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RESOLUTION NO. 5 2 1 1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN, WASHINGTON, AUTHORIZING THE MAYOR
TO EXECUTE A SETTLEMENT AGREEMENT BETWEEN
THE CITY OF AUBURN AND HAROLD GAMBINI FOR
SETTLEMENT OF THE LAWSUIT FILED IN THE KING
COUNTY SUPERIOR COURT UNDER CAUSE NUMBER
14-2-34852-5 KNT
WHEREAS, on September 7, 2007, the City of Auburn and Harold Gambini
entered into a ninety-four (94) year sublease agreement for certain commercial space
and parking spaces in the Sound Transit parking terminal and garage at.23 A Street SW
in the City of Auburn; and
WHEREAS, sections three and four of the Sublease Agreement obligated
Gambini to pay the City for certain maintenance, repair, and operation costs associated
with the commercial space and the parking spaces and billed to the City by Sound
Transit; and
WHEREAS, the City and Harold Gambini differed in what maintenance, repair
and operating costs applied to the parking spaces; and
WHEREAS, following unsuccessful efforts to resolve the dispute, the City
commenced a lawsuit, filed in the King County Superior Court under cause number 14-
2-34852-5 KNT, seeking a judicial determination of the issues in dispute and collection
of monies owed; and
WHEREAS, during the pendency of the lawsuit, the parties negotiated a
Settlement Agreement that amended the Sublease Agreement, clarifying the
maintenance, repair and operation costs for the commercial space and parking spaces
for which Harold Gambini would be responsible, and settling the claims of the parties.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, HEREBY RESOLVES as follows:
Resolution No. 5211
February 22, 2016
Page 1
Section 1. That the Mayor and City Clerk are hereby authorized to execute the
Settlement Agreement between the City and Harold Gambini, which agreement shall be
in substantial conformity with the agreement attached hereto, marked as Exhibit "1" and
incorporated herein by this reference.
Section 2. That the Mayor' is authorized to implement such administrative
procedures as may be necessary to carry out the directives of this legislation.
Section 3. That this Resolution shall take effect and be in full force upon passage
and signatures hereon.
Dated and Signed this 5 day of( , 2016.
CITY OF AUBURN
ANCY B US, MA OR
ATTEST:
&� �
Danielle E. Daskam, City Clerk
APP.' •VED = O FORM"
Daniel B. Heid, City A orney
Resolution No. 5211
February 22, 2016
Page 2
EXHIBIT "1"
SETTLEMENT AGREEMENT
City of.Auburn v.Harold Gambini,et.a1.,14-2-34852-5 KNT
This Settlement Agreement("Settlement Agreement")is made this,' day of
_____ ,2016,(the"Effective Date"),by and between the City of Auburn,a
municipal c rporation organized under Title 35A of the Revised Code of Washington(the
"City"), and Harold Gambini, ("Gambini").
WHEREAS,the City and Gambini(together the"Parties")entered into a sublease agreement
(the"Sublease Agreement")on September 7,2007,for certain commercial space and parking
spaces in the Sound Transit parking terminal and garage at 23 A Street.SW in the City of Auburn
for a period of ninety-four(94)years,and;
WHEREAS,sections three and four of the Sublease Agreement obligate Gambini to pay the City
for certain maintenance,repair, and operation costs associated with the commercial space and the
parking spaces billed to the City by Sound Transit,excluding any security fee,and;
WHEREAS,the City did not invoice Gambini for maintenance,repair and operating costs for the
parking spaces between September 7,2007,and July 2011,because of an imbedded security fee
as billed by Sound Transit to the City,and;
WHEREAS,the City first demanded payment of past maintenance,repair and operating costs
from Gambini on December 18,2013,upon clarification of the amount of the security fee from
Sound Transit,and;
WHEREAS,Gambini has not paid said maintenance,repair,and operation costs from the period
September 7, 2007 to December 31,2015 (the"Disputed.Billing Timeframe"),and;
WHEREAS, section seven of the Sublease Agreement.obligates Gambini to pay the leasehold
excise tax assessed for the commercial space and the parking spaces pursuant to the laws of the
State of Washington and the ordinances of the City of Auburn,and;
WHEREAS, Gambini has not paid the leasehold excise tax obligation in full;
WHEREAS,the City commenced a breach of action claim against Gambini, 14-2-34852-5 KNT,
in King County Superior Court on December 31,2014,and;
WHEREAS,the Parties have negotiated an amendment to the Sublease Agreement that clarifies
the portions of the maintenance,repair and operation costs for the commercial space and parking
spaces for which Gainbini is responsible and wish to settle their claims.
1.
NOW,THEREFORE,for good and valuable consideration,the receipt and sufficiency of which,
is hereby acknowledged,the City and Gambini agree as follows:
1. That the Parties shall each execute,within 5 days of the effective date of this Agreement,
the amendment to the Sublease Agreement,attached hereto as Exhibit A and incorporated
herein by this reference.
2. That the City, for and in consideration of the amount of twenty-eight thousand dollars
($28,000),the receipt and sufficiency of which is acknowledged,does release Gambini
from any and all actions and causes of action,rights,suits,covenants and demands
whatsoever in law or in equity,including attorneys' fees,which have been and may be
sustained by the City or by any and all other persons,associations,and corporations,
whether named or not,arising out of the unpaid maintenance,repair and operating costs
accrued during the Disputed Billing Timeframe.
3. That the$28,000 described in section two above shall be paid and is due in full by the
anniversary of the Effective Date in the year 2021. The unpaid balance shall accrue
interest at six-percent(6%)per annum until such date. If any amount remains due after
such date,that balance shall accrue interest at twelve-percent(12%)per annum thereafter
until paid in full.
4. That from January 1,2016,through December 31, 2024, Gambini shall receive a
discount to the costs described in section four(4)of the Sublease Agreement,described
in Exhibit A,as follows:
Year Discount
2016 100%
2017 90%
2018 80%
2019 70%
2020 60%
2021 50%
2022 40%
2023 30%
2024 20%
5. That the discount described in section four(4)above shall apply only to subtenancies
existing as of the Effective Date,and shall be apportioned according to the proportional
share of the total square footage of the ground floor commercial tenancies, such that the
discount shall not apply to any new subtenancies commenced after the Effective Date or
2'.
to any vacancies.' To determine the appropriate discount,the City shall initially use the
square footage amounts provided in Mr. Gambini's September 11,2015 letter to the City
Finance Director, Shelley Coleman.
6. That within thirty(30)days of any changes to subtenants,other than renewal of
sublease(s), Gambini shall notify the City of the change and the proportional square
footage that remains occupied by those subtenancies existing as of the Effective Date.
Upon executing a sublease with a subtenant other than the five subtenants existing as of
the Effective Date, Gambini shall forward a copy of the sublease agreement to the City of
Auburn Finance Department.
7. That the City,for and in consideration of the amount of thirty-six thousand, six hundred
and fifty-eight dollars($36,658),due and payable within thirty(30)days of the Effective
Date,does release Gambini from any and all actions and causes of action,rights,suits,
covenants and demands whatsoever in law or in equity,including attorneys' fees,which
have been and may be sustained by the City or by any and all other persons, associations,
and corporations,whether named or not,arising out of the unpaid leasehold excise tax.
accrued during the Disputed Billing Time,subject to section 8 of this agreement.
8. That Gambini shall indemnify the City for any unpaid taxes,interest,and penalties that
are determined to be due by the Washington Department of.Revenue(DOR)for unpaid
leasehold excise tax during the Disputed Billing Time.
9. That the Parties shall,jointly,stipulate to the dismissal of 14-2-34852-5 KNT with
prejudice and without costs.
10. That each party shall bear its own costs and attorneys' fees.
11. That any dispute regarding the language or the terms of the Settlement Agreement shall
be decided by binding arbitration. The arbitrator shall be an attorney who is mutually
agreeable to the parties and if the parties are unable to reach agreement,the King County
Presiding Judge shall appoint the-arbitrator. The fees and costs of the arbitrator shall be
paid by the losing party.
'As an illustrative example,if the existing subtenancies occupy forty-five percent(45%)of the
total square footage in 2019,the remainder is either vacant or sublet by new tenants,and the total
cost to be apportioned is$1,000: Gambini would pay$550 for the portion of the commercial
retail space that is either vacant or occupied by new subtenants and$135 for the portion of the
commercial retail space occupied by existing subtenants,which is a seventy percent(70%)
discount on the remaining$450.
3
12. That this Settlement Agreement covers any and all actions, causes of action,rights, suits,
covenants,contracts,agreements,judgments,claims and demands, including attorneys'
fees, for which one party may, in any combination and with any other person, association,
or corporation,and/or his,her, or their heirs, assigns, and executors and administrators,
whether named or not,arising out of the leasehold excise tax and operating costs accrued
during the Disputed Billing Timeframe.
13. That the City does acknowledge full and final settlement for any claims arising from the
leasehold excise tax and operating costs accrued during the Disputed Billing Timeframe,
and that such settlement shall not be treated as evidence of liability,or an admission of
liability or responsibility at any time or in any matter
14. That the Parties shall not be precluded or barred from asserting any claim or cause of
action they may have against the other party or others,unrelated to the leasehold excise
tax and operating costs accrued during the Disputed Billing Timeframe,that right being
expressly reserved.
15.That this Settlement Agreement will be governed by the laws of the State of Washington.
16. That no promise,inducement,or agreement not herein referenced has been made to either
of the Parties,and that this Settlement Agreement,together with the Sublease Agreement
and the amendment thereto attached as Exhibit A,contains the entire agreement between
the Parties hereto, and that the terms of this Settlement Agreement are contractual and not
mere recital.
17. That Gambini acknowledges that this Agreement does not bind the City of Auburn until
the City Council approves:the agreement.
ACCEPTANCE OF SETTLEMENT AGREEMENT
The Parties have read and fully understand the nature and terms of this Settlement Agreement,.
and accept such terms as full and final resolution of their respective claims arising out of the
leasehold excise tax and operating costs accrued during the Disputed Billing Timeframe.
Harold Gambini:.
Signature
STATE OF W A 9114/6/1016
4
) SS
COUNTY OF r1t IV(,t )
On this I 511^ day of r i 2016,before me personally appeared
}{L g19la ,u,,N,A,tiA.: o me personally known, and known to the persons,
individually an jointly described in and who executed the above instrument and who
acknowledged the act of signing and sealing thereof.
CUNTON H.VV1LCOX
STATE OF WASHINGTON ,,
NOTARY PUBLIC +otary Public, . At D K. 1a;tcoy,.
UN COMMISSION EXPIRES in and for the State Of Washington
07-17-18 Residing at: TA co w
My commission expires: /,t' Za t7,
The City of Auburn:
ancy Back yor
ATTEST:
City Clerk
APPR• 'ED AS a •RM:
Attorney
5
Exhibit A
to the
SETTLEMENT AGREEMENT
City of Auburn v. Harold Gambini, et. al., 14-2-34852-5 KNT
Amendment 1
to
AUBURN SOUND,TRANSIT STATION SUBLEASE AGREEMENT
by and between
CITY OF AUBURN and HAROLD GAMBINI
For good and valuable consideration, the parties agree to amend the above agreement in
the following manner:
Section 3. Assumption of Obligations: is amended to read as follows:
Unless otherwise excepted or modified by Section 4 of this Agreement as Amended, Gambini
accepts all obligations and conditions of Auburn as they pertain to the commercial retail space as
outlined in the Lease Agreement between Auburn and Sound Transit, Exhibit 1, and the 42
parking spaces provided in Section 2, hereof, including but not limited all maintenance, repair,
utilities, insurance, and operating costs. Auburn represents that not hing in this sublease conflicts
with the lease agreement attached hereto as Exhibit 1.
Section 4. "Sound Transit Costs:" is retitled "Chargeable Costs & Waiver" and is amended
to read as follows:
(a) Chargeable Costs: Auburn will bill Gambini for the Sound Transit Costs invoiced
to Auburn for the Parking Garage Operating Costs as set forth in Exhibit 3.2 of the
Master Lease between Auburn and Sound Transit, EXCLUDING those costs specified in
/ subsection(i)below.
(i) Auburn will not bill Gambini for any Security costs billed to Auburn by Sound
Transit. Auburn will bill Gambini for seven and eighteen one hundredths percent
(7.18%Q) of the property insurance cost of Sound Transit. In addition,to the extent Sound
Transit is responsible to cover the following described costs Auburn will not bill Gambini
for catastrophic costs, special assessments, or local improvement district(LID) charges
assessed against the Parking Garage spaces, or the commercial retail space that is subject
to this sublease.
(ii) If Chargeable Costs are not billed to Gambini within 90 days of Auburn's receipt of a
Sound Transit invoice, Auburn waives its right to bill and collect payment from Gambini
for his share of those Chargeable Costs.
Section 19, Miscellaneous Provisions is amended to add the following provision at the end of
the section:
"K. The failure of either party to enforce any provision of this Agreement shall not
be construed as a waiver or limitation of that party's right to subsequently enforce and
compel strict compliance with every provision of this Agreement."
All other provisions of the Agreement and of any previous amendments remain in full
force and effect.
Executed this day of , 2016
CITY OF AUBURN HAROLD GAMBINI
J\ ' 6,1,1
■Ire 7/441;d
ancy Bac 4,k Vayor Mr. Harold .
ATTEST:
edba4ULk_
Danielle E. Daskam, City Clerk
APP' ED A i .ORM:
•+1 Heid, City Attorney