NK Legacy Partnership DRAFT MOU

8/9/2019 NK Legacy Partnership DRAFT MOU

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DRAFTNORTH KITSAP LEGACY PARTNERSHIP

Memorandum of Understanding

This Memorandum of Understanding is entered into by Kitsap County

(County) and Olympic Property Group (OPG) to identify the guidingprinciples and actions to be undertaken to evaluate, and implement iffeasible, a comprehensive program for public acquisition of up to 7,000 acresof open space and plan for the sustainable development of Port Gamble andits related uplands (North Kitsap Legacy Partnership).

RECITALS

WHEREAS, the Kitsap County Comprehensive Plan and Open SpacePlan envisions a coordinated open space network that includes public accessto saltwater shorelines, interconnected trail systems, sustainable forestry

practices, as well as opportunities for recreation and enhanced protection forwildlife habitat; and

WHEREAS, the North Kitsap Trails Association has been established tofacilitate the creation of land and water-based trails and kayak routes inNorth Kitsap; and

WHEREAS, OPG controls approximately 8,000 acres of real propertywithin Northern Kitsap County (OPG Property). OPGs property includes theNational Historic Landmark District of Port Gamble, approximately threemiles of salt water shoreline on Hood Canal and on Port Gamble Bay, and

approximately 7,000 acres of commercial timberland that may be suitablefor permanent public open space and recreational opportunities, as well assustainable forestry activities; and

WHEREAS, as a public entity, Kitsap County has limited financialresources and is interested in pursuing public/private economic developmentopportunities that provide jobs and is a viable tax base to support necessarypublic services; and

WHEREAS, Kitsap County recognizes the importance of rural lands andrural character to its economy, its people, and its environment, as well as

reducing the inappropriate conversion of undeveloped land into low-densitydevelopment.

WHEREAS, to carry out its mission as a publicly-held company, OPG isactively evaluating conversion to alternative uses or third party sales of itsproperty. OPGs interests include obtaining a fair risk-adjusted economicreturn for its owners, determining the long-term future of Port Gamble, andproviding certainty for overall use and disposition of the OPG Properties in

April 26, 2010- DRAFT 1


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North Kitsap County. Port Gamble is not economically viable in its currentstate. OPG has made annual subsidies to maintain Port Gamble, suchsubsidies are not sustainable. Conventional commercial forestry is noteconomically nor socially viable in Northern Kitsap County; and

WHEREAS, Kitsap County has an interest in enhancing the historicalcharacter of Port Gamble and by providing a pilot program for ruralclustering techniques, consistent with the Growth Management Act, for PortGambles associated uplands. This demonstration shall reduceenvironmental impacts through improved infrastructure that incorporatessustainable, low-impact development and energy efficiency techniques(water reuse, solar, geothermal, etc), as well as enhancing its economicvitality; and

WHEREAS, as the single owner of approximately 8,000 acres of land inNorth Kitsap County, OPG is in a unique position to partner with the Kitsap

County to achieve permanent public benefits, as well as fulfilling its missionof providing an appropriate economic return for its owners; and

WHEREAS, Kitsap County and OPG share multiple common interestswhich could benefit from a public and private cooperative and innovativeapproach; and

WHEREAS, the parties acknowledge a limited window of opportunityexists for Kitsap County and OPG, along with other interested agencies,groups and members of the public, to each secure permanent benefitsconsistent with their respective interests; and

WHEREAS, without these joint efforts, OPGs land disposition will bedriven solely by market forces, which may include sales to third parties orother actions to dispose of its land portfolio in North Kitsap County; and

WHEREAS, the process sent forth in this Memorandum will includeextensive input from the general public and interested parties with a focuson open space, trails and recreation, shoreline and waterfront access andhistoric preservation; and

WHEREAS, OPG and Kitsap County acknowledge this type ofcomprehensive, multiple-land planning, as set forth in this Memorandum and

to be contained in a proposed development agreement, is an unprecedentednew collaborative approach. The parties will use all reasonable efforts tofurther each partys interests, but the parties acknowledge there is noguarantee of success.

NOW, THEREFORE, Kitsap County and OPG intend this Memorandum ofUnderstanding to identify actions and responsibilities necessary to evaluateand implement an overall plan for OPG lands in North Kitsap County.



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AGREEMENT

1. Overall Goals and Guiding Principles . Currently, theconceptual components of the North Kitsap Legacy Partnership are listedbelow and illustrated in Exhibit A. However, these components may

change for political, environmental, practical, or economic reasons. Allacreages below are approximate.

Hansville Block No development of OPGs Hansville 2,000-acre block.

Public ownership of the Hansville block.

Option and The Divide Properties

Create a publicly owned open space and trail corridor

from Arness Slough in Kingston to OPGs Port Gamble block. 104-acre publicly owned open space through theArborwood project to the Heritage Park Option property.

Public ownership and no development of the Heritage ParkOption Property (366 acres) and OPGs Divide property (664acres), in addition to the existing Heritage Park acreage (447)

Port Gamble (Port Gamble Block, Port Gamble Townsite and PortGamble Shoreline)

3,000 acres (+/-) contiguous blockin the Port Gamble land block (south of the townsite) in public

ownership, no development. 1.5 miles (+/-) of Port Gamblewaterfront (south of the townsite), in public ownership, nodevelopment.

Permitting higher densities in andnear Port Gamble to offset reduced or no density in Hansville,The Divide, and Port Gamble southern block properties.

Maintain and enhance the historiccharacter and economic sustainability of Port Gamble,including the townsite (120 acres) and the adjacent uplands(1000 acres)

Port Gamble and the associateduplands development to be an economic center that:o Is designed to be as self supporting a community as possible

(regarding daily goods and services)o Produces enough public revenues to pay for public services

required to support the towno Embraces sustainable development and operating principles to



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the extent feasible

Contiguous blocks of open space or forestland will be:

Owned by public or land trust, subject to a conservationeasement outlining allowed and prohibited uses

Managed for limited forestry or timber production ifdesired by public or land trust

Used for connected public access for trails and otherrecreation

Used to promote and preserve wildlife habitat

Used for limited utility crossings or areas through reservedeasements

2. Operating Principles and Public Involvement . KitsapCounty and OPG will work collaboratively and in partnership in thedevelopment of a public involvement plan, as well as public information

materials and presentations. The process will be inclusive with extensiveconsultation with affected interest groups, other agencies with jurisdictionand members of the general public. Decisions to implement thisMemorandum will be transparent through a public process described below.

The mutual commitments outlined in this Memorandum entail legislativeactions, consistent with Kitsap County Code Title 21, with final determinationby the Kitsap County Board of Commissioners. The parties recognize thatOPG is a publically held company subject to certain rules and restrictionssuch as federal securities regulations, other regulations or company policieswhich will have to be observed through this process.

3. Cooperative Funding Investigation . OPG and the Countywill explore funding solutions to implement the North Kitsap LegacyPartnership. The parties will explore multiple financing options to acquirethe public ownership of OPG properties noted in Section 1 of thisMemorandum. Potential funding sources include, but are not limited to,phased sales of conservation easements (including the 1.5 miles of PortGamble waterfront), public infrastructure funding such as sewer and waterfacilities, and density bonuses. The parties acknowledge success of theoverall North Kitsap Legacy Partnership components will require some levelof public funding and a cooperative and coordinated vision among many

private, governmental and tribal groups.

4. Process . The County and OPG will convene appropriatemeetings to determine the feasibility of completing the North Kitsap LegacyPartnership. This includes the legislative processes and hearings describedin Sections 2 and 5 of this Agreement. Also, the parties will meet with otheragencies, groups, and/or parties to determine the feasibility of requiredinfrastructure, such as wastewater treatments, stormwater, potable water



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and transportation. This process will include a technical advisory committeediscussed in section 5 below The parties also will explore sustainablepractices and design, energy efficiency techniques, habitat protection andrestoration and enhancement of marine environmental recreation and waterquality.

5. Partnership Advisory Committee . The partnership willemploy an advisory committee consisting of citizens, the County, state andlocal agencies, tribes, OPG and other interested parties with technicalexpertise to bring to the project. This committee will review existingenvironmental information and provide input to inform the initialdevelopment of sub-area details. This input will help the parties develop apreliminary design which will then be reviewed and further refined by thecommittee. After these refinements have been included, the sub-area designwill begin full SEPA review as detailed Section 7.3 below.

6.

Proposed Schedule . The parties propose the followingschedule, which is subject to adjustment as additional information isobtained regarding funding and feasibility of the North Kitsap LegacyPartnership:

Memorandum of Agreement between OPG and Kitsap Countyapproved. May/June 2010

Partnership Advisory Committee processMay August 2010

Adopt Title 17 regulations regarding development agreements andTitle 21 regulations regarding development agreement processing.

July/August 2010

Adoption of Large On-Site Septic (LOSS) ordinance and repeal ofmoratorium. July 2010

Submittal of proposed development agreement, sub-area site plan,allowed densities, and capital facility needs.October 2010

County SEPA Determination of Significance and EIS Scoping.October 2010

Adopt County-wide non-motorized plan (trails, etc.).December 2010

Adopt of Comprehensive Plan language regarding National HistoricTowns, their components and candidate sites (such as Port Gamble).December 2010

Release first draft Sub-Area Plan policies and development regulations.January 2011

Approval of population allocation to Port Gamble Townsite.March 2011



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Release second draft Sub-Area Plan policies and developmentregulationsJuly/August 2011

EIS Complete.July/August 2011

Adopt of Sub-Area Plan, development regulations and approval ofdevelopment agreement.December 2011

7. Legislative Actions. Kitsap County and OPG agree to follow thework items/deliverables outlined in this Section.

7.1 Development Agreement . Kitsap County and OPG, through theNorth Kitsap Legacy Partnership, agree to collaboratively work together on aDevelopment Agreement to address, including but not limited to, thefollowing items:

Development agreement term of applicability.

Cross-reference to concurrently adopted Comprehensive Plan revisionssub-area plan, development regulations and their associatedenvironmental documentation for Port Gamble and its associateduplands that addresses:

o National Historic Town Designation as authorized under the

Growth Management Act (36.70A.520 RCW).o Rural clustering program.

o Capital facilities plan.

o Inclusion of low impact development techniques.

o Inclusion of water reuse technologies. Agreed upon property valuation methodology of OPG Properties.

A schedule and sequence of properties to be transferred to publicownership, as well as definition of public ownership.

Agreement regarding appropriate land use activities on propertiesnoted in Section 1 of this Memorandum.

Agreement on the sale of such properties while agreement is in effect.

Agreed upon low-impact forestry practices.

Termination clause and associated conditions for such a termination.

7.2Comprehensive Plan/Sub-Area Plan Preparation. Kitsap Countyand OPG agree that comprehensive plan map and text amendments, as well

as the development of a sub-area plan and associated development code areappropriate for the Port Gamble Townsite and its associated uplands (PortGamble Block and Shoreline properties) and shall be considered by theCounty. The development agreement, as outlined in Section 6.1, shalladdress the specific components of the necessary amendments and sub-areaplan development. This development agreement will also include evaluation



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of the shoreline designations of Port Gamble Townsite and shoreline incoordination with other County shoreline program revisions processes.

7.3 SEPA. Upon availability of substantial sub-area information, theCounty will review existing environmental documentation and make a

threshold determination under the State Environmental Policy Act (SEPA) onthe proposed project components outlined in Sections 6.1 and 6.2 of thismemorandum. The Partnership expects an environmental impact statementwill be required. OPG shall be responsible to fund the appropriate level ofenvironmental documentation, consistent with Kitsap County Code Title 18.However, Kitsap County shall have ultimate responsibility for the SEPAprocess.

8. Suspension Period.OPGs 8,000 acre North Kitsap ownershiprepresents a significant portion of the companys operating portfolio andsource of ongoing revenue. The parties acknowledge that pressure exists

between the companys need to maintain ongoing operating revenue andthe Legacy Partnerships need to keep as much of the land ownership andmature timber available for public acquisition.

8.1 Therefore, between the execution of this agreement and January1, 2011 (Suspension Period), during which time the transaction feasibilityand acquisition targets will be more firmly defined, OPG agrees that:

a. The company will not engage in any clear-cut timber harvests inthe North Kitsap portfolio, and;b. The company will not market or sell any portion of its 8,000 acreholding with the exception of the approximately 142acre block which

houses the former transplant nursery and the 150acre Chathamdevelopment.

8.2 At least thirty (30) days prior to the termination of theSuspension Period the parties shall meet to discuss the desirability and/orfeasibility of extending said period. The company in good faith will considerextending the Suspension Period in the context of its business needs, but thedecision to continue to forego or not the companys timber harvesting,marketing and sales is in the companys sole discretion.



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DATE: DATE:

OPG Properties, LLC, KITSAP COUNTY BOARD OFCOMMISSIONERS

a Washington limited liability

company

Jon Rose, President Josh Brown, Chair19245 Tenth Ave. NEPoulsbo, WA 98370-7456

Steve Bauer, Commissioner

Charlotte Garrido, Commissioner

ATTEST:

Opal RobertsonClerk of the Board

Approved as to form by the CountyProsecutors Office


Documents

NK Legacy Partnership DRAFT MOU