2015-02-24 AgendaPkg

8850 SW State Hwy 3, Bremerton, WA 98312 | 360.674.2381 | www.portofbremerton.org

BOARD OF COMMISSIONERS

REGULAR BUSINESS MEETING

A G E N D A February 24, 2015 Bill Mahan Conference Room 6:00 PM Port Administration Offices Bremerton Nat’l Airport Terminal Bldg 8850 SW State Hwy 3, Bremerton Call to Order

Pledge of Allegiance

Approval of Agenda

Consent Items All matters listed under Consent Items have been distributed to each member of the Commission for reading and study, are considered to be routine, and will be enacted by one motion of the Commission with no separate discussion. If separate discussion is desired, that item may be removed from the Consent Items and placed under Action Items by request. A. Minutes of the regular business meeting and executive session of February 10, 2015.

B. Payment of checks #1013000 through #1013031 and #71162 through #71163 and #71164 through #71172 and #71177 through #71234 from the General Fund for $200,098.20; #71173 through #71176 from the Construction Fund for $1,765.46 and the payment of payroll taxes for $17,560.00.

C. Fund Transfer Resolutions:

x Resolution 2015-04 monthly transfer to the General Fund: $47,575.97 from the Airport Fund; $140,813.66 from the Harbor Fund; $26,687.39 from the Airport-Industrial Development Fund.

Information Items

1. South Kitsap Fire and Rescue (SKFR) Emergency Medical Services Levy – Deputy Chief Guy Dalrymple and Fire Commissioner Dave Gelsleichter

Work Study Session

Agenda for February 10, 2015 Page 2

** The Commission may add and take action on other items not listed on the Agenda **

Citizen Comments: Open to the public for comment on subjects not listed on the agenda. Speakers are asked to keep their comments to less than 3 minutes. A Commissioner may request to waive the 3 minute time limit. Please feel free to submit further comments in writing to the Clerk of the Board.

Action Items

1. Lease Amendments with SAFE Boats International LLC

New Business

Staff Reports

Commission Reports

Executive Session (if necessary)

Adjournment

Regular business and other meetings that may be attended by members of the Board Date Time Meeting 02/24 12:30 pm Kitsap Aerospace & Defense Alliance Steering Committee 02/24 6 pm *Commission Regular Meeting – Bill Mahan Conference Room 02/26 10 am Puget Sound Regional Council (PSRC) Executive Board 03/03 10:15 am Kitsap Regional Coordinating Council (KRCC) Executive Board 03/04 1 pm PSRC Economic Development District 03/10 6 pm *Commission Regular Meeting – Bill Mahan Conference Room

Meetings are subject to change or cancellation

*Denotes events in which two (2) or more Commissioners may attend



REGULAR BUSINESS MEETING

M I N U T E S February 10, 2014 Bill Mahan Conference Room 6:00 PM Port Administration Offices Bremerton Nat’l Airport Terminal Bldg 8850 SW State Hwy 3, Bremerton Call to Order

President Zabinski called the meeting to order at 6:00 p.m. and led the Pledge of Allegiance.

Commissioners and Staff Present

Commissioners Roger Zabinski Axel Strakeljahn Larry Stokes

Staff Members Jim Rothlin Becky Swanson Steven Sparks

Kathy Garcia Ginger Waye Gordon Walgren, Atty

Approval of Agenda

It was moved by STRAKELJAHN, seconded by STOKES to:

Approve the Agenda with the removal of New Business Item #1.

MOTION CARRIES, 3-0 Consent Items

A. Minutes of the regular business meeting of January 27, 2015. B. Payment of checks #1012969 through #1012999 and #71100 through #71107 and #71114

through #71161 from the General Fund for $102,487.82; #71108 through #71111 from the Construction Fund for $166,257.57 and the payment of payroll taxes for $17,556.90.

It was moved by STOKES, seconded by STRAKELJAHN to:

Approve the Consent Items as presented.

MOTION CARRIES, 3-0

Regular Business Meeting Minutes February 10, 2015

Page 2 of 4

Information Items

1. West Sound Alliance Stakeholders Update – Commissioner Axel Strakeljahn

Commissioner Strakeljahn provided background on the West Sound Alliance Stakeholder Group from throughout Kitsap, Mason, and Pierce Counties who have collaborated to develop regional project priorities for State transportation funding. He detailed their current campaign encouraging State Legislators to fund those priorities and presented a video that was produced as part of their media packet to promote those transportation improvements.

2. Seattle Boat Show Review – Kathy Garcia, Marina Operations Manager

Ms. Garcia provided statistics on attendance at this year’s Seattle Boat Show stating she felt the show was a little slower but customers seemed more serious. She described events within the show and thanked Commissioners, staff, consultant Bob Wise and community member Roger Gay for their assistance with the booth. She stated the focus was on promoting Bremerton Marina with an aggressive marketing campaign and explained the promotions and amenities offered at the show. She described the changes in this year’s booth layout and provided the cost breakdown for marketing and participating in the show.

The Board and CEO expressed their appreciation for Ms. Garcia’s enthusiasm, hard work, and ability to connect with the public.

Mr. Wise discussed the importance of the marketing promotions and the advantage of having the ability to sign people up in the booth this year. There was discussion with the Board related to this year’s Rock the Dock series and other harbor events.

Work Study Session - None

Citizen Comments Jim Posner

x Announced the Northwest Aviation Conference and Trade Show is being held February 21-22 at the Washington State Fair Events Center in Puyallup noting that the president of AOPA will be a keynote speaker. CEO Rothlin mentioned the Port will have a booth at this event.

Roger Gay

x Discussed some of his observations while assisting at the boat show offering suggestions for boater bag advertising and updating the booth appearance. He also discussed the importance of contacting legislators on items of interest such as transportation initiatives and marina tourism bill stating that it does make a difference as the legislators do listen.


Page 3 of 4

Action Items - None New Business 1. Potential benefits to spec building construction – Commissioner Zabinski Removed Staff Reports Jim Rothlin, Chief Executive Officer

x Reported on HB 2049 relating to supporting urban development in housing areas. He read a portion of the bill that states 20% of the sale price of any surplus property is required to be deposited in the housing trust fund for use in Seattle, Tacoma or Spokane urban areas for affordable housing. There was discussion on the confusing and contradictory bill; Port Attorney Walgren and CEO Rothlin will contact Representative Sherry Appleton to share the Port’s concern on the bill.

Gordon Walgren, Port Attorney

x Per Commissioner Strakeljahn’s request, Mr. Walgren reported on HB 1221 and SB 5242 that both relate to Kitsap Transit’s passenger-only ferry service initiative. He described the bills and the movement of the bills through committees and hearings. A concern is that the bills might be held hostage in the bigger transportation package.

Commission Reports Commissioner Stokes

x Recently attended an Economic Development/Tourism Committee meeting at Port Orchard City Hall in which the foot ferry service between Port Orchard and Bremerton for summer holiday and weekend service was discussed. The past several years the service has been provided in partnership with the Cities, the Port, and last year, the County. There was discussion between the Board members and staff related to benefits of the program and whether there is worth to the partners’ subsidizing an effort that is felt to be Kitsap Transit’s responsibility. The Board asked Ms. Garcia to provide input at the next meeting related to how the ferry service benefits the Port including dates that the service is most advantageous. It is understood the foot ferry has value; it just needs to be established what that value is to the Port.

Commissioner Strakeljahn x Reported on the following meetings and events recently attended:

o West Sound Alliance Stakeholders o Kitsap Regional Coordination Council (KRCC) Executive Board o South Kitsap Rotary’s Annual Bay Street Bash


Page 4 of 4

Commissioner Zabinski x Will be attending the upcoming Puget Sound Regional Council TransPol meeting as the

Port alternate.

x Currently attending meetings and making phone calls relating to potential grant opportunities and liquid nitrogen gas business development opportunities.

x Announced that he will not be running for reelection this election year explaining that he has a new job that involves 40%-50% foreign travel making it difficult to physically attend meetings and he also needs to have time to focus on his teenage daughters. He stated he has enjoyed working with the commission and staff and will remain interested in economic development, aviation, and working with the community. Discussed some accomplishments and progress of the Port during his time on the board.

Executive Session

President Zabinski recessed the meeting at 7:15 p.m. and reconvened into executive session at 7:20 p.m. for approximately 30 minutes regarding: real estate issues [RCW 42.30.110(1)(c)]. At 7:50 p.m., executive session was extended ten minutes. At 8:00 p.m. the regular meeting was reconvened.

Adjournment

There being no further business before the Board, the meeting was adjourned at 8:00 p.m.

Submitted, Approved, Jim Rothlin Larry Stokes Chief Executive Officer Commission Secretary February 19, 2015 February 24, 2015



EXECUTIVE SESSION

M I N U T E S 7:20 PM CEO Office February 10, 2015 Port Administration Offices Bremerton Nat’l Airport Terminal Bldg 8850 SW State Hwy 3, Bremerton Call to Order

President Zabinski called the executive session to order at 7:20 p.m., February 10, 2015. Commissioners and Staff Present

Commissioners Roger Zabinski Axel Strakeljahn Larry Stokes

Staff Members Jim Rothlin Steven Sparks Gordon Walgren, Atty

Item #1: Real estate issues were discussed [RCW 42.30.110(1)(c)]. With no further business to come before the Board, the meeting was adjourned into regular session at 8:00 p.m.

Submitted, Approved, Jim Rothlin Larry Stokes Chief Executive Officer Commission Secretary February 19, 2015 February 24, 2015

PORT OF BREMERTON KITSAP COUNTY, WASHINGTON

RESOLUTION NO. 2015-04 DATED: February 24, 2015

A RESOLUTION of the Board of Commissioners, Port of Bremerton, providing for the transfer of monies to replenish the General Fund for warrants issued to cover expenses related to other funds during the month. WHEREAS, all non-construction warrants were issued from the General Fund, and WHEREAS, some of the expenses covered by the warrants related to other funds, and WHEREAS, the General Fund should be replenished for the monies related to other fund expenses. NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners, Port of Bremerton that the Port Treasurer transfer monies between Port funds as follows:

1. Transfer $47,575.97 from the Airport Fund to the General Fund.

2. Transfer $140,813.66 from the Harbor Fund to the General Fund. 3. Transfer $26,687.39 from the Airport-Industrial Development Fund to the

General Fund.

ADOPTED by the Board of Commissioners of the Port of Bremerton at the regular public meeting thereof held this 24th day of February, 2015, and duly authenticated in open session by the signatures of the Commissioners voting in favor thereof and the Seal of the Commission. Commission President Commission Vice-President ATTEST: Commission Secretary

J:\Public_Forms\Agenda Materials\2015-02-24\Agenda Summary - SBI Lease Amendments.docx

AGENDA SUMMARY

Agenda Item No: Action Item #1

Subject: Lease Amendments with SAFE Boats International

Exhibits: Lease Amendments

Prepared By: Fred Salisbury, Director, Airport & Real Estate

Meeting Date: February 24, 2015 Summary: SAFE Boats International (SBI) has four leases with the Port: three building and one ground lease (3.5 acres). The building leases terminate June 30, 2015 and the land lease terminates September 30, 2030. SBI has requested the Port align all four leases to the same terms. The following lease amendments were negotiated by the staff:

OVIP 5: Two year term (July 1, 2015 through June 30, 2017); 4 successive one year options, each option approved 9 months prior to termination; annual periodic rental adjustments; improvement removal adjustment (new provision) - lessee shall be responsible for 50% of financial cost for removal of approved leasehold improvements not to exceed $40,000.

OVIP 2: Same terms and options as OVIP 5; annual periodic rental adjustments; early termination (new provision) lease may be terminated if lessee consolidates use of premises into main manufacturing building (OVIP 5) with no less than 9 months written notification; improvement removal adjustment (new provision) - lessee shall be not be responsible for financial cost for removal of approved leasehold improvements.

OVIP 7: Same terms and options as OVIP 5; annual periodic rental adjustments; early termination (new provision) lease may be terminated if lessee consolidates use of premises into main manufacturing building (OVIP 5) with no less than 9 months written notification; improvement removal adjustment (new provision) - lessee shall be not be responsible for financial cost for removal of approved leasehold improvements.

Land Lease: Revised terms to coincide with building leases; two year term (July 1, 2015 through June 30, 2017); 4 successive one year options, each option approved 9 months prior to termination; annual periodic rental adjustments.

Fiscal Impact: Revenue projections included in 2015 budget.

Recommendation: Recommend approval of the SAFE Boat International lease amendments. All four amendments require separate motions.

Motion for Consideration: Move to approve the SBI OVIP Building #5 Lease Amendment No. 13

Move to approve the SBI OVIP Building #2 Lease Amendment No. 2

Move to approve the SBI OVIP Building #7 Lease Amendment No. 7

Move to approve the SBI 3.5 Acre Land Lease Amendment No. 2

SBI – OVIP Bldg #5 – 8800 Barney White Rd Port of Bremerton 2/19/2015 Amended Lease #13 Page 1

THIRTEENTH LEASE AGREEMENT SAFE BOATS INTERNATIONAL LLC

IT IS HEREBY AGREED by and between the PORT OF BREMERTON, a municipal corporation organized under the laws of the State of Washington, hereinafter referred to as “Port” and SAFE BOATS INTERNATIONAL, a Washington Limited Liability Company hereinafter referred to as “Lessee”, to amend that certain building lease (commonly known as OVIP Building #5) dated June 27, 2000, and as amended, to read as follows (all other terms remain the same):

1. PREMISES

1A. Property and Premises The real property subject matter of this Lease is described in Exhibit “A-1” attached hereto and made a part hereof (hereinafter “premises”). The Premises, commonly known as the Imperial Building (OVIP #5), consist of approximately 62,500 sq. ft. of building space more or less, associated parking lot located on approximately 6.7 acres, an additional two-acre parcel of land adjacent to the north, and an external butler hut building of 4,300 sf all of which are graphically depicted for illustrative purposes on the diagram attached hereto as Exhibit “B” and made a part hereof. As used herein, the term “Premises” includes the real property and improvements now existing or hereafter constructed or installed on the property. Lessee has examined the Premises and accepts the same in their present condition, “as is”.

2. TERM

2A. Extended Term The Port leases the Premises to Lessee and Lessee leases the Premises from the Port for a term of two (2) years commencing on the 1st day of July, 2015, and terminating on the 30th day of June, 2017, unless sooner terminated as provided in this Lease.

2B. Option In addition, so long as Lessee is not in default, the Port grants Lessee an option to extend this Lease upon the same terms and conditions except as to rent, for four (4) successive one year terms. Each option will be approved through written notice of acceptance, due nine (9) months prior to the termination of the existing lease, or any extended term hereof.


3. RENTAL

3A. Base Rent 1. Lessee shall pay the Port as “Base Rent” in the amount of $15,364.00 (Building & Butler Hut) and $800.00 (2 Acres) rental per month, in advance, on the 1st day of July, 2015, and adjusted annually per the table in section 3E. 3C. Late Payments

In the event any rental payment is not made within ten (10) days of its due date, Lessee shall also pay the Port a late payment penalty in the amount of $50.00 for each such delinquent rental payment, together with interest on the delinquent total at the rate of eighteen percent (18%) per annum (minimum $20.00 per month) until the delinquency is cured. The acceptance of rent by the Port for any period or portions thereof after default by the Lessee shall not constitute a waiver of the default unless the Port so notifies Lessee in writing. With the exception of finished Lessee manufactured vessels already under contract for sale, the Lessee agrees that the Port shall have a lien against all assets of the Lessee located on the Premises or used in connection with the Lessee’s occupation of the Premises for all rents, charges, interest and fees payable under this Lease, and the Lessee further agrees that it shall not remove any of said assets from its locations until all such charges and fees payable under this Lease are paid in full.

3E. Periodic Adjustment (New Provision) Effective the 1st day of July 2016, the base rent shall be adjusted at the following rates: Building & Butler Hut Land (2 Acres) July 1, 2016 $16,032 $820.00 July 1, 2017 $18,036 $840.00 July 1, 2018 $19,372 $862.00 July 1, 2019 $20,708 $884.00 July 1, 2020 $22,044 $906.00

All rental rates and other charges due hereunder shall be renegotiated by the parties prior to the expiration of the applicable lease term.

6. IMPROVEMENTS/ALTERATIONS The Lessee shall not make any improvements or alterations to the Premises without the express, prior written consent of the Port, which consent shall not be unreasonably withheld. Any improvements or alterations shall become the property of the Port upon the termination of this Lease (except trade fixtures and equipment which may be removed by Lessee at its own cost and expense, and Lessee agrees to and shall make


any repairs to the Premises necessitated by the removal). If the Lessee intends to make changes in the Premises, Lessee shall submit plans to the Port no less than thirty (30) days before the commencement of such changes. Upon completion, the Lessee shall provide the Port with “as built” diagrams and specifications for its records. The Lessee agrees that it is solely responsible for and shall secure all permits required in connection with any construction and improvements and pay the required fees therefor. The Lessee agrees that all construction, improvements, and maintenance shall be paid for by the Lessee and be made in conformance with the provisions of applicable laws, rules, codes, and regulations. It is further agreed that all leasehold improvements shall be kept in condition so as to meet the requirements of applicable laws, rules, codes and regulations at all times. Upon receiving all necessary approvals of its plans and specifications, the Lessee shall engage one or more qualified contractors to construct said improvements. Other provisions: The Lessee will obtain an Occupancy Permit from the applicable local jurisdictional authority. The Port does not assume any responsibility for compliance with the foregoing requirements or the improvements/alterations made.

14. LEASEHOLD IMPROVEMENTS AT TERMINATION

14A. Improvement Removal Adjustments (New Provision) Should Lessee default or terminate the lease as provided in Section 15 prior to the expiration of the term, including all options, Port has the option to have all leasehold improvements removed by lessee and the Premises returned to it clear of all improvements, clean, and in good condition as provided in Section 16 above. Should Lessee terminate the lease at the end of the full term, including all four (4) options, Lessee shall be responsible for fifty (50) percent of the financial cost, mutually agreed to by the parties, for the removal of approved leasehold improvements, not to exceed $40,000.00.

IN WITNESS WHEREOF the parties hereto have caused this Amendment to Lease this day of , 2015. SAFE BOATS INTERNATIONAL LLC PORT OF BREMERTON A Washington Limited Liability Company A Municipal Corporation ______________________________ ________________________________ Dennis Morris, President & CEO President and Commissioner ________________________________ Approved As To Form: Vice President and Commissioner ______________________________ ________________________________ Port Attorney Date Secretary and Commissioner

SBI – OVIP Bldg #5 PORT OF BREMERTON Amended Lease – Notary Page 2/19/2015

STATE OF WASHINGTON ) )ss County of Kitsap )

On this day of before me personally appeared to me known to be the of the limited liability company that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said limited liability company, for the uses and purposes therein mentioned, and that they are authorized to execute said instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Official Seal the day and year first above written.

Notary Public in and for the State of

Name Printed residing at My commission expires:

STATE OF WASHINGTON ) )ss County of KITSAP )

On this day of before me personally appeared to me known to be the of the Port of Bremerton, the municipal corporation that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said municipal corporation, for the uses and purposes therein mentioned, and that they are authorized to execute said instrument.


Notary Public in and for the State of Washington


SBI – OVIP Bldg #2 – 5650 Imperial Way Port of Bremerton 2/19/2015 Amended Lease #2 Page 1

SECOND LEASE AMENDMENT SAFE Boats International LLC

IT IS HEREBY AGREED by and between the PORT OF BREMERTON, a municipal corporation organized under the laws of the State of Washington, hereinafter referred to as “Port” and SAFE BOATS INTERNATIONAL LLC, a Washington Limited Liability Company, hereinafter referred to as “Lessee”, to amend that certain building lease (commonly known as OVIP Building #2) dated October 10, 2008, and as amended on June 26, 2012, to read as follows. All terms of the original lease shall remain the same except for the following amendments

2. TERM.

2A. Extended Term The Port leases the Premises to Lessee and Lessee leases the Premises from the Port for a term of two (2) years commencing on the 1st day of July 2015, and terminating on the 30th day of June, 2017, unless sooner terminated as provided in this Lease.

2B. Option In addition, so long as Lessee is not in default, the Port grants Lessee an option to extend this Lease upon the same terms and conditions except as to rent, for four (4) successive one year terms. Each option will be approved through written notice of acceptance, due nine (9) months prior to the termination of the existing lease, or any extended term hereof. 3. RENTAL

3A. Base Rent Lessee shall pay the Port as “Base Rent” rental in the amount of $3,719.10 per month, in advance, commencing on the 1st day of July 2015, and adjusted annually per the table in section 3D.

3C. Late Payments

In the event any rental payment is not made within ten (10) days of its due date, Lessee shall also pay the Port a late payment penalty in the amount of $50.00 for each such delinquent rental payment, together with interest on the delinquent total at the rate of eighteen percent (18%) per annum (minimum $20.00 per month) until the delinquency is cured. The acceptance of rent by the Port for any period or portions thereof after default by the Lessee shall not constitute a waiver


of the default unless the Port so notifies Lessee in writing. With the exception of finished Lessee manufactured vessels already under contract for sale, the Lessee agrees that the Port shall have a lien against all assets of the Lessee located on the Premises or used in connection with the Lessee’s occupation of the Premises for all rents, charges, interest and fees payable under this Lease, and the Lessee further agrees that it shall not remove any of said assets from its locations until all such charges and fees payable under this Lease are paid in full.

3D. Periodic Adjustment (New Provision) Effective the 1st day of July 2016, the base rent shall be adjusted at the following rates: July 1, 2016: $3,880.80 July 1, 2017: $4,365.90 July 1, 2018: $4,689.30 July 1, 2019: $5,012.70 July 1, 2020: $5,336.10


8. IMPROVEMENTS/ALTERATIONS The Lessee shall not make any improvements or alterations to the Premises without the express, prior written consent of the Port, which consent shall not be unreasonably withheld. Any improvements or alterations shall become the property of the Port upon the termination of this Lease (except trade fixtures and equipment which may be removed by Lessee at its own cost and expense, and Lessee agrees to and shall make any repairs to the Premises necessitated by the removal). If the Lessee intends to make changes in the Premises, Lessee shall submit plans to the Port no less than thirty (30) days before the commencement of such changes. Upon completion, the Lessee shall provide the Port with “as built” diagrams and specifications for its records. The Lessee agrees that it is solely responsible for and shall secure all permits required in connection with any construction and improvements and pay the required fees therefor. The Lessee agrees that all construction, improvements, and maintenance shall be paid for by the Lessee and be made in conformance with the provisions of applicable laws, rules, codes, and regulations. It is further agreed that all leasehold improvements shall be kept in condition so as to meet the requirements of applicable laws, rules, codes and regulations at all times. Upon receiving all necessary approvals of its plans and specifications, the Lessee shall engage one or more qualified contractors to construct said improvements. Other provisions: The Lessee will obtain an Occupancy Permit from the applicable local jurisdictional authority. The Port does not assume any responsibility for compliance with the foregoing requirements or the improvements/alterations made.


15. DEFAULT AND TERMINATION

15F. Early Termination (New Provision) This Lease may be terminated by the Lessee if the Lessee consolidated use of the premises into Lessee’s main manufacturing building (known as the Port OVIP Building #5) as long as the Lessee notifies the Port in writing with no less than 9 months prior to such consolidation.

16. LEASEHOLD IMPROVEMENTS AT TERMINATION 16A. Improvement Removal Adjustments (New Provision)

Should Lessee default or terminate the lease as provided in Section 15 prior to

the expiration of the term, including all options, Port has the option to have all leasehold improvements removed by lessee and the Premises returned to it clear of all improvements, clean, and in good condition as provided in Section 16 above. Should Lessee terminate the lease at the end of the full term, including all four (4) options, Lessee shall be responsible for zero (0) percent of the financial cost for the removal of approved leasehold improvements. Lessee shall be responsible for removal of any unapproved leasehold improvements.

IN WITNESS WHEREOF the parties hereto have caused this Amendment to Lease this day of , 2015. SAFE BOATS INTERNATIONAL PORT OF BREMERTON A Washington Limited Liability Company A Municipal Corporation ______________________________ ________________________________ Dennis Morris, President & CEO President and Commissioner ________________________________ Vice President and Commissioner

________________________________ Secretary and Commissioner

Approved As To Form: ______________________________ Port Attorney Date:_________________________












SBI – OVIP Bldg #7 – 5626 SW Imperial Way Port of Bremerton 2/19/2015 Amended Lease #7 Page 1

SEVENTH LEASE AMENDMENT SAFE Boats International LLC

IT IS HEREBY AGREED by and between the PORT OF BREMERTON, a municipal corporation organized under the laws of the State of Washington, hereinafter referred to as “Port” and SAFE BOATS INTERNATIONAL (formerly known as SAFE AIRE LLC a subsidiary of SAFE Boats International LLC), a Washington Limited Liability Company, hereinafter referred to as “Lessee”, to amend that certain building lease (commonly known as OVIP Building #7) dated September 24, 2002, and as amended October 1, 2005 and further amended October 5, 2006, November 29, 2007, December 30, 2009, March 4, 2011, and June 26, 2012 to read as follows (all other terms remain the same):

2. TERM


2B. Option In addition, so long as Lessee is not in default, the Port grants Lessee an option to extend this Lease upon the same terms and conditions, except as to rent, for four (4) successive one year terms. Each option will be approved through written notice of acceptance, due nine (9) months prior to the termination of the existing lease, or any extended term hereof.

3. RENTAL

3A. Base Rent Lessee shall pay as “Base Rent” rental in the amount of $2,760.00 per month, in advance, commencing on or before the 1st day of July 2015, and adjusted annually per the table in section 3D.

3C. Late Payments

In the event any rental payment is not made within ten (10) days of its due date, Lessee shall also pay the Port a late payment penalty in the amount of $50.00 for each such delinquent rental payment, together with interest on the delinquent total at the rate of eighteen percent (18%) per annum (minimum $20.00 per


month) until the delinquency is cured. The acceptance of rent by the Port for any period or portions thereof after default by the Lessee shall not constitute a waiver of the default unless the Port so notifies Lessee in writing. With the exception of finished Lessee manufactured vessels already under contract for sale, the Lessee agrees that the Port shall have a lien against all assets of the Lessee located on the Premises or used in connection with the Lessee’s occupation of the Premises for all rents, charges, interest and fees payable under this Lease, and the Lessee further agrees that it shall not remove any of said assets from its locations until all such charges and fees payable under this Lease are paid in full.

3D. Periodic Adjustment (New Provision) Effective the 1st day of July 2016, the monthly rent shall be adjusted at the following rates: July 1, 2016: $2,880.00 July 1, 2017: $3,240.00 July 1 2018: $3,480.00 July 1, 2019: $3,720.00 July 1, 2020: $3,960.00


7. IMPROVEMENTS/ALTERATIONS The Lessee shall not make any improvements or alterations to the Premises without the express, prior written consent of the Port, which consent shall not be unreasonably withheld. Any improvements or alterations shall become the property of the Port upon the termination of this Lease (except trade fixtures and equipment which may be removed by Lessee at its own cost and expense, and Lessee agrees to and shall make any repairs to the Premises necessitated by the removal). If the Lessee intends to make changes in the Premises, Lessee shall submit plans to the Port no less than thirty (30) days before the commencement of such changes. Upon completion, the Lessee shall provide the Port with “as built” diagrams and specifications for its records. The Lessee agrees that it is solely responsible for and shall secure all permits required in connection with any construction and improvements and pay the required fees therefor. The Lessee agrees that all construction, improvements, and maintenance shall be paid for by the Lessee and be made in conformance with the provisions of applicable laws, rules, codes, and regulations. It is further agreed that all leasehold improvements shall be kept in condition so as to meet the requirements of applicable laws, rules, codes and regulations at all times. Upon receiving all necessary approvals of its plans and specifications, the Lessee shall engage one or more qualified contractors to construct said improvements. Other provisions: The Lessee will obtain an Occupancy Permit from the applicable local jurisdictional authority. The Port does not assume any responsibility for compliance with the foregoing requirements or the improvements/alterations made.


14. DEFAULT AND TERMINATION

14F. Early Termination This Lease may be terminated by the Lessee if the Lessee consolidated use of the premises into Lessee’s main manufacturing building (known as the Port OVIP Building #5) as long as the Lessee notifies the Port in writing with no less than nine (9) months prior to such consolidation.

15. LEASEHOLD IMPROVEMENTS AT TERMINATION

15A. Improvement Removal Adjustments (New Provision) Should Lessee default or terminate the lease as provided in Section 14 prior to

the expiration of the term, including all options, Port has the option to have all leasehold improvements removed by lessee and the Premises returned to it clear of all improvements, clean, and in good condition as provided in Section 16 above. Should Lessee terminate the lease at the end of the full term, including all four (4) options, Lessee shall be responsible for zero (0) percent of the financial cost for the removal of approved leasehold improvements. Lessee shall be responsible for removal of any unapproved leasehold improvements.


________________________________ Approved As To Form: Secretary and Commissioner ______________________________ Port Attorney Date:_________________________












SBI – 3.5 Acre Land Lease (OVIP A-1) Port of Bremerton 2/19/2015 Amended Lease #2 Page 1

SECOND LEASE AMENDMENT SAFE BOATS INTERNATIONAL

IT IS HEREBY AGREED by and between the PORT OF BREMERTON, a municipal corporation organized under the laws of the State of Washington, hereinafter referred to as “Port” and SAFE BOATS INTERNATIONAL, a corporation organized under the laws of the State of Washington, hereinafter referred to as “Lessee”, to amend that certain 3.5 acre land lease dated August 9, 2006, and as amended on June 26, 2012, to read as follows (all other terms remain the same):

2. TERM


2B. Option In addition, so long as Lessee is not in default, the Port grants Lessee an option to extend this Lease upon the same terms and conditions, except as to rent, for four (4) successive one year terms. Each option will be approved through written notice of acceptance, due nine (9) months prior to the termination of the existing lease, or any extended term hereof.

3. RENTAL

3A. Base Rent Lessee shall pay the Port as “Base Rent” rental in the amount of $1,400.00 per month, in advance, commencing on the 1st day of July, 2015, and adjusted annually per the table in Section 3D.

3C. Late Payments In the event any rental payment is not made within ten (10) days of its due date, Lessee shall also pay the Port a late payment penalty in the amount of $50.00 for each such delinquent rental payment, together with interest on the delinquent total at the rate of eighteen percent (18%) per annum (minimum $20.00 per month) until the delinquency is cured. The acceptance of rent by the Port for any period or portions thereof after default by the Lessee shall not constitute a waiver of the default unless the Port so notifies Lessee in writing. With the exception of finished Lessee manufactured vessels already under contract for sale, the

SBI – 3.5 Acre Land Lease (OVIP A-1) Port of Bremerton 2/19/2015 Amended Lease #2 Page 2

Lessee agrees that the Port shall have a lien against all assets of the Lessee located on the Premises or used in connection with the Lessee’s occupation of the Premises for all rents, charges, interest and fees payable under this Lease, and the Lessee further agrees that it shall not remove any of said assets from its locations until all such charges and fees payable under this Lease are paid in full.

3D. Periodic Adjustment (New Provision) Effective the 1st day of July 2016, the base rent shall be adjusted at the following rates: July 1, 2016: $1,435.00 July 1, 2017: $1,470.00 July 1, 2018: $1,508.50 July 1, 2019: $1,547.00 July 1, 2020: $1,585.00



________________________________ Secretary and Commissioner

Approved As To Form: ______________________________ Port Attorney Date:_________________________

SBI – 3.5 Acre Land Lease (OVIP A-1) Port of Bremerton Amended Lease – Notary Page 2/19/2015











Documents

2015-02-24 AgendaPkg