2007/01/31 Council Agenda Packet

$3,000,000. If OM does not obtain reasonably acceptable Key Development Permits but also does not elect to rescind the transaction, then the City is granted a limited right to re-acquire ownership of the City Property and to purchase the Deliverables for an amount equal to the City Property's appraised fair market value, but in no event for an amount less than$11,000,000. Upon obtaining acceptable Key Development Permits, OM will be obligated to include certain required "minimum elements" in the Development both to proceed with commencement of the retail component of the Development and to have the City acknowledge that OM has fulfilled its overall contractual development obligations to the City under the PDA. OM is granted a period of eight years to fulfill its development obligations under the PDA. Among other things, the PDA requires, as "minimum elements," that(i) at least 400,000 rentable square feet of retail space be constructed on the Landfill Site and that such space include a certain minimum number of tenants who are new to the City of Everett with a limitation on the size of any off-price tenants, (ii) at least 150,000 square feet of space be constructed for small shop tenants, (iii) at least 100 residential and/or hospitality units be included on the Landfill site, (iv) a LEED silver certification be obtained for the Development, (v) a main road and associated utilities be constructed on the Landfill Site and(vi) a 3 acre public gathering space and approximately 2.3 miles of trails be dedicated to the City along with conservation easements on the wetland areas. As a condition to proceeding with the retail development on the Landfill Site, OM will be obligated to submit a proposal to the City that, among other things, includes(i) at least 250,000 square feet of space with an anchor tenant new to the City of Everett or a collection of at least 7 lifestyle tenants together with, in either case, (ii) at least 100,000 square feet of space for small shop tenants, and(iii) subject to a requirement for a certain minimum number of tenants new to the City of Everett with a limitation on the limited number of off-price tenants, and(iv) includes a public gathering space of at least 1.5 acres. With respect to both the retail and residential components of the Development, the PDA requires OM to impose design guidelines, development plans or covenants reasonably acceptable to the City consistent with the Development Plan, which is generally described in Exhibit G to the PDA. For its part, the PDA obligates the City to undertake and complete certain work(the "City Work), generally described in Section 18.1. The City Work includes, among other things, (i) the construction of a two lane roundabout on 41st street, (ii)the extension of 41st Street to the northwest corner of the Simpson Site and the roadway from Pacific Avenue to the northern terminus of the road through the Landfill Site, (iii) the completion of the track relocation work to be undertaken by BNSF pursuant to the existing Exchange Agreement, (iv) certain limited grading, fill and surcharge on the Landfill and Mill Sites, (v) the construction of certain public amenity improvements on the dedicated trails and other areas, including a three acre park, and (vi) certain wetland restoration. The City also will agree in the PDA and the Environmental Indemnification and Landfill Agreement to participate with OM in and share the cost of the design, construction, operation and maintenance of certain elements of the methane and leachate system to be installed and operated on the City Property. 06107-0063/LEGAL12979654.1 2