09-071.05 Splash Down Lease oy-07 ( .o5
/ OFFICE OF THE CITY ATTORNEY
SCITYUlan CARY P.DRISKELL—CITY ATTORNEY
pERIK J.LAMB—DEPUTY CITY ATTORNEY
Valley
11707 East Sprague Avenue Suite 103 • Spokane Valley WA 99206
509.720.5105 ♦ Fax: 509.688.0299 • cityattorney®spokanevalley.org
REPAYMENT AGREEMENT WITH SPLASH-DOWN CONCESSIONS,INC.
REGARDING UNPAID LEASEHOLD EXCISE TAX ARREARAGE 2009-2015
The City of Spokane Valley entered into a lease agreement with Splash-Down Concessions, Inc.
(Splash-Down) on May 19, 2009 for use of certain park property located at Mission Park. The
parties executed an amendment in 2012 to reduce the yearly lease payment amount (the 2012
Amendment),and executed a second amendment in 2014 to amend the minimum liability insurance
amount(the 2014 Amendment).
The contract executed in 2009 contained a provision(paragraph 20)requiring Splash-Down to pay
any leasehold excise tax which was generated as a result of the contract. A leasehold excise tax is
required by the state of Washington pursuant to chapter 82.29A RCW when public property is
leased to private interests. The parties have determined that Splash-Down failed to pay any of the
leasehold excise tax that was due and owing from January 1, 2009 to date. The total amount in
arrearage is$28,096.40.
The City and Splash-Down agree that the $28,096.40 arrearage shall be repaid no later than
September 8,2020,with total annual payments in the amount of$5,619.28 being repaid each year
for the years 2016-2020. Splash-Down may repay the arrearage at a more accelerated rate.
This arrearage repayment schedule is predicated on Splash-Down exercising at least the first five-
year lease option so that the expiration date would change from April 19,2019,to April 19,2024.
It is expressly agreed that by executing this Repayment Agreement, Splash-Down Concessions,
Inc. is agreeing to also exercise the first five year lease renewal under the same terms the parties
have agreed to in the 2009 Agreement, as modified by the 2012 Amendment(lease rate) and the
2014 Amendment(insurance).
The repayment schedule, including annual lease payment, current leasehold excise tax, and
leasehold excise tax arrearage owed for 2009-2015, is as follows:
2016 2017 2018 2019 2020 I
Annual Lease Payment 25,000.00 25,000.00 25,000.00 25,000.00 25,000.00
Current Leasehold Tax 3,210.00 3,210.00 3,210.00 3,210.00 3,210.00
Leasehold Tax Arrearage 5,619.28 5,619.28 5,619.28 5,619.28 5,619.28
33,829.28 33,829.28 33,829.28 33,829.28 33,829.28
t
The total owed per year for 2016-2020 is$33,829.28,which shall be paid in three yearly payments
of$11,276.43 as follows:
Schedule ofyearly payments:
-First yearly payment: July 5 (or the following Monday if it falls on a Saturday or Sunday);
-August 5 (or the following Monday if it falls on a Saturday or Sunday); and
- September 5 (or the following Monday if it falls on a Saturday or Sunday; if September 5 is
Labor Day,payment is due the following day.)
Once the leasehold excise tax arrearage is repaid, the combined lease and leasehold tax payment
shall be $28,210.00, which shall be paid to the City in three equal installments of $9,403.33
pursuant to the schedule of yearly payments,immediately above,through the remainder of the lease
agreement.
The City elects to not collect interest on the arrearage so long as it is paid in compliance with the
terms of this Repayment Agreement.- In the event Splash-Down fails to comply with the terms of
this Repayment Agreement, all of the interest that could otherwise be charged from the date of
execution of this Repayment Agreement at an annual rate of 12% shall immediately become due
and owing along with the entire remaining leasehold excise tax arrearage.
2.
Dated: — — Dated: 24(240(,
4_ _Ilk COBA,INA----
ie_,- . a,' _:_ .Office'._—-- n, Tty Manager
Maw Cit(lwlvt,
Leri, . Kellogg(O leer) ib