WHEREAS, 507 Northgate LLC has submitted a complete application for multifamily housing limited property tax exemption as required by SMC Chapter 5.73, proposing to construct multifamily housing ("Multifamily Housing") known as 507 Northgate Apartments, on property situated at 507 Northeast Northgate Way in Seattle, Parcel Numbers 2926049307 and 2926049038, legally described as follows:

PARCEL A:

THE NORTH 180 FEET OF THE WEST 282 FEET OF THE NORTH HALF OF THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 29, TOWNSHIP 26 NORTH, RANGE 4 EAST, W.M., IN KING COUNTY, WASHINGTON; EXCEPT THAT PORTION THEREOF LYING WESTERLY OF THE EAST LINE OF FIFTH AVENUE NORTHEAST AS ESTABLISHED IN DEED RECORDED UNDER RECORDING NO. 8111020172; ALSO EXCEPT THE NORTH 40 FEET FOR NORTHEAST NORTHGATE WAY; AND EXCEPT THAT PORTION LYING NORTH AND EAST OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT THE SOUTHEAST CORNER OF THE ABOVE DESCRIBED PROPERTY; THENCE NORTH 00 degrees 00'22" WEST ALONG THE EAST LINE THEREOF 120.06 FEET TO THE BEGINNING OF SAID LINE;

THENCE NORTH 88 degrees 29'53" WEST 5.58 FEET; THENCE NORTH 01 degrees 25'33" EAST 20.00 FEET TO A POINT ON THE SOUTH MARGIN OF NORTHEAST NORTHGATE WAY AND THE TERMINUS OF SAID LINE.

(ALSO KNOWN AS NEW PARCEL A OF CITY OF SEATTLE LOT BOUNDARY ADJUSTMENT RECORDED UNDER RECORDING NO. 20070315900008).

PARCEL B:

THE WEST 282 FEET OF THE NORTH HALF OF THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SOUTHEAST QUARTER OF SECTION 29, TOWNSHIP 26 NORTH, RANGE 4 EAST, W.M., IN KING COUNTY, WASHINGTON; EXCEPT THE NORTH 180 FEET THEREOF;

AND EXCEPT THE WEST 34.5 FEET THEREOF FOR ROAD PURPOSES AS CONTEMPLATED BY ORDINANCE NO. 91334 OF THE CITY OF SEATTLE; TOGETHER WITH THE EAST 6.50 FEET OF THE WEST 288.50 FEET OF THE SOUTH 103.50 FEET OF THE NORTH HALF OF THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 29, TOWNSHIP 26 NORTH, RANGE 4 EAST, W.M., IN KING COUNTY WASHINGTON.

(ALSO KNOWN AS NEW PARCEL C OF CITY OF SEATTLE LOT BOUNDARY ADJUSTMENT RECORDED UNDER RECORDING NO. 20070315900008).

PARCEL C:

EASEMENT AND BENEFICIAL RIGHTS CONTAINED IN DOCUMENT ENTITLED "RECIPROCAL EASEMENT AGREEMENT FOR ACCESS, TIEBACKS AND UTILITIES" RECORDED UNDER RECORDING NO. 20061117001015, AS AMENDED BY INSTRUMENT RECORDED UNDER RECORDING NO. 20070316001563; and

WHEREAS, the Director of Housing has determined that the Multifamily Housing, if completed as proposed, will comply with the provisions of SMC 5.73.040 and, in accordance with SMC 5.73.060 A., has approved the application for limited property tax exemption for the proposed Multifamily Housing;

NOW, THEREFORE,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEATTLE, THE MAYOR CONCURRING, THAT:

The Director of Housing is authorized to enter into the Multifamily Housing Limited Property Tax Exemption Agreement concerning the Multifamily Housing, in substantially the form attached as Exhibit A, on behalf of the City of Seattle.

Adopted by the City Council the ____ day of _________, 2008, and signed by me in open session in authentication of its adoption this _____ day of __________, 2008.

_________________________________

President __________of the City Council

THE MAYOR CONCURRING:

_________________________________

Gregory J. Nickels, Mayor

Filed by me this ____ day of _________, 2008.

____________________________________

City Clerk

(Seal)

Exhibit A: Multifamily Housing Limited Property Tax Exemption Agreement

Amy Gray/ASG

Resolution 507 Northgate Apartments

March 24, 2008

Version #1

Form last revised on 7/17/06 1

Exhibit A

MULTIFAMILY HOUSING LIMITED PROPERTY TAX EXEMPTION AGREEMENT

THIS MULTIFAMILY HOUSING LIMITED PROPERTY TAX EXEMPTION AGREEMENT ("Agreement") is entered into on the date signed below between 507 Northgate LLC, a Washington limited liability company, referred to as "Applicant," and The City of Seattle, a Washington municipal corporation, referred to as "City".

Recitals.

1. Applicant applied, prior to July 1, 2007, for a limited property tax exemption as provided for in Chapter 84.14 RCW and Chapter 5.73 SMC for new multifamily rental housing ("Multifamily Housing") in the Northgate residential targeted area, and the Director of Housing ("Director") has approved the application; and

2. Applicant has submitted to the City preliminary site plans and floor plans for the Multifamily Housing to be constructed as part of a mixed-use project ("Project") on property situated at 507 NE Northgate Way in Seattle, Washington, and described more specifically as follows:

PARCEL A:

THE NORTH 180 FEET OF THE WEST 282 FEET OF THE NORTH HALF OF THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 29, TOWNSHIP 26 NORTH, RANGE 4 EAST, W.M., IN KING COUNTY, WASHINGTON;

EXCEPT THAT PORTION THEREOF LYING WESTERLY OF THE EAST LINE OF FIFTH AVENUE NORTHEAST AS ESTABLISHED IN DEED RECORDED UNDER RECORDING NO. 8111020172;

ALSO EXCEPT THE NORTH 40 FEET FOR NORTHEAST NORTHGATE WAY;

AND EXCEPT THAT PORTION LYING NORTH AND EAST OF THE FOLLOWING DESCRIBED LINE:

COMMENCING AT THE SOUTHEAST CORNER OF THE ABOVE DESCRIBED PROPERTY;

THENCE NORTH 00 degrees 00'22" WEST ALONG THE EAST LINE THEREOF 120.06 FEET TO THE BEGINNING OF SAID LINE;

THENCE NORTH 88 degrees 29'53" WEST 5.58 FEET;

THENCE NORTH 01 degrees 25'33" EAST 20.00 FEET TO A POINT ON THE SOUTH MARGIN OF NORTHEAST NORTHGATE WAY AND THE TERMINUS OF SAID LINE.

(ALSO KNOWN AS NEW PARCEL A OF CITY OF SEATTLE LOT BOUNDARY ADJUSTMENT RECORDED UNDER RECORDING NO. 20070315900008).

PARCEL B:

THE WEST 282 FEET OF THE NORTH HALF OF THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SOUTHEAST QUARTER OF SECTION 29, TOWNSHIP 26 NORTH, RANGE 4 EAST, W.M., IN KING COUNTY, WASHINGTON;

EXCEPT THE NORTH 180 FEET THEREOF;

AND EXCEPT THE WEST 34.5 FEET THEREOF FOR ROAD PURPOSES AS CONTEMPLATED BY ORDINANCE NO. 91334 OF THE CITY OF SEATTLE;

TOGETHER WITH THE EAST 6.50 FEET OF THE WEST 288.50 FEET OF THE SOUTH 103.50 FEET OF THE NORTH HALF OF THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 29, TOWNSHIP 26 NORTH, RANGE 4 EAST, W.M., IN KING COUNTY WASHINGTON.

(ALSO KNOWN AS NEW PARCEL C OF CITY OF SEATTLE LOT BOUNDARY ADJUSTMENT RECORDED UNDER RECORDING NO. 20070315900008).

PARCEL C:

EASEMENT AND BENEFICIAL RIGHTS CONTAINED IN DOCUMENT ENTITLED "RECIPROCAL EASEMENT AGREEMENT FOR ACCESS, TIEBACKS AND UTILITIES" RECORDED UNDER RECORDING NO. 20061117001015, AS AMENDED BY INSTRUMENT RECORDED UNDER RECORDING NO. 20070316001563.

hereafter referred to as the "Property"; and

3. Applicant is the owner of the Property; and

4. No existing rental housing building that contained four or more occupied dwelling units was demolished on the Property within eighteen (18) months prior to Applicant's submission of its application for limited property tax exemption; and

5. The City has determined that the Multifamily Housing will, if completed, occupied, and owned as proposed, satisfy the requirements for a final certificate of tax exemption

NOW, THEREFORE, in consideration of the mutual promises herein, City and Applicant do mutually agree as follows:

1. Conditional Certificate of Acceptance of Tax Exemption.

Subject to Seattle City Council ("Council") approval of this Agreement and Applicant's execution of this Agreement, City agrees to issue a conditional certificate of acceptance of tax exemption ("Conditional Certificate"), which will expire three (3) years from the date of approval of this Agreement by the Council unless extended by the Director as provided in SMC 5.73.070. Applicant understands and agrees that this Agreement and the Conditional Certificate pertain to rental housing and that in the event that individual residential units within the Multifamily Housing are sold, this Agreement will automatically terminate, and any Conditional Certificate issued pursuant to this Agreement is void. For purposes of this Agreement, a sale will be deemed to have occurred when an instrument transferring title to an occupant or proposed occupant of an individual residential unit is recorded.

2. Agreement to Construct Multifamily Housing.

a. Applicant agrees to construct the Project on the Property, including the Multifamily Housing, substantially as described in the project plans submitted in the application, subject to such modifications thereto as may be required to comply with applicable codes and ordinances, including the design review process. In no event shall Applicant provide fewer than four new dwelling units designed for permanent residential rental occupancy, nor shall permanent residential rental housing comprise less than fifty percent of the gross floor area of the Project constructed pursuant to this Agreement

b. Applicant agrees to comply with all applicable zoning requirements, land use regulations, and building and housing code requirements contained or incorporated in SMC Titles 22, 23, and 25. Applicant further agrees that approval of this Agreement by the Council, its execution by the Director, or issuance of a Conditional Certificate by the City pursuant to SMC Chapter 5.73 in no way constitutes approval of proposed improvements on the Property with respect to applicable provisions contained or incorporated in SMC Titles 22, 23, and 25 or obligates the City to approve proposed improvements.

c. Applicant agrees that the Multifamily Housing will be completed within three years from the date of approval of this Agreement by the Council, unless extended by the Director for cause as provided in SMC 5.73.070.

3. Agreement to Provide Affordable Housing.

a. Applicant agrees that, for the entire period of time for which the Multifamily Housing receives a tax exemption, a certain minimum number of the residential units in the Project shall be Affordable Units. Affordable Units means residential units rented at an Affordable Rent (defined below) to Income Eligible Occupants. In accordance with SMC 5.73.040 G.1., there are three options for complying with this requirement: 1) 20% of units to be rented at Affordable Rent to tenants whose Household Annual Income at initial occupancy is no greater than 60% of Median Income; 2) 25% of units to be rented at Affordable Rent to tenants whose Household Annual Income at initial occupancy is no greater than 65% of Median Income; or 3) 30% of units to be rented at Affordable Rent to tenants whose Household Annual Income at initial occupancy is no greater than 70% of Median Income. For purposes of this Agreement, Affordable Rent means that the annual rent for the unit plus an allowance for basic utilities does not exceed 30% of the percentage of Median Income chosen by the Applicant in accordance with SMC 5.73.040 G.1. Median Income means annual family median income for the Seattle-BellevueEverett Primary Metropolitan Statistical Area, as published from time to time by HUD, and as adjusted for household size according to the method used by HUD for income limits in subsidized housing. For purposes of rent limits, Median Income generally is adjusted according to the presumed family size based on the number of bedrooms in a unit, consistent with HUD rules for the HOME program. Income Eligible Occupants means that the Household Annual Income of the tenant household that will occupy the rental unit, at the time of the tenant household's initial occupancy, is no greater than the percentage of Median Income chosen by the Applicant in accordance with SMC 5.73.040 G.1. Household Annual Income is defined in subsection c.(2) below.

b. Applicant must designate in writing to the City which of the three (3) options listed in subsection a. above the Multifamily Housing will comply with, no later than the date of application for the final certificate of tax exemption ("Final Certificate").

c. Applicant is responsible for verifying the income of households occupying Affordable Units no later than the date of initial occupancy.

(1) Prospective tenants of Affordable Units shall be advised of the definition of Household Annual Income at the time they are provided with an application for tenancy.

(2) For purposes of this Agreement, Household Annual Income means the aggregate annual income of all persons over eighteen (18) years of age residing within the same household for a period of at least one month and shall be calculated for prospective tenants by projecting the income anticipated to be received over the twelvemonth period following the date of initial occupancy, based on the prevailing rate of income of each person at the time of income verification, which shall be no more than six (6) months prior to the date of initial occupancy.

(3) Documentation of tenant income eligibility for Affordable Units shall be obtained by Applicant or Applicant's agent and maintained on file for audit or inspection through the term of the tenancy, and for one (1) calendar year thereafter. Documentation shall include, at a minimum, an application signed by the prospective tenant declaring monthly or annual income, and certifying that the information thereon is correct, and evidence of current income.

d. Applicant agrees to make good faith efforts to rent all vacant Affordable Units. Applicant shall comply with all applicable fair housing and nondiscrimination laws, ordinances and regulations.

e. Applicant agrees to rent Affordable Units only pursuant to a form lease or rental agreement prepared by Applicant. Applicant shall provide a copy of the form of lease currently in use to the City promptly upon any request by the City. The form lease or rental agreement shall comply with all applicable laws; shall not include any provisions prohibited by applicable laws or regulations; shall prohibit subletting or assignment of the lease without the express written approval of Applicant, which approval shall not be granted by Applicant if the result would be any violation of the requirements of this Agreement to provide affordable housing; and shall state that information about the affordable housing requirements pursuant to SMC Chapter 5.73 is available from the City's Office of Housing.

f. Applicant agrees that the mix and configuration of the Affordable Units shall be substantially proportional to the mix and configuration of the total housing units in the Project provided that units with the same number of bedrooms shall be combined into a single category for the purpose of compliance with this provision. If the Project contains more than one building, Applicant agrees that all of the Affordable Units will not be located in the same building.

g. Applicant agrees that the Affordable Units shall have substantially the same level of interior fixtures and quality of finish as the other housing units in the Project.

4. Right of First Offer.

a. By execution of this Agreement Applicant hereby grants to the City or its assignee, beginning on the date the Final Certificate is issued and continuing throughout the entire period of the limited property tax exemption and for one (1) additional year thereafter, a right of first offer under terms and conditions contained in this Section and consistent with SMC 5.73.040 G. Applicant agrees that this right of first offer is, and is intended to be, binding upon Applicant and all successors, heirs and assigns.

b. Applicant agrees on behalf of itself and all successors, heirs and assigns, to inform the City in writing, consistent with the notice provisions of Section 15 of this Agreement, of Applicant's intent to sell the Multifamily Housing at least thirty (30) days prior to placing the Multifamily Housing on the market for sale or taking any action to sell the Multifamily Housing.

c. Applicant agrees that the City or its assignee has twenty (20) days after receipt of the notice of intent to sell the Multifamily Housing to present Applicant with a written offer setting forth the price, terms and conditions under which the City or its assignee is prepared to purchase the Multifamily Housing.

d. Upon notice from Applicant that the offer has been received, the City or its assignee has thirty (30) calendar days in which to enter into a real estate purchase and sales agreement with Applicant containing the price, terms and conditions described in the offer or other price, terms and conditions agreed to by the parties.

e. In the event that Applicant submits a notice of intent to sell to the City and either the City or its assignee does not submit an offer within the permitted timeframe, or the City or its assignee submits an offer but no sale to the City or its assignee occurs for reasons not the fault of Applicant, the City agrees that Applicant does not, with the exception provided below, have any further obligation to offer the Multifamily Housing for sale to the City for a period of one (1) year from the date the notice of intent to sell is received by the City. In the event, however, that the City or its assignee makes an offer to purchase the Multifamily Housing but no sale occurs, Applicant may not offer the Multifamily Housing for sale to a third party at a price or under terms and conditions more favorable to the buyer than the terms offered by the City or its assignee for a period of one (1) year from the date the offer is received by Applicant.

f. In the event of changes to the right of first offer requirements of SMC Chapter 5.73 that were effective on July 1, 2007, Applicant may request amendment of this Agreement to conform to such changes.

5. Requirements for Final Certificate of Tax Exemption.

Applicant may, upon completion of the Multifamily Housing and upon issuance by the City of a temporary or permanent certificate of occupancy, request a Final Certificate. The request shall be in writing directed to the City's Office of Housing and be accompanied by all of the following:

a. A statement of expenditures made with respect to each housing unit in the Project and the total expenditures made with respect to the entire Project.

b. A description of the completed work and a statement of qualification for the exemption.

c. Documentation that the Multifamily Housing was completed within the required three-year period or any authorized extension and in compliance with the terms of this Agreement.

d. Information regarding Applicant's compliance with the affordability requirements in SMC 5.73.040 and this Agreement, which shall include all of the following:

(1) Designation of which affordability option, contained in SMC 5.73.040 G.1. and referenced in Section 3 above, Applicant will follow.

(2) Identification of all Affordable Units, whether rented or held vacant to be rented by Income Eligible Occupants.

(3) Rents (or offering rents, as applicable) for all Affordable Units.

(4) A copy of the application form used for rental of Affordable Units.

(5) A copy of the form of lease or rental agreement to be used for Affordable Units.

e. Any such further information that the Director deems necessary or useful to evaluate eligibility for the Final Certificate.

6. Agreement to Issue Final Certificate.

The City agrees to file a Final Certificate with the King County Assessor within forty (40) days of submission of all materials required by Section 5, if Applicant has:

a. successfully completed the Multifamily Housing in accordance with the terms of this Agreement and SMC Chapter 5.73; and

b. filed a request for a Final Certificate with the City's Office of Housing and submitted the materials described in Section 5 above; and

c. paid to the City a fee in the amount of $150.00 to cover the Assessor's administrative costs; and

d. met all other requirements provided in SMC Chapter 5.73 for issuance of the Final Certificate.

7. Annual Certification.

Within thirty (30) days after the first anniversary of the date the City filed the Final Certificate with the King County Assessor and each year thereafter for a period of ten (10) years, Applicant agrees to file a certification or declaration with the Director, verified upon oath or affirmation, with respect to the accuracy of the information provided therein, containing the following:

a. a statement of the occupancy and vacancy of the Multifamily Housing during the previous year; and

b. a statement that the Multifamily Housing has not changed use since the date of filing of the Final Certificate; and

c. a statement that the Multifamily Housing continues to be in compliance with this Agreement and the requirements of SMC Chapter 5.73; and

d. a description of any improvements or changes to the Project made after the filing of the Final Certificate or the previous annual certification; and

e. information and documentation sufficient to demonstrate, to the satisfaction of the Director, compliance with the affordability requirements of SMC 5.73.040 G.1. and this Agreement, which shall, at minimum, include the following:

(1) identification of each Affordable Unit, and any substitution of Affordable Units during the previous year; and

(2) for each Affordable Unit that was initially occupied or that had a change of tenancy during the previous year, the date of each tenant's initial occupancy, the household size and Household Annual Income of each tenant household at initial occupancy, and the rent charged at initial occupancy; and

(3) for any Affordable Units with turnover during the previous calendar year, the date on which any tenancy was terminated, and the time during which the unit remained vacant; and

(4) the current contract rent on the anniversary date of the Final Certificate for each Affordable Unit.

8. No Violations for Duration of Exemption.

For the duration of the limited tax exemption granted under SMC Chapter 5.73, Applicant agrees that the Project and the Property will have no violations of applicable zoning requirements, land use regulations, and building and housing code requirements contained in SMC Titles 22, 23, and 25 for which the City's Department of Planning and Development or its functional successor shall have issued a notice of violation, citation or other notification that is not resolved by a certificate of compliance, certificate of release, withdrawal, or another method that proves either compliance or that no violation existed, within the time period for compliance, if any, provided in such notice of violation, citation or other notification or any extension of the time period for compliance granted by the Director of the Department of Planning and Development.

9. Notification of Transfer of Interest or Change in Use.

Applicant agrees to notify the Director within thirty (30) days of any transfer of Applicant's ownership interest in the Project or the Property. Applicant further agrees to notify the Director and the King County Assessor within sixty (60) days of any change of use of any or all of the Multifamily Housing to another use. Applicant acknowledges that such a change in use may result in cancellation of the limited tax exemption and imposition of additional taxes, interest and penalties pursuant to State law.

10. Cancellation of Exemption Appeal.

a. The City reserves the right to cancel the limited tax exemption if at any time the Multifamily Housing no longer complies with the terms of this Agreement or with the requirements of SMC Chapter 5.73, or for any other reason no longer qualifies for a limited tax exemption.

b. If the limited tax exemption is canceled for noncompliance, Applicant acknowledges that State law requires that an additional real property tax is to be imposed in the amount of: (1) the difference between the tax paid and the tax that would have been paid if it had included the value of the non-qualifying improvements, dated back to the date that the improvements became non-qualifying; (2) a penalty of 20% of the difference calculated under (1) of this subsection b.; and (3) interest at the statutory rate on delinquent property taxes and penalties, calculated from the date the tax would have been due without penalty if the improvements had been assessed without regard to the exemptions provided by RCW Chapter 84.14 and SMC Chapter 5.73. Applicant acknowledges that, pursuant to RCW 84.14.110, any additional tax owed, together with interest and penalty, become a lien on the Property and attach at the time of any change of use of any or all of the Multifamily Housing or at the time that all or any portion of the Multifamily Housing no longer meets applicable requirements, and that the lien has priority to and must be fully paid and satisfied before a recognizance, mortgage, judgment, debt, obligation, or responsibility to or with which the Property may become charged or liable. Applicant further acknowledges that RCW 84.14.110 provides that any such lien may be foreclosed in the manner provided by law for foreclosure of liens for delinquent real property taxes.

c. Upon determining that a limited tax exemption is to be canceled, the Director, on behalf of the Council, shall notify the owner of the Property by certified mail, return receipt requested. The owner of the Property may appeal the determination in accordance with RCW 84.14.110 and SMC 5.73.110.

11. Amendments.

No modification or amendment of this Agreement shall be made unless mutually agreed upon by the parties in writing and unless in compliance with the provisions of SMC 5.73.065.

12. Binding Effect.

The provisions, covenants, and conditions contained in this Agreement are binding upon the parties hereto and their legal heirs, representatives, successors, assigns, and subsidiaries and are intended to run with the land.

13. Recording of Agreement.

The Director shall cause to be recorded, or require Applicant to record, in the real property records of the King County Department of Records and Elections, this Agreement and any other documents as will identify such terms and conditions of eligibility for limited tax exemption as the Director deems appropriate for recording, including requirements under SMC Chapter 5.73 relating to affordability.

14. Audits and Inspection of Records.

Applicant understands and agrees that the City has the right to audit or review appropriate records to assure compliance with this Agreement and SMC Chapter 5.73 and to perform evaluations of the effectiveness of the Multifamily Tax Exemption program. Applicant agrees to make appropriate records available for review or audit upon seven (7) days' written notice by the City.

15. Notices.

All notices to be given pursuant to this Agreement shall be in writing and shall be deemed given when hand-delivered within normal business hours, when actually received by facsimile transmission, or two business days after having been mailed, postage prepaid, to the parties hereto at the addresses set forth below, or to such other place as a party may from time to time designate in writing.

APPLICANT:

507 Northgate LLC

330 112th NE #200

Bellevue WA 98004

Phone (425) 455-9976 Fax: (425) 646-3374

Attention: Kevin Wallace

CITY: City of Seattle

Office of Housing

700 Fifth Avenue, #5700

PO Box 94725

Seattle, Washington 98124-4725

Phone: (206) 684-0721 Fax: (206) 233-7117

Attention: Director

16. Severability.

In the event that any term or clause of this Agreement conflicts with applicable law, such conflict shall not affect other terms of this Agreement that can be given effect without the conflicting terms or clause, and to this end, the terms of the Agreement are declared to be severable.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates indicated below.

THE CITY OF SEATTLE APPLICANT

Office of Housing 507 Northgate LLC

a Washington limited liability company

By:_______________ By: The Northwestern Mutual Life Insurance

Adrienne E. Quinn, Director Company,

a Wisconsin corporation

_______________________ Its: Member

Date By: Northwestern Investment Management Company, LLC,

a Delaware limited liability company,

Its: Wholly-owned affiliate and authorized representative

By:

Its: Managing Director

Attest:

Assistant Secretary

Date

By: Wallace Northgate Investor, LLC,

a Washington limited liability company,

Its: Member

By: Wallace Properties Development Company LLC,

a Washington limited liability company

Its: Manager

By: Kevin R. Wallace

Its: President

_____________________

Date

STATE OF WASHINGTON )

) ss.

COUNTY OF KING )

On this day of , 2008, personally appeared before me Adrienne E. Quinn, to me known to be the Director of the Office of Housing of The City of Seattle, the municipal corporation that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said municipal corporation for the uses and purposes therein mentioned and on oath stated that she was authorized to execute said instrument.

WITNESS my hand and official seal the date and year first above written.

________________________________________

Print name:_______________________________

NOTARY PUBLIC in and for the State of Washington, residing at

My Commission expires ___________

STATE OF _____________ )

) ss.

COUNTY OF _______________ )

On this day of , 2008, personally appeared before me _______________________________, to me known to be the Managing Director of the Northwestern Investment Management Company, LLC, a Delaware limited liability company, Member of the Northwestern Mutual Life Insurance Company, a Wisconsin corporation, Member of 507 Northgate LLC, a Washington limited liability company that executed the within and foregoing instrument and acknowledged said instrument to be the free and voluntary act and deed of said party, for the uses and purposes therein mentioned, and on oath stated that ___ was authorized to execute said instrument.

In witness whereof I have hereunto set my hand and affixed my official seal the day and year first above written.

_______________________________________

Print name:_________________________

NOTARY PUBLIC in and for the State of _________,

residing at ______________________

My Commission expires ____________________

STATE OF _____________ )

) ss.

COUNTY OF ____________ )

On this day of , 2008, personally appeared before me ________________, to me known to be the Assistant Secretary of the Northwestern Investment Management Company, LLC, a Delaware limited liability company, Member of the Northwestern Mutual Life Insurance Company, a Wisconsin corporation, Member of 507 Northgate LLC, a Washington limited liability company that executed the within and foregoing instrument and acknowledged said instrument to be the free and voluntary act and deed of said party, for the uses and purposes therein mentioned, and on oath stated that ___ was authorized to execute said instrument.

In witness whereof I have hereunto set my hand and affixed my official seal the day and year first above written.

_______________________________________

Print name:_________________________

NOTARY PUBLIC in and for the State of ___________,

residing at ______________________

My Commission expires ____________________

STATE OF WASHINGTON )

) ss.

COUNTY OF K I N G )

On this day of , 2008, personally appeared before me Kevin Wallace, to me known to be the President of Wallace Properties LLC, a Washington limited liability company, Member of Wallace Northgate Investor LLC, a Washington limited liability company, Member of 507 Northgate LLC, a Washington limited liability company that executed the within and foregoing instrument and acknowledged said instrument to be the free and voluntary act and deed of said party, for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute said instrument.

In witness whereof I have hereunto set my hand and affixed my official seal the day and year first above written.

_______________________________________

Print name:_________________________

NOTARY PUBLIC in and for the State of Washington,

residing at ______________________

My Commission expires ____________________ 1

Exhibit A: MULTIFAMILY HOUSING LIMITED PROPERTY TAX EXEMPTION AGREEMENT