Code Compliance Settlement Agreement 104 Pine Street SDCI Case #1042469 THIS CODE COMPLIANCE SETTLEMENT AGREEMENT (“this Agreement”) dated March ___, 2018, is executed by the City of Seattle Department of Construction and Inspections (“SDCI”) and 1st and Pine Property Owner LLC (“Owner”). The City and Owner are collectively referred to as the “Parties.” The Parties agree as follows: RECITALS A. Owner owns the Atwood Apartment building, a 55-unit apartment building located at 104 Pine Street in Seattle, Washington. B. Owner directed a rent increase of more than 20% to tenants at 104 Pine Street in late October 2017. C. Four units that are rented via the Housing Choice voucher system administered by the Seattle Housing Authority were exempted from the rent increase. D. Four units were vacant at the time of the rent increase and remain vacant. E. One unit became vacant when the employment of a resident manager was terminated. F. Between late October 2017 and January 1, 2018 when the rent increase took effect, tenants in 18 units moved out; 28 units currently have tenants who are not receiving a Housing Choice voucher. G. On February 27, 2018, following a complaint from a tenant, SDCI issued Notice of Violation (NOV) #1042469 for violating the Tenant Relocation Assistance Ordinance (TRAO), Chapter 22.210 Seattle Municipal Code. H. Owner objects to the NOV and denies that any actions taken were intended to violate or circumvent the TRAO requirements. I. Owner further states they have no desire to empty the building to facilitate substantial rehabilitation of the units or structure, and Owner is willing to provide financial assistance to tenants who may wish to move. J. SDCI and Owner desire to avoid litigation over the NOV and to achieve results as good or better than what might be achieved through the NOV process. In consideration of the mutual promises and agreements contained in this document, SDCI and Owner agree as follows: 1st and Pine Property Owner LLC (Owner) 1. Special Account for Relocation Assistance Payments. Owner agrees to set up a special bank account in trust or otherwise specifically limited to making payments according to the terms of this Agreement. The account shall be fully funded with $168,268 for payment of relocation assistance in the amount of $3658 to 46 non-Seattle Housing Authority (SHA) tenant households currently or formerly in residence at 104 Pine Street according to the rent roles as of October 30, 2017. The account shall be funded within three working days of the effective date of this Agreement. Any funds remaining in the account after October 1, 2018 shall be donated to the City of Seattle Emergency Relocation Assistance Account administered by SDCI. 2. Seattle Housing Authority Housing Choice Voucher Tenants. Owner agrees that when the next rent increase for four units currently rented to SHA tenants is established, as expected in July 2018, the rent will be increased only to the level established as “market rate” by SHA for Seattle Code Compliance Settlement Agreement: 104 Pine Street Case #1042469 units. Owner agrees that rent charged for SHA units will not exceed the maximum payment level allowed in Seattle under the Housing Choice voucher program. 3. Former Tenants: Owner will pay relocation assistance in the amount of $3,658 to each tenant household that (1) moved out following the rent increase notice issued in October 2017 and (2) can be located using the procedures described below. The payment will be made to the former tenant households regardless of household income. a) Former tenants will have up to one month (30 days) to respond and claim the relocation assistance payment once they are notified of the offer. b) Owner must make a good faith effort to contact the former tenants to inform them of the offer of financial assistance. Owner will acquire the forwarding address information for the former tenants from the prior management company for 104 Pine Street and will reach out to former tenants via regular mail and certified mail, and if an email address or a mobile phone number is available via email and text message. If the former tenants have not responded within 45 days of the initial contact efforts and there is no evidence that the offer has been received and rejected, Owner will hire a process service company to locate the former tenants and deliver the offer of relocation assistance. c) Owner will keep a record showing what efforts Owner took to contact the former tenants, which tenants were contacted, and which tenants accepted and have received the relocation assistance. 4. Current Tenants. Owner will provide relocation assistance in the amount of $3,658 to any current tenant household that elects to move before October 1, 2018. a) Owner will contact each current tenant household within 30 days of the effective date of this Agreement and offer relocation assistance to any household that chooses to move out on or before October 1, 2018. The offer shall be made regardless of household income. b) Owner will reach out to current tenants via regular mail and certified mail, and if an email address or a mobile phone number is available via email and text message. Contact with existing tenants may be made by personal service and email in lieu of the other methods. c) A current tenant must notify Owner within 30 days of receiving the offer of relocation assistance whether the tenant will accept the offer and move out by October 1, 2018. d) Full payment to a tenant household that chooses to move shall occur before the tenant moves and within two working days of a written request from the tenant. e) Any tenant that accepts the relocation assistance payment is bound by this choice to move out by October 1, 2018 and shall continue to pay rent to Owner while in tenancy at 104 Pine Street. f) Owner agrees to fully refund any security deposit made by a current tenant when the tenant has accepted relocation assistance and moved out by October 1, 2018. Security deposit refunds shall be made within 7 working days of the tenant vacating the property. g) Owner shall document service of the notice about the potential relocation assistance and what response was received from each existing tenant. 5. Rent Reduction. Owner will reduce the rent for current tenants to the rent levels in effect prior to January 1, 2018 and credit the rental ledger for current tenants with any amount paid in excess of the previous rent. The pre-January 2018 rent levels will stay in effect through June 30, 2018 and cannot be raised during this time. Effective July 1, 2018, the rent will increase to the amounts in the original October notices, and will remain fixed for current tenants through Page 2 of 4 Code Compliance Settlement Agreement: 104 Pine Street Case #1042469 6. 7. 8. 9. 10. December 31, 2018. No additional notice for the rent increase is required under City code, but Owner should remind tenants in June that rent will increase in July. Information and materials. Owner is responsible for preparing clear information to be presented or sent to former and current tenants. The information shall explain the consequences of choosing to take or not take relocation assistance payments and for current tenants will summarize the portions of this Agreement such as rent reduction and construction management that will apply. Owner will submit the information or materials to SDCI for review before distribution, and SDCI will review and return with any comments within two working days. Construction management. Owners, building management, and all representatives, agents and contractors will make a good faith effort to minimize disruption to tenants from any ongoing remodeling, maintenance, repair, or construction work in the building. This will include: a) Limiting construction hours to 8:00 AM to 5:00 PM; b) Providing tenants with a general workplan for the whole building and a schedule for construction work that affects common areas, utility services, access, or is likely to involve noticeable noise or odors. The schedule may be updated or changed as needed over the course of construction. c) Providing at least two-day advance notice to tenants when access through corridors, stairs, or doors will be temporarily restricted or unusable due to construction activities; d) Providing at least two-day advance notice to tenants when utility services will be temporarily turned off; e) Providing proper notice before entering occupied units and reasonably accommodating tenant requests for different access arrangements; and f) Workers will maintain a clean worksite and clean up areas accessible to tenants every day and will take steps to minimize tenant exposure to dust and fumes. Electrical Permit. Owner agrees to stage the remaining electrical work under permit #6648844 so that vacant units are upgraded first. If work then needs to be done in an occupied unit Owner will provide tenants with at least two options (different day or days) for when the work would occur. Monthly Updates. Owner will provide updates to SDCI at monthly intervals through the close of this Agreement. The updates will include documentation about establishment of and balances in the special account for relocation assistance, efforts to contact and make payments to current and former tenants, changes to rent, and construction management. Additional Incentives. Nothing in this Agreement precludes or restricts Owner from offering additional compensation or incentives to tenants in return for tenants moving out early, moving to other units, or in other ways cooperating with the Owner. Seattle Department of Construction and Inspections (SDCI) 11. Closure of case #1042469. Upon notice that the account referenced in part 1 of this Agreement has been funded, SDCI will administratively close case number 1042469. SDCI will concurrently remove any TRAO hold on permitting in vacant units and will exempt all vacant units from future application of the Tenant Relocation Assistance Ordinance. Closure of the enforcement case is subject to and dependent upon compliance with the terms of this Agreement. 12. Waiver of Penalties. In return for compliance with this Agreement and following deposit of the relocation funds in a special account, SDCI waives the right to seek penalties under NOV #1042469. If Owner fails to comply in all material ways with the terms of this Agreement, SDCI reserves the right to bring legal action to enforce this Agreement and to issue a new Notice of Page 3 of 4 Code Compliance Settlement Agreement: 104 Pine Street Case #1042469 Violation under which SDCI could immediately seek penalties in Seattle Municipal Court of up to $1000 per day from the date of this Agreement. SDCI reserves the right to pursue all penalties and remedies which may be available and to place a new hold on permitting and revoke any issued Relocation License. 13. Relocation License. Following receipt of records documenting Owner’s efforts to contact tenants and former tenants, payment of relocation assistance or agreements to pay relocation assistance, verification of the required rent reduction, and of a plan for construction management as provided above, SDCI will issue a tenant relocation license covering each dwelling unit at 104 Pine Street that is currently occupied but will be vacated by October 1, 2018. SDCI will issue the relocation license within two working days of receipt of records and documentation showing that Owner is in compliance with this Agreement. 14. Permit Issuance. Any permit to correct fire or life safety issues will be issued as soon as permit review requirements are complete. If Owner is in compliance with this Agreement, electrical permit #6648844 will be issued as soon as plan review is complete and any fees still owing have been paid. 15. Summary of Information for Tenants. SDCI will prepare a summary of information in this Agreement for current residents explaining the terms of the Agreement 16. Single Point of Contact. Jessica Long, Housing Compliance Supervisor, will be the single point of contact at SDCI for tenants and building management regarding this Agreement and any questions related to tenant relocation assistance. This Agreement shall be effective immediately following execution by all Parties. 1st and Pine Property Owner LLC A Delaware Limited Liability Company I, Jerry Wise, Manager of 1st and Pine Property Owner LLC, approve the execution of the foregoing Agreement. I have read the Agreement and by my signature attest that I fully understand its meaning and effect. By: _________________________ Jerry Wise, Manager Date: ______________ and Seattle Department of Construction and Inspections The City of Seattle I, Nathan Torgelson, Director of SDCI, approve the execution of the foregoing Agreement. I have read the Agreement and by my signature attest that I fully understand its meaning and effect. By: __________________________ Nathan Torgelson, Department Director Date: ______________ Page 4 of 4