WHEREAS, the City of Seattle ("City") acquired the former Naval Reserve Building ("Armory") at Lake Union Park in 2000 with the purpose of developing it into a community facility with special attention to maritime heritage; and

WHEREAS, Resolution 30917, adopted by the City Council on October 2, 2006, supported and encouraged negotiations between the City and the Historical Society of Seattle and King County, a Washington non-profit corporation d/b/a the Museum of History and Industry ("MOHAI ") to potentially develop the Armory into MOHAI's primary public venue; and

WHEREAS, after preliminary negotiations with MOHAI were favorably concluded, on December 10, 2007, the City Council adopted Resolution 31011, which requested the Superintendent of Parks and Recreation to continue to investigate the feasibility of developing the Armory for MOHAI's use consistent with certain principles that the City Council endorsed in that resolution; and

WHEREAS, during the course of the parties' investigations, the State of Washington moved forward with plans to redevelop the SR 520 floating bridge that would require demolishing the City facility in McCurdy Park that MOHAI currently occupies; and

WHEREAS, both MOHAI and the City have now completed their due diligence and confirmed the viability and desirability of establishing a new regional history museum in the Armory inasmuch as it would perpetuate an important cultural function, restore a historically significant structure, and help anchor a major new public park; and

WHEREAS, the City recognizes that MOHAI is a vital Seattle institution whose future success will help ensure that future generations continue to learn the history of our region through public access to MOHAI's collections, programs, and expertise; and

WHEREAS, because MOHAI is being displaced by another public project, it is appropriate that MOHAI receive the public compensation available for use of the site it currently occupies in order to help ensure that it can develop replacement facilities and continue to perform its important cultural role within the City; and

WHEREAS, even with City funding pledged to the development of a new regional history museum in Seattle, MOHAI will bring substantial private as well as other public resources to the project; and

WHEREAS, MOHAI's redevelopment of the Armory and its anticipated collaboration with other maritime heritage organizations to form a Maritime Heritage Partnership at Lake Union Park will create a unique maritime heritage experience at the Park for the benefit of a broad cross section of the public and will symbolize and reinforce the ongoing revitalization of the South Lake Union neighborhood;

NOW, THEREFORE,

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

Section 1. The City endorses the principles contained in Attachment 1 hereto concerning the potential development of a Regional History Museum at the Lake Union Park Armory. The Superintendent of Parks and Recreation is hereby requested to negotiate with the Museum of History and Industry (MOHAI) one or more agreements consistent with those principles and necessary to implement the transactions contemplated therein for City Council review and approval.

Section 2. The City Council requests that MOHAI and the Executive provide the City Council with updates to the due diligence study and business plan contained in Clerk's File Number 309599, as well as current reports on the status of fundraising, financing, use of historic tax credits, parking and access, and construction plans and costs when the project agreement is submitted for City Council approval.

Section 3. The Parks Superintendent and Finance Director, or their designees, are requested to provide a briefing to the Chairs of the Finance and Budget and Parks and Seattle Center Committees (or their successor committees) on the results of the City's review of MOHAI's finances with respect to the construction of the Armory project before MOHAI is authorized to proceed with construction.

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

Attachment 1: Principles for the Development of a Maritime Heritage Center at Lake Union Park

9/24/2008 Version # 3 t

Attachment 1: Principles for the Development of a Maritime Heritage Center at Lake Union Park

Project Summary

MOHAI currently operates from a museum facility at McCurdy Park under a long-term agreement with the City. MOHAI financed and built the museum on City property and then transferred the building to the City for its care and maintenance. The building and its grounds have been used for decades for museum purposes but are now in the path of the State of Washington's project to replace the SR-520 floating bridge. Consequently, MOHAI will need to permanently relocate from McCurdy Park to allow the State to construct this essential public facility.

Following substantial due diligence investigations, MOHAI and the Executive propose that MOHAI relocate its museum to the former Naval Reserve Building at Lake Union Park, known as the "Armory." Under the proposal, MOHAI will substantially restore the landmark Armory building consistent with applicable historic preservation guidelines, transforming it into a new regional history museum. The Project is expected to cost approximately $45.4 million (in 2010 dollars) and include comprehensive building systems upgrades, access and circulation improvements, and achieve life safety code compliance. Combined with the public investment in the Project described herein, MOHAI will bring major private funding to the Project. The Project will include exhibit galleries in the large open volume of the building that also will serve the community as a space for large gatherings and events. Traditional museum support spaces such as classrooms and a retail store; amenities including a cafe and restrooms available to both visitors to Lake Union Park and museum patrons; and work space for museum and Parks staff also will be provided. Along with other maritime heritage organizations already resident at South Lake Union, MOHAI will participate in a Maritime Heritage Partnership including the museum and the activities and organizations using the Historic Ships Wharf to serve area residents and visitors.

A significant source of funds for the Project is expected to be Historic Rehabilitation Tax Credits. To secure such credits requires that the City convey the Armory to MOHAI and grant MOHAI a long-term ground lease for its site.

In recognition of their shared interest in the Montlake facility and mutual commitment to create a new regional history museum at the Armory, the City proposes that MOHAI receives all the compensation from the State for the value of the Montlake facility and the use of the underlying land. The City will retain ownership of all areas of McCurdy Park that the State does not permanently require for the SR520 project and will require that the site be restored for public park use at the conclusion of the State's construction project, at no cost to the City.

The next step is for the City and MOHAI to negotiate and present to City Council for its review and approval a Project Agreement governed by and consistent with the following principles.

Guiding Principles

The following guiding principles are intended to reflect the City's priorities in its relationship with MOHAI in the Armory project and are more fully discussed herein.

* The Armory is a valuable public asset that will return to City ownership at the end of the City's ground lease of the Armory site to MOHAI.

* The City's contribution to the Project shall be fixed and structured to minimize financial risk to the City.

* Recognizing that MOHAI is a regional history museum, MOHAI shall use its best efforts to secure other public funding to offset construction costs for the Project.

* The Armory and Lake Union Park shall be accessible to as broad a segment of the public as is possible.

* Parking and vehicular access at the Armory shall be consistent with existing Lake Union Park plans and policies and designed to minimize vehicular traffic in the park.

* Together with other maritime heritage organizations resident at South Lake Union, MOHAI will forge and manage the Maritime Heritage Partnership at its new Lake Union Park site.

I. Armory Ownership and Ground Lease

A. In order for MOHAI to pursue and provided it is able to secure Historic Rehabilitation Tax Credits as part of its financing package (see Section II.B), the City will convey the Armory building to MOHAI and lease to it the underlying land (the Ground Lease); otherwise, MOHAI will lease both the building and the land from the City. Under either scenario, the building will be restricted to use as a regional history museum and the land will be restricted to use as a Maritime Heritage Partnership. The Partnership will reflect collaboration between MOHAI, the Center for Wooden Boats, Northwest Seaport, and the Virginia V Foundation and will create a regional history center with a focus on maritime heritage, including an integrated regional history museum in the Armory and historic ship visitor experience with facilities for public accommodation and convenience. At a minimum, the Ground Lease will include use rights to the Armory site as well as a portion of Terry Avenue as needed to accommodate a portico entrance at the west side of the Armory building. The City also will grant MOHAI access and use rights along the surface access road on the east side of Lake Union Park, necessary for the successful operation of the museum.

B. The Ground Lease term shall be consistent with the term necessary to secure Historic Rehabilitation Tax Credits, estimated to be 50 to 60 years.

II. Project Definition

The Project means the regional history museum to be developed in the Armory as described in the "Scope of Proposed Building Improvements/Design & Cost Estimate" attached hereto as Exhibit A.

III. Funding Sources.

Funding for the Project will come from a variety of public and private sources:

A. Proceeds from the Sale of MOHAI's 800 Pike Street Condominium. Both the City and the State provided financial support for MOHAI's acquisition of the condominium at 800 Pike Street. From the sale proceeds, $5.75 million, representing the State's original contribution and $1.2 million, representing the City's original contribution, plus interest, are required to be used for capital costs associated with development within the City of MOHAI's principal regional history museum, construction of which must begin by mid-2017.

B. City Armory and Lake Union Park Investments. The City plans to undertake utility upgrades and make other improvements to the Armory and surrounding portions of Lake Union Park that are directly or indirectly beneficial to development of a regional history museum in the Armory and that may be completed before the parties have negotiated the next phase of project agreements.

C. Additional City Contribution. In addition to the $1.2 million reserved from MOHAI's 800 Pike Street condominium sale proceeds, the City's sole remaining contribution to the Project will be to assign to MOHAI all compensation for the Washington State Department of Transportation's (WSDOT) acquisition and/or condemnation of real property and improvements comprising the MOHAI building and grounds historically used for the museum and museum access and parking, to the extent owned, controlled, or in which use rights may have been reserved by the City of Seattle. The City will designate MOHAI to vtake lead responsibility for negotiating with WSDOT for such compensation but any final agreement shall require the City's consent. The City reserves the right to negotiate separately with WSDOT concerning the restoration of McCurdy Park following completion of the SR-520 project. Except for compensation available to MOHAI from WSDOT for relocation assistance, MOHAI shall reserve such compensation for capital costs associated with replacing the functions and facilities at its McCurdy Park location including but not limited to those facilities and functions included in the Project. Funding the Project shall be the first priority use of such compensation.

D. Historic Rehabilitation Tax Credits. MOHAI shall work to secure Historic Rehabilitation Tax Credits for the Project, including engaging consultants necessary for successfully participating in the program.

E. Regional Public Funding. MOHAI shall use its best efforts to secure additional county, state and federal funds for the Museum Project, in recognition of the fact that MOHAI is a museum of regional significance.

F. MOHAI's Share of Project Funding. MOHAI shall be responsible for all other costs to complete the Project, including publicly accessible restrooms, workspace for museum and Parks staff, and cafe.

G. Possible Recovery of Funding by City. Unless MOHAI and the City agree otherwise, in the event that MOHAI does not commence construction of a new regional history museum within the City by mid 2017, it will return to the City the City's funds described in paragraph III above, except for that portion of such compensation it would have received in its own right as a tenant, including relocation assistance and compensation otherwise associated with displacement from its current facility.

IV. Schedule MOHAI shall use its best efforts to start construction of the Project within one year from the completion of the Lake Union Park Phase II renovations, but in no event later than January 1, 2012, unless compensation from the expansion of SR-520 is substantially delayed and the parties agree to extend that deadline.

V. Financial Risk Management

A. MOHAI will be responsible for all cost overruns that may be experienced by the Project, including those due to unforeseen conditions.

B. MOHAI will procure and execute design and construction contracts.

C. Sequential, major phase design documents, change orders that represent material changes to the final design, and all decisions that affect the construction or provision of public amenities are subject to the review and approval of the City Parks Superintendent, which approval shall not be unreasonably denied or delayed.

D. MOHAI responsibility for cost overruns notwithstanding, the City shall bear financial responsibility for any Project cost increases associated with additions to the Project that the City requests after the Superintendent approves the final project scope and design (excluding permitting or other regulatory requirements).

E. City-MOHAI project construction agreement will require MOHAI (or its contractor, as appropriate) to do the following to the Parks Superintendent's and City Finance Director's reasonable satisfaction:

1. Demonstrate dedicated financial resources adequate to complete construction, including appropriate construction contingency consistent with industry standards, and to pay associated construction financing debt service, before entering into a construction contract for the Project and before release of funds reserved for Project capital costs derived from either the City's participation in MOHAI's original acquisition of its 800 Pike Street condominium or assignment to MOHAI of compensation for the WSDOT acquisition of its McCurdy Park facility.

2. Provide assurances that MOHAI and its Project team can successfully manage the Project by engagement of professional Project management staff.

3. Ensure that the Project complies and that its general contractor monitors compliance with prevailing wage and other public works contracting requirements.

4. Ensure that the Project is free of construction-related liens before it is put in service as a regional history museum.

5. Ensure that the Project receives Leadership in Energy and Environmental Design (LEED) certification at the silver level or greater, under the U.S. Green Building Council's Rating System.

VI. Operations and Maintenance

A. MOHAI will provide all routine and major building maintenance, including maintenance of special building systems installed for museum purposes and will develop a long -term maintenance plan for the building, subject to review and approval by the Superintendent and that demonstrates that it has or will have sufficient resources to meet its responsibilities as identified in its plans.

B. City will contribute $300,000.00, annually, towards building operating costs and/or major maintenance for the Armory. The City will remain responsible for costs associated with major maintenance of the site leased to MOHAI, including without limitation, the wharfs, docks and floats and all subsurface pilings, excluding any damage resulting from MOHAI's restoration of the Armory. MOHAI will hold the City harmless for and address at its expense any damage to or compromise of the site and existing subsurface support resulting from the restoration of the Armory for its intended purpose, regardless of when such damage is discovered.

C. MOHAI will insure or require that any successors or lessees (such as tax credit investor assignees and the cafe operator) insure the building and tenant improvements and provide general liability insurance.

VII. Public Benefits

A. In exchange for and generally commensurate with the funding for the Project derived from the City and other public sources, MOHAI shall (i) make its own substantial investment in the Project; (ii) construct the Project consistent with these principles; (iii) operate its regional history museum as a publicly accessible facility consistent with these principles for the duration of its tenancy; and (iv) provide, at a minimum, additional public benefits at the Armory similar to those it had committed to provide at 800 Pike Street (see Exhibit B).

B. MOHAI shall operate the museum at least 50 hours per week, 50 weeks per year and regularly schedule days when admission to the museum is free of charge.

C. MOHAI agrees to develop and implement benefits, programs and enrichment opportunities of special interest to particular segments of the public, such as free admission on a regular basis for children less than 14 years old.

D. The Armory shall be available for a specified number of no-cost public events each year, identified by the City.

E. MOHAI will provide a meeting room space for community use by South Lake Union neighborhood groups for a minimum of 30 hours per month on a first-come first-served basis, at no cost, generally during MOHAI ' s regular operating hours. MOHAI will be compensated for audio/visual, after-hours security, and other special needs at cost.

F. Armory redesign shall include public restrooms accessible to the public without paying admission to the museum that will remain open, at a minimum, during normal cafe operating hours.

G. Armory redesign shall include work space for occasional use by museum staff and by City staff during MOHAI's normal museum operating hours in connection with the operation and maintenance of Lake Union Park and the functioning of the Maritime Heritage Partnership.

H. The museum cafe shall be designed, built, and operated so as to serve not only MOHAI but Lake Union Park users generally and shall provide public restrooms that will be available to Park users during the cafe's operating hours. The cafe's operating hours and access policies (if any) shall be subject to the review and approval of the Parks Superintendent, which may not be unreasonably withheld.

I. MOHAI shall not limit pedestrian access to the Historic Ships Wharf or around the Armory except as and only to the extent necessary to accommodate occasional Maritime Heritage Partnership-related functions or activities.

VIII. Future Facilities

A. MOHAI shall continue to investigate options for replacing facilities and functions that will be lost with the anticipated WSDOT acquisition of the McCurdy Park museum and that will not be accommodated at the Armory. MOHAI will keep the City informed of its planning, the schedule for and estimated cost of completing preferred alternatives identified by MOHAI, and MOHAI's plans for meeting such costs. Except for the possible application of a portion of the proceeds from the taking of MOHAI's current location for expansion of SR-520, as provided in Section III(C), the City shall in no way be obligated to assist MOHAI further in identifying or funding such replacement facilities or functions.

B. MOHAI may continue to use the McCurdy Park facility, including for administration, storage and public assembly purposes, after the Armory museum opens, until WSDOT removes the facility from service or MOHAI has secured facilities fully replacing all the facilities and functions currently provided at McCurdy Park, whichever first occurs. Following the opening of the Armory museum, MOHAI shall pay all operations and maintenance costs for the McCurdy Park facility during this time if it continues to be occupied exclusively by MOHAI or on a pro rata basis with the City if use is shared between MOHAI and the City. If WSDOT does not require the use of the facility immediately upon MOHAI's vacation or if, following the opening of the Armory museum, MOHAI agrees to shared use of the McCurdy Park facility with the City, the auditorium and the other primary public assembly spaces within the McCurdy Park facility shall be available for parks-related uses (including periodic use by MOHAI).

IX. Parking and Access

A. The City will continue to collaborate with MOHAI in developing a strategy to meet overall parking needs for Lake Union Park that is consistent with the approved Lake Union Master Plan and/or Phase II build-out.

B. MOHAI will provide staff to coordinate traffic and vehicle movements in and out of the north parking lot, including managing loading, special deliveries, and the ADA parking.

C. MOHAI acknowledges that Terry Walk, the central pedestrian walkway through Lake Union Park, shall function as a pedestrian-only facility and will not be used to access the Armory Building except in emergencies or other special circumstances acceptable to the City. Service access to the Armory Building for loading, ADA parking, and other special needs shall routinely take place from the service road on the east side of the Park. Until improvements to the east side of the Historic Ships Wharf necessary to provide a bus turn-around to enable school bus drop-off/pick-up in the north parking lot adjacent to the museum can be funded and completed, bus drop-off/pick-up shall routinely take place from the temporary parking lot immediately adjacent to Valley Street. The Parties will work collaboratively to identify the funding to make the wharf improvements needed to accommodate the bus turn-around adjacent to the museum, via the east side service road.

D. MOHAI shall be responsible, without any further City financial assistance, for the costs of obtaining or constructing any additional parking that it may deem necessary for the success of the museum.

X. Integration with other Maritime Heritage Organizations

A. MOHAI will cooperate with other maritime heritage organizations, including those currently resident at South Lake Union, in establishing and operating a Maritime Heritage Partnership on the property subject to its Ground Lease.

B. Under the Ground Lease, MOHAI will itself, or in collaboration with other maritime heritage organizations, manage the historic ships wharf and will be responsible for coordinating day-to-day activities and programming, including marine and pedestrian access and circulation at the premises.

C. MOHAI will enter into collaborative agreements with the Center for Wooden Boats, Northwest Seaport, and the Virginia V Foundation, and with similar organizations in the event such entities' occupancy ends, relating to, among other things, marketing, programming, and reasonable shared use of appropriate regional history museum facilities for public accommodations (such as ticketing, merchandizing, and way-finding facilities).

D. MOHAI will cooperate in the implementation of the Wawona Preservation Memorandum of Agreement, including good faith consideration of options for preservation of components of the vessel for display in the regional history museum.

Attachments: Exhibit A: Scope of Proposed Building Improvements/Design & Cost Estimates Exhibit B: 800 Pike Street Public Benefits

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EXHIBIT A: Scope of Proposed Building Improvements/Design & Cost Estimate

MOHAI Regional History Museum at Lake Union Park

The Project shall include but not be limited to the following elements:

Architectural Components. The following improvements will be provided:

* Installation of a new central elevator serving all four levels of the building;

* Conversion of the entire second floor to gallery space;

* Installation of a climate controlled temporary exhibit gallery to meet requirements for hosting national traveling exhibitions;

* Conversion of the perimeter of the first floor of the building to various uses including a cafe', gift shop, classrooms, offices and other support spaces;

* Installation of a new loading dock and lift to meet museum standards;

* Installation of a new roof top deck in the northeast corner of the building;

* Construction of a new portico and canopy on the west side of the building;

* ADA compliant restrooms serving the museum;

* Separate women and men's ADA compliant restrooms with a minimum of two fixtures each made available to park users without requiring museum admission; and

* Attainment of LEED Silver Certification as per standards of the United States Green Building Council (USGBC).

Systems. The following systems will also be installed, improved or replaced to standards applicable for a public museum use.

* Heating, air conditioning and ventilation; * Electrical; * Telecommunications; * Fire Life Safety.

Program. The building will be programmed as follows:

* Exhibit Galleries/Event Space 26,150 sf * Temporary Exhibit Gallery 4,800 sf * Other public spaces 4,096 sf * Administrative Spaces 2,777 sf * Support Spaces 2,918 sf * Utility 2,345 sf t

EXHIBIT B: 800 Pike Street Public Benefits

1. DEFINITIONS

Eligible School: An accredited primary or secondary school located in Seattle.

Eligible School Group: A group of not-to-exceed thirty (30) students, with accompanying teachers or other adults, from an Eligible School, attending the Facility as part of an organized Eligible School function.

Occasion: A four (4) hour period (or any part thereof) during which Grantee uses or has reserved the right to use the portions of the Facility described in Section 2 below. Grantee may schedule use of the Facility for a full eight hour day as two (2) Occasions. For example, Grantee's use of two meeting rooms for one three (3) hour period would constitute one Occasion.

Seattle Resident: A person whose primary residence is in Seattle.

2. Grantee Functions and Events

A. On ten (10) Occasions during each Use Year (with the number of Occasions prorated for Partial Use Years, rounded to the nearest whole number), upon making a reservation therefore, Grantee shall have the exclusive use of any conference rooms, meeting rooms, the auditorium/theater and similar rooms and other spaces in the Facility

for City-sponsored functions and events.

B. For each use of the Facility by the Grantee under this Exhibit Section 2 during the regular hours of operation of the Facility, Grantor will not charge Grantee for Grantor's normal operation (during Grantor's business hours) of or overhead (including without limitation utilities, taxes, assessments) on the Facility. Normal operations include but are not limited to turning on and off all lighting, adjusting climate controls, turning on and adjusting the public address system, providing access to the Facility and its public rooms, locking and unlocking doors, HVAC and other systems as necessary, providing janitorial service and securing the Facility after each such use, and providing all necessary information concerning the operations and policies of the Facility. If Grantee desires to use the Facility on an Occasion that does not occur during the Facility's regular hours of operation or if Grantee desires technical or specialized assistance that Grantor agrees to provide, Grantor may charge Grantee the rates that normally would be charged by the Grantor for such space or services under arms-length arrangements.

C. Grantee shall observe rules adopted by Grantor respecting the manner of use of the Facility for all persons other than Grantor. Grantee shall be liable for any injury to persons, damage to the Facility or its contents, and any other claim, expense or liability incurred by Grantor, other than normal wear and tear, caused by the acts or omissions of Grantee, its agents, employees, contractors or invitees in connection with uses by Grantee pursuant to this Exhibit Section 2.

D. The scheduling of Grantee functions and events at the Facility shall be arranged as follows:

(i) Grantor shall, at least thirty (30) days in advance of the start of each Use Year or Partial Use Year, provide to Grantee a written schedule showing the dates and times when conference and meeting rooms in the Facility will be available for use by Grantee pursuant to this Exhibit Section 2. Such schedule is subject to reasonable change by Grantor. If Grantor desires to change the schedule, it shall promptly inform Grantee. Once Grantee has made a reservation as provided below, Grantor shall not enter into any agreements or commitments for the use of the Facility that, individually or in the aggregate, would preclude it from reasonably accommodating the Grantee's use rights under this Exhibit Section 2, and Grantor shall not rescind a scheduled date after it has been reserved by Grantee pursuant to Exhibit Section 2D(ii).

(ii) The Grantee shall contact the Grantor before scheduling an event at the Facility, to confirm its availability. If the date, time and particular space are available, the Grantor shall confirm such availability and shall irrevocably reserve the date and time requested. If the date and time requested by the Grantee are not available, then unless otherwise agreed to by the Grantee, the Grantor shall offer an equivalent date and time within thirty (30) days after the date originally requested. Unless Grantee cancels its reservation at least thirty (30) days in advance, the reservation shall be considered an Occasion of use, whether or not Grantee actually uses the space.

E. If Grantee uses the Facility on fewer than ten (10) Occasions in any Use Year or the proportionate number of Occasions in any Partial Use Year, the balance shall carry forward and shall increase the minimum number of uses to which the Grantee is entitled in the following Use Year, but in no event shall the total number of uses by the Grantee under this Exhibit Section 2 exceed twelve (12) Occasions per Use Year.

3. Exhibits and Programs

A. Seattle Government Exhibit

For at least three (3) months of every two (2) Use Years throughout the Use Period, Grantor shall display at the Facility an exhibit (which may be part of a larger exhibit) on the governance of The City of Seattle, which exhibit shall be created and maintained by Grantor.

B. Exhibit in City Hall

If MOHAI becomes the Grantor hereunder, Grantor shall, at Grantee's request, prepare an exhibit for permanent display in Grantee's new City Hall, using materials belonging to Grantee or Grantor. The topic, size and content of such exhibit shall be as agreed to by Grantor and the Archivist of The City of Seattle.

C. Cultural Diversity

Grantor shall create and maintain at the Facility, throughout the Use Period, an ongoing exhibit (which may be part of a larger exhibit) or periodic programs on the cultural diversity of Seattle. Such exhibit may consist of one permanent exhibit or a series of temporary exhibits provided that there is an exhibit on diversity on display at all times (except for brief periods necessary to change or refurbish such exhibit). Alternatively, Grantor may provide educational programs on cultural diversity, so long as such programs occur at least four times during each Use Year.

4. Use and Access by Seattle Residents and Schools

A. Free Days for All Seattle Residents

At least once a month throughout the Use Period, Grantor shall offer free all day admission (for the hours that the museum is open) to the Facility (including all open exhibits, but not including special private or fund-raising events) to all Seattle Residents.

Grantor shall make good-faith efforts to publicize the free admission days. These efforts shall include, without limitation, prominently posting the schedule of free days at the Facility and including notice of free days in written museum advertising and literature. Free admission required under this Exhibit Section 4.A shall be in addition to all other obligations of Grantor under this Covenant and Easement.

B. Free Access by Eligible School Groups

(i) Throughout the Use Period Grantor shall offer half price admission (half the general public admission price for children of the same age) to the Facility to all Eligible School Groups, for up to and including five (5) such groups per day. If fifty percent (50%) of the students in an Eligible School meet the qualifications of the United States National School Lunch Program, there shall be no admission charge at any time.

(ii) Reduced price or free admission to Eligible School Groups shall include access to all exhibits and activities during normal hours of operation of the Facility. It shall be the responsibility of Eligible Schools to make arrangements for such admission. Such admission shall be granted, on a "first come, first served" basis, provided that the total number of Eligible School Groups shall not exceed five (5) per day. Grantor shall make goodfaith efforts to publicize reduced price and free admission for Eligible School Groups. These efforts shall include without limitation prominently posting notice of this service at the Facility, and including such in written advertising and literature. The free and reduced price admissions required under this Exhibit Section 5.B shall be in addition to all other obligations of Grantor under this Covenant and Easement.

5. Donation Admission

Throughout the Use Period, Grantor shall have a policy of donationbased access for persons unable to pay the full entrance fee. Such donation admission shall mean that any person seeking admission on any day that the museum is open to the public shall be able to pay only what that person can afford for admittance.