AGREEMENT FOR ACQUISITION, DISPOSITION AND DEVELOPMENT

OF A RELOCATION PROPERTY

FOR FIRE STATION #1

THIS AGREEMENT FOR DISPOSITION AND DEVELOPMENT OF PROPERTY (this “Agreement”) is made as of __________, 2004, by the CITY OF PORTLAND (the “City”), a municipal corporation of the State of Oregon, acting by and through the PORTLAND DEVELOPMENT COMMISSION, the duly designated urban renewal agency of the City of Portland (“PDC”), and the CITY, acting by and through the BUREAU OF GENERAL SERVICES (“BGS”) ON BEHALF OF PORTLAND FIRE AND RESCUE (“PF&R”). PDC, BGS and PF&R are referred to jointly in this Agreement as “Parties” and individually as a “Party”. BGS and PF&R are referred to jointly as “the City” in this agreement.

RECITALS

1.  The object of this agreement is describe the development responsibilities of the Parties following the acquisition of the Relocation Property without regard to which of the Parties obtains title first.

2.  In furtherance of the objectives of Oregon revised statues, Chapter 457, and Chapter XV of the Charter of the city of Portland, PDC has undertaken a program for the clearance and reconstruction of blighted areas in the City of Portland, Oregon (the “City”) and, in this connection, there has been prepared and approved by PDC an urban renewal plan for the Downtown Waterfront Urban Renewal District (the “District”) approved by the City Council of the City on April 25, 1974, by Ordinance No. 31395, as subsequently amended (the “UR Plan”). A counterpart of the UR Plan has been recorded in the Official Records of Multnomah County, Oregon and is incorporated herein by reference for all purposes.

3.  In order to enable PDC to achieve the objectives of the UR Plan, PDC is authorized to acquire and make available certain land for redevelopment by public and/or private enterprise in accordance with the uses specified in the UR Plan.

4.  PDC or The City will acquire approximately 39,000 square feet, which is legally described as: Lots 1 through 8, Block 8 of Couch’s Addition, in the City of Portland, County of Multnomah, State of Oregon. Of that, PDC will make available to PF&R approximately 29,500 square feet, three quarters of Block 8, which is legally described as: Lots 1, 4, 5, 6, 7 and 8, Block 8 of Couch’s Addition, in the City of Portland, County of Multnomah, State of Oregon (hereinafter “subject relocation property”, or “Relocation Property”). The Relocation Property is within the present UR Area boundaries.

5.  Portland Fire Bureau (PF&R) currently occupies approximately 46,500 square feet of land which is legally described as (Lots 1-8, BLOCK 34 [the Fire Bureau occupies part of a larger parcel. B34 L1-8 is an approximation of the area occupied by Station 1.) of Portland, in the City of Portland, County of Multnomah, State of Oregon (hereinafter “subject current property”, or “Current Property”). The Property is within the present UR Area boundaries.

6.  If the BGS or PF&R obtains the Relocation Property in advance of PDC’s acquisition, the Parties agree that PDC will contribute up to $10.5 M towards development of the Relocation Property as outlined in this agreement and, in addition, provide for all acquisition costs incurred by the BGS or PF&R relating to the Relocation property.

7.  PF&R will transfer to PDC its Current Property for the Relocation Property and funding as called for by the Payment Schedule (Exhibit B) to bridge the costs exceeding the allocated Fire Bond pledge for upgrading the current Fire Station #1, in order to develop a new Fire Station #1 as described in the Development Program (Attachment D). This transfer of the Current Property to PDC shall occur without regard to which of the Parties obtains the Relocation Property.

8.  When exchanged, PDC will renovate and seismically upgrade the adjacent Globe Hotel, the historic structure adjacent to the Relocation Property, for the purpose of mitigating any risk to a new PF&R facility during a seismic event either itself or through a third party developer. PDC shall also choose to develop the Globe Hotel for a mix of housing or office and retail uses; and to issue a future development offering for the Current Property to develop a mix of housing and retail uses. At a minimum, PDC will ensure that the Globe does not present a seismic threat to Fire Station #1.

9.  By Resolution Number 6069­­­, adopted on November 19, 2003, PDC found it in the public interest to adopt the Twenty-seventh Amendment to the UR Plan, which authorizes acquisition of the Relocation Property through condemnation if necessary.

10.  PF&R and PDC have shared goals for the health, safety and welfare of the citizens of Portland, the development and growth of the City of Portland in general, and the UR Area in particular. They executed an agreement whereby they acknowledged their mutual and shared interests in the relocation of Fire Station #1 and future redevelopment of the Relocation and Current Properties, and have agreed to work cooperatively to accomplish these shared development goals (Memorandum of Understanding between PDC and PR&R dated July 3, 2003).

11.  The Relocation Property and Current Property are located in a portion of the UR Plan area that was the focus of the Downtown Waterfront Development Opportunity Report (“Report”) adopted by PDC Resolution 6068, dated November 19, 2003, with findings that identify redevelopment to promote high density mixed uses, with an emphasis South of Burnside Avenue on mixed income rental and ownership housing. The Report calls for development of underutilized non-historic properties, rehabilitation of existing historic structures and other projects to contribute to a vibrant downtown neighborhood.

12.  PDC, PF&R and (BGS) have previously agreed to a Conceptual Master Plan for the redevelopment of the Relocation Property (the “Conceptual Master Plan”), (Exhibit “C” attached hereto). The general location, configuration and content of the new Fire Station #1, and the relationship of the Globe Hotel to adjacent improvements is also shown on the Conceptual Master Plan. Exhibit D, which is based on the Conceptual Master Plan but also reflects the outcome of negotiations between the parties, outlines the Development Program that is the subject of this agreement. The Conceptual Master Plan is included for illustrative purposes only.

13.  In order to implement the Development Program, the Parties have agreed that PF&R, in cooperation with the Mayor’s Office and the Office of the Fire Commissioner, and with the support of BGS, PDC & Planning, will jointly conduct a Design Competition (“Competition”) to find appropriate parties to complete professional design services of the Development Program, on behalf of PF&R. PF&R, with the support of BGS & PDC, will jointly determine the best method for completion of the construction contract, such as bid or negotiated contract. All professional design service and construction contracts will be administered by BGS.

14.  The Parties mutually agree:

14.1.  that it is desirable to have PDC acquire the Relocation Property and trade Relocation Property to PF&R for redevelopment consistent with the Development Program; and

14.2.  for PDC to provide funding in accordance with the Payment Schedule in Exhibit B; and

14.3.  Upon completion and occupancy of the new Fire Station #1, the Current Property will be conveyed to PDC to be offered to public and/or private enterprise for future redevelopment of mixed-use commercial and residential uses.

14.4.   In the alternative, if the City acquires the Relocation Property, the Parties agree to follow the Payment Schedule in Exhibit B and convey the Current Property as described in this section and otherwise provided for in this agreement.

15.  The Parties finds that the fulfillment of this Agreement, and the intentions set forth herein, are in the vital and best interests of the City and the health, safety, and welfare of its residents, and are in accord with the public purposes and provisions of the applicable state and federal laws and requirements under which the Relocation Property will be acquired. The PDC also finds that the proposed development of the Relocation Property for use and development consistent with the terms of this Agreement will support specific goals and policies of PDC, including the goals of the UR Plan.

16.  PDC finds that the future redevelopment of the Current Property, pursuant to this Agreement, will help achieve local and regional growth management and mixed income housing development goals, and will help provide needed services in support of the development of a vibrant, mixed-use downtown neighborhood along the Downtown Waterfront and to address significant public safety issues in the area.

17.  PDC finds that PF&R’s commitments hereunder to make available the Current Property to PDC for mixed-use housing and retail will help meet Downtown Waterfront Development Opportunity Project Report dated April 11, 2003.

AGREEMENT

The Parties, in consideration of the promises and the agreements set forth herein and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, covenant and agree as follows:

DEFINITIONS

 The following terms have the designated meanings in this Agreement:

1)  “Available Funds” means (i) funds appropriated or otherwise made available by the Oregon Legislative Assembly including limited and non-limited funds, or allotments pursuant to ORS Chapter 291, and (ii) restricted and unrestricted funds of PF&R (including, without limitation, funds on deposit in the Fire Bond fund), which in the aggregate are sufficient to allow PF&R, in the exercise of its reasonable administrative discretion, to pay amounts due under this Agreement for the fiscal period in which the amounts are due.

2)  “Agreement” means this Disposition and Development Agreement and all attached Exhibits.

3)  “Certificate of Completion” means a certificate to be issued by PDC to PF&R pursuant to Section 2.8 of this Agreement.

4)  “City” means the City of Portland, Oregon and its constituent bureaus and agencies, except PDC.

5)  “Close” or “Closing” means the Conveyance to PF&R by PDC of the Relocation Property by Deed.

6)  “Closing Date” means the date on which the Relocation Property is conveyed to PF&R by Deed or PDC grants PF&R the right to begin development, which will be no later than October 18, 2004 unless extended by mutual written agreement signed by both of the parties.

7)  “Construction Documents” means documents based upon approved Design Development and Review Documents that set forth in detail the requirements for construction of the Project pursuant to the terms of this Agreement, approved by PDC and the appropriate City agencies.

8)  “Conveyance” means the transfer by PDC to PF&R of the Relocation Property, if necessary or the Conveyance of the Current Property to PDC.

9)  “Contingency” means a budget line item in the Development Program pro forma for unanticipated costs.

10)  “Current Property” means Part of Lot 1-8, Block “34”, Portland, in the City of Portland, County of Multnomah, State of Oregon.

11)  “Deed” means the form of Special Warranty Deed conveying fee simple title to the Relocation Property attached to this Agreement as Exhibit A.

12)  “Design Development and Review Documents” means:

a)  Documents based upon approved Schematic Design Documents and a preliminary budget illustrating and describing the refinement of the design of the Project, and establishing the scope, relationships, forms, size and appearance of the Project by means of plans, sections and elevations, typical construction details, and equipment layouts. The documents must be sufficient to determine the primary design elements of the building(s) exterior, including but not limited to proposed building materials and colors;

b)  Specifications that identify major materials and systems and establish in general their quality levels;

c)  Detailed engineering and architectural site plans for the Project showing all structures on the Relocation Property, the relationship of the buildings to projected final topography of the land, with all proposed connections to existing or proposed utilities and services, together with a landscape plan;

d)  A 3-dimensional illustration of the project showing its relationship to adjacent buildings and open space;

e)  Calculations of gross building areas, floor areas, height ratios and open spaces;

f)  Proposed layouts for exterior signage and graphics;

g)  Outline of the exterior lighting plan; and

h)  A description of servicing requirements, trash collection locations, loading docks and related functional areas.

13)  “Development Program” means the Minimum Development Requirements and description of the improvements to be built on the Relocation Property, attached hereto and incorporated herein as Exhibit D.

14)  “Development Program and Concept Documents” means:

a)  A program setting forth the objectives, schedule, constraints and criteria, including space requirements and relationships, special equipment, systems and site requirements.

b)  A preliminary building and site evaluation for the project based on site conditions, program, schedule, and proposed method of contracting for construction services.

c)  Documentation shall include a schedule, program and diagrammatic sketches of the building and context,

15)  “Effective Date” means the date that both Parties have executed this Agreement.

16)  “Environmental Laws” means all federal, state and local laws, ordinances, rules and regulations pertaining to the protection or regulation of the environment that apply to the Property, including without limitation, ORS chapter 466, OAR Chapter 341, RCRA (defined herein), CERCLA (defined herein), the Safe Drinking Water Act, the Clean Air Act, the Clean Water Act, and the Toxic Substances Control Act.

17)  “Environmental Reports” means the Phase I and Phase II Environmental Assessments prepared by Parametrix dated August 15, 2003 and September 4, 2003 respectively, and a geotechnical survey prepared by Shannon and Wilson, dated August 28, 2003 relating to the Relocation Property.

18)  “Escrow Agent” means Ticor Title Insurance Company.

19)   “Final Termination Date” means March 31, 2009 or the date the Certificate of Completion is executed.

20)  “Fire Station 1” means the combined program as shown in Exhibit D.

21)  “Hard Costs” means costs related to construction, land acquisition, furniture, fixtures and equipment, moving costs and hazmat remediation as distinguished from Soft Costs.

22)  “Hazardous Substances” means any pollutant, dangerous substance, toxic substance, asbestos, petroleum, petroleum product, hazardous waste, hazardous materials or hazardous substances as defined in or regulated by Chapter 466 of the Oregon Revised Statutes, the Resource Conservation Recovery Act, as amended, 42 USC Section 6901, et seq. (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 USC Section 9601, et seq. (“CERCLA”), or any other Environmental Law.

23)  “Inflation Reimbursement” means amount PDC agrees to pay PF&R for all increased costs caused by the delay in design and construction of the Current Property in lieu of funding for a relocated Fire Station #1. Delay began on March 18, 2003. In the event PDC is in Material Default, the Inflation Reimbursement will be calculated, using the daily-liquidated sum of $1,118.10, from March 18, 2003 to and ending on the date of the default. The Inflation Reimbursement provisions of the Memorandum of Understanding shall terminate and be null and void. In no case shall inflation reimbursement exceed $10.5 million.

24)   “LEED” means “Leadership in Energy and Environmental Design.”

25)  “Material Default” means a failure by the Parties to pursue development consistent with the Minimum Development Requirements. Material default also pertains to specific events outlined in Section 1.10, infra. A Material Default or any event deemed to be a material Default by the Parties shall result in termination of the Agreement and disbursement of liquidated damages under the Inflation Reimbursement provisions, unless the Parties otherwise agree in writing to other remedies and will result in the application of remedies.

26)  “Memorandum of Understanding” means the agreement signed by both parties on July 3, 2003 which governs Inflation Reimbursement owed by PDC to PF&R in the event that PDC fails to substantially meet its obligations under this agreement.

27)  “Minimum Development Requirements” shall have the meaning set forth in Section 3 of Exhibit D, the Development Program

28)  “Permitted Exceptions” means exceptions mutually agreed as acceptable by the parties at Closing.

29)  “Project” means the Relocation Property, fixtures and the buildings, and other improvements associated with Fire Station 1 as described in the Development Program, to be newly constructed by PF&R on the Relocation Property in accordance with the Development Program.

30)  “Project Costs” means all costs to fund the actual construction of building improvements on the Relocation Property including Fire Learning Center shell costs and Soft Costs, but not including the costs of acquisition of the Relocation Property nor tenant improvements for a Fire Learning Center. Costs incurred by PDC in the design and evaluation of the Project shall not be counted toward Project Costs.

31)   “Project Funding” means the total funds available to PF&R to complete construction of the Development Program and related development goals. This funding is composed of $11.668 million in funds currently available to PF&R, plus a maximum $10.5 million contribution from PDC, for a total Project Funding of $22.168 million.

32)  “Project Savings” means the difference between Project Funding and Project Costs.

33)  “Public Entitlements” means those items required by public agencies for the development of the project, such as planning and zoning requirements, building permit requirements and transportation department requirements.

34)  “Relocation Property” means Part of Lots 1, 4, 5, 6, 7 and 8, Block “8”, Couch’s Addition, in the City of Portland, County of Multnomah, State of Oregon.

35)  “Schematic Design Documents” means:

a)  Documents based on a mutually agreed-upon program and schedule.

b)  The documents shall establish the conceptual design of the Project illustrating the scale and relationship of the Project components.

c)  The documents shall include a conceptual site plan, conceptual site elevations, preliminary building plans, sections and elevations.

d)  Three-dimensional representations of the project in the site that may include study models, perspective sketches, electronic modeling or combinations of this media.

e)  Preliminary selections of major building systems and construction material shall be noted on the drawings or described in writing.

36)“Soft Costs” means architectural, engineering, project management, construction management, building permit, system development, land use and technical consultant, legal fees, application and loan fees, study costs, etc. as distinguished from land and hard costs.

37)“Term of this Agreement” means the period from the Effective Date through the later of March 31, 2009 or the issuance of a Certificate of Completion, unless changed as a written amendment to this DDA signed by both parties.

1.  GENERAL TERMS OF CONVEYANCE

1.1.  Closing If PDC Acquires the Relocation Property. If PDC acquires the Relocation Property, the Conveyance of the Relocation Property to PF&R shall occur in an escrow closing at the office of the Escrow Agent not later than October 18, 2004 subject to extension to not later than the Final Termination Date as provided in Section 1.8. At Closing, PF&R shall accept such Conveyance.

1.2.  Conveyance of Relocation Property. Upon satisfaction of the Conditions Precedent to Conveyance provided in Section 1.6 hereof PDC will convey Relocation Property to PF&R by Warranty Deed in substantially the form attached hereto as Exhibit A.

1.3.  PF&R Conveyance of Current Property. PF&R will convey title to Current Property upon its occupancy of the Relocation Property. The Parties agree that, to PDC satisfaction, PF&R will convey the Current Property to PDC in a condition that complies with all Environmental Laws.

1.4.  Prior to conveyance, PF&R agrees to provide PDC access to the Current Property for purposes of conducting Phase I and Phase II environmental studies and other inspections necessary, in PDC’s sole discretion, for performance of due diligence and redevelopment.

1.5.  Title Review. Within twenty (20) days after the receipt of the preliminary title report, PF&R shall notify PDC of the title exceptions it will accept at Closing which shall be called “Permitted Exceptions”. If PF&R objects to any item, then PDC shall have twenty (20) days after receiving PF&R’s written objection to notify PF&R in writing of its intention to remove or not remove the objected-to exceptions to title prior to Closing. If PDC refuses to remove any such objected-to exceptions, PF&R shall within twenty (20) days elect whether to waive such objections or terminate this Agreement in accordance with sections 1.7 and 1.8.

1.6.  Closing Costs and Taxes. All Closing and escrow costs shall be paid by PDC, including, but not limited to, the costs for recording a Memorandum of this Agreement and the Deed. PDC shall be responsible for payment of any taxes, if any, due at Closing.

1.7.  Conditions. The following are conditions precedent to Conveyance. The Party benefited by a particular condition shall not unreasonably withhold, condition or delay acknowledgment that the condition has been satisfied. Except as otherwise noted, all conditions apply regardless of which of the Parties obtains the Relocation Property.

(A)  To the Satisfaction of Both PDC and PF&R:

(a)  The Parties shall have agreed to the final form of the Deeds, Exhibit A, including the final legal description of the Relocation Property and Current Property, and any other documents necessary to close the Conveyances.

(b)  PDC shall have amended the UR Plan to include the Relocation Property, and such action is final and cannot be appealed subject to the provisions of 1.7 and 1.8.

(c)  There shall be no litigation pending that prevents PDC or PF&R from performing their respective obligations under this Agreement; provided that, in the event of filing any such litigation, PF&R may extend this condition, and the Closing, for a period not to exceed one hundred and eighty (180) days, or both parties may mutually agree to any period of extension.

(d)  The Parties have reviewed Fire Station #1 Financial Summary (Exhibit E).

(e)  PDC’s payments to PF&R under the Payment Schedule shall be joined with $11,668.200 in bond proceeds available to PF&R to construct the new Fire Station #1 on the Relocation Property.

(f)  The Parties accept the estimated costs of the Financial Summary (Exhibit E) as sufficient to complete the Development Program.

(g)  The Parties agree that Project Savings up to $1,000,000 be split evenly between a fund to be used for any environmental remediation needed for the Current Property and the completion of the Fire Learning Center at the Relocation Property. The next $500,000 in project savings will be applied towards completion of the Fire Learning Center. Savings in excess of $1,500,000 will be split evenly between PF&R and PDC. If any portion of the fund set aside for environmental remediation of the Current Property is not needed, any remaining funds will be applied towards the completion of the Fire Learning Center. In the event there are no Project Savings, PDC will be solely responsible for additional environmental remediation at the Current Property.

(h)  PF&R/BGS agree to actively cooperate in approaches to reduce the total fire project cost. These may include:

(i)  engaging a Construction Manager/General Contractor (CMGC) for construction, stipulating incentives for cost savings, and

(j)  turn key construction based on the agreed upon design.

(k)  PDC will ensure that the Globe does not pose a seismic safety threat to the new Station #1 on the Relocation Property. If this condition has not been met at the time of the issuance of the Certificate of Completion of the new station, this requirement will continue beyond the life of this agreement and PDC shall provide an estimated timeline to meet this condition to PF&R’s satisfaction.

(l)  PF&R has reviewed and approved all inspection, environmental, title and other reports it deems necessary or desirable.

(B) To PF&R’s Satisfaction:

(a)  PDC shall have transferred title to the Relocation Property to PF&R, or authorize PF&R to commence design/development of the relocation property, subject only to any Permitted Exceptions, on or before October 18, 2004.

(b)  If PDC has authorized PF&R to commence design/development work before October 18, 2004, but is unable to transfer title by October 18, 2004, and determines, on or before October 18, 2004, that it will not continue with the Project, PDC shall be in Material Default and liable for the remedies found in Section 5.2.

(c)  In the event PDC has authorized commencement of design/development and construction for the Relocation Property and: 1) was unable to transfer title to the Relocation Property on or before October 18, 2004, and 2) the Parties agreed that the date of title transfers could be extended, and PDC fails, by the extended date, to provide title or decides not to continue with the Project, PDC shall be in Material Default and subject to the remedies found in Section 5.2. Any agreed upon extended date shall end on or before October 18, 2005, unless otherwise mutually agreed, in writing, by the Parties.

(d)  The Escrow Agent shall have issued to PF&R a binding commitment to issue to PF&R an Owner's Extended Coverage Title Insurance Policy covering the Relocation Property in an amount acceptable to PF&R, in form and substance satisfactory to the PF&R, subject only to the Final Permitted Exceptions.

(e)  PDC will assume the cost of acquisition of the Relocation Property and the eventual sale of the Current Property regardless of which of the parties acquires the Relocation Property.

(f)  PDC will allocate funds toward the construction of the Development Program (Exhibit D) in accordance with the Payment Schedule Exhibit B. This is in addition to any Relocation Property acquisition costs.

(g)  All existing tenants on the Relocation Property legally entitled to relocation benefits shall be relocated by PDC at its sole expense.

(h)  The current project budget includes an estimate of $205,000 for environmental remediation. This estimate was developed through a Phase I and II analysis of the site. If the environmental remediation cost exceeds this, the following sources in sequence shall be used:

(i)  Any unused PDC contingency on the land acquisition budget, then

(ii)  Up to $20,000 from the Fire Station relocation contingency, and then

(iii)  Above that, PDC will either cover the additional cost or, at its sole discretion, decide to not proceed with this project, which will be considered Material Default triggering Inflation Reimbursement as outlined in this agreement.

(i)  PDC’s representations stated in Section 1.10 herein are true and correct as of the Effective Date.

(j)  PDC authorized this relocation project conditioned on the issuance of additional bonds for the Downtown Waterfront URA upon City Council approval. If the Council authorizes the issuance of additional bonds and if that bond allocation includes funds for the revitalization of Ankeny Plaza and Globe Hotel Building, then $500,000 of those new bond proceeds will be made available for the Project Funding. This sum will complete the PDC contribution of $10,500,000 for the Project Funding unless the parties otherwise agree in writing.

(k)  PDC shall not be in default under any material term or condition of this Agreement.

(l)  No action or appeal has been filed concerning

(i)  the Relocation Property, or

(ii)  Any action taken by PF&R or PDC with regard to the Relocation Property, unless PF&R has determined in its good faith discretion that there is little risk of such action or appeal resulting in

(m)  damage, harm, or loss to PF&R or the Relocation Property or

(n)  a delay in PF&R’s ability to use the Relocation Property as a new fire station by the end of 2009.  

(C)  To PDC’s Satisfaction:

(a)  PF&R has full authority to enter into and perform its obligation under this Agreement.

(b)  PF&R shall not be in default under any material term or condition of this Agreement.

(c)  PF&R’s representations and warranties stated in Section 1.11 herein are true and correct as of the Closing Date.

1.8.  Elections upon Non-Occurrence of Conditions. Except as provided below, if any condition in Section 1.6 is not fulfilled to the satisfaction of the benefited Party or Parties by the date scheduled for Closing, then such benefited Party may elect to:

1.8.1.  Terminate this Agreement in which case each party’s obligations to the other, other than the provisions related to Inflation Reimbursement as described in Exhibit H shall terminate; or

1.8.2.  Waive in writing the benefit of that condition precedent to its obligation to perform under this Agreement, and proceed in accordance with the terms hereof; or

1.8.3.  Extend the Termination Date by which the other Party must satisfy the applicable condition, if the other Party can satisfy the condition and if the other Party agrees in writing to the extension.

1.9.  Extensions to Deadlines. Notwithstanding Section 1.8 above, if all of the conditions precedent under Section 1.6 have not been satisfied, waived or otherwise resolved pursuant to this Agreement by the Closing Date, then PF&R and PDC shall have the ability to further extend the date for Closing and the satisfaction of conditions upon written and signed agreement of both parties.

1.10.  Material Default. Notwithstanding any other provisions of this agreement, the following specific events shall be considered Material Defaults.

1.10.1.  any failure by PF&R to

(a)  Provide notice and get PDC approval of any plans, change of plans, or any other notice required by this agreement which results in a decision or event that is contrary to the Minimum Development Requirements.

(b)  To begin construction of the Development Program in Exhibit D, no later than the dates indicated in the Preliminary Schedule of Performance in Exhibit D.

(c)  Meet the conditions outlined in 1.7

(d)  To provide occupancy according to the Development Program in Exhibit D no later than the dates indicated in the Preliminary Schedule of Performance in Exhibit D.

1.10.2  any failure by PDC to

(a)  meet the Payment Schedule outlined in Exhibit B,

(b)  convey the Relocation Property ,if necessary, to PF&R by the Closing Date.

(c)  Meet the applicable conditions outlined in 1.7

1.11.  PDC Representations. If PDC acquires the Relocation Property, PDC upon conveyance represents that:

1.11.1.  Except as has been disclosed to PF&R in the Environmental Reports and to the best of PDC's actual knowledge, there has been no generation, manufacture, refinement, transportation, treatment, storage, handling, disposal, transfer, release or production of Hazardous Substances, or other dangerous or toxic substances or solid wastes on the Relocation Property, or underground storage tanks existing on the Relocation Property, except in compliance with Environmental Laws currently in effect, and PDC has not received notice of the release of any Hazardous Substances on the Relocation Property.

1.11.2.  PDC has full power and authority to enter into and perform this Agreement in accordance with its terms, and all requisite action has been taken by PDC in connection with the execution of this Agreement and the transactions contemplated hereby.

1.11.3.  PDC is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended.

1.11.4.  To the best of PDC's knowledge, there is no undisclosed litigation, action, suit, or any condemnation, environmental, zoning, or other government proceeding pending or threatened, which may affect the Relocation Property, PDC's ability to perform its obligations under this Agreement, or PF&R's ability to develop the Project.

1.11.5.  To the best of PDC's knowledge, and except as disclosed in writing to PF&R, the Relocation Property is in compliance with all applicable laws, rules, regulations, ordinances and other governmental requirements (“Laws”). Section 3 governs responsibilities related to liabilities arising from Environmental Laws applicable to the Relocation Property.

1.11.6.  PDC has not received or given any notice stating that the Relocation Property is in violation of any Laws; provided, however that PDC makes no representation as to the availability or suitability of utility connections to the Relocation Property.

1.11.7.  No representation, warranty or statement of PDC in this Agreement or any of the exhibits attached contains any untrue statement of a material fact or omits a material fact necessary to make the statements of facts contained herein not misleading.

1.11.8.  As of the date hereof, there are no defaults by PDC under this Agreement or events that with the passage of time would constitute a default of PDC under this Agreement.

1.12.  PF&R Representations. PF&R represents that:

1.12.1.  PF&R has full power and authority to enter into and perform this Agreement in accordance with its terms.

1.12.2.  Except as has been disclosed to PDC in the Environmental Reports and to the best of PF&R's actual knowledge, there has been no generation, manufacture, refinement, transportation, treatment, storage, handling, disposal, transfer, release or production of Hazardous Substances, or other dangerous or toxic substances or solid wastes on the Current Property, or underground storage tanks existing on the Current Property, except in compliance with Environmental Laws currently in effect, and PF&R has not received notice of the release of any Hazardous Substances on the Current Property.

1.12.3.  To the best of PF&R's knowledge, there is no undisclosed litigation, action, suit, or any condemnation, environmental, zoning, or other government proceeding pending or threatened, which may affect the Current Property, PF&R's ability to perform its obligations under this Agreement, or PDC's ability to redevelop the Current Property.

1.12.4.  To the best of PF&R's knowledge, and except as disclosed in writing to PDC, the Current Property is in compliance with all applicable laws, rules, regulations, ordinances and other governmental requirements (“Laws”).

1.12.5.  PF&R has not received or given any notice stating that the Current Property is in violation of any Laws; provided, however that PF&R makes no representation as to the availability or suitability of utility connections to the Current Property.

1.12.6.  No representation or statement of PF&R in this Agreement or any of the exhibits attached contains any untrue statement of a material fact or omits a material fact necessary to make the statements of facts contained herein not misleading.

1.12.7.  To the best of the signor’s knowledge, as of the date hereof there are no defaults by PF&R under this Agreement or events that with the passage of time would constitute a default of PF&R under this Agreement.

2.  DEVELOPMENT

2.1.  Project Funding. PDC will provide a maximum of $10.5 million in project funding to PF&R in accordance with the Payment Schedule Exhibit B unless further disbursements are authorized by the Commission, and such funds will be joined with the $11.668 million available to PF&R for this project. The total Project Funding is $22.168 million. Failure by PDC to provide $10.5 million in funds, if necessary to meet the Project Costs, constitutes Material Default.

2.2.  Development Program. PF&R has prepared an initial Development Program, attached as Exhibit D, identifying the components of the Development Program that are the basis for entering into this Agreement. Any material change in the Development Program shall require prior consent of PDC. A material change shall mean any change that would have a material impact on the use, scope, function, timing, appearance and cost of the Project.

2.3.  PDC Design Review and Approval. By participating in early design phases, PDC intends to assist in making design decisions that will best represent its knowledge of long term development plans and interests in the area, as well as goals for public parks and streetscapes and common amenities. PDC’s primary focus of design review will include but not be limited to urban design, including the pedestrian environment, street frontages and visible courtyards, material and systems quality, and relationship to the Globe Hotel redevelopment. It is PDC’s intent that its design Review and Approval process will not delay the development Program schedule. PF&R shall work with the Offices of the Mayor and the Fire Commissioner on project design.

2.3.1.  PF&R, with PDC’s participation as described in Sections 2.3.8, shall prepare the Development Program and Concept Documents, Schematic Design Documents/Portland Design Review Documents (one set of Documents to serve both purposes), Design Development and 50% and 90% Construction Documents. PDC staff will review and approve the Concept Documents, the Schematic Design Documents, the Design Development and Review Documents and 90% Construction Documents at each phase of the work in accordance with the Schedule of Performance. If PDC elects to not participate in regularly scheduled design meetings according to Section 2.3.9, PDC staff will also review 50% Construction Documents.

2.3.2.  All plans and specifications referred to in this Section 2.3 are referred to herein as the “Documents.” PDC will not unreasonably withhold its approval of any documents for the Development Program. PDC’s staff review is limited to a period not to exceed ten (10) business days from the date of its receipt of Documents. PF&R shall have ten (10) business days to respond in writing to PDC’s written comments. Thereafter, PDC will have five (5) business days to respond to any written comments received from PF&R. Should either Party fail to respond within the timeframes established herein, then the comments of the other shall be deemed to be acceptable.

2.3.3.  Schematic Design/ Portland Historic Landmarks Commission Design Review Documents will be approved by official action of the PDC Commission upon recommendation of the PDC Project Manager. These documents are considered to be the same package.

2.3.4.  PDC shall be informed of any material changes to project use, scope, function, time, appearance and cost during the construction phase of the Project.

2.3.5.  Changes in Approved Documents. If PF&R wants to materially change any Documents after approval by PDC and/or the City, PF&R shall submit the proposed changes to PDC for approval. PF&R acknowledges that it may be necessary to secure separate City approval of such changes. Any separate City approvals shall be sought after PDC has approved the changes. PDC shall assist PF&R throughout any City or PDC design review, and the applicable land use and development review processes of appropriate bureaus or agencies within the City, but PDC does not represent or warrant that its assistance will guarantee or accelerate approval.

2.3.6.  PF&R will provide PDC with a color project rendering showing surrounding context prior to approval of Schematic Design/Landmarks Design Commission Design Review Documents by the Commission, and an updated color rendering showing surrounding context prior to receiving the final jointly issued Certificate of Completion for the Project.

2.3.7.  PDC may retain a design advisor, at its expense and its discretion, to assist in review of the Development Program design. The role of the design advisor is to review the design of the Development Program and to advise the PDC Project Manager as to design considerations consistent with this Agreement. The advisor’s review will take into consideration building codes and other governmental regulations but will not include any analysis of compliance with same. Costs for the PDC design advisory will be paid separate from PDC’s $10.5 million contribution to the program budget.

2.3.8.  PDC staff and its design advisor, at their option, will be invited and may attend regular design meetings. Beginning with the initial program development, competition and concept design work by PF&R, the PDC Project Manager and/or design advisor will meet at regularly scheduled intervals with PF&R and its design team to exchange information, review progress and resolution of design and construction issues.

2.4.  Diligent Completion. Subject to the terms and conditions of this Agreement, PF&R covenants to complete the development of the Development Program through the construction of the fire station, fire administration, fire museum, parking and related elements in substantial conformance with the Final Construction Plans and Specifications and to comply with the Schedule of Performance, subject to force majeur as provided in Section 5.4. PF&R agrees to keep PDC informed of its progress with respect to development of the Project during construction, with periodic reports to be issued no less frequently than once per quarter until PDC issues its final Certificate of Completion for the Project.

2.4.1  Project development shall include:

(a)  Entering into all necessary architectural and construction contracts;

(b)  Securing all necessary public entitlements and building permits;

2.5.  Development Obligations of PF&R.

PF&R shall develop the Relocation Property consistent with the Development Program (Exhibit D) to the extent made possible by the Project Funding. If PF&R believes that it will be unable to develop the Relocation Property consistent with the Development Program, PF&R and PDC agree that they shall in good faith attempt to modify the Development Program in a manner that addresses the material interests of the parties.

2.6.  Inspection and Property Access Before Conveyance of Relocation Property. If PDC acquires the Relocation Property, subject to the terms of any existing leases, before conveying the Relocation Property to PF&R, and pursuant to a written permit of entry, PDC shall allow PF&R and PF&R’s employees, agents and consultants to enter upon the Relocation Property, at all reasonable times whenever and to the extent necessary to carry out the purposes of this Agreement.

If the City acquires the Relocation Property, the Parties agree, subject to the same terms to allow PDC employees, agents and consultants to enter upon the Relocation Property, at all reasonable times whenever and to the extent necessary to carry out the purposes of this Agreement.

2.7.  After Conveyance of Property. Regardless of who acquires the Relocation Property, during design and construction of the Project, and until a Certificate of Completion is issued, PF&R’s work shall, upon reasonable notice, be accessible at all reasonable times for inspection by representatives of PDC. PDC agrees not to interfere with the work occurring on the Relocation Property.

2.8.  Certificate of Completion.

2.8.1.  Certificate of Completion. Upon completion of the Development Program, PDC and PF&R will mutually execute a Certificate of Completion for the Project, substantially in the form attached hereto as Exhibit F. The Project will be deemed to be complete when

(a)  the Minimum Development Requirements of the Development Program are completed; and

(b)  the City has issued a temporary or permanent Certificate(s) of Occupancy for Relocation Property with respect to the Minimum Development Requirements; and

(c)  PDC has met all financial obligations related to the Payment Schedule in Exhibit B.

2.8.2.  Meaning and Effect of the Certificate of Completion. The Certificate of Completion shall provide for termination of obligations under this Agreement by both parties, with the exception of PDC’s obligation to ensure that the Globe Hotel does not pose a public safety threat to the new Station #1 on the Relocation Property consistent with Section 1.6.1.8. Either issuance of a Certificate of Completion for seismic stabilization of the Globe Hotel or demolition of the Globe Hotel shall satisfy PDC’s obligation to ensure the Globe Hotel does not pose a seismic safety threat to the new Fire Station #1 on the Relocation Property.

3.  ENVIRONMENTAL MATTERS

3.1.  Responsibility for Environmental Compliance. With respect to the Relocation Property, PF&R shall be responsible for compliance with all Environmental Laws with respect to its business and the operation of the Project from and after the date of Conveyance of the Replacement Property

3.2.  Responsibility for Environmental Compliance. With respect to the Current Property, PDC shall be responsible for compliance with all Environmental Laws with respect to the Current Property from and after the date of Conveyance of the Current Property. The parties agree that PF&R will convey the property in a condition that complies with all Environmental Laws.

3.3.  Sections 3.1 and 3.2 do not limit any rights of contribution that the parties may have against others under applicable law or agreement. The indemnity is intended only as an allocation of responsibility between the parties to this Agreement.

4.  SPECIAL COVENANTS AND CONDITIONS

4.1.  Staffing and Operation of Project. PF&R covenants and agrees that during each design, development and construction phase under the Development Program, it will provide an experienced qualified project representative with authority to act on behalf of the PF&R.

4.2.  Staffing and Operation of Project. PDC covenants and agrees that during each design, development and construction phase under the Development Program, it will provide an experienced qualified project representative with authority to act on behalf of the PDC.

5.  DEFAULT; REMEDIES

If there is a Material Default by either party, the following are remedies.

5.1.  PDC's Remedies

5.1.1.  Notice and Opportunity to Cure. If, after Closing, PF&R Materially Defaults under its obligations under this Agreement, then PDC may demand in writing that PF&R timely cure such default. If such Material Default can be reasonably cured within sixty (60) days, PF&R shall have 60 days to cure such material default. If such material default is not curable within said sixty (60) day period, PF&R shall have 60 days to in good faith commence actions necessary to cure such default and diligently pursue such cure to completion. If performance requires the consent or action of the Legislature and/or the City, PF&R shall have such time to obtain such action/consent as is reasonably required.

5.1.2.  5.1.3.  Notwithstanding any other provision in this Agreement, PDC’s remedies for PF&R’s failure to perform the Minimum Development Requirements are limited to:

(a)  PDC Right of Repurchase. If PF&R is in Material Default, section 1.10, PDC shall have the right to re-purchase the Relocation Property at current Fair Market Value (FMV). The parties agree to select an appraiser to determine FMV of the Relocation Property. If the parties disagree on a sales price after such an appraisal, the matter shall be submitted for mediation under the provision of Section 5.4.4, infra.

(b)  PDC is relieved of its responsibility to make any additional payments under the Payment Schedule.

(c) PDC may seek specific performance of any obligation in this agreement

5.2.  PF&R’s Remedies.

5.2.1.  If PDC fails to perform any obligation under this Agreement, PF&R may, at its option:

(a)  terminate this Agreement by written notice to PDC, without waiving any cause of action it may have against PDC;

(b)  specifically enforce the obligations of PDC under this Agreement; and

(c)  receive monetary damages against PDC equal to the Inflation Reimbursement as defined in this Agreement.

(d)  In addition to and not in lieu of the Inflation Reimbursement, require PDC to pay, the General Obligation Bond Fund (G O Bond Fund) actual project costs in accord with the following:

(i)  if the Material Default occurs prior to October 18, 2004 PF&R can require PDC to pay up to $500,000 in actual costs incurred by the G O Bond Fund;

(ii)  if the Material Default occurs after October 18, 2004 and before the beginning of Construction, PF&R can require PDC to pay up to $2,500,000 in actual cost incurred by the G O Bond Fund;

(iii)  if the Material Default occurs after the beginning of Construction, PF&R can require PDC to pay up to $3,500,000 in actual cost incurred by the G O Bond Fund.

5.3  Exclusive Remedies. The rights and remedies provided by this Agreement shall be deemed exclusive, except where otherwise indicated. The exercise by either Party of one or more of such remedies shall preclude the exercise by it, at the same or different times, of any other such remedies for the same default or of any of its remedies for any other default by the other Party, including, without limitation, the right to compel specific performance. The Parties agree that any limitation of remedies set forth herein limits the obligations of a Parties to any contractual indemnities set forth herein.

5.4  Force Majeure

5.4.1  Neither a Party nor Party’s successor in interest shall be considered in breach of or in default with respect to any obligation created hereunder or progress in respect thereto if the delay in performance of such obligations (the “Unavoidable Delay”) is due to causes that are beyond its control, and without its fault or negligence, including but not limited to

(a)  acts of God, acts of state or federal government, acts of the public enemy, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquake, explosion, mob violence, and riot or

(b)  inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a Party or others relating to malicious mischief, condemnation action delays of litigation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar events and/or occurrences beyond the control of such Party.

(c)  It is not the intent of this section to relieve either Party of any obligation that can or could have been performed.

5.4.2  It is the purpose and intent of Section 5.4 that, in the event of the occurrence of any such Unavoidable Delay, the time or times for performance of the obligations of PDC or PF&R, as the case may be, shall be extended for the period of the Unavoidable Delay; provided, however, that the Party seeking the benefit of this Section shall, within fourteen (14) days after the Party becomes aware of the causes of any such Unavoidable Delay, notify the other Party in writing of the cause or causes of the delay and the estimated time of correction.

5.4.3  Action by the State Legislature, the City and/or other governmental entities may be required in order for PF&R to fund the Development Program and/or comply with obligations of PF&R hereunder, including the Development Obligations of Section 2.5. If consent or approval of any such governmental entity is necessary for PF&R to perform such obligations hereunder, and PF&R is unable to obtain such consent or approval, such inability to obtain consent or approval shall for the purposes of this Agreement be considered a force majeure. The parties shall still be able to declare a Matgerial Default as a result of such inability to obtain consent.

5.4.4  Mediation and Arbitration. The parties shall attempt to resolve all disputes arising pursuant to this Agreement or any additional documents contemplated by this Agreement by mediation conducted in the City of Portland, Oregon by a neutral mediator to be selected by agreement of the parties. The mediator shall be an attorney familiar with business and real estate transactions. Either party may commence a mediation proceeding by written request to the other. If agreed upon, the initial mediation shall occur within thirty (30) days of such request, or as soon thereafter as the parties are able to agree upon and schedule a mediator. Mediation shall continue for so long as the parties believe that reasonable progress is being made toward a resolution of the dispute. At such time as the parties are no longer able to agree that the mediation is productive, either party may initiate arbitration by providing written notice of a desire to arbitrate to the other party. Such arbitration shall be held in the City of Portland, Oregon, by one (1) neutral arbitrator appointed by agreement of the parties. If the parties cannot agree on an arbitrator they will request the Multnomah County Circuit Court to appoint an arbitrator. The arbitrator shall have experience in the development and operation of mixed-use projects. The arbitrator shall not have the power to amend this Agreement or to substitute his/her judgment for the judgment of a Party, but may determine whether a Party is acting reasonably if a Party is bound to act reasonably by this Agreement. The arbitrator shall be directed to complete the arbitration within thirty (30) days after the request for arbitration.

Each side shall bear their own attorney fees and legal costs. However the Parties agree to share equally the costs of arbitration and mediation itself.

6.  MISCELLANEOUS PROVISIONS

6.1.  PDC Project Manager. For the purposes of managing the implementation of this Agreement on behalf of PDC, the Executive Director of the Portland Development Commission shall designate a Project Manager. Upon the initial execution of this Agreement, the PDC Project Manager shall be Amy Miller Dowell or other authorized representative.

6.2.  PF&R Project Manager. For the purposes of managing the implementation of this Agreement on behalf of PF&R, the Portland Fire Chief shall designate a Project Manager. Upon the initial execution of this Agreement, the PF&R Project Manager shall be John Klum or other authorized representative.

6.3.  BGS Project Manager. For the purposes of managing the implementation of this Agreement on behalf of BGS, the Director of Bureau of General Services shall designate a Project Manager. Upon the initial execution of this Agreement, the BGS Project Manager shall be Connie Johnson or other authorized representative.

6.4.  Discrimination. The Parties for themselves and their successors and assigns, agree that during the construction of the Property, they will not discriminate against any employee or applicant for employment because of race, color, religion, age, gender, sexual orientation or national origin.

6.5.  Notice. Any notice or communication under this Agreement by either Party to the other shall be deemed given and delivered (a) forty-eight (48) hours after being dispatched by registered or certified U.S. mail; postage prepaid, return receipt requested, or (b) when received if personally delivered, and:

In the case of a notice to PF&R, addressed as follows:

With a copy to: Jack Graham

with copies to: John Klum

   Connie Johnson

In the case of a notice or communication to PDC, addressed as follows:

Amy Miller Dowell, Project Manager

Portland Development Commission

1900 S.W. Fourth Avenue, Suite 7000

Portland, OR 97201-5304

or addressed in such other way in respect to either Party as that Party may, from time to time, designate in writing dispatched as provided in this Section. Notice given in any other manner shall be effective upon receipt by the Party for whom the same is intended.

Any termination required by the Agreement shall be in writing and shall conform to the notice requirements of this section.

6.6.  Participation in Portland Development Commission Special Programs.

6.6.1  MWESB Opportunity Program. The City of Portland shall implement good faith efforts to contract with minorities, women and emerging small business firms in compliance with the City’s Emerging Small Business Opportunity Programs and MWESB Programs. PDC has offered outreach assistance in an effort to achieve PDC’s MWESB Opportunity Program goals.

6.6.1  6.6.2  Workforce Training and Hiring Program. The City of Portland shall

implement their Workforce Training and Hiring Program aimed at increasing apprenticeship training and work opportunities for minorities, guidelines and general conditions that are effective at the time of Closing shall be applied to the Project.

6.6.3.  Green Building Standards. PF&R will require that the Architectural/Design team selected to design Fire Station 1 ensure that the project receives LEED certification.

6.6.4.  Equal Employment Opportunity. PF&R must comply with all applicable provisions of Federal or state statutes and regulations and City ordinances concerning equal employment opportunities for persons engaged in the Project.

6.7.  Headings. Titles of the Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions.

6.8.  Waivers. No waiver made by either Party with respect to the performance, or manner or time thereof, of any obligation of the other Party or any condition inuring to its benefit under this Agreement shall be considered a waiver of any other rights of the Party making the waiver. No waiver by PDC or PF&R of any provision of this Agreement or any breach thereof, shall be of any force or effect unless in writing; and no such waiver shall be construed to be a continuing waiver.  

6.9.  Calculation of Time. All periods of time referred to herein shall include Saturdays, Sundays, and legal holidays in the State of Oregon, except that if the last day of any period falls on any Saturday, Sunday or legal holiday, the period shall be extended to include the next day which is not a Saturday, Sunday or legal holiday.

6.10.  Construction. In construing this Agreement, singular pronouns shall be taken to mean and include the plural and the masculine pronoun shall be taken to mean and include the feminine and the neuter, as the context may require.

6.11.  Legal Purpose. PF&R agrees that it shall use the Property solely for lawful purposes.

6.12.  Severability. If any clause, sentence or any other portion of the terms and conditions of this Agreement becomes illegal, null or void for any reason, the remaining portions will remain in full force and effect to the fullest extent permitted by law.

6.13.  Entire Agreement. This Agreement and the attachments hereto are the entire agreement between the Parties. There is no other oral or written agreement between the Parties with regard to this subject matter. There are no oral or written representations made by either Party, implied or express, other than those contained in this Agreement.

6.14.  Amendments and Modifications. Any modifications to this Agreement shall be made in writing and executed by all Parties, and approved by the PDC Commission, if required. Notwithstanding this general requirement, the PDC Executive Director may approve minor modifications to this Agreement without Commission approval. “Minor Modifications” include:

6.14.1.  Changes in the timing of the phases described in the Development Program when deemed warranted by the Executive Director which do not exceed three years; and

6.14.2.  Corrections of errors, clarifications, or minor modifications that do not change the substantive content of the Agreement.

6.15.  Successors and Assigns. Subject to the provisions of Section 4, the benefits conferred by this Agreement, and the obligations assumed thereunder, shall inure to the benefit of and bind the successors and assigns of the Parties.

6.16.  Place of Enforcement. Any action or suit to enforce or construe any provision of this Agreement by any Party shall be brought in the Circuit Court of the State of Oregon for Multnomah County, or the United States District Court for the District of Oregon in Portland, Oregon. Oregon law shall govern this Agreement.

6.17.  No Partnership. Nothing contained in this Agreement or any acts of the Parties hereby shall be deemed or construed by the Parties, or by any third person, to create the relationship of principal and agent, or of partnership, or of joint venture, or any association between any of the Parties.

6.18.  Counterparts. This Agreement may be executed in one or more counterparts all of which shall be considered one and the same Agreement and shall be effective when one or more counterparts have been signed and delivered by each of the parties.

Executed in multiple counterparts as of the day and year first above written.

CITY OF PORTLAND, a municipal corporation in the State of Oregon, acting by and through the Portland Development Commission as the duly designated Urban Renewal Agency of the City of Portland.

By:            

Donald F. Mazziotti, Executive Director

APPROVED AS TO FORM:

_____________________________

Portland Development Commission

General Counsel

PORTLAND FIRE AND RESCUE

By:            

            Portland Fire and Rescue

Fire Chief

       By: ______________________________________

        COMMISSIONER

EXHIBITS

Exhibit A  Form of Deed

Exhibit B   PDC Payment Schedule

Exhibit C  Conceptual Master Plan

Exhibit D  Development Program and Preliminary Schedule of Performance

Exhibit E  Fire Station #1 Financial Summary

Exhibit F  Form of Certificate of Completion

Exhibit G  Memorandum of Agreement for Recording

EXHIBIT A to FIRESTATION #1 RELOCATION DDA

FORM OF WARRENTY DEED

WARRANTY DEED

KNOW ALL MEN BY THESE PRESENTS, that the CITY OF PORTLAND, a municipal corporation of the State of Oregon, acting by and through the PORTLAND DEVELOPMENT COMMISSION, as the duly designated Urban Renewal Agency of the City of Portland (which, together with any successor public agency designated by or pursuant to law, is herein called “PDC”), does hereby grant, convey and specially warrant unto the City of Portland, Bureau of Fire and Rescue (“PF&R”), and unto its successors and assigns, all the following described real property, with the tenements, hereditaments and appurtenances (herein called the “ Relocation Property”), situated in the County of Multnomah and State of Oregon, free and clear of all encumbrances except as specifically set forth herein Covenants, conditions, restrictions, reservations, set back lines, powers of special districts, and easements of record, if any.

[Insert legal description]

 The true and actual consideration for the conveyance is Ten Million Five Hundred Thousand Dollars ($10,500,000.00) and ownership for Lots 1-8, Block 34, Portland. It is advised that a survey of the current property be performed to determine if this legal description is correct. A land partition may be required in the future. If so, the cost of this partition shall be at the sole expense of PDC.

Until a change is requested, all tax statements are to be sent to the following address:

John Matschiner

Real Estate Manager

Portland Development Commission

1900 SW Fourth Avenue, Suite 7000

Portland, Oregon 97201

The conveyance is subject to the following:

1.  All easements, covenants, restrictions, conditions and encumbrances of record, as set out in Exhibit “1” attached hereto and incorporated herein; and

2.  This Deed is made by PDC pursuant to powers exercised by it under Oregon Revised Statutes Chapter 457, and Chapter XV of the Charter of the City of Portland, and for the purpose of carrying out an urban renewal plan for the Downtown Waterfront Urban Renewal Project approved by the City Council of the City on August 11, 1999, as amended.

 TO HAVE AND TO HOLD the same unto the said City of Portland, Bureau of PF&R and unto its successors and assigns forever.

THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES, AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING AND FOREST PRACTICES AS DEFINED IN ORS 30.390.

 IN WITNESS WHEREOF, the City of Portland Development Commission, as the duly designated urban renewal agency of the City of Portland, a municipal corporation of the State of Oregon, has caused this Deed to be executed this ______ day of __________________, 2004.

CITY OF PORTLAND, a municipal corporation of the State of Oregon, acting by and through the Portland Development Commission, as the duly designated urban renewal agency of the City of

Portland.

By:________________________________, Chairman

By:________________________________, Secretary

This conveyance is approved by the City of Portland, Oregon.

_____________________________________________

Fire Commissioner

STATE OF OREGON  )

 ) ss.

County of Multnomah    )

 The foregoing instrument was acknowledged before me this _______ day of _________________, 2004, by _______________, and ______________ as Chairman and Secretary of the City of Portland Development Commission, on its behalf.

                   ____________________________

   Notary Public for

             My commission expires:    

EXHIBIT B

PDC Payment Schedule

1.1  Language for to include in DDA regarding draws on PDCs share of project:

Payments on invoices for the Project Costs on the Relocation Property shall be split proportionately between PF&R and PDC based upon each Party’s share of total Project Funding. Project Costs are the total costs of the project, including hard costs and soft costs. PF&R will contribute $11,668,177 and PDC will contribute $10,500,000. PF&R’s share is 53%. PDC’s share is 47%.

In order to facilitate prompt payments to vendors and to have each payment funded by PF&R’s percentage contribution and PDC’s percentage contribution, the following process will be put in place:

•  The City will request in writing a payment from PDC on a quarterly basis equal to their share of cash requirements over the next three months as per a cash flow projection (“forecast”), adjusted by actual spending variances, as described below. Within three weeks of receipt PDC will provide the payment. This will be deposited in a separate interest bearing account within the PF&R GO Bond Fund. PDC’s 47% share of payments to vendors will be made from the money in this account.

o  For the period July through September, the forecast will be due June 15

o  For the period October through December, the forecast will be due September 15

o  For the period January through March, the forecast will be due December 15

o  For the period April through June, the forecast will be due March 15

This will continue until the PDC budget of $10,500,000 is exhausted, the project is completed or terminated.

PDC will honor requests for additional funds between quarterly forecasts if it is necessary.

•  Each forecast (after the first forecast) will be accompanied by a summary of actual spending and copies of all approved vendor invoices with related back-up material for PDC review and records. The variance between actual spending and previous projections will adjust the amount of PDC’s next payment. If actual cumulative spending is less than previous payments made by PDC, this variance will be deducted from the next forecast submitted to PDC. If actual cumulative spending exceeds previous payments, this variance shall be added to the next forecast submitted to PDC for payment.

o  Forecasts and spending summaries shall specify vendors and categorize the expenditures by type, as follows:

Design & Other Professional Services

Demolition & Site Preparation

Environmental Testing & Remediation

Permits and Fees

Construction

Furniture & Fixtures

The forecasts shall be available in electronic format.

o  Copies of all approved invoices from vendors shall include the following:

Invoice date

Copies of consultant invoices indicating project number, project task or service, dollar amount and allowable reimbursable expenses.

Copies of construction invoices will be submitted on an approved Application for Payment form, such as AIA Form G702 and G703, showing work completed within the past month that is consistent with the Schedule of Values approved by the Owner. Mid-month accelerated payments are allowed in BGS General Conditions of the Contract for Construction “B”. These requests include an estimate of month-end payment, retainage, and the total payment requested less retainage.

If PDC takes exception to any approved invoices or forecasted payments, PDC shall notify the City and make the necessary adjustment to the payment request. The PDC Project Manager may ask for additional or clarifying information, in which case, the requested information will be supplied in a manner as timely as practicable; however, it shall not interfere with the net 30 days payment schedule.

•  City will provide a year-end summary of payments by August 1 each year. This will augment the June 15 summary of payments with all subsequently-paid invoices relating to work performed prior to June 30.

•  City will provide PDC a final accounting of project expenses in a mutually agreed upon format at the end of project. City will return any unspent construction funds that PDC had previously paid.

•  City will return to PDC interest earned on their money while in the PF&R GO Bond Fund.

Payments on invoices for the Project Costs on the Relocation Property shall be split proportionately between PF&R and PDC based upon each Party’s share of total Project Funding. PF&R will contribute $11,668,200 to Project Funding. PDC will contribute $10,500,000 to Project Funding.

Consistent with the above commitments to Project Funding, PF&R will pay 52.6% of each invoice related to the Construction Costs on the Relocation Property, with PDC paying the remaining 47.4%. PDC’s maximum contribution will be $10,500,000.

EXHIBIT C to FIRE STATION #1 RELOCATION DDA

CONCEPT MASTER PLAN

Many different development options, each with a different mix of uses, were considered for the relocation of Firestation #1 and the use of the site occupied by the Globe Hotel Building.

The following concept plan and section represents the best blend of uses and balances between public goals, urban design, market acceptance, financial feasibility and constructability, and is included only for illustrative purposes.

EXHIBIT D to FIRE STATION #1 RELOCATION DDA

DEVELOPMENT PROGRAM

1.  General

The Project is to be sited on the Relocation Property, an approximately 0.68 acre site located at 1 NW Couch Street. The project will be a fire station, fire administration, fire museum, parking and potentially a fire learning center and/or retail structures. Spaces visible or accessible to the public will be provided along the rights of way.

2.   Property Zoning

The property is zoned Cxd with a base Floor Area Ratio (FAR) of 4:1, allowing up to 118,000 gross square feet of development.

3.  Minimum Development Requirements

At a minimum, the property will be developed to achieve a base floor area ratio (FAR) of 1.9:1 .

4.  Development Goals

4.1  It is the goal of PF&R to develop the Relocation Property with a more active street front than fire station operations at the Current Property.

4.2  The ground floor of the building(s) will house the fire station with an access court, apparatus bays and support spaces. These functional spaces are to be designed to meet the operational needs of PF&R and when possible open to view from the street if appropriate. As much as possible, those spaces along or visible from the public right of way will house active uses including educational, recreational or neighborhood retail spaces.

4.3  Although a Fire Learning Center was not included as a requirement in the 6/3/03 PDC & PF&R Memorandum of Understanding for Fire Station #1 relocation, both Parties believe that including space for a new Fire Learning Center will contribute to both improved fire education and increase the new Firestation's positive impact in the neighborhood. However, as this development agreement provides only partial funding for a finished Learning Center, PF&R will make every effort to fundraise and construct a learning center, but does not guarantee that it will do so. In any event, at ground floor spaces built for a future learning center, PF&R will make every effort to find an interim active use.

4.4  PF&R will be required to meet the provisions of Section 6.6 relating MWESB Programs, Workforce Training and Hiring, Green Building Standards and Equal Employment Opportunity.

4.5   A competition will be held to select the fire station design consultant team. PDC will assist in the process, including assisting in the formation of selection criteria and representation on the selection jury.

5.  Preliminary Program

   The following is the preliminary program developed by The City. During design by the A/E team some changes may occur to the program to ensure the operational needs of PF&R are met.    

   31,720 SF for Administration

   3,000 SF for the Fire Museum

   16,500 SF for Emergency Response Operations

   Up to 6,000 SF for the Fire Learning Center, Shell Costs only

   57,220 SF total

6.  Parking

All parking is to be provided on-site in an underground structure, except for 12 on grade spaces, 7 of which may be located on street. The visual impact of any above-grade parking will be mitigated through site planning and façade treatment.

   74 parking spaces, underground structured parking

 12 on grade parking spaces on-site dedicated to Fire vehicles, of which 7 may

     be on-street spaces

 86 total spaces

7.  Preliminary Schedule of Performance

 A.  PDC provides right of property possession  October 18, 2004

 B.  A/E Team Selected  September 2005

 C.  A/E Completes Bidding Documents  March 2007

 D.  Construction begins  September 2007

 E.  Occupancy  March 2009

EXHIBIT E to FIRE STATION #1 RELOCATION DDA

FIRE STATION #1 FINANCIAL SUMMARY

Below is a Fire Station #1 Financial Summary that identifies Sources and Uses of funds. Included is a breakdown of three elements: 1) land (values representing two appraisals), 2) fire station construction (with accompanying program) and 3) the Globe Hotel building (showing three development scenarios).

EXHIBIT F to FIRESTATION #1 RELOCATION DDA

FORM OF CERTIFICATE OF COMPLETION

CERTIFICATE OF COMPLETION

(Project Complete)

 The PORTLAND DEVELOPMENT COMMISSION, the duly designated urban renewal agency of the City of Portland (“PDC”) and the City of Portland Fire and Rescue (PF&R) hereby mutually certify that the Project as described in the Agreement for Disposition and Development of Property, dated _______, 2004 (herein called the “DDA”) has been completed to the satisfaction of both parties. Capitalized terms used herein without definition shall have the meaning ascribed to them in the DDA.

 Pursuant to Section 2.8 of the DDA, PDC and PF&R hereby certify that both parties have substantially complied with their obligations under the DDA.

This Certificate of Completion is and shall be a conclusive determination of the satisfaction of all of the agreements, covenants and conditions contained in the DDA with respect to the obligations of both parties, their successors and assigns, as to the construction of the Project, and such obligations are hereby terminated. This Certificate represents and certifies the completion of PDC and PF&R’s construction obligations described herein.

(1)  Notwithstanding the above the Certificate of Completion shall provide for termination of obligations under this Agreement by both parties, with the exception of PDC’s obligation to ensure that the Globe Hotel does not pose a seismic threat to the new Station #1 on the Relocation Property consistent with Section 1.7.j.

Other than their right to enforce the Surviving Sections, PDC and PF&R shall hereafter have, or be entitled to exercise, no rights or remedies or controls that they may otherwise have been entitled to exercise under the DDA with respect to the construction of the Project, or as a result of a default in or breach of any provisions of the DDA relating to construction by the either party, or by any successors in interest or assigns of either party.

 IN WITNESS WHEREOF, PDC and PF&R have caused this instrument to be executed this ___ day of _________________, 2004.

           PORTLAND DEVELOPMENT COMMISSION

           By: _____________________________

            Donald F. Mazziotti, Executive Director

           By: _______________________________          

            Ed Wilson, Chief

            Portland Fire and Rescue

EXHIBIT G to FIRESTATION #1 RELOCATION DDA

FORM OF MEMORANDUM OF AGREEMENT

MEMORANDUM OF AGREEMENT

Memorandum of Contract

[And Agreement For Disposition And Development]

 THIS MEMORANDUM OF CONTRACT AND AGREEMENT FOR DISPOSITION AND DEVELOPMENT OF PROPERTY (“Memorandum”) shall serve as notice to all persons that the CITY OF PORTLAND (the “City”), a municipal corporation of the State of Oregon, acting by and through the PORTLAND DEVELOPMENT COMMISSION, the duly designated urban renewal agency of the City of Portland (“PDC”), with an address of Portland Development Commission, 1900 S.W. Fourth Avenue, Suite 7000, Portland, Oregon 97201-5304 and Portland Fire and Rescue (“PF&R”), with an address of ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­55 SW Ash Street, Portland, Oregon 97201, entered into an Agreement For Disposition And Development Of Property, dated as of __________, 2004 (“Agreement”) relating to the real properties located in Multnomah County, Oregon, as more particularly described in Exhibit “1” to Exhibit “G” attached hereto (the “Relocation Property” and the “Current Property”).

Among other things, the Agreement requires PDC to convey the Relocation Property to PF&R or provide funds for the acquisition of the Relocation Property upon the satisfaction of certain conditions precedent, and requires in turn PF&R to exchange with PDC the Current Property after fulfilling its obligations to construct and complete certain infrastructure and project improvements on the Relocation Property, all as more particularly set forth in the Agreement. Other property or value was part of the whole consideration given for the Relocation Property conveyance referenced herein.

Pursuant to such Agreement, PF&R has agreed to develop the Relocation Property in accordance with certain provisions of the Agreement.

Notwithstanding the above, PDC retains no interest in or to the three-quarters block Relocation Property

 PDC and PF&R execute this Memorandum to acknowledge being bound by the Agreement and to give notice of the Agreement to third parties.

CITY OF PORTLAND, a municipal corporation of the State of Oregon, acting by and through the PORTLAND DEVELOPMENT COMMISSION, the duly designated urban renewal agency of the City of Portland

By:                 Donald F. Mazziotti, Executive Director

Date:  __________________, 2004

By:                 Fire Commissioner

Date:  __________________, 2004

By:                 Chief Ed Wilson, PF&R

Date:  __________________, 2004

STATE OF OREGON)

 ) ss.

County of Multnomah  )

 This instrument was acknowledged before me on __________________, 2004, by Donald F. Mazziotti, Executive Director of the PORTLAND DEVELOPMENT COMMISSION, the duly designated urban renewal agency of the City of Portland.

   ____________________________  

   Notary Public for

   My commission expires:    

[Acknowledgements continued on next page]

STATE OF OREGON  )

 ) ss.

County of Multnomah  )

 This instrument was acknowledged before me on __________________, 2004, by____________________, Fire Chief for PORTLAND FIRE AND RESCUE of the City of Portland.

   ____________________________

   Notary Public for

             My commission expires:    

EXHIBIT 1 to EXHIBIT G

RELOCATION PROPERTY:  1 NW Couch Street, Portland, Oregon

Legal Description

Lots 1, 4, 5, 6, 7 and 8, Block 8 of Couch’s Addition, in the City of Portland, County of Multnomah, State of Oregon

CURRENT PROPERTY:  55 Ash Street, Portland, Oregon

Legal Description

Lots 1-8, BLOCK 34, Portland, in the City of Portland, County of Multnomah, State of Oregon