205 Sunnyside, LLC V. Clackamas County Court Documents

3/10/2023 10:55 AM
23CV10550
4 IN THE CIRCUIT COURT OF THE STATE OF OREGON
5 FOR THE COUNTY OF CLACKAMAS
205 SUNNYSIDE, LLC, an Oregon Case No.

Limited Liability Company, and G
GROUP, LLC, an Oregon Limited COMPLAINT (Declaratory and
Liability Company, Injunctive Relief under ORS
28.020 and 28.080)
Plaintiffs,
NOT SUBJECT TO
v. MANDATORY ARBITRATION
CLACKAMAS COUNTY, a Fees under ORS 21.135(2)(f)

Municipal Corporation of the State
of Oregon, YKC HOSPITALITY,
LLC, an Oregon Limited Liability
Company, and THE OREGON
COMMUNITY FOUNDATION, a
Non-Profit Organization,
Defendants.
6 Plaintiffs 205 Sunnyside, LLC and G Group, LLC (“Plaintiffs”)
7 allege the following:
Page 1 - COMPLAINT HATHAWAY LARSON LLP

1125 NW Couch Street, Suite 550
Portland, OR 97209
Telephone: 503-303-3101 (Main)
1 PRELIMINARY ALLEGATIONS
2 1.
3 Plaintiff 205 Sunnyside, LLC (“205 Sunnyside”) owns property
4 located at 9757 – 9919 SE Sunnyside Road in Clackamas County, Oregon.
5 The property consists of 4.62 acres of land and 53,029 square feet of
6 building space providing restaurant, medical, office and retail services, and
7 products to customers in a multi-building shopping center setting
8 (“Shopping Center”). Plaintiff G Group, LLC (“G Group”) manages the
9 Shopping Center.
10 2.
11 The tenants of the Shopping Center currently include:
12 McMenamins, Inc.; Clackamas Dermatology, PC; Clackamas County
13 Community Health; Dave’s Hot Chicken; FreshFish Poke; Baja Fresh; The
14 Shoe Shop; Pho Sen 2; Original Thai BBQ; Luxury Nail Bar; Salon Volume;
15 Palm Beach Tan; BestMind Behavioral Health; Nothing Bundt Cakes;
16 Ocean Paradise Dive and Travel; Massage Envy; Starbucks; and FedEx.
17

Portland, OR 97209
1 3.
2 Defendant Clackamas County (“County”) applied for a grant
3 from The Oregon Community Foundation to purchase property to convert
4 an existing motel or hotel to emergency shelter housing for the homeless.
5 This grant is commonly referred to as Project Turnkey and is funded in
6 part by the State of Oregon and administered by The Oregon Community
7 Foundation which serves as a fiduciary and administrator of the funds.
8 4.
9 The County entered into a Purchase and Sale Agreement with
10 Defendant YKC Hospitality, LLC (“YKC”) on December 12, 2022, to
11 purchase the Quality Inn Hotel for the purpose of converting it to
12 emergency shelter housing for the homeless.
13 5.
14 The Quality Inn Hotel is located at 9717 SE Sunnyside Road,
15 Clackamas, Oregon, and is adjacent to the Shopping Center and the
16 property owned by Plaintiff 205 Sunnyside. The relationship between the
17 Quality Inn Hotel and the Shopping Center is shown on the aerial attached
18 herein as Exhibit A.

Portland, OR 97209
1 6.
2 The Quality Inn Hotel is a 100-room hotel used for the purpose
3 of temporary, overnight lodging providing accommodations and other
4 services for travelers and tourists for which a fee is paid.
5 7.
6 The County, through its Board of Commissioners, on February
7 16, 2023, voted to purchase the Quality Inn Hotel in the amount of $15.2
8 million for the purpose of converting the Hotel to emergency shelter
9 housing for the homeless.
10 8.
11 Certain Declaration of Easements, Conditions, Covenants, and
12 Restrictions (“CC&Rs”) apply to the Shopping Center and the Quality Inn
13 Hotel dated April 29, 1988. The CC&Rs are attached herein as Exhibit B.
14 9.
15 This is a declaratory action under ORS 28.020 to determine
16 whether, under applicable law, the County either violates or threatens to
17 violate certain provisions of the CC&Rs by converting the Quality Inn Hotel
18 to emergency shelter housing for the homeless.

Portland, OR 97209
1 6.
2 The Quality Inn Hotel is a 100-room hotel used for the purpose
3 of temporary, overnight lodging providing accommodations and other
4 services for travelers and tourists for which a fee is paid.
5 7.
6 The County, through its Board of Commissioners, on February
7 16, 2023, voted to purchase the Quality Inn Hotel in the amount of $15.2
8 million for the purpose of converting the Hotel to emergency shelter
10 8.
11 Certain Declaration of Easements, Conditions, Covenants, and
12 Restrictions (“CC&Rs”) apply to the Shopping Center and the Quality Inn
13 Hotel dated April 29, 1988. The CC&Rs are attached herein as Exhibit B.
14 9.
15 This is a declaratory action under ORS 28.020 to determine
16 whether, under applicable law, the County either violates or threatens to
17 violate certain provisions of the CC&Rs by converting the Quality Inn Hotel
18 to emergency shelter housing for the homeless.

Portland, OR 97209
1 10.
2 Plaintiffs also seek supplemental relief under ORS 28.080 to
3 restrain the County from converting the Quality Inn Hotel to emergency
4 shelter housing for the homeless.
5 PARTIES
6 11.
7 Plaintiff 205 Sunnyside is an Oregon Limited Liability
8 Company properly authorized to engage in business in the State of Oregon
9 and is the owner of the Shopping Center.
10 12.
11 Plaintiff G Group is an Oregon Limited Liability Company
12 properly authorized to engage in business in the State of Oregon and is the
13 manager of the Shopping Center.
14 13.
15 Defendant County is an Oregon Municipal Corporation and is
16 the purchaser of the Quality Inn Hotel for purposes of converting it to an
17 emergency shelter for the homeless.
18

Portland, OR 97209
1 14.
2 Defendant YKC is an Oregon Limited Liability Company
3 properly authorized to engage in business in the State of Oregon and is the
4 seller of the Quality Inn Hotel to the County.
5 15.
6 The Oregon Community Foundation is a non-profit
7 organization who administers the Project Turnkey funds used in part by
8 the County to purchase the Quality Inn Hotel for emergency shelter
10 FACTUAL BACKGROUND
11 16.
12 Plaintiff G Group advised the County, prior to its decision to
13 purchase the Quality Inn Hotel, that the conversion of the Hotel to
14 emergency shelter housing for the homeless would adversely impact the
15 Shopping Center and its tenants.
16 17.
17 Plaintiff G Group also advised the County that the conversion
18 of the Quality Inn Hotel to emergency shelter housing for the homeless

Portland, OR 97209
1 would violate certain provisions of the CC&Rs applicable to the Shopping
2 Center and the Quality Inn Hotel.
3 18.
4 The County advised Plaintiff G Group that its purchase of the
5 Quality Inn Hotel would not violate the CC&Rs. The appraisal conducted
6 by The Oregon Community Foundation and the County, as part of due
7 diligence, concluded there were no adverse easements or restrictions that
8 would prevent the conversion of the Quality Inn Hotel to emergency
10 19.
11 Paragraph 8 of the CC&Rs entitled “Building and Property
12 Uses”, provides that the parties will devote buildings to the same general
13 use during the life of the CC&Rs. Exhibit 1 to the CC&Rs specifically
14 designated Parcel A as the “Hotel Property”. At the time the CC&Rs were
15 executed, and as shown on Exhibit 2 to the CC&Rs, the Days Inn Hotel
16 operated on Parcel A and in the building which now houses the Quality
17 Inn Hotel. A conversion of the Quality Inn Hotel to emergency shelter

Portland, OR 97209
1 housing for the homeless is not the same general use as a hotel and will
2 violate Paragraph 8.
3 20.
4 Paragraph 9 of the CC&Rs entitled “Nuisance”, provides that
5 no use or operation conducted on the Quality Inn Hotel property, Parcel A,
6 will be out of harmony with the restaurant operating within the Shopping
7 Center. The McMenamins restaurant is a current tenant of the Shopping
8 Center. A conversion of the Quality Inn Hotel to emergency shelter
9 housing for the homeless will be out of harmony with the restaurant and
10 will violate Paragraph 9.
11 21.
12 Paragraph 14 of the CC&Rs entitled “Enforcement”, provides
13 that the parties can enforce the provisions of any violation or threatened
14 violation of the CC&Rs.
15 22.
16 Paragraph 23 of the CC&Rs entitled “Notice”, provides that a
17 party seeking enforcement of the CC&Rs provide notice to the other party
18 of any violation or threatened violation of the CC&Rs. Plaintiff G Group

Portland, OR 97209
1 provided the County notice under Paragraph 23 of the CC&Rs, that the
2 County’s conversion of the Quality Inn Hotel to emergency shelter housing
3 for the homeless would violate Paragraphs 8 and 9 of the CC&Rs. Plaintiff
4 G Group also notified the County of its intent to enforce the CC&Rs and
5 pursue all of its remedies, including restraining any violation or threatened
6 violation of the CC&Rs. Plaintiff G Group’s notice is attached herein as
7 Exhibit C.
8 23.
9 Paragraph 18 of the CC&Rs, provides that a prevailing party in
10 any enforcement action is entitled to its attorney fees.
11 JURISDICTION AND VENUE
12 24.
13 This Court has jurisdiction under ORS 28.010 and ORS 28.020,
14 which grant circuit courts the power to declare rights regarding questions
15 arising under a contract. Plaintiffs are requesting the Court to declare that
16 the County’s conversion of the Quality Inn Hotel to emergency shelter
17 housing for the homeless will violate Paragraphs 8 and 9 of the CC&Rs.
18

Portland, OR 97209
1 25.
2 This Court also has jurisdiction to grant supplemental relief
3 based on a declaratory judgment under ORS 28.080 when further relief is
4 necessary or proper. Plaintiffs are requesting that the Court issue an
5 injunction restraining the County from converting the Quality Inn Hotel to
7 26.
8 Venue is proper in this circuit court because the Shopping
9 Center and the Quality Inn Hotel are both located in Clackamas County.
10 27.
11 Plaintiff 205 Sunnyside has standing because it owns the
12 Shopping Center. Plaintiff G Group has standing because it manages the
13 Shopping Center.
14 FIRST CLAIM FOR RELIEF

15 (Declaratory Relief under ORS 28.020)
16 28.
17 Plaintiffs reallege and incorporate by reference all those
18 allegations set forth above as though fully set forth herein.
19

Portland, OR 97209
1 29.
2 ORS 28.020 authorizes this Court to determine any question
3 arising under a contract and render a declaration regarding any right a
4 party may have under the contract. The CC&Rs constitute a contract
5 between the Plaintiffs and Defendants. This is a declaratory action to
6 determine whether Defendants either violate or threaten to violate
7 Paragraphs 8 and 9 of the CC&Rs by converting the Quality Inn Hotel to
9 30.
10 Plaintiffs and Defendants have a justiciable controversy over
11 whether the conversion of the Quality Inn Hotel to emergency shelter
12 housing for the homeless either violates or threatens to violate the CC&Rs.
13 31.
14 Declarations by the Court on Plaintiffs’ requests and contentions
15 will resolve the controversy between the parties and eliminate uncertainty
16 as to the rights of the parties under the CC&Rs.

Portland, OR 97209
1 SECOND CLAIM FOR RELIEF
2 (Injunctive Relief under ORS 28.080)
3 32.
4 Plaintiffs reallege and incorporate by reference all those
5 allegations set forth above as though fully set forth herein.
6 33.
7 ORS 28.080 authorizes this Court to grant supplemental relief
8 based upon a declaration issued under ORS Chapter 28.
9 34.
10 If this Court issues the declaratory relief requested, then the
11 County has no lawful right to convert the Quality Inn Hotel to emergency
13 35.
14 Plaintiffs seek injunctive relief as an equitable remedy because
15 no other legal remedy is available or adequate to prevent the County from
16 converting the Quality Inn Hotel to emergency shelter housing for the
17 homeless.

Portland, OR 97209
1 E. An award of attorney fees pursuant to Paragraph 18 of
2 the CC&Rs.
DATED this 9th day of March 2023.
HATHAWAY LARSON LLP
By: /s/ Gregory S. Hathaway

Gregory S. Hathaway, OSB No. 731240
Portland, OR 97209
Telephone: (503) 303-3101
Email: greg@hathawaylarson.com
Of Attorneys for Plaintiffs 205 Sunnyside, LLC
and G Group, LLC

Portland, OR 97209
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Exhibit A
AFTER RECORDING RETURN TO:
Gramor Development, Inc.
10300 S. W. Greenburg Rd - #275
Portland, Oregon 97223
DECLARATION OF EASEMENTS,
COVENANTS, CONDITIONS AND RESTRICTIONS
AGREEMENT, macle Ace. ws » lL. &, between BRUTGES

EQUITIES, INC., a Minnesota corporation, with its principal
place of business in the City of St. Cloud, County of Stearns,
State of Minnesota, hereinafter called "BRUTGER; and GRAMOR/
BEAUPRE JOINT VENTURE III, a Washington partnership of the City
of Portland, Oregon, hereinafter called "GRAMOR".
WHEREAS, BRUTGER is the owner in fee of that property

situated in Clackamas County, Oregon, described as Parcel A,
on Exhibit 1 attached hereto and shown as such on Exhibit 2
attached hereto; ar?
WHEREAS, GRAMOR is the owner in fee of that property situated

in Clackamas County, Oregon, described as Parcel B, on Exhibit 1
and shown as such on Exhibit 2 and 3 attached hereto; having
purchased Parceit B Erom BRUTGER, subject to the condition that
certain c atinuing easements, protective covenants and
restriction be placed upon the respective parcels; and
WHEREAS, GRAMOR is the owner in fee of certain property

situated in Clackamas County, Oregon, described as Parcel C, on
Exhibit 1 and shown as such as Exhibit 2 and 3; and
WHEREAS, GRAMOR intends to construct and develop a retail

center, including a restaurant, on land which includes Parcels B
and C and has agreed to extend certain easements and impose
protective convenants and restricts onto all of its property to
result in an overall development for the benefit the land of both
parties; and
NOW, THEREFORE, in consideration of the mutual agreements

herein contained, the parties covenant and agree for themselves,
SAFECO HILE INSURANCE CO. 0.54223,
and theic heirs, successors, and assigns, as follows:
l. Public Road Access Across Parcels B_ and C. GRAMOR shall

at all times maintain free vehicular and pedestrian access across
Parcels B and C and between each of those access points shown on
Exhibit 3 (the "Access Points") and hereby grants to BRUTGER a
perpetual non-exclusive right of access, in common with the owners
of Parcel RB and C, or any part thereof, and their invitees, for
motor vehicles and pedestrians for ingress and egress to and from
Stevens Road and Sunnyside Road between such Access Points.
GRAMOR reserves the right to alter the internal traffic
circulation pattern on Parcels B and C, provided that such
alteration does not, in BRUTGER'S sole opinion, which may not be
unreasonably withheld, unduly restrict traffic circulation
between the Access Points; and provided further that the straight
course for traffic between Access Polnts AP-1l and AP+=5, shall not
be changed without BRUTGER'S priot “approval, which shall not be
unreasonably withheld.
-1- 88 16988
Exhibit B, Page 1 of 20
sy
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2. Cross Access. The parties covenant that at all times
free vehicular and pedestrian access between the Parcels owned by
each party will not be impeded and will be maintained for the
mutual benefit and convenience of the patrons, business invitees,
and employees of the business enterprises conducted on Parcels A
Bandc.
3. Utility Easement. GRAMOR shall have a non-exclusive

easement for the installation, construction, repair, maintenance,
and reconstruction of utility lines and appurtenances along and
across the strip of land 20 feet wide described as Parcel D,
“utility Easement" on Exhibit 1 and shown as such on Exhibits 2
and 3.
Pursuant to this Utility Easement, GRAMOR, in conjunction with

development of the improvements upon its property, may install or
have installed such utility services to its premises as necessary
and appropriate for its development at its sole cost. Upon
completion of the initial installment of utilities, GRAMOR at its
sole cost, shall restore the surface area to the same condition
as existed prior to the construction. GRAMOR shall maintain and
keep in good repair the lines, pipes, conduits, and appurtenances
installed within utility easements at its sole cost and expense.
For this purpose GRAMOR is granted a continuing and non-exclusive
license to go upon the premises on which the Utility Easement is
located for the purpose of installing, maintaining, repairing,
and replacing the utility lines, pipe, conduits and appurtenances
as necessary to assure continuous service to its property;
provided, that, except in the event of an emergency, GRAMOR shall
give reasonable notice to BRUTGER prior to commencement of any
work and assure that such work causes no interruption of services
to business enterprises on Parcel A; provided further, any damage
caused by the exercise of such rights is promptly repaired,
including without implied Limitation the restoration of all
surface areas to their condition immediately prior to such
exercise.
4. Signage:
A. GRAMOR shall have the right and License, at all times

for so long as a restaurant is being operated on Parcel B or
Parcel C, to place and maintain an illuminated sign advertising
the restaurant (the “Sign") on the sign standard located on
Parcel A advertising the motel. For such purposes GRAMOR shall
have the right of access to the sign standard during regular
business hours by its officers, agents, and employees, with all
necessary tools, equipment, materials and appliances, and the
tight to equip the Sign with the incidentals to placing,
maintaining, and operating such Sign. Unless otherwise approved
by BRUTGER only the restaurants’ tradename or style shall appear
on the Sign and GRAMOR agrees to submit complete sign drawings
and specifications to BRUTGER for prior approval regarding
compatibility of colors, materials and style with the motel's
sign before any sign is placed on the standard, which approval
shall not be unreasonably withheld.
B. GRAMOR shall be solely responsible for all costs of
Placing, maintaining and operating such Sign. Upon completion of
the initial placement of the Sign, GRAMOR, at its sole cost,
shall restore the surface area to the same condition as existed
prior to the construction. Electrical power to such Sign shall
be separately metered if reasonably possible. In the event
separate metering is installed, GRAMOR shall nav all sums that
may become due for electrical energy supplied to the Sign and
shall keep BRUTGER indemnified against being called on to pay the
same. In the event separate metering is not installed BRUTGER
shall allocate such charges on a reasonable basis and GRAMOR
shall pay for such usage on a monthly basis based upon the rate
charged BRUTGER for electricity upon receipt from BRUTGER of a
copy of BRUTGER'S electric utility bill with respect to the month
for which payment is sought. GRAMOR shll have the duty as well
as the right to inspect the Sign and repair it or replace burned
out Lamps and to do all other work necessary to maintain the Sign
in proper working order, all of which shall be done at its sole
expense.
C. BRUTGER shall have the right and License, at all

times for so long as a Motel is being operated on Parcel A, to
place and maintain illuminated signs on GRAMOR'S monument sign on
Southeast Sunnyside Road providing traffic directory information
to the Motel as shown on Exhibit 4, at the location shown at AP-3
on Exhibit 3, and for such time to place and maintain such a sign
of its own at the sign location shown at AP-5 on Exhibit 3 if
GRAMOR is able to obtain governmental approval for a sign at such
location. If GRAMOR fails to obtain such approval, BRUTGER shall
have the right and license, at all times for so long as a Motel
is being operated on Parcel A, to place and maintain illuminated
signs on GRAMOR'S monument sign on Southeast Sunnyside Road
providing traffic directory information to the Motel as shown on
Exhibit 4, at the location shown at AP-4 on Exhibit 3.
D. BRUTGER shall be solely responsible for all costs of

placing, maintaining and operating such Signs. Electrical power
to such Signs shall be separately metered if reasonably possible.
In the event separate metering is installed, BRUTGER shall pay
all sums that may become due for electrical energy supplied to
the Signs and shall keep GRAMOR indemnified against being called
on to pay the same. In the event separate metering is not
installed GRAMOR shall allocate such charges on a reasonable
basis and BRUTGER shall pay for such usage on a monthly basis
based upon the rate charged GRAMOR for electricity upon receipt
from GRAMOR of a copy of GRAMOR'S electric utility bill with
respect to the month for which payment is sought. BRUTGER shill
have the duty as well as the right to inspect the Signs and
repair them or replace burned out lamps and to do all other work
necessary to maintain the Signs in proper working order, all of
which shall be done at its sole expense.
5. Prohibition of Improvements on Easement Areas. Neither

BRUTGER nor GRAMOR shall build, or permit to be built, any
a)
structure on the lands which interferes with the access rights or
utility easement granted above. These restrictions shall not
apply to light towers, appurtenant electrical equipment, signs
relating to business conducted on Parcels A, B or C, traffic or
directicnal signs, feuces, gates or other traffic control
structures which at the time of the erection thereof are usual in
connection with the operation of parking lots and which do not
themselves interfere with usual operation of parking lots and
traffic flow.
6. Maintenance of Easement Areas.
A. Each party will improve the parking and driveway

areas on its own property at its own expense in conjunction with
development of its property. GRAMOR shall complete development
of the parking and driveway areas, subject to the access rights
granted above within six months after the date of this Agreement,
unless delayed due to causes beyond GRAMOR'S reasonable control;
and upon completion of the initial improvements shall restore the
surface area of any adjacent property which may have been damaged
in the course of construction to the same condition as existed
prior to the construction. GRAMOR shall preserve the present
access to Parcel A from Sunnyside Road until GRAMOR substantially
completes a paved access way between Access Points AP-2 and AP-3.
B. Each party will maintain and keep the easement areas

and all buildings and plantings situated on their respective
premises in good condition and repair. Each party shall keep
such areas and all parking areas striped and clear and free of
snow, ice, rubbish, and obstructions of every nature, and shall
provide adequate drainage and lighting thereon. (For the purpose
of this provision, adequate lighting on the access, frontage road
and parking areas shall be a minimum of .5 foot candle
illumination at the paved surface.) The parking areas and
driveways on all abutting parcels shall meet at equal grades and
no obstructions shall be erected or permitted upon Parcel A, B or
¢ which will in any way interfere with any rights granted by this
Agreement.
C. Each party shall maintain at all times comprehensive

genetal liability insurance on its premises with combined single
limits insurance coverage in an amount not less than
$L,000,000.00. All such policies shall name both parties as
insured as their interests shall appear.
7. Liens. [In the event any mechanic's liens are filed

against the Parcel of either party as a result of services
performed ot materials furnished for the use of the other party's
Parcel or Parcels, the party permitting or causing such lien to
be filed hereby covenants to cause such lien to be removed and
further agrees to indemnify, defend and also hold harmless the
other party against Liability, loss, damage, cost of expenses
including attorney's fees and cost of suit on account of such
claim of lien. Upon request of the party whose Parcel is subject
to such lien, the party permitting or causing such lien to be
=4-
filed agrees to promptly cause such Lien to be released and
discharged of record either by paying the indebtedness which gave
rise to such lien or posting such bond or other securities as
shall be required by law to obtain such release and discharge.
Nothing herein shall prevent a party permitting or causing such
lien to contest the validity thereof in any manner such party
chooses so long as such contest is pursued with reasonable
diligence, and in the event such contest is determined adversely,
such party shall promptly pay in full the required amount,
together with any interest penalty and costs.
PROTECTIVE COVENANTS AND RESTRICTIONS
8. Building and Property Uses. Within one year after the

date of recording of this Agreement GRAMOR shall commence
construction of a restaurant on Parcel B or Parcel C. GRAMOR
shall have the right to extend the period in which construction
of the Restaurant must commence for up to an additional 12 month
period by written notice to BRUTGER stating GRAMOR'S election to
do so, mailed to BRUTGER on or before the expiration of such one
year period. The restaurant shall be built at either the
locations identiiied in Exhibit 3 as “Restaurant Pad" or “Retail
2" in accordance with plans and specifications therefor,
including a site plan showing among other things building
location, size and elevation, site parking and traffic flow plan,
exterior design treatment, landscaping plan and signage, all as
approved by BRUTGER following request therefor from GRAMOR, which
approval may nol be unreasonably withheld (the “Restaurant")}. No
building shall be located upon Parcel A, B or C except as
generally shown on the attached Exhibits during the 120 month
period commencing on the date this Agreement is recorded in the
real property records of Clackamas County. Each party shall
maintain the areas of their respective Parcel designated on the
attached Exhibits as devoted to the following uses: building,
landscaping and sidewalk, parking and traffie circulation, in
good condition, and devoted to substantially the same general
uses during the Life of this Agreement. After such 120 month
period, either party may alter the uses of such areas subject to
the provisions of paragraphs 1 and 13 of this Agreement.
9. Nuisance. No use or operation will be made, conducted

or permitted on or with respect to all or any part of Parcel A, B
or C, which use or operation is obnoxious to or out of harmony
with the development ot operation of the motel conducted on
Parcel A or the restaurant conducted on Parcel B or Parcel C.
10. Parcel B Restriction. It is hereby further acknowledged

and agreed that Parcel B and C is held and shall be held,
conveyed, encumbered, Leased, rented, used, occupied and improved
subject to the Limitations, restrictions, conditions and
covenants of the following paragraphs numbered 11, 12, 13 and 14,
all of which are declared and agreed to be in furtherance of a
plan for the improvement of the whole property comprised of
Parcels A, B and C, and are agreed upon for the purpose of
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enhancing and protecting the value, desirability and
attractiveness of the lands and every part thereof. All of the
limitations, restrictions, conditions and covenants in this
section entitled Protective Covenants shall run with the land and
shall be binding on all parties having or acquiring any right,
title or interest in Parcels B and C, or any part thereof, and
the benefit thereof shall inure to BRUTGER, its successors and
assigns so long as Parcel A, the Motel Property, shall be devoted
to hotel, motel, or motel/condominium use.
ll. Building Size. For the period of the five (5) years
next following the recording of this Agreement, no building
erected or modified on the south half of Parcel B may be of
greater size (ground floor area and height), than the building as
indice -ed on Exhibit 3; provided nevertheless, that iff GRAMOR
fails to comply with the provisions of paragraphs 8 and 12
‘N herein, then the restrictions of this paragraph 11 shall be
automatically thereby extended for an additional period of ten
(10) years beyond the initial five (5) year period stated herein.
12. Restaurant Use Requirement. Commencing upon execution

of this Agreement, GRAMOR shall proceed diligently (consistent
with sound business practices) to assure that a lunch and dinner
restaurant shall be operated upon Parcel B or C in the restaurant
building as approved by BRUTGER pursuant to paragraph 8 above for
a period of five (5) years following the recording of this
Agreement (plus any period of construction). GRAMOR shall take
no action which will preclude GRAMOR from performing its
obligations under this paragraph. GRAMOR'S obligation under this
paragraph 12 shall be deemed satisfied so long as GRAMOR, not
Later than the end of the period of time provided in paragraph 8
above for commencement of construction of a restaurant buildiag,
has entered into a lease with a creditworthy tenant for a term of
not Less than five (5) years commencing upon completion of
construction of the restaurant building requiring the operation
of such a restaurant and GRAMOR is diligently performing and
enforcing such Lease in good faith to assure its continued
operation.
13. Restriction On Adjacent Premises. For so long as Parcel

A is utillzed as a motel or hotel, no hotel or motel may be built
or operated on Parcel B or C. This is an absolute restriction on
such development of such property and may not be waived in any
circumstance except by the express written consent of BRUTGER or
its successors or assigns as owner of Parcel A contained in an
instrument executed and recorded in th land records of Clackamas
County while owner of Parcel A.
14. Enforcement. Enforcement of these Protective Covenants,

other than paragraph 12, shall be by proceeding at law or in
equity against any person or persons violating or attempting to
violate any covenant either to restrain violation or to recover
damages. Enforcement of the Protective Covenant in paragraph 12
shall be limited to a proceeding at law for damages.
Sik lea =.
GENERAL PROVISIONS:
15. Severability. Invalidation of any one of these

provisions by Judqment or court order shall in no way affect
any of the other provisions which shall remain in full force and
effect.
16. Amendment. This Agreement represents the entire

agreement and understanding of the parties with respect to its
subject matter and supersedes and cancels all other negotiations,
understandings or agreements, oral, written or otherwise, if any,
between the parties with respect to the subject matter of this
Agreement. This Agreement shall not be amended except by express
written modification hereof, signed by all parties and mortgagees
having an interest in or liens on the lands described herein.
It is agreed, however, that the attached Exhibits 1, 2 and 3 are
attached for purposes set forth in this Agreement only. Such
Exhibits may be replaced by one or more surveys or drawings more
accurately depicting the Site Plan as built and matters described
herein, promptly upon conpletion of the improvements on the
respective premises.
17. Remedies. If ary party (defaulting party) fails to

comply with the provisions of paragraphs 3, 6 and 8 herein,
relative to maintenance of and the other party (non-defaulting
party) at its option within thirty (30) days prior written notice
may proceed ta cure the default by the payment of money or other
action for the account of the defaulting party, and recover all
costs of curing, plus interest and attorneys’ fees from the
defaulting party. The foregoing right to cure shall not apply if
within the thirty (30) day notice period, the defaulting party
cures the default or if the default cannot reasonably be cured
within that time period diligently begins pursuing curative
completion. The thirty (30) day notice period shall not be
required i€ using reasonable judgment the non-defaulting party
deems that an emergency exists which requires immediate cure. In
the event of such an emergency, the non-defaulting party shall
give whatever notice is reasonable to the defaulting party.
Any remedies in this agreement are cumulative and shall be

deemed additional to any and all other remedies to which any
persons may be entitled in law or in equity, and shall include
the right to restrain by injunction any violation or threatened
violation by any party of the terms, covenants, or conditions of
this agreement, and by decree to compel performance of such
terms, covenants or conditions, it being agreed that the remedy
involved for any breach of any such term, covenant or condition.
18. Attorney's Fees. In the event any party shall institute

an action or proceeding against the other party relating to the
provisions of this Agreement or any default hereunder or to
collect any amounts owing hereunder or in arbitration proceedings
as cotimenced by an agreement of the parties to any dispute, the
unsuccessful litigant im such action or proceeding agrees to
reimburse the successful litigant therein for the reasonable
-7-
expenses of attorney's fees and disbursements incurred therein by
the successful Litigant, including such costs and expenses
incurred in connection with any such action or proceeding and any
appeals therefrom.
19. Agreement Shall Continue Notwithstanding Breach. It is

expressly agreed that no breach of this agreement shall entitle
any party to cancel, rescind or otherwise terminate this
agreement; however, such Limitations shall not affect in any
manner any other rights or remedies which such parties have
hereunder by reason of any such breach.
20. Covenants Running With Land. The easements hereby

granted, the restrictions hereby imposed, and the protective
covenants and contract rights herein contained shall be
easements, restrictions, covenants running with the land ani
shall along with all contract rights inure to the benefit of, and
be binding upon, the parties hereto and their respective heirs,
successors and assigns, including, but without limitation, all
subsequent owners of Parcels A, B and C, and all persons claiming
under them.
22. Counterparts. This 7 jreement may be executed in

counterparts, each Of which still constitute an original, and all
of which when taken together snall constitute one Agreement.
23. Notices. Except as otherwise provided herein, all

communications, demands, notices, or objections permitted or
required to be given or served under this Ayreement shall be in
writing and shall be deemed to have been duly given or served if
| delivered in person or deposited in the United States mail,
| postage prepaid, for mailing by certified or registered mail,
return receipt requested, or by private express mail carrier
similarly addressed and deposited, or if telegraphed, by prepaid
telegram, and addressed to a party to this Agreement, to the
address set forth next to that party's signature at the end of
this Agreement, or if to a person not a party to this Acreement,
to the address designated by a party to this Agreement in the
foregoing manner. Any party may change its address by giving
notice in writing, stating its new address, to any other party as
provided in foregoing manner. Commencing on the 10th day after
the giving of notice, the newly designated address shall be that
party's address for the purposes of all communications, demands,
notices, of objections permitted or required to be given or
served under this Agreement.
~8-
IN WITNESS WHERECF, the parties have caused this Agreement to
be executed effective the date and year first set forth above.
Address: BRUTGER EQUITIES, INC.

P.O. Box 399
St. Cloud, MM 56302
By:
Its Vice ~presidew
T
Address: GRAMOR/BEAUPRE' JOINT VENTURE III,

LO001 SE Sunnyside Road a partnership
Clackamas, OR 97015
By Cramor Develaoment,. Igc.,
a Washington corporation
partner
By: Ld) fd. ppc Se
By R. E. neni sane
By: # ») x be : 77
RoE. Beaupr
STATE OF MINNESOTA)
)ss.
COUNTY OF STEARNS }
The foregoing instrument was acknowledged before ae this
Bitte day of Dei k , 1988, by “te A. ce Jr
the pice Spoesident. ot BRUTGER EQUITIES, INC., a Minnesota
corporation, on behalf of the corporation.
tary siaedh
STATE OF SAGMYNGKROM OREGON

SS.
COUNTY OF _ CLACKAMAS )
I certify that ft know or have satisfactory evidence that

R. EB, Beaupre’ signed this instrument, on oath stated
shat (he/she) was authorized to execute the instrument and
acknowledged it as the President o£ GRAMOR
DEVELOPMENT, INC., a Washington corporation, to be the free and
voluntary” act of such corporation for the uses and purposes
_ > : y April 29 , 1988 ) y Naine. bl ei

y/Public for Washingtpp
: a eee Pes, expires 9 29-88
~9-
A j
STATE OF WASHINGRGNYOREGON
ss.
COUNTY OF — CLACKAMAS)
I certify that I know or have satisfactory evidence that

R. E. BEAUPRE' signed this instrument and acknowledged it to dbe in
y act for the uses and purposes mentione
his free and voluntar
the instrument.
rye *
Dated: April 29 , 1988 /) { |
370° ‘ Z prdams Riaw

Jobe : ae Notary gublic for Washington
My appoAntment expires: jp.29.98
THIS INSTRUMENT DRAFTED BY:
Roger D. Neils
Hoolihan & Neils
1011 North 2nd Street
P.O. Box 307
St. Cloud, MN 56302
(612) 253-7130
EXHIBIT "1°
PARCED A The Hotel Property
A tract of land in the Southeast one-quarter of Section

33, Township 1 South, Range 2) East of the Willamette
Netidian, Clackamas County, Qregon, described as
follows:
Beginning at the Northeast corner of Lot 1, "FIODDLER'S

ACRES", a subdivision plat of record (Book 37, Page 10)
in said Clackamas County, and cunning thence along the
North line thereof, North 88° 42° 59" West, a distance
of 12.64 feat to the Easterly right-of-way line of the
1-205 Freeway as described in Deed to the State of
Oreqon, recorded July 1, 1971 under Clackamas County
Recorder's Fee No. 71 15154; thence along said
right-of-way line, North 29° 23' 44" West, a distance of
150.53 Feet; thence North 25° 27 59” West, a distance
O£ 16.68 feek Lo (the North line of that tract described
in Deed to Walter E. Winkelman, cecorded July 2, 1971
under Clackamas County Recorder's Fee No. 71 15404;
thence along said North line of the Winkelman tract,
South 88% 41° 46" East, a distance of 128.33 feet to the
Northeast corner thereof; thence along. the East Line of
said Wirkelman tract, South 1° 15' 41" West, a distance
of 100.00 feet to the Northwest corner of that tract
described in Deed to Walter E. Winkelman, recorded
January 23, 1970 under Clackamas County Recorder's Fee
No. 70 1583; thence along the North line o€ said
Winkelman tract, (70-1583) South 89° 41° 22" East, a
distance of 199.08 feet to the Northeast corner thereof;
thence alony the West right-of-way line of S.E. Stevens
Roatl, (County Road No. 1258) . (20 feet From the
centerline) South 1° 15' 41" West, a distance of 31.98
feet to the intersection of the Westerly extension of
the Northerly line of that tract described in Deed to
Gerald L. Killian, et ux, recorded July 26, 1979, Fee
No. 79 32222; thence along the North line and the
Westerly extension of that tract described in Deed to
Gerald L. Fillian, et uxor, cecorded July 26, 1979,
under Clackamas County Recorder's Fee Uo. 79 32222,
South 9° 44° In" vast, a distance . of 118.00 feet;
thence South OL 15' 41" West, a distance of 40.00 Leet;
thence North 838° 44" 19" West, a distance of 4.00 Ecet:
thence South OL° 15" 41" West, a distance of 216.42 feet
to Lhe orth cight-of-way line of S.E. Sunnyside Road
(Narket Road No. 29) (38 feet From centerline) as
deseribed in Deed to Ciackamas County, vecorded
Seplember 20, 1982 under Clackamas County Recorder's Fee
No. 82 26050, said, place of intersection being North 78°
5$2' 33" East, a distance of 74.05 feet Erom the
intersection of the East right-of-way line of said S.E.
Stevens Road (20 feet from the centerline) and the said
North cight of way line of Sunnyside Road;
(COMreeur ny | \
sy
%
2. Cross Access. The parties covenant that at all times
free vehicular and pedestrian access between the Parcels owned by
each party will not be impeded and will be maintained for the
mutual benefit and convenience of the patrons, business invitees,
and employees of the business enterprises conducted on Parcels A
Bandc.
3. Utility Easement. GRAMOR shall have a non-exclusive

easement for the installation, construction, repair, maintenance,
and reconstruction of utility lines and appurtenances along and
across the strip of land 20 feet wide described as Parcel D,
“utility Easement" on Exhibit 1 and shown as such on Exhibits 2
and 3.
Pursuant to this Utility Easement, GRAMOR, in conjunction with

development of the improvements upon its property, may install or
have installed such utility services to its premises as necessary
and appropriate for its development at its sole cost. Upon
completion of the initial installment of utilities, GRAMOR at its
sole cost, shall restore the surface area to the same condition
as existed prior to the construction. GRAMOR shall maintain and
keep in good repair the lines, pipes, conduits, and appurtenances
installed within utility easements at its sole cost and expense.
For this purpose GRAMOR is granted a continuing and non-exclusive
license to go upon the premises on which the Utility Easement is
located for the purpose of installing, maintaining, repairing,
and replacing the utility lines, pipe, conduits and appurtenances
as necessary to assure continuous service to its property;
provided, that, except in the event of an emergency, GRAMOR shall
give reasonable notice to BRUTGER prior to commencement of any
work and assure that such work causes no interruption of services
to business enterprises on Parcel A; provided further, any damage
caused by the exercise of such rights is promptly repaired,
including without implied Limitation the restoration of all
surface areas to their condition immediately prior to such
exercise.
4. Signage:
A. GRAMOR shall have the right and License, at all times

for so long as a restaurant is being operated on Parcel B or
Parcel C, to place and maintain an illuminated sign advertising
the restaurant (the “Sign") on the sign standard located on
Parcel A advertising the motel. For such purposes GRAMOR shall
have the right of access to the sign standard during regular
business hours by its officers, agents, and employees, with all
necessary tools, equipment, materials and appliances, and the
tight to equip the Sign with the incidentals to placing,
maintaining, and operating such Sign. Unless otherwise approved
by BRUTGER only the restaurants’ tradename or style shall appear
on the Sign and GRAMOR agrees to submit complete sign drawings
and specifications to BRUTGER for prior approval regarding
compatibility of colors, materials and style with the motel's
sign before any sign is placed on the standard, which approval
shall not be unreasonably withheld.
Exhibit “1" Continued...
Legal Description Continued...
Thence along said right-of-way line, South 88° 52' 33"

West, a distance of 171.89 feet to a point which is a
distance of 74.05 feet From the intersection of said
right-of<way line with the East right-of-way lise of
S.&. Stevens Road (County Road No. 1258) (20 feet from
centerline); thence North 01° 15* 41" . East, a distance
of 216.42 feet: thence South 88° 44' 19" East, a
distance of 4.00 feet; thence North O1° 15' 41" East,a
distance of 40.00 feet to the North line of that tract
described in Deed to Gerald -L. Killian, et uxo',
recerded July 26, 1979 under Clackamas County Recorder's
Fee No. 79,32222; thence along said North Line of the
Killian Tract, South 89° 44° 18" East, a distance of
132.10 feet to the re-entry corner of said Lot 1, “HT.
SCOTT ACRES"; thence North 01° O8' 51” East, a distance
@O£ 35.15 fewrt to the place of beginning. .
PARCEL C The Adjacent Property
A tract of land located in the southeast one-quarter of the

southeast one-quarter of Section 33, Township 1 South, Range 2
East of the Willamette Meridian, in Clackamas County, Oregon,
more particularly described as follows:
Beginning at a brass screw on which bears North 70°37'28" West

1,300.09 feet from the southeast corner of Section 33, Township
1 South, Range 2 East of the Willamette Meridian; said brass
screw heing 2: point on the north right of vay of southeast
Sunnyside Road, said brass screw also being THE TRUE POINT OF
BEGINNING; thence North 01°10'O4" East 216.62 feet to a 5/8
inch iron rod; thence South 68°49.'56" East 4.01 feet to a 5/8
inch iron rod; thence North 01°10'04: East 40.12 feet to a 5/6
inch iron rod; thence North 89°39'27" West 77.12 feet to a 5/8
inch iron rod, said 5/8 inch iron rod also being a point on the
east right of way of Southeast 97th Avenue (Stevens Road);
thence North 01°13'17" East 233.13 feet along the east right cf
way of southeast 97th Avenue (Stevens Road) to a 5/8 inch iron
rod; thence South 68°31'20": East 447.65 feet to a point, said
point also being a point onithe west right of way of the nevly
relocated Stevens Road; thence along said west right of way an
are @istance of 139.15 feet through a 349.00 foot radius
nontangent curve to the richt (the long chord of which bears
South 19°03'26" East 138.23 feet) to a 5/8 inch iron rod;
thence South 00°07'23” East: 338.79 feet along said west right
of way to a brass screw, said brass screw also being a point on
the north right of way of southeast Sunnyside Road; thence
South 88°46'S6" West 430.55 feet along said North right of way
to a brass serew, said brass screw being THE TRUE POINT OF
BEGINNING. Excepting:

3. Township 1 South, Range 2 East of the Willamette
Heridian, Clackamas County, © Oreyon, destribed as
follows: .
Beginning at the: most Northerly Northwest corner of Lot
1, “ar. Scert acres", ao subdivision plat of record (Duvk
32, Pane 133. in said Clackamas Counly; thence along thy
North line thereof, Soulh 8B* 31" 2uU" Cast, a distante
of 35.16 fe2L to the Northeast corner of that tract
descrided in beed to Oliver G. tlendrickson, ct uxor,
cecarded August 4, 1967 in Clackamas County Weed Sook
6394, arge 548; thenee glong the Cast line of said
Usndrichsor tract, South 01° 00' 51° West, a distance of
346.57 feel to the North right-of-way line of S.E.
Sunnyside Road (Morket Road No. 29) (30.00 feet fron
centerline) as deseribed in Deed to Clackamas County
reededod September 8, 1902, under Clackamas County
Recorder's Tee No, U2 249381;
Thence wlong said ‘right-of-way line, South 80° 52° 33°
distance of 74.05 feet from the intersection of said
right-of-way line with the East right-of-way line of
S.E. Stevens Road (County Road No. 1258) (20 FEcet from
centerline): thence North 01° 15° 4)" + East, a distance
of 216.42 fect; thence South 68° 44* 19" Ezst, a
distance of 4.00 feet; thence North O1° 15' 41" East, 8
Gistance of 40.00 feet to the North line of that tract
described {fn feed t& Gerald -L. Killian, et uxo%,
A
recorded July 26, 1979 under Clackamas County Recorder's
Fee No. 7932222; thence along said North line of the
Killian Tract, South 89° 44° 10" East, a distance of
232.10 fect to the re-entry corner of said Lot 1, “NT.
SCOTT ACRES"; thenee North 01° O8* SI)” East, a distance
of 95.13 feet to the place of beginning. :
PARCEL C The Adjacent Property
A tract of land Jocated in the southeast one-quarter of the

southeast one-quarter of Section 33, Township 1 South, Range 2
East of the Willamette Meridian, in Clackamas County, Oregon,
more particularly described as follows:
Beginning at a brass screw on which Sears North 70°37'29" feet

1,300.09 feet from the southeast corner of Section 33, Township
1 South, Range 2 East of the Willamette Meridian; said brass
screw being a point on the north right of way of southeast
Sunnyside Road, said brass screw also being THE TRUE POINT OF
BEGINNING: thence North 01°30'O04" East 216.62 feet to a 5/8
inch iron rod; thence South 88°49.°56" East 4.01 feet to a 5/8
inch iron roe; thence North 01°10°04: East 40.12 feet to a 5/8
inch iron rod; thence North 89°39°'27" West 77.12 feet to a 5/8
inch iron rod, said 5/8 inch iron rod also being a point on the
east right of way of Southeast 97th Avenue (Stevens Road);
thence North 01°13'17" East 233.13 feet along the east right cf
way of southeast 97th Avenue (Stevens Road) to a $/8 inch iron
rod; thence South 88°31'20", East 447.65 feet to a point, said
point also being a point onithe west right of way of the newly
relocated Stevens Road; thence along said west right of way an
are distance of 139.15 feet through a 349.00 foot radius
nontangent curve to the richt (the long chord of which bears
South 19°03'26" East 138.23 feet) to a 5/8 inch iron rod;
thence South 00°07'23" East. 338.79 feet along said west right
of way to a brass screw, said brass s¢rew also being a point on
the north right of way of southeast Sunnyside Road; thence
South 88°46'S6* West 430.55 feet along said North right of way
to a brass screw, said brass screw being THE TRUE POINT OF
BEGINNING. Excepting:
33, Township 1 South, Range 2 East of the Willamette
Heridian, Clackamas County, © Oregon, described as
follows: .
Beginning at the most Northerly Northwest corner Of Lot
1, “HT. SCCTT ACRES", o subdivision plat of record (Buvk
32, Pose 133, in said Clackamas County; thence alony the
North line thereof, South 8B*° 31° 2U" Bast, a distance
of 35.!6 fe2t to the Northeast corner of that tract
descrided in Deed to Oliver G. Hendrickson, ct uxor,
RECORDED
recorded August 4, 1967 in Clackamas County Deed Dook

634, prge $48; Lhence glong the Last line of said
endciclhsor tract, South 0J° O8* 51° West, a distance of
346.57 feet to the North right-of-way line of S$...
Sunnyside Road (Hackett Road No. 29) {38.90 feet Crom
WHEN
canterline) as destribed in Deed lo Clackomas County

recorded September 8, 1902, under Clackamas County
Revorder‘s Fee No. U2 2498);
ILLEGIBLE
Thence along said ‘right-of-way line, South 88° 52° 33°

distance of 74.05 feet from the intersection of said
right-of-way line with the East right-of-way line of
S.C. Stevens Road (County Road No. 1258) (20 feet from
centerline): thence Worth 01° 15° 41" . East, & distance
of 216.42 feet; thence South 88° 44° 19" East, a
distance of 4.00 feet; thence North O° 15' 41” East,a
distance of 40.00 fect to the North line of that tract
described in Meed to Gerald -L. Killian, et uxo',
recorded July 26, 1979 under Clackamas County Recorder's
Fee No. 79.32222; thence Slong said North line of the
Killian Tract, South 89° 44° 18° East, a distance of
132.10 fect to the re-entry corner of said Lot 2, “HT.
SCOTT ACRES"; thence North 01° OO 51” East, a distance
of 95.13 feet to the place of beginning.
nnenad Son GES cae See
Exhibit "1" Continued...

Legal Description Continued...
PARCEL D UTILITY EASEMENT
A strip of land 20 feet in width located in the Southeast one-quarter of

Section 33, Township 1 South, Range 2 East of the Willamette Meridian,
Clackamas County, Oregon, described as follows:
Beginning at the intersection of the West right-of-way line of S.E. Stevens

Road (County Road No. 1258) (20 feet from the centerline), and the Westerly
extension of the Northerly line of that tract described in Deed to Gerald L.
Killian, et ux, recorded July 26, 1979, Fee No. 79 32222; thence along the
North line and the Westerly extension of that tract described in Deed to
Gerald L, Killian, et uxor, recorded July 26, 1979, under Clackamas County
Recorder's Fee No. 79 32222, South 89° 44’ 18" East, a distance of 118.0
feet; thence South 01° 15" 41" West, a distance of 20.00 feet; thence North
89° 44' 18" West, a distance of 118.00 feet to the West right-of-way line of
said S.E. Stevens Road (20 feet from the centerline); thence along the said
West right-of-way line North 01° 15' 41" East, a distance of 20.00 feet to
the point of beginning.
structure on the lands which interferes with the access rights or
utility easement granted above. These restrictions shall not
apply to light towers, appurtenant electrical equipment, signs
relating to business conducted on Parcels A, B or C, traffic or
directicnal signs, feuces, gates or other traffic control
structures which at the time of the erection thereof are usual in
connection with the operation of parking lots and which do not
themselves interfere with usual operation of parking lots and
traffic flow.
6. Maintenance of Easement Areas.
A. Each party will improve the parking and driveway

areas on its own property at its own expense in conjunction with
development of its property. GRAMOR shall complete development
of the parking and driveway areas, subject to the access rights
granted above within six months after the date of this Agreement,
unless delayed due to causes beyond GRAMOR'S reasonable control;
and upon completion of the initial improvements shall restore the
surface area of any adjacent property which may have been damaged
in the course of construction to the same condition as existed
prior to the construction. GRAMOR shall preserve the present
access to Parcel A from Sunnyside Road until GRAMOR substantially
completes a paved access way between Access Points AP-2 and AP-3.
B. Each party will maintain and keep the easement areas

and all buildings and plantings situated on their respective
premises in good condition and repair. Each party shall keep
such areas and all parking areas striped and clear and free of
snow, ice, rubbish, and obstructions of every nature, and shall
provide adequate drainage and lighting thereon. (For the purpose
of this provision, adequate lighting on the access, frontage road
and parking areas shall be a minimum of .5 foot candle
illumination at the paved surface.) The parking areas and
driveways on all abutting parcels shall meet at equal grades and
no obstructions shall be erected or permitted upon Parcel A, B or
¢ which will in any way interfere with any rights granted by this
Agreement.
C. Each party shall maintain at all times comprehensive

genetal liability insurance on its premises with combined single
limits insurance coverage in an amount not less than
$L,000,000.00. All such policies shall name both parties as
insured as their interests shall appear.
7. Liens. [In the event any mechanic's liens are filed

against the Parcel of either party as a result of services
performed ot materials furnished for the use of the other party's
Parcel or Parcels, the party permitting or causing such lien to
be filed hereby covenants to cause such lien to be removed and
further agrees to indemnify, defend and also hold harmless the
other party against Liability, loss, damage, cost of expenses
including attorney's fees and cost of suit on account of such
claim of lien. Upon request of the party whose Parcel is subject
to such lien, the party permitting or causing such lien to be
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February 23, 2023
VIA EMAIL AND CERTIFIED MAIL
Chair Tootie Smith, Paul Choi

tootiesmith@clackamas.us YKC Hospitality, LLC
Commissioner Paul Savas, 9717 SE Sunnyside Road
psavas@clackamas.us Clackamas, OR 97015
Commissioner Martha Schrader,
marthaschrader@clackamas.us
Commissioner Mark Shull,
markshull@clackamas.us
Commissioner Ben West,
benwest@clackamas.us
2051 Kaen Road
Oregon City, OR 97045
Re: Clackamas County’s Purchase and Conversion of the Quality Inn

Hotel for Transitional Housing for the Homeless
Dear Members of the Board and Mr. Choi,
I represent G Group LLC who manages the Shopping Center

near the intersection of the I-205 Freeway and Sunnyside Road in Clackamas
County adjacent to the Quality Inn Hotel (“Quality Inn”). Last week, the
Clackamas County Board of Commissioners agreed to purchase the Quality
Inn for purposes of converting it to transitional housing for the homeless
under Project Turnkey administered by the Oregon Community
Foundation.
Gregory S. Hathaway
Portland, OR 97209
greg@hathawaylarson.com
(503) 303-3103 Direct
(503) 303-3101 Main
Exhibit C, Page 1 of 3
fy
my
enhancing and protecting the value, desirability and
attractiveness of the lands and every part thereof. All of the
limitations, restrictions, conditions and covenants in this
section entitled Protective Covenants shall run with the land and
shall be binding on all parties having or acquiring any right,
title or interest in Parcels B and C, or any part thereof, and
the benefit thereof shall inure to BRUTGER, its successors and
assigns so long as Parcel A, the Motel Property, shall be devoted
to hotel, motel, or motel/condominium use.
ll. Building Size. For the period of the five (5) years
next following the recording of this Agreement, no building
erected or modified on the south half of Parcel B may be of
greater size (ground floor area and height), than the building as
indice -ed on Exhibit 3; provided nevertheless, that iff GRAMOR
fails to comply with the provisions of paragraphs 8 and 12
‘N herein, then the restrictions of this paragraph 11 shall be
automatically thereby extended for an additional period of ten
(10) years beyond the initial five (5) year period stated herein.
12. Restaurant Use Requirement. Commencing upon execution

of this Agreement, GRAMOR shall proceed diligently (consistent
with sound business practices) to assure that a lunch and dinner
restaurant shall be operated upon Parcel B or C in the restaurant
building as approved by BRUTGER pursuant to paragraph 8 above for
a period of five (5) years following the recording of this
Agreement (plus any period of construction). GRAMOR shall take
no action which will preclude GRAMOR from performing its
obligations under this paragraph. GRAMOR'S obligation under this
paragraph 12 shall be deemed satisfied so long as GRAMOR, not
Later than the end of the period of time provided in paragraph 8
above for commencement of construction of a restaurant buildiag,
has entered into a lease with a creditworthy tenant for a term of
not Less than five (5) years commencing upon completion of
construction of the restaurant building requiring the operation
of such a restaurant and GRAMOR is diligently performing and
enforcing such Lease in good faith to assure its continued
operation.
13. Restriction On Adjacent Premises. For so long as Parcel

A is utillzed as a motel or hotel, no hotel or motel may be built
or operated on Parcel B or C. This is an absolute restriction on
such development of such property and may not be waived in any
circumstance except by the express written consent of BRUTGER or
its successors or assigns as owner of Parcel A contained in an
instrument executed and recorded in th land records of Clackamas
County while owner of Parcel A.
14. Enforcement. Enforcement of these Protective Covenants,

other than paragraph 12, shall be by proceeding at law or in
equity against any person or persons violating or attempting to
violate any covenant either to restrain violation or to recover
damages. Enforcement of the Protective Covenant in paragraph 12
shall be limited to a proceeding at law for damages.
Clackamas County Board of Commissioners
Paul Choi
February 23, 2023
Page 3
Please be advised that due to today’s weather conditions we are

unable to send this letter via certified mail today. Instead, we are hopeful,
unless tomorrow’s weather conditions do not permit us to, that it will be sent
via certified mail tomorrow.
Thank you.
Very truly yours,
HATHAWAY LARSON LLP
/s/ Gregory S. Hathaway
Gregory S. Hathaway
GSH/ep
cc: G Group, LLC

Stephen Madkour, County Counsel (smadkour@clackamas.us)
Megan Loeb, Oregon Community Foundation (mloeb@oregoncf.org)
Exhibit C, Page 3 of 3

205 Sunnyside, LLC V. Clackamas County Court Documents

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What is the dispute about?

What is the dispute about?

What are the arguments against converting the Quality Inn?

What are the arguments against converting the Quality Inn?

3/10/2023 10:55 AM

4 IN THE CIRCUIT COURT OF THE STATE OF OREGON

5 FOR THE COUNTY OF CLACKAMAS

205 SUNNYSIDE, LLC, an Oregon Case No.

CLACKAMAS COUNTY, a Fees under ORS 21.135(2)(f)

6 Plaintiffs 205 Sunnyside, LLC and G Group, LLC (“Plaintiffs”)

7 allege the following:

Page 1 - COMPLAINT HATHAWAY LARSON LLP

3 Plaintiff 205 Sunnyside, LLC (“205 Sunnyside”) owns property

4 located at 9757 – 9919 SE Sunnyside Road in Clackamas County, Oregon.

7 products to customers in a multi-building shopping center setting

8 (“Shopping Center”). Plaintiff G Group, LLC (“G Group”) manages the

11 The tenants of the Shopping Center currently include:

12 McMenamins, Inc.; Clackamas Dermatology, PC; Clackamas County

15 Palm Beach Tan; BestMind Behavioral Health; Nothing Bundt Cakes;

Page 2 - COMPLAINT HATHAWAY LARSON LLP

2 Defendant Clackamas County (“County”) applied for a grant

3 from The Oregon Community Foundation to purchase property to convert

4 an existing motel or hotel to emergency shelter housing for the homeless.

5 This grant is commonly referred to as Project Turnkey and is funded in

6 part by the State of Oregon and administered by The Oregon Community

7 Foundation which serves as a fiduciary and administrator of the funds.

9 The County entered into a Purchase and Sale Agreement with

10 Defendant YKC Hospitality, LLC (“YKC”) on December 12, 2022, to

11 purchase the Quality Inn Hotel for the purpose of converting it to

12 emergency shelter housing for the homeless.

14 The Quality Inn Hotel is located at 9717 SE Sunnyside Road,

15 Clackamas, Oregon, and is adjacent to the Shopping Center and the

16 property owned by Plaintiff 205 Sunnyside. The relationship between the

Page 3 - COMPLAINT HATHAWAY LARSON LLP

3 of temporary, overnight lodging providing accommodations and other

4 services for travelers and tourists for which a fee is paid.

6 The County, through its Board of Commissioners, on February

8 million for the purpose of converting the Hotel to emergency shelter

9 housing for the homeless.

11 Certain Declaration of Easements, Conditions, Covenants, and

15 This is a declaratory action under ORS 28.020 to determine

16 whether, under applicable law, the County either violates or threatens to

18 to emergency shelter housing for the homeless.

Page 4 - COMPLAINT HATHAWAY LARSON LLP

3 of temporary, overnight lodging providing accommodations and other

4 services for travelers and tourists for which a fee is paid.

6 The County, through its Board of Commissioners, on February

8 million for the purpose of converting the Hotel to emergency shelter

9 housing for the homeless.

11 Certain Declaration of Easements, Conditions, Covenants, and

15 This is a declaratory action under ORS 28.020 to determine

16 whether, under applicable law, the County either violates or threatens to

18 to emergency shelter housing for the homeless.

Page 4 - COMPLAINT HATHAWAY LARSON LLP

2 Plaintiffs also seek supplemental relief under ORS 28.080 to

4 shelter housing for the homeless.

7 Plaintiff 205 Sunnyside is an Oregon Limited Liability

8 Company properly authorized to engage in business in the State of Oregon

9 and is the owner of the Shopping Center.