. THEREFORE, the parties agree as follows: SECTION 1 PROPERTY 1.1 Property Defined. State leases to Tenant and Tenant leases from State the real property described in Exhibit A together with all the rights of State, if any, to improvements on and easements benefiting the Property, but subject to the exceptions and restrictions set forth in this Lease (collectively the "Property"). This Lease is subject to all valid interests of third parties noted in the records ofClallam County, or on file in the office of the Commissioner of Public Lands, Olympia, Washington; rights of the public under the Public Trust Doctrine or federal navigation servitude; and treaty rights ofIndian Tribes. Not included in this Lease are any right to harvest, collect or damage any natural resource, including aquatic life or living plants, any water rights, or any mineral rights, including any right to excavate or withdraw sand, gravel, or other valuable materials. State reserves the right to grant easements and other land uses on the Property to others when the easement or other land uses will not unreasonably interfere with Tenant's Permitted Use. State also reserves the right to grant an easement in favor ofthe Port of Port Angeles, its successors and assigns for pedestrian and vehicular access to harbor areas lying north ofthe leased premises, and to maintain an existing pier, its pilings and underpinnings, over, under and across a strip ofland thirty (30) feet in width, being fifteen (15) feet on each side of the north-south center line of the existing pier. 1.2 Survey, Maps, and Plans. In executing this Lease, State is relying on the surveys, plats, diagrams, and/or legal descriptions provided by Tenant. Tenant is not relying Lease No. 20-074165 Page I of 20 CommercIal Lease upon and State is not making any representations about any survey, plat, diagram, and/or legal description provided by State. 1.3 Inspection. State makes no representation regarding the condition ofthe Property, improvements located on the Property, the suitability of the Property for Tenant's Permitted Use, compliance with governmental laws and regulations, availability of utility rights, access to the Property or the existence of hazardous substances on the Property. Tenant has inspected the Property and accepts it "AS IS." SECTION 2 USE 2.1 Permitted Use. Tenant shall use the Property for support areas to a hotel and conference center including parking, public access areas, landscaped buffers and bulkhead (the "Permitted Use"), and for no other purpose. The Permitted Use is described or shown in greater detail in Exhibit B, the terms and conditions of which are incorporated by reference and made a part of this Lease. The parties agree that this is 138,560 square feet of non water-dependent use. 2.2 Restrictions on Use. Tenant shall not cause or permit any damage to natural resources on the Property. Tenant shall also not cause or permit any filling activity to occur on the Property. This prohibition includes any deposit of rock, earth, ballast, refuse, garbage, waste matter (including chemical, biological or toxic wastes), hydrocarbons, any other pollutants, or other matter in or on the Property, except as approved in writing by State. Tenant shall neither commit nor allow waste to be committed to or on the Property. If Tenant fails to comply with all or any of the restrictions on the use ofthe Property set out in this Subsection 2.2, State shall notify Tenant and provide Tenant a reasonable time to take all steps necessary to remedy the failure. If Tenant fails to do so in a timely manner, then State may take any steps reasonably necessary to remedy this failure. Upon demand by State, Tenant shall pay all costs of such remedial action, including but not limited to the costs of removing and disposing of any material deposited improperly on the Property. This section shall not in any way limit Tenant's liability under Section 8, below. 2.3 Conformance with Laws. Tenant shall, at all times, keep current and comply with all conditions and terms of any permits, licenses, certificates, regulations, ordinances, statutes, and other government rules and regulations regarding its use or occupancy of the Property. 2.4 Liens and Encumbrances. Tenant shall keep the Property free and clear of any liens and encumbrances arising out of or relating to its use or occupancy ofthe Property. SECTION 3 TERM 3.1 Term Defined. The term ofthis Lease is thirty (30) years (the "Term"), beginning on the I st day of September, 2002 (the "Commencement Date"), and ending on the 31 st day of August, 2032' (the "Termination Date"), unless terminated sooner under the terms of this Lease. 3.2 Renewal of the Lease. The lease is for the maximum allowed term. At the end ofterm a new lease may be negotiated with State. Lease No 20-074165 Page 2 of 20 CommercIal Lease 3.3 Delay in Delivery of Possession. If State, for any reason whatsoever, cannot deliver possession ofthe Property to Tenant on the Commencement Date, this Lease shall not be void or voidable, nor shall State be liable to Tenant for any loss or damage resulting from the delay in delivery of possession. In such event, the date of delivery of possession shall be the Commencement Date for all purposes, including the payment of rent. In the event Tenant takes possession before the Commencement Date, the date of possession shall be the Commencement Date for all purposes, including the payment of rent. If the Lease Term commences earlier or later than the scheduled Commencement Date, the Termination Date shall be adjusted accordingl y. 3.4 End of Term. Upon the expiration or termination ofthe Term or extended term, as applicable, Tenant shall surrender the Property to State in the same or better condition as on the Commencement Date, reasonable wear and tear excepted. 3.5 Hold Over. If Tenant remains in possession of the Property after the Termination Date, the occupancy shall not be an extension or renewal of the Term. The occupancy shall be a month-to-month tenancy, on terms identical to the terms of this Lease, which may be terminated by either party on thirty (30) days written notice. The monthly rent during the holdover shall be the same rent which would be due if the Lease were still in effect and all adjustments in rent were made in accordance with its terms. If State provides a notice to vacate the Property in anticipation of the termination of this Lease or at any time after the Termination Date and Tenant fails to do so within the time set forth in the notice, then Tenant shall be a trespasser and shall owe the State all amounts due under RCW 79.01.760 or other applicable law. SECTION 4 RENT 4.1 Annual Rent. Until adjusted as set forth below, Tenant shall pay to State an annual rent of One Hundred Fifty Four Thousand Nine Dollars and Forty Four Cents ($154,009.44), based on the sale price of the abutting port upland and calculated as per Exhibit C. Zero rent will be assessed for designated public use areas, approved by State and dedicated exclusively for the use of the general public. Approval by State will require a development plan and timeline, management plan and sublease (if applicable). The rent assessment will be modified at such time as the tenant secures written approval of State. The annual rent, as it currently exists or adjusted or modified (the "Annual Rent"), shall be due and payable in full on or before the Commencement Date and on or before the same date of each year thereafter. 4.2 Payment Place. Payment is to be made to W A Department of Natural Resources, Financial Management Division, 1111 Washington Street SE, PO Box 47041, Olympia, W A 98504-7041. 4.3 Adjustment Based on Use. Annual Rent is based on Tenant's Permitted Use of the Property, as described in Section 2 above. If Tenant's Permitted Use changes, the Annual Rent shall be adjusted as appropriate for the changed use. Lease No 20-074]65 Page 3 of 20 CommerCIal Lease 4.4 Rent Adjustments for Water-Dependent Uses. (a) Inflation Adjustment. State shall adjust water-dependent rent annually pursuant to RCW 79.90.450 -902, except in those years in which the rent is revalued under Subsection 4.5(b) below. This adjustment shall be effective on the anniversary of the Commencement Date. (b) Revaluation of Rent. State shall, at the end of the first four-year period of the Term, and at the end of each subsequent four-year period, revalue the Annual Rent in accordance with RCW 79.90.450-.902, based on the adjusted sale price of the abutting upland. (c) Rent Cap. After the initial year's rent is determined under Subsection 4.1, rent may increase by operation of Subsection 4.4(a) or 4.4(b). If application of the statutory rent formula for water-dependent uses would result in an increase in the rent attributable to such uses of more than fifty percent (50%) in anyone year, the actual increase implemented in such year shall be limited to fifty percent (50%) of the then-existing rent, in accordance with RCW 79.90.490. The balance of the increase determined by the formula shall be deferred to subsequent years and added to the next and subsequent years' rental increases until the full amount of the increase is lawfully implemented. 4.5 Rent Adjustments for Non water-Dependent Uses (a) Inflation Adjustment. Except in those years in which the rent is revalued under Subsection 4.5(b), below, State shall adjust the non water-dependent rent annually on the anniversary of the Commencement Date by an amount equal to the percentage increase in the most recently published Consumer Price Index, All Urban Consumers, for the Seattle-Everett SMSA, over the Consumer Price Index for the preceding anniversary of the Commencement Date. All items 1982-84 = 100, as published by the US Department of Labor, Bureau of Labor Statistics. If publication of the Consumer Price Index is discontinued, a reliable governmental or other nonpartisan publication evaluating the information used in determining the Consumer Price Index shall be used.] (b) Revaluation of Rent. State shall, at the end of the first four-year period of the Term, and at the end of each subsequent four-year period, revalue the non water-dependent Annual Rent to reflect the then-current fair market value based on the adjusted 2002 sale price of the abutting upland, as specified in Exhibit C. In the event that agreement cannot be reached between State and Tenant on the fair market rental value, the valuation shall be submitted to a review board of appraisers. The board shall consist ofthree members, one selected by and at the cost of Tenant; a second member selected by and at the cost of State; and a third member selected by the other two members with the cost shared equally by State and Tenant. The decision of the majority of the board shall be binding on both parties. Until the new rent is established by agreement or by the review board, Tenant shall pay rent in the same amount established for the preceding year. If additional rent is required as a result of this review, Tenant shall pay the additional rent within ten (10) days ofthe board's decision. If a refund is required as a result of this review, State shall pay the refund within ten (10) days of the board's decision. 4.6 Rent Adjustment Procedures. (a) Notice of Rent Adjustment. Notice of any adjustments to the Annual Rent that are allowed by Subsection 4.4(b) and 4.5(b) shall be provided to Tenant in writing no later than ninety (90) days after the anniversary date of the Lease. Lease No. 20-074165 Page 4 of 20 CommercIal Lease (b) Procedures on Failure to make Timely Adjustment. In the event the State fails to provide the notice required in Subsection 4.6(a), it shall be prohibited from collecting any adjustments to rent only for the year in which it failed to provide notice. No failure by State to adjust Annual Rent pursuant to Subsection 4.6(a) shall affect the State's right to establish Annual Rent for a subsequent lease year as if the missed or waived adjustment had been implemented. The State may adjust, bill, and collect Annual Rent prospectively as if any missed or waived adjustments had actually been implemented. This includes the implementation of any inflation adjustment and any rent revaluations that would have been authorized for previous lease years. SECTION 5 OTHER EXPENSES During the Term, Tenant shall pay the following additional expenses: 5.1 Utilities. Tenant shall pay all fees charged for utilities in connection with the use and occupancy ofthe Property, including but not limited to electricity, water, gas, and telephone servIce. 5.2 Taxes and Assessments. Tenant shall pay all taxes (including leasehold excise taxes), assessments, and other governmental charges, of any kind whatsoever, applicable or attributable to the Property, Tenant's leasehold interest, the improvements, or Tenant's use and enjoyment of the Property. 5.3 Right to Contest. Tenant may, in good faith, contest any tax or assessment at its sole cost and expense. At the request of State, Tenant shall furnish reasonable protection in the form of a bond or other security, satisfactory to State, against any loss or liability by reason of such contest. 5.4 Proof of Payment. Tenant shall, if required by State, furnish to State receipts or other appropriate evidence establishing the payment of any amounts required to be paid under the terms of this Lease. 5.5 Failure to Pay. If Tenant fails to pay any of the amounts due under this Lease, State may pay the amount due, and recover its cost in accordance with the provisions of Section 6 of this agreement. SECTION 6 LATE PAYMENTS AND OTHER CHARGES 6.1 Late Charge. If any rental payment is not received by State within ten (10) days of the date due, Tenant shall pay to State a late charge equal to four percent (4%) of the amount of the payment or Fifty Dollars ($50), whichever is greater, to defray the overhead expenses of State incident to the delay. 6.2 Interest Penalty for Past Due Rent and Other Sums Owed. If rent is not paid within thirty (30) days of the date due, then Tenant shall, in addition to paying the late charges determined under Subsection 6.1, above, pay interest on the amount outstanding at the rate of one percent (1 %) per month until paid. If State pays or advances any amounts for or on behalf of Tenant, including but not limited to leasehold taxes, taxes, assessments, insurance premiums, costs of removal and disposal of unauthorized materials pursuant to Section 2 above, costs of removal and disposal of improvements pursuant to Section 7 below, or other amounts not paid Lease No 20-074165 Page 5 of 20 Commerclal Lease when due, Tenant shall reimburse State for the amount paid or advanced and shall pay interest on that amount at the rate of one percent (1 %) per month from the date State notifies Tenant of the payment or advance. 6.3 No Accord and Satisfaction. If Tenant pays, or State otherwise receives, an amount less than the full amount then due, State may apply such payment as it elects. In the absence of an election, the payment or receipt shall be applied first to accrued taxes which State has advanced or may be obligated to pay, then to other amounts advanced by State, then to late charges and accrued interest, and then to the earliest rent due. State may accept any payment in any amount without prejudice to State's right to recover the balance of the rent or pursue any other right or remedy. No endorsement or statement on any check, any payment, or any letter accompanying any check or payment shall constitute or be construed as accord and satisfaction. 6.4 No Counterclaim, Setoff, or Abatement of Rent. Except as expressly set forth elsewhere in this Lease, rent and all other sums payable by Tenant pursuant to this Lease shall be paid without the requirement that State provide prior notice or demand, and shall not be subject to any counterclaim, setoff, deduction, defense or abatement. SECTION 7 IMPROVEMEN'fS 7.1 Existing Improvements. On the Commencement Date, there are no tenant owned improvements currently on the leasehold. Fill material on this site has attached to the realty and become part of the land. 7.2 Tenant-Owned Improvements. So long as this Lease remains in effect, Tenant shall retain ownership of all authorized improvements and trade fixtures it may place on the Property (collectively "Tenant-Owned Improvements"). Tenant-Owned Improvements shall not include any Unauthorized Improvements as defined in Subsection 7.5 below. No Tenant-Owned Improvements shall be placed on the Property without State's prior written consent. 7.3 Construction. Prior to any construction, alteration, replacement, removal or major repair of any improvements (whether State-Owned or Tenant-Owned), Tenant shall submit to State plans and specifications which describe the proposed activity. Construction shall not commence until State has approved those plans and specifications in writing and Tenant has obtained a performance and payment bond in an amount equal to 125% of the estimated cost of construction. The performance and payment bond shall be maintained until the costs of construction, including all laborers and material persons, have been paid in full. State shall have sixty (60) days in which to review the proposed plans and specifications. The plans and specifications shall be deemed approved and the requirement for State's written consent shall be treated as waived, unless State notifies Tenant otherwise within the sixty (60) days. Upon completion of construction, Tenant shall promptly provide State with as-built plans and specifications. State's consent and approval shall not be required for any routine maintenance or repair of improvements made by the Tenant pursuant to its obligation to maintain the Property in good order and repair that does not result in the construction, alteration, replacement, removal, or major repair of any improvements on the Property. Lease No. 20-074165 Page 6 of 20 Commercia] Lease 7.4 Removal. Tenant-Owned Improvements shall be removed by Tenant by the Termination Date unless State notifies Tenant that the Tenant-Owned Improvements may remain. If the State elects for the Tenant-Owned Improvements to remain on the Property after the Termination Date, they shall become the property of State without payment by State (if the provisions ofRCW 79.94.320 or RCW 79.95.040 apply, Tenant shall be entitled to the rights provided in the statute). To the extent that Tenant-Owned Improvements include items of personal property which may be removed from the leasehold premises without harming the Property, or diminishing the value ofthe Property or the improvements, the State asserts no ownership interest in these improvements unless the parties agree otherwise in writing upon termination of this Lease. Any Tenant-Owned Improvements specifically identified as personal property in Exhibit A or B shall be treated in accordance with this provision. Tenant shall notify State at least one hundred eighty (180) days before the Termination Date if it intends to leave the Tenant-Owned Improvements on the Property. State shall then have ninety (90) days in which to notify Tenant that it wishes to have the Tenant-Owned Improvements removed or elects to have them remain. Failure to notify Tenant shall be deemed an election by State that the Tenant-Owned Improvements will remain on the Property. If the Tenant-Owned Improvements remain on the Property after the Termination Date without State's actual or deemed consent, they still will become the property of the State but the State may remove them and Tenant shall pay the costs of removal and disposal 'upon State's demand. 7.5 Unauthorized Improvements. Improvements made on the Property without State's prior consent pursuant to Subsection 7.3 or which are not in conformance with the plans submitted to and approved by State ("Unauthorized Improvements") shall immediately become the property of State, unless State elects otherwise. Regardless of ownership of Unauthorized Improvements, State may, at its option, require Tenant to sever, remove, and dispose of them, charge Tenant rent for the use of them, or both. If Tenant fails to remove an Unauthorized Improvement upon request, State may remove it and charge Tenant for the cost of removal and disposal. SECTION 8 ENVIRONMENTAL LIABILITY/RISK ALLOCATION 8.1 Definition. "Hazardous Substance" means any substance which now or in the future becomes regulated or defined under any federal, state, or local statute, ordinance, rule, regulation, or other law relating to human health, environmental protection, contamination or cleanup, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. 9601 et seq., and Washington's Model Toxics Control Act ("MTCA"), RCW 70.1 05D.Ol 0 et seq. 8.2 Use of Hazardous Substances. Tenant covenants and agrees that Hazardous Substances will not be used, stored, generated, processed, transported, handled, released, or disposed of in, on, under, or above the Property, except in accordance with all applicable laws. 8.3 Current Conditions, Duty of Utmost Care, and Duty to Investigate. (a) State makes no representations about the condition of the Property, except as follows: Hazardous Substances, including those identified in the Sediment Investigation Report attached as Exhibit C, are known to exist in, on, under or above the Property. With regard to any Hazardous Substances that may exist in, on, under, or above the Property, State disclaims any Lease No 20-074165 Page 7 of 20 CommerCIal Lease and all responsibility to conduct investigations, to review any State records, documents or files, or to obtain or supply any information to Tenant. (b) Tenant shall exercise the utmost care with respect to both Hazardous Substances in, on, under, or above the Property as ofthe Commencement Date, and any Hazardous Substances that come to be located in, on, under, or above the Property during the Term of this agreement, along with the foreseeable acts or omissions of third parties affecting those Hazardous Substances, and the foreseeable consequences of those acts or omissions. The obligation to exercise utmost care under this Subsection 8.3 includes, but is not limited to, the following requirements: (1) Tenant shall not undertake activities that will cause, contribute to, or exacerbate contamination of the Property; (2) Tenant shall not undertake activities that damage or interfere with the operation of remedial or restoration activities on the Property or undertake activities that result in human or environmental exposure to contaminated sediments on the Property; (3) Tenant shall not undertake any activities that result in the mechanical or chemical disturbance of on-site habitat mitigation; (4) If requested, Tenant shall allow reasonable access to the Property by employees and authorized agents of the Environmental Protection Agency, the Washington State Department of Ecology, or other similar environmental agencies; and (5) Ifrequested, Tenant shall allow reasonable access to potentially liable or responsible parties who are the subject of an order or consent decree which requires access to the Property. Tenant's obligation to provide access to potentially liable or responsible parties may be conditioned upon the negotiation of an access agreement with such parties, provided that such agreement shall not be unreasonably withheld. (c) It shall be Tenant's obligation to gather sufficient information concerning the Property and the existence, scope, and location of any Hazardous Substances on the Property, or adjoining the Property, that allows Tenant to effectively meet its obligations under this lease. 8.4 Notification and Reporting. (a) Tenant shall immediately notify State if Tenant becomes aware of any of the following: (1) A release or threatened release of Hazardous Substances in, on, under, or above the Property, any adjoining property, or any other property subject to use by Tenant in conjunction with its use ofthe Property; (2) Any problem or liability related to, or derived from, the presence of any Hazardous Substance in, on, under, or above the Property, any adjoining property, or any other property subject to use by Tenant in conjunction with its use of the Property; (3) Any actual or alleged violation of any federal, state, or local statute, ordinance, rule, regulation, or other law pertaining to Hazardous Substances with respect to the Property, any adjoinipg property, or any other property subject to use by Tenant in conjunction with its use of the Property; (4) Any lien or action with respect to any of the foregoing; or, (5) Any notification from the US Environmental Protection Agency (EPA) or the Washington State Department of Ecology (DOE) that remediation or removal of Hazardous Substances is or may be required at the Property. Lease No 20-074] 65 Page 8 of 20 CommerCIal Lease (b) Upon request, Tenant shall provide State with copies of any and all reports, studies, or audits which pertain to environmental issues or concerns associated with the Property, and which were prepared for Tenant and submitted to any federal, state or local authorities pursuant to any federal, state or local permit, license or law. These permits include, but are not limited to, any National Pollution Discharge and Elimination System Permit, any Army Corps of Engineers permit, any State Hydraulics permit, any State Water Quality certification, or any Substantial Development permit. 8.5 Indemnification. (a) Tenant shall fully indemnify, defend, and hold State harmless from and against any and all claims, demands, damages, natural resource damages, response costs, remedial costs, cleanup costs, losses, liens, liabilities, penalties, fines, lawsuits, other proceedings, costs, and expenses (including attorneys' fees and disbursements), that arise out of or are in any way related to: (1) The use, storage, generation, processing, transportation, handling, or disposal of any Hazardous Substance by Tenant, its subtenants, contractors, agents, employees, guests, invitees, or affiliates in, on, under, or above the Property, any adjoining property, or any other property subject to use by Tenant in conjunction with its use of the Property, during the Term of this Lease or during any time when Tenant occupies or occupied the Property or any such other property; (2) The release or threatened release of any Hazardous Substance, or the exacerbation of any Hazardous Substance contamination, in, on, under, or above the Property, any adjoining property, or any other property subject to use by Tenant in conjunction with its use of the Property, which release, threatened release, or exacerbation occurs or occurred during the Term of this Lease or during any time when Tenant occupies or occupied the Property or any such other property, and as a result of: (i) Any act or omission of Tenant, its subtenants, contractors, agents, employees, guests, invitees, or affiliates; or, (ii) Any foreseeable act or omission of a third party unless Tenant exercised the utmost care with respect to the foreseeable acts or omissions of the third party and the foreseeable consequences of those acts or omissions. (b) In addition to the indemnifications provided in Subsection 8.5(a), Tenant shall fully indemnify State for any and all damages, liabilities, costs or expenses (including attorneys' fees and disbursements) that arise out of or are in any way related to Tenant's breach of the obligations of Subsection 8.3(b). This obligation is not intended to duplicate the indemnity provided in Subsection 8.5(a) and applies only to damages, liabilities, costs, or expenses that are associated with a breach of Subsection 8.3(b) and which are not characterized as a release, threatened release, or exacerbation of Hazardous Substances. . 8.6 Cleanup. Ifa release of Hazardous Substances occurs in, on, under, or above the Property, or other State-owned property, arising out of any action, inaction, or event described or referred to in Subsection 8.5, above, Tenant shall, at its sole expense, promptly take all actions necessary or advisable to clean up the Hazardous Substances. Cleanup actions shall include, without limitation, removal, containment and remedial actions and shall be performed in accordance with all applicable laws, rules, ordinances, and permits. Tenant's obligation to undertake a cleanup under this Subsection 8.6 shall be limited to those instances where the Lease No 20-074165 Page 9 of 20 CommercIal Lease Hazardous Substances exist in amounts that exceed the threshold limits of any applicable regulatory cleanup standards. Tenant shall also be solely responsible for all cleanup, administrative, and enforcement costs of governmental agencies, including natural resource damage claims, arising out of any action, inaction, or event described or referred to in Subsection 8.5, above. Tenant may undertake a cleanup pursuant to the Washington State Department of Ecology's Voluntary Cleanup Program, provided that: (1) Any cleanup plans shall be submitted to State (DNR) for review and comment at least thirty (30) days prior to implementation (except in emergency situations), and (2) Tenant must not be in breach of this lease. Nothing in the operation of this provision shall be construed as an agreement by State that the voluntary cleanup complies with any laws or with the provisions of this Lease. 8.7 Sampling by State, Reimbursement, and Split Samples. (a) State may conduct sampling, tests, audits, surveys, or investigations ("Tests") of the Property at any time to determine the existence, scope, or effects of Hazardous Substances on the Property, any adjoining property, any other property subject to use by Tenant in conjunction with its use of the Property, or any natural resources. If such Tests, along with any other information, demonstrates the existence, release, or threatened release of Hazardous Substances arising out of any action, inaction, or event described or referred to in Subsection 8.5, above, Tenant shall promptly reimburse State for all costs associated with such Tests. (b) State's ability to seek reimbursement for any Tests under this Subsection shall be conditioned upon State providing Tenant written notice of its intent to conduct any Tests at least thirty (30) calendar days prior to undertaking such Tests, unless such Tests are performed in response to an emergency situation in which case State shall only be required to give such notice as is reasonably practical. (c) Tenant shall be entitled to obtain split samples of any Test samples obtained by State, but only if Tenant provides State with written notice requesting such samples within twenty (20) calendar days of the date Tenant is deemed to have received notice of State's intent to conduct any non-emergency Tests. The additional cost, if any, of split samples shall be borne solely by Tenant. Any additional costs State incurs by virtue of Tenant's split sampling shall be reimbursed to State within thirty (30) calendar days after a bill with documentation for such costs is sent to Tenant. (d) Within thirty (30) calendar days of a written request (unless otherwise required pursuant to Subsection 8.4(b ), above), either party to this Lease shall provide the other party with validated final data, quality assurance/quality control information, and chain of custody information, associated with any Tests of the Property performed by or on behalf of State or Tenant. There is no obligation to provide any analytical summaries or expert opinion work product. 8.8 Reservation of Rights. The parties have agreed to allocate certain environmental risks, liabilities, and responsibilities by the terms of Section 8. With respect to those environmental liabilities covered by the indemnification provisions of Subsection 8.5, that subsection shall exclusively govern the allocation of those liabilities. With respect to any environmental risks, liabilities, or responsibilities not covered by Subsection 8.5, the parties expressly reserve and do not waive or relinquish any rights, claims, immunities, causes of action, or defenses relating to the presence, release, or threatened release of Hazardous Substances in, on, under, or above the Property, any adjoining property, or any other property subject to use by Lease No 20-074165 Page 10 of20 Commercial Lease Tenant in conjunction with its use of the Property, that either party may have against the other under federal, state, or local laws, including but not limited to, CERCLA, MTCA, and the common law. No right, claim, immunity, or defense either party may have against third parties is affected by this Lease and the parties expressly reserve all such rights, claims, immunities, and defenses. The allocations of risks, liabilities, and responsibilities set forth above do not release either party from, or affect either party's liability for, claims or actions by federal, state, or local regulatory agencies concerning Hazardous Substances. SECTION 9 ASSIGNMENT AND SUBLETTING. 9.1 State Consent Required. Tenant shall not sell, convey, mortgage, assign, pledge, sublet, or otherwise transfer or encumber all or any part of Tenant's interest in this Lease or the Property without State's prior written consent, which shall not be unreasonably conditioned or withheld. (a) In determining whether to consent, State may consider, among other items, the proposed transferee's financial condition, business reputation and experience, the nature ofthe proposed transferee's business, the then-current value ofthe Property, and such other factors as may reasonably bear upon the suitability of the transferee as a tenant ofthe Property. Tenant shall submit information regarding any proposed transferee to State at least thirty (30) days prior to the date of the proposed transfer. (b) State reserves the right to condition its consent upon: (1) changes in the terms and conditions of this Lease, including the Annual Rent and other terms; and/or (2) the agreement of Tenant or transferee to conduct Tests for Hazardous Substances on the Property or on other property owned or occupied by Tenant or the transferee. (c) Each permitted transferee shall assume all obligations under this Lease, including the payment of rent. No assignment, sublet, or transfer shall release, discharge, or otherwise affect the liability of Tenant. 9.2 Event of Assignment. If Tenant is a corporation, a dissolution ofthe corporation or a transfer (by one or more transactions) of a majority of the voting stock of Ten ant shall be deemed to be an assignment of this Lease. If Tenant is a partnership, a dissolution of the partnership or a transfer (by one or more transactions) of the controlling interest in Tenant shall be deemed an assignment of this Lease. 9.3 Rent Payments Following Assignment. The acceptance by State of the payment of rent following an assignment or other transfer shall not constitute consent to any assignment or transfer. 9.4 Terms of Subleases. All subleases shall be submitted to State for approval and shall meet the following requirements: (a) The sublease shall be consistent with and subject to all the terms and conditions of this Lease; (b) The sublease shall confirm that if the terms of the sublease conflict with the terms of this Lease, this Lease shall control; (c) The term ofthe sublease (including any period oftime covered by a renewal option) shall end before the Termination Date of the initial Term or any renewal term; Lease No. 20-074]65 Page] ] of20 CommercIa] Lease (d) The sublease shall terminate if this Lease terminates, whether upon expiration of the Term, failure to exercise an option to renew, cancellation by State, surrender or for any other reason; (e) The subtenant shall receive and acknowledge receipt of a copy of this Lease; (f) The sublease shall prohibit the prepayment to Tenant by the subtenant of more than one month's rent; (g) The sublease shall identify the rental amount to be paid to Tenant by the subtenant; (h) The sublease shall confirm that there is no privity of contract between the subtenant and State; (i) The sublease shall require removal of the subtenant's improvements and trade fixtures upon termination of the sublease; and, (j) The subtenant's permitted use shall be within the Permitted Use authorized by this Lease. SECTION 10 INDEMNITY, FINANCIAL SECURITY, INSURANCE. 10.1 Indemnity. Tenant shall indemnify, defend, and hold harmless State, its employees, officers, and agents from any and all liability, damages (including bodily injury, personal injury and damages to land, aquatic life, and other natural resources), expenses, causes of action, suits, claims, costs, fees (including attorneys' fees), penalties, or judgments, of any nature whatsoever, arising out ofthe use, occupation, or control of the Property by Tenant, its subtenants, invitees, agents, employees, licensees, or permittees, except as may arise solely out of the willful or negligent act of State or State's elected officials, employees, or agents. To the extent that RCW 4.24.115 applies, Tenant shall not be required to indemnify, defend, and hold State harmless from State's sole or concurrent negligence. Tenant's liability to State for hazardous substances, and its obligation to indemnify, defend, and hold the State harmless for hazardous substances, shall be governed exclusively by Section 8. 10.2 Financial Security. (a) At its own expense, Tenant shall procure and maintain a corporate surety bond or provide other financial security satisfactory to State (the "Bond") in an amount equal to Three Hundred Ten Thousand One Hundred Sixty One Dollars, ($310,161.00), which shall secure Tenant's full performance of its obligations under this Lease, with the exception of the obligations under Section 8 (Environmental LiabilitylRisk Allocation) above. The Bond shall be in a form and issued by a surety company acceptable to State. State may require an adjustment in the amount of the Bond: (1) (2) (3) (4) Upon a change in the Permitted Use. A new or modified Bond shall be delivered to State within thirty (30) days after adjustment of the amount of the Bond has been required by State. (b) Upon any default by Tenant in its obligations under this Lease, State may collect on the Bond to offset the liability of Tenant to State. Collection on the Bond shall not At the same time as revaluation of the Annual Rent; As a condition of approval of assignment or sublease ofthis Lease; Upon a material change in the condition of any improvements; or, Lease No. 20-074165 Page 12 of20 CommercIal Lease relieve Tenant ofliability, shall not limit any of State's other remedies, and shall not reinstate or cure the default or prevent termination of the Lease because of the default. 10.3 Insurance. At its own expense, Tenant shall procure and maintain during the Term of this Lease, the insurance coverages and limits described in Subsections 10.3(a) and (b) below. This insurance shall be issued by an insurance company or companies admitted and licensed by the Insurance Commissioner to do business in the State of Washington. Insurers must have a rating ofB+ or better by "Best's Insurance Reports," or a comparable rating by another rating company acceptable to State. If non-admitted or non-rated carriers are used, the policies must comply with Chapter 48.15 RCW. (a) Types of Required Insurance. (1) Commercial General Liability Insurance. Tenant shall procure and maintain Commercial General Liability insurance and, if applicable, Marina Operators Legal Liability insurance covering claims for bodily injury, personal injury, or property damage arising on the Property and/or arising out of Tenant's operations. Ifnecessary, commercial umbrella insurance covering claims for these risks shall be procured and maintained. Insurance must include liability coverage with limits not less than those specified below: Description Each Occurrence $1,000,000 General Aggregate Limit $2,000,000 State may impose changes in the limits of liability: (i) As a condition of approval of assignment or sublease of this Lease; (ii) Upon any breach of Section 8, above; (iii) Upon a material change in the condition of the Property or any improvements; or, (iv) Upon a change in the Permitted Use. New or modified insurance coverage shall be in place within thirty (30) days after changes in the limits ofliability are required by State. (2) Property Insurance. Tenant shall procure and maintain property insurance covering all real property located on or constituting a part of the Property in an amount equal to the replacement value of all improvements on the Property. Such insurance may have commercially reasonable deductibles. (3) Worker's Compensation/Employer's Liability Insurance. Tenant shall procure and maintain: (i) State of Washington Worker's Compensation coverage, as applicable, with respect to any work by Tenant's employees on or about the Property and on any improvements; (ii) Employers Liability or Stop Gap insurance coverage, as applicable, with limits not less than those specified below. Insurance must include bodily injury coverage with limits not less than those specified below: Each Employee By Accident $1,000,000 Policy Limit By Disease $1,000,0000,000 By Disease $1,000,000 Lease No 20-074165 Page 13 of20 Commercial Lease (iii) Longshore and Harbor Worker's Act and Jones Act coverage, as applicable, with respect to any work by Tenant's employees on or about the Property and on any improvements. (4) Builder's Risk Insurance. As applicable, Tenant shall procure and maintain builder's risk insurance in an amount reasonably satisfactory to State during construction, replacement, or material alteration ofthe Property or improvements on the Property. Coverage shall be in place until such work is completed and evidence of completion is provided to State. (5) Business Auto Policy Insurance. As applicable, Tenant shall procure and maintain a business auto policy. The insurance must include liability coverage with limits not less than those specified below: Description Bodily Injury and Property Damage Each Accident $1,000,000 (b) Terms of Insurance. The policies required under Subsection 10.3 shall name the State of Washington, Department of Natural Resources as an additional insured (except for State of Washington Worker's Compensation coverage, and Federal Jones' Act and Longshore and Harbor Worker's Act coverages). Furthermore, all policies of insurance described in Subsection 10.3 shall meet the following requirements: (1) Policies shall be written as primary policies not contributing with and not in excess of coverage that State may carry; (2) Policies shall expressly provide that such insurance may not be canceled or nonrenewed with respect to State except upon forty-five (45) days prior written notice from the insurance company to State; (3) To the extent of State's insurable interest, property coverage shall expressly provide that all proceeds shall be paid jointly to State and Tenant; (4) All liability policies must provide coverage on an occurrence basis; and (5) Liability policies shall not include exclusions for cross liability. (c) Proof of Insurance. Tenant shall furnish evidence of insurance in the form of a Certificate of Insurance satisfactory to the State accompanied by a checklist of coverages provided by State, executed by a duly authorized representative of each insurer showing compliance with the insurance requirements described in section 10, and, if requested, copies of policies to State. The Certificate of Insurance shall reference the State of Washington, Department of Natural Resources and the lease number. Receipt of such certificates or policies by State does not constitute approval by State of the terms of such policies. Tenant acknowledges that the coverage requirements set forth herein are the minimum limits of insurance the Tenant must purchase to enter into this agreement. These limits may not be sufficient to cover all liability losses and related claim settlement expenses. Purchase of these limits of coverage does not relieve the Tenant from liability for losses and settlement expenses greater than these amounts. 10.4 State's Acquisition of Insurance. If Tenant fails to procure and maintain the insurance described above within fifteen (15) days after Tenant receives a notice to comply from State, State shall have the right to procure and maintain comparable substitute insurance and to Lease No 20-074165 Page 14 of20 CommercIa] Lease pay the premiums. Tenant shall pay to. State upan demand the full am aunt paid by State, tagether with interest at the rate pravided in Subsectian 6.2 from the date af State's natice af the expenditure until Tenant's repayment. SECTION 11 MAINTENANCE AND REPAIR. 11.1 State's Repairs. State shall nat be required to. make any alteratians, maintenance, replacements, ar repairs in, an, ar abaut the Praperty, ar any part thereaf, during the Term. 11.2 Tenant's Repairs, Alteration, Maintenance and Replacement. (a) Tenant shall, at its sale cast and expense, keep and maintain the Property and all impravements (regardless af awnership) in gaad arder and repair, in a clean, attractive, and safe canditian. (b) Tenant shall, at its sale cast and expense, make any and all additians, repairs, alteratians, maintenance, replacements, ar changes to. the Praperty ar to. any improvements an the Property which may be required by any public autharity. (c) All additians, repairs, alteratians, replacements ar changes to. the Praperty and to. any improvements an the Property shall be made in accardance with, and awnership shall be gaverned by, Sectian 7, abave. SECTION 12 DAMAGE OR DESTRUCTION (a) In the event af any damage to. ar destructian afthe Praperty ar any impravements, Tenant shall promptly give written natice to. State. Unless atherwise agreed in writing, Tenant shall promptly recanstruct, repair, ar replace the Praperty and any improvements as nearly as passible to. its canditian immediately priar to. the damage ar destructian. (b) Tenant's duty to. recanstruct, repair, ar replace any damage or destructian af the Property ar any improvements an the Property shall nat be canditianed upan the availability af any insurance praceeds to. Tenant fram which the cast af repairs may be paid. (c) Unless this Lease is terminated by mutual agreement, there shall be no. abatement ar reductian in rent during such recanstructian, repair, and replacement. (d) Any insurance praceeds payable by reasan af damage ar destructian shall be first used to. rest are the real property cavered by this Lease, then to. pay the cast af the recanstructian, then to. pay the State any sums in arrears, and then to. Tenant. (e) In the event Tenant is in default under the terms afthis Lease at the time damage ar destructian accurs, State may elect to. terminate the Lease and State shall then have the right to. retain any and all insurance praceeds payable as a result af the damage ar destructian. SECTION 13 CONDEMNATION 13.1 Definitions. (a) Taking. The term "taking," as used in this Lease, means the taking afall ar any partian af the Property and any impravements therean under the pawer af eminent damain, either by judgment or settlement in lieu af judgment. Taking also. means the taking af all ar a partian afthe Property and any improvements therean to. the extent that the Permitted Use is prevented ar, in the judgment af State, the Property is rendered impractical far the Permitted Use. A tatal taking accurs when the entire Praperty is taken. A partial taking accurs when the taking daes nat canstitute a tatal taking as defined abave. Lease No. 20-074165 Page 15 of20 Commercial Lease (b) V oluntary Conveyance. The terms "total taking" and "partial taking" shall include a voluntary conveyance, in lieu of formal court proceedings, to any agency, authority, public utility, person, or corporate entity empowered to condemn property. (c) Date of Taking. The term "date oftaking" shall mean the date upon which title to the Property or a portion of the Property passes to and vests in the condemnor or the effective date of any order for possession if issued prior to the date title vests in the condemnor. 13.2 Effect of Taking. If during the Term there shall be a total taking, the leasehold estate of Tenant in the Property shall terminate as of the date oftaking. If this Lease is terminated, in whole or in part, all rentals and other charges payable by Tenant to State and attributable to the Property taken shall be paid by Tenant up to the date of taking. If Tenant has pre-paid rent, Tenant will be entitled to a refund of the pro rata share of the pre-paid rent attributable to the period after the date of taking. In the event of a partial taking, there shall be a partial abatement of rent from the date of taking in a percentage equal to the percentage of Property taken. 13.3 Allocation of A ward. State and Tenant agree that in the event of any condemnation, the award shall be allocated between State and Tenant based upon the ratio of the fair market value of Tenant's leasehold estate and Tenant-Owned Improvements on the Property and State's interest (a) in the Property, (b) in the reversionary interest in Tenant-Owned Improvements, and (c) in State-Owned Improvements. In the event of a partial taking, this ratio will be computed on the basis of the portion of Property or improvements taken. If Tenant and State are unable to agree on the allocation, it shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association. SECTION 14 DEFAULT AND REMEDIES (a) Tenant shall be in default of this Lease on the occurrence of any of the following: (1) Failure to pay Annual Rent or other expenses when due; (2) Failure to comply with any law, regulation, policy, or order of any lawful governmental authority; (3) Failure to comply with any other provision of this Lease; (4) Two or more defaults over a period of time, or a single serious default, that demonstrates a reasonable likelihood of future defaults in the absence of corrective action by Tenant; or, (5) Proceedings are commenced by or against Tenant under any bankruptcy act or for the appointment of a trustee or receiver of Tenants' property. (b) A default shall become an event of default ("Event of Default") if Tenant fails to cure the default within sixty (60) days after State provides Tenant with written notice of default, which specifies the nature of the default. (c) Upon an Event of Default, State may terminate this Lease and remove Tenant by summary proceedings or otherwise. State may also, without terminating this Lease, relet the Property on any terms and conditions as State in its sole discretion may decide are appropriate. If State elects to relet, rent received by it shall be applied: (1) to the payment of any indebtedness other than rent due from Tenant to State; (2) to the payment of any cost of such reletting; (3) to the payment ofthe cost of any alterations and repairs to the Property; and, (4) to Lease No. 20-074165 Page 16 of20 CommercIal Lease the payment of rent and leasehold excise tax due and unpaid under this Lease. Any balance shall be held by State and applied to Tenant's future rent as it becomes due. Tenant shall be responsible for any deficiency created by the reletting during any month and shall pay the deficiency monthly. State's reentry or repossession of the Property under this subsection shall not be construed as an election to terminate this Lease or cause a forfeiture of rents or other charges to be paid during the balance ofthe Term, unless State gives a written notice of termination to Tenant or termination is decreed by legal proceedings. State may at any time after reletting elect to terminate this Lease for the previous Event of Default. SECTION 15 ENTRY BY STATE State shall have the right to enter the Property at any reasonable hour to inspect for compliance with the terms of this Lease. SECTION 16 DISCLAIMER OF QUIET ENJOYMENT As indicated in Section 1.1, this Lease is subject to all valid recorded interests of third parties, as well as rights of the public under the Public Trust Doctrine or federal navigation servitude, and treaty rights of Indian Tribes. State believes that its grant of the Lease is consistent with the Public Trust Doctrine and that none of the identified interests of third parties will materially and adversely affect Tenant's right of possession and use of the Property as set forth herein, but makes no guaranty or warranty to that effect. Tenant and State expressly agree that Tenant shall be responsible for determining the extent of its right to possession and for defending its leasehold interest. Consequently, State expressly disclaims and Tenant expressly releases State from any claim for breach of any implied covenant of quiet enjoyment with respect to the possession of the Property. This disclaimer includes, but is not limited to, interference arising from or in connection with access or other use rights of adjacent property owners or the public over the water surface or in or under the water column, including rights under the Public Trust Doctrine; rights held by Indian Tribes; and the general power and authority of State and the United States with respect to aquatic lands, navigable waters, bedlands, tidelands, and shorelands. In the event Tenant is evicted from the Property by reason of successful assertion of any of these rights, this Lease shall terminate as of the date of the eviction. In the event of a partial eviction, Tenant's rent obligations shall abate as of the date of the partial eviction, in direct proportion to the extent of the eviction, but in all other respects, this Lease shall remain in full force and effect. SECTION 17 NOTICE Any notices required or permitted under this Lease may be personally delivered, delivered by facsimile machine, or mailed by certified mail, return receipt requested, to the following addresses or to such other places as the parties may direct in writing from time to time: State: DEPARTMENT OF NATURAL RESOURCES Aquatic Resources Division 1111 Washington Street SE PO Box 47027 Olympia, W A 98504-7027 PIER GROUP LLC 2707 California Avenue SW Seattle, W A 98116 Tenant: Lease No 20-074165 Page 17 of20 CommercIal Lease A notice shall be deemed given and delivered upon personal delivery, upon receipt of a confirmation report if delivered by facsimile machine, or three (3) days after being mailed as set forth above, whichever is applicable. SECTION 18 MISCELLANEOUS 18.1 Authority. Tenant and the person or persons executing this Lease on behalf of Tenant represent that Tenant is qualified to do business in the State of Washington, that Tenant has full right and authority to enter into this Lease, and that each and every person signing on behalf of Tenant is authorized to do so. Upon State's request, Tenant will provide evidence satisfactory to State confirming these representations. This Lease is entered into by State pursuant to the authority granted it in Chapters 79.90 to 79.96 RCW and the Constitution of the State of Washington. 18.2 Successors and Assigns. This Lease shall be binding upon and inure to the benefit of the parties, their successors and assigns. 18.3 Headings. The headings used in this Lease are for convenience only and in no way define, limit, or extend the scope of this Lease or the intent of any provision. 18.4 Entire Agreement. This Lease, including the exhibits and addenda, if any, contains the entire agreement ofthe parties. All prior and contemporaneous agreements, promises, representations, and statements relating to this transaction or to the Property, if any, are merged into this Lease. 18.5 Waiver. The waiver by State of any breach or default of any term, covenant, or condition of this Lease shall not be deemed to be a waiver of such term, covenant, or condition; of any subsequent breach or default of the same; or of any other term, covenant, or condition of this Lease. State's acceptance of a rental payment shall not be construed to be a waiver of any preceding or existing breach other than the failure to pay the particular rental payment that was accepted. 18.6 Cumulative Remedies. The rights and remedies of State under this Lease are cumulative and in addition to all other rights and remedies afforded to State by law or equity or otherwise. 18.7 Time is ofthe Essence. TIME IS OF THE ESSENCE as to each and every provision of this Lease. 18.8 Language. The word "Tenant" as used in this Lease shall be applicable to one or more persons, as the case may be. The singular shall include the plural, and the neuter shall include the masculine and feminine. Ifthere is more than one Tenant, their obligations shall be joint and several. The word "persons," whenever used, shall include individuals, firms, associations, and corporations. Lease No 20-074165 Page 18 of20 CommercIal Lease 18.9 Invalidity. If any provision of this Lease shall prove to be invalid, void, or illegal, it shall in no way affect, impair, or invalidate any other provision of this Lease. 18.10 Applicable Law and Venue. This Lease shall be interpreted and construed in accordance with the laws of the State of Washington. Any reference to a statute shall mean that statute as presently enacted or hereafter amended or superseded. Venue for any action arising out of or in connection with this Lease shall be in the Superior Court for Thurston County, Washington. 18.11 Recordation. Tenant shall record this Lease or a memorandum documenting the existence of this Lease in the county in which the Property is located, at Tenant's sole expense. The memorandum shall, at a minimum, contain the Property description, the names of the parties to the Lease, the State's lease number, and the duration ofthe Lease. Tenant shall provide State with recording information, including the date of recordation and file number. Tenant shall have thirty (30) days from the date of delivery ofthe final executed agreement to comply with the requirements of this subsection. If Tenant fails to record this Lease, State may record it and Tenant shall pay the costs of recording upon State's demand. 18.12 Modification. Any modification ofthis Lease must be in writing and signed by the parties. State shall not be bound by any oral representations or statements. THIS AGREEMENT requires the signature of all parties and is executed as ofth,e date of the last signature below. STATE: TENANT: STATE OF WASHINGTON DEPARTMENT OF NATURAL RESOURCES PIER GROUP L.L.C. By: By: Title: Title: Dated: ,20_. Dated: ,20 . , 2~V-:- } IAQRIDA T A ISUPPORTlProgram DevelopmentlPORTSIPMA PORT FILESIPI Angeles 20080013120-074165 Pier Group LLC lease doc STATE Page 19 of20 CommercIal Lease STATE OF WASHINGTON) ss. COUNTY OF ) I certify that I know or have satisfactory evidence that [ ] is the person who appeared before me, and is the [ ] of the STATE OF WASHINGTON DEPARTMENT OF NATURAL RESOURCES. I further certify that said person acknowledged the foregoing to be the free and voluntary act of the STATE OF WASHINGTON DEPARTMENT OF NATURAL RESOURCES for the uses and purposes mentioned in the instrument, and on oath stated that [he/she] is duly authorized to execute and acknowledge said instrument. DATED: [ ] SEAL (Type/Print Name) Notary Public in and for the State of Washington residing at: My Commission Expires: STATE OF WASHINGTON) ss. COUNTY OF ) I certify that I know or have satisfactory evidence that [ ] is the person who appeared before me, and is the [President/Secretary/Managing Partner/General Partner/ ] of [ ] ("Tenant"). I further certify that said person acknowledged the foregoing instrument to be the free and voluntary act of the Tenant for the uses and purposes mentioned in the instrument, and on oath state that [he/she] is duly authorized to execute and acknowledge said instrument. DATED: [ ] SEAL (Type/Print Name) Notary Public in and for the State of Washington residing at: My Commission Expires: STATE Page 20 of 20 CommerCIal Lease