AGENDA

Board of Directors Meeting

Fort Worden Public Development Authority

Wednesday, January 24, 2018 | 9 a.m. – 12 p.m.

Commons B, Fort Worden

Regular Board Meeting:

I. Call to Order

II. Roll Call & Staff Introductions

Lamont Thornton & Landon Thornton

III. Fort Worden Partner Presentation

Friends of Fort Worden - Janine Anderson

IV. Changes to the Agenda

V. Correspondence

Fort Worden Partners Report

Executive Committee Minutes January 16, 2018

VI. Consent Agenda

A. Review and approval of Board Meeting Minutes, December 20, 2017

VII. Review and Discussion of December Financials

A. Staff Report

B. Board Discussion

VIII. Market Segment Presentation: Weddings

A. Staff Report - PowerPoint

B. Board Discussion

IX. Update on Makers Square

A. Historic Tax Credits

B. Capital Budget

C. Design Process

D. Project Schedule

X. Review and Discussion of Signal Architecture Contract Amendments

A. Staff Report

B. Board Discussion

Action: Resolution 18-01 to authorize Executive Director to amend contract with Signal

Architecture to include additional services.

Page 1 of 47

XI. Motion to authorize Executive Director to negotiate lease amendments with State Parks.

A. Staff Report

B. Board Discussion

Action: Motion to authorize Executive Director to negotiate lease amendments with State

Parks

XII. Staff Report

A. Washington State Parks Update

B. Glamping Workshop/ Schedule

C. All Staff Meeting

D. Board Retreat

E. Property Management System

XIII. Public Comment

XIV. Board Reports/Discussion

XV. Next Meetings

Executive Committee Meeting February 20, 2018

Board of Directors Meeting February 28, 2018

Board of Directors Retreat, March 28 & 29, 2018

XVI. Adjourn

Page 2 of 47

FriendsofFortWordenStatePark2017Accomplishments

1. MaintainedFortWordenStateParkVisitorsInformationCenter2. OperatedFFWGiftShop(proceedsfromwhichsupportParkprojectsandprograms)3. Morethan$72,000inDiscoverPasssalesinsupportofFWPDAandWSP4. Providednearly6,000volunteershoursinsupportofFWSP

a. FFWSPBoard1,872hoursb. VisitorCenter/GiftShopvolunteers2,968hoursc. TrailTeam1,107hoursd. Total5,947hours

5. Projectsandprogramsa. TrailTeam

i. SixTrailTeamworkpartiesremovedinvasiveplantsandweedsii. ContinuedTrailTeamstewardshipofthenaturalbeautyofthePark(trail

maintenance,improvements,cleanupandaccessibility)andservedasfriendlyambassadors

iii. MadeupdatesandimprovementstotheFortWordenTrailMapb. FundedandprovidedtwowaterbottlefillingstationsontheFortWorden

campusattheCommonsandBuilding200c. Purchaseofsixbicycleracks(2016)installedatTapsattheGuardhouse(2017)

andfouradditionalbikerackssoontobeinstalledonArtilleryHill(2018)d. ProvidedfreeDogi-PotpetwastebagsthroughouttheParke. SuppliedandinstallednewtrailsignageonArtilleryHillf. SupportforTourdeFortseventg. Sponsorededucationalandexplorationallearningsuchasguidednaturewalks

i. QuarterlySundaysintheParkinterpretivewalksonbirds,geology,nativeplantsandinter-tidalzone

ii. TakeaHikeguidedtourofParkviewpointsh. Presentededucationalprogramsaboutnatureandnaturalhistoryi. Providededucationalinformationspotsinsocialmedia(Facebookandwebsite)j. WorkedcollaborativelywiththePDAandStateParksonprogramsandprojects

thatsupportFortWordenStateParkk. Brickpaverfundraiser–completedandinstalledallpendingpaverordersl. Oralhistoryprogram–newprogramcoordinatorrecruitedm. Initialdevelopmentofplansforfundingandprovidingfreepublicspotting

scopesattwolocationsintheparkn. Expandedandsupported“LittleFreeLibrary”bookexchangeforParkvisitorso. Publishedquarterlye-newslettertoamailinglistof500+recipients

1-24-2018

Fort Worden Partners’ Report to PDA Board January 2017

Port Townsend School of the Arts

Julie Johnson is our new program manager. Teresa Verraes began as Executive Director on January 1. Friends of Fort Worden State Park

Save the Date: Friends of Fort Worden Annual Meeting, April 20, 2018, 5:00 pm – 8:00 pm. Guest speaker is Brian Cladoosby. Where the Waters Converge: How Historic Gathering Places Shaped Tribal Traditions.

The “Sundays in the Park” series of natural history walks will resume in 2018! The first in the series will be led by local Landscape Designer and Horticulturalist, Matt Berberich. The walk will be held on Sunday, March 25 at 2:00 PM. For more information or to register email nhc@fwfriends.org.

Join the Friends of Fort Worden Trail Team for a “Walk in the Park” on February 10 from 9:00 – 10:00. Meet and mingle with our dedicated trail team on a stroll into the Park over some of the many trails we maintain and improve. Walkers meet at 9:00 am at the parking lot near the School of Woodworking.

Madrona MindBody

January 27, 2018, 1:00 PM 4:00 PM: SpeakUP about Community - An Afternoon of Communication Games with Jessica Tartaro https://madronamindbody.com/new-events/2018/1/27/speakup

Jan 30-Feb 4 Movement Medicine: Phoenix Retreat: 5 day residential workshop. https://madronamindbody.com/new-events/2018/phoenix-retreat

Feb 11 Valentine's Couples Yoga Workshop with Renee Klein - https://madronamindbody.com/new-events/2018/valentine-yoga

New Wednesday night yoga class Gentle Yoga Flow 7-8:15pm

Thursday Night Dance Lab Every Thursday 7-8:30pm Starts Jan 11: https://madronamindbody.com/thursday-dance-lab

Beginning Drumming Series Starts Sunday Jan 7: https://madronamindbody.com/new-events/beginninghanddrum-abbpj

Tribal BellyDance series starts Monday, Jan 8 https://madronamindbody.com/new-events/2018/01/08/bellydance

Feel Good. Do Good. Monthly yoga Benefit. This month benefiting the Boiler Room Monday, Jan 8: https://madronamindbody.com/new-events/2017/1/9/feel-good-do-good-yoga

Peninsula College

Winter quarter is in session. Advising and Registration for spring quarter will begin in February. Wes Cecil's popular & free lecture series is back again. The first lecture was on September 21st at

6:00pm in the Commons. Once again sponsored by Peninsula College Foundation, Peninsula College and Fort Worden. The subject is Philosophy: The Ancients. Lectures for the year are: Oct 19, 2017 - Confucius; Nov 16, 2017 – Lao-Tzu; Dec 21, 2017 – Siddhartha Gautama; Jan 18, 2018 – Socrates; Feb 15, 2018 – Plato; Mar 15, 2018 – Aristotle; April 19, 2018 Vyasa; May 24, 2018 -Conclusion

Page 4 of 47

Minutes

Executive Committee Meeting

Fort Worden Public Development Authority (FWPDA)

Seminar Building 298, Fort Worden

Tuesday, December 14, 2017

9:00 a.m. to 11:00 a.m.

Regular Executive Committee Meeting:

I. Call to Order: 9:03 a.m.

II. Roll Call

Committee Members: Cindy Finnie (by phone), Jeff Jackson (by phone), Gee Heckscher,

Norm Tonina, Jane Kilburn

Staff: Dave Robison, Diane Moody, Karolina Anderson

III. DRAFT December Board Meeting Agenda The committee reviewed the December board meeting agenda - only the facilities crew

will be introduced at this time.

IV. Review and approval of Executive Committee Minutes

The Committee reviewed the November meeting minutes.

Motion: Approve the Executive Committee minutes from November 21, 2017

Unanimously APPROVED

V. Review Cash Flow Report and 2018 Draft Budget Diane Moody reviewed FWPDA organizational goals and top five goals by department

(Food & Beverage, Guest Services, Facilities, Administration & Finance, Planning &

Development and Sales & Reservations). Moody reviewed highlights of the proposed

2018 budget and 2018 cash flow projections. Moody and Robison reviewed the Capital

Improvement budget (see memo and spreadsheets in committee packet for details).

Robison commended Moody on facilitating the budget process in a way that increased

ownership, accountability and a sense of collaboration between department directors.

VI. Board and Staff Discussion

Glamping: The committee discussed financing options, budget and the timeline.

Energy Efficiency Project: Committee discussed an anticipated payback timeframe

for the project, the scope of the project, installing meters and a letter of commitment

from Kitsap Bank.

Planning and Development: The Committee discussed pros and cons of moving

forward on the Culinary Institute feasibility study.

Makers Square: Robison reported that the Fort Worden Foundation is working with

attorney Erik Wishneff, who is a preeminent expert on Historic Tax Credits

Page 5 of 47

nationally. Wishneff has advised the Fort Worden Foundation to form a Manager and

Landlord LLC before the end of 2017 in order to take advantage of the existing tax

code (the LLC’s are necessary for Makers Square to be eligible for Historic Tax

Credits). Under the new tax code, the payments would be spread out over five years

rather than disbursed in a lump sum – some funders would find incremental

disbursements less desirable. The Committee discussed the timeline for Makers

Square including the project budget and fundraising.

Maintenance Transition: The Committee discussed a three-year transition plan and

project management. The PDA will be absorbing about $500,000 in maintenance

costs starting in May 2018 – the Committee discussed associated risks. Robison

reported that he and Sammons are seeking additional funding from State Parks to

offset some of these expenses. The Committee also discussed a volunteer program.

Sustainability Plan: Robison reported that the Recycling Committee is making

headway towards implementing a comprehensive recycling program across the

property. A garbage compressor is being purchased and Food and Beverage is

exploring initiatives to reduce waste and increase purchasing of local produce. The

Committee discussed seeking additional funding for sustainability initiatives.

Strengthening Connection with Downtown Port Townsend: The Committee

discussed networking opportunities and collaborative initiatives including package

opportunities (i.e. Rose Theater, Key City Public Theater, Soak on the Sound).

Robison reported that 2018 LTAC funding will be focused on tourism infrastructure –

at $25k for 2018.

Strengthening Relationships with Existing Partners: The Committee discussed

opportunities for strengthening relationships with Fort Worden Partner organizations.

Robison reported on the Fall Break initiative.

Sales & Marketing: Robison reported that wedding revenue has doubled from last

year and that the sales department is getting very creative with their marketing and

offerings (i.e. marketing “new moons” – second honeymoons).

New Partners: Cindy Finnie suggested, and the Committee discussed, developing a

matrix of qualifications for new partners.

Retention and Guest Experience: The Committee discussed turnover in

housekeeping – noting that this property is a particularly physically demanding place

to work. The Committee discussed ways to increase retention including: wage

increases, promotions and fostering and elevating staff – providing opportunities for

advancement and to learn new skills (i.e. moving a housekeeper to front desk or cross

training). The Committee discussed consistency, reliability and quality customer

service.

VII. Public Comment

David Goldman encouraged the Committee to consider opportunities for telling the story

of the economic impact that Fort Worden is having on Jefferson County – suggesting that

a consultant could be hired to analyze the impact.

VIII. Adjourned: 11:28 a.m.

Page 6 of 47

MINUTES

Board of Directors Meeting

Fort Worden Public Development Authority (FWPDA)

Wednesday, December 20, 2017 | 9 a.m. – 1 p.m.

Commons B (Building 210), Fort Worden

ACTIONS:

APPROVED Board Meeting Minutes from November 29, 2017

APPROVED Resolution 17-08 authorizing Executive Director to enter into leases to carry-out the

redevelopment of Makers Square to qualify for Historic Tax Credits

APPROVED Resolution 17-09 to authorize Executive Director to sign a commitment letter for bond

financing with Kitsap Bank

APPROVED Resolution 17-10 to adopt the 2018 General Operating Budget

Regular Board Meeting:

I. Call to Order: 9:02 a.m. II. Roll Call & Staff Introductions

Board Members: Todd Hutton, Bill James, Bill Brown, Harold Andersen, Jane Kilburn, Gee Heckscher,

Cindy Finnie, Norm Tonina (by phone), Jeff Jackson (by phone)

Staff: Dave Robison, Diane Moody, Karolina Anderson

Public: George Randels, David Goldman, Jon Schorr, Jeff Krida, Larry Sammons, Anna Green, Kristan

McCary, Daniele Costello

Larry Sammons introduced the Fort Worden facilities crew: Noa Montoya, Tracy Ralls, Jeff Martin and

Jason Dempsey. He also introduced Ben and Aaron, Grey Wolf Ranch Academy students who are

volunteering with the facilities crew.

III. Fort Worden Partner Presentation – Peninsula College

Dr. Luke Robins, President of Peninsula College, gave a PowerPoint presentation and talked about the

success of the collaborative effort by Peninsula College, Peninsula College Foundation, Fort Worden

PDA, City of Port Townsend, First Federal, the Office of Financial Management, Lynn Kessler and State

Parks in seeking Historic Tax Credits for building 202. Robins especially commended the FWPDA on

helping to facilitate the process which resulted in the renovation of building 202 into a state of the art

learning environment that is an anchor for the Lifelong Learning Center here at Fort Worden. Robins

noted that Peninsula College and Washington State Parks received an honorable mention award by the

American Institute of Architects Washington Council for excellence in architectural design and planning.

In addition, the Jefferson County Historical Society awarded Peninsula College and Fort Worden

Development Authority a Certificate of Appreciation for the restoration and adaptive use of Building 202.

Anna Green presented Peninsula College academic offerings (see PowerPoint presentation for details) and

noted upcoming events including a Philosophy Series by Dr. Wes Cecil: December 21 & January 18 at

6:00 p.m. in Commons B. The college will hold an informational night on January 3 at 5:30 p.m. –

members of the public are invited to attend. Julie McCullough spoke on behalf of the Board of Trustees,

and suggested that Fort Worden Foundation and Peninsula College Foundation board members connect to

explore areas of mutual interest.

Page 7 of 47

Please see board packet for updates provided by other Fort Worden Partner organizations.

IV. Changes to the Agenda

No changes

V. Correspondence Fort Worden Partners Report

Executive Committee Minutes November 21, 2017

Nora Porter Plaque Dedication Article

Perspective on Capital Budget by Kate Dean

VI. Consent Agenda Review and approval of Board Meeting Minutes, November 29, 2017

Action: Motion to approve Board Meeting Minutes from November 29, 2017

Unanimously APPROVED

VII. Review and Discussion of November FinancialsA. Staff Report

Moody reviewed the financial report memo (see packet) and noted that $12,000 in marketing and

advertising expenses are LTAC funded and will be reimbursed.

B. Board Discussion None

VIII. Resolution authorizing Executive Director to enter into leases to carry-out the redevelopment of MakersSquare to qualify for Historic Tax Credits (HTC’s)

A. Staff Report

Robison reported that the Fort Worden Foundation is working with attorney Erik Wishneff, who is a

preeminent expert on Historic Tax Credits nationally. Attorney John Watts and Robison stated that

Wishneff has advised the Fort Worden Foundation to form a Manager and Landlord LLC before the end

of 2017 in order to take advantage of the existing tax code (the LLC’s are necessary for Makers Square to

be eligible for Historic Tax Credits). Erik Wishneff joined the meeting by phone and stated that under the

new tax code, the net value of the Historic Tax Credits will decrease - the net benefit of the HTC credit to

the project will be greater if it’s grandfathered in under the current tax code by December 31, 2017. Under

the new code HTC payments would be spread out over five years rather than disbursed in a lump sum -

Robison noted that some funders would find incremental disbursements less desirable. Wishneff noted

that if there are any changes of circumstance, it is easy to dissolve to companies and that we are following

the same process as was used for building 202 (Peninsula College).

Robison noted that this is an interim organizational structure that does not in any way change the way that

Makers Square is operated or managed. Robison noted that the Makers Square project must be completed

30 months from January 1, 2018.

B. Board Discussion

The board discussed the process going forward – including the Operating Agreement with Makers

Square, the project timeline and the two-tiered LLC. Robison explained that the two-tiered structure was

also utilized in applying for Historic Tax Credits for building 202 (Peninsula College). Erik Wishneff

explained that the LLC’s will collapse after 5 years (after the HTC’s are paid out) and the ground lease

will revert back to the PDA.

Page 8 of 47

Action: Motion to approve Resolution 17-08 authorizing Executive Director to enter into leases to carry-out the

redevelopment of Makers Square to qualify for Historic Tax Credits Unanimously Approved

IX. Resolution authorizing the Executive Director to sign a commitment letter for bond financing with Kitsap

Bank A. Staff Report

Robison presented a resolution for bond financing with Kitsap Bank to make energy efficiency

improvements including: installing a digital control for the heating system, upgrading all lighting to LED

lights and placing a solar grid on building 210.

B. Board Discussion

The board discussed whether the digital heating control system includes partner buildings and Robison

responded that buildings occupied by partner organizations were not included. The board discussed which

other buildings were included as well as bond payment term options. Robison thanked Kitsap Bank for

funding this project.

Action: Move to adopt Resolution 17-09 to authorize Executive Director to sign a commitment letter for bond financing with Kitsap Bank Unanimously Approved

X. 2018 Budget Review & Resolution to adopt 2018 General Operating Budget

A. Staff Report

Gee Heckscher provided a brief overview of the 2018 general operating budget, noting that department

heads had major input throughout the process. Heckscher noted that over $6 million in gross revenue is

projected for 2018 – a significant increase over last year. Heckscher noted that FWPDA will also be

absorbing about $500,000 in maintenance costs starting in May 2018 due to the maintenance transition

from State Parks. Expenses include: additional staff, materials and equipment. Moody and Robison

presented a 2018 Goals and Budget PowerPoint including the following:

FWPDA strategic priorities:

1. Provide a memorable and extraordinary guest experience

2. Ensure a sustainable year-round economy

3. Preserve and revitalize our historic campus

4. Inspire leaders in environmental sustainability

5. Develop and nurture partnerships for success (including downtown community and other

nonprofits)

2018 Priorities/Themes: Communication, Consistency, Culture

2018 Priorities by department

Robison outlined the impact of the Maintenance Transition on the budget and Moody talked about

sustainability initiatives and lodging efficiencies. Moody stated that weddings and group sales have

improved significantly – crediting the sales & reservation team. Robison outlined new initiatives

including: the maintenance transfer, music events, “Fall Break”, “Extended Stay”, the “Passport Program”

and a mobile bar.

Page 9 of 47

Moody and Robison presented the 2018 Operating and Capital budget:

Capital Improvement Fund (Note – Numbers are rounded)

Glamping $ 450,000

Energy Efficiency Project $1,675,000

Culinary Planning $ 29,225

Fundraising $ 50,000

Makers Square $ 588,500

Total $2,742,725

Hospitality Services

Personnel Services $3,488,000

Cost of Goods $ 895,000

Maintenance & Repairs $ 141,000

Utilities $ 475,000

Leasehold Improvements and Capital $ 75,000

Total $5,224,000

Moody reviewed some major expenses including a new property management system, ice machine,

combi oven, mobile bar and room amenities. Finally, Robison and Moody reviewed risks and

opportunities.

Please note that details about the 2018 goals and budget are available on the PowerPoint presentation (on

our website).

B. Board Discussion

The board discussed pricing differences resulting from the minimum wage increase and group sales. Todd

Hutton asked about increasing group sales - Robison stated that the NCO Row renovations would help

increase group sales since those units would provide single occupancy accommodations – which would

appeal to certain groups. The board discussed contingencies if the FWPDA does not receive additional

funding from State Parks to help ameliorate the impact of the Maintenance Transition. Moody stated that

she and Robison would review personnel and materials expenses as well as debt/cost scenarios for

different projects. The board discussed debt payments and outflows. Jane Kilburn requested monthly

updates to the board about Makers Square and Robison stated that a project timeline will be presented to

the Executive Committee in January. Cindy Finnie asked whether Fort Worden might be impacted by the

construction projects in town. Jane Kilburn suggested that we have someone from Main Street Program

come and speak to the board about the construction project as well as opportunities for Fort Worden &

Main Street to collaborate.

Action: Move to adopt Resolution 17-10 to adopt the 2018 General Operating Budget Unanimously Approved

Page 10 of 47

XI. Staff Report A. Washington State Capital Budget Status Robison stated that the Capital Budget still has not been passed – March is the next likely date.

B. Makers Square Business Plan

Robison stated that the final version of the Makers Square business plan is included in the board packet.

C. Coordinating Committee Meeting

Robison stated that the Coordinating Committee ensures that State Parks and the Fort Worden PDA

priorities are in alignment and that both entities are meeting Lease Terms and commitments. The

PowerPoint Presentation that includes State Parks and PDA Capital Improvement priorities is available at

fortworden.org under public documents>agendas & documents>public meetings>Coordinating Committee

Meeting

D. 2018 Maintenance Plan

Robison reviewed the 2018 Maintenance Plan Summary:

1

Existing Facilities labor 5.0 FTE PDA funded

$ 217,200

2 New Facilities labor 2.7 FTE due to maintenance transition

PDA funded

$ 160,000

3 Facility Maintenance (materials and supplies)

Not funded

$ 101,500

4 PM and New Service Contracts (transferred to PDA this year)

Not funded

$ 165,500

5 PDA Capital Projects (Glamping and other projects)

Funding pending

$ 1,895,000

6

PDA Preventive Maintenance (PM) Funding pending

$ 86,700

7

Parks PM 2016/17 (ends May 1, 18) WSP funded

$ 73,000

XII. Public Comment

David Goldman suggested a merit-based performance measure system that includes an algorithem of key

indicators that rewards staff who live the PDA values daily. He also stated that the PDA has done a great

job of stewarding this property and that this part of the story often doesn’t get told.

XIII. Board Reports/Discussion 2018 Board Meeting Schedule – the board discussed the date of the Board Retreat and decided to move it

to sometime in March. A Doodle Poll will be sent out

XIV. Next Meetings Executive Committee Meeting, January 16, 2018 PDA Board of Directors Meeting January 24, 2018 PDA Board Retreat, TBD

XV. Adjourn: 12:21 p.m.

Board Packets and PowerPoint Presentations are available on our website at: www.fortworden.org under public

documents>agendas & documents>public meetings>PDA Board Meeting 12.20.17

Page 11 of 47

1

To: Fort Worden PDA Board of Directors

From: Diane Moody

Date: 1/24/17

RE: FWPDA December 2017 Revenue and Expense and Balance Sheet reports.

The 2017 year- end preliminary results for the Fort indicate the PDA surpassed its net revenue budget by 70%, ending at $157,950, which is ahead of budget by $65,176.

Total Gross Revenue is 20% ahead of budget for December, bringing year-end totals to just over 9% of budget at $5.237 million. Compared to 2016 Gross Revenue, It is also up by 46% and 20% respectively. Accommodations revenue stayed its course to the end. Revenues surpassed plan, for the month by 37% and for year-end, by 16%.

Year-End Actual Budget % Group $ 673,336 $ 740,606 91% Partner $ 490,390 $ 485,816 100.9% Leisure $1,436,541 $ 1,019,294 141% Total $2,603.268 $2,245,716 116%

Food and Beverage exceed December budget by 52%, bringing the department actuals to finish the year slightly ahead of budget at 1.876 million. Compared to 2016, sales are $385,000 or 26% higher year over year.

Year-End Actual Budget % Reveille $331,212 $262,433 126% Cablehouse $94,871 $76,300 124% Guardhouse $476,147 $446,401 107% Catering/Mess Hall $973,460 $977,670 100% Total $1,875,690 $1,762,804 106%

The Cost of Goods and Personnel Costs do surpass budget for both the month and year-end, however both are in good position as a percentage of overall revenue. Food Cost of Goods is at 32% and merchandise is just under 50% of related revenue for the year. Personnel costs as a percentage of total revenue is lower than budget (83% to a 1.25% budget) for December and for year-to-date they are 52% to a 54% budget.

2

Total Ordinary Expenses, minus Personnel Costs also exceed budget for the month by 2.5 times the budget and for the year, 19%. The main contributors continue to be repairs and maintenance and utilities. There were a few other operating expenses in December that were significantly more than budgeted. These are advertising and marketing related contracts and promotions, insurance, AV equipment and linen services.

Despite the ordinary expenses exceeding budget, the PDA did end the year ahead of planned Net Revenue at 157,653. This is a significantly stronger position than 2016 net revenue of $17,950. The PDA is also ending the year in a stronger cash position than it has in the last few years. All major partner events accounts were paid in full, providing the PDA more than an additional $155,000 cash to start 2018. As you would expect, the 2017 Occupancy percentage for December is almost triple that of 2016. This is mostly due to the Cottage and Courtside collections. The Average Daily Rate (ADR) also remains stable for these two collections. Officers Row remained stable in Occupancy, and had a little dip in ADR. All in all, I am glad to report that the preliminary financial reports for 2017 indicate the PDA finished the year in a stronger financial position than planned.

Accrual Basis FORT WORDEN PDAHospitality Services

Revenue & Expense Budget Performance December 2017

Dec 16 Dec 17 Budget $ Over Budget % of Budget

Ordinary Revenue/Expense

Revenue

4000 Accomodations 92,348.83 99,194.73 72,454.00 26,740.73 136.91%

4400 Food Sales Revenue 48,584.01 81,607.60 53,760.79 27,846.81 151.8%

4600 Other Revenues 34,161.53 34,127.90 31,469.37 2,658.53 108.45%

4900 PDA Grants/Donations 0.00 40,000.00 0.00 40,000.00 100.0%

Total Revenue 175,094.37 254,930.23 157,684.16 97,246.07 161.67%

Cost of Goods Sold 18,950.03 35,945.79 26,257.37 (9,688.42) 136.9%

Gross Revenue 156,144.34 218,984.44 131,426.79 87,557.65 166.62%

Expense

6010 Personnel Costs 180,324.19 210,752.63 198,614.17 (12,138.46) 106.11%

6031 Event Gratuities & Tips 5,728.69 1,517.41

7000 Occupancy Expense 6,495.88 7,332.76 1,150.00 (6,182.76) 637.63%

7100 Utilities 40,145.15 54,628.45 33,800.00 (20,828.45) 161.62%

8000 Contracts 13,884.32 33,911.64 10,650.00 (23,261.64) 318.42%

8500 Operating Expense 25,161.16 70,370.88 20,330.75 (50,040.13) 346.13%

Total Expense 271,739.39 378,513.77 264,544.92 113,968.85 143.08%

Net Ordinary Revenue -115,595.05 -159,529.33 -133,118.13 (26,411.20) 119.84%

Other Revenue/Expense

Other Expense

9500 Capital Purchase/Equipment 0.00 0.00 0.00 0.00 0.0%

9600 Leasehold Improvements 900.73 593.12 0.00 593.12 100.0%

Total Other Expense 900.73 593.12 0.00 593.12 100.0%

Net Other Revenue -900.73 -593.12 0.00 (593.12) 100.0%Net Revenue -116,495.78 -160,122.45 -133,118.13 (27,004.32) 120.29%

Page 12 of 47

Accrual Basis FORT WORDEN PDAHospitality Services

Revenue & Expense Budget Performance December 2017

Ordinary Revenue/Expense

Revenue

4000 Accomodations

4400 Food Sales Revenue

4600 Other Revenues

4900 PDA Grants/Donations

Total Revenue

Cost of Goods Sold

Gross Revenue

Expense

6010 Personnel Costs

6031 Event Gratuities & Tips

7000 Occupancy Expense

7100 Utilities

8000 Contracts

8500 Operating Expense

Total Expense

Net Ordinary Revenue

Other Revenue/Expense

Other Expense

9500 Capital Purchase/Equipment

9600 Leasehold Improvements

Total Other Expense

Net Other RevenueNet Revenue

Jan - Dec 16 Jan - Dec 17 Annual Budget $ Over Budget % of Budget

2,053,421.70 2,603,266.83 2,245,715.97 357,550.86 115.92%

1,490,746.56 1,875,690.41 1,762,804.31 112,886.10 106.4%

781,735.68 717,099.84 735,462.87 (18,363.03) 97.5%

44,880.00 40,500.00 60,000.00 (19,500.00) 67.5%

4,370,783.94 5,236,557.08 4,803,983.15 432,573.93 109.0%

676,302.71 782,509.00 764,290.22 (18,218.78) 102.38%

3,694,481.23 4,454,048.08 4,039,692.93 414,355.15 110.26%

2,347,927.65 2,757,480.75 2,612,430.88 (145,049.87) 105.55%

38,004.08 43,562.73

107,866.51 102,814.75 51,722.80 (51,091.95) 198.78%

417,225.91 525,236.23 389,997.90 (135,238.33) 134.68%

142,853.33 191,519.53 204,800.00 13,280.47 93.52%

564,069.37 654,540.80 595,264.17 (59,276.63) 109.96%

3,617,946.85 4,275,154.79 3,854,215.75 (420,939.04) 110.92%

76,534.38 178,893.29 185,477.18 (6,583.89) 96.45%

46,334.07 0.00 78,000.00 78,000.00 0.0%

12,249.98 21,239.87 15,000.00 (6,239.87) 141.6%

58,584.05 21,239.87 93,000.00 71,760.13 22.84%

-58,584.05 -21,239.87 -93,000.00 71,760.13 22.84%17,950.33 157,653.42 92,477.18 65,176.24 170.48%

Page 13 of 47

Accrual Basis FORT WORDEN PDA Balance Sheet

As of December 31, 2017

Dec 31, 17

ASSETS

Current Assets

Checking/Savings

1000 Operating Accounts 363,217.19

1003 Advance Deposit Account 150,818.53

1010 Capital Fund Accounts 1,782,758.74

Total Checking/Savings 2,296,794.46

Accounts Receivable

1100 Hospitality Services 16,960.34

1120 Partner Tenant 23,364.24

1130 Food Service-Other 358.29

1140 Grants 30,000.00

Total Accounts Receivable 70,682.87

Other Current Assets

1050 Food Service Inventories 70,886.72

1055 Merchandise for Resale 40,421.69

1056 Discover Passes 14,762.42

1200 Prepaid Expenses 38,039.93

Total Other Current Assets 164,110.76

Total Current Assets 2,531,588.09

Fixed Assets

1300 Fixed Assets 123,724.25

Total Fixed Assets 123,724.25TOTAL ASSETS 2,655,312.34

LIABILITIES & EQUITY

Liabilities

Current Liabilities

Accounts Payable

2000 Operating 107,819.55

2003 Capital Fund 3,733.43

Total Accounts Payable 111,552.98

Credit Cards 10,590.05

Other Current Liabilities

2100 Current Liabilities

2101 Deferred Revenue 74,081.56

2104 Payroll Liabilities 61,026.63

2110 Accrued Business/Sales Tax 19,646.98

Total 2100 Current Liabilities 154,755.17

2200 Advance Deposits 439,448.98

2600 State Parks Pass Thru-Oth 1,721.19

Total Other Current Liabilities 595,925.34

Total Current Liabilities 718,068.37

Total Liabilities 718,068.37

Page 14 of 47

Accrual Basis FORT WORDEN PDA Balance Sheet

As of December 31, 2017

Dec 31, 17

Equity

Opening Balance Equity 26,464.33

Unrestricted Net Assets 1,621,309.48

Net Income 289,470.16

Total Equity 1,937,243.97TOTAL LIABILITIES & EQUITY 2,655,312.34

Page 15 of 47

Up to 30 31 - 60 121+ Balance

$ (2,000.00) $ - $ - $ (2,000.00)

$ 1,199.00 $ - $ - $ 1,199.00

$ 1,313.45 $ - $ - $ 1,313.45

$ (218.31) $ - $ - $ (218.31)

$ 1,174.20 $ - $ - $ 1,174.20

$ (272.50) $ - $ - $ (272.50)

$ - $ - $ - $ 463.25

$ - $ - $ - $ 447.17

$ - $ - $ - $ 1,880.56

$ - $ - $ - $ 11,954.50

$ 1,195.84 $ - $ - $ 15,941.32

Tacoma Arts 2017 $ 1,880.56 $ -

UW Immunology 2017 $ - $ 11,954.50

Peninsula Mens Bible Retreat 2017 $ 463.25 $ -

PTMSC Teacher Appreciation October 2017

$ 447.17 $ -

$ - $ -

Olympic Community Of Health 2018

$ - $ -

Groups $ 2,790.98 $ 11,954.50

CANCELED: Swedish Family Medicine - Cherry Hill 2017

$ - $ -

Centrum Dance Residency December 2017

$ - $ -

Flying Karamazov Brothers $ - $ -

Gold Star Marine Holiday Party 2017

$ - $ -

Meagan Rhoades Luncheon

Account AgingFort Worden Housing

As of 12/31/17

Name61 - 90 91 - 120

Page 16 of 47

FORT WORDEN PDALEASES

A/R Aging Summary

As of December 31, 2017

Current 1 - 30 31 - 60 TOTAL

P-Copper Canyon 552.16 629.14 325.66 1,506.96

P-Friends_of_Fort Worden 0.00 218.00 0.00 218.00

P-Madrona MindBody Institute 0.00 2,473.90 0.00 2,473.90

P-PeninsulaCollege 5,072.44 1,311.18 0.00 6,383.62

P-PT Marine Science Center 0.00 1,809.19 1,537.56 3,346.75

P-WA State Parks Lease 0.00 4,658.45 4,776.56 9,435.01TOTAL 5,624.60 11,099.86 6,639.78 23,364.24

Page 17 of 47

Collection Sold Room ADR Occ% Sold Room ADR Occ%Officer's Row 136 $ 50,854.03 $ 376.70 26.63% 150 $ 45,446.11 $ 302.97 25.47%

Cottage Collection 84 $ 20,998.24 $ 249.98 27.45% 98 $ 29,299.47 $ 298.97 31.72%

Courtside Collection 110 $ 15,022.80 $ 136.57 25.35% 203 $ 32,057.44 $ 157.92 47.99%

Dorm 225 4 $ 1,180.00 $ 295.00 0.23% - - -

Total 333 $ 88,114.16 $ 264.61 11.16% 453 $ 106,803.02 $ 235.77 30.69%

ADR December 2016 and 2017

December

2016 2017

Fort Worden Housing

Page 18 of 47

Accrual Basis FORT WORDEN PDA Capital Improvement Projects

January through December 2017

Total Capital Improvement Projects Bldg 4 Bldg 16

Bldg 235 - Bliss Vista Bldg 272 Bldg 277

Fund Budget 1,392,875.00$ 186,750.00$ 16,400.00$ 43,000.00$

Ordinary Revenue/Expense

Total Revenue 1,287,133.56 0.00 0.00 0.00 0.00 0.00

Gross Revenue 1,287,133.56 0.00 0.00 0.00 0.00 0.00

Expense

6010 Personnel Costs 404,154.59 81,999.82 1,140.31 25,012.78 0.00 0.00

7000 Occupancy Expense 3,084.04 208.01 0.00 730.02 0.00 0.00

Total 7100 Utilities 3,987.06 3,362.27 624.79 0.00 0.00 0.00

8000 Contracts 426,147.77 4,586.25 246.25 5,997.20 0.00 232.50

8500 Operating Expense 37,658.97 8,494.58 0.00 2,445.11 0.00 0.00

Total Expense 875,032.43 98,650.93 2,011.35 34,185.11 0.00 232.50

Net Ordinary Revenue 412,101.13 -98,650.93 -2,011.35 -34,185.11 0.00 -232.50

Other Revenue/Expense

Other Expense

9600 Leasehold Improvements 224,261.48 175,071.38 24,798.95 13,149.24 2,172.66 471.00

Total Other Expense 224,261.48 175,071.38 24,798.95 13,149.24 2,172.66 471.00

Net Other Revenue -224,261.48 -175,071.38 -24,798.95 -13,149.24 -2,172.66 -471.00Net Revenue 187,839.65 -273,722.31 -26,810.30 -47,334.35 -2,172.66 -703.50

Ending Fund Balance 1,580,712.85$ (86,972.31)$ (10,410.30)$ (4,334.35)$ (2,172.66)$ (703.50)$

Page 19 of 47

Accrual Basis FORT WORDEN PDA Capital Improvement Projects

January through December 2017

Fund Budget

Ordinary Revenue/Expense

Total Revenue

Gross Revenue

Expense

6010 Personnel Costs

7000 Occupancy Expense

Total 7100 Utilities

8000 Contracts

8500 Operating Expense

Total Expense

Net Ordinary Revenue

Other Revenue/Expense

Other Expense

9600 Leasehold Improvements

Total Other Expense

Net Other RevenueNet Revenue

Ending Fund Balance

Bldg 305 - Makers Square

Maintenance Transition &

Leasehold Other Culinary School Glamping

935,000.00$ 107,500.00$ 29,225.00$ 75,000.00$

1,287,131.76 0.00 0.00 0.00

1,287,131.76 0.00 0.00 0.00

172,160.35 118,430.63 0.00 5,410.70

0.00 2,146.01 0.00 0.00

0.00 0.00 0.00 0.00

413,977.67 41.55 0.00 1,066.35

20,118.07 5,749.29 0.00 851.92

606,256.09 126,367.48 0.00 7,328.97

680,875.67 -126,367.48 0.00 -7,328.97

2,826.46 156.04 0.00 5,615.75

2,826.46 156.04 0.00 5,615.75

-2,826.46 -156.04 0.00 -5,615.75678,049.21 -126,523.52 0.00 -12,944.72

1,613,049.21$ (19,023.52)$ 29,225.00$ 62,055.28$

Page 20 of 47

Page 21 of 47

Page 22 of 47

RESOLUTION NO. 18-01

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE FORT WORDEN

LIFELONG LEARNING CENTER PUBLIC DEVELOPMENT AUTHORITY (FWPDA)

AUTHORIZING THE EXECUTIVE DIRECTOR TO ENTER INTO AN AMENDED

CONTRACT WITH SIGNAL ARCHITECTURE & RESEARCH TO INCLUDE

ADDITIONAL SERVICES FOR MAKERS SQUARE

RECITALS

A. The Board of Directors adopted Resolution 15-10 providing for master policy directives

and the administrative authority of the Executive Director.

B. The Board of Directors authorized the Executive Director to enter into a design services

contract with Signal Architecture on December 21, 2016 to complete the design of

Makers Square.

C. On January 16, 2018 the FWPDA Executive Committee reviewed and discussed two

requests for additional services submitted by Signal Architecture at the request of the

Executive Director. The requests for additional services include: a) Direct and Manage

LEED documentation with Green Building Certification Institute to obtain LEED

certification for Building 305. Cost not to exceed $66,850. b) Design and documentation

for tenant improvements for KPTZ radio station in the basement of building 305. Cost

not to exceed $50,000.

D. The Executive Committee recommends that the Board by this Resolution authorize the

Executive Director to amend the contract with Signal Architecture.

Attachment A: Building 305 – LEED Benefits

Attachment B: Signal Architecture Request for Additional Services 2A: Building 305

LEED Documentation: Certified Level

Attachment C: Signal Architecture Request for Additional Services 3 – Building 305 /

KPTZ Basement Tenant Improvement

Page 23 of 47

BE IT RESOLVED that the Board of Directors of the Fort Worden Public Development

Authority confirms and approves the Executive Director to amend the contract with Signal

Architecture to include additional design services for Makers Square.

ADOPTED by a majority of the Board of Directors at its regular meeting on January 24, 2018

PASSED this ______day of ________________, 2018, and signed in authentication of its

passage this _____day of ______________, 2018.

__________________________________

Norm Tonina, Chairperson

ATTEST:

__________________________________

Jane Kilburn, Secretary

Page 24 of 47

1

The outline below describes benefits of LEED documentation for the renovation and reuse of Building 305. There are multiple sustainability rating systems available, however LEED is one of the most recognizable and applicable to adaptive reuse and new construction of humanities projects. We have outlined the description of LEED and why it is the right system for the project, with a series of bullets describing the benefits of LEED documentation. A pledge to pursue LEED is required for Building for the Arts funding.

LEED description Environmental stewardship focused Most well known internationally, nationally, and regionally One-time certification for design and construction, recertification available

Benefits of third party rating systems (LEED): The Fort becomes a model for sustainability at a historic landmark Provides a tool for translating project goals into measurable performance targets Aligns with project goals Aligns the whole project team (Owner, A/E, Contractor) towards achieving those goals Drives better performance of the building, which can result in capital savings over its

operational life Communicates your commitments to funders, stakeholders, and community Tracks sustainability goals and progress through design and construction Provides independent verification of achievements Recognized by funders or other funding incentive programs

Grant requirement: Washington State Department of Commerce mandates that projects seeking Building

for the Arts funding must pursue LEED Silver documentation. Exceptions include: o The project is less than 5,000sfo Renovation occurs in less than half of the building or 5,000sfo The project is a hospitalo The grant is applied to an acquisition only

While LEED is required for the BFA funding, it is a proven fundraising asset for capitalcampaigns and sustainability driven philanthropy.

Fort Worden Building 305 - LEED Benefits

To: Dave Robison Date: January 8, 2018

From: Mark Johnson, AIA

Project: Fort Worden Building 305 Project No: 1601

Subject: Building 305 LEED Documentation Benefits

Attachment A Page 25 of 47

1

Dear Dave,

Please find the following Request for Additional Services (RAS 02A) LEED Documentation services (Certified Level) for Building 305.

Scope listed below is to provide LEED Documentation and A/E support for Building 305. O’Brien and Company will direct and manage documentation with GBCI (Green Building Certification Institute), with support of Signal Architecture + Research and consulting engineers. The project is registered under LEED 2009.

Target: LEED Certified (40 points in LEED 2009). A LEED certified building will focus on documenting reuse of an historic structure with low VOC, high performance, sustainable products. Minimal energy credits will be attempted to reduce cost. Should enough credits not appear to be available through this approach, an energy model and energy credits will need to be pursued to achieve a minimum of 40 credits. See supplemental scope below.

SCOPE:

LEED Documentation: Document LEED credits achieved by the project via LEED Online Support owner in filling out user forms LEED workshop to identify appropriate LEED goals and credits Architectural support to describe design alignment with credits Engineering support to document energy performance, water, and waste goals LEED specification sections (Division 1 and associated product sections)

Supplemental Scope: Following the LEED Workshop, the team will notify you if there will be a need for energy credits to make the minimum 40 credits for Certification. The following scope items could be initiated to make up the difference:

Energy Model: develop an energy model of the building that describes the thermalenvelope and prescribed performance above Baseline

Mechanical engineering documentation of system performance above baseline

Add Services Request 2A (RAS 02A)

To: Dave Robison Date: December 8, 2017

From: Mark Johnson, AIA

Project: Fort Worden Building 305 Project No: 1601

Subject: Request for Additional Services 2A: Bldg 305 LEED Documentation: Certified Level

Attachment B Page 26 of 47

2

SCHEDULE MILESTONES:

LEED ECO Charrette: prior to commencement of Construction Documents LEED Documentation: through CDs LEED Design Review: following CDs, concurrent with permit application Construction Submittal review and documentation LEED Construction review submittal (final) Response to GBCI clarifications Final review, delivery of LEED Certification and LEED plaque

FEE:

LEED Documentation (Certified): Obrien and Company: Documentation Lead 34,650 (5% markup)

Documentation, coordination, submission, CA Energy model (basic) 7,800

Support (hourly, NTE): Signal A+R: LEED architectural support: 16,000*

Diagrams, LEED specifications, drawing support Greenbusch: Mechanical + Plumbing 2,200*

Water credits (no mechanical credits) Blanca Lighting: Lighting 3,400*

Wattage/ SF documentationTravis Fizmaurice: Electrical 2,800*

Energy use review

LEED Documentation (Certified) FEE: 66,850

Standard markup is 12% unless noted otherwise *Represents services to be billed hourly

Expenses: Consultant expenses (allow): 750LEED submission and review (allow): 4,000

Attachment B

Page 27 of 47

3

Expense allowance: 4,750Signal will not incur reimbursable expenses against this RAS

Request for Additional Services 2 (RAS 02) for LEED documentation (Certified) services fee is Sixty-Six Thousand, Eight Hundred Fifty Dollars ($66,850.00) plus expenses, to be invoiced monthly by percent complete and hourly for task items as described above.

We are confident that the project can achieve a Certified level with the above outlined scope and fee. However, if it is determined at the Eco-Charrette that there are not enough credits available to achieve a LEED Certified level submission, supplemental credits could be pursued. Potential costs for additional credits could be:

Green Energy credit: purchase clean energy credits 1,500+/- Advanced energy modeling: 10,080Advanced Energy credit documentation: 22,400+/-

We look forward to continuing the great work at Fort Worden with you.

Signed:

Mark Johnson, AIA Dave Robison Principal Executive DirectorSignal Architecture + Research Fort Worden PDA

Attachment B

Page 28 of 47

Attachment C Page 29 of 47

Attachment C Page 30 of 47

Attachment CPage 31 of 47

Attachment CPage 32 of 47

Tracked changes on original lease language shown first, as proposed (CLEAN) shown second- Not including PDA proposed changes in Blue. PDA Proposed Changes in Blue

WASHINGTON STATE PARKS AND RECREATION COMMISSION Don Hoch, Director

FORT WORDEN STATE PARK

Proposed Amendment #2 to Master Lease

This Second Amendment to the Master Lease (the “Lease”) is made by and between the

Fort Worden Lifelong Learning Center Public Development Authority, a Washington public authority chartered by the City of Port Townsend under authority of State law and City ordinance (“Tenant and/or Lessee”) and the Washington State Parks and Recreation Commission (the “Commission”).

RECITALS

A. Whereas the Commission leases to the Lessee a portion of Fort Worden State Park, and;

B. Whereas the Lessee and the Commission entered into said Lease on November 8, 2013 and;

C. Whereas pursuant to Section 20.4 Integration and Amendments the lease may only be modified by written agreement signed by the parties to the original Agreement and;

D. Whereas both parties to the original Agreement desire to modify certain terms and conditions within the original Agreement;

NOW THEREFORE:

Amend 4.6 Reservation Administration to reflect current CAMIS system. State Parks to supply language.

6.1 Alterations. Delete Blue, accept RED 6.1 Alterations. "Alterations" are any alterations, additions, or improvements made by Tenant to the Building Interiors, Exteriorss or Campus grounds. Alterations do not include any work or improvements that may be considered as routine/normal maintenance or repair as described in Section 8 or Exhibit G or does not trigger a building permit. Any alterations must be in compliance with the United State Secretary of Interior Standards for the Treatment of Historic Properties and the Commission-adopted Fort Worden Guidelines for Rehabilitation or have been otherwise approved by the Commission’s Historic Preservation Officer. Only alterations that are categorically exempt or result in a determination of non-significance through the SEPA process are authorized under this section. Tenant may, from time-to-time, at its own cost and expense,

Page 33 of 47

make interior alterations to the Buildings in an amount not to exceed $100,000 per building, without the consent of the Director or designee for such things as carpeting, interior painting, changing electrical or light fixtures, plumbing fixtures, etc. Any alteration that requires or affects the structural components of a building such as floors, walls, or ceilings require advance consent from the Director unless such change meets the definition of modernization improvements discussed below. In conducting any construction work on the Campus, Tenant shall cause all work to be done in a good and workmanlike manner and shall comply with or cause compliance with all laws. Tenant shall obtain or cause to be obtained and maintain in effect, as necessary, all building permits, licenses, and other governmental approvals that may be required in connection with such work and such insurance as Tenant, in consultation with the Coordinating Committee or Director, as applicable, determine is reasonable for the scope and scale of the work to be undertaken. Alterations must be in compliance with the United States Secretary of Interior Standards for the Treatment of Historic Properties and the Commission adopted Fort Worden Guidelines for Rehabilitation. Tenant shall have a right to make modernization improvements to the interior or exterior of Buildings, including adding structures, to improve energy efficiencies (Modernization Improvements) in amounts not to exceed $100,000 per building, at its sole cost and upon written notification at least thirty (30) days in advance of the commencement of any work to the Park Manager describing the work to be undertaken.

Interior Alterations: Commission will review any proposed interior alterations to all buildings constructed prior to 1946. Tenant may, from time-to-time, at its own cost and expense make interior alterations to the Buildings in an amount not to exceed $150,000 per building, without the consent of the Director or designee for work items, elements or projects that have been previously approved or exempted by the agencies Historic Preservation Officer for such things as carpeting, interior painting, changing electrical or light fixtures, and plumbing fixtures. Any interior alteration under $150,000 not described above, requires written notice and associated plan documents describing the work to be undertaken be submitted to the Park Manager at least seven (7) days prior to the commencement of any work.

Exterior Alterations: Commission will review any proposed exterior alterations to all buildings constructed prior to 1946. All exterior alterations will be reviewed by the Commission for consistency with the Fort Worden Guidelines. Any project not clearly consistent with the guidelines will have a pre-development walk-through with the Commission’s Historic Preservation Officer and the Fort Worden Area Manager. Alterations over $150,000 or any alteration that affects the existing historical features such as replacement of windows, doors, chimneys, porches, or structural components such as floors, walls or ceilings require advance consent from the Director or designee. Tenant shall provide written notification at least 30 days in advance of commence of any work to the Director describing the work to be undertaken.

Campus Grounds Alterations: Tenant may, from time-to-time, at its own cost and expense make alterations to the grounds not to exceed $75,000 per project including, routine maintenance, planting of lawns or landscaping, or other earthwork which do not require a grading permit or cause or require ground disturbing actions, etc. Alteration requests must be submitted to the Park Manager at least seven (7) days prior to the commencement of any

Page 34 of 47

work. Any grounds alteration that result in new or additional grounds maintenance costs shall be the responsibility of the Tenant. Any new or additional grounds alterations that require new or additional parking (formal or informal parking areas) shall be approved in writing by the Park Manager in advance and comply with Commission-adopted Fort Worden Guidelines for Rehabilitation.

Section 6.1 is replaced in its entirety with the following:

6.1 Alterations. "Alterations" are any alterations, additions, or improvements made by Tenant to the Building Interiors, Exteriors or Campus grounds. Alterations do not include any work or improvements that may be considered as routine/normal maintenance or repair as described in Section 8 or Exhibit G. Any alterations must be in compliance with the United State Secretary of Interior Standards for the Treatment of Historic Properties and the Commission-adopted Fort Worden Guidelines for Rehabilitation or have been otherwise approved by the Commission’s Historic Preservation Officer. Only alterations that are categorically exempt or result in a determination of non-significance through the SEPA process are authorized under this section. In conducting any construction work on the Campus, Tenant shall cause all work to be done in a good and workmanlike manner and shall comply with or cause compliance with all laws. Tenant shall obtain or cause to be obtained and maintain in effect, as necessary, all building permits, licenses, and other governmental approvals that may be required in connection with such work and such insurance as Tenant, in consultation with the Coordinating Committee or Director, as applicable, determine is reasonable for the scope and scale of the work to be undertaken.

Interior Alterations: Commission will review any proposed interior alterations to all buildings constructed prior to 1946. Tenant may, from time-to-time, at its own cost and expense make interior alterations to the Buildings in an amount not to exceed $150,000 per building, without the consent of the Director or designee for work items, elements or projects that have been previously approved or exempted by the agencies Historic Preservation Officer for such things as carpeting, interior painting, changing electrical or light fixtures, and plumbing fixtures. Any interior alteration under $150,000 not described above, requires written notice and associated plan documents describing the work to be undertaken be submitted to the Park Manager at least seven (7) days prior to the commencement of any work.

Exterior Alterations: Commission will review any proposed exterior alterations to all buildings constructed prior to 1946. All exterior alterations will be reviewed by the Commission for consistency with the Fort Worden Guidelines. Any project not clearly consistent with the guidelines will have a pre-development walk-through with the Commission’s Historic Preservation Officer and the Fort Worden Area Manager. Alterations over $150,000 or any alteration that affects the existing historical features such as replacement of windows, doors, chimneys, porches, or structural components such as floors, walls or ceilings require advance consent from the Director or designee. Tenant shall provide

Page 35 of 47

written notification at least 30 days in advance of commence of any work to the Director describing the work to be undertaken.

Campus Grounds Alterations: Tenant may, from time-to-time, at its own cost and expense make alterations to the grounds not to exceed $75,000 per project including, routine maintenance, planting of lawns or landscaping, or other earthwork which do not cause or require ground disturbing actions, etc. Alteration requests must be submitted to the Park Manager at least seven (7) days prior to the commencement of any work. Any grounds alteration that result in new or additional grounds maintenance costs shall be the responsibility of the Tenant. Any new or additional grounds alterations that require new or additional parking (formal or informal parking areas) shall be approved in writing by the Park Manager in advance and comply with Commission-adopted Fort Worden Guidelines for Rehabilitation.

7.4.3 Development/Reserve Fund.

7.4.3 Development/Reserve Fund. Tenant shall establish a development/reserve fund ("Development/Reserve Fund") in an amount determined by Tenant in its sole discretion to be held and administered solely by Tenant, and which shall be dedicated to specifically fund activities necessary for the continued operation and development of the Campus. The Development/Reserve Fund may be used without limitation for payment of planning, design, permitting, and construction costs of improvements or capital improvements, as matching funds for grants related to the development and operation of the Campus, marketing of the Campus's facilities and programs, or for the replacement, substitution, repair, and/or restoration of any furniture, fixtures, or equipment, and/or modernization improvements located on the campus.

Section 7.4.3 is struck in it’s entirety

7.4.4 Capital Improvement Fund.

7.4.4 Capital Improvement Fund. Tenant shall establish a segregated (bank account) capital improvement fund dedicated specifically in an amount determined by Tenant in its sole discretion to fund deferred maintenance, leasehold or capital improvements within the Campus (the "Capital Fund"); provided that the existence of such Capital Fund shall not reduce Commission's obligation with respect to defterred maintenance or capital improvements under this Lease. The Capital Fund may be without limitation for payment of planning, design, permitting, project management staffing, and construction costs of leasehold improvements or capital improvements, as matching funds for grants related to the development and operation of the Campus or for the replacement, substitution, repair and/or restoration of any furniture, fixtures, or equipment and/or capital improvements located on the Campus. used solely for the replacement, repair, and restoration of Buildings, landscaping, site improvements, and infrastructure within the Campus, including without limitation, emergency repairs; roof and boiler replacement; exterior and interior painting; electrical, plumbing, and mechanical systems replacement and repair; road and parking improvements; and site and drainage improvements.

Page 36 of 47

Section 7.4.4 is replaced in its entirety with the following:

7.4.4 Capital Improvement Fund. Tenant shall establish a segregated (bank account) capital improvement fund dedicated specifically in an amount determined by Tenant in its sole discretion to fund deferred maintenance, leasehold or capital improvements within the Campus (the "Capital Fund"); provided that the existence of such Capital Fund shall not reduce Commission's obligation with respect to deferred maintenance or capital improvements under this Lease. The Capital Fund may be without limitation for payment of planning, design, permitting, project management staffing, and construction costs of leasehold improvements or capital improvements, as matching funds for grants related to the development and operation of the Campus or for the replacement, substitution, repair and/or restoration of any furniture, fixtures, or equipment and/or capital improvements located on the Campus.

Section 7.8 Discover Pass Annual Proceeds.

7.8 Discover Pass Annual Proceeds As part consideration for the benefits accruing to the Commission under this Lease, visitors to and patrons of the Campus willshall not be required to acquire a Discover Pass or Day Use Permit (for the purposes of this section known collectively as “Discover Pass”) to operate or park a vehicle within the Campus. In return for this concession, Tenant hereby guarantees the sale of commits to sell at least Two Hundred Fifty Thousand and no/ 100 Dollars ($250,000.00) worth of Discover Passes ("Annual Discover Pass Obligation"), by itself, its Campus agents and Fort Worden State Park combined under the terms of a separate vendor agreement (copy attached as Exhibit H), for each fiscal year (July 1I-June 30) starting from the Date of Possession for the first seven (7) years of the Term. The first year’s annual Discover Pass obligation shall be prorated based on the Date of Possession and the number of months remaining in that fiscal year. In the event the Tenant is not able to meet its Annual Discover Pass obligation , Tenant shall pay to Commission, by September 15 following the applicable fiscal year, anythe deficiency between Tenant's and Fort Worden State Park’s combined actual sales revenue from Discover Passes and Tenants its Annual Discover Pass obligation. Notwithstanding the foregoing, Tenant's Annual Discover Pass obligation for any particular year shall be reduced for that year in proportion to any reduction in the ratio of direct sales of Discover Passes in state parks across the state to sales of Discover Passes by any means. Direct Sales is defined as Discover Pass sales transacted within a state park. Additionally, if total Discover Pass sales statewide drop below the Fiscal Year 2013 baseline of Sixteen Million Six Hundred Fifty Thousand and Thirty-Three Dollars ($16,650,033.00), the annual Discover Pass obligationTenant Discover Pass sales requirement will be adjusted downward by that percentage change. Should statewide Discover Pass sales exceed the Fiscal Year 2013 baseline, the annual Tenant Discover Pass sales obligation will remain at $250,000; provided that sales in excess of the Annual Discover Pass obligation shall pass on to the Commission. “Discover Pass Sales” in all cases as used herein excludes infraction revenue.

Page 37 of 47

Section 7.8 is replaced in its entirety with the following:

7.8 Discover Pass Annual Proceeds As part consideration for the benefits accruing to the Commission under this Lease, visitors to and patrons of the Campus will not be required to acquire a Discover Pass or Day Use Permit (for the purposes of this section known collectively as “Discover Pass”) to operate or park a vehicle within the Campus. In return for this concession, Tenant hereby guarantees the sale of at least Two Hundred Fifty Thousand and no/ 100 Dollars ($250,000.00) worth of Discover Passes ("Annual Discover Pass Obligation") by itself, its Campus agents and Fort Worden State Park combined for each fiscal year (July 1-June 30) starting from the Date of Possession for the first seven (7) years of the Term. The first year’s annual Discover Pass obligation shall be prorated based on Date of Possession and the number of months remaining in that fiscal year. Tenant shall pay to Commission, by September 15 following the applicable fiscal year, any deficiency between Tenant's and Fort Worden State Park’s combined actual sales revenue from Discover Passes and Tenants Annual Discover Pass obligation. Notwithstanding the foregoing, Tenant's Annual Discover Pass obligation for any particular year shall be reduced for that year in proportion to any reduction in the ratio of direct sales of Discover Passes in state parks across the state to sales of Discover Passes by any means. Direct Sales is defined as Discover Pass sales transacted within a state park. Additionally, if total Discover Pass sales statewide drop below the Fiscal Year 2013 baseline of Sixteen Million Six Hundred Fifty Thousand and Thirty-Three Dollars ($16,650,033.00), the annual Discover Pass obligation will be adjusted downward by that percentage change. Should statewide Discover Pass sales exceed the Fiscal Year 2013 baseline, the annual Discover Pass sales obligation will remain at $250,000; provided that sales in excess of the Annual Discover Pass obligation shall pass on to the Commission. “Discover Pass Sales” in all cases as used herein excludes infraction revenue.

Section 8.4 Annual Maintanance Plan.

8.4 Annual Maintenance Plan. The Annual Maintenance Plan shall include a two-year maintenance timeline consistent with the upcoming biennium on even years. Within one hundred twenty (120) days of the Possession Date, the Operations Work Group shall present an initial plan ("Annual Maintenance Plan") for the Campus for the first operating year. This initial Annual Maintenance Plan shall be submitted to the Coordinating Committee for its review and adoption. The Annual Maintenance Plan shall be updated on an annual basis and submitted to the Coordinating Committee by December IMarch 1 of each year. The purpose of the Annual Maintenance Plan is to assign and coordinate Routine Maintenance and Major Maintenance priorities between the parties hereto (subject to the terms of this Lease), and establish minimum standards to be met and a schedule that includes frequency of maintenance (e.g., daily, monthly, annually, or as needed). The Annual Maintenance Plan shall include the lead party for specific tasks as well as the anticipated costs for each task included in the plan and, as applicable, the

Page 38 of 47

respective share of such costs allocated to each party. The parties acknowledge that maintenance needs are not always predictable and that unforeseen circumstances may require the parties to adjust agreed upon Annual Maintenance Plan priorities.

Section 8.4 is replaced in its entirety with the following: 8.4 Annual Maintenance Plan. The Annual Maintenance Plan shall include a two-year maintenance timeline consistent with the upcoming biennium on even years. The Annual Maintenance Plan shall be updated on an annual basis and submitted to the Coordinating Committee by March 1 of each year. The purpose of the Annual Maintenance Plan is to assign and coordinate Routine Maintenance and Major Maintenance priorities between the parties hereto (subject to the terms of this Lease), and establish minimum standards to be met and a schedule that includes frequency of maintenance (e.g., daily, monthly, annually, or as needed). The Annual Maintenance Plan shall include the lead party for specific tasks as well as the anticipated costs for each task included in the plan and, as applicable, the respective share of such costs allocated to each party. The parties acknowledge that maintenance needs are not always predictable and that unforeseen circumstances may require the parties to adjust agreed upon Annual Maintenance Plan priorities.

Section 8.5 Annual Maintenance Report. 8.5 Annual Maintenance Report. Following the first (lst) year of the Term and by October 31 of each year thereafter, by January 31st, the Operations Work Group shall provide to the Coordinating Committee a status report regarding the tasks and priorities undertaken and completed as described in the Annual Maintenance Plan. The annual maintenance report shall also beA final annual maintenance report shall be submitted after review by the Coordinating Committee to Tenant and Commission by December I of each year.

Section 8.5 is replaced in its entirety with the following: 8.5 Annual Maintenance Report. Following the first (lst) year of the Term and by October 31 of each year thereafter, by January 31st, the Operations Work Group shall provide to the Coordinating Committee a status report regarding the tasks and priorities undertaken and completed as described in the Annual Maintenance Plan. The annual maintenance report shall also be submitted after review by the Coordinating Committee to Tenant and Commission.

Section 15.2.3 15.2.3 Tenant shall not accept directly or indirectly more than three (3) months' prepaid rent from any subtenant.

Section 15.2.3 is struck in it’s entirety

Full Force and Effect. Except as expressly modified herein, the terms and conditions of the Lease shall remain in full force and effect. All provisions contained in this Second Amendment shall be subject to the provisions of the Lease. In the event of a conflict between the terms of

Page 39 of 47

this Second Amendment and the terms of the Lease, the terms of this Second Amendment shall govern and control.

EXECUTED effective as of the date last written below.

Fort Worden Lifelong Learning Center Public Development Authority (TENANT) By: ______________________________ Title: ____________________________ Date: _______________________________

WASHINGTON STATE PARKS AND RECREATION COMMISSION (COMMISSION) By: ______________________________ Title: ____________________________ Date: _______________________________

Page 40 of 47

Collateral List

January 2018

In room collateral –

Table-tents listing events on property & food related happenings.

Available: In all housing units.

Banners/Signage –

Seattle Wedding Show poster (18x24)

Rose Theater Ad (NYE)

Target Market: Locals & people who are already here and hungry

Goal: To raise awareness & bring people to Reveille for dinner

Offer: $10 off dinner with your ticket stub; limit one per table

Available: At the Rose Theater only

Billfold Inserts –

Target Market: Locals

Goal: To engage with the local community

Offer: N/A

Available: Taps at the Guardhouse

Sales Collateral – Venue & Accommodation Sheets/PDFS*

Target Market: Quick, easy handouts with information & photos on each meeting space

and housing unit type. (Dimensions; bathrooms details; limitations; ada friendly, etc.)

Goal: To streamline sales & help explain the uniqueness of the property to potential

guests.

Offer: N/A

Available: Upon Request; At the Front Desk; Sales Office; Reservations Office

*Not yet complete

Monthly Leader Ad

None in January

Vista & Foodies E-News

Seattle Wedding Show 2018 (5x7 postcard sized handouts – 2 versions)

Version 1: “Golden Ticket”

Target: Brides and grooms who have not yet chosen a wedding venue

Goal: That they choose Fort Worden as their wedding site

Offer: Win one night free and complimentary breakfast for two.

Page 41 of 47

Version 2: “One Extraordinary Experience”

Target: Less serious candidates who may already have a venue, but may want to

check us out for an anniversary, family getaway, honeymoon site etc.

Goal: To raise awareness

Offer: Come out for a tour with our very own Julie Brown!

Sales Collateral – “Partner Change Form” –

*Can be altered & used in sales for all groups as needed*

Target: Partners

Goal: To track reservation changes, better communicate, prevent

misunderstandings or miscommunications about bookings. Better customer

service.

Offer: N/A

In the works for February:

Sales Collateral –

Catering Guide

Venue FAQ Sheet

Housing FAQ Sheet

Page 42 of 47

CHEERS TO 2018A T T H E F O R T

TEQUILA TUESDAYS 21+ • All Day

Enjoy weekly flights, paired with a rotating menu of

“South of the Border” fare.

WHISKEY WEDNESDAYS

21+ • All Day

Enjoy weekly flights, paired with a rotating menu of

“pub-style” fare.

21+ • 6pm – 8pm • $55JAN. 25: Idiots Grace Memaloose Winery • winesofthegorge.com

Five-course dinner with wine pairings. Memaloose produces bright, “finesse” wines under the “Memaloose” and “Idiot’s Grace” labels. Over 20 grape varieties are sourced from five organic estate vineyards on both

the Washington and Oregon Banks of the Columbia River.

Reservations recommended: 360.344.4400 ext. 304

LIVE MUSICJAN. 28: JACK DWYER

5:30pm – 7:30pm • Learn more at jackdwyer.com

Wine Dinners

Page 43 of 47

360.344.4400 | FortWorden.org

If you’re a foodie & want to know what’s going on at the Fort, sign up for our

Foodie List by going to:

FORTWORDEN.ORG/EAT-HERE

Or fill this out & hand it to your server to join our E-news today!

Fort Worden

FULL NAME:

EMAIL:

ZIP CODE:

@FortWordenPDA @TapsFortWorden @CablehouseFortWorden @ReveilleFortWorden

@FortWorden1 @FortWordenFOLLOW US

Page 44 of 47

TEQUILA TUESDAYS 21+ • All Day

Enjoy weekly flights, paired with a rotating menu of “South of the Border” fare.

WHISKEY WEDNESDAYS 21+ • All Day

Enjoy weekly flights, paired with a rotating menu of “pub-style” fare.

GUARDHOUSE

Bubbles and BrunchSundays • 8AM – 1PM

Build your own omelet option, bottomless mimosas with a variety of fresh fruit juices,

complimentary fruit and fresh pastries.

Call 360.344.4400 ext. 308 to make a reservation today!

SPECIAL EVENTSJAN. 26-27 : 14th Annual Strange Brewfest

DECEMBER EVENTS

PORT TOWNSEND SCHOOL OF THE ARTS

adult classesJAN. 8-FEB. 5 : Play With Paint w/ Max GroverJAN. 8-FEB. 5 : Watercolor w/ Suzanne LamonJAN. 9-FEB. 6 : Paint Using Acrylics w/ Julie ReadJAN. 9-FEB. 6 : Working in Pastel w/ Chris WitkowskiJAN. 10-FEB. 7 : Surface Design w/ Ginny KingJAN. 11-FEB. 8 : Calligraphy w/ Rebecca WildJAN. 11-FEB. 8 : Photography w/ Ginny BanksJAN. 12-FEB. 9 : Paint with Gouache w/ Kelly DrakeJAN. 17-FEB. 14 : Watercolor w/ Marcy Gordon

youth classesJAN. 10-FEB. 7 : Composition w/ Jesse J. Watson

make it & take itJAN. 19 : Quick Collage w/ Cheri Kopp

weekend workshopsJAN. 27-28 : Reverse Ekphrastic w/ Meg Kaczyk

paint your palateJAN. 26 : Spin Your Art w/ Meg Kaczyk

BUSINESS & COMMUNITY MEETINGSTUESDAYS : Noon RotaryJAN. 22 : Jefferson County Chamber of Commerce

CENTRUMJAN. 4-7 : Winter YAWP (Writing Program)

MADRONA MINDBODY INSTITUTEdaily drop-in classes • massages by appointment

JAN. 2-FEB. 27 : Shamanic & Yogic Practices w/ Heather Cole GattoJAN. 5-7 : New Year Yoga Retreat w/ Renee KleinJAN. 7-FEB. 25 : Beginning Hand Drum Series w/ Adrienne RobineauJAN. 8 : Feel Good. Do Good. Monthly Yoga BenefitJAN. 8-FEB.12 : Tribal Belly w/ Stormy GantonJAN. 27 : Speak Up About Community w/ Jessica TartaroJAN. 30-FEB. 4 : Movement Medicine w/ Ya’Acov Khan

PORT TOWNSEND MARINE SCIENCE CENTEROPEN FRIDAY – SUNDAY, 12 PM – 5 PMJAN. 14 : Lecture Series: Sea Level Rise - Its Impact on Humans & Habitat in the Salish Sea

PUGET SOUND COAST ARTILLERY MUSEUMOPEN DAILY 11 AM – 4 PM• Harbor Entrance Control Post, BY APPOINTMENT• Artillery Hill Walking Tours, BY APPOINTMENT

PORT TOWNSEND SCHOOL OF WOODWORKINGJAN. 8-MAR. 30 : Furniture MakingJAN. 8-MAR. 30 : Foundations of WoodworkingJAN. 13-14 : Hand Saws w/ Steve EastwoodJAN. 20-21 : Hand Planes w/ Steve EastwoodJAN. 27-28 : Hand Tools: Dovetails w/ Steve Eastwood

PENINSULA COLLEGEJAN. 18 : Philosophy Lecture Series: The Ancients w/ Wes Cecil, PhD. Topic: Socrates

Five-course dinner with wine pairings. Memaloose produces bright, “finesse” wines under the

“Memaloose” and “Idiot’s Grace” labels. Over 20 grape varieties are sourced from five organic estate

vineyards on both the Washington and Oregon Banks of the Columbia River.

Wine DinnersJAN. 25 • 6PM – 8PM

21+ • $55Reservations recommended:

360.344.4400 ext. 304

Page 45 of 47

Page 46 of 47

Page 47 of 47