Northwest Real Estate Law Blog : Northwest Real Estate Lawyer & Attorney : Davis Wright Tremaine Law Firm : Land Use, Development, Commercial Property : Seattle, Portland, Alaska, Washington, Oregon

Authored by: Karen Thiessen

As originally published in Daily Journal of Commerce

Folks in the hotel or restaurant industry are probably very familiar by now with “radius restrictions.” These requests are increasingly being included in contracts by landlords in commercial leases, owners in management agreements (such as for hotels, restaurants, theaters or other venues operated on behalf of the owner for a fee), and licensees in brand franchise agreements.

The restrictions typically limit the tenant, manager or licensor from opening, operating, permitting or otherwise engaging in their business in another location within a certain radius or area, known as the area of protection (or AOP).

When encountering a proposed radius restriction clause, negotiate carefully. While many radius restrictions are reasonable, they can easily become overbroad. A savvy “restricted party” will think beyond only present operations to how the radius restriction may impact other business opportunities.

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Authored by: Jim Reinhart

As published in the Daily Journal of Commerce

How should a potential tenant decide which building to select for office space? Rental rate, incentives, class of space, location and tenant improvements make the usual list of important factors. In this competitive market, landlords are paying more attention to how they can differentiate their office space from the building down the street. One inventive way is to allow pets.

Portland has a few pet-friendly office buildings. Wieden + Kennedy, recognized for its originality, is known for the dogs in its building. Both its employees and its tenants can bring their dogs into the office. Despite a lack of policy, Portland’s EcoTrust Building has many dogs inside. Most buildings expressly do not allow pets, but that is changing around the country and in the Portland-metropolitan area.

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Authored by: Gene Grant

As published in the Daily Journal of Commerce

The city of Portland is known for great restaurants, a beautiful environment, progressive land-use planning, bike friendliness, mass transit, etc. Lately, however, Portland is becoming known for negative job growth.

In an ECONorthwest study commissioned jointly by the Portland Business Alliance, the Oregon Business Association, the Oregon Business Council, Associated Oregon Industries, the Port of Portland and the Pacific Northwest International Trade Association, Multnomah County was found to be almost dead last in the western United States for private-sector job creation, among many other indicia of relative economic decline.

I chaired programs presented by the nonpartisan Urban Land Institute the last couple of years in connection with the ongoing Portland comprehensive land-use plan, which corroborates results of the study. The panelists reported that 30 years ago, two-thirds of the metropolitan jobs were in Portland; today, two-thirds of those jobs are in suburban counties.

In absolute terms, the number of Portland jobs has remained relatively flat over that entire period. While city staffers participated in these programs and acknowledged the long-term failure of Portland’s plan to achieve job growth, Mayor Sam Adams and all but one commissioner were conspicuously absent.

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Authored by:  Steve Ledoux

As posted in the Daily Journal of Commerce

President Obama recently told the New York Times that one thing he has learned on the job is that there is no such thing as a “shovel ready” project. Hence, there is a long delay between stimulus budgeting and actual job creation.

Developers and those who represent them know better than anyone that local, participatory planning environmental review, rezoning, mapping, discretionary and ministerial approval - often lasts twice as long as construction. For example, a major hotel project on the Oregon Coast needed three years to secure approval, and only 18 months to be built.

The recent good news for those of us in the development industry is that more ground is being broken. After nearly two years of stagnation, capital is beginning to flow into new development and clients are building again.

New development has been paralyzed for several reasons.

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Authored by:  Jonathan Lloyd, Stephen M. Rummage, Daniel M. Waggoner, and Maya Yamazaki

Yesterday, in a 5-4 decision, the Washington Supreme Court ruled that Washington state statutes of limitations do not apply to claims brought in arbitration, absent specific contractual language to the contrary. In particular, the Court found those statutes, which specifically require that "actions" be commenced or parties "sue" within a certain time, do not apply in the context of arbitration proceedings, which are not "actions" or "suits," unless the parties expressly provide for such applicability in their arbitration agreement. Broom v. Morgan Stanley DW, Inc., No. 82311-1 (7/22/10).  Click here to read the full article.

 

 

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Authored by:  Craig Gannett, Lauren Giles, and Clayton P. Graham

On May 27, the Washington Department of Ecology (“Ecology”) released draft Guidance regarding the analysis of climate change impacts under Washington’s State Environmental Policy Act ("SEPA"). The Guidance, which will be open for comment until June 25, proposes extensive analysis of both direct and indirect greenhouse gas ("GHG") emissions potentially resulting from government actions covered under SEPA. Among the government actions that are subject to SEPA’s requirements are local governments’ issuance of land use and construction permits for many types of projects, especially commercial, industrial, or larger residential developments. The Guidance also describes potential mitigation measures that project proponents may be required to undertake. Given the broad scope of the Guidance, it is essential that owners and developers of real estate, as well as any business or institution with expansion plans, become familiar with these proposed requirements.

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One of the largest commercial real estate transactions in Portland history was completed at the end of December 2009 when American Pacific International Capital purchased the office portion of KOIN Center. The KOIN Center is Portland’s ninth largest office building with 415,425 square feet and its largest mixed-use project in a single building. While terms of the deal have not been revealed, the Oregonian reported that the sale price was between $50 and $60 million. This is approximately half of the $109 million that the California Public Employees Pension System (CalPERS) paid for the same property in 2007, and less than the $70 million loan which encumbered it.

After CalPERS defaulted on the loan, the mortgage holder, New York Life Insurance Inc. sued to take control of the building and completed the transaction with APIC. Calpers and CommonWealth Partners LLC were joint owners of the office portion of the building and decided to submit a deed in lieu of foreclosure after Ater Wynne LLP vacated 50,000 square feet in the building, relocating to the Lovejoy Building, a mixed-use complex in the Pearl District that also houses a new Safeway and rental apartments. The story of the KOIN Center’s development and transitions, with its colorful cast of characters, makes instructive reading for students of Portland’s urban development history.

To read full article, click here.

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When a boundary line dispute arises between neighboring property owners, one claim that is commonly asserted—along with adverse possession, estoppel in pais, and a few other legal bases for boundary adjustment—is "mutual recognition and acquiescence" in a common boundary. A recent opinion from the Washington Supreme Court (Merriman v. Cokeley) has refined the standard that Washington courts will apply in determining whether a party can establish title under this doctrine.

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Authored by:  Lauren Giles, Kerry Shea, and Clayton Graham

Findings recently issued by the Environmental Protection Agency (EPA) could be the first step in national regulation of greenhouse gas (GHG) emissions under the Clean Air Act. Although the findings apply only to new motor vehicles and engines for the time being, they lay the groundwork for regulating GHGs emitted by power plants and manufacturing facilities.

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We recently met with some surveyors, who passed on the following tips for keeping costs down on land surveys:

 

• In order for them to provide a realistic price quote, they need to see copies of the property title report, the prior survey (if you have it), and the lender's survey requirements (including the form of surveyor's certificate required by the lender).

• Attached is a PDF of the 2005 minimum standards for an ALTA/ACSM survey.  The "Table A items" on pages 4 and 5 are the additional items that a surveyor can show on a survey.  Ask your surveyor to look at the list of Table A items required by your lender.  The following Table A items can significantly increase the cost of the survey:

• Item #1:  Placing a monument (e.g., a marker or a pin) at every major corner on the property.  The surveyor must also file a record of survey with the County Recorder’s office at an additional cost of approximately $2000.

• Item 5:  Showing the contours and the elevations of the property.  This is usually required only if development or construction on the land is involved.

• Item 7(b)(2):  Calculating the gross floor area of all buildings on the property.  

• Item 11(b):  Mapping the location of underground utilities.  See if your lender will accept Item 11(a) instead, in which the surveyor shows the location of utilities based on observed evidence on the surface.

• Make sure the list of items your lender says it wants the surveyor to cover is consistent with the lender’s form of surveyor’s certificate.  The lender’s form of surveyor’s certificate often contains additional requirements, so the cost to you will increase if the surveyor has to go back and do additional work.

• For projects with lots of acreage, one way to cut down on costs can be to have an aerial photogrammetry map done showing the location of interior buildings.  Traditional survey methods would then be used to establish the boundaries of the property and any features within 5 feet of the boundaries.  You should talk to your lender about whether this method is acceptable in lieu of a traditional ALTA/ACSM survey.

One other tip: surveyor contracts often contain a provision limiting their liability for any errors to the cost of the survey, which doesn’t provide much protection to you.  It’s worth asking the surveyor to delete that limitation before you sign the contract.

 

ALTA 2005 Standards (pdf)

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If you are interested in learning creative ways to structure your transactions through the use of entities, you should read the article below:

www.dwtrealestatelawnw.com/Rathbone Article in PSBJ.pdf

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