1030-00003 · Calderwood & Harkness LLP · Correspondence

offer-letter-veldkamp.docx DOCUMENT Real Estate

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CASCADIA STATE INFRASTRUCTURE AUTHORITY 1100 Jefferson Avenue SE, Suite 400 Olympia, WA 98501

Prepared by: CALDERWOOD & HARKNESS LLP 999 Second Avenue, Suite 4200 Seattle, WA 98104 C&H Matter No. 1030-00003 CSIA Capital Project No. CP-2025-NPS-004

April 21, 2025

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND FIRST-CLASS MAIL

Hendrik "Hank" Veldkamp, Managing Member Veldkamp Family Holdings LLC 2240 Meridian Street Bellingham, WA 98225

Re: Good-Faith Offer for Acquisition of Permanent and Temporary Easements — Regional Flood Resilience and Stormwater Management Program, Lower Nooksack Pump Station Network — Whatcom County Parcel Nos. 380219-401200 and 380219-401201; Offer Made Pursuant to RCW 8.25 (Uniform Condemnation Procedures Act)

Dear Mr. Veldkamp:

1. Introduction and Purpose of Letter

The Cascadia State Infrastructure Authority ("CSIA"), a Washington State governmental instrumentality created by Chapter 43.99N RCW, is developing the Regional Flood Resilience and Stormwater Management Program — Lower Nooksack Pump Station Network (the "Project"). CSIA is writing to you in your capacity as Managing Member of Veldkamp Family Holdings LLC ("VFH" or "Grantor"), a Washington limited liability company and the fee owner of certain real property in Whatcom County, Washington, that is needed for the Project.

This letter constitutes CSIA's formal written good-faith offer to acquire certain permanent and temporary easement interests in real property owned by VFH, in compliance with the requirements of RCW 8.25.020 and related provisions of Washington's Uniform Condemnation Procedures Act (the "UCPA"). In accordance with the UCPA, CSIA is required to make a written offer of just compensation to the owner of property interests that are necessary for a public project, based upon an independent appraisal of the fair market value of the interests to be acquired. This letter satisfies that requirement and sets forth the terms of CSIA's offer in detail.

In connection with this offer, CSIA is represented by the law firm of Calderwood & Harkness LLP, 999 Second Avenue, Suite 4200, Seattle, WA 98104. This letter has been prepared by Angela Fontaine, Responsible Partner at Calderwood & Harkness LLP, on behalf of CSIA. The letter is signed by Martin R. Calloway, Executive Director of CSIA, and has been prepared with the review and authorization of CSIA's General Counsel, Priya Shankar-Wells. All statements and representations made herein are made by and on behalf of CSIA in its capacity as the acquiring governmental entity.

CSIA sincerely values its relationship with the agricultural landowners of the Nooksack River corridor and is committed to conducting this acquisition process in a manner that is fair, transparent, and respectful of VFH's rights as a property owner. We encourage VFH and its representatives to carefully review this offer and the enclosed materials and to contact us with any questions or concerns.

2. Project Description

The Project involves the construction, equipping, and commissioning of four pump stations, designated PS-1, PS-2, PS-3, and PS-4, to be located at strategic points along the Lower Nooksack River corridor in Whatcom County, Washington. In addition to the pump station facilities themselves, the Project includes the installation of approximately 6.2 miles of 24-inch and 36-inch high-density polyethylene ("HDPE") force-main pipeline connecting all four pump stations to the existing Nooksack Regional Wastewater Treatment Plant outfall, along with associated electrical infrastructure, supervisory control and data acquisition ("SCADA") systems, access roads, and ancillary improvements.

The total estimated value of the Project is approximately $48,000,000. Funding for the Project is derived from two principal sources:

(a) A Washington State Capital Appropriation under Senate Bill 5140 (2025 Legislative Session) in the amount of $31,200,000, representing approximately 65% of the total Project cost; and

(b) CSIA Series 2025A Revenue Bonds in the amount of $16,800,000, representing approximately 35% of the total Project cost, underwritten by Harborstone Capital Markets LLC.

The purpose of the Project is to significantly enhance regional flood resilience and stormwater management capacity within the Lower Nooksack corridor. The Lower Nooksack River basin has experienced repeated and increasingly severe flooding events in recent years, causing substantial damage to agricultural lands, residential properties, transportation infrastructure, and critical public utilities. The Project is a central component of CSIA's multi-year capital improvement strategy to address these challenges through improved stormwater conveyance and flood management infrastructure.

The Project is being managed by CSIA's Capital Programs Division. Teresa Villanueva serves as the Project Manager, and Connor Oakes serves as the Director of Capital Programs. Both are available to discuss the Project with VFH and its representatives.

The current target schedule for the Project is as follows: CSIA anticipates issuing the Construction Notice to Proceed on or about December 15, 2025, with Project Substantial Completion targeted for June 30, 2027. Acquisition of the necessary easement interests is a prerequisite to the commencement of construction, and CSIA's target date for execution of all required easement agreements is August 15, 2025. CSIA appreciates VFH's cooperation in assisting CSIA in meeting this schedule.

3. Identification of Property Interests to Be Acquired

(a) Subject Parcels

Based upon CSIA's review of Whatcom County Assessor records and title information obtained for the Project, VFH is the fee owner of approximately 187 acres of agricultural land along River Road in Whatcom County, Washington. Of this acreage, the following two parcels are relevant to this offer and are the parcels upon which the proposed easement interests are to be located (collectively, the "Subject Parcels"):

(i) Whatcom County Parcel No. 380219-401200 — The PS-1 site, located at or near the intersection of River Road and Slater Road, Whatcom County, Washington; and

(ii) Whatcom County Parcel No. 380219-401201 — The PS-2 site, located on River Road, approximately 0.6 miles north of Ten Mile Road, Whatcom County, Washington.

Both Subject Parcels are currently used for agricultural purposes. CSIA understands that VFH and its tenants conduct farming operations on the Subject Parcels, and CSIA has taken this use into account in its planning and in the valuation of the easement interests to be acquired.

(b) Permanent Easement Interests

CSIA proposes to acquire the following permanent easement interests in the Subject Parcels:

(i) Pump Station No. 1 (PS-1) Permanent Easement: A permanent easement over, across, and upon approximately 2.3 acres of Parcel No. 380219-401200, for the purpose of constructing, operating, maintaining, repairing, replacing, and improving a pump station facility, including all associated equipment, electrical infrastructure, SCADA systems, fencing, paved access, and ancillary improvements, and for providing vehicular and pedestrian access thereto. The easement area is more particularly described in the legal description and depicted on the easement plat prepared by Ironclad Surveying & Land Services LLC, copies of which are enclosed herewith or will be provided under separate cover.

(ii) Pump Station No. 2 (PS-2) Permanent Easement: A permanent easement over, across, and upon approximately 1.8 acres of Parcel No. 380219-401201, for the same purposes as described in subparagraph (i) above. The easement area is more particularly described in the legal description and depicted on the easement plat prepared by Ironclad Surveying & Land Services LLC, copies of which are enclosed herewith or will be provided under separate cover.

The total area of the proposed permanent easements is approximately 4.1 acres across both Subject Parcels. Legal descriptions and easement plats for both permanent easement areas have been prepared by Ironclad Surveying & Land Services LLC (Karen Whitfield, PLS), located at 4850 Cordata Parkway, Suite 110, Bellingham, WA 98226. Metes-and-bounds descriptions and easement plats for each easement area are enclosed with this letter as part of the draft easement agreement exhibits, or will be provided promptly under separate cover if they are not yet finalized at the time of this mailing.

It is important to note that the proposed permanent easements will encumber only the described easement areas. VFH will retain fee ownership of the Subject Parcels, including the easement areas, and will retain all rights to use the remainder of its property outside the easement areas for agricultural purposes or any other lawful purpose, without restriction. VFH's use of the land within the easement areas will be subject only to the restrictions necessary to protect the integrity and function of the pump station facilities, as more fully set forth in the draft Permanent Easement Agreement enclosed with this letter.

In addition to the permanent easements described above, CSIA proposes to acquire a temporary construction easement over approximately 3.1 acres on the VFH Subject Parcels. The temporary construction easement area is needed for construction staging, material and equipment laydown, equipment storage, temporary construction access, and related construction activities during the construction of PS-1, PS-2, and the associated pipeline segments.

The term of the temporary construction easement will commence upon recording of the temporary easement instrument with the Whatcom County Auditor and will expire upon the earlier of: (i) CSIA's issuance of a written notice of completion of construction activities within the temporary easement area, or (ii) twenty-four (24) months from the date of recording.

Upon expiration or earlier termination of the temporary construction easement, CSIA will restore the temporary easement area to substantially its pre-construction condition, including re-grading, re-seeding, and removal of all construction materials, equipment, and debris. CSIA's restoration obligations are more fully described in the draft Temporary Construction Easement Agreement enclosed with this letter.

4. Statement of Good-Faith Offer and Compensation

(a) Appraised Fair Market Values

In compliance with the requirements of RCW 8.25.020, CSIA has obtained an independent appraisal of the fair market values of the permanent and temporary easement interests proposed to be acquired from VFH. The appraisal was prepared by Jocelyn Trueblood, MAI, of Northwind Valuation Group LLC, 505 Lakeway Drive, Suite 220, Bellingham, WA 98229. Ms. Trueblood is a Member of the Appraisal Institute ("MAI") and a certified general real estate appraiser licensed in the State of Washington.

The appraisal is dated March 14, 2025, and was prepared in conformance with the Uniform Standards of Professional Appraisal Practice ("USPAP") as promulgated by The Appraisal Foundation. In addition, as a matter of CSIA best practice, the appraisal was prepared utilizing the methodologies prescribed by the Uniform Appraisal Standards for Federal Land Acquisitions (commonly referred to as the "Yellow Book"), published by the Interagency Land Acquisition Conference.

The appraised fair market values of the easement interests to be acquired are as follows:

(i) PS-1 Permanent Easement (2.3 acres, Parcel No. 380219-401200): $345,000

(ii) PS-2 Permanent Easement (1.8 acres, Parcel No. 380219-401201): $270,000

(iii) Combined Permanent Easement Value (4.1 acres): $615,000

(iv) Temporary Construction Easement (3.1 acres across VFH Parcels): $62,000

A summary of the appraised values, including the methodology and key assumptions underlying the appraisal, is enclosed with this letter as Enclosure 1. A copy of the full appraisal report prepared by Northwind Valuation Group LLC is available upon request to VFH or its counsel, as required by RCW 8.25.020.

(b) Total Good-Faith Offer

Based upon the independent appraisal described in Subsection 4(a) above, CSIA hereby offers VFH total compensation in the amount of Six Hundred Seventy-Seven Thousand Dollars ($677,000), consisting of the following:

(i) $615,000 for the permanent easements (PS-1 and PS-2 combined); and

(ii) $62,000 for the temporary construction easement.

This offer constitutes CSIA's good-faith estimate of just compensation for the property interests described herein, based upon the Northwind Valuation Group LLC appraisal dated March 14, 2025. The offer is made in compliance with RCW 8.25.020, which requires that the acquiring agency make a written offer to the property owner based upon a qualified appraisal of the fair market value of the interests to be acquired.

Payment of the total offer amount will be made to VFH (or as otherwise directed by VFH) at the time of closing of the easement transactions, by cashier's check or wire transfer, at VFH's election. If there are outstanding liens, mortgages, or other encumbrances affecting the Subject Parcels that must be satisfied or subordinated in connection with the easement conveyances, CSIA will work cooperatively with VFH and the title company to address such matters at closing.

The appraised values reflected in this offer are based upon the fair market value of the easement interests to be acquired, as determined by the independent appraiser in accordance with USPAP and Yellow Book standards. In arriving at the appraised values, the appraiser considered the following factors, among others:

(i) The property's highest and best use as agricultural land, consistent with its current zoning, soil classification, and historical use;

(ii) The nature and extent of the easement rights being acquired, including the permanent encumbrance on the land within the easement areas and the restrictions on VFH's use of the easement areas;

(iii) The impact, if any, of the easement acquisition on the value of the remainder of VFH's property outside the easement areas; and

(iv) Comparable sales and market data for agricultural land and easement transactions in the Whatcom County area.

The offer does not include any separate allowance for relocation assistance, crop damages, or business damages beyond the appraised value of the easement interests themselves. However, if VFH believes that it is entitled to additional compensation for any reason — including, without limitation, crop loss, disruption to agricultural operations, or other damages — VFH is encouraged to present such claims for CSIA's consideration. CSIA is committed to a fair and equitable process and will evaluate any such claims in good faith.

5. CSIA's Condemnation Authority

CSIA is a governmental instrumentality of the State of Washington, created under Chapter 43.99N RCW, and possesses the power of eminent domain for the acquisition of real property interests necessary for its authorized purposes, including the planning, design, construction, operation, and maintenance of regional water, wastewater, and stormwater management infrastructure. CSIA's eminent domain authority is conferred by statute and is subject to the substantive and procedural requirements of Title 8 RCW (Eminent Domain), Chapter 43.99N RCW, and the Uniform Condemnation Procedures Act (RCW 8.25).

It is the strong and unequivocal preference of CSIA to acquire all necessary property interests for the Project through voluntary negotiation and mutual agreement with the affected property owners. CSIA believes that a negotiated transaction is in the best interest of both CSIA and VFH and will yield the most fair and efficient outcome for all parties. CSIA is willing to engage in good-faith negotiations with VFH and its representatives and to consider reasonable modifications to the terms of the proposed easement agreements in order to reach a mutually acceptable resolution.

However, CSIA wishes to advise VFH that, if a negotiated acquisition cannot be achieved within a reasonable time, CSIA has the legal authority to initiate condemnation proceedings under the applicable provisions of Title 8 RCW and Chapter 43.99N RCW to acquire the necessary easement interests. In such proceedings, the question of just compensation would be determined by a court of competent jurisdiction.

This letter is not a notice of condemnation and does not commence any condemnation proceedings. It is intended solely as an offer of amicable acquisition, made in full compliance with the Uniform Condemnation Procedures Act (RCW 8.25). CSIA sincerely hopes that condemnation will not be necessary and that a voluntary agreement can be reached.

6. Terms of Proposed Easement Agreements

If VFH accepts this offer, or if the parties reach agreement on modified terms, CSIA proposes to formalize the acquisition through the execution of the following instruments:

(a) A Permanent Easement Agreement covering both the PS-1 and PS-2 permanent easement areas, to be recorded with the Whatcom County Auditor upon execution and delivery; and

(b) A Temporary Construction Easement Agreement covering the approximately 3.1-acre construction staging and workspace area, also to be recorded with the Whatcom County Auditor upon execution and delivery.

Draft forms of both agreements are enclosed with this letter (Enclosures 2 and 3). CSIA encourages VFH and its counsel to review the draft agreements carefully and to contact Calderwood & Harkness LLP with any questions, comments, or proposed revisions. Key terms of the proposed easement agreements include, but are not limited to, the following:

• Purpose of Easements: The permanent easements are for the purpose of constructing, operating, maintaining, repairing, replacing, and improving pump station facilities and associated infrastructure, and for providing vehicular and pedestrian access thereto. The temporary construction easement is for the purpose of construction staging, laydown, equipment storage, and construction access during the Project construction period.

• Reservation of Grantor's Rights: VFH will retain fee ownership of the Subject Parcels and all rights to use the remainder of its property outside the easement areas for agricultural purposes or any other lawful purpose, without interference from CSIA's operations within the easement areas. VFH's use of the land within the permanent easement areas will be subject only to the restrictions necessary to protect the integrity and function of the pump station facilities.

• Indemnification and Insurance: CSIA will indemnify and hold harmless VFH from and against claims, damages, and liabilities arising out of CSIA's construction, operation, and maintenance activities within the easement areas, subject to the terms and conditions set forth in the agreements. CSIA will maintain appropriate insurance coverage for its activities within the easement areas.

• Restoration Obligations: Upon expiration or termination of the temporary construction easement, CSIA will restore the temporary easement area to substantially its pre-construction condition, including re-grading, re-seeding, and removal of construction materials and debris.

• Governing Law: The easement agreements will be governed by and construed in accordance with the laws of the State of Washington.

• Recording: Both agreements will be recorded with the Whatcom County Auditor at CSIA's expense, and CSIA will provide VFH with conformed copies of the recorded instruments.

The draft easement agreements incorporate, as exhibits, the legal descriptions and easement plats prepared by Ironclad Surveying & Land Services LLC. If VFH or its surveyor identifies any discrepancies in the legal descriptions or plats, CSIA will work with Ironclad Surveying to address such matters promptly.

7. Response Period and Process

VFH is requested to respond to this offer within thirty (30) days of receipt of this letter — that is, on or before the date that is thirty calendar days following the date on which this letter is delivered to VFH (the "Response Deadline"). VFH may respond by accepting the offer, rejecting the offer, or presenting a counteroffer during this period. All responses should be in writing and directed to the contact persons identified in Section 12 of this letter.

CSIA emphasizes that the expiration of the thirty-day response period does not preclude further negotiations. CSIA remains willing to continue discussions with VFH beyond the Response Deadline if VFH is engaged in good-faith negotiations. However, CSIA does request a timely response in order to advance the acquisition process and maintain the Project schedule.

CSIA is willing and available to meet with VFH and its representatives — in person, by telephone, or by video conference — to discuss any questions, concerns, or proposed modifications to the offer or to the terms of the proposed easement agreements. CSIA's objective is to reach a fair and mutually acceptable agreement, and CSIA is prepared to consider reasonable adjustments to the terms of the transaction in order to accomplish that goal.

CSIA acknowledges that VFH is represented by the law firm of Bridger Hollis & Pratt LLP, specifically by Nadia Sorensen, Partner, and Tyler Fong, Associate, located at 300 Prospect Street, Suite 600, Bellingham, WA 98225. CSIA, through its counsel Calderwood & Harkness LLP, will communicate with Bridger Hollis & Pratt LLP as appropriate and as directed by VFH. If VFH prefers that all further communications regarding this offer and the proposed acquisition be directed exclusively through Bridger Hollis & Pratt LLP, CSIA will respect that preference upon receipt of written notice from VFH or its counsel.

In addition, VFH has the right to obtain its own independent appraisal of the property interests proposed to be acquired, at VFH's expense. CSIA will consider any such appraisal submitted by VFH as part of the negotiation process, although CSIA is not obligated to accept VFH's appraised values. If there is a significant difference between the parties' respective appraisals, CSIA is open to discussing the basis for such differences and exploring whether a resolution can be achieved.

8. Right to Accompany Appraiser

Consistent with RCW 8.25.020, VFH is hereby advised that it had the right to accompany CSIA's appraiser during the inspection of the Subject Parcels conducted in connection with the appraisal. CSIA notes that Northwind Valuation Group LLC conducted its property inspections of the Subject Parcels in connection with the preparation of the March 14, 2025 appraisal. If VFH was not afforded the opportunity to accompany the appraiser during such inspections, or if VFH has any concerns regarding the inspection process, VFH is encouraged to contact CSIA or its counsel to discuss the matter. CSIA is committed to ensuring that VFH's rights under the UCPA are fully respected.

9. Title Information

In preparation for the proposed acquisition, CSIA has obtained preliminary title commitments for the Subject Parcels from Cascade Basin Title Company (Diane Ashworth, Title Officer), located at 119 East Magnolia Street, Bellingham, WA 98225. The title commitments identify the current ownership of the Subject Parcels, together with any liens, encumbrances, easements, restrictions, and other exceptions of record that may affect title to the easement areas.

At closing, CSIA will obtain a title insurance policy insuring CSIA's easement interests in the Subject Parcels. Any lien encumbrances, mortgages, deeds of trust, or other title exceptions affecting the easement areas that would impair CSIA's easement interests will need to be addressed, satisfied, subordinated, or otherwise resolved prior to or at closing. CSIA will work cooperatively with VFH and the title company to identify and resolve any such issues in advance of closing.

VFH is responsible for ensuring that all members of VFH (and any other persons or entities with an ownership or security interest in the Subject Parcels) execute, join in, or consent to the easement instruments as required to convey clear and insurable easement interests to CSIA. If VFH's operating agreement or any applicable loan or financing documents require the consent of any third party to the grant of easements, VFH should promptly identify such requirements to CSIA so that they can be addressed in a timely manner.

10. Environmental and Project Context

The pump station sites are located along the Lower Nooksack River corridor in Whatcom County, Washington, an area that is subject to periodic flooding and is of significant environmental sensitivity. Both the PS-1 and PS-2 sites are located within FEMA Flood Zone AE (the 100-year floodplain), as shown on the current Flood Insurance Rate Maps for Whatcom County. The pump stations will be designed and constructed with finished floor elevations at 65.0 feet NAVD88, providing approximately 2.5 feet of freeboard above the Base Flood Elevation ("BFE") of 62.5 feet NAVD88. This design standard ensures that the pump station facilities will remain operational during flood events and will comply with all applicable floodplain management regulations.

CSIA has retained Pinnacle Geotechnical & Environmental Consulting Inc. (Dr. Raymond Ostrowski, PE) to perform environmental due diligence for the Project. As part of this effort, Pinnacle completed Phase I Environmental Site Assessments ("ESAs") for each of the Subject Parcels, dated January 22, 2025. The Phase I ESAs were conducted in accordance with ASTM Standard E1527-21 and did not identify any recognized environmental conditions ("RECs") on any of the Subject Parcels. In addition, Pinnacle has completed wetland delineation studies for the proposed easement areas, and the results of those studies have been submitted to the U.S. Army Corps of Engineers and the Washington Department of Ecology for review and verification.

CSIA is currently pursuing all necessary federal, state, and local permits and approvals for the Project, including but not limited to Section 404 permits (Clean Water Act), Shoreline Substantial Development Permits, SEPA determinations, and local grading and building permits. The acquisition of the easement interests from VFH is a prerequisite to the commencement of construction on the PS-1 and PS-2 sites. CSIA's target date for execution of all required easement agreements is August 15, 2025, and CSIA's target date for issuance of the Construction Notice to Proceed is December 15, 2025.

11. Enclosures

The following documents are enclosed with this letter for VFH's review:

1. Summary of Appraised Values — Prepared from the Northwind Valuation Group LLC appraisal dated March 14, 2025, including a tabular summary of the appraised fair market values for each easement interest and notes on the valuation methodology.

2. Draft Permanent Easement Agreement (PS-1 and PS-2) — Including exhibits consisting of legal descriptions and easement plats for both permanent easement areas, prepared by Ironclad Surveying & Land Services LLC.

3. Draft Temporary Construction Easement Agreement — Including exhibits consisting of the legal description and easement plat for the temporary construction easement area, prepared by Ironclad Surveying & Land Services LLC.

4. Project Location Map / Site Plan — Showing the locations of the PS-1 and PS-2 easement areas on the VFH Subject Parcels, the proposed pipeline alignments, and the temporary construction easement area.

5. Copy of Relevant Provisions of RCW 8.25 — Selected provisions of the Uniform Condemnation Procedures Act for VFH's reference.

If any of the above enclosures are not included with the copy of this letter received by VFH, VFH should contact Calderwood & Harkness LLP or CSIA promptly, and the missing enclosures will be provided without delay.

12. Contact Information

All communications regarding this offer, including questions, comments, counteroffers, and requests for additional information, should be directed to:

Angela Fontaine Responsible Partner Calderwood & Harkness LLP 999 Second Avenue, Suite 4200 Seattle, WA 98104 Telephone: (206) 555-1740

Email: afontaine@calderwoodharkness.com

Teresa Villanueva Project Manager Cascadia State Infrastructure Authority 1100 Jefferson Avenue SE, Suite 400 Olympia, WA 98501 Telephone: (360) 555-0482

Email: tvillanueva@csia.wa.gov

If VFH prefers that all communications regarding this offer and the proposed acquisition be directed exclusively through its counsel, Bridger Hollis & Pratt LLP (Nadia Sorensen, Partner, and Tyler Fong, Associate), 300 Prospect Street, Suite 600, Bellingham, WA 98225, CSIA will respect that preference upon receipt of written notice from VFH or its counsel. Until such notice is received, CSIA may direct communications to VFH directly, with copies to Bridger Hollis & Pratt LLP as a courtesy.

13. Closing

CSIA values its relationship with the landowners of Whatcom County and is deeply committed to conducting a fair, respectful, and transparent acquisition process. CSIA recognizes that VFH's land is an important asset and that the grant of easements for public infrastructure is a significant decision. CSIA is dedicated to minimizing the impact of the Project on VFH's property and agricultural operations to the greatest extent practicable.

CSIA looks forward to working cooperatively with VFH and its counsel at Bridger Hollis & Pratt LLP to reach a mutually acceptable agreement for the acquisition of the easement interests described in this letter. CSIA is available to meet at VFH's convenience to discuss any aspect of this offer, the proposed easement terms, or the Project itself.

As stated above, this letter constitutes CSIA's good-faith offer of just compensation under RCW 8.25.020 of the Uniform Condemnation Procedures Act. CSIA strongly prefers to achieve a voluntary, negotiated acquisition and sincerely hopes that the exercise of eminent domain authority will not be necessary. We are confident that, through open communication and good-faith negotiation, a fair resolution can be reached.

We look forward to hearing from you or your counsel at your earliest convenience.

Sincerely,

CASCADIA STATE INFRASTRUCTURE AUTHORITY

By: ________

Name: Martin R. Calloway

Title: Executive Director

Date: ________

Prepared by:

CALDERWOOD & HARKNESS LLP

Angela Fontaine, Responsible Partner 999 Second Avenue, Suite 4200 Seattle, WA 98104 C&H Matter No. 1030-00003

cc (via first-class mail and electronic mail):

Priya Shankar-Wells, General Counsel, Cascadia State Infrastructure Authority

Connor Oakes, Director of Capital Programs, Cascadia State Infrastructure Authority

Teresa Villanueva, Project Manager, Cascadia State Infrastructure Authority

Nadia Sorensen, Partner, Bridger Hollis & Pratt LLP, 300 Prospect Street, Suite 600, Bellingham, WA 98225 (Counsel for Veldkamp Family Holdings LLC)

Tyler Fong, Associate, Bridger Hollis & Pratt LLP, 300 Prospect Street, Suite 600, Bellingham, WA 98225

Angela Fontaine, Calderwood & Harkness LLP

Douglas Fairchild, Calderwood & Harkness LLP

ENCLOSURE 1

SUMMARY OF APPRAISED VALUES

Prepared from the Appraisal Report of Northwind Valuation Group LLC

Appraiser: Jocelyn Trueblood, MAI Northwind Valuation Group LLC 505 Lakeway Drive, Suite 220 Bellingham, WA 98229

Appraisal Date: March 14, 2025 Appraisal Standards: Uniform Standards of Professional Appraisal Practice (USPAP); Uniform Appraisal Standards for Federal Land Acquisitions ("Yellow Book") Methodology

Property Owner: Veldkamp Family Holdings LLC Project: Regional Flood Resilience and Stormwater Management Program — Lower Nooksack Pump Station Network CSIA Capital Project No.: CP-2025-NPS-004

Table of Appraised Values

Notes on Valuation

1. Highest and Best Use. The appraised values are based upon the highest and best use of the Subject Parcels as agricultural land, consistent with the current zoning classification, soil characteristics (NRCS Class I and Class II soils), agricultural productivity data, and the historical and ongoing use of the parcels for crop cultivation and related farming operations.

2. Permanent Easement Valuation. The permanent easement values reflect the diminution in the fee value of each Subject Parcel attributable to the permanent encumbrance imposed by the easement, including the loss of the landowner's right to use the easement area for agricultural purposes and the impact of the pump station facilities on the remaining property. The appraiser employed the "before and after" methodology to measure the difference in value of each parcel as a whole before the proposed acquisition and the value of each parcel as a whole after the proposed acquisition, with the difference representing the fair market value of the easement interest acquired.

3. Temporary Easement Valuation. The temporary construction easement value reflects the estimated rental value of the approximately 3.1-acre temporary easement area over the anticipated construction period of up to twenty-four (24) months. The appraiser considered market rental rates for comparable agricultural land in the Whatcom County area, adjusted for the nature and extent of the temporary use and the anticipated impact on agricultural operations during the construction period.

4. No Recognized Environmental Conditions. The appraiser relied upon the Phase I Environmental Site Assessment prepared by Pinnacle Geotechnical & Environmental Consulting Inc. (dated January 22, 2025), which identified no recognized environmental conditions on the Subject Parcels.

5. Availability of Full Appraisal Report. The full appraisal report prepared by Northwind Valuation Group LLC, including all supporting data, comparable sales analysis, and the appraiser's certifications, is available upon request to VFH or its counsel, in accordance with RCW 8.25.020.

This summary is provided for informational purposes as part of CSIA's good-faith offer under RCW 8.25.020. It does not constitute the full appraisal report. VFH is entitled to receive a copy of the full appraisal report upon request.

Easement Interest	Parcel No.	Acreage	Appraised Fair Market Value
PS-1 Permanent Easement	380219-401200	2.3 acres	$345,000
PS-2 Permanent Easement	380219-401201	1.8 acres	$270,000
Subtotal — Permanent Easements	—	4.1 acres	$615,000
Temporary Construction Easement	Across VFH Parcels	3.1 acres	$62,000
Total Offer	—	7.2 acres	$677,000

CASCADIA STATE INFRASTRUCTURE AUTHORITY 1100 Jefferson Avenue SE, Suite 400 Olympia, WA 98501
Prepared by: CALDERWOOD & HARKNESS LLP 999 Second Avenue, Suite 4200 Seattle, WA 98104 C&H Matter No. 1030-00003 CSIA Capital Project No. CP-2025-NPS-004
April 21, 2025
VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND FIRST-CLASS MAIL
Hendrik "Hank" Veldkamp, Managing Member Veldkamp Family Holdings LLC 2240 Meridian Street Bellingham, WA 98225
Re: Good-Faith Offer for Acquisition of Permanent and Temporary Easements — Regional Flood Resilience and Stormwater Management Program, Lower Nooksack Pump Station Network — Whatcom County Parcel Nos. 380219-401200 and 380219-401201; Offer Made Pursuant to RCW 8.25 (Uniform Condemnation Procedures Act)
Dear Mr. Veldkamp:
1. Introduction and Purpose of Letter
The Cascadia State Infrastructure Authority ("CSIA"), a Washington State governmental instrumentality created by Chapter 43.99N RCW, is developing the Regional Flood Resilience and Stormwater Management Program — Lower Nooksack Pump Station Network (the "Project"). CSIA is writing to you in your capacity as Managing Member of Veldkamp Family Holdings LLC ("VFH" or "Grantor"), a Washington limited liability company and the fee owner of certain real property in Whatcom County, Washington, that is needed for the Project.
This letter constitutes CSIA's formal written good-faith offer to acquire certain permanent and temporary easement interests in real property owned by VFH, in compliance with the requirements of RCW 8.25.020 and related provisions of Washington's Uniform Condemnation Procedures Act (the "UCPA"). In accordance with the UCPA, CSIA is required to make a written offer of just compensation to the owner of property interests that are necessary for a public project, based upon an independent appraisal of the fair market value of the interests to be acquired. This letter satisfies that requirement and sets forth the terms of CSIA's offer in detail.
In connection with this offer, CSIA is represented by the law firm of Calderwood & Harkness LLP, 999 Second Avenue, Suite 4200, Seattle, WA 98104. This letter has been prepared by Angela Fontaine, Responsible Partner at Calderwood & Harkness LLP, on behalf of CSIA. The letter is signed by Martin R. Calloway, Executive Director of CSIA, and has been prepared with the review and authorization of CSIA's General Counsel, Priya Shankar-Wells. All statements and representations made herein are made by and on behalf of CSIA in its capacity as the acquiring governmental entity.
CSIA sincerely values its relationship with the agricultural landowners of the Nooksack River corridor and is committed to conducting this acquisition process in a manner that is fair, transparent, and respectful of VFH's rights as a property owner. We encourage VFH and its representatives to carefully review this offer and the enclosed materials and to contact us with any questions or concerns.
2. Project Description
The Project involves the construction, equipping, and commissioning of four pump stations, designated PS-1, PS-2, PS-3, and PS-4, to be located at strategic points along the Lower Nooksack River corridor in Whatcom County, Washington. In addition to the pump station facilities themselves, the Project includes the installation of approximately 6.2 miles of 24-inch and 36-inch high-density polyethylene ("HDPE") force-main pipeline connecting all four pump stations to the existing Nooksack Regional Wastewater Treatment Plant outfall, along with associated electrical infrastructure, supervisory control and data acquisition ("SCADA") systems, access roads, and ancillary improvements.
The total estimated value of the Project is approximately $48,000,000. Funding for the Project is derived from two principal sources:
(a) A Washington State Capital Appropriation under Senate Bill 5140 (2025 Legislative Session) in the amount of $31,200,000, representing approximately 65% of the total Project cost; and
(b) CSIA Series 2025A Revenue Bonds in the amount of $16,800,000, representing approximately 35% of the total Project cost, underwritten by Harborstone Capital Markets LLC.
The purpose of the Project is to significantly enhance regional flood resilience and stormwater management capacity within the Lower Nooksack corridor. The Lower Nooksack River basin has experienced repeated and increasingly severe flooding events in recent years, causing substantial damage to agricultural lands, residential properties, transportation infrastructure, and critical public utilities. The Project is a central component of CSIA's multi-year capital improvement strategy to address these challenges through improved stormwater conveyance and flood management infrastructure.
The Project is being managed by CSIA's Capital Programs Division. Teresa Villanueva serves as the Project Manager, and Connor Oakes serves as the Director of Capital Programs. Both are available to discuss the Project with VFH and its representatives.
The current target schedule for the Project is as follows: CSIA anticipates issuing the Construction Notice to Proceed on or about December 15, 2025, with Project Substantial Completion targeted for June 30, 2027. Acquisition of the necessary easement interests is a prerequisite to the commencement of construction, and CSIA's target date for execution of all required easement agreements is August 15, 2025. CSIA appreciates VFH's cooperation in assisting CSIA in meeting this schedule.
3. Identification of Property Interests to Be Acquired
(a) Subject Parcels
Based upon CSIA's review of Whatcom County Assessor records and title information obtained for the Project, VFH is the fee owner of approximately 187 acres of agricultural land along River Road in Whatcom County, Washington. Of this acreage, the following two parcels are relevant to this offer and are the parcels upon which the proposed easement interests are to be located (collectively, the "Subject Parcels"):
(i) Whatcom County Parcel No. 380219-401200 — The PS-1 site, located at or near the intersection of River Road and Slater Road, Whatcom County, Washington; and
(ii) Whatcom County Parcel No. 380219-401201 — The PS-2 site, located on River Road, approximately 0.6 miles north of Ten Mile Road, Whatcom County, Washington.
Both Subject Parcels are currently used for agricultural purposes. CSIA understands that VFH and its tenants conduct farming operations on the Subject Parcels, and CSIA has taken this use into account in its planning and in the valuation of the easement interests to be acquired.
(b) Permanent Easement Interests
CSIA proposes to acquire the following permanent easement interests in the Subject Parcels:
(i) Pump Station No. 1 (PS-1) Permanent Easement: A permanent easement over, across, and upon approximately 2.3 acres of Parcel No. 380219-401200, for the purpose of constructing, operating, maintaining, repairing, replacing, and improving a pump station facility, including all associated equipment, electrical infrastructure, SCADA systems, fencing, paved access, and ancillary improvements, and for providing vehicular and pedestrian access thereto. The easement area is more particularly described in the legal description and depicted on the easement plat prepared by Ironclad Surveying & Land Services LLC, copies of which are enclosed herewith or will be provided under separate cover.
(ii) Pump Station No. 2 (PS-2) Permanent Easement: A permanent easement over, across, and upon approximately 1.8 acres of Parcel No. 380219-401201, for the same purposes as described in subparagraph (i) above. The easement area is more particularly described in the legal description and depicted on the easement plat prepared by Ironclad Surveying & Land Services LLC, copies of which are enclosed herewith or will be provided under separate cover.
The total area of the proposed permanent easements is approximately 4.1 acres across both Subject Parcels. Legal descriptions and easement plats for both permanent easement areas have been prepared by Ironclad Surveying & Land Services LLC (Karen Whitfield, PLS), located at 4850 Cordata Parkway, Suite 110, Bellingham, WA 98226. Metes-and-bounds descriptions and easement plats for each easement area are enclosed with this letter as part of the draft easement agreement exhibits, or will be provided promptly under separate cover if they are not yet finalized at the time of this mailing.
It is important to note that the proposed permanent easements will encumber only the described easement areas. VFH will retain fee ownership of the Subject Parcels, including the easement areas, and will retain all rights to use the remainder of its property outside the easement areas for agricultural purposes or any other lawful purpose, without restriction. VFH's use of the land within the easement areas will be subject only to the restrictions necessary to protect the integrity and function of the pump station facilities, as more fully set forth in the draft Permanent Easement Agreement enclosed with this letter.
(c) Temporary Construction Easement Interests
In addition to the permanent easements described above, CSIA proposes to acquire a temporary construction easement over approximately 3.1 acres on the VFH Subject Parcels. The temporary construction easement area is needed for construction staging, material and equipment laydown, equipment storage, temporary construction access, and related construction activities during the construction of PS-1, PS-2, and the associated pipeline segments.
The term of the temporary construction easement will commence upon recording of the temporary easement instrument with the Whatcom County Auditor and will expire upon the earlier of: (i) CSIA's issuance of a written notice of completion of construction activities within the temporary easement area, or (ii) twenty-four (24) months from the date of recording.
Upon expiration or earlier termination of the temporary construction easement, CSIA will restore the temporary easement area to substantially its pre-construction condition, including re-grading, re-seeding, and removal of all construction materials, equipment, and debris. CSIA's restoration obligations are more fully described in the draft Temporary Construction Easement Agreement enclosed with this letter.
4. Statement of Good-Faith Offer and Compensation
(a) Appraised Fair Market Values
In compliance with the requirements of RCW 8.25.020, CSIA has obtained an independent appraisal of the fair market values of the permanent and temporary easement interests proposed to be acquired from VFH. The appraisal was prepared by Jocelyn Trueblood, MAI, of Northwind Valuation Group LLC, 505 Lakeway Drive, Suite 220, Bellingham, WA 98229. Ms. Trueblood is a Member of the Appraisal Institute ("MAI") and a certified general real estate appraiser licensed in the State of Washington.
The appraisal is dated March 14, 2025, and was prepared in conformance with the Uniform Standards of Professional Appraisal Practice ("USPAP") as promulgated by The Appraisal Foundation. In addition, as a matter of CSIA best practice, the appraisal was prepared utilizing the methodologies prescribed by the Uniform Appraisal Standards for Federal Land Acquisitions (commonly referred to as the "Yellow Book"), published by the Interagency Land Acquisition Conference.
The appraised fair market values of the easement interests to be acquired are as follows:
(i) PS-1 Permanent Easement (2.3 acres, Parcel No. 380219-401200): $345,000
(ii) PS-2 Permanent Easement (1.8 acres, Parcel No. 380219-401201): $270,000
(iii) Combined Permanent Easement Value (4.1 acres): $615,000
(iv) Temporary Construction Easement (3.1 acres across VFH Parcels): $62,000
A summary of the appraised values, including the methodology and key assumptions underlying the appraisal, is enclosed with this letter as Enclosure 1. A copy of the full appraisal report prepared by Northwind Valuation Group LLC is available upon request to VFH or its counsel, as required by RCW 8.25.020.
(b) Total Good-Faith Offer
Based upon the independent appraisal described in Subsection 4(a) above, CSIA hereby offers VFH total compensation in the amount of Six Hundred Seventy-Seven Thousand Dollars ($677,000), consisting of the following:
(i) $615,000 for the permanent easements (PS-1 and PS-2 combined); and
(ii) $62,000 for the temporary construction easement.
This offer constitutes CSIA's good-faith estimate of just compensation for the property interests described herein, based upon the Northwind Valuation Group LLC appraisal dated March 14, 2025. The offer is made in compliance with RCW 8.25.020, which requires that the acquiring agency make a written offer to the property owner based upon a qualified appraisal of the fair market value of the interests to be acquired.
Payment of the total offer amount will be made to VFH (or as otherwise directed by VFH) at the time of closing of the easement transactions, by cashier's check or wire transfer, at VFH's election. If there are outstanding liens, mortgages, or other encumbrances affecting the Subject Parcels that must be satisfied or subordinated in connection with the easement conveyances, CSIA will work cooperatively with VFH and the title company to address such matters at closing.
(c) Basis of Valuation
The appraised values reflected in this offer are based upon the fair market value of the easement interests to be acquired, as determined by the independent appraiser in accordance with USPAP and Yellow Book standards. In arriving at the appraised values, the appraiser considered the following factors, among others:
(i) The property's highest and best use as agricultural land, consistent with its current zoning, soil classification, and historical use;
(ii) The nature and extent of the easement rights being acquired, including the permanent encumbrance on the land within the easement areas and the restrictions on VFH's use of the easement areas;
(iii) The impact, if any, of the easement acquisition on the value of the remainder of VFH's property outside the easement areas; and
(iv) Comparable sales and market data for agricultural land and easement transactions in the Whatcom County area.
The offer does not include any separate allowance for relocation assistance, crop damages, or business damages beyond the appraised value of the easement interests themselves. However, if VFH believes that it is entitled to additional compensation for any reason — including, without limitation, crop loss, disruption to agricultural operations, or other damages — VFH is encouraged to present such claims for CSIA's consideration. CSIA is committed to a fair and equitable process and will evaluate any such claims in good faith.
5. CSIA's Condemnation Authority
CSIA is a governmental instrumentality of the State of Washington, created under Chapter 43.99N RCW, and possesses the power of eminent domain for the acquisition of real property interests necessary for its authorized purposes, including the planning, design, construction, operation, and maintenance of regional water, wastewater, and stormwater management infrastructure. CSIA's eminent domain authority is conferred by statute and is subject to the substantive and procedural requirements of Title 8 RCW (Eminent Domain), Chapter 43.99N RCW, and the Uniform Condemnation Procedures Act (RCW 8.25).
It is the strong and unequivocal preference of CSIA to acquire all necessary property interests for the Project through voluntary negotiation and mutual agreement with the affected property owners. CSIA believes that a negotiated transaction is in the best interest of both CSIA and VFH and will yield the most fair and efficient outcome for all parties. CSIA is willing to engage in good-faith negotiations with VFH and its representatives and to consider reasonable modifications to the terms of the proposed easement agreements in order to reach a mutually acceptable resolution.
However, CSIA wishes to advise VFH that, if a negotiated acquisition cannot be achieved within a reasonable time, CSIA has the legal authority to initiate condemnation proceedings under the applicable provisions of Title 8 RCW and Chapter 43.99N RCW to acquire the necessary easement interests. In such proceedings, the question of just compensation would be determined by a court of competent jurisdiction.
This letter is not a notice of condemnation and does not commence any condemnation proceedings. It is intended solely as an offer of amicable acquisition, made in full compliance with the Uniform Condemnation Procedures Act (RCW 8.25). CSIA sincerely hopes that condemnation will not be necessary and that a voluntary agreement can be reached.
6. Terms of Proposed Easement Agreements
If VFH accepts this offer, or if the parties reach agreement on modified terms, CSIA proposes to formalize the acquisition through the execution of the following instruments:
(a) A Permanent Easement Agreement covering both the PS-1 and PS-2 permanent easement areas, to be recorded with the Whatcom County Auditor upon execution and delivery; and
(b) A Temporary Construction Easement Agreement covering the approximately 3.1-acre construction staging and workspace area, also to be recorded with the Whatcom County Auditor upon execution and delivery.
Draft forms of both agreements are enclosed with this letter (Enclosures 2 and 3). CSIA encourages VFH and its counsel to review the draft agreements carefully and to contact Calderwood & Harkness LLP with any questions, comments, or proposed revisions. Key terms of the proposed easement agreements include, but are not limited to, the following:
•  Purpose of Easements: The permanent easements are for the purpose of constructing, operating, maintaining, repairing, replacing, and improving pump station facilities and associated infrastructure, and for providing vehicular and pedestrian access thereto. The temporary construction easement is for the purpose of construction staging, laydown, equipment storage, and construction access during the Project construction period.
•  Reservation of Grantor's Rights: VFH will retain fee ownership of the Subject Parcels and all rights to use the remainder of its property outside the easement areas for agricultural purposes or any other lawful purpose, without interference from CSIA's operations within the easement areas. VFH's use of the land within the permanent easement areas will be subject only to the restrictions necessary to protect the integrity and function of the pump station facilities.
•  Indemnification and Insurance: CSIA will indemnify and hold harmless VFH from and against claims, damages, and liabilities arising out of CSIA's construction, operation, and maintenance activities within the easement areas, subject to the terms and conditions set forth in the agreements. CSIA will maintain appropriate insurance coverage for its activities within the easement areas.
•  Restoration Obligations: Upon expiration or termination of the temporary construction easement, CSIA will restore the temporary easement area to substantially its pre-construction condition, including re-grading, re-seeding, and removal of construction materials and debris.
•  Governing Law: The easement agreements will be governed by and construed in accordance with the laws of the State of Washington.
•  Recording: Both agreements will be recorded with the Whatcom County Auditor at CSIA's expense, and CSIA will provide VFH with conformed copies of the recorded instruments.
The draft easement agreements incorporate, as exhibits, the legal descriptions and easement plats prepared by Ironclad Surveying & Land Services LLC. If VFH or its surveyor identifies any discrepancies in the legal descriptions or plats, CSIA will work with Ironclad Surveying to address such matters promptly.
7. Response Period and Process
VFH is requested to respond to this offer within thirty (30) days of receipt of this letter — that is, on or before the date that is thirty calendar days following the date on which this letter is delivered to VFH (the "Response Deadline"). VFH may respond by accepting the offer, rejecting the offer, or presenting a counteroffer during this period. All responses should be in writing and directed to the contact persons identified in Section 12 of this letter.
CSIA emphasizes that the expiration of the thirty-day response period does not preclude further negotiations. CSIA remains willing to continue discussions with VFH beyond the Response Deadline if VFH is engaged in good-faith negotiations. However, CSIA does request a timely response in order to advance the acquisition process and maintain the Project schedule.
CSIA is willing and available to meet with VFH and its representatives — in person, by telephone, or by video conference — to discuss any questions, concerns, or proposed modifications to the offer or to the terms of the proposed easement agreements. CSIA's objective is to reach a fair and mutually acceptable agreement, and CSIA is prepared to consider reasonable adjustments to the terms of the transaction in order to accomplish that goal.
CSIA acknowledges that VFH is represented by the law firm of Bridger Hollis & Pratt LLP, specifically by Nadia Sorensen, Partner, and Tyler Fong, Associate, located at 300 Prospect Street, Suite 600, Bellingham, WA 98225. CSIA, through its counsel Calderwood & Harkness LLP, will communicate with Bridger Hollis & Pratt LLP as appropriate and as directed by VFH. If VFH prefers that all further communications regarding this offer and the proposed acquisition be directed exclusively through Bridger Hollis & Pratt LLP, CSIA will respect that preference upon receipt of written notice from VFH or its counsel.
In addition, VFH has the right to obtain its own independent appraisal of the property interests proposed to be acquired, at VFH's expense. CSIA will consider any such appraisal submitted by VFH as part of the negotiation process, although CSIA is not obligated to accept VFH's appraised values. If there is a significant difference between the parties' respective appraisals, CSIA is open to discussing the basis for such differences and exploring whether a resolution can be achieved.
8. Right to Accompany Appraiser
Consistent with RCW 8.25.020, VFH is hereby advised that it had the right to accompany CSIA's appraiser during the inspection of the Subject Parcels conducted in connection with the appraisal. CSIA notes that Northwind Valuation Group LLC conducted its property inspections of the Subject Parcels in connection with the preparation of the March 14, 2025 appraisal. If VFH was not afforded the opportunity to accompany the appraiser during such inspections, or if VFH has any concerns regarding the inspection process, VFH is encouraged to contact CSIA or its counsel to discuss the matter. CSIA is committed to ensuring that VFH's rights under the UCPA are fully respected.
9. Title Information
In preparation for the proposed acquisition, CSIA has obtained preliminary title commitments for the Subject Parcels from Cascade Basin Title Company (Diane Ashworth, Title Officer), located at 119 East Magnolia Street, Bellingham, WA 98225. The title commitments identify the current ownership of the Subject Parcels, together with any liens, encumbrances, easements, restrictions, and other exceptions of record that may affect title to the easement areas.
At closing, CSIA will obtain a title insurance policy insuring CSIA's easement interests in the Subject Parcels. Any lien encumbrances, mortgages, deeds of trust, or other title exceptions affecting the easement areas that would impair CSIA's easement interests will need to be addressed, satisfied, subordinated, or otherwise resolved prior to or at closing. CSIA will work cooperatively with VFH and the title company to identify and resolve any such issues in advance of closing.
VFH is responsible for ensuring that all members of VFH (and any other persons or entities with an ownership or security interest in the Subject Parcels) execute, join in, or consent to the easement instruments as required to convey clear and insurable easement interests to CSIA. If VFH's operating agreement or any applicable loan or financing documents require the consent of any third party to the grant of easements, VFH should promptly identify such requirements to CSIA so that they can be addressed in a timely manner.
10. Environmental and Project Context
The pump station sites are located along the Lower Nooksack River corridor in Whatcom County, Washington, an area that is subject to periodic flooding and is of significant environmental sensitivity. Both the PS-1 and PS-2 sites are located within FEMA Flood Zone AE (the 100-year floodplain), as shown on the current Flood Insurance Rate Maps for Whatcom County. The pump stations will be designed and constructed with finished floor elevations at 65.0 feet NAVD88, providing approximately 2.5 feet of freeboard above the Base Flood Elevation ("BFE") of 62.5 feet NAVD88. This design standard ensures that the pump station facilities will remain operational during flood events and will comply with all applicable floodplain management regulations.
CSIA has retained Pinnacle Geotechnical & Environmental Consulting Inc. (Dr. Raymond Ostrowski, PE) to perform environmental due diligence for the Project. As part of this effort, Pinnacle completed Phase I Environmental Site Assessments ("ESAs") for each of the Subject Parcels, dated January 22, 2025. The Phase I ESAs were conducted in accordance with ASTM Standard E1527-21 and did not identify any recognized environmental conditions ("RECs") on any of the Subject Parcels. In addition, Pinnacle has completed wetland delineation studies for the proposed easement areas, and the results of those studies have been submitted to the U.S. Army Corps of Engineers and the Washington Department of Ecology for review and verification.
CSIA is currently pursuing all necessary federal, state, and local permits and approvals for the Project, including but not limited to Section 404 permits (Clean Water Act), Shoreline Substantial Development Permits, SEPA determinations, and local grading and building permits. The acquisition of the easement interests from VFH is a prerequisite to the commencement of construction on the PS-1 and PS-2 sites. CSIA's target date for execution of all required easement agreements is August 15, 2025, and CSIA's target date for issuance of the Construction Notice to Proceed is December 15, 2025.
11. Enclosures
The following documents are enclosed with this letter for VFH's review:
1.  Summary of Appraised Values — Prepared from the Northwind Valuation Group LLC appraisal dated March 14, 2025, including a tabular summary of the appraised fair market values for each easement interest and notes on the valuation methodology.
2.  Draft Permanent Easement Agreement (PS-1 and PS-2) — Including exhibits consisting of legal descriptions and easement plats for both permanent easement areas, prepared by Ironclad Surveying & Land Services LLC.
3.  Draft Temporary Construction Easement Agreement — Including exhibits consisting of the legal description and easement plat for the temporary construction easement area, prepared by Ironclad Surveying & Land Services LLC.
4.  Project Location Map / Site Plan — Showing the locations of the PS-1 and PS-2 easement areas on the VFH Subject Parcels, the proposed pipeline alignments, and the temporary construction easement area.
5.  Copy of Relevant Provisions of RCW 8.25 — Selected provisions of the Uniform Condemnation Procedures Act for VFH's reference.
If any of the above enclosures are not included with the copy of this letter received by VFH, VFH should contact Calderwood & Harkness LLP or CSIA promptly, and the missing enclosures will be provided without delay.
12. Contact Information
All communications regarding this offer, including questions, comments, counteroffers, and requests for additional information, should be directed to:
Angela Fontaine Responsible Partner Calderwood & Harkness LLP 999 Second Avenue, Suite 4200 Seattle, WA 98104 Telephone: (206) 555-1740
Email: afontaine@calderwoodharkness.com
Teresa Villanueva Project Manager Cascadia State Infrastructure Authority 1100 Jefferson Avenue SE, Suite 400 Olympia, WA 98501 Telephone: (360) 555-0482
Email: tvillanueva@csia.wa.gov
If VFH prefers that all communications regarding this offer and the proposed acquisition be directed exclusively through its counsel, Bridger Hollis & Pratt LLP (Nadia Sorensen, Partner, and Tyler Fong, Associate), 300 Prospect Street, Suite 600, Bellingham, WA 98225, CSIA will respect that preference upon receipt of written notice from VFH or its counsel. Until such notice is received, CSIA may direct communications to VFH directly, with copies to Bridger Hollis & Pratt LLP as a courtesy.
13. Closing
CSIA values its relationship with the landowners of Whatcom County and is deeply committed to conducting a fair, respectful, and transparent acquisition process. CSIA recognizes that VFH's land is an important asset and that the grant of easements for public infrastructure is a significant decision. CSIA is dedicated to minimizing the impact of the Project on VFH's property and agricultural operations to the greatest extent practicable.
CSIA looks forward to working cooperatively with VFH and its counsel at Bridger Hollis & Pratt LLP to reach a mutually acceptable agreement for the acquisition of the easement interests described in this letter. CSIA is available to meet at VFH's convenience to discuss any aspect of this offer, the proposed easement terms, or the Project itself.
As stated above, this letter constitutes CSIA's good-faith offer of just compensation under RCW 8.25.020 of the Uniform Condemnation Procedures Act. CSIA strongly prefers to achieve a voluntary, negotiated acquisition and sincerely hopes that the exercise of eminent domain authority will not be necessary. We are confident that, through open communication and good-faith negotiation, a fair resolution can be reached.
We look forward to hearing from you or your counsel at your earliest convenience.
Sincerely,
CASCADIA STATE INFRASTRUCTURE AUTHORITY
By: ________
Name: Martin R. Calloway
Title: Executive Director
Date: ________
Prepared by:
CALDERWOOD & HARKNESS LLP
Angela Fontaine, Responsible Partner 999 Second Avenue, Suite 4200 Seattle, WA 98104 C&H Matter No. 1030-00003
cc (via first-class mail and electronic mail):
Priya Shankar-Wells, General Counsel, Cascadia State Infrastructure Authority
Connor Oakes, Director of Capital Programs, Cascadia State Infrastructure Authority
Teresa Villanueva, Project Manager, Cascadia State Infrastructure Authority
Nadia Sorensen, Partner, Bridger Hollis & Pratt LLP, 300 Prospect Street, Suite 600, Bellingham, WA 98225 (Counsel for Veldkamp Family Holdings LLC)
Tyler Fong, Associate, Bridger Hollis & Pratt LLP, 300 Prospect Street, Suite 600, Bellingham, WA 98225
Angela Fontaine, Calderwood & Harkness LLP
Douglas Fairchild, Calderwood & Harkness LLP
ENCLOSURE 1
SUMMARY OF APPRAISED VALUES
Prepared from the Appraisal Report of Northwind Valuation Group LLC
Appraiser: Jocelyn Trueblood, MAI Northwind Valuation Group LLC 505 Lakeway Drive, Suite 220 Bellingham, WA 98229
Appraisal Date: March 14, 2025 Appraisal Standards: Uniform Standards of Professional Appraisal Practice (USPAP); Uniform Appraisal Standards for Federal Land Acquisitions ("Yellow Book") Methodology
Property Owner: Veldkamp Family Holdings LLC Project: Regional Flood Resilience and Stormwater Management Program — Lower Nooksack Pump Station Network CSIA Capital Project No.: CP-2025-NPS-004
Table of Appraised Values
Notes on Valuation
1.  Highest and Best Use. The appraised values are based upon the highest and best use of the Subject Parcels as agricultural land, consistent with the current zoning classification, soil characteristics (NRCS Class I and Class II soils), agricultural productivity data, and the historical and ongoing use of the parcels for crop cultivation and related farming operations.
2.  Permanent Easement Valuation. The permanent easement values reflect the diminution in the fee value of each Subject Parcel attributable to the permanent encumbrance imposed by the easement, including the loss of the landowner's right to use the easement area for agricultural purposes and the impact of the pump station facilities on the remaining property. The appraiser employed the "before and after" methodology to measure the difference in value of each parcel as a whole before the proposed acquisition and the value of each parcel as a whole after the proposed acquisition, with the difference representing the fair market value of the easement interest acquired.
3.  Temporary Easement Valuation. The temporary construction easement value reflects the estimated rental value of the approximately 3.1-acre temporary easement area over the anticipated construction period of up to twenty-four (24) months. The appraiser considered market rental rates for comparable agricultural land in the Whatcom County area, adjusted for the nature and extent of the temporary use and the anticipated impact on agricultural operations during the construction period.
4.  No Recognized Environmental Conditions. The appraiser relied upon the Phase I Environmental Site Assessment prepared by Pinnacle Geotechnical & Environmental Consulting Inc. (dated January 22, 2025), which identified no recognized environmental conditions on the Subject Parcels.
5.  Availability of Full Appraisal Report. The full appraisal report prepared by Northwind Valuation Group LLC, including all supporting data, comparable sales analysis, and the appraiser's certifications, is available upon request to VFH or its counsel, in accordance with RCW 8.25.020.
This summary is provided for informational purposes as part of CSIA's good-faith offer under RCW 8.25.020. It does not constitute the full appraisal report. VFH is entitled to receive a copy of the full appraisal report upon request.
Easement Interest | Parcel No. | Acreage | Appraised Fair Market Value
PS-1 Permanent Easement | 380219-401200 | 2.3 acres | $345,000
PS-2 Permanent Easement | 380219-401201 | 1.8 acres | $270,000
Subtotal — Permanent Easements | — | 4.1 acres | $615,000
Temporary Construction Easement | Across VFH Parcels | 3.1 acres | $62,000
Total Offer | — | 7.2 acres | $677,000

CASCADIA STATE INFRASTRUCTURE AUTHORITY 1100 Jefferson Avenue SE, Suite 400 Olympia, WA 98501

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND FIRST-CLASS MAIL

CASCADIA STATE INFRASTRUCTURE AUTHORITY

CALDERWOOD & HARKNESS LLP

ENCLOSURE 1

SUMMARY OF APPRAISED VALUES

Record

Parties

Dates

Amounts