City of Salem and Willamette Queen proposed agreement

8/4/2019 City of Salem and Willamette Queen proposed agreement

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TO:

THROUGH:

FROM:

SUBJECT:

ISSUE:

FOR AGENCY MEETING OF:.AGENDA ITEM NO.:

UR N RENEWAL AGENCY BOARD

August 22, 20114 (a)

~ A J ~I NORRIS, EXECUTIVE DIRECTORH H. A ~ O RBAN DEVELOPMENT DEPARTMENT

MINTO ISLAND BICYCLE AND PEDESTRIAN BRIDGE -WILLAMETTE QUEEN STERNWHEELER LOSS OF USEAGREEMENT

Shall the Agency Board authorize the Executive Director to execute a Loss of UseAgreement with the owners of the Willamette Queen Sternwheeler for compensation oflost revenue due to the construction of a low span, tied arch bicycle and pedestrianbridge between Riverfront Park and Minto Island which will prohibit the Sternwheeler'suse of the Willamette River Slough?

RECOMMENDATION:

Staff recommends the Agency Board authorize the Executive Director to execute a Lossof

Use Agreement with the ownersof

the Willamette Queen Sternwheeler (Owners)fo r

compensation of lost revenue due to the construction of a low span, tied arch bicycleand pedestrian bridge between Riverfront Park and Minto Island which will prohibit theSternwheeler's use of the Willamette River Slough (Slough).

BACKGROUND:

In the Spring of 2009, staf f met with the Owners to negotiate a strategy and offset thepotential business losses from the reduction in navigability up the Slough should theAgency decide to place a low span, tied arch bridge that could restrict access. Thenegotiations were not successful.

In November 2010, Council directed Staff to: (1) hire a third party, independentconsultant to review the Willamette Queen Sternwheeler business to determine thefinancial impact of closing the Slough to commercial traffic and (2) re-open negotiationswith the owners o f the Willamette Queen Sternwheeler in order to reach an agreementthat would allow the permit process for the construction of the Minto Island pedestrianbridge to proceed and compensate the Owners fo r thei r loss of access to the Slough.

Sternwheeler Page 1 of 3 August 22, 2011


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FACTS AND FINDINGS:

In January 2011, staff hired Valuations Northwest, a business financial consultant, to

analyze the Willamette Queen Sternwheeler business, with the specific task ofdetermining the financial impact to the business if the Slough were to be closed tocommercial traffic due to the construction of a pedestrian bridge. The study concludedif the Slough was blocked from commercial traffic, the annual loss of revenue to thebusiness would be $54, 216 and that without compensation; the Sternwheeler would beforced to cease operations in Salem.

Based on the independent financial analysis, staff and the Owners completednegotiations and have agreed in principle, subject to Agency Board approval, on amutually beneficial Loss of Use Agreement (Attachment A) that will both fairlycompensate the Owners for their loss of revenue and allow the permit process and

bridge construction to occur.

Staff and the Owners have reached agreement in principal on the following key terms:

1. The Owners will be compensated up to $250,000, payable in five consecutiveannual installments of $50,000.

2. The Owners agree to support and not contest the permit process for the low spanbridge option across the Slough.

3. Compensation will commence in the calendar year in which the Slough isblocked by bridge construction.

4. The Willamette Queen Sternwheeler must be in continuous operation for the

twelve months prior to each payment date to receive payment.5. The Owners agree not to sell the sternwheeler or the business prior to theAgency's receipt of all applicable permits unless the new owner agrees to bebound by the terms of the Agreement.

6. The Owners may assign the Agreement to another party with written consentfrom the Agency.

7. The Agreement is valid for a period of 10 years.

It is anticipated the $250,000 loss of revenue payment will be made from the Riverfront-Downtown Urban Renewal Area funds as a cost of the Minto Island Pedestrian Bridgeproject.

ATTACHMENT A: Loss of Use Agreement

Report Prepared by: Clint Dameron, Real Property Services Manager, Urban Development DepartmentG:\URBANDEVIADMINISTRA TION\Final Council Staff Reports\2011\Aug 22\Sternwheeler\Council Sta ff Bridge Report. doc

Sternwheeler Page 2 of 2 August 22, 2011


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AGREEMENT

Agreement between the Urban Renewal Agency of the City of Salem, Oregon, a quasi-municipal

corporation (the Agency), and Richard Chesbrough, Barbara Chesbrough, CBVB Associates,Inc, an Oregon corporation, and Stem Wheeler Excursions, LLC, an Oregon limited liabilitycompany (collectively the Owners).

Recitals:

(a) The Riverfront Downtown Urban Renewal Plan contains a project for theconstruction of a pedestrian bridge across the Willamette River Slough (the Slough) fromRiverfront Park to Minto Island (the Bridge).

(d) Richard Chesbrough and Barbara Chesbrough are the sole shareholders ofCBVBAssociates, Inc. and are the sole members of Stern Wheeler Excursions, LLC.

(b) CBVB Associates, Inc. is the owner of the Willamette Queen Sternwheeler(Willamette Queen).

(c) Stem Wheeler Excursions, LLC operates the Willamette Queen, and provides forprofit excursions to the public on the Willamette River and the Slough.

(e) The Willamette Queen uses the Slough for excursions when conditions on the mainchannel of the Willamette River make the main channel unsafe.

(f) The Agency desires to construct a Bridge over the Slough, to provide pedestrian andbicycle access to the City of Salem's Minto-Brown Park.

(g) The Agency has considered two options, a "low span" bridge and a "high span"bridge. The cost of construction of a low span bridge is estimated to be $5,618,000; thecost of construction of a high span bridge is estimated to be $9,800,000.

(h) The Agency desires to construct a low span bridge (the Bridge), the effect of whichwould be to prevent the Willamette Queen from using of the Slough.

(i) The parties agree that Owner's loss of business from the construction of the Bridgewould be approximately $50,000 per year.

(j) The Agency must obtain a Bridge Permit from the United States Coast Guard BridgeAdministration Division prior to commencing construction of the Bridge (the Permit).

(k) The purpose of this Agreement is to make provisions for the Owners' agreement andconsent to allow the construction of the Bridge to proceed, notwithstanding the Owners'loss of access to the Slough, and to compensate the Owner for loss of business related tothe loss of access to the Slough that will be caused by the Bridge.

ATTACHMENT A


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(I) The purpose for which this Agreement is made is in the public interest, and thecompensation provided herein reflects an appropriate balance between the interests of theOwners in the operation of the Willamette Queen, and the Agency's interest in

undertaking a project that provides the greatest benefit to the public at the mostappropriate cost.

Agreement:

NOW, THEREFORE, the parties agree as follows:

1. Project Support. Upon the Agency's submission of its application for the Permit to theUnited States Coast Guard, the Owners will submit a letter of support of the application for thePermit to the USCG. The Owners will not take any action to oppose the Agency's applicationfor the Permit, or take any action to oppose any other Agency application for permits orapprovals necessary for, or related to, the construction, maintenance or operation of the Bridge.The Owners' letter of support shall be substantially in the form set forth in Attachment 1, whichattached hereto and incorporated herein by reference.

2. Compensa tion. As consideration for the Owners' duties under this Agreement, the Agencywill pay the Owners up to $250,000, in five consecutive annual installments of $50,000, subjectto the following conditions:

(a) Agency shall have no obligation to make any annual installment payment under thisAgreement until construction of the Bridge prevents the Willamette Queen fromaccessing the Slough.

(b) Annual payments shall occur on or before the fifteenth day of January for each year,commencing with the calendar year in which construction of the Bridge prevents theWillamette Queen from accessing the Slough (the Annual Payment Date), and paymentsshall continue each year until fully paid.

(c) The Willamette Queen must be in continuous operation for a period of twelve monthsprior to the Annual Payment Date of each year. "Continuous operation" means that SternWheeler Excursions, LLC uses the Willamette Queen for excursions and to operate itsbusiness on a regular basis, and making a minimum of 85 excursions during eachcalendar year. If the Willamette Queen is not in continuous operation, as defined herein,at the time of an Annual Payment Date, this Agreement shall terminate, and the Agency'sduty to make payment under this Agreement shall have no further force or effect.

3. Sale ofWillamette Queen.

(a) Prior to Agency obtaining the Bridge Permit from the USCG and all other requiredpermits and approvals for the construction and operation of the Bridge, Owners may notsell, lease, transfer, or otherwise convey or alienate the Willamette Queen, or any interest


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therein, unless the person or entity acquiring the Willamette Queen or any such interestconsents, in writing, to be bound by this Agreement.

(b) Owner acknowledges that Agency is expending funds for the purposes of obtaining

permits and approvals and the commission of construction plans for the construction ofthe Bridge in reliance on this Agreement. Owner further acknowledges that Owner'sviolation any of its duties under this Section will cause Agency to incur substantialeconomic damages and losses of types and in amounts which are impossible to computeand ascertain with certainty as a basis for recovery by Agency of actual damages, and thatliquidated damages in the amount of $500,000 represent a fair, reasonable andappropriate estimate thereof, and the Owners their heirs, successors and assigns shall bejointly and severally liable for the liquidated damages as set forth in this section.

Accordingly, in lieu of actual damages, Owners agree that liquidated damages may beassessed and recovered by Agency against Owners, without Agency being required topresent any evidence of the amount or character of actual damages sustained by reasonthereof, in the event that Owners conveys the Willamette Queen, or any interest therein,to another party, and that party does not agree, in writing, to be bound by this Agreement.Such liquidated damages are intended to represent estimated actual damages and are notintended as a penalty, and Owners shall pay them to Agency without limiting Agency'sright to terminate this Agreement for default as provided herein.

4. Assignment. This Agreement may be assigned, subject to the following conditions:

(a) Any assignment of Owners' rights and obligations under this Agreement shall besubject to Agency's written consent, which may be withheld on Agency's reasonablediscretion.

(b) Owners' rights and obligations under this Agreement may be assigned to a party orparties only if that party or parties also assumes ownership of the Willamette Queen, orany interest therein, concurrent with the assignment of the rights and obligations of thisAgreement.

5. Term and Termination.

(a) This Agreement is valid for a period often years from the date it is executed by allparties hereto, unless terminated earlier as set forth in this section; provided, however, ifthe Agency obtains the Bridge Permit from the USCG, this Agreement shall continueuntil all required payments have been made, as provided in Section 2.

(b) This Agreement shall terminate immediately upon:

(1) Denial by the USCG of Agency's Bridge Permit application; or

(2) Breach of this Agreement by Owner.


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6. Nonwaiver. Waiver by either party of performance of any provision of this Agreement shallnot be a waiver of or prejudice the party's right to require performance of the same provision inthe future or of any other provision.

7. Notices. Any notice required or desired to be given by one party to the other shall be given,in writing, by personal delivery; by United States mail; by FAX; or by nationally recognizedovernight courier service, to the following addresses, or to such other address as may bespecified from time to time by the respective party in writing.

Urban Renewal Agency of the City of Salem Richard and Barbara Chesbrough, et.al.

8. Heirs, Successors, an d Assigns. Subject to the above stated limitations on assignment ortransfer, the rights and obligations herein shall be binding on and inure to the benefit of theparties and their respective heirs, successors and assigns.

9. Time of Essence. Time is of the essence of the performance of this Agreement.

10. Amendment. This agreement may not be altered, modified, supplemented, or amended inany manner whatsoever except by mutual agreement of the parties in writing. Any suchalteration, modification, supplementation, or amendment, if made, shall be effective only in thespecific instance and for the specific purpose given, and shall be valid and binding only if signedby the parties.

11. Integ ration. This Agreement constitutes the entire agreement between the partiesconcerning the subject matter hereof and supersedes any and all prior negotiations andagreements between the parties, whether written or verbal, which are not fully expressed herein.

12. Severabili ty. The parties agree that if any term or provision of this Agreement is declaredby a court of competent jurisdiction to be illegal or in conflict with any law, the validity of theremaining terms and provisions shall not be affected, and the rights and obligations of the partiesshall be construed and enforced as if this Agreement did not contain the particular term orprovision held to be invalid. Should any provision be declared invalid, the parties shall agree toenter into negotiations within ten days of fmal judgment regarding any matter so declaredinvalid, and reform or replace such provision or part thereof with a valid and enforceableprovision that comes as close as possible to expressing the intention of the provision so declared.

13. Legal Counsel; No Construction Against Drafter. Both parties acknowledge and affirmthey each have sought the advice of, or are each represented by, legal counsel in connection withthe terms, conditions, and effect of this Agreement, have read and understood the Agreement, arefully informed of the contents of the Agreement and the legal consequences thereof, knowinglyand voluntarily agree to be bound by its terms, and acknowledge and affirm that the terms of thisAgreement shall not be construed against either party as a drafter hereof.


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14. Execution in Counterparts. This Agreement may be executed in counterparts, each ofwhich shall be an original, and all of which shall constitute but one and the same instrument.

Urban Renewal Agency of th e City of Salem

Date:By: Linda Norris, Executive Director

Date:Richard Chesbrough

Date:Barbara Chesbrough

CBVB Associates, Inc.

Date:By: Barbara Chesbrough

Stern Wheeler Excursions, LL C

Date:By: Barbara Chesbrough

Date:By: Richard Chesbrough


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ATTACHMENT 1

Date: _ _ _ _ _ _ _

This is a letter in support of the application by the Urban Renewal Agency of the City of Salem("Agency") for a permit to construct a low-span bridge across the Minto Island Slough that willconnect downtown Salem to Minto Brown Park.

We are the owners and operators of the Willamette Queen stemwheeler and, since 20XX, haveprovided excursions on the Willamette River to the public from the public dock in Salem. As acommercial user of the Willamette River near downtown Salem, and a part of Salem's tourismindustry, we wish to provide our support for the proposed bridge.

Although the low-span bridge will limit access to the Willamette River Slough for theWillamette Queen, we will be able to continue to operate on the Willamette River, andunderstand the benefit the bridge will provide to the community.

When completed, the bridge will provide an important link in Salem's bike and pedestrian trailsystem and will create a public gateway from downtown Salem to the green space, trails andnatural areas in Minto Brown Park. The bridge will increase the visibility and vitality of Salem'sexisting Riverfront Park and will open up Sa lem's riverfront area, an underutilized amenity inSalem, making it more accessible to the public.

We support the Agency's application, and urge you to approve it without delay.

Sincerely,

Richard and Barbara Chesbrough

City of Salem and Willamette Queen proposed agreement

Documents

Transcript of City of Salem and Willamette Queen proposed agreement