Settlement Agreement

SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS

This Settlement Agreement and Mutual Release of Claims (this “Agreement”) is entered

into by Seattle House, LLC (“Plaintiff,” “Seattle House,” or “Applicant”), an Ohio limited

liability company, whose address is 470 Olde Worthington Road, Suite 100, Westerville, Ohio

43082, on behalf of themselves, their officers, employees and agents, their predecessors and

successors, and the City of Delaware, Ohio (“Defendant” or the “City”), a chartered municipal

corporation operating under the laws of the State of Ohio whose address is 1 South Sandusky

Street, Delaware, OH 43015, on behalf of itself, its officials, employees and agents, and their

predecessors and successors. Plaintiff and Defendant are collectively referred to in this Agreement

as the “Parties” and individually as a “Party.”

WHEREAS, the City adopted Ordinance Nos. 06-32 and 06-33, which enumerated the

City’s sewer capacity fees (the “Sewer Capacity Fees”) and water capacity fees (the “Water

Capacity Fees”), respectively (the Sewer Capacity Fees and Water Capacity Fees are collectively

referred to in this Agreement as the “Capacity Fees”);

WHEREAS, the City contends that Ordinance Nos. 06-32 and 06-33 were lawfully adopted

in accordance with industry standards;

WHEREAS, in 2019, the City approved the final development plan for Seattle House

Apartments, a multi-family residential community consisting of 60 one-bedroom apartments and

180 two-bedroom apartments (“Seattle House I”);

WHEREAS, pursuant to Ordinance Nos. 06-32 and 06-33, Seattle House paid the City

under protest, $935,913.00 in Sewer Capacity Fees and $981,970.00 in Water Capacity Fees for a

total of $1,917,833.00;

WHEREAS, on June 29, 2020, Seattle House filed a lawsuit against the City, captioned as

Seattle House, LLC, et al. v. The City of Delaware, Ohio, S.D. Ohio Case No. 2:20-cv-03284,

alleging that the Capacity Fees paid by Seattle House and other similarly situated plaintiffs were

unlawful (the “Litigation”);

WHEREAS, the City disputes all claims and allegations contained in the Litigation;

WHEREAS, nothing in this Agreement shall be construed as an admission by the City that

it engaged in any unlawful, unjust, or unconstitutional behavior; and

WHEREAS, Seattle House and the City have reached an agreement pursuant to the terms

set forth herein for the final settlement of all claims that were raised or could have been raised by

Seattle House in its individual capacity or any of its parents or affiliates or predecessors and

successors in the Litigation and the Parties desire to avoid any further controversy, litigation, costs,

legal fees, and inconvenience.

NOW, THEREFORE, based upon the foregoing recitals, which are incorporated herein,

and for good and valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, and the mutual promises and covenants contained herein, the Parties mutually

agree as follows:

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1. Settlement Payment. Within sixty (60) days of the City’s execution of this

Agreement, the City shall pay to Seattle House the sum of Five Hundred Fifteen Thousand Dollars

and No Cents ($515,000.00) (the “Settlement Payment”).

2. Development Period. On September 25, 2023, the Court administratively closed

the Litigation. Within fifteen (15) days of the Parties’ execution of this Agreement, and consistent

with the Court’s September 25, 2023, Order, the Parties will jointly file a request to reopen the

case, notify the Court that settlement has been reached, and will thereafter file a joint motion to

stay the Litigation (the “Development Period”). The Development Period shall be for a period of

three years beginning upon the filing of the joint motion to stay. Applicant may, at Applicant’s

option, extend the Development Period for one additional year (“Contingency Period”). In the

event Applicant elects to exercise the Contingency Period, Applicant shall inform the City in

writing on or before the expiration of the Development Period, and the Parties shall agree to file a

joint motion notifying the Court of the same, which will be filed by Applicant.

3. Seattle House II. During the duration of the Development Period, the City shall

make good faith efforts to approve a multifamily development (“Seattle House II”) by Seattle

House, and/or any of its parents, affiliates, successors, or assigns (collectively, the “Applicant”).

The following terms shall apply to the application, review, approval, and development of Seattle

House II:

a. Seattle House II Characteristics. Seattle House II will be similar in size,

character, and density to Seattle House I, including:

i. at least three-story (3-story) buildings in height with open breezeways

for resident access;

ii. use of vinyl materials on building exteriors and brick and stone on

public-facing exteriors similar to Seattle House I; and

iii. contain three hundred sixty (360) residential units.

b. Capacity Fees. In consideration of the terms of this Agreement, Capacity Fees

for Seattle House II shall be an amount totaling no greater than Five Hundred

Twenty Two Thousand Dollars ($522,000) in connection with Seattle House II

based on an estimated development size of three hundred sixty (360) residential

units and shared common areas for a multi-family residential development of

that size. In the event Seattle House II does not contain three hundred sixty

(360) residential units, the amount of the Capacity Fees shall be pro-rated based

upon the actual number of residential units at One Thousand Four Hundred

Fifty Dollars ($1,450) per unit.

c. Review and Approval Process. To the extent that a zoning application

concerning Seattle House II complies with applicable law, the City shall not

withhold or otherwise unreasonably delay approval of such zoning application.

Further, the City shall review in good faith and shall not take any action to

unreasonably delay or unreasonably withhold approval or acceptance of any

plans, permits, plats, or other approvals necessary to zone, develop, construct,

complete, or occupy Seattle House II, nor shall the City require offsite

improvements in connection with Seattle House II except as provided in this

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Section 3(c) below. Notwithstanding the foregoing, the City may require

Applicant to pay for reasonable offsite improvements in the event that Seattle

House II requires offsite infrastructure that is necessary to provide public

utilities or turn lane access to Seattle House II for purposes of ingress and

egress.

In no event shall the City require the Applicant to construct or provide financial

contribution toward the construction of offsite infrastructure or a public

roadway improvements beyond what is attributable to Seattle House II

generated traffic impacts. Further, the Parties do not intend to enter into a

contract obligating the Applicant to construct Seattle House II or any

improvements relating thereto. It is further acknowledged and understood that

Seattle House II will be a private development, on private property, and is not

intended for use by the City or any other public authority. Notwithstanding any

other provision in this Agreement, the City shall have no greater right to

participate in design, engineering, or construction planning or decisions on

Seattle House II than it would for any other builder or developer that is

constructing any other privately owned or occupied structure. It is

acknowledged and agreed by the Parties that no provision in this Agreement

presently violates any City building or zoning requirements. Nothing in this

Agreement shall exempt Applicant from being subject to compliance with all

Ohio and City building and zoning requirements except as specifically set forth

in this Agreement or shall require the City to provide Applicant with any greater

preference or treatment than the City would provide any other builder or

developer that is constructing any other privately owned or occupied structure.

CRA/TIF. The City shall take all reasonable steps necessary to approve

legislation authorizing a 10-year, 70% community reinvestment area real

property tax abatement for each building within the Seattle House II

development pursuant to Section 3735.65 et. seq. of the Ohio Revised Code

(each, a “CRA Abatement,” and collectively, the “CRA Abatements”). In the

event that the CRA Abatement is not approved, then the City shall take all

reasonable steps necessary to approve legislation (“TIF Ordinance”)

establishing a tax increment financing incentive district (“TIF District”)

pursuant to Section 5709.40 of the Ohio Revised Code, the boundaries of which

shall be coextensive with the boundaries of, and include the parcels of all real

property included within the Seattle House II development. Seventy percent

(70%) of the increase in assessed value of each parcel within the TIF District

shall be exempt from taxation, on a rolling basis if applicable, commencing the

tax year in which the construction of Seattle House II is completed for all

parcel(s) (i.e., when the final certificate of occupancy is issued for Seattle House

II) and ending ten (10) years after such commencement (“TIF Exemption”).

Owners of property within the TIF District shall make annual service payments

in lieu of taxes (“Service Payments”) during the TIF Exemption period in an

amount that is equal to the real property taxes that would have been charged

and payable against the property if the property were not subject to the TIF

Exemption. One hundred percent (100%) of the Service Payments made shall

be utilized to reimburse Applicant or Applicant’s affiliates, successor(s) or

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assign(s) for any expenses, debt, or finance costs arising from or related to

Seattle House II for any public infrastructure improvements permitted under

Chapter 5709.40 of the Ohio Revised Code and all related costs of permanent

improvements (including, but not limited to, those costs listed in Section

133.15(B) of the Ohio Revised Code): (“Public Infrastructure

Improvements”), or other costs or expenses otherwise permitted by law for such

funds. For the avoidance of doubt, Public Infrastructure Improvements that are

eligible for reimbursement shall include eligible improvements made on the

Seattle House II parcel(s).

The Parties agree that establishing and maintaining the CRA Abatements or the

TIF Exemptions, as applicable, are a critical component of this Agreement. The

City and the Seattle House II owner shall perform such acts as are reasonably

necessary or appropriate to effect, claim, reserve and maintain the CRA

Abatements, or the TIF Exemptions, as applicable, including, without

limitation, joining in the execution of all documentation and providing any

necessary documents or information required in connection with such

exemptions.

d. Workforce Housing Period. The Workforce Housing Period shall commence

during the first tax year a Seattle House II building is subject to the CRA

Abatement or TIF Exemption, as applicable, and shall end on the date a Seattle

House II building is no longer subject to the CRA Abatement or TIF Exemption,

as applicable.

e. Affordable Housing. During the Workforce Housing Period, Applicant or

Applicant’s successor(s) or assign(s) shall allocate and make available ten

percent (10%) of the residential units in Seattle House II for households at or

below eighty percent (80%) of the area median income (“AMI”) and ten percent

(10%) of the residential units in Seattle House II for households at or below

sixty percent (60%) of the AMI (the “Affordable Housing Obligation”).

Unless otherwise mutually agreed in writing by the Parties, the Affordable

Housing Obligation shall be determined as set forth in this subsection. The

AMI shall be based upon the then current United States Department of Housing

and Urban Development’s (“HUD”) AMI calculated from time to time,

currently annually, for the Columbus, Ohio HUD Metro Fair Market Rents

Area, which includes Delaware County, Ohio (the “Columbus Metro FMR”).

Further, the amount of rent subject to the Affordable Housing Obligation shall

be calculated by doubling the applicable “50% Rent Limit” published by HUD

as part of the HOME Program from time to time, currently annually, for the

Columbus Metro FMR and multiplying the result by either sixty percent (60%)

or eighty percent (80%) as may be applicable and subtracting a utility

allowance. Such utility allowance shall be calculated through a consumptionbased

methodology utilizing residents’ average utility consumption for like

utilities across Applicant’s and its affiliates’ affordable housing portfolio

consisting of at least ten thousand (10,000) total apartment units. For the

avoidance of doubt, the calculation of the Affordable Housing Obligation

applicable in 2023 is set forth in Exhibit 1 and incorporated herein by reference.

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At the end of Year 1, Year 4, Year 7, and Year 10 of the Workforce Housing

Period the management of Seattle House II shall prepare and submit a “Rent

and Occupancy Report” to the City of Delaware to ensure that rents and

occupant households of the designated Affordable Housing Obligation units

comply with the agreed upon and required percentages set forth in this

subsection and the annual rents and household income limits as provided by

HUD from time to time, currently annually. Unless mutually agreed by the

Parties, the format of the “Rent and Occupancy Report” will be similar to the

template set forth in Exhibit 2 that is incorporated herein by reference.

f. Contingent Settlement Payment. In the event the City does not satisfy its

obligations in this Section 3 such that Seattle House II is not fully approved for

occupancy within the Development Period or Contingency Period, as applicable

and as described in Section 2, despite Applicant’s best efforts, the City shall

pay Applicant the sum of One Million Dollars ($1,000,000.00). Nothing in this

Agreement shall obligate the City to pay this $1,000,000.00 to Applicant should

the failure of Seattle House II to be fully approved for occupancy within the

Development Period or the Contingency Period, as applicable, results from: (i)

the actions or conduct of the Applicant, or (ii) any reason beyond the control of

the City unless the City caused or contributed to any such reason. The Parties

agree that the stipulated dismissal of the Litigation with prejudice referenced in

Section 4(a) shall be filed if the City pays Applicant the One Million Dollar

($1,000,000.00) Contingent Settlement Payment.

4. Contingent Release of Claims. Within thirty (30) days of the full approval of

Seattle House II for occupancy of all residential units or at such time as the Parties mutually agree,

the Parties agree as follows:

a. Dismissal of Litigation. At the end of the Development Period, the Parties shall

file the stipulation of dismissal attached hereto as Exhibit 4, dismissing the

Litigation with prejudice. A copy of the stipulation of dismissal is attached as

Exhibit 3 and incorporated herein by reference.

b. Seattle House’s Release. Seattle House, for itself, and its present and former

officers, directors, shareholders, managers, members, agents, employees,

contractors, predecessors, successors, parent companies, subsidiaries,

divisions, affiliates, legal representatives, sureties, and/or assigns, fully and

finally releases, settles, and forever discharges and releases the City, and its

officials, insurers, officers, partners, employees, agents, affiliates, successors,

guarantors, indemnitors, and assigns from any and all damages, injuries,

omissions, actions and causes of action, suits, debts, disputes, consultant’s fees,

attorneys’ fees, expenses, costs, liabilities, and demands whatsoever, from the

beginning of time until the Effective Date, arising out of or related to any of the

claims made, or that could have been made by Seattle House and its present and

former officers, directors, shareholders, managers, members, agents,

employees, contractors, predecessors, successors, parent companies,

subsidiaries, divisions, affiliates, legal representatives, sureties and/or assigns,

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in or related to the Litigation. This release does not apply to any obligations,

claims, or other liabilities created by this Agreement or to claims or rights, if

any, based totally on events occurring after the Effective Date of this

Agreement.

c. The City’s Release. The City, for itself, its present and former officials,

insurers, officers, partners, employees, agents, affiliates, successors,

guarantors, indemnitors, and assigns fully and finally releases, settles, and

forever discharges and releases Seattle House, and its present and former

officers, directors, shareholders, managers, members, agents, employees,

contractors, predecessors, successors, parent companies, subsidiaries,

divisions, affiliates, legal representatives, sureties, and/or assigns, from any and

all damages, injuries, omissions, actions and causes of action, suits, debts,

disputes, consultant’s fees, attorneys’ fees, expenses, costs, liabilities, and

demands whatsoever, from the beginning of time until the Effective Date,

arising out of or related to any of the claims made, or that could have been made

by the City in or related to the Litigation. This release does not apply to any

obligations, claims, or other liabilities created by this Agreement or to claims

or rights, if any, based totally on events occurring after the Effective Date of

this Agreement.

5. Seattle House’s Representations and Warranties. Seattle House hereby

represents and warrants to the City the following:

a. Before executing this Agreement, Seattle House became fully informed of the

terms, contents, conditions, and effects of this Agreement, and any Exhibits

attached hereto, and have been fully apprised by their attorneys of the legal

effect and meaning thereof;

b. This Agreement is fully and forever binding on Seattle House, its present and

former officers, directors, shareholders, managers, members, agents,

employees, contractors, predecessors, successors, parent companies,

subsidiaries, divisions, affiliates, legal representatives, sureties, and/or assigns;

c. No promise or representations of any kind have been made to Seattle House by

the City, or its counsel, or by anyone acting for the City, nor has Seattle House

relied upon any representation by the City, its counsel, or by anyone acting for

the City, except as is expressly stated in this Agreement (including any Exhibits

attached hereto), and Seattle House has been afforded the full opportunity to

make whatever investigation or inquiry they deem necessary or appropriate in

connection with the subject matter of this agreement, and the full opportunity

to negotiate any and all terms thereof; and

d. Seattle House agrees to execute any and all additional documents reasonably

necessary to effectuate the intent of this Agreement.

6. The City’s Representations and Warranties. The City hereby represents and

warrants to Seattle House the following:

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a. Before executing this Agreement, the City became fully informed of the terms,

contents, conditions, and effects of this Agreement, and other exhibits attached

hereto, and has been fully apprised by its attorneys of the legal effect and

meaning thereof;

b. The signatory to this Agreement, for or on behalf of the City, is fully authorized

and legally competent to execute this Agreement and is a duly authorized

representative of the City;

c. Any measure necessary to zone, rezone, or otherwise permit or approve Seattle

House II adopted by the City pursuant to this Agreement is acknowledged and

agreed to constitute the discharge of a legal obligation created by this

Agreement;

d. The execution, delivery and performance of this Agreement has been

authorized by all necessary actions on the part of the City, and no further action

on the part of the City is necessary to authorize the execution, delivery and

performance of this Agreement;

e. This Agreement is fully and forever binding on the City and its successors and

assigns;

f. No promise or representation of any kind has been made to the City by Seattle

House or their counsel, or by anyone acting for Seattle House, nor has the City

relied upon any representation by Seattle House or their counsel, or anyone

acting for Seattle House except as expressly stated in this Agreement (including

any Exhibits attached hereto); and the City has been afforded the full

opportunity to make whatever investigation or inquiry it deems necessary or

appropriate in connection with the subject matter of this Agreement, and the

full opportunity to negotiate any and all terms thereof; and

g. The City agrees to execute any and all additional documents reasonably

necessary to effectuate the intent of this Agreement.

7. Joint Statement on City Development and Affordable Housing Advancements

Within the City. After the Settlement Payment is sent to Seattle House, the City will issue the

Joint Statement that is attached as Exhibit 4. The City may thereafter provide additional public

communications about the availability of the Affordable Housing Obligation described in Section

3(f) of the Agreement but will notify Seattle House at least twenty-four hours in advance for any

such communication that refers to Seattle House II.

8. Severability. The provisions of this Agreement are severable, and if any provision

of this Agreement is found to be invalid or unenforceable, then such provision shall be deemed to

be deleted only to the extent that it is found to be invalid or unenforceable. Such an invalid or

unenforceable provision shall not affect the validity of the remainder of this Agreement, and the

remaining provisions shall continue in full force and effect.

9. Enforcement. Any action by a Party to enforce any provision of this Agreement

shall not relieve it or the other Party from its obligations under this Agreement, and no failure to

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enforce any provision of this Agreement shall constitute a waiver of any future default or breach of

that or any other provision. Nothing in this Agreement shall prevent or bar a Party from bringing

a claim to enforce this Agreement or a claim based upon events that lead to a new cause of action

that arises after the Effective Date of this Agreement.

10. Additional Acts and/or Documents. If any additional acts are required to

consummate the transactions contemplated hereby, and/or to perform any Party’s obligations

hereunder, the Parties covenant in good faith to perform such additional acts and execute any

documents as may be reasonably necessary to give effect to the terms of this Agreement.

11. Negotiated Settlement. The Parties acknowledge that the terms of this Agreement

are contractual and the result of negotiations held on equal footing between the Parties and their

counsel. Each Party and its counsel cooperated in the drafting and preparation of this Agreement

and the Parties agree that in the event of any ambiguity herein, such ambiguity shall not be resolved

to the detriment of any Party hereto by reason of the actions of such Party as a participant in the

drafting of this Agreement.

12. No Third-Party Beneficiaries. This Agreement shall not confer any rights or

remedies upon any person other than the Parties hereto, and their heirs, successors, and assigns.

13. Binding Effect. This Agreement shall become binding and effective as to all

Parties upon its execution by Seattle House and the City, as of the Effective Date.

14. Amendment. This Agreement shall not be amended, altered, or modified except

by an instrument in writing and duly executed by all Parties or their authorized representatives.

15. Complete Agreement. This Agreement, including any Exhibits attached hereto

and made a part hereof, constitutes the complete and final understanding between the Parties with

respect to the subject matter hereof and supersedes all prior understandings and agreements between

the Parties.

16. Choice of Law. This Agreement and any disputes which may arise in connection

with the interpretation or enforcement of this Agreement shall be governed by the laws of the State

of Ohio without regard or reference to choice or conflict of law rules, and the Parties submit to the

continuing jurisdiction of the United States District Court for the Southern District of Ohio for

enforcement of this Agreement.

17. Counterparts. This Agreement may be executed in one or more counterparts, all

of which shall be considered the same agreement, and each of which shall be deemed an original.

18. Expenses; Costs. Each Party shall be responsible for its own costs and expenses,

including attorneys’ fees, incurred in connection with this Agreement and litigation of this case.