AN ORDINANCE relating to the Central Waterfront Project, authorizing execution of a Memorandum of Understanding Concerning Redevelopment of the PC-1 North Site within the Pike Place Market Historical District

WHEREAS, the City owns certain land in the Pike Place Urban Renewal Project area designated as PC-1 North ("PC-1N") in the Pike Place Urban Renewal Plan as amended in January of 1974, pursuant to Ordinance 102916 (the "Plan"). The property consists of approximately .75 acres and is bounded by Western Avenue to the east, the Alaskan Way Viaduct (the "Viaduct") to the west, the existing Pike Place Market parking garage to the south, and Victor Steinbrueck Park and the Market Place North parking garage to the north; and

WHEREAS, the PC-1N site was occupied by the Municipal Market building, which contained public parking and marketrelated commercial uses until that building burned down in 1974. The Pike Place Market Preservation and Development Authority ("PPMPDA") has operated surfacelevel public parking on the site under an agreement with the City since 1979; and

WHEREAS, redevelopment of the PC-1N site for Market-related purposes has been a PPMPDA priority for over 30 years in order to restore the property to its historic uses and reintegrate it into the Market.; and

WHEREAS, the Community Renewal Act, RCW 35.81, authorizes the disposition of community renewal project property such as the PC-1N site for such consideration as the City deems adequate, including redevelopment that would advance public purposes and provide public benefits. The Act also authorizes the City to transfer such property to another public body with or without consideration for the purposes of implementing a community renewal project. Further, pursuant to RCW 35.21.730 governing public development authorities, the City may transfer property to the PPMPDA with or without consideration; and

WHEREAS, any redevelopment of the PC-1N faces substantial and costly challenges, including extraordinary structural issues associated with its elevation and location as well as the location of the Burlington Northern Railroad tunnel transecting the site. Any redevelopment may also encounter environmental, archaeological and other challenges; and

WHEREAS, over the past two years the PPMPDA has passed four resolutions supporting the redevelopment of the PC-1N site, including resolutions 12-31 (MOU negotiation), 1177 (PC-1N uses), 11-102 (PC-1N preliminary building program), and 12-77 (endorsing PC-1N Concept Design ). Resolution 11-77 prioritized uses for any PC-1N development to include such traditional Market uses as commercial, residential (either stand-alone or provided in conjunction with the substantial renovation or even complete redevelopment of the adjacent Heritage House), human services, storage, and other Market support functions; and

WHEREAS, the Washington State Department of Transportation is presently undertaking the SR 99 bored tunnel project that involves demolition and removal of the Viaduct and the planned construction of a new elevated street connecting the waterfront to Belltown; and

WHEREAS, in 2003, in conjunction with plans for the removal of the Viaduct and replacement of the aging Elliott Bay Seawall, the City began developing a community vision for the central city that resulted in the adoption by Resolution 31264 of a series of Guiding Principles for the Central Waterfront that includes reconnecting downtown Seattle to its waterfront, and future development on the PC-1N site is a critical component of achieving that goal; and

WHEREAS, the PPMPDA been actively engaged in planning for the eventual development of the PC-1N site in conjunction with the development of the Central Waterfront including completing conceptual design for the PC-1N Project for the Director of Transportation's approval and renewing its eligibility under State law to utilize an alternative procurement process to select a general contractor/construction manager for its project; and

WHEREAS, on August 13, 2012, the Seattle City Council unanimously adopted Resolution 31399, with the Mayor concurring, which Resolution expresses support for the City's Central Waterfront Committee's Strategic Plan and for the Central Waterfront Concept Design and Framework Plan (contained in Clerk File Number 312468) and encourages agreements to be completed with the Pike Place Market and Seattle Aquarium Society by the end of 2012 for complementary developments to further the parties' common objectives; and

WHEREAS, the Memorandum of Understanding authorized by this ordinance is intended to satisfy the requirements of Resolution 31399 with regard to an agreement between the City and the Pike Place Market and serve as the basis for the City to reimburse PPMPDA for certain design work for its PC-1N project so that it may proceed with such work as expeditiously as possible;

NOW, THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. The Director of Transportation or his/her designee is hereby authorized to execute, for and on behalf of the City, an agreement with the Pike Place Market Preservation and Development Authority substantially in the form of Attachment 1 hereto, and entitled "Memorandum of Understanding Concerning Redevelopment of the PC-1 North Site within the Pike Place Market Historical District".

Section 2. This ordinance shall take effect and be in force 30 days after its approval by the Mayor, but if not approved and returned by the Mayor within ten days after presentation, it shall take effect as provided by Seattle Municipal Code Section 1.04.020.

Passed by the City Council the ____ day of ________________________, 2012, and signed by me in open session in authentication of its passage this

_____ day of ___________________, 2012.

_________________________________

President __________of the City Council

Approved by me this ____ day of _____________________, 2012.

_________________________________

Michael McGinn, Mayor

Filed by me this ____ day of __________________________, 2012.

____________________________________

Monica Martinez Simmons, City Clerk

(Seal)

Joyce C. Kling SDOT Central Waterfront PPM MOU ORD December 14, 2012 Version #4

MEMORANDUM OF UNDERSTANDING

CONCERNING REDEVELOPMENT OF THE PC-1 NORTH SITE

WITHIN THE PIKE PLACE MARKET HISTORICAL DISTRICT

Dated: ________________________

TABLE OF CONTENTS

Page

Section I. Recitals 1

Section II. Guiding Principles 7

Section III. Design Development. 8

A. Shared Principles 8

B. Management, Review and Approvals 9

C. Funding 10

Section IV. Project Development 11

A. Shared Principles 11

B. Project Development Agreement 12

Section V. Abandonment or Curtailment of Central Waterfront Project 17

Section VI. Miscellaneous Provisions. 19

A. Nondiscrimination/Compliance with Laws 19

B. Notices 19

C. Indemnifications 20

D. Term and Termination 22

E. Legal Relationship 22

F. Mandatory Disclaimer 22

G. Governing Law 23

H. Entire Agreement 23

MEMORANDUM OF UNDERSTANDING

CONCERNING REDEVELOPMENT OF THE PC-1 NORTH SITE

WITHIN THE PIKE PLACE MARKET HISTORICAL DISTRICT

THIS MEMORANDUM OF UNDERSTANDING CONCERNING REDEVELOPMENT OF THE PC-1 NORTH SITE WITHIN THE PIKE PLACE MARKET HISTORICAL DISTRICT (the "MOU") is dated as of _______________, 2012, and is by and between THE CITY OF SEATTLE (the "City"), a first class city organized under the laws of the State of Washington, and THE PIKE PLACE MARKET PRESERVATION & DEVELOPMENT AUTHORITY (the "PPMPDA"), a Washington public development authority chartered by the City under the laws of the State of Washington and City ordinance (the "Parties").

Section I . Recitals . The following facts and circumstances form the background of this MOU:

A. The City owns certain land in the Pike Place Urban Renewal Project area designated as PC-1 North ("PC-1N") in the Pike Place Urban Renewal Plan as amended in January of 1974, pursuant to Ordinance 102916 (the "Plan"). The property consists of approximately .75 acres and is bounded by Western Avenue to the east, the Alaskan Way Viaduct (the "Viaduct") to the west, the existing Pike Place Market parking garage to the south, and Victor Steinbrueck Park and the Market Place North parking garage to the north.

B. The PC-1N site was occupied by the Municipal Market building, which contained public parking and marketrelated commercial uses until that building burned down in 1974. The PPMPDA has operated surface-level public parking on the site under an agreement with the City since 1979.

C. Following passage of the "Save the Market" initiative (the "Initiative") in 1971, the Plan was redirected toward the rehabilitation of the Pike Place Market (the "Market"). The Initiative also provided for the establishment of the Pike Place Market Historical District (the "District") and the formation of the Pike Place Market Historical Commission to ensure continuing consistency with the Initiative over time. The PPMPDA was formed to implement the revised Plan and thereafter to operate and maintain the publicly-owned properties within the District.

D. The PC-1N site is the last of the parcels acquired by the City under the Plan. The Plan calls for the site to be the location of public parking for the Market, and of commercial, residential, and public spaces to complement existing Market activity. A June, 1974, Pike Place Design Report also recommended these uses for the site.

E. Redevelopment of the PC-1N site for Market-related purposes has been a PPMPDA priority for over 30 years in order to restore the property to its historic uses and reintegrate it into the Market. However, any redevelopment of the PC-1N site faces substantial and costly challenges, including extraordinary structural issues associated with its elevation and location as well as the location of the Burlington Northern Railroad tunnel transecting the site. Any redevelopment may also encounter environmental, archaeological and other challenges.

F. The Washington State Department of Transportation is presently undertaking the SR 99 bored tunnel project that involves demolition and removal of the Alaskan Way Viaduct ("Viaduct") and the planned construction of a new elevated street connecting the waterfront to the Belltown neighborhood.

G. In 2003, in conjunction with plans for the removal of the Viaduct and replacement of the aging Elliott Bay seawall, the City began developing a community vision for the central waterfront that resulted in the adoption of a series of Guiding Principles that includes reconnecting downtown Seattle to its waterfront. Future development on the PC-1N site is one critical component of achieving that goal.

H. The Central Waterfront Concept Design and Framework Plan ("Waterfront Concept Design") has been developed by City staff and a multi-disciplinary team of consultants under the oversight of the Central Waterfront Committee, with lead designer James Corner Field Operations building on broad public engagement.

I. Responding to the Guiding Principles, the Waterfront Concept Design calls for a significant new public pedestrian connection, the "Overlook Walk," between Pike Place Market and the waterfront, in the vicinity of the Seattle Aquarium. This public connection will require use of the PC1N site for public access from the Market, and will include significant public open space on the site as described in the Waterfront Concept Design. The Waterfront Concept Design is generally consistent with the 1974 Plan and also allows the use of the PC-1N site to achieve a critical public goal for the Central Waterfront redevelopment.

J. To guide design and future development of the PC1N site and to participate constructively as a stakeholder in the City's Waterfront Concept Design process, the PPMPDA governing council has adopted its own set of guiding principles for the site and areas extending west to the waterfront, that address pedestrian access and neighborhood connectivity, vehicle access, character and identity, PC-1N priority uses, views, 24-hour activation, financial viability, and preservation and sustainability.

K. In addition, over the past two years, the PPMPDA has passed four resolutions supporting the redevelopment of the PC-1N site, including resolutions 12-31 (MOU negotiation), 11-77 (PC-1N uses), 11-102 (PC-1N preliminary building program), and 12-77 (endorsing PC-1N Concept Design). Resolution 11-77 prioritized uses for any PC-1N development to include such traditional Market uses as commercial, residential (either stand-alone or provided in conjunction with the substantial renovation or even complete redevelopment of the adjacent Heritage House), human services, storage, and other Market support functions.

L. The PPMPDA has also been actively engaged in planning for the eventual development of the PC-1N site in conjunction with the development of the Central Waterfront. Through a competitive process, the PPMPDA retained The Miller/Hull Partnership to provide design services in connection with its envisioned PC-1N project (the "PC-1N Project") and to coordinate with James Corner Field Operations. The PPMPDA has completed conceptual design for the PC-1N Project (as reflected in Exhibit A hereto) for the Director of Transportation's approval. While encouraging, meeting the City's expectations for incorporation of substantial public amenity spaces and features in any PC-1N redevelopment to be undertaken by the PPMPDA may increase overall project costs to the exclusion of alternate uses that could be more self-sustaining. Anticipating construction of the project, the PPMPDA also has renewed its eligibility under State law to utilize an alternative procurement process to select a general contractor/construction manager for its project.

M. The Community Renewal Act, RCW 35.81, authorizes the disposition of community renewal project property such as the PC-1N site for such consideration as the City deems adequate, including redevelopment that would advance public purposes and provide public benefits. The Act also authorizes the City to transfer such property to another public body with or without consideration for the purposes of implementing a community renewal project. Further, pursuant to RCW 35.21.730 governing public development authorities, the City may transfer property to the PPMPDA with or without consideration.

N. The City has conveyed other property within the District to the PPMPDA to manage and operate including, in 1989, the PC-1 South ("PC-1S") property immediately south of the PC-1N site. The PPMPDA constructed a structured public parking garage on the PC-1S site that also provides space for commercial and human services uses. That project also included construction of Heritage House, currently owned by the Seattle Housing Authority, which includes 62 units of assisted living housing for low-income elderly persons.

O. The PPMPDA has a history of successful project management. In 2008, Seattle voters approved a property tax levy that yielded $68.4 million to fund an extensive renovation of the Market, including replacement of obsolete systems and building elements and components, earthquake stabilization, and provision of other improvements to enhance accessibility and provide needed public accommodations. Under an agreement with the City the PPMPDA successfully managed the complex project with all major work completed on budget and on schedule, with minimal disruption to Market tenants and users. The PPMPDA also leveraged the levy funding to secure additional resources, including Federal tax credits, to expand the scope of the project to include additional improvements.

P. On August 13, 2012, the Seattle City Council unanimously adopted Resolution 31399 (the "Resolution"), with the Mayor concurring. The Resolution expresses support for the City's Central Waterfront Committee's Strategic Plan (the "CWC Strategic Plan") and encourages agreements with the Market and Aquarium for co-developments that will integrate the Waterfront Concept Design with related major projects proposed by both of them. The Resolution calls for agreements between the City, the Market and the Aquarium to be negotiated by the end of 2012.

Q. The Resolution also indicates that the City's continuing financial participation in the development of the PC-1N Project will depend upon the City's success in securing funding for the PC-1N Project as a component of the Central Waterfront Project funding outlined in the CWC Strategic Plan. Additional City participation in the PC-1N Project is therefore contingent on the successful implementation of a downtown local improvement district (the "LID") projected to be in place by mid-2014.

R. The Resolution also affirms the importance of continuing work on the Central Waterfront project as well as the PC-1N Project as the funding plans for the projects are achieved. Consequently, in the Resolution, the Seattle City Council:

S. The Central Waterfront project represents a unique and unprecedented opportunity to accomplish both the PPMPDA's longstanding goals of redevelopment of the PC-1N site and replacing parking lost as a consequence of the Viaduct removal, as well as several of the City's objectives for the Central Waterfront project, including making the important connection between the Market and the Aquarium.

T. The City and the PPMPDA concur that in addition to meeting these goals, their coordination of the PC-1N Project with the Central Waterfront project will achieve efficiencies and potential cost savings to both projects that are in their respective and mutual best interests and will accomplish numerous public purposes.

U. This MOU is intended to satisfy the requirements of Resolution 31399 and to serve as the basis for the City to reimburse PPMPDA for certain design work for its PC-1N Project so that it may proceed with such work as expeditiously as possible.

Section II . Guiding Principles . The following guiding principles are intended to reflect the City's priorities with respect to the development of the PC-1N site.

A. The City will cooperate with the PPMPDA in the development of the PC-1N site provided that the project meets both the City's goals for its Central Waterfront project and the PPMPDA's aspiration for recovering the PC-1N site for historic Market uses. Specifically, the PC-1N Project must be consistent with and complement key adjacent elements of the Waterfront Concept Design (contained in Clerk File Number 312468), including but not limited to the Overlook Walk and the Elevated Elliott Connection. The design of the PC-1N site must address the City's need for a public connection in perpetuity from the waterfront to Western Avenue, Victor Steinbrueck Park and Pike Place Market, and provide public open spaces of a size, character and quality consistent with the Waterfront Concept Design.

B. City financial participation in the PC-1N Project will be applied only to PC-1N Project capital costs. Because City funding will be a fungible component of the overall PC-1N project budget, the project must include elements of priority concern to the City such as the Waterfront-Related Elements specifically identified in Exhibit B hereto, and publicly accessible open space. It is likely that the PC-1N Project will include other elements that also represent public uses or provide public benefits such as affordable housing, Market retail space, and retention and replacement of parking serving both the Market and waterfront, and that project infrastructure will support all project elements in an integrated manner.

C. To the maximum extent possible, the PC-1N Project should be undertaken on a schedule that maximizes opportunities for meaningful coordination with construction of certain other elements of the Waterfront Concept Design such as the Overlook Walk and the Elevated Elliott Connection in order to yield efficiencies and help to ensure successful integration of the Parties' respective projects.

D. The City's financial participation in the PC-1N Project shall be for a defined maximum dollar amount and structured to minimize financial risk. As noted, funds for the City's participation in the development of the PC-1N Project are included in the funding plan incorporated in the CWC Strategic Plan and that plan currently contemplates that a LID will provide the City's share of PC-1N Project funding. Consequently, availability of additional City funding for development of the PC-1N Project, shall be contingent upon the formation of and confirmation of the assessment roll for a LID, as recommended in the CWC Strategic Plan.

E. The City's financial support for the PC-1N Project also will be contingent upon reasonable City review and approval of the design of the PC-1N Project in both its regulatory and proprietary roles.

Section III . Design Development .

A. Shared Principles . The Parties agree that the following principles shall guide the evolving design of the PC-1N Project, specifically including the WaterfrontRelated Elements.

1. Both the PC-1N Project and the WaterfrontRelated Elements should respect the character of the District as well as the regulatory requirements governing it. For example, the visual expression, scale and character of new structures and buildings should be appropriate to their use and function, utilitarian and consistent with the character of the Market.

2. The design of the PC-1N Project should integrate with the evolving design of the new ADA-accessible pedestrian overlook and Overlook Walk. The public spaces on the PC-1N site should be ample and generous so as to facilitate easy public access to the Overlook Walk from the Market and Victor Steinbrueck Park and vice versa. Market uses on the PC-1N site should be designed to encourage public use and activation of public spaces in the PC-1N Project.

3. Public parking on the PC-1N surface lot and other Market public parking lost to demolition of the Viaduct should be replaced in the PC-1N Project with on-site structured parking for short-term Market and waterfront use ("Replacement Parking") to the extent feasible. Replacement Parking should, to the degree possible, physically connect and functionally integrate with the PPMPDA's PC-1S garage so as to provide access and functionality for Market and waterfront use.

4. Overall cost-effectiveness is a core shared principle. The PC-1N Project design, including but not limited to the Waterfront-Related Elements, should be continuously evaluated for cost-effectiveness, taking into consideration both initial development costs and ongoing costs for operation and maintenance.

5. The Waterfront-Related Elements, together with the PC-1N Conceptual Design, attached as Exhibit A hereto, represent an appropriate and generally mutually acceptable baseline for ongoing refinement by the City's and the PPMPDA's respective design teams. Such continuing design processes should be collaborative and yield a fully integrated PC-1N Project design acceptable to both Parties for incorporation in the Project Development Agreement, as required under Section IV.B.1 of this MOU.

B. Management, Review and Approvals . Upon execution of this MOU, the PPMPDA shall proceed with the design of the PC-1N Project, subject to the City's continuing review and approval, as provided herein. The Parties will develop and observe procedures for continued close collaboration between their respective design teams. The PPMPDA shall be responsible for managing all regulatory review for the PC-1N Project including, but not limited to, Pike Place Market Historical Commission review, environmental review, and any other City review and permitting processes, including supporting the City in reviews by the Design Commission with respect to the Waterfront-Related Elements. The PPMPDA also shall be responsible for undertaking and managing informal, community-based design review, including review by the Market community. Separate and apart from any permissions or approvals required by any regulatory agency, the City in its proprietary capacity shall have the right to review and approve of the evolving PC-1N Project design, specifically including Exhibit A, for its continuing compatibility with the evolving Waterfront Concept Design, and cost-effectiveness, among other purposes. Such review and approval shall be required upon completion of design development documents, and 30%, 60% and 100% construction documents. City review shall be led and, when appropriate, approval shall be provided by the City's Director of Transportation ("Director") or his designee.

C. Funding . As contemplated in the Resolution, the City's 2013-14 biennial budget includes funding for continued design collaboration between the City and the PPMPDA. The City agrees to reimburse the PPMPDA for fifty percent (50%) of its expenditures for PC-1N Project engineering, design and consultant services incurred after August 21, 2012, to a maximum payment of $7 million; provided, however, that no more than $1 million shall be payable during 2013.

Such reimbursement may include PPMPDA direct projectrelated costs as well as the fair market value of up to a maximum of $200,000 in in-kind project-related services provided through 2014, but shall not be available for PPMPDA general or central overhead or staffing. The City will reimburse the PPMPDA for such expenditures within 30 days after it provides the City with a fully-documented invoice, supplemented with such additional information as the Director may reasonably request from time to time. Upon the PPMPDA's request and at the City's discretion, the City may direct that any portion of the $7 million not required for engineering and design services be used for PC-1N Project site preparation work. The PPMPDA currently anticipates securing its share of PC-1N design costs incurred after January 1, 2013 from funds available from the SR 99 bored tunnel project for replacement of surface parking that will be lost when the Viaduct is demolished. The PPMPDA's commitment to continue to fund its share of ongoing design costs is contingent upon the availability of such funding. If such funding is not available, the PPMPDA may continue to fund its share of such costs using other resources or it may suspend design development until the Parties can agree on alternative arrangements for funding design.

Section IV . Project Development .

A. Shared Principles . The Parties agree that the following principles shall guide project development.

1. The PC-1N Project shall proceed with the goal of starting construction on the below-ground portions no later than June 30, 2014. It is the Parties' intention that the below-ground Replacement Parking be completed prior to demolition of the Viaduct, to provide replacement parking for the Market and waterfront businesses and attractions, including the Aquarium.

2. Because the PC-1N site will be developed in a manner consistent with the PPMPDA's Charter, the Pike Place Market Historical Commission rules and regulations, and the Waterfront Concept Design, opportunities to develop spaces within the PC-1N Project for fully self-sustaining uses will be limited. Consequently, the ability of the PPMPDA to finance its participation in the PC-1N Project also will be constrained and the Project funding plan will include a disproportionate amount of funding from sources other than debt incurred by the PPMPDA.

3. A portion of the PC-1N site may serve as a construction staging site for the construction of the Elevated Elliott Connection, the Overlook Walk, and Alaskan Way ("Construction Staging"), unless the Parties reasonably conclude that such temporary staging is technically infeasible or would adversely impact the PC-1N Project schedule.

4. To the maximum extent possible, the timeline for construction of the Replacement Parking should be coordinated to ensure it can be used for Construction Staging at critical periods in the Central Waterfront Project construction, currently identified as between 2016 and 2018.

B. Project Development Agreement . The Parties will negotiate and submit to the PPMPDA Council and the Seattle City Council for their respective review and approval a Project Development Agreement that will include the following:

1. A design for the PC-1N Project that integrates with the design of the City's Central Waterfront Project. The PC-1N Project design, when approved by the Director as provided in Section III, above, shall constitute the "Approved Project Design" for purposes of the Project Development Agreement. This MOU will not impact the imposition of regulatory requirements on the project by the City as part of the permitting and plan review process. In addition, the PPMPDA will brief the Seattle City Council on the design status of the PC-1N Project in August 2013 or when 30% design is complete, whichever occurs first in order to receive Council review comments.

2. If the Parties determine to use a portion of the PC-1N site for Construction Staging, the Project Development Agreement shall address the extent, nature and duration of such use, as well as the subsequent restoration of that portion of the site used for Construction Staging.

3. An overall PC-1N Project budget identifying, with reasonable specificity, the principal sources of funding sufficient to complete development and construction of the PC-1N Project in accordance with the Approved Project Design. In developing its PC-1N Project funding plan, the PPMPDA must demonstrate that the project as designed and funded is feasible and can be undertaken in a manner consistent with the prudent financial management of the PPMPDA and its properties. The City Council will consider the feasibility and prudency of the proposed funding and financing of the PC-1N Project among other matters in its review of the Project Development Agreement. Funding for the PC-1N Project is anticipated to come from a variety of sources including, but not limited to, the following currently identified sources:

a. Central Waterfront project funding in an amount not to exceed $40 million, which amount includes the payments for design, consultant and site preparation services for the PC-1N Project made pursuant to this MOU. The Parties understand and agree that any such City funding will be provided only as a component of overall funding for construction of the Waterfront Concept Design, specifically including the PC-1N Project, as both are presently conceived and designed. As stated in Section II.D, the City currently expects to fund its share of the PC-IN Project through proceeds derived from the LID and the City's contribution of any funds for construction of the PC-1N Project is contingent upon the successful formation of such LID. The CWC Strategic Plan contemplates formation of a LID that would yield $200 million to $300 million for overall waterfront project costs. City Resolution 31399 recognizes that the City's ability to fund partner projects is dependent on successful implementation of LID funding, which may call for flexibility in implementing the PC-1N development. The Resolution states that the City intends to form and confirm the assessment roll for a LID by Spring 2014, before leveraging the other identified funding sources, including levy lid lift, City general fund, and private philanthropic funding. In the event the contemplated LID yields materially less than $200 million and the CWC Funding Plan requires substantial revision such that City funds for construction of the PC 1N Project cannot realistically be provided solely from LID funding, the City and the PPMPDA also will reassess the funding plan for the PC-1N Project accordingly. Any PC-1N Development Agreement must be consistent with any revised central waterfront project funding plan.

b. Funding from other public programs or projects. For instance, depending upon how the PC-1N development evolves, elements of the PC-1N Project may also be eligible for public funding or financing through various City, State or other public lowand moderate-income housing assistance programs, as well as capital grants from jurisdictions other than the City.

c. The PPMPDA may secure additional funding for construction of elements of the PC-1N Project through Federal New Markets income tax credits. Unlike some other sources of proposed funding, use of tax credit funding would likely be restricted to certain end use project elements like structures or improvements for Market retail, services and housing. The Parties will work to ensure that PC-1N Project asset ownership and funding can be structured in such a way as to maximize the ability of the PPMPDA to secure such funding. The Project Development Agreement should include appropriate provisions to facilitate PPMPDA access to such tax credits.

d. The PPMPDA may be able to borrow funds to pay for elements of the PC-1N Project for which financing would be available and appropriate. However, the Waterfront Concept Design, zoning, Pike Place Market Historical District regulations and related constraints, and other public policies may limit the PPMPDA's ability to develop conventional retail and other spaces within the project from which it could realize sufficient net revenue to finance development of such spaces.

e. The PPMPDA currently has retained funds in the form of capital reserves, some of which it already has committed to design of the PC-1N Project. The PPMPDA anticipates committing additional funding to design and eventual construction of the PC-1N Project, provided that such commitment can be made without impairing the financial security or prudent financial management of the PPMPDA or its properties.

f. The PPMPDA, working with the Pike Place Market Foundation, will attempt to develop additional funding from grants and philanthropic gifts. A detailed fundraising plan and feasibility study will be developed by the PPMPDA to maximize the potential for new, revenue sources to the project. This plan and study will be reviewed by City staff as due diligence during the negotiation of the Project Development Agreement.

4. A detailed PC-1N Project schedule incorporating agreed-upon sequencing of construction of the basic project elements and threshold requirements for commencing construction of each such element, if necessary. For instance, if commencement of construction of any material element is subject to confirmation of funding or any other major contingency, such contingency should be explicitly identified. The Parties may agree to phase construction of the overall PC-1N Project in the interest of ensuring completion of the Replacement Parking to correspond with demolition of the Viaduct.

5. Provision for transfer of ownership of the PC-1N site to the PPMPDA, subject to a right of access, easement, or other form of interest providing for public access to and use of particular PC-1N Project spaces in perpetuity.

6. City requirements for the PPMPDA management of construction of the PC-1N Project, including but not limited to the following:

a. that the PPMPDA shall complete construction of the PC-1N Project substantially consistent with the Approved Project Design.

b. that the PPMPDA will negotiate and execute design and construction contracts.

c. that the PPMPDA will be responsible for all cost overruns that may be experienced by the PC-1N Project, including those due to unforeseen conditions.

d. that change orders that represent material changes to the Approved Project Design are subject to the review and approval of the Director, which approval shall not be unreasonably denied or delayed.

e. that the PPMPDA shall cause all work to be done in a good and workmanlike manner and shall comply with or cause compliance with all laws. The PPMPDA also shall obtain or cause to be obtained and maintain in effect all building permits, licenses and other governmental approvals that may be required in connection with such work.

7. Additional conditions to property conveyance and construction commencement, which conditions may apply to commencement of the entire PC-1N Project or any phase of the project identified in the schedule required under Section IV.B.4. The PC-1N site will be conveyed to the PPMPDA (subject to the perpetual public access, use right or easement required herein) and the PPMPDA may issue its notice to proceed with construction to its general contractor when the Director has provided written concurrence that the PPMPDA has satisfied all of the following conditions, which concurrence shall not be unreasonably withheld:

a. Compliance with Resolution 31399. The PPMPDA has demonstrated that it has timely access to sufficient funds from all available sources, including the City funding identified in this MOU, to fully fund construction of the entire PC-1N Project or a mutually acceptable phase thereof, consistent with the Approved Project Design, including construction contingencies consistent with industry standards.

b. The PPMPDA has obtained all necessary permits or other governmental approvals for the project.

c. The PPMPDA has negotiated a construction contract that is consistent with the requirements of the Project Development Agreement and under which the PPMPDA's general contractor has agreed to construct the PC-1N Project or an acceptable phase thereof consistent with the Approved Project Design for a guaranteed maximum price.

8. A memorandum of agreement regarding operations and maintenance of the Waterfront-Related Elements.

Section V . Abandonment or Curtailment of Central Waterfront Project .

In the event that the Central Waterfront Concept Design and Framework Plan, as approved by the City Council under Resolution 31399, is effectively abandoned or curtailed in whole or material part such that the PC-1N Concept Design is rendered not viable (for example, the Overlook Walk is eliminated, materially reduced in scope or materially redesigned), the Parties agree that if a form of the Central Waterfront Project is proceeding and the project continues to include funding for redevelopment of the PC-1N site, the Parties will evaluate proceeding with a phase or phases of the PC-1N Concept Design that may have been previously identified pursuant to Section IV.B.4 of this MOU or a mutually acceptable alternative project. Any such project shall include public parking for both Market and waterfront use and provide public access and use features appropriate for the project. If the Parties determine such a project can be undertaken within resources available to the Parties, a Project Development Agreement for such project will be negotiated for review by the PPMPDA Council and the City Council.

Under circumstances in which the City funding for the PC1N Project identified in Section IV.B.3.a is eliminated or reduced so as to render the PC-1N Concept Design not feasible or the PC-1N Project is not undertaken under this MOU within five (5) years after its effective date, the PC-1N site shall be conveyed to the PPMPDA for continued use for Market and related public purposes, contingent on the City's approval of the PPMPDA's revised development concept; reservation of reasonable and appropriate rights of public access and use; and PPMPDA Council and City Council review and approval of a new or revised development agreement for such project. Any such project should specifically include public parking serving the Market and the waterfront; public spaces; and such connection between the waterfront and the Market as the Parties determine feasible and appropriate.

Section VI . Miscellaneous Provisions .

A. Nondiscrimination/Compliance with Laws . The PPMPDA shall comply with all applicable laws including, without limitation, all equal employment opportunity and nondiscrimination laws of the United States, the State of Washington, and the City of Seattle, including but not limited to Chapters 14.04, 14.10, and 20.42 of the Seattle Municipal Code (SMC), as they may be amended, and rules, regulations, orders, and directives of the associated administrative agencies and their officers.

B. Notices . All notices and requests required or permitted to be given in connection with this MOU shall be in writing and shall be deemed given as of the day they are received either by messenger, express delivery service, or in the United States of America mails, postage prepaid, certified or registered, return receipt requested, and addressed as follows, or to such other address as the party to receive the notice or request so designates by written notice to the other consistent with this Section VI:

If to City: Seattle Department of Transportation

Attn: Peter Hahn, Director

Seattle Municipal Tower

700 Fifth Avenue, Suite 3900

PO Box 34996

Seattle, WA 98124-4996

With a copy to: City of Seattle

City Attorney's Office

Attn: Helaine Honig, Senior Assistant City Attorney

600 Fourth Avenue, 4 ^th Floor

PO Box 94769

Seattle, WA 98124-4769

If to the PPMPDA: Pike Place Market Preservation & Development Authority

Attn: Ben Franz-Knight, Executive Director

85 Pike Street, Room 500

Seattle, WA 98101

With a copy to: Pacifica Law Group LLP

Attn: B. Gerald Johnson

1191 2 ^nd Avenue, Suite 2100

Seattle, WA 98101-2945

C. Indemnifications .

1. Right to Indemnification .

a. To the extent permitted by law, the PPMPDA agrees to indemnify, defend, and hold the City harmless from and against, and to reimburse the City with respect to, any and all losses, damages, liabilities, claims, judgments, settlements, fines, costs, and expenses ("Indemnifiable Amounts") of every nature whatsoever incurred by the City by reason of or arising out of or in connection with any breach or default in the performance of any obligation on the PPMPDA's part to be performed under the terms of this MOU or arising out of or relating to any actual or alleged negligent act or omission or willful misconduct of the PPMPDA with respect to its performance under the terms of this MOU, or any of the PPMPDA's officers, agents, employees or contractors ("Indemnifiable Events"). The indemnifications to be provided pursuant to this subsection shall survive the expiration or earlier termination of this MOU.

b. To the extent permitted by law, the City agrees to indemnify, defend, and hold the PPMPDA harmless from and against, and to reimburse the PPMPDA with respect to, any and all losses, damages, liabilities, claims, judgments, settlements, fines, costs, and expenses ("Indemnifiable Amounts") of every nature whatsoever incurred by the PPMPDA by reason of or arising out of or in connection with any breach or default in the performance of any obligation on the City's part to be performed under the terms of this MOU or arising out of or relating to any actual or alleged negligent act or omission or willful misconduct of the City with respect to its performance under the terms of this MOU, or any of the City's officers, agents, employees or contractors ("Indemnifiable Events"). The indemnifications to be provided pursuant to this subsection shall survive the expiration or earlier termination of this MOU.

2. Procedure .

a. With respect to any claims or demands by third parties that relate to Indemnifiable Events and/or Amounts, whenever the City shall have received a written notice that such a claim or demand has been asserted or threatened, it shall deliver notice to the PPMPDA of such claim or demand and of the facts within the City's knowledge that relate thereto within the earlier of: (a) fifteen (15) days after receiving written notice of the claim or demand; or (b) with respect to arbitration, litigation, or similar proceedings, not less than ten (10) days before the initial date by which the City would be required to file its first substantive response to such action, but in no event less than the amount of time that the City is given to respond to the action. The PPMPDA shall then have the right and the obligation to contest, defend, negotiate or settle any such claim or demand through counsel of its own selection, solely at its own cost, risk, and expense.

b. With respect to any claims or demands by third parties that relate to Indemnifiable Events and/or Amounts, whenever the PPMPDA shall have received a written notice that such a claim or demand has been asserted or threatened, it shall deliver notice to the City of such claim or demand and of the facts within the PPMPDA's knowledge that relate thereto within the earlier of: (a) fifteen (15) days after receiving written notice of the claim or demand; or (b) with respect to arbitration, litigation, or similar proceedings, not less than ten (10) days before the initial date by which the PPMPDA would be required to file its first substantive response to such action, but in no event less than the amount of time that the PPMPDA is given to respond to the action. The City shall then have the right and the obligation to contest, defend, negotiate or settle any such claim or demand through counsel of its own selection, solely at its own cost, risk, and expense.

D. Term and Termination . This MOU shall commence on the date first set forth above and shall continue for a term of ten (10) years. Notwithstanding the foregoing, this MOU may be terminated by written notice under the following circumstances: (a) a party has breached its obligations hereunder and such breach remains uncured for one hundred twenty (120) days after the non-breaching party has given notice to the breaching party describing such breach or, in the case of a breach by the PPMPDA, such other period as the Director may reasonably determine; (b) either party has defaulted in its obligations under this MOU on three or more occasions during any consecutive 12-month period; or (c) the City has transferred the PC-1N site to the PPMPDA under the circumstances contemplated under Section IV.B.

E. Legal Relationship . This MOU does not constitute the PPMPDA as the agent or legal representative of the City for any purpose whatsoever. The PPMPDA has no express or implied right or authority to assume or create any obligation or responsibility on behalf of or in the name of the City or to bind the City in any manner or thing whatsoever.

F. Mandatory Disclaimer .

The Pike Place Market Preservation and Development Authority ("PDA") is organized pursuant to Seattle Municipal Code (SMC) 3.110 and RCW 35.21.660, 35.21.670, and 35.21.730.755. RCW 35.21.750 provides in part as follows: "All liabilities incurred by such public corporation, commission, or authority shall be satisfied exclusively from the assets and properties of such public corporation, commission or authority and no creditor or other person shall have any right of action against the city, town, or county creating such corporation, commission, or authority on account of any debts, obligations, or liabilities of such public corporation, commission, or authority." The powers of the PDA are limited by state and federal law and regulations, ordinances of The City of Seattle, and other elements of the local regulatory scheme.

G. Governing Law . This MOU shall be governed by and interpreted under the laws of the State of Washington applicable to agreements made and to be performed in Washington, exclusive of its conflict of law rules.

H. Entire Agreement . This MOU, when executed, contains the entire understanding between the Parties with respect to the subject matter hereof, and supersedes any promises or conditions in any other oral or written agreement. No provision of this MOU may be amended or supplemented except by a written agreement signed by the Parties hereto or their respective successors in interest.

IN WITNESS WHEREOF, the Parties have executed this MOU as of the day and year stated above.

EXHIBIT A

PC-1N CONCEPTUAL DESIGN

EXHIBIT B

WATERFRONT-RELATED ELEMENTS