HomeMy WebLinkAbout2025, SKHHP, Burien Family Housing - Partners ContractSKHHP Housing Capital Fund Contract Page 1 of 39 2025 Contract – 2022-02
South King Housing and
Homelessness Partners
25 W Main Street
Auburn, WA 98001
(253) 931-3042
cvgoodwin@skhhp.org
www.skhhp.org
Contractor MHNW 28 Burien 9 LLLP
Project Title Burien Family Housing
Contract Amount $ $3,093,308.00
Contract Start Date: 06/05/2025
Project Construction Completion Date: 03/31/2027
Operations Start Date: 03/31/2027
Contract End Date: 12/31/2077
DUNS No. (if applicable) NA SAM No. (if applicable) NA
Federal Taxpayer ID No. 93-4339589
SOUTH KING HOUSING AND HOMELESSNESS PARTNERS CONTRACT
THIS CONTRACT No. 2022-02 (“Contract”) made and entered into on this 5th day of June, 2025
by and between the City of Auburn, as Administering Agency for itself and for the Cities of Burien,
Covington, Des Moines, Federal Way, Kent, Maple Valley, Normandy Park, Renton and Tukwila, each of
which is a member jurisdiction of the SOUTH KING HOUSING AND HOMELESSNESS PARTNERS
(“SKHHP”), an RCW 39.34 joint board, as described below, and MHNW 28 BURIEN 9 LLLP, a
Washington limited liability limited partnership (the “Contractor”), whose address is c/o Mercy Housing
Northwest, 6930 Martin Luther King Jr. Way S., Seattle, WA 98118, and/or its successors or assigns.
Contractor is a Washington limited liability limited partnership, which is controlled by a Washington
nonprofit corporation. Use of the term "Contractor" in this Contract is for ease of reference only and in no
respect signifies that the party is a "Contractor" as described in 2 C.F.R. §200.331. Contractor and SKHHP
are collectively referred to herein as the “Parties”.
RECITALS
1. In order to support creating and preserving affordable housing for South King County, the
Cities of Auburn, Burien, Covington, Des Moines, Federal Way, Kent, Normandy Park, Renton, and
Tukwila, and King County entered into an interlocal agreement in 2019 (the “2019 Interlocal Agreement”)
to create a joint undertaking known as the South King Housing and Homelessness Partners. The Cities of
Maple Valley and SeaTac subsequently adopted the 2019 Interlocal Agreement as companion agreements.
2. In 2021, (a) the Cities of Auburn, Burien, Des Moines, Federal Way, Kent, Normandy
Park, Renton, and Tukwila (each, a “Member Jurisdiction”) enacted an interlocal agreement to pool RCW
82.14.540 sales tax funds with SKHHP and (b) the Cities of Covington and Kent enacted an interlocal
agreement in 2023, and the City of Maple Valley joined the interlocal agreement in 2024 through the
execution of a Companion Agreement, to pool RCW 82.14.530 sales tax funds with SKHHP, in each case
to administer the funds through SKHHP’s Housing Capital Fund. and (c) the City of SeaTac pooled general
funds in 2024 for purposes of supporting projects administered through the Housing Capital Fund. Each of
the cities listed in this Section 2 are referred to herein as a “Member Jurisdiction”).
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3. The SKHHP Executive Board has developed recommended conditions to ensure that its
affordable housing funds are used only for their intended purpose and that projects financed with these
funds maintain their affordability over time.
4. The legislative body of each SKHHP Member Jurisdiction that participates in funding a
SKHHP project or program must authorize its specific contribution of funds to SKHHP’s Housing Capital
Fund toward the project or program.
5. The purpose of this Contract is to set forth the terms and conditions by which SKHHP will
use a portion of its Housing Capital Funds to support the construction of the project known as Burien Family
Housing (“Project”), a to be constructed multi-family housing project in Burien, Washington, having a mix
of 1, 2, 3, and 4 bedroom units for households earning a mix of 30% and 50% area median income (“AMI”).
The Project is or will be located on the real property described in Exhibit A, attached hereto and
incorporated by reference.
6. This Contract to provide funding to the Project is entered into pursuant to legislative actions
taken by the City Councils of SKHHP’s Member Jurisdictions that establish the following Project funding
contributions:
2022 Project Award:
City Date Amount Proportionate Share
Auburn 3/6/2023 $230,532.27 21.1%
Burien 2/6/2023 $110,495.25 10.1%
Des Moines 3/9/2023 $39,091.99 3.6%
Federal Way 1/17/2023 $183,573.11 16.8%
Kent 2/7/2023 $249,387.81 22.5%
Normandy Park 2/14/2023 $2,161.58 0.2%
Renton 3/13/2023 $254,678.90 23.3%
Tukwila 2/13/2023 $23,387.09 2.1%
TOTAL: - $1,093,308.00 100%
2024 Project Award:
City Date Amount Proportionate Share
Covington $153,964.00 7.7%
Kent $1,485,801.00 74.3%
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Maple Valley $360,235.00 18.0%
TOTAL: - $2,000,000.00 100%
7. Each city contributing funding to this Contract is a member of SKHHP pursuant to an
Interlocal Agreement for SKHHP dated January 1, 2019 (the “Interlocal Agreement”) or a companion
agreement dated February 1, 2022. The City of Auburn, separate from its role as a contributing City to the
Project, has been appointed as the administering agency of SKHHP, pursuant to SKHHP Resolution No.
2019-01 (“Administering Agency”). Nothing in this Contract modifies the relationship between the separate
cities established through the Interlocal Agreement or the resolutions designating the Administering
Agency, nor does this Agreement create any additional rights, obligations, or covenants between and among
the cities.
8. SKHHP desires to loan certain funds to the Contractor (the “Loan”) for use as described in
this Contract and as authorized by contributing city resolutions, for the purpose of implementing eligible
activities as applicable under one or more of the following: HUD regulations, State laws, and/or adopted
County and/or City ordinances of the project location.
NOW, THEREFORE, for and in consideration of payments, covenants, and agreements hereinafter
mentioned, to be made and performed by the Parties hereto, the Parties mutually covenant and agree to
abide by the provisions of this Contract.
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INDEX TO CONTRACT
1. SCOPE OF CONTRACT AND
INCORPORATION OF EXHIBITS.......... 5
2. CONTRACT TERM ............................... 5
3. TERM OF COMPLIANCE ...................... 6
4. FUTURE SUPPORT ............................... 6
5. COMPENSATION AND METHOD OF
PAYMENT ............................................ 6
6. PROJECT BUDGET ............................. 10
7. CONTRACT AMENDMENTS AND
EXTENSIONS ..................................... 10
8. INTERNAL CONTROL, ACCOUNTING
SYSTEM AND AUDITS ...................... 10
9. PROJECT RECORDS ........................... 11
10. EVALUATIONS AND INSPECTIONS .. 12
11. CORRECTIVE ACTION ...................... 12
12. ASSIGNMENT .................................... 13
13. TERMINATION .................................. 13
14. ENTIRE CONTRACT/WAIVER OF
DEFAULT ........................................... 14
15. INDEPENDENT CONTRACTOR ......... 14
16. HOLD HARMLESS AND
INDEMNIFICATION ........................... 15
17. INSURANCE REQUIREMENTS—
GENERAL .......................................... 15
18. NONDISCRIMINATION ...................... 21
19. SUBCONTRACTS AND PURCHASES . 21
20. DEBARMENT ..................................... 22
21. BOARD OF DIRECTORS .................... 22
22. CONFIDENTIALITY ........................... 23
23. NOTICES ............................................ 23
24. SERVICES PROVIDED IN
ACCORDANCE WITH LAW AND RULE
AND REGULATION ........................... 23
25. POLITICAL ACTIVITY PROHIBITED . 24
26. FORCE MAJEURE .............................. 24
27. FUNDING DOCUMENTS .................... 24
28. ANTI-DISPLACEMENT AND
RELOCATION ASSISTANCE FOR
CAPITAL PROJECTS .......................... 25
29. PROPERTY MANAGEMENT FOR
CAPITAL PROJECTS .......................... 25
30. TAXES AND LICENSES ..................... 25
31. PROCEDURE IN THE EVENT OF
CASUALTY/CONDEMNATION FOR
CAPITAL PROJECTS .......................... 25
32. CODE OF CONDUCT .......................... 26
33. MISCELLANEOUS PROVISIONS ........ 26
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EXHIBITS ATTACHED HERETO
“A” LEGAL DESCRIPTION OF PROPERTY
“B” PROJECT REQUIREMENTS
“C” PROJECT BUDGET
GENERAL TERMS AND CONDITIONS
1. SCOPE OF CONTRACT AND INCORPORATION OF EXHIBITS
A. Scope
This Contract between the Parties shall include and incorporate its signature page, Exhibits A, B
and C attached hereto (each a “Project Exhibit”) and incorporated by reference, all referenced matters and
laws, and any written amendments made in accordance with these Contract provisions. This Contract
supersedes any and all prior agreements regarding the Project as described in the attached Project/Program
Exhibit(s). This Contract shall govern the Project, which includes acquiring, improving, and/or
rehabilitating real property and the construction of affordable housing.
B. Conflicts in Contract Language
Unless the Parties agree in writing otherwise, the language in a Project Exhibit will control over
the language in this Contract in the event of conflict.
C. Mandatory Certification
The Contractor certifies that it shall comply with Contract Sections 18 (Nondiscrimination and
Equal Employment Opportunity) and 25 (Political Activity Prohibited).
D. Contact Person
SKHHP and the Contractor shall designate a contact person for each Project Exhibit incorporated
in this Contract. All correspondence, reports and invoices shall be directed to this designated contact person.
This provision does not supplant or override Section 23 (Notices) of this Contract.
E. Lead-Based Paint
The Contractor shall comply with the Lead-Based Paint Poisoning Prevention Act (42 U.S.C.
§§ 4821-4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. §§ 4851-4856),
and implementing regulations at 24 C.F.R. Part 35, subparts A, B, J, K, and R. Generally, these laws: (1)
prohibit the use of lead-based paint (whenever Contract funds are used directly or indirectly for
construction, rehabilitation, or modernization of residential structures), (2) require the elimination of
immediate lead-based paint hazards in residential structures, and (3) require notification to certain
residential structure tenants/purchasers of lead-based paint poisoning hazards.
2. CONTRACT TERM
The term of this Contract begins on the date of its execution and shall continue in effect until the
Contract End Date, unless and until terminated earlier in accordance with Section 13 (Termination) of this
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Contract. Project Exhibits for individual projects under this Contract shall specify a project’s start date, end
date and affordability period, unless the Parties agree on different date(s) pursuant to the terms and
conditions of the Contract.
3. TERM OF COMPLIANCE
The Contractor shall own and operate the Project during its Affordability Period as defined in
Exhibit B to this Contract.
4. FUTURE SUPPORT
Except as expressly set forth in this Contract, SKHHP makes no commitment to support the
services or Project during construction or in the future.
5. COMPENSATION AND METHOD OF PAYMENT
SKHHP shall compensate the Contractor only for the approved activities specified in each Project
Exhibit. SKHHP shall advance funds to the Contractor for satisfactory completion of the requirements
specified in this Contract and the Project Exhibit, and upon Contractor’s submission to SKHHP of invoices
and supporting documentation described in Section 5.B below. Compensation shall not exceed a Project
Exhibit’s specified amount. SKHHP may, at its sole option, waive any condition, wholly or in part, with
respect to any disbursement. Any request for disbursement by Contractor shall constitute a representation
and warranty that, to the best of Contractor’s knowledge, all applicable conditions to Contractor’s right to
such disbursement are satisfied, except as otherwise expressly set forth in the request for disbursement or
in a monthly progress report submitted with such request. SKHHP will compensate the Contractor in the
following manner:
A. Start Date and End Date
Start Dates and End Dates for individual portions of the Project shall be specified in each Project
Exhibit. SKHHP will not reimburse Contractor for costs incurred prior to a Project Exhibit’s Start Date or
after its End Date. The funding commitment continues for thirty-six (36) months from the date of Council
approval of original award and shall expire thereafter. An extension may be requested to SKHHP staff no
later than sixty (60) days prior to the expiration date. At that time, the Contractor will provide a status report
on progress to date and expected schedule for start of construction and project completion. The SKHHP
Executive Board will consider a twelve-month extension only on the basis of documented, meaningful
progress in bringing the project to readiness or completion. At a minimum, the Contractor will demonstrate
that all capital funding has been secured or is likely to be secured within a reasonable period of time.
B. Procedure for Draws; Submission of Invoices, Supporting Documentation and Reports
(i) Funds shall be disbursed by SKHHP no more frequently than monthly unless otherwise
approved by SKHHP and shall be conditioned upon at SKHHP’s option, upon SKHHP inspection and
approval of completed work. Any SKHHP inspection shall be completed and SKHHP’s notice of approval
or disapproval shall be given within ten (10) working days of receipt of Contractor’s complete request.
SKHHP shall not be responsible for any misapplication of funds by any party to whom disbursement is
made. Fund disbursements may be made, in SKHHP’s discretion, by checks payable to either or both of
Contractor and the contractor, supplier or other person entitled to payment for services or materials in
connection with the Project. If funds are disbursed to Contractor then Contractor shall apply such funds
immediately to the documented Project expenses for which funds are disbursed, and until so applied such
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funds shall be held in trust for SKHHP.
(ii) Contractor shall not request disbursement of funds from SKHHP until the funds are needed
for payment of eligible costs. The amount of each request must be limited to the amount needed.
(iii) To receive payment under this Contract, Contractor shall (i) submit to SKHHP an invoice
for Contractor’s paid costs that includes supporting documentation (such as purchase orders, bills, etc.),
lien waivers from the general contractor for the Project for which a payment request is made, and all reports
specified in each Project Exhibit and (ii) follow the procedures provided for in the Project Exhibit(s), if
applicable. Upon SKHHP’s receipt and approval of a complete and correct Contractor invoice and other
required documentation, SKHHP shall begin processing the invoice for payment within thirty (30) days
unless Project Exhibit(s) provide otherwise.
(iv) On or before the date of this and before the first advance of funds:
(a) Contractor shall furnish SKHHP, at Contractor’s expense, from a title insurance
company acceptable to SKHHP, an ALTA Extended Coverage 2021 form lender’s policy of title
insurance in the amount of the Loan, showing SKHHP as an insured mortgagee, that fee title to the
Property is vested in Contractor and that the Deed of Trust is a valid lien upon the Property, subject
only to the Covenant, such encumbrances described in the Priority and Subordination Agreement
executed concurrently herewith (the “Priority Agreement”) and any other exceptions satisfactory
to SKHHP in its sole discretion. The title policy shall: (a) include such endorsements as SKHHP
shall request; (b) expressly insure SKHHP against the rights and liens of mechanics and other
statutory lien claimants; (c) contain no exceptions for matters that could be ascertained by
inspection or that would be disclosed by survey or rights of parties in possession; and (d) contain
no exception for matters shown by survey except as SKHHP may allow in its discretion.
(b) Contractor shall have delivered to SKHHP an opinion of counsel in form and
content satisfactory to SKHHP, to the effect that: (a) the Contractor and its applicable affiliates, are
existing; (b) the Funding Documents (defined below) are duly authorized, executed and delivered
by Contractor; (c) the Funding Documents are the valid, binding obligations of Contractor,
enforceable in accordance with their terms; and (d) the execution, delivery and performance of the
Funding Documents by Contractor will not cause a default under or violate any applicable laws or
any judgments, orders, decrees, agreements or instruments known to such counsel to which the
Contractor is a party or by which it is bound.
(c) Contractor shall have provided to SKHHP evidence satisfactory to SKHHP that
Contractor has obtained binding commitments for all financing contemplated by the Project
Budget; that all such commitments are in full force and effect, and that all conditions to availability
of funds thereunder are satisfied or will be satisfied in a timely manner for disbursements consistent
with a disbursement schedule approved by SKHHP.
(d) Contractor, and all other necessary parties, shall have executed and delivered to
SKHHP all other Funding Documents required by SKHHP in form and content acceptable to
SKHHP.
(e) Contractor shall have provided to SKHHP a report of a qualified environmental
consultant with respect to an investigation of hazardous substance issues and the presence of
underground tanks on the Property, and such other documentation regarding environmental
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conditions as SKHHP may require, and such report and documentation shall be in form and content
acceptable to SKHHP.
(f) Contractor shall have provided to SKHHP copies of insurance policies or other
evidence satisfactory to SKHHP of property and liability insurance in compliance with the Funding
Documents.
(g) Contractor shall have satisfied all conditions in subsection B(v) of this Section and
any other conditions to disbursement (except for any waived in writing by SKHHP) set forth in this
Contract shall be satisfied.
(v) The following shall be conditions precedent to SKHHP’s obligation to make each
disbursement of funds requested by Contractor:
(a) Contractor’s draw request shall include a certificate in the form prescribed by
SKHHP, signed by Contractor or its agent, by the general contractor and, if so requested by
SKHHP, by the Project architect, as to the percentage of completion and the conformity of work to
the Plans and Specifications (as defined below in subsection g) and showing to the satisfaction of
SKHHP the allocation of the costs of all work and materials as between the SKHHP-funded Units
and other portions of the Project, if any. Such certificate(s) shall demonstrate to the satisfaction of
SKHHP that the Project is “in balance,” that is, (i) the percentage of completion is at least equal to
the ratio of (A) the total of all disbursements and pending requests for disbursement of funds for
Construction Costs under this Contract and all other sources, to (B) the total funds allocated for
Construction Costs in the Project Budget, and (ii) sufficient funds remain undisbursed from all such
sources to complete construction. For the purpose of any computation as to whether the Project is
“in balance,” funds withheld from progress payments to the general contractor as retainage shall be
considered as disbursed, and construction contingency funds in the Project Budget shall be
considered as allocated to Construction Costs.
(b) The percentage of any Construction Cost line item in the Project Budget or in any
schedule of values in the Construction contract that will have been paid out after the disbursement
shall not exceed the percentage of completion of that line item as certified by Contractor, general
contractor and Project architect to the satisfaction of SKHHP.
(c) All contractors and subcontractors for the Project shall be in compliance with the
terms of their respective contracts in all material respects, including without limitation all
provisions of such contracts required to be included in accordance with the terms hereof, all of
which are material.
(d) SKHHP shall not be prohibited from disbursing or approving disbursement under
any applicable lien laws or stop notice statutes or otherwise.
(e) SKHHP shall have received signed acknowledgments of payment and either
conditional lien releases or unconditional lien releases , through the date covered by the
immediately preceding advance, from the general contractor.
(f) Contractor shall have provided evidence satisfactory to SKHHP of compliance
with the Evergreen Sustainable Development Standard (See Project Exhibit).
(g) If required by SKHHP, a construction consultant engaged by SKHHP or other
representative of SKHHP (“Construction Consultant”), shall have provided, at Contractor’s sole
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expense, a certificate or report based upon a site observation made by the Construction Consultant
not more than ten (10) days prior to the date of such the request for disbursement, in which the
Construction Consultant in substance: (i) verifies that the portion of the Project completed as of the
date of such site observation has been completed substantially in accordance with the Plans and
Specifications; (ii) states its estimate of (A) the percentage of construction of the Project completed
as of the date of such site observation, (B) Construction Costs actually incurred for work in place
as part of the Project as of the date of such site observation, (C) the sum necessary to complete
construction of the Project in accordance with the plans and specifications delivered to SKHHP in
connection with the Project, and approved in writing by SKHHP and Contractor, as the same may
be modified with the written approval of SKHHP (“Plans and Specifications”), which are
incorporated herein by reference and which modifications shall become a part of this Contract upon
such approval, and (iv) the amount of time from the date of such inspection which will be required
to complete construction of the Project in accordance with the Plans and Specifications; and (c)
approves the amount to be advanced.
C. Final Invoice for Capital Projects
(i) Unless Project Exhibit(s) provide otherwise, the Contractor shall submit its final invoice,
supporting documentation, and any outstanding reports for each Project Exhibit before the Project
Exhibit’s End Date.
(ii) If the Contractor fails to timely submit final invoices, supporting documentation, and
reports as required, SKHHP shall be relieved of all liability to pay the Contractor’s final invoice or any
subsequent invoice. However, SKHHP may choose to pay any invoice that Contractor fails to timely
submit without waiving the provisions of this paragraph.
(iii) SKHHP shall retain five percent (5%) of the funds provided under this Contract
(“Retention”) as a trust fund for the protection and payment of Contract claims and legally required
taxes, increases and penalties. SKHHP shall release this retention only after:
(a) Contractor has completed all construction activities, and has met all standards related to
labor and the environment (see Section 11 (Construction Requirements) and Section 13
(Amendments and Modifications) of the Exhibit B);
(b) Contractor has provided SKHHP with a final Evergreen Sustainable Development
Standard (ESDS) v. 4.1 monitoring checklist; and
(c) SKHHP has verified that the Contractor has complied with all provisions of this Exhibit
that are applicable to construction contracts.
D. Unspent Funds
(i) SKHHP shall recapture from the Contractor any unspent funds encumbered by this
Contract after each Project Exhibit’s End Date. To the extent Contractor holds any unspent funds after a
Project Exhibit’s End Date, Contractor shall return such funds to SKHHP within ten (10) days of such
Project Exhibit’s End Date.
(ii) During the term of the Contract, SKHHP may agree with the Contractor to recapture any
unspent funds for reallocation to other Project activities, so long as they comply with the eligible uses of
the funds.
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E. Reimbursement for Travel:
SKHHP will not reimburse the Contractor for travel unless otherwise expressly specified within a
Project Exhibit.
Should any conflict arise between Exhibit B and this section, the terms of Exhibit B shall control.
6. PROJECT BUDGET
The Contractor shall apply SKHHP funds under this Contract in accordance with each Project
Exhibit. Contractor may not exceed a budgeted line-item contained within Exhibit C by more than 10%
without prior written approval from SKHHP. Contractor shall support such requests with documentation
explaining the nature and purpose of the request.
7. CONTRACT AMENDMENTS AND EXTENSIONS
Either party may request to amend or extend this Contract. Unless otherwise provided in the
Contract, an amendment shall not take effect until both Parties approve it in writing. Amendments to the
Exhibits shall be considered to be approved in writing when signed by both Parties. Exhibit amendments
shall not require a further written document attaching the amended exhibit and striking its prior versions to
be effective. If different versions of Exhibits conflict, the version maintained by SKHHP as the then-current
version, signed by the Contractor and SKHHP, shall prevail.
Any budget revisions are subject to Section 6 (Projected Budget) of this Contract.
8. INTERNAL CONTROL, ACCOUNTING SYSTEM AND AUDITS
A. Internal Control and Accounting
The Contractor shall establish and maintain an accounting system and internal controls that comply
with applicable, generally accepted accounting principles and financial and governmental reporting
standards as prescribed by the Financial Accounting Standards Board or Governmental Accounting
Standard Board, as applicable.
B. Audits
The Parties agree that SKHHP’s funding, invoice payment and expense reimbursement under this
Contract are subject to audit by the State Auditor, the Administering Agency of SKHHP, and/or the
Contractor’s independent audit services. The Parties further agree as follows:
(i) General Requirements. Contractor must procure independent audit services and those
services shall be based on the following guidelines:
(a) The Contractor shall maintain its records and accounts so as to facilitate audits
and shall ensure that Subcontractor(s) also maintain auditable records.
(b) The Contractor is responsible for any audit exceptions incurred by its own
organization or that of its Subcontractor(s).
(c) The Contractor shall perform an independent audit each fiscal year.
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(ii) Right to Recover Disallowed Costs. SKHHP reserves the right to recover from the
Contractor all disallowed costs disclosed in audit.
(iii) Audit Report. Responses to any unresolved financial findings and disallowed or questioned
costs shall be included with the audit report. The Contractor must respond to SKHHP’s requests for
information or corrective action concerning audit issues within thirty (30) days of the date of SKHHP’s
request.
(iv) Documentation Requirements. The Contractor must send SKHHP all required audit reports
no later than six (6) months after the end of the Contractor’s fiscal year. Reports shall be scanned and sent
to Claire Goodwin, SKHHP Executive Manager, at cvgoodwin@skhhp.org or such other person as
requested by SKHHP.
9. PROJECT RECORDS
A. Maintenance and Retention of Records
The Contractor shall maintain all project accounts and records (including personnel, property,
financial, and programmatic records, and other such records specified in each Project Exhibit) that are
necessary for Contractor’s accounting and compliance with this Contract. Contractor shall retain these
records for at least six (6) years after the termination or expiration of this Contract, unless the law or a
Project Exhibit specifies a different period for records retention.
B. Location of Records/Notice to SKHHP
If different from the Contractor address listed on page 1 of this Contract, Contractor shall inform
SKHHP in writing of the location of the above books, records, documents, and other evidence within ten
(10) business days of any such relocation.
C. Financial Management Records
Contractor’s financial records shall identify the source and application of funds for activities under
this Contract, in accordance with 2 C.F.R. Part 200. These records shall contain information pertaining to
grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income.
D. SKHHP Inspection of Records
SKHHP may visit the Contractor’s work site and/or office to review the foregoing records at any
time. The Contractor shall provide every assistance requested by SKHHP during such visits. In all other
respects, the Contractor shall make the foregoing records available to SKHHP for inspection and copying
upon request. If this Contract involves federal funds, the Contractor shall comply with all record keeping
requirements set forth in any federal rules, regulations or statutes included or referenced in the contract
documents.
E. Public Records
Contractor understands and agrees that this Contract, all of its exhibits and attachments, and any
other documents prepared or submitted pursuant to this Contract are subject to public disclosure under
RCW 42.56 or other applicable law. If SKHHP or any of its Member Jurisdictions receives a public records
request seeking any documents related to this Contract, Contractor agrees to provide SKHHP with its fullest
assistance in preserving, locating, and providing records required to fulfill the request. Records include any
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item falling within the definition contained in RCW 42.56.010(3) & (4).
10. EVALUATIONS AND INSPECTIONS
A. Right of Access to Facilities for Inspection of Records
The Contractor shall provide right of access to its facilities, including those of any subcontractor,
to SKHHP, King County (the “County”), the State, and/or federal agencies or officials at all reasonable
times, subject to the right of tenants in order to monitor and evaluate the activities funded under this
Contract.
B. Time for Inspection and Retention
The records and documents with respect to all matters covered by this Contract shall be subject at
all times to inspection, review, or audit by SKHHP, the County and/or federal/state officials so authorized
by law during the performance of this Contract and six (6) years after the termination date, unless a different
period is specified in the Project Exhibit or attachment or a longer retention period is required by law.
C. Agreement to Cooperate
The Contractor agrees to cooperate with SKHHP (or its agent) in the evaluation of the Contractor’s
performance under this Contract and to make available all information reasonably required by any such
evaluation process.
11. CORRECTIVE ACTION
If SKHHP determines that the Contractor has failed to (i) comply with any material Contract terms
or conditions, (ii) comply with any of the Funding Documents, or (iii) provide the work or services required
under this Contract in any manner (each a “breach”), and if SKHHP determines that the breach warrants
corrective action, then, in addition (and not in lieu of) any remedy available in the Funding Documents, the
following procedures shall apply:
A. Written Notification
SKHHP shall notify the Contractor in writing of the nature of the breach.
B. Contractor’s Correction Plan
The Contractor shall respond with a written corrective action plan within ten (10) business days of
receiving such notification from SKHHP (unless SKHHP in its sole discretion agrees to extend this response
time in writing). The Contractor’s response and plan shall indicate: (i) the steps being taken to correct the
specified breach, and (ii) the proposed completion date for curing the breach (which shall not be more than
sixty (60) days from the Contractor’s response, unless extended pursuant to this section). If the breach is
such that it is not reasonably capable of being cured within sixty (60) days or such longer period if so
specified, and if Contractor (a) initiates corrective action within said period and (b) diligently, continually
and in good faith works to effect a cure as soon as possible, the Contractor shall have such additional time
as is reasonably necessary to cure the default prior to the exercise of any remedies by SKHHP.
C. SKHHP’s Determination of Corrective Action Plan Sufficiency
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SKHHP will evaluate the sufficiency of Contractor’s proposed corrective action plan and notify
Contractor of its determination in writing. SKHHP’s determination of Contractor’s corrective action plan
sufficiency shall be at SKHHP’s sole discretion.
D. Termination or Suspension of Contract
If the Contractor fails to timely respond with a corrective action plan, or SKHHP determines that
Contractor’s corrective action plan is insufficient, SKHHP may partially or wholly terminate or suspend
this Contract pursuant to Section 13.B (Termination for Cause).
E. SKHHP Withholding of Payment
SKHHP may withhold any payment to the Contractor or prohibit the Contractor from incurring
additional obligations of funds until SKHHP is satisfied that corrective action has been taken or completed.
F. No Waiver of Other Remedies
Nothing herein shall be deemed to affect or waive any rights the Parties may have pursuant to
Section 13 (Termination) of this Contract, the other Funding Documents, or any other remedies authorized
by law.
12. ASSIGNMENT
The Contractor shall not assign or transfer any portion of this Contract, or transfer or assign any
claim arising pursuant to this Contract without SKHHP’s prior written consent, which consent shall be in
SKHHP’s sole discretion. Contractor shall deliver its consent request to SKHHP at least thirty (30) days
before the proposed assignment, transfer or subcontract. The request shall include the proposed assignee,
transferee or subcontractor, and their proposed mission, legal status, and financial and management
capabilities (as is reasonably available to the Contractor). Within fifteen (15) days after Contractor’s request
for consent, SKHHP may request additional available information about the proposed assignee,
subcontractor or transferee. Any assignment, transfer, or subcontract without prior SKHHP written consent
shall be void. Project Exhibits may expressly specify additional terms for SKHHP consent to assignment,
transfer or subcontract that shall supplement this Section’s requirements and limitations.
Notwithstanding the foregoing or anything to the contrary herein, SKHHP’s prior written consent shall not
be required for (i) transfers by the investor limited partner (together with its successors and/or assigns, the
“Investor Limited Partner”) of the Contractor of its limited partner interest, (ii) transfers of interests in the
Investor Limited Partner, and (iii) the removal of the general partner of the Contractor for cause under the
terms of the Contractor’s organizational documents so long as an affiliate of the Investor Limited Partner
is admitted as the replacement general partner.
13. TERMINATION
A. Termination for Convenience
(i) [Reserved].
(ii) Upon seven (7) days advance written notice to Contractor, SKHHP may partially or wholly
terminate this Contract if expected or actual funding is withdrawn, reduced, or limited in any way prior to
the termination date set forth in the Project Exhibit.
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B. Termination for Cause
(i) SKHHP may partially or wholly terminate this Contract upon seven (7) days advance
written notice to the Contractor if SKHHP determines in its sole discretion that:
the Contractor has materially breached any Contract duty, obligation, or service
and has failed to cure the breach using the Section 11 corrective action process. In this event, the
Contractor shall be liable to SKHHP for damages, including any additional costs of procuring
similar services from another source; or
the Contract duties, obligations, or services have become impossible, illegal, or
infeasible.
(ii) If termination results from acts or omissions of the Contractor (including but not limited to
misappropriation of funds, nonperformance of required services, or fiscal mismanagement), the Contractor
shall return any such misappropriated or unexpended funds to SKHHP immediately.
C. If the Contract is terminated as provided in this section:
(i) SKHHP shall only be liable to reimburse Contractor for services rendered before the
effective date of termination; and
(ii) On and after the termination date, Contractor shall be released from any further obligation
to provide services under the Contract.
D. Non-Waiver of Rights
Nothing herein shall limit, waive, or extinguish a party’s rights or remedies in this Contract or in
law or equity if the other party breaches any of the obligations, terms and conditions set forth in this
Contract.
14. ENTIRE CONTRACT/WAIVER OF DEFAULT
The Parties agree that this Contract (including all its exhibits and addenda), and any amendments or
modifications executed consistent with Section 6 and/or Section 7, is the complete expression of the
described subject matter, and that any unincorporated oral or written representations or understandings are
excluded. Both Parties recognize that time is of the essence in the performance of this Contract. Waiver of
any default shall not be deemed to be a waiver of any subsequent default. Waiver or breach of any provision
of the Contract shall not be deemed to be a waiver of any other or subsequent breach and shall not be
construed to be a modification of the terms of the Contract unless stated to be such through written approval
by SKHHP, which shall be attached to the original Contract.
15. INDEPENDENT CONTRACTOR
A. Contractor shall provide all services under this Contract as an independent Contractor, and
neither it nor its officers, agents, or employees are employees of SKHHP or any of SKHHP’s Member
Jurisdictions for any purpose. The Contractor shall be responsible for all federal and/or state tax, industrial
insurance, and Social Security liability that may result from its performance of this Contract and resulting
compensation. Contractor shall make no claim of career service or civil service rights which may accrue to
SKHHP employees under state or local law.
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B. SKHHP and its Member Jurisdictions assume no responsibility for the payment of any
compensation, wages, benefits, or taxes, by or on behalf of the Contractor, its employees, and/or others by
reason of this Contract. The Contractor shall protect, indemnify, defend and save harmless SKHHP and its
Member Jurisdictions’ officers, agents, and employees from and against any and all claims, costs, and/or
losses whatsoever occurring or resulting from: (1) the Contractor’s failure to pay any such compensation,
wages, benefits, or taxes, and/or (2) the supplying to the Contractor of work, services, materials, or supplies
by Contractor employees or other suppliers in connection with or support of the performance of this
Contract. The rights of any persons to indemnity hereunder shall survive the final payment of funds under
this Contract. The provisions of this section shall survive the expiration or termination of this Contract.
16. HOLD HARMLESS AND INDEMNIFICATION
A. The Contractor agrees that it is financially responsible for and will repay SKHHP all
indicated amounts following an audit exception which occurs (i) due to the negligence, intentional act,
and/or (ii) failure, for any reason, to comply with the terms of this Contract by the Contractor, its officers,
employees, agents, and/or representatives. This duty to repay SKHHP shall not be diminished or
extinguished by the prior termination of the Contract.
B. The Contractor shall defend, indemnify and hold SKHHP, its officers, officials, employees,
volunteers and SKHHP Member Jurisdictions harmless from any and all claims, injuries, damages, losses
or suits including reasonable attorney fees, arising out of or in connection with the performance of this
Contract and/or conduct on or around the Project, except to the extent such injuries or damages are caused
solely by the negligence or willful misconduct of SKHHP. However, should a court of competent
jurisdiction determine that this Contract is subject to RCW 4.24.115, then, in the event of liability for
damages arising out of bodily injury to persons or damages to property caused by or resulting from the
concurrent negligence of the Contractor and SKHHP, its officers, officials, employees, volunteers or
SKHHP Member Jurisdictions, the Contractor’s liability hereunder shall be limited to the extent of the
Contractor’s negligence. It is further specifically and expressly understood that the indemnification
provided herein constitutes the Contractor’s waiver of immunity under Industrial Insurance, Title 51 RCW,
solely for the purposes of this indemnification. This waiver has been mutually negotiated by the Parties.
The provisions of this section shall survive the expiration or termination of this Contract.
C. For purposes of this section, claims shall include, but not be limited to, assertions that use
or transfer of software, book, document, report, film, tape, or sound reproduction or material of any kind,
delivered hereunder, constitutes an infringement of any copyright, patent, trademark, trade name, and/or
otherwise results in unfair trade practice.
D. The indemnification, protection, defense and hold harmless obligations contained herein
shall survive the expiration, abandonment or termination of this Contract.
17. INSURANCE REQUIREMENTS—GENERAL
A. Insurance Required
The Contractor shall procure and maintain for the term of this Contract, insurance covering
SKHHP, as described in this section, against claims which may arise from, or in connection with, the
performance of work hereunder by the Contractor, its agents, representatives, employees, contractors,
and/or subcontractors. The Contractor or its contractor/subcontractor shall pay the costs of such insurance.
The Contractor shall obtain separate certificates of insurance and policy endorsements from each of its
contractors/subcontractors as evidence of compliance with the insurance requirements of this Contract and
shall furnish it upon request by SKHHP.
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Contractor shall provide evidence of the insurance required under this Contract, including a
Certificate of Insurance and Endorsements covering SKHHP for full coverage and policy limits within ten
(10) business days of signing the contract. Evidence of Insurance and Endorsements shall be submitted by
email to cvgoodwin@skhhp.org. The Contractor may request additional time to provide the required
documents by emailing cvgoodwin@skhhp.org. Extensions will be granted at the sole discretion of
SKHHP.
The Contractor is responsible for ensuring compliance with all of the insurance requirements stated
herein. Failure by the Contractor, its agents, employees, officers, contractor/subcontractors, providers
and/or provider subcontractors to comply with the insurance requirements stated herein shall constitute a
material breach of this Contract.
Each insurance policy shall be written on an “occurrence” form; except that insurance on a “claims
made” form may be acceptable in SKHHP’s sole discretion with prior written approval from SKHHP. If
coverage is approved and purchased on a “claims made” basis, the Contractor warrants continuation of
coverage, either through policy renewals or the purchase of an extended discovery period, if such extended
coverage is available, for not less than three (3) years from the date of Contract termination, and/or
conversion from a “claims made” form to an “occurrence” coverage form.
Nothing contained within these insurance requirements shall be deemed to limit the scope,
application and/or limits of the coverage afforded by said policies, which coverage will apply to each
insured to the full extent provided by the terms and conditions of the policy(s). Nothing contained in this
provision shall affect and/or alter the application of any other provision contained within this Contract.
B. Risk Assessment by Contractor
By requiring such minimum insurance, SKHHP shall not be deemed or construed to have assessed
the risks that may be applicable to the Contractor under this Contract, nor shall such minimum limits be
construed to limit the limits available under any insurance coverage obtained by the Contractor. The
Contractor shall assess its own risks and, if it deems appropriate and/or prudent, maintain greater limits
and/or broader coverage.
C. Minimum Scope of Insurance
Coverage shall be at least as broad as the following:
(i) General Liability
Insurance Services Office form number (CG 00 01) covering COMMERCIAL
GENERAL LIABILITY.
(ii) Professional Liability, Errors and Omissions Coverage
In the event that services delivered pursuant to this Contract either directly or indirectly
involve or require professional services, Professional Liability, Errors and Omissions coverage
shall be provided. “Professional Services”, for the purpose of this Contract section, shall mean any
services provided by a licensed professional or those services that require a professional standard
of care.
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(iii) Automobile Liability
Insurance Services Office form number (CA 00 01) covering BUSINESS AUTO
COVERAGE, symbol 1 “any auto”; or the appropriate coverage provided by symbols 2, 7, 8, or
9.
(iv) Workers’ Compensation
Workers’ Compensation coverage, as required by the Industrial Insurance Act of the
State of Washington (RCW Title 51), as well as any similar coverage required for this work by
applicable federal or “Other States” state law.
(v) Stop Gap/Employers Liability
Coverage shall be at least as broad as the protection provided by the Workers’
Compensation policy Part 2 (Employers Liability) or, in states with monopolistic state funds, the
protection provided by the “Stop Gap” endorsement to the general liability policy.
(vi) Property Insurance
Insurance Services Office form number (CP 00 10), or its substantive equivalent,
covering BUILDING AND PERSONAL PROPERTY COVERAGE and Insurance Services
Office form number (CP 10 30) CAUSES OF LOSS – SPECIAL FORM or project appropriate
equivalent, written on a replacement cost basis is required.
(vii) Builder's Risk/Installation Floater
The Contractor shall procure and maintain during the life of the Contract, or until
acceptance of the project by SKHHP, whichever is longer, “All Risk” Builders Risk Insurance at
least as broad as ISO form number CP0020 (Builders Risk Coverage Form) with ISO form number
CP0030 (Causes of Loss—Special Form) including coverage for collapse, theft and property in
transit. The coverage shall insure for direct physical loss to property of the entire construction
project, for one hundred percent of the replacement value thereof, and include coverage for flood,
Earth Movement (including earthquake) and owner-furnished equipment, as applicable. The policy
shall be endorsed to cover the interests, as they may appear, of SKHHP, Contractor and
subcontractors of all tiers with SKHHP and its Member Jurisdictions listed as Named Insureds. In
the event of a loss to any or all of the work and/or materials therein and/or to be provided at any
time prior to the final close-out of the Contract and acceptance of the project by SKHHP, the
Contractor shall promptly reconstruct, repair, replace or restore all work and/or materials so
damaged or destroyed. Nothing herein provided for shall in any way excuse the Contractor or its
surety from the obligation of furnishing all the required m aterials and completing the work in full
compliance with the terms of the Contract. The policy shall include a waiver of subrogation in favor
of SKHHP.
D. Minimum Limits of Insurance—Capital Projects
The Contractor shall maintain limits no less than the following:
(i) Commercial General Liability: $5,000,000 combined single limit per occurrence by bodily
injury, personal injury, and property damage; and for those policies with aggregate limits, a $5,000,000
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aggregate limit.
(ii) Professional Liability, Errors, and Omissions: $1,000,000, Per Claim and in the Aggregate.
Please note that this coverage is required only in the event that services delivered pursuant to this contract
either directly or indirectly involve or require professional services.
(iii) Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and
property damage if the use of motor vehicles is contemplated.
(iv) Intentionally Deleted.
(v) Workers’ Compensation: Statutory requirements of the state of residency.
(vi) Stop Gap/Employers Liability: $1,000,000 each occurrence.
(vii) Property Insurance: One hundred percent replacement value of funded structure.
E. Minimum Limits of Insurance — Building Construction Period
Prior to commencement of building construction and until construction is complete and approved
by the Contractor, the Contractor shall cause its construction contractor and related professionals (together,
“Subcontractors”) to procure and maintain insurance against claims for injuries to persons or damages to
property which may arise from, or in connection with the activities related to this Contract. The Contractor
and SKHHP shall be named as additional insureds, for full coverage and policy limits, on liability policies
except Workers Compensation and Professional Liability, and as Named Insureds on Builders Risk policies.
The cost of such insurance shall be paid by the Contractor and/or any of the Contractor’s contractors/
subcontractors. The Contractor shall maintain, or shall cause its Subcontractors to maintain, limits no less
than the following:
(i) Commercial General Liability: $5,000,000 combined single limit per occurrence for bodily
injury, personal injury and property damage and $5,000,000 in the aggregate.
(ii) Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and
property damage.
(iii) Professional Liability, Errors & Omissions: $2,000,000, Per Claim and in the Aggregate.
Please note that this coverage is required only in the event that services delivered pursuant to this contract
either directly or indirectly involve or require professional services.
(iv) Builder's Risk Insurance: One hundred percent replacement cost value.
(v) Intentionally Deleted.
(vi) Workers Compensation: Statutory requirements of the State of residency.
(vii) Stop Gap or Employers Liability Coverage: $1,000,000, each occurrence.
F. Minimum Limits of Insurance—Services Agreements
The Contractor shall maintain limits no less than the following:
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(i) Commercial General Liability: $1,000,000 combined single limit per occurrence for bodily
injury, personal injury and property damage and $2,000,000 in the aggregate.
(ii) Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and
property damage.
(iii) Professional Liability, Errors & Omissions: $1,000,000, Per Claim and in the Aggregate.
(iv) Workers Compensation: Statutory requirements of the State of Residency.
(v) Stop Gap or Employers Liability Coverage: $1,000,000.
Paragraphs G, H, I, J, K and L below apply to Capital Projects, Construction Projects and Services
Contracts.
G. Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to, and approved by, SKHHP. The
deductible and/or self-insured retention of the policies shall not apply to the Contractor’s liability to SKHHP
and shall be the sole responsibility of the Contractor.
H. Other Insurance Provisions
The insurance policies required in this Contract are to contain, or be endorsed to contain, the
following provisions:
(i) All Liability Policies except Professional and Workers Compensation.
SKHHP, its officers, officials, employees, and agents and its Member Jurisdictions
are to be covered as additional insureds as respects liability arising out of activities performed by
or on behalf of the Contractor in connection with this Contract. Such coverage shall include
Products-Completed Operations.
To the extent of the Contractor’s negligence, the Contractor’s insurance coverage
shall be primary insurance as respects SKHHP, its officers, officials, employees, and agents. Any
insurance and/or self-insurance maintained by SKHHP, its officers, officials, employees, or agents
shall not contribute with the Contractor’s insurance or benefit the Contractor in any way.
The Contractor’s insurance shall apply separately to each insured against whom a
claim is made and/or lawsuit is brought, except with respect to the limits of the insurer’s liability.
(ii) Property Coverage Policies
SKHHP and its Member Jurisdictions shall be added to all Property Coverage
Policies as loss payees as their interests may appear.
SKHHP and its Member Jurisdictions shall be added as Named Insureds as their
interests may appear to all Builders Risk policies.
(iii) All Policies
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Coverage shall not be suspended, voided, canceled, reduced in coverage or in limits,
except by the reduction of the applicable aggregate limit by claims paid, until after thirty (30) days
prior written notice has been given to SKHHP.
I. Acceptability of Insurers
Unless otherwise approved by SKHHP, insurance is to be placed with insurers with an AM Bests’
rating of no less than A: VIII, or, if not rated with AM Bests, with minimum surpluses the equivalent of
AM Bests’ surplus size VIII.
Professional Liability, Errors, and Omissions insurance may be placed with insurers with AM
Bests’ rating of B+VII. Any exception must be approved by SKHHP.
If, at any time, the foregoing policies shall fail to meet the above requirements, the Contractor shall,
upon notice from SKHHP, promptly obtain a new policy, and shall submit the same to SKHHP, with
appropriate certificates and endorsements, for approval.
J. Verification of Coverage
The Contractor shall furnish SKHHP with certificates of insurance and endorsements required by
this Contract. The certificates and endorsements for each insurance policy are to be signed by a person
authorized by that insurer to bind coverage on its behalf. The certificates and endorsement s for each
insurance policy are to be on forms approved by SKHHP prior to the commencement of activities associated
with the Contract. SKHHP reserves the right to require complete, certified copies of all required insurance
policies at any time.
If the Contractor is a Municipal Corporation or an agency of the State of Washington and is a
member of the Washington Cities Insurance Authority (WCIA) or any other self-insurance risk pool, a
written acknowledgement/certification of current membership incorporated into this Contract will satisfy
the insurance requirements specified above.
K. Subcontractors
The Contractor shall include all subcontractors as insureds under its policies or shall require
separate certificates of insurance and policy endorsements from each subcontractor. If the Contractor is
relying on the insurance coverages provided by subcontractors as evidence of compliance with the
insurance requirements of this Contract, then such requirements and documentation shall be subject to all
of the requirements stated herein.
L. Municipal or State Contractor Provisions
If the Contractor is a municipal corporation or an agency of the State of Washington and is self-
insured for any of the above insurance requirements, a certification of self -insurance shall be provided for
the self-insured requirements and attached hereto and be incorporated by reference and shall constitute
compliance with this Section. If the certificate of self-insurance does not cover all mandatory requirements,
the Contractor shall provide separate certificates and endorsements that document coverage.
M. Reservation of Rights
SKHHP reserves the right to periodically review the adequacy of coverages and/or limits of liability
in view of inflation and/or a change in loss exposures and shall have the right to require an increase in such
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coverages and/or limits upon ninety (90) days prior written notice to the Contractor. Should Contractor,
despite its best efforts, be unable to maintain any required insurance coverage or limit of liability due to
deteriorating insurance market conditions, it may upon thirty (30) days prior written notice request a waiver
of any insurance requirement, which request shall not be unreasonably denied.
18. NONDISCRIMINATION
A. Compliance with Laws and Regulations
The Contractor shall comply fully with all applicable federal, state and local laws, ordinances,
Presidential Executive Orders and regulations that prohibit discrimination to the extent applicable. These
laws include, but are not limited to, RCW 49.60, Titles VI and VII of the Civil Rights Act of 1964 (42
U.S.C. § 2000a, et seq.), the American with Disabilities Act of 1990 (42 U.S.C. § 12101, et seq.), and the
Civil Rights Restoration Act of 1987 (20 U.S.C. § 1687, et seq.). The Contractor shall further comply fully
with any equal opportunity requirements set forth in any federal regulations, statutes or rules incl uded or
referenced in the Contract documents.
B. Equal Employment Opportunity Efforts
The Contractor shall undertake equal employment opportunity efforts to ensure that applicants and
employees are treated without regard to their sex, race, color, marital status, national origin, religious
affiliation, disability, sexual orientation, gender identity or expression, or age. The Contractor's equal
employment opportunity efforts shall include but not be limited to, the following: employment, upgrading,
demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other
forms of compensation; and selection for training, including apprenticeships.
C. Sanctions for Violations
Any violation of the mandatory requirements of the provisions of this section shall be a material
breach of contract for which the Contractor may be subject to damages, withholding payment and any other
sanctions provided for by the Contract or by applicable law.
19. SUBCONTRACTS AND PURCHASES
A. Subcontract Defined
“Subcontract” shall mean any agreement between the Contractor and a Subcontractor, or between
Subcontractors that is based on this Contract, provided that the term “subcontract” does not include
contracts or agreements for the purchase of (1) support services not related to the subject matter of this
Contract, or (2) supplies.
B. Writing Required
Any Contract work or service assignment or subcontract shall be written and a copy of the
subcontract shall be provided to SKHHP upon request.
C. SKHHP Rejection of Subcontractor
If applicable, SKHHP’s rejection, approval of a Subcontractor, or a Subcontractor’s termination
will not relieve Contractor of its Contract responsibilities, nor will it be the basis for additional charges to
SKHHP.
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D. Liability for and to Subcontractors
Contractor’s responsibility to SKHHP for acts and omissions of its subcontractors (and their
employees and agents) shall be to the same extent as its responsibility for the acts and omissions of its own
employees and agents.
SKHHP has no contractual obligations to any Subcontractor or vendor of the Contractor. Contractor
is fully responsible for all contractual obligations, financial or otherwise, to its Subcontractors.
E. Required Contract Terms
The Contractor shall include the applicable provisions of Sections 17 (Insurance Requirements –
General), 18 (Nondiscrimination) and 19 (Subcontracts and Purchases) or substantively similar provisions
in every subcontract or purchase order for goods or services which are paid for in whole or in part with
funds provided under this Contract. In addition, Contractor shall be responsible for ensuring that each
Subcontractor and subcontract complies with the terms of this Contract, as applicable.
20. DEBARMENT
A. Federal Debarment
Entities that are debarred, suspended, or proposed for debarment by the U.S. Government are
excluded from receiving federal funds and contracting with SKHHP. The Contractor, by signature to this
Contract, certifies that the Contractor is not currently debarred, suspended, or proposed for debarment, by
any Federal department or agency. The Contractor also agrees that it will not enter into a subcontract with
a person or entity that is debarred, suspended, or proposed for debarment. The Contractor shall notify
SKHHP if it, or a subcontractor, is debarred, suspended, or proposed for debarment, by any Federal
department or agency. Debarment status may be verified at https://www.sam.gov/.
B. State and Local Debarment
Entities may also be debarred, suspended, or proposed for debarment by the State, the County,
SKHHP, and/or SKHHP’s Member Jurisdictions. Such entities are excluded from contracting with SKHHP.
The Contractor, by signature to this Contract, certifies that the Contractor is not currently debarred,
suspended, or proposed for debarment, by any of these agencies or jurisdictions. The Contractor also agrees
that it will not enter into a subcontract with a person or entity that is debarred, suspended, or proposed for
debarment. The Contractor shall notify SKHHP if it, or a subcontractor, is debarred, suspended, or proposed
for debarment by any of the above agencies or jurisdictions.
21. BOARD OF DIRECTORS
A. If the Contractor is an incorporated entity, it must have an active, legally constituted board
of directors in accordance with RCW Titles 23B or 24, to the extent applicable.
B. If the Contractor qualifies as a non-profit organization under 26 U.S.C. § 501(c)(3), its
Board of Directors shall meet regularly and shall adopt a formal conflict of interest policy for its members
that is consistent with the Contractor’s 26 U.S.C. § 501(c)(3) status, and that addresses issues regarding
board member gifts, financial gain, and improper use of position.
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22. CONFIDENTIALITY
The Contractor agrees that all information, records, and data collected in connection with this
Contract shall be protected from unauthorized disclosure in accordance with applicable state and federal
law.
23. NOTICES
All notices to be given pursuant to this Contract shall be in writing and shall be deemed given when
hand-delivered within normal business hours, when delivered by a reputable national overnight commercial
courier service (such as FedEx) addressed to the party to be notified, or three (3) business days after mailing,
postage prepaid, to the Parties hereto at the addresses set forth below, or to such other place as a party may
from time to time designate in writing. Deadlines for any required action by a party will start to run on the
date notice is received. Courtesy email copies of notices are permitted so long as the sending Party has
provided a hardcopy notice in compliance with this Section 23.
Contractor: MHNW 28 Burien 9 LLLP
c/o Mercy Housing Northwest
6930 Martin Luther King Jr. Way S
Seattle, WA 98118
Attn: President
With a copy to: Kantor Taylor
1200 Fifth Avenue, Suite 1910
Seattle, WA 98101
Attn: Andrea Sato
With a copy to: Wells Fargo Bank, National Association
550 S. Tryon Street
23rd Floor, MAC D1086-239
Charlotte, NC 28202-4200
Attn: Director of Tax Credit Asset Management
SKHHP: South King Housing and Homelessness Partners
c/o City of Auburn, Administering Agency
25 W Main Street
Auburn, Washington 98001
Attn: Executive Manager
The Investor Limited Partner has the right but not the obligation to cure any default of Borrower hereunder
and the Lender agrees to accept any cure tendered by the Investor Limited Partner on the same terms if
tendered by the Borrower.
24. SERVICES PROVIDED IN ACCORDANCE WITH LAW AND RULE AND
REGULATION
The Contractor (and any Subcontractors) agree to abide by the applicable terms of RCW Chapters
26.44, 70.02, 71.05, 71A.10, 71A.14, 71A.18, 71.20, 71.24, and 71.34, any rules and regulations
promulgated thereunder, and regulations of the state and federal governments, as applicable, which control
disposition of funds granted under this Contract, all of which are incorporated by reference.
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25. POLITICAL ACTIVITY PROHIBITED
Contractor shall use no funds, materials, property or services provided directly or indirectly under
this Contract for any partisan political activity or to further the election or defeat of any candidate for public
office.
26. FORCE MAJEURE
“Force Majeure” means an event or events beyond the Parties’ reasonable control, occurring not as
a product or result of an afflicted party’s negligence, and which materially and adversely affect the ability
to perform Contract obligations. Force Majeure events may include, but are not limited to: Acts of God or
Nature; war; civil, military, public, or industrial disturbances; acts or threats of terrorism; epidemics, fire,
flood or other casualty; pandemics; labor difficulties, shortages of labor or materials or equipment;
government regulations; delay by government or regulatory agencies; shutdowns for purpose of emergency
repairs, and/or unusually severe weather.
A. No Breach if Force Majeure Applies
Neither party shall be considered in breach of this Contract to the extent that their performance is
prevented by a Force Majeure event.
B. Duty to Minimize Disruption and Give Notice
Parties maintain an express duty to minimize the disruption caused by Force Majeure. As soon as
reasonably practicable, a party asserting Force Majeure as a non-performance basis shall give notice to the
other party of the nature and impact of the Force Majeure. If the effect of a Force Majeure event or series
of events continues for a period of 180 days or more, SKHHP or the Contractor may give to the other a
notice of suspension or termination.
C. Extension of Time
Should Force Majeure events delay the Contractor’s completion of Contract deliverables and
performance commitments, SKHHP may in its sole discretion extend the Contractor’s time for completion
in writing.
D. Suspending Performance
Should a Force Majeure event prevent the Contractor from Contract performance, Contractor’s
performance shall be suspended only as necessary and commercially practicable to enable the resumption
of normal performance. Contractor and SKHHP shall endeavor to continue Contract performance during a
Force Majeure event to the extent reasonably practicable and will adjust their respective work as needed to
enable such continued performance. Contractor may seek reimbursement for costs incurred in mitigating
the Force Majeure event, and compensation for any partial work that Contractor performed during the event.
27. FUNDING DOCUMENTS
The Contractor agrees that SKHHP funding provided under this Contract to construct and improve
real property (the “Premises”) owned by the Contractor is a SKHHP secured grant to the Contractor. To
secure Contractor’s performance of this Contract (including the Project Exhibits), the Contractor or its
successors or assigns shall execute: (i) a Low Income Housing Covenant Agreement (“Covenant”); (ii) one
or more Promissory Note(s) (collectively, “Note”) in the aggregate principal amount not to exceed
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$3,093,308.00; (iii) a Deed of Trust securing the Note (“Security Instrument”), and (iv) Certificate of
Indemnity Agreement Regarding Hazardous Substances and Building Laws (“Environmental Indemnity”).
Items (i) – (iv) are referred to herein collectively, as “Funding Documents”. The terms and conditions of
these documents (including but not limited to terms and conditions of principal repayment and payment of
interest) are incorporated into this Contract by this reference. If at any time during the Contract term the
Contractor fails to adhere to the affordability requirements in Covenant or fails to perform any other
Contract term or condition, the Contractor shall be in breach of the Contract and in default of the Covenant,
Note, and Security Instrument. In the event of such a default, SKHHP (and/or its Member Jurisdictions)
shall be entitled to repayment of the $3,093,308.00 principal sum (plus interest at the default rate, as
applicable), and SKHHP’s share of the property’s Net Appreciated Value as defined in the Note. SKHHP
may in its sole discretion treat any default under this paragraph as a default under this Contract.
SKHHP’s providing of funds to the Contractor shall be non-recourse, but nothing shall diminish
Contractor’s indemnity and defense obligations in Section 16 of this Contract (Hold Harmless and
Indemnification), or its liability for damages or deficiencies resulting from theft, waste, fraud, material
misrepresentation, or misuse of rents.
28. ANTI-DISPLACEMENT AND RELOCATION ASSISTANCE FOR CAPITAL PROJECTS
The Contractor shall at all times comply with all applicable federal, state, and local laws, statutes,
rules and regulations relating to the relocation of those persons and households residing at the Premises
prior to occupancy by tenants. The Contractor shall be solely responsible for the cost of all relocation
benefits required by law.
29. PROPERTY MANAGEMENT FOR CAPITAL PROJECTS
The Contractor shall engage in sound property and program management practices and will at all
times operate and maintain the Premises in full compliance with all applicable current or amended federal,
state, and local health and safety laws, statutes, rules and regulations to provide decent, safe and sanitary
affordable housing. The Contractor agrees to comply without any SKHHP notice of a compliance
requirement, and to pay all costs associated with such compliance. SKHHP does not waive this section by
giving Contractor a notice of demand for compliance in any instance.
During the Contract term and without cost or expense to SKHHP, the Contractor shall keep and
maintain the Premises and all current or future improvements, landscaping, fixtures, and equipment in a
neat, clean and sanitary condition, and shall at all times preserve the Premises in good and safe repair
(ordinary wear and tear excepted).
30. TAXES AND LICENSES
Throughout the term of this Contract, the Contractor shall pay all applicable taxes, and all licenses
and excise fees covering the ownership and operations of the Premises.
31. PROCEDURE IN THE EVENT OF CASUALTY/CONDEMNATION FOR CAPITAL
PROJECTS
A. If part or all of the Premises is taken or conveyed through condemnation or is damaged by
any casualty, SKHHP and the Contractor agree to apply any proceeds from the condemnation or casualty
to repairing or restoring the Premises, if SKHHP and the Contractor in their reasonable judgment agree
that:
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(i) Repair or restoration is feasible and sufficient funds are available to complete such work;
(ii) After the completion of such work, the Premises can be feasibly operated within the Project
Exhibit’s restrictions and requirements; and
(iii) More than 2 years remain after the completion of the work until the Contract End Date.
B. SKHHP and the Contractor shall meet as necessary to discuss the rebuilding or repair of
the Premises in good faith and to reach a decision within sixty (60) days after the casualty or condemnation.
If the Parties cannot in good faith agree to repair or restore the Premises, within sixty (60) days of demand,
any casualty or condemnation proceeds shall be paid first to satisfy SKHHP, and the balance paid to the
Contractor.
32. CODE OF CONDUCT
SKHHP is committed to providing an inclusive, welcoming, supportive, and safe environment for
all to feel respected, valued, and empowered. The Contractor shall, while performing the work as described
in the attached Project Exhibit(s), interact with the community being served and SKHHP employees in a
respectful manner.
SKHHP and Contractor shall refrain from engaging in any conduct that communicates a hostile,
demeaning, or unwelcome message. Such prohibited conduct can be either verbal or nonverbal and
includes, but is not limited to microaggressions, deliberate misgendering, slights, and other conduct that
could cause harm.
33. MISCELLANEOUS PROVISIONS
A. Severability
Whenever possible, each provision of this Contract shall be interpreted to be effective and valid
under applicable law. If part or all of any Contract provision is found to be invalid, illegal or unenforceable,
the Parties shall modify the provision to the extent necessary to render it legal, valid and enforceable and
to have its intent and economic effect match the invalid, illegal and unenforceable version of the provision
as closely as possible.
B. Remedies Not Exclusive
No provision of this Contract precludes SKHHP from pursuing any other remedies for the
Contractor’s failure to perform its obligations.
C. No Third-Party Beneficiaries
Except for valid Contract assignees, this Contract has no third-party beneficiaries and shall not give
any enforceable rights to any non-party person or entity.
Except as specifically referenced otherwise, this Contract shall be governed by and construed
according to the laws of the State. Any claim or suit between the Parties arising out of this Contract may
only be filed and prosecuted in King County Superior Court or the U.S. District Court for the Western
District of Washington, in Seattle.
[Signatures Follow]
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IN WITNESS HEREOF, the Parties hereto have caused this Contract to be executed and instituted
on the date of execution below.
SKHHP:
CITIES OF AUBURN, BURIEN, COVINGTON,
DES MOINES, FEDERAL WAY, KENT, MAPLE
VALLEY, NORMANDY PARK, RENTON AND
TUKWILA
By: City of Auburn, the Administering Agency
pursuant to that certain Interlocal Agreement,
effective January 1, 2019
By:
CONTRACTOR:
MHNW 28 BURIEN 9 LLLP
a Washington limited liability limited partnership
By: MHNW 28 Burien 9 GP LLC, a Washington
limited liability company, its General Partner
By: Mercy Housing Northwest, a Washington
nonprofit corporation, its Manager
Nancy Backus, Mayor
Approved as to form:
By:
City Attorney
Signature
Name (Please type or print)
Date Date
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
PARCEL A:
UNIT 2 OF MERCY BURIEN, A CONDOMINIUM, ACCORDING TO THE DECLARATION THEREOF
RECORDED UNDER RECORDING NO. ____________, AND AMENDMENTS THERETO; SAID UNITS
ARE LOCATED ON SURVEY MAP AND PLANS FILED IN VOLUME ____ OF CONDOMINIUMS, AT PAGES
__ THROUGH ___, IN KING COUNTY, WASHINGTON.
PARCEL B:
A NON-EXCLUSIVE EASEMENT FOR ACCESS AS CREATED BY THAT DECLARATION OF ACCESS AND
PARKING EASEMENT RECORDED UNDER RECORDING NO. _____________, IN KING COUNTY,
WASHINGTON.
PARCEL C:
A NON-EXCLUSIVE EASEMENT FOR MAINTENANCE ACCESS AND TEMPORARY CONSTRUCTION AS
CREATED BY THE EASEMENT AND UTILITY MAINTENANCE AGREEMENT RECORDED _________,
2025 AS RECORDING NO. ______________, IN KING COUNTY, WASHINGTON.
PARCEL D:
A NON-EXCLUSIVE EASEMENT FOR ACCESS AND UTILITIES AS CREATED BY THE CONDOMINIUM
DECLARATION FOR MERCY BURIEN, A CONDOMINIUM, RECORDED _________, 2025 AS
___________, RECORDS OF KING COUNTY, WASHINGTON.
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EXHIBIT B
PROJECT REQUIREMENTS
The Contractor agrees to begin performance of all construction activities described in this Project
Exhibit (“Exhibit”) on 06/05/2025 (“Contract Start Date”) and to complete them on or before 03/31/2027
(“Project Construction Completion Date”).
1. The Contractor also agrees to perform all housing stewardship activities described in this
Exhibit for at least 50 years beginning no later than 03/31/2027 (“Operations Start Date”) and ending no
earlier than 12/31/2077 (“Contract End Date”). The period between this Operations Start Date and Contract
End Date is the “Affordability Period.” Contractor shall perform all such activities in a manner that fully
complies with all applicable federal, state, and local laws, statutes, rules, and regulations, as are now enacted
or hereafter amended. For ease of reference, where sections of this Project Exhibit cross reference other
Exhibit sections, the term “this Exhibit” will be used. By contrast, where this Exhibit cross-references
Contract sections, the cross-reference will use the term “this Contract.”
2. SKHHP funds provided under this Contract are to assist, in part, for the costs of
construction of the Project. The Project consists of the construction of (i) forty-five (45) permanent
affordable housing units, consisting of seventeen (17) one bedroom units, nineteen (19) two bedroom units,
six (6) three bedroom units, and three (3) four bedroom units.
3. Rental Restrictions. The Contractor or its permitted assigns shall own and operate the
Premises as permanent housing for people who are low-income. The total number of regulated units at the
Premises is forty-five (45) (“Regulated Units”). The Regulated Units shall be occupied by “Eligible
Households”, defined as persons whose household gross annual incomes do not exceed the percent of the
area median income (AMI) listed for the regulated units in the table below. The table below provides
numbers of Regulated Units to be rented to tenants at each income level, with each income level defined
by its upper limit for each unit size in the project. For new construction, the Contractor shall follow the
guidelines in the table to income qualify tenants for each unit size at initial occupancy and at change of
tenancy following a vacancy. Non-regulated units listed in the table below are not subject to the rent
restrictions of this Contract, provided however, in the event non-regulated units are subject to rent
restrictions or similar requirements pursuant to other agreements entered into by Contractor or under
applicable law, Contractor shall be obligated to comply with such requirements and nothing in this Contract
shall be deemed to remove such requirements or alleviate Contractor from the same.
(a) Rents for the Regulated Units shall be set at an affordable level for Eligible
Households and assume occupancy of one and one-half (1.5) persons per bedroom. The affordable rent
level including a utility allowance is defined as no greater than thirty percent (30%) of the maximum
Eligible Household income for the Regulated Unit. The amount of the utility allowance shall be calculated
based on the Method 8 – Energy Consumption Model set forth in Appendix O to the Washington State
Housing Finance Commission’s Tax Credit Compliance Procedures Manual
(https://wshfc.org/managers/ManualTaxCredit/290_AppendixOUtilityAllowanceProceduresForLIHTCPr
operties.pdf). In no case shall the rent including a utility allowance exceed Fair Market Rent for the unit
size, as published annually by HUD. An approved rent schedule setting forth the maximum tenant-paid
portion of rent is incorporated to the end of Exhibit B and labeled “Schedule 1”.
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All Units in the Project
Bedroom size:
Tenant income level: 1br 2br 3br 4br Total
Regulated
Units
30% AMI 6 14 5 3 28
50% AMI 11 5 1 - 17
60% AMI - - - - -
Non-regulated units - - - - -
Total Project units 17 19 6 3 45
In addition to the foregoing, and to satisfy the requirements of RCW 82.14.530(2)(b),
of the Regulated Units, thirty-four (34) units shall be occupied by families with children who are
exiting homelessness and nine (9) units shall be occupied by households in which one member has a
physical disability. Another nine units for households in which one member has a physical disability will
be provided off-site by a related party to the Contractor but are not regulated by the Low Income Housing
Covenant Agreement.
Tenant income levels shall be determined using the then current median income in King
County adjusted for family size as published annually by HUD. If at any time HUD no longer publishes
median income data, the maximum allowable household incomes for Eligible Households shall be based
on a program selected by SKHHP at its sole discretion.
If at any time during the course of this Contract the Contractor determines that it is no
longer feasible to house Eligible Households within the Regulated Units, the Contractor shall inform
SKHHP that it desires to negotiate with SKHHP for the purpose of serving an alternative population within
the Regulated Units. SKHHP may, at its sole option, agree to negotiate this matter with the Contractor and
all public agencies that have provided funding. Such negotiation shall not waive or otherwise affect
SKHHP’s rights or recourse under this Contract or otherwise at law. The negotiation period shall not exceed
one hundred eighty (180) days unless circumstances warrant an extension, and SKHHP agrees in writing
to such extension.
(b) Rents shall not be increased more often than once per year and the Contractor shall
provide written notice to tenants at least thirty (30) days prior to implementing any increase. Rent may be
reduced at any time on a temporary or permanent basis if there is a loss of household income. Changes in
the method of determining rent or modifications in the rent schedule for the Premises shall be approved in
writing by SKHHP, in advance of notification to tenants.
(c) The Contractor shall certify household income, and household size and
composition, and shall verify household employment and sources of income at each tenant’s initial
occupancy. Thereafter, tenant incomes shall be certified annually. To determine the tenant’s income, the
Contractor shall use the tenant’s adjusted income as defined at 24 CFR Part 5.
(d) Tenants living in Regulated Units prior to acquisition by the Contractor whose
incomes exceed the limits set forth Section 3(a) of this Exhibit shall not be subject to the income
requirements set forth in Section 3(a). As vacancies occur those units shall be rented to Eligible Households
and rents shall be subject to the rent restrictions set forth in Section 3(a).
(e) Full occupancy is defined as a vacancy rate of less than or equal to five percent
(5%). If, within six months from the date of project completion, no rental units are occupied, the Contractor
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must provide SKHHP information about current marketing efforts and, if necessary, a plan for marketing
the units so they are leased as quickly as possible.
(f) Excessive Rents. If SKHHP makes a preliminary determination that the Contractor
has charged or collected rents, or imposed rent increases, in excess of the limits hereunder, SKHHP may
give the Contractor written notice of such determination and if the Contractor does not respond in writing
within thirty (30) days such determination shall be final and binding. If the Contractor disputes SKHHP’s
determination that a rent increase exceeds permissible limits, or that excess rents have been collected, or
the amount of any excess, by a written response within such 30-day period stating in detail the basis for the
Contractor’s disagreement with SKHHP’s preliminary determination, the Parties shall meet and attempt to
resolve any differences. If agreement is not reached within thirty (30) days after SKHHP’s receipt of the
Contractor’s response, SKHHP may require, upon ten (10) days’ notice, that the Contractor either accept
SKHHP’s final determination or be subject to default under the Funding Documents.
4. Standard Conditions
(a) Contractor shall provide SKHHP with development and operating budgets based
upon actual funding commitments for approval by SKHHP staff. Contractor must notify SKHHP staff
immediately if it is unable to adhere to these budgets and must submit new budget(s) to SKHHP staff for
approval. SKHHP staff shall not unreasonably withhold its approval of these budget(s), so long as they do
not materially or adversely change the Project. This shall be a continuing obligation of Contractor, and shall
survive the transfer or assignment of this Contract. Contractor’s failure to adhere to budgets (either original
or new/amended) may result in SKHHP’s withdrawal of its funding commitment. Contractor must prepare
and submit final budgets to SKHHP at the time it starts project construction and at the project’s completion.
(b) Contractor shall submit to SKHHP evidence of funding commitments from all
proposed public and private funding sources. If Contractor cannot secure an identified commitment within
an application’s time frame, Contractor shall immediately notify SKHHP staff and describe its anticipated
actions and time frame for securing alternative funding.
(c) Contractor shall use SKHHP provided funds toward specific project costs as
included in this Exhibit and consistent with RCW 82.14.540 and/or 82.14.530, as applicable. Contractor
may not use SKHHP funds for any other purpose unless SKHHP staff authorizes such alternate use in
writing. If budget line items with unexpended balances exist after completion of the project, SKHHP and
other public funders shall approve adjustments to the project capital sources (including potential reductions
in public fund loan balances).
(d) Contractor shall evaluate and consider maximizing sustainability features for the
Project (such as an efficient building envelope and heat pumps) and shall propose a plan to maximize the
Project’s sustainability.
(e) If Contractor uses federal funds toward the Project, it must meet applicable federal
guidelines, including but not limited to: contractor solicitation, bidding and selection; wage rates; and
federal laws and regulations.
(f) Contractor shall maintain documentation of any necessary land use approvals,
permits, and licenses required by the jurisdiction in which the project is located.
(g) Contractor shall submit to SKHHP project monitoring reports quarterly through its
completion of the project, and annually thereafter. Contractor shall submit a final budget to SKHHP upon
project completion. If applicable, Contractor shall submit initial tenant information as required by SKHHP.
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(h) Quarterly Status Reports. Contractor is required to provide SKHHP with quarterly
status reports for projects funded through SKHHP’s Housing Capital Fund during the project’s development
stage (from the time funds are awarded until the project’s completion and occupancy). These quarterly
reports must include at a minimum the status of funds expended and progress to date. SKHHP will rely on
these quarterly reports to determine whether Contractor is making satisfactory progress on the project.
(i) SKHHP may inspect the project site during the project’s construction.
(j) After occupancy, the Contractor will submit annual reports (which may be reports
in the form submitted to the Washington State Department of Commerce or King County) (each an “Annual
Report”) to SKHHP summarizing the number of project beneficiaries, housing expenses for the target
population, and the proportion of those beneficiaries that are low- and/or moderate-income and that meet
other eligibility criteria established in this Contract. In addition, the Annual Report shall include
certifications to SKHHP that it is in compliance with the Covenant, which shall include the most current
occupancy information, rent schedule (showing which Units are in each income class), a calculation
justifying any increases in rents from the previous rent schedule, consistent with the Covenant and this
Contract, and the actual rents being charged to each unit. SKHHP shall have the right to review rents for
compliance and approve or disapprove them every year. In the event the Contractor submits annual
certifications to satisfy the reporting requirements of multiple funders, Contractor will designate and report
all units at the income class required by the most restrictive funder as well as the classification for purposes
of the Covenant and this Contract. The Contractor shall also include with such certification any changes in
the management policies for the Property and such other information covering the prior calendar year as
SKHHP may request by notice at least ninety (90) days in advance of the due date, and with such
accompanying documentation as SKHHP may request. The Annual Reports shall be submitted by June 30
of each year and will be required for the full duration of the Affordability Period. SKHHP will also
periodically evaluate all projects for long term sustainability.
(k) For rental projects, Contractor shall maintain the project in good and habitable
condition for the duration of the Affordability Period.
(l) SKHHP will provide project funds to the Contractor in the form of a loan secured
by a deed of trust recorded against the development property to ensure that Contractor maintains the
project’s affordability and target population. Contractor shall not be required to repay the SKHHP grant so
long as it maintains these project requirements.
5. Budget Sources and Uses
(a) Contractor shall finance and develop the Project substantially in accordance with the
following SKHHP funding sources:
SKHHP Funding
Source
Contract No. SKHHP Funding
Year
Amount
RCW 82.14.540 2022-02 2022 $1,093,308
RCW 82.14.530 2022-02 2024 $2,000,000
Total - - $3,093,308
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Uses of SKHHP Funds Total
Construction, soft costs related to construction
including predevelopment soft costs, and other
development costs
$3,093,308
Total
6. Compensation and Method of Payment
(a) SKHHP shall provide payment to the Contractor for satisfactory completion of the
requirements specified in the Contract and this Exhibit, and upon Contractor’s submission to SKHHP of
invoices and supporting documentation described herein and as required in Section 5.B of the Contract,
SKHHP shall pay the Contractor a maximum of $3,093,308.
(b) In addition to funding provided under this Contract, the Contractor shall secure other public
and/or private funding from sources other than SKHHP or its Member Jurisdictions totaling approximately
$25,274,194, which shall be sufficient to fully fund the project’s total approximate cost of $28,367,502.
SKHHP shall not advance funds under this Contract until the Contractor has secured commitments for all
other financing necessary to meet total project costs.
(c) SKHHP shall retain five percent (5%) of the funds provided under this project Exhibit
(“Retention”) as a trust fund for the protection and payment of Contract claims and legally required taxes,
increases and penalties. SKHHP shall release this retention only after:
i. Contractor has completed all construction activities, and has met all standards
related to labor and the environment (see Section 11 (Construction Requirements) and Section 13
(Amendments and Modifications) of this Exhibit);
ii. Contractor has provided SKHHP with a final Evergreen Sustainable Development
Standard (ESDS) v. 4.1 monitoring checklist; and
iii. SKHHP has verified that the Contractor has complied with all provisions of this
Exhibit that are applicable to construction contracts.
(d) The Contractor shall expend SKHHP and other project-committed funds only for purposes
directly related to this project. Unless otherwise agreed to in writing by SKHHP, Contractor shall expend
all such funds strictly in accordance with the Project Budget as set forth in Exhibit C to this Contract.
(e) Any SKHHP funds that are undisbursed upon completion of the Project and full payment
of all Project costs shall remain undisbursed. Contractor shall notify SKHHP if there are any unused
contingency funds or other cost savings at the completion of the Project and initial drafting of the Project’s
Cost Certification (as hereinafter defined). Contractor shall apply any unused contingency funds or other
cost savings existing at Project completion to reduce the balance owing on this Contract, unless otherwise
agreed in writing by SKHHP.
(f) Within two hundred forty (240) days after completion of the Project (as evidenced by a
Certificate of Substantial Completion signed by the Project architect), Contractor shall provide SKHHP
with a “Cost Certification” showing expenditures corresponding to line items in the Project Budget. The
Cost Certification shall be either:
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i. certified by an independent certified public accountant satisfactory to SKHHP, and
prepared in accordance with Generally Accepted Auditing Standards and the 1994 Revision of
Government Auditing Standards issued by the Comptroller General of the United States; or
ii. the same cost certification that Contractor submits to the Washington State
Housing Finance Commission.
If the Cost Certification shows disbursements for items not included in the Project Budget, or
in excess of SKHHP approved written Project Budget line-item amounts, then (unless such excess is
expressly approved in writing by SKHHP) SKHHP shall have the right to withhold disbursement of
Retention (if any) and to reduce its final payment by the total amount of such discrepancies. If the Cost
Certification shows unused funds in any line item after taking any SKHHP approved written reallocations
into account, the unused funds shall be applied to reduce the amount of SKHHP funds outstanding, and
SKHHP shall have the right to withhold the reduction amount from its final disbursement. If SKHHP has
already disbursed funds to Contractor that exceed SKHHP’s total required payment in a Cost Certification,
Contractor shall pay the difference to SKHHP within one hundred twenty (120) days of Project completion,
unless otherwise agreed in writing by SKHHP.
7. Project Milestones
(a) In addition to the above, Contractor shall submit proof of meeting certain Project
accomplishments or milestones to SKHHP with each request for payment. Contractor may amend
milestones with prior SKHHP written approval through a Contract amendment consistent with Section 13
(Amendments and Modifications) of this Exhibit.
(b) Milestones for this Project are outlined as follows:
Task Date
Acquisition start 06/05/2025
Construction start 06/09/2025
Construction completion 03/31/2027
Full occupancy 03/31/2027
End date 09/30/2027
8. Procurement Requirements
(a) The Contractor shall use and document an open and competitive bidding process
(consisting of at least three bids) for construction and related consultant services associated with the Project,
regardless of the source of funds used to pay their costs. All activities which relate to the Project either
geographically or functionally will be considered “associated with the Project” for purposes of procurement
requirements. The project-specific procurement requirements will depend on the amount of expenditure
and whether federal funds are being used.
(b) If federal funds have been awarded to the Project, the Contractor’s procurement process
must also be consistent with all requirements specified in 2 C.F.R. § 200.112, and in particular, the process
must: 1) avoid real or apparent conflicts of interest; 2) be open and freely competitive; 3) follow written
procedures adopted by the Contractor; 4) make good faith efforts to use small businesses, minority-owned
firms, and women’s business enterprises; and 5) include some form of cost or price analysis in connection
with every procurement action.
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(c) The Contractor must seek and receive written SKHHP approval of the specific procurement
methods and/or procedures that Contractor intends to follow when retaining project consultants or
contractors and issuing bid specifications prior to advertisement. Contractor shall make every reasonable
and practicable effort to utilize a competitive public bidding process consistent with RCW 35.21.685.
(d) Prevailing Wage Requirements. The Contractor shall pay or cause to be paid RCW 39.12
prevailing wages in all projects funded by SKHHP that include construction activities, unless federal funds
awarded to the project mandate use of federal prevailing wage rates. If federal prevailing wage rate
regulations apply the Contractor shall comply with Davis-Bacon and related Acts set forth at 29 C.F.R. Part
5,and shall consult with SKHHP to establish applicable Davis-Bacon wage rates and reporting
requirements.
(e) Nonprofit Requirements. The Contractor shall comply with 12 U.S.C. § 1701u and 24
C.F.R. Part 75 if any federal assistance provided under this Contract is used to pay for construction costs
in a construction project with a contract value exceeding the thresholds in 24 C.F.R. § 75.3. Compliance
includes, but is not limited to, incorporating the Section 3 clause set forth at 24 C.F.R. § 75.3 on construction
bid specifications, invitations to bid and/or requests for proposals, and construction contracts with contract
values exceeding the thresholds in 24 C.F.R. § 75.3.
9. Acquisition Activities
To the extent that the project includes real property acquisition, the Contractor shall follow sound
standard business practices to ensure that public dollars are appropriately spent. At a minimum, the
Contractor shall take the following actions:
Purchase no property in which a SKHHP board or staff member has any financial interest.
Obtain and submit to SKHHP an appraisal of the property from an appraiser with Member
of Appraisal Institute (MAI), Senior Residential Appraiser (SRA), or Residential Member (RM) that
complies with the Uniform Standards of Professional Appraisal Practices. If an appraisal exceeds
$5,000,000 or involves income property, the Contractor shall obtain a review appraisal, unless SKHHP
waives this requirement upon review of the circumstances of the acquisition.
Obtain an American Land Title Association (ALTA)/National Society of Professional
Surveyors (NSPS) survey certified to SKHHP.
Have the closing documents prepared by an attorney or escrow officer.
Ensure that any Cost Settlement Statement for the acquisition includes only the following
costs eligible for SKHHP payment: recording fees, transfer taxes, documentation stamps, title certificates,
other evidence of title, boundary surveys, penalty costs and charges for repayment of any preexisting
recorded mortgage entered into in good faith encumbering the real property, and the pro rata portion of any
prepaid real property taxes and other charges such as water, sewer and garbage allocable to the period
subsequent to closing or possession, whichever is first.
10. Reserved.
11. Construction Requirements
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(a) At a minimum, Contractor shall construct the Project to comply with National HUD
Housing Condition Standards in 24 C.F.R. § 5.703, and shall maintain the constructed Project to these or
higher property standards throughout the Contract term.
(b) All construction under this Contract shall comply with currently applicable building codes,
electrical codes, plumbing codes, energy codes, this Contract and the Washington State Evergreen
Sustainable Development Standard (ESDS) (if proposed by the Contractor in the approved Combined
Funders Application or if otherwise required for the Project).
(c) All substantially rehabilitated housing shall meet applicable local codes, rehabilitation
standards, ordinances, and zoning codes.
12. Reserved.
13. Amendments and Modifications
SKHHP or the Contractor may request to amend this Contract. Unless otherwise provided in
the Contract, an amendment shall not take effect until SKHHP and the Contractor approve it in writing.
Amendments to Exhibits shall be considered to be approved in writing when signed by the Contractor and
SKHHP. Exhibit amendments shall not require a further written document attaching the amended exhibit
and striking its prior versions to be effective. If different versions of Exhibits conflict, the version
maintained by SKHHP as the then-current version, signed by the Contractor and SKHHP, shall prevail.
14. Affirmative Marketing
Throughout the Affordability Period, units must comply with non-discrimination and affirmative
marketing requirements. The Contractor shall provide SKHHP with an affirmative marketing plan covering
internal procedures and marketing materials specific to the Project no later than the Operations Start Date.
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Schedule 1
Approved Rent Schedule
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EXHIBIT C
PROJECT BUDGET
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