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December 13, 2016

The Honorable Jim Ferrell, Mayor of Federal Way
and Members of the Federal Way City Council
Federal Way City Hall

33325 8th Avenue South

Federal Way, WA 98003

Dear Mayor Ferrell and Members of the City Council:

I am writing today to inform you that Industrial Realty Group (IRG) and Preferred Freezer Services (PFS)
have terminated the contract for the sale of land which would have resulted in development of a 19?
acre warehousing, distribution and processing center. We cannot speak to the details of this
arrangement, however, this was a mutual decision that allows PFS to better meet its project timeline.

IRG is continuing to move forward with our response to the city?s State Environmental Policy Act (SEPA)
technical review comments. While the end-use and building construction details studied under SEPA will
likely change, perhaps resulting in fewer environmental impacts, the proposed building footprint
representing a similar (non-frozen) warehouse and distribution operation is expected to remain
nominally the same as the original project application. There has been and continues to be incredibly
strong demand for this use in this location. As a result, IRG will take the next several weeks to
thoughtfully explore a new user and project that fits the Corporate Park?1 zoning, hopefully bringing
critical jobs and much-needed tax revenue to the city of Federal Way.

As has been the case throughout our planning process, IRG is committed to leaving vast amounts of the
remaining developable iand on the property untouched, including advancing creative options for the 40
acres of wooded lakefront. We continue to respect the required tree buffers and lakefront setbacks,
and value our leases with the Bonsai and Rhododendron Societies. We remain committed to the
Headquarters Campus environment within the ring road and other currently undeveloped areas. in
addition, i believe you?ll be pleased to know we are receiving a tremendous response to our plans to
update The Greenline building to current Class?A standards for large?scale of?ce users.

I look forward to providing further updates in the near future as our project plans progress. Please do
not hesitate to contact me if you should have any questions or if I can provide any additional

information.

Sin l,
fZDQI-ch?szc

Tom Messmer