Newman Development - Development AgreementRECORDING REQUESTED BY
AND WHEN RECORDED, RETURN TO:
City of Gilroy
7351 Rosanna Street
Gilroy, California 95020 -6190
Attention: City Administrator
13958:6343404.2
DOCUMENT: 17147097
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BRENDA DAVIS
SANTA CLARA COUNTY RECORDER
Recorded at the request of
City
DEVELOPMENT AGREEMENT
BETWEEN
CITY OF GILROY
AND
NEWMAN DEVELOPMENT GROUP OF GILROY, LLC
Dated: April 21, 2003
Pages 69
RDE # 005
6/30/2003
10 :55 AM
CITY OF GILROY
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (the Agreement) is made
and entered into as of this 2lstday of April, 2003, by and between
CITY OF GILROY, a California municipal corporation (City),
and NEWMAN DEVELOPMENT GROUP OF GILROY, LLC, a California limited
liability company (NDG).
RECITALS:
This Agreement is entered into on the basis of the
following facts, understandings and intentions of the Parties:
A. These Recitals refer to and utilize
terms which are defined in this Agreement; and the Parties refer
to those definitions in conjunction with their use in these
Recitals.
B. The Development Agreement Legislation
authorizes City to enter into development agreements in
connection with the development of real property within its
jurisdiction. The Development Agreement Ordinance establishes
the authority and procedure for review and approval of proposed
development agreements by City.
C. NDG owns or has rights to acquire the
Property, and therefore has a sufficient legal interest to enter
into a development agreement with City pursuant to the
Development Agreement Legislation and Development Agreement
Ordinance.
D. NDG applied for approval of this
Agreement in order to (i) vest the land use policies established
in the General Plan and other Existing City Regulations as of the
Adoption Date, and (ii) memorialize certain agreements made
between City and NDG with respect to the City Financial
Contribution. City and NDG acknowledge that development and
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construction of the Project is a large -scale undertaking
involving major investments by NDG. Thus, certainty that the
Project can be developed and used in accordance with the General
Plan and other Existing City Regulations will benefit City and
NDG and will provide the Parties certainty with respect to
implementation of the policies set forth in the General Plan and
the Project Approvals.
E. City is willing to enter into this
Agreement to (i) eliminate uncertainty in the comprehensive
development and planning of the Project and the timing of the
construction and occupancy of the Project; (ii) secure orderly
development and progressive fiscal benefits for public services,
improvements and facilities planning in City; (iii) meet the
goals and objectives of the General Plan and the Project
Approvals; and (iv) provide significant new retail uses in City
which will add to the existing retail base within City and
significantly enhance retail uses within City because of the
types of Occupants which will lease and /or own space within the
Project.
F. Development of the Project in City will
locate in City major retailers with a high profile in the.
shopping center industry and enhance both the image and stature
of City. Furthermore, development of the Project will increase
employment opportunities in City, leading to the production of
increased revenues for City both through taxes paid by Occupants
of the Project, as well as other fiscal benefits to City, such as
sales taxes generated through retail sales at the Project, and
property taxes that result from the enhancing effect that the
Project has on real estate values in City.
G. NDG has informed City that, however, in
order for NDG to construct, develop, lease and /or sell space in
the Project, NDG will require a financial contribution from City
in order to make the Project financially feasible. Specifically,
NDG has informed City that the cost and expense required of NDG
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in order to design, install and construct the Public Improvements
required by the Project Approvals that are not otherwise
reimbursed by City would, if City does not make the City
Financial Contribution, make the Project financially infeasible.
In connection with NDGs request for the City Financial
Contribution, NDG has informed City that the Occupants of the
Project will generate substantial sales tax revenues to City and
has supplied to City a Fiscal Revenue Analysis of the Project
prepared by Sedway Group, dated July 25, 2002. Such Fiscal
Revenue Analysis supports the conclusion that the Occupants of
the Project will generate substantial sales tax revenues to City.
In consideration of this sales tax revenue generation, City has
agreed to make the City Financial Contribution, but on terms and
conditions which will ensure that Occupants will occupy space in
the Project and generate sales tax revenue.
H. NDG has provided to City for review and
approval by City the estimate of NDGs engineer of the projected
cost of the Public Improvements. The City Engineer has reviewed
such estimates and has determined that they are reasonable and
that the City Financial Contribution will not exceed the cost to
design, construct and install the Public Improvements.
I. On March 13, 2003, after due review of
and report on NDGs application for this Agreement by City staff,
and consideration of all other evidence heard and submitted at a
duly noticed public hearing held on March 13, 2003, pursuant to
the Development Agreement Legislation and the Development
Agreement Ordinance, the Planning Commission duly adopted its
Resolution No. 2003 -04, and (i) found and determined that
consideration of this Agreement complies with the Final Mitigated
Negative Declaration, and that this Agreement is consistent with
the objectives, policies, land uses and programs specified in the
General Plan and in the other Existing City Regulations
pertaining thereto, and (ii) recommended that the City Council
approve this Agreement based on the foregoing findings.
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J. On March 17, 2003, the City Council held
a duly noticed public hearing on this Agreement pursuant to the
requirements of the Development Agreement Legislation and the
Development Agreement Ordinance. After due review of and report
on NDGs application for this Agreement by City staff, and
consideration of the Planning Commissions recommendations
thereon, and of all other evidence heard and submitted at such
public hearing, the City Council introduced the Enacting
Ordinance approving this Agreement, finding-and determining in
connection therewith that this Agreement is consistent with the
objectives, policies, land uses and programs specified in the
General Plan, and in the other Existing City Regulations
pertaining thereto. On April 21, 2003, the City Council adopted
the Enacting Ordinance enacting this Agreement.
NOW, THEREFORE, pursuant to the authority contained in
the Development Agreement Legislation and the Development
Agreement Ordinance, and in consideration of the foregoing
Recitals and the mutual covenants and promises of the Parties
herein contained, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1. Defined Terms. Each reference in this
Agreement to any of the following terms shall have the meaning
set forth below for each such term.
Additional Conditions: Collectively, those Additional
Conditions specified in Schedule I to this Agreement.
Adoption Date: The date the City Council adopted the
Enacting Ordinance enacting this Agreement.
Affiliate: Any Person directly or indirectly
controlled by, controlling, or under common control of, another
Person; any Person resulting from the merger or consolidation of
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a Person with another Person; any Person which acquires the
controlling interest in the assets of another Person as a going
concern; or any parent of a Person, any subsidiary of a Person,
or any subsidiary of a parent of a Person, including, for
purposes of the foregoing, any parent or subsidiary through one
or more parents or subsidiaries owned or controlled by such
parent or subsidiary.
Applicable City Regulations: The Existing City
Regulations and such other City Regulations otherwise applicable
to development of the Project pursuant to the provisions of
Ccni- 4 nn 'A 2 _
Building Group: Each Building Group designated as such
on the Site Plan.
CEQA: The California Environmental Quality Act (Public
Resources Code Section 21000, et sec.) and the Guidelines
thereunder (14 California Code of Regulations Section 15000, et.
seq.).
Certificate of Occupancy: A certificate of occupancy
issued by City pursuant to the Construction Codes upon due
application by NDG following completion of the shell and core
of each Building Group, sufficient to allow any relevant Occupant
of any such Building Group pursuant to an Occupant Transfer to
occupy such Building Group for the purposes of completing its
improvements in the interior of such space and stocking its store
with merchandise, or sufficient to allow NDG or its Affiliates or
contractors to construct improvements in the interior of such
space on behalf of any Occupant. For purposes hereof, a
Certificate of Occupancy shall include one or more such
certificates of occupancy which may be required for occupancy of
a Building Group for such purposes.
City Application Fee: A fee levied or assessed by City
to cover the reasonable cost of Citys performance of any
discretionary, ministerial, clerical or other action, or required
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by City for reviewing and processing applications for City
Approvals, including City Application Fees for the Project
Approvals and compliance with CEQA.
City Approvals: The permits or approvals required
under Applicable City Regulations in order to develop, use and
operate the Project, or any portion thereof.
City Development Fee: A fee or assessment, other than
a City Application Fee, charged or required by City in connection
with any City Approval to defray the cost of public services or
facilities or imposed for a public purpose.
City Fee: A City Application Fee and /or City
Development Fee.
City F.
City Development
Development Fees
this Agreement.
to space in each
Development Fees
Exhibit A
financial Contribution: The waiver by City of
Fees, or a Qualified Portion of such City
pursuant to the provisions of Section 4.3 of
The City Development Fees which are applicable
Building Group and the amount of the City
payable for each such space are set forth in
City Regulations: The General Plan of City, and
ordinances, resolutions, codes, rules, regulations and official
policies of City, in effect as of the time in question,
determined in accordance with the provisions of this Agreement.
City Standards: The standards for the design,
installation and construction of the Public Improvements under
Existing City Regulations, including the Construction Codes under
Existing City Regulations, as specified in Exhibit B.
Construction Codes: The City Regulations pertaining to
or imposing life safety, fire protection, mechanical, electrical
and /or building integrity requirements with respect to the design
and construction of buildings and improvements.
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Dedicate: An irrevocable offer to make a dedication of
land and /or improvements to City.
Dedication: An Exaction comprised of land and /or
improvements required to be Dedicated to City.
Development Agreement Legislation: Government Code
§ §65864- 65859.5, authorizing City to enter into development
agreements as therein set forth.
Development Agreement Ordinance: Resolution No.
2002 -61, adopted by Citys City Council on August 5, 2002,
establishing the authority and procedure for review and approval
of proposed development agreements.
Effective Date: The date that is thirty (30) days
after the date the Enacting Ordinance was adopted by City
Council. The Effective Date shall be extended, as necessary, by
any referendum challenging this Agreement, the response of the
City Council thereto, litigation filed challenging this
Agreement, or similar events warranting such extension as City
and NDG may so determine.
Enacting Ordinance: Ordinance No. 2003 -04, enacted by
City Council on April 21, 2003, enacting this Agreement as an
ordinance of City pursuant to Section 65867.5(a) of the
Development Agreement Legislation.
Exaction: An exaction (other than City Fees),
Dedication or reservation requirement, an obligation for on- or
off -site improvements or construction of public improvements, or
an obligation to provide services, in connection with the
development of the Project. For purposes hereof, Exactions
include mitigation measures imposed or adopted pursuant to CEQA.
Existing City Regulations: The City Regulations in
effect as of the Adoption Date, including the Project Approvals.
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Final Mitigated Negative Declaration: The final
Mitigated Negative Declaration covering the Project, as described
in Exhibit C
Force Majeure: A delay in the Project Development
Schedule or the opening for business of an Occupant caused by
reason of events beyond the reasonable control of a Party,
including acts of God or civil commotion; riots, strikes,
picketing, or other labor disputes; shortage of materials or
supplies; damage to work in process by reason of fire, floods,
earthquake, or other casualties; restrictions or delays imposed
or mandated by Responsible Agencies; enactment of Laws which
prevent or preclude compliance by a Party with any material
provision of this Agreement; litigation brought by Persons other
than a Party, or an Affiliate of a Party; acts (or failure to act
when action is required) or neglect of another Party.
Indemnify: An obligation of a Party to indemnify,
defend, protect and hold the other Party, its officials,
officers, employees, agents, stockholders, constituent partners
and members of its boards and commissions, harmless from and
against Losses.
Laws: The Constitution and laws of the State, the
Constitution of the United States, and any codes, statutes,
regulations, or executive mandates thereunder, and any court
decision, State or federal, thereunder.
Losses: Claims, damages, liabilities, penalties,
fines, causes of action, lawsuits and other proceedings, and
costs and expenses in connection therewith, including reasonable
attorneys fees.
Mortgage: A mortgage or deed of trust, or other
transaction, in which NDG or any Transferee conveys or pledges as
security its interest in the Project, or a portion thereof, or
interest therein, or any improvements thereon; or a sale and
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leaseback arrangement, in which NDG or any Transferee sells and
leases back concurrently therewith its interest in the Project,
or a portion thereof, or interest therein, or improvements
thereon.
Mortgagee: The holder of the beneficial interest under
a Mortgage, or the owner of the Project, or interest therein,
under a Mortgage, or any entity nominated by any such holder of a
Mortgagee interest for the purposes of holding title to the
Project or any portion thereof after a foreclosure, transfer in
lieu of foreclosure, or termination of any sale leaseback
arrangement after a default thereunder.
Non -Tax Generating Entities: A Person which, due to
the nature of its business or its status as a tax - exempt
organization, would not generate substantial retail sales taxes
to City if space in the Project were leased or sold to such
Person. Examples of such Persons include religious facilities,
public agencies, non - profit organizations, and medical or dental
offices without significant accompanying retail sales.
Occupants: Persons from time to time entitled to the
use and occupancy of space within the Building Groups in the
Project pursuant to Occupant Transfers. Reference to an
Occupant shall refer to any or all of the Occupants of the
Project, as the context may require.
Occupant Transfer: Any transaction by which an Occupant
becomes entitled to occupy and use space within a Building Group,
including a lease agreement, or a transaction through which NDG
transfers to an Occupant the fee title interest in a Building
Group, or portion thereof, and /or a portion of the Property upon
which a Building Group is, or will be, located. Any Occupant
Transfer made by a lease agreement shall have a lease term of not
less than five (5) years. Any transaction by which a Non -Tax
Generating Entity or a Relocation Entity becomes an Occupant
13958:6316445.17 -9-
shall not constitute an Occupant Transfer for any purpose under
this Agreement.
Party: City, and /or NDG, and NDGs Transferees,
determined as of the time in question.
Person: An individual, partnership, firm, association,
corporation, trust, governmental agency, administrative tribunal
or other form of business or legal entity.
Phase IA: The Building Groups identified as numbers 1-
4 on the attached Site Plan.
Phase IB: The Building Groups identified as numbers 5-
7 on the attached Site Plan.
Phase II: The Building Groups identified as numbers 8-
15 on the attached Site Plan.
Project: The development, use and occupancy of
buildings and other improvements on the Property pursuant to the
Project Approvals.
Project Approvals: The City Approvals governing the
Project in existence as of the date of this Agreement or enacted
or obtained after the date of this Agreement, all as set forth in
Exhibit C hereto, as the same may be amended from time to time
during the Term. Reference in this Agreement to a particular
Project Approval shall have the meaning ascribed to such Project
Approval set forth in Exhibit C.
Project Development Schedule: The schedule for
development of the Project prepared by NDG and approved by City
as part of this Agreement attached hereto as Exhibit D.
Property: The real property more particularly
described in Exhibit E hereto, either currently owned or to be
acquired by NDG.
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Public Improvements: The off -site public improvements
required to be designed, installed and constructed by NDG
pursuant to the Project Approvals, which Public Improvements are
listed in Exhibit F hereto, some of which are subject to
reimbursement of the cost thereof by City, as shown on Exhibit F.
Relocation Entity: A Person which, if space were
leased or sold to such Person in the Project, would result in
the relocation of the business of such Person from an existing
location in City and the closure by such Person of such existing
business location.
Responsible Agencies: All governmental or quasi -
governmental agencies (such as public utilities) having
jurisdiction over, or the authority to regulate development of,
the Project.
Responsible Agency Regulations: The Laws, ordinances,
resolutions, codes, rules, regulations and official policies of
Responsible Agencies in effect as of the time in question.
Site Plan: The site plan for the shopping center
comprised in the Project attached hereto as Exhibit G, as amended
from time to time to reflect Project Approvals obtained after the
date of this Agreement.
State: The State of California and any department or
agency acting on behalf of the State.
Term: The term of this Agreement, determined as of the
time in question pursuant to Article II below, unless sooner
Terminated as provided in this Agreement.
Terminate: The expiration of the Term of this
Agreement, whether by the passage of time or by any earlier
occurrence pursuant to any provision of this Agreement.
13958:6316445.17 _11-
Transfer: The sale, assignment, lease, sublease, or
other transfer by NDG of this Agreement, or any right, duty or
obligation of NDG under this Agreement, made pursuant to the
terms, standards and conditions of Article X of this Agreement,'
including by foreclosure, trustee sale, or deed in lieu of
foreclosure, under a Mortgage, but excluding (i) a Dedication and
(ii) a Mortgage, including a transfer or assignment of this
Agreement to a Mortgagee as additional security under a Mortgage.
Transferee: The Person to whom a Transfer is effected.
1.2. Certain Other Terms. Certain other terms shall
have the meaning set forth for each such term in this Agreement.
ARTICLE II
EFFECTIVE DATE: TERM
2.1. Effective Date; Term Commencement. This
Agreement shall be dated as of the Adoption Date; the rights,
duties and obligations of the Parties hereunder shall be
effective, and the Term shall commence, as of the Effective Date.
NDG has previously executed and acknowledged this Agreement
before adoption by the City Council of the Enacting Ordinance.
Not later than thirty (30) days after the Effective Date, City,
by and through its Mayor, shall execute and acknowledge this
Agreement; and not later than ten (10) days after City's
execution and acknowledgment of this Agreement, the City Clerk
shall cause this Agreement to be recorded in the Official Records
of the County of Santa Clara.
2.2. Expiration of Term. Unless sooner Terminated
pursuant to the applicable provisions of this Agreement, the Term
of this Agreement shall commence on the Adoption Date and shall
continue for a period of five (5) full calendar years after the
issuance of the last Certificate of Occupancy covering a Building
Group in connection with the initial development of the Project,
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unless sooner terminated as provided in this Development
Agreement.
2.3. Subsequent Amendments or Termination. If the
Parties amend, modify or Terminate this Agreement as herein
provided or as otherwise provided in the Development Agreement
Ordinance or if this Agreement is modified or Terminated pursuant
to any provision hereof, then City Clerk shall, within ten (10)
days after such action takes effect, cause an appropriate notice
of such action to be recorded in the Official Records of the
County of Santa Clara.
2.4. Extension by Agreement. The term of this
Agreement may be extended at any time before its Termination date
by the mutual agreement of City and NDG by following the
procedures for the extension of the term of the statutory
development or the amendment of the terms of statutory
development agreements which are provided for by the resolutions
or ordinances of the City Council and by the Development
Agreement Legislation.
2.5. Expiration of Term. Except for accrued
obligations of a Party, upon expiration of the Term, this
Agreement and all of the rights, duties and obligations of the
Parties hereunder shall Terminate and be of no further force or
effect. Expiration of the Term (including by Termination of this
Agreement) shall not affect any right vested under Laws (absent
this Agreement), or other rights arising from City Approvals
granted by City for development of all or any portion of the
Project.
ARTICLE III
GENERAL REGULATION OF DEVELOPMENT OF PROJECT
3.1. Project Development; Control of Development.
NDG shall have the right to develop the Project in accordance
with the terms and conditions of this Agreement; and City shall
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have the right to control development of the Project in
accordance with the provisions of this Agreement. The Applicable
City Regulations and this Agreement shall control the overall
design, development and construction of the Project, and all on-
and off -site improvements and appurtenances in connection
therewith, in the manner specified in this Agreement. In the
event of any inconsistency between the Applicable City
Regulations and this Agreement, this Agreement shall control,
except that if the inconsistency cannot be reconciled by
application of this rule of construction, the provision which
best gives effect to the purposes of this Agreement shall
control.
3.2. Applicable City Regulations. Except as
specifically provided in this Section 3.2 and Section 3.3, the
Existing City Regulations shall govern the development of the
Project and all subsequent City Approvals with respect to the
Project. City shall have the right, in connection with any
further City Approvals, to apply City Regulations as Applicable
City Regulations only in accordance with the following terms,
conditions and standards:
3.2.1. Future City Regulations. City shall have
the right to apply City Regulations adopted by City or Agency
after the Adoption Date only if such City Regulations (i) are not
in any manner inconsistent or in conflict with the intent,
purposes, terms, standards or conditions of this Agreement;
(ii) do not in any manner change or modify the uses, height,
density and intensity of development specified in the Existing
City Regulations or this Agreement with respect to the Project,
or do not change or modify, or interfere with, the timing,
phasing, or rate of development of the Project; (iii) do not
require any additional on -site or off -site public improvements to
be constructed or paid for by NDG or any Transferee, subject,
however, to the last sentence of this paragraph; and (iv) do not
interfere with or diminish the ability of a Party to perform its
obligations hereunder or expand, enlarge or accelerate NDGs
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obligations hereunder. Notwithstanding the foregoing, in the
event that the traffic study to assess the impact of any
development that is the subject of a specific Architectural and
Site approval application, proposed to be located in Phase II of
the of the Project, shall conclude that due to the nature of the
project described in such application, additional measures may be
necessary in connection with the traffic impacts associated with
such project, the foregoing will not preclude the City from
requiring such measures.
3.2.2. Regulation for Health and Safety.
Notwithstanding any other provisions of this Agreement, City
shall have the right to apply City Regulations adopted by City
after the Adoption Date, if such application (i) is otherwise
permissible pursuant to Laws (other than the Development
Agreement Legislation); (ii) is required to protect against a
demonstrated threat to the physical health and safety of existing
or future Occupants, or users of the Project, or any portion
thereof or any lands immediately adjacent thereto; and (iii) is
made in a manner that does not discriminate against NDG or the
Project.
3.2.3. Construction Codes. Except for the Public
Improvements governed by the City Standards and the standards of
any Responsible Agency applicable to the Project pursuant to
Section 4.2 below, City shall have the right to apply to the
Project, as a ministerial act, the Construction Codes in effect
at the time of the approval of any City Approval thereunder. All
permits required under Construction Codes shall be issued by City
after Citys review and approval of NDGs or an Occupants
applications therefor, except that Citys review of the
applications shall be limited to determining whether (i) the
application is complete, and (ii) the application complies with
the Construction Codes then in effect, the City Approvals and
this Agreement.
13958:6343404.2 -is-
3.3. Review and Processing of City Approvals. City
shall accept for processing, review and action, all applications
for City Approvals with respect to the Project when and if the
same are complete, as determined pursuant to Government Code
Section 65940, et sec.. Upon acceptance by City, such
applications shall be reviewed and processed to completion in a
reasonable time, with the overall goal of the Parties being to
maintain the Project Development Schedule and allow Occupants to
open for business in the Project including scheduling of all
required public hearings, and processing and checking of all
maps, plans, permits, building plans and specifications and other
plans relating to development of the Project filed by NDG or an
Occupant. In connection with any City Approval, City shall
exercise its discretion or take action only in a manner which
complies and is consistent with the standards, terms and
conditions contained in this Agreement.
3.4. Effect of Agreement. This Agreement
constitutes a City Approval adopted pursuant to the Applicable
City Regulations.
3.5. Other Governmental Approvals. NDG (or an
Occupant) shall be responsible for complying with all Responsible
Agency Regulations and Laws in connection with the development,
use and operation of, or provision of services to, the Project.
NDG (or an Occupant) shall be responsible for applying for and
obtaining all approvals required from Responsible Agencies
necessary for the development, use and operation of, or provision
of services to, the Project. NDG (or an Occupant) shall
undertake reasonable, diligent and good faith efforts to obtain
all Responsible Agency Approvals in a timely fashion. City shall
cooperate with NDG and any Occupant in such endeavors upon
request made for such cooperation but without cost to City.
3.6. Effect of Termination. Upon Termination of
this Agreement pursuant to Article VI, City shall retain any and
all benefits, including money or land, previously received by
13958:6343404.2 -16-
City as of the date of Termination under or in connection with
this Agreement. No Termination of this Agreement shall prevent
NDG or an Occupant from completing and occupying buildings or
other improvements authorized pursuant to valid building permits
previously approved by City or under construction at the time of
Termination, but City may take any action permitted by Laws or
City Regulations to prevent, stop or correct any violation of
Laws or City Regulations occurring during and after construction.
No Termination of this Agreement.shall affect any accrued
obligation of either Party under this Agreement to pay or refund
money to the other Party.
3.7. Operating Memoranda. The provisions of this
Agreement require a close degree of cooperation between City and
NDG, and refinements and further development of the Project may
demonstrate that clarifications with respect to the details of
performance of City and NDG or minor revisions to the Project are
appropriate. If and when, from time to time, during the term of
this Agreement, City and NDG agree that such clarifications or
minor modifications are necessary or appropriate, they shall
effectuate such clarifications through operating memoranda
approved by City and NDG, which, after execution, shall be
attached to and become a part of this Agreement. No such
operating memoranda shall constitute an amendment to this
Agreement requiring public notice or hearing. The City Attorney
shall be authorized to make the determination whether a requested
clarification may be effectuated pursuant to this Section 3.7 or
whether the requested clarification is of such a character to
require an amendment hereof pursuant to Article XI below. The
Parties acknowledge that modifications which would be categorized
as exempt under CEQA, or which, after an initial study made
pursuant to CEQA, City determines do not require any further
environmental review, or do not increase the density or intensity
of use or the maximum height, bulk, size or architectural style
of proposed buildings within the Property, may be effectuated
through operating memoranda pursuant to this Section 3.7. The
13958:6343404.2 -17-
City Administrator may execute any operating memoranda hereunder
without City Council action.
ARTICLE IV
SPECIFIC CRITERIA AND OBLIGATIONS APPLICABLE
TO DEVELOPMENT OF PROJECT
4.1. Right to Develop; Requirement to Develop
Project in Accordance with Project Development Schedule. City
acknowledges that, subject to receiving any further required City
Approvals subject to the standards and provisions of this
Agreement, NDG may proceed with the development, construction,
use and occupancy of the Project as a matter of right under this
Agreement. NDG shall develop the Project (including the Public
Improvements) in accordance with the Project Development Schedule
such that, subject to Force Majeure, Occupants begin to generate
sales tax revenues in appropriate and reasonable relationship to
the timing and making of the City Financial Contribution pursuant
to Section 4.3 below. Any date specified in the Project
Development Schedule shall, however, be extended by any Force
Majeure delay for the duration of any such Force Majeure delay.
Without limiting the foregoing, the parties acknowledge that the
Santa Clara Valley Transportation Authority (VTA) will make
certain improvements to Highway 152 that are more fully described
in the Project Approvals, and which are necessary for the
development of the Project (the VTA Improvements). Failure
of the VTA to complete the VTA Improvements may delay the
completion of Phase II. The Parties anticipate that the VTA
Improvements will be completed by April, 2004 (the VTA
Completion Date). City and NDG will meet and revise the
Project Schedule and make an amendment thereto that shall take
into account any reasonable delay in completion of Phase II
resulting from the failure of VTA to complete the VTA
Improvements by the VTA Completion Date.
4.2. Construction of Public Improvements. NDG shall
be solely responsible to design, install and construct the Public
13958:6343404.2 - 18 -
Improvements at NDGs sole cost and expense, provided City has
agreed to reimburse NDG for the cost of those Public Improvements
listed on Exhibit F as being subject to reimbursement by City in
accordance with City policies regarding such reimbursements. NDG
shall design, install and construct the Public Improvements in
accordance with the City Standards. Prior to commencing
construction of the Public Improvements, NDG shall enter into one
or more improvement agreements with performance and payment
security in accordance with the requirements of the City
Approvals and Applicable City Regulations. Unless otherwise
required by Responsible Agencies under Responsible Agency
Regulations, which requirements become part of the City
Approvals, City shall impose no requirements in addition to, or
more stringent than, the strictest among any standards specified
by (a) the City Standards, (b) the standards of any Responsible
Agency applicable to the Project, or the (c) Additional
Conditions. Promptly upon completion of any of the Public
Improvements, NDG shall Dedicate such Public Improvements to City
or the Responsible Agency having jurisdiction. City and NDG
acknowledge that in each case where Exhibit F designates Public
Improvements that are to be reimbursed to NDG by City, City has
agreed to reimburse NDG only for those Public Improvements that
are of the nature that would normally be paid by the public or
City and not NDG in connection with the development of a project
such as the Project.
4.2.1. Additional Conditions. Notwithstanding
anything contained in the City Approvals, NDG agrees to comply
with the Additional Conditions in connection with the
construction of the Project.
4.3. Terms of City Financial Contribution. The City
Financial Contribution shall be made by City in accordance with
the terms and conditions of this Section 4.3.
13958:6343404.2 -19-
4.3.1. Deferral of Payment of City Development
Fees. Notwithstanding anything to the contrary contained in the
Applicable City Regulations, no City Development Fee comprised in
the City Financial Contribution shall be due or payable by NDG
for space contained in any Building Group developed by NDG in the
Project unless and until NDG has applied for and City is prepared
to issue, a Certificate of Occupancy for such Building Group.
Concurrently with making an application for a Certificate of
Occupancy for a Building Group or any space therein, NDG shall
supply to City evidence of any Occupant Transfers in effect for
the space in such Building Group to be occupied by Occupants.
Such application shall be accompanied by'a writing that shall set
forth the total gross leaseable or useable area in any such
Building Group intended to be occupied by Occupants, and the
leaseable or useable area of any such Building Group covered by
Occupant Transfers, and the party to whom all or any portion of
any City Development Fees paid by City pursuant to this Section
4.3 shall be paid, which party shall be either NDG or any
Transferee who has assumed NDGs obligations under Section 10.2
hereof. If NDG submits evidence of one (1) or more Occupant
Transfers covering all of the leaseable or useable space in any
relevant Building Group, then NDG shall have no obligation to pay
City Development Fees applicable to such space, and City shall
forever waive and relinquish its right to collect such City
Development Fees. Alternatively, if the party otherwise
obligated to pay such City Development Fees shall be an Occupant
pursuant to an Occupant Transfer, NDG may elect to cause such
fees to be paid by such Occupant upon issuance of the relevant
Certificate of Occupancy, and may request that the City refund
the relevant City Development Fees to NDG, or to such party as
NDG may designate, upon satisfaction of the foregoing condition.
If, at the time NDG or its successor Occupant makes application
for a Certificate of Occupancy for a Building Group or space
therein, NDG does not so provide evidence of an Occupant Transfer
covering the space in such Building Group, then NDG or any other
party obligated to pay such City Development Fees shall pay to
13958:6343404.2 -20-
City the City Development Fees, based on the proportion that the
amount of useable or leaseable area in such Building Group that
is not covered by Occupant Transfers bears, at the time of such
application, to the total leaseable or useable area in such
Building Group, concurrently with issuance by City of the
Certificate of Occupancy for the affected space in such Building
Group. In the event that NDG, after making such payment provides
to City evidence of one (1) or more Occupant Transfers for any
leaseable or useable areas in such Building Group for which NDG
or any Occupant pursuant to an Occupant Transfer has paid City
Development Fees hereunder, that are completed within one hundred
eighty (180) days after issuance by City of such Certificate of
Occupancy and within two - hundred -forty (240) days after the
issuance by City of such Certificate of Occupancy, the Occupant
to which the Occupant Transfer has been effected opens for
business in its space in the affected Building Group, then within
thirty (30) days after the date such Occupant first opens for
business in such space, City shall pay to NDG or the party
designated by NDG any City Development Fees previously paid and
attributable to the relevant space covered by such subsequent
Occupant Transfers, in such Building Group, and such City
Development Fees shall be deemed waived and relinquished by City
with respect to the relevant space covered by such Occupant
Transfers, pursuant to this Section 4.3.1. To the extent that
NDG fails to meet the requirements for Occupant Transfers
covering all of the useable or leaseable space in a Building
Group under this Section 4.3.1, then City shall thereupon have no
obligation to waive and relinquish City Development Fees with
respect to any useable or leaseable space in such Building Group
that remains not subject to Occupant Transfers that qualify for a
refund of City Development Fees hereunder, and neither NDG nor
any Occupant of the relevant Building Group shall thereupon have
any further right for the City Financial Contribution with
respect to any such space that does not become subject to
qualifying Occupant Transfers or otherwise satisfy the conditions
13958:6343404.2 -2 1-
for a return of any portion of the City Development Fees in the
relevant period.
4.3.2. Non -Tax Generating Entity and Relocation
Entity Transfers. If NDG effectuates an Occupant Transfer to a
Non -Tax Generating Entity and /or a Relocation Entity, NDG shall
not be entitled to any City Financial Contribution on account of
such Occupant Transfer, and any City Development Fees payable by
NDG with respect to the space to be occupied by such Non -Tax
Generating Entity or Relocation Entity shall be fully due and
owing by NDG upon issuance of the Certificate of Occupancy
covering the relevant Building Group.
4.3.3. City Development Fees. The City
Development Fees payable by NDG with respect to space in Building
Groups and the Project are listed on Exhibit A. which City
Development Fees have been calculated based on the square footage
of space in each Building Group and the Project shown on the Site
Plan. If the square footage of space in a Building Group is,
when constructed, greater or lesser than the square footage of
space shown on the Site Plan for such Building Group, then the
amount of City Development Fees payable by NDG with respect to
space in such Building Group shall be adjusted on a per square
foot basis to reflect the actual square footage of space
contained in such Building Group. No other City Development Fees
shall be imposed by City, other than those specified in
Exhibit A City shall not increase the amount of the City
Development Fees as specified in Exhibit A, and NDGs obligation
for City Development Fees to the extent payable by NDG pursuant
to this Section 4.3 shall not be increased above the amount for
each City Development Fee specified in Exhibit A hereto.
4.3.4. No Effect on Obligation to Design, Install
and Construct Public Improvements. Notwithstanding that NDG may
pay City Development Fees with respect to space in one or more
Building Groups pursuant to Section 4.3.1 above, NDG shall remain
13958:6343404.2 -22-
fully obligated to design, install and construct the Public
Improvements at its sole cost and expense pursuant to Section 4.2
above. Nothing in this Section 4.3 shall otherwise relieve NDG
of such obligation under Section 4.2.
4.3.5. Prevailing Wage Requirement. NDG
understands that the payment by City of the City Financial
Contribution under this Section 4.3 may require that the design,
installation, and construction of the Public Improvements be
accomplished by payment of prevailing wage in accordance with
applicable requirements of State Laws. NDG further understands
that City has no responsibility to ensure compliance with such
Laws and that NDG is solely responsible to ensure that such Laws
have been complied with. In addition, NDG understands that City,
by providing the City Financial Contribution under this
Agreement, has assumed no responsibility whatsoever (direct,
indirect, implied or express) for paying any cost or expense in
connection with the design, installation or construction of the
Public Improvements, other than any reimbursement obligation
previously agreed by City and listed on Exhibit F, and that the
responsibility for payment thereof is solely the responsibility
of NDG. Subject to the foregoing provisions, the Parties
acknowledge that they have concluded, based on NDG's estimate of
NDG's engineer of the projected cost of the Public Improvements,
that the City Financial Contribution will not exceed the cost to
design, construct and install the Public Improvements.
4.4. Reasonable Efforts to Lease or Sell to Tax
Generating Occupants. NDG understands and acknowledges that
Citys willingness to provide the City Financial Contribution
pursuant to Section 4.3 above is based on Citys expectation that
NDGs Project will generate substantial retail sales tax
revenues. To this end, NDG shall use commercially reasonable,
good faith efforts to effectuate Occupant Transfers to Occupants
which will generate high taxable sales, taking into account
customary and usual standards for leasing and /or selling space
13958:6343404.2 -23-
and /or property in similar shopping centers, such as appropriate
tenant mix and balance, mix of retail and other uses and
categories, return on investment, and similar criteria. City
acknowledges that NDG cannot, and does not, guarantee that the
Project will in fact generate the highest sales tax revenues, but
the Parties mutual expectation is that substantial sales tax
revenues will be generated by the Project.
4.5. Vacation of a Portion of Renz Lane. City
acknowledges that the Project and the Public Improvements require
that a portion of the existing Renz Lane be vacated and abandoned
by City (the Vacated Portion), with title to the Vacated
Portion reverting to the owner of the underlying Property.
Concurrently with processing of a final parcel map covering the
affected area, the City shall commence and conduct proceedings to
vacate the Vacated Portion in accordance with its policies and
procedures. Nothing in this Section 4.5 is intended, however, to
limit the discretion of City to take appropriate legislative
action pursuant to the proceedings to vacate the Vacated Portion
under California Streets and Highways Code Section 8320, et seq.
It is contemplated that the City Councils approval of the final
parcel map, consideration of the vacation, and approval of the
Phase IA improvements would all occur at the same City Council
meeting. Citys vacation of the Vacated Portion may be subject
to such exceptions, Dedications, reservations and easements
and /or other reserved rights as may be customary in connection
with such proceedings, or contained in any resolution of
vacation, or otherwise consistent with the Project Approvals
(including the above - referenced final parcel map) that may be in
place at the time of such vacation, including, without
limitation, one or more irrevocable offers of Dedication covering
Citys rights in and to any and all public utility improvements
or facilities currently located under or on the Vacated Portion,
together with rights of entry, as well as reasonable reserved
rights in favor of the City for the purposes of the construction
of certain frontage improvements along Highway 152.
13958:6343404.2 -24-
ARTICLE V
INDEMNITY
5.1. NDG Indemnity.
5.1.1. NDGs Indemnity . NDG shall Indemnify City
from any Losses arising out of or in connection with any
litigation or other proceeding initiated by a third Person
challenging any City Approval (including this Agreement). NDG's
obligation to Indemnify City under this Section 5.1 shall include
the obligation to Indemnify for any claim that any work performed
by NDG is subject to prevailing wage requirements under Laws and
the obligation to Indemnify City for costs incurred by City Staff
and the City Attorney in connection with any such litigation or
other proceeding. The Parties shall cooperate in defending any
such litigation or other proceeding. City shall have the right
to employ its own counsel in such litigation or other proceeding
and NDG's obligation to Indemnify City under this Section 5.1
shall include all fees and costs incurred by City for City's
counsel. In no event shall City be required to bear the fees or
costs of NDG's counsel in any such litigation or other
proceeding. The Parties acknowledge that this Section 5.1
constitutes a separate agreement entered into concurrently with
this Agreement, and that if any other provision of this Agreement
or the Agreement as a whole is invalidated, rendered null or set
aside by a court of competent jurisdiction as a result of any
such litigation or other proceeding, the Parties shall
nevertheless be bound by the terms of this Section 5.1, which
shall survive such invalidation, nullification or setting aside
by such court
5.1.2. Defense of Legal Action. In furtherance
of the foregoing, in the event of a legal action by a third party
challenging the validity, interpretation, or effectiveness of all
or any part of this Agreement or contesting any alleged actions
or omissions of the City relating to, or forming part of, the
13958:6343404.2 -25-
enactment of the ordinance adopting this Agreement, if City
elects to defend such action, or if NDG requests that the City
defend such action within five (5) days after City notifies NDG
of such legal action, City will exert reasonable efforts to
defend such action. Upon becoming aware of such legal action,
City shall have the right to submit a demand for a deposit, in an
amount to be determined by City, toward costs to be incurred by
City in connection with such action, including, without
limitation, staff time and all court costs, litigation expenses,
and attorneys fees (hereinafter Litigation Costs). Said
deposit, as well as reimbursement for all Litigation Costs
incurred by City in connection with such'action, shall be paid by
NDG within ten (10) days after written demand. If the City seeks
reimbursement of any Litigation Costs, City shall provide
reasonably detailed invoices of such Litigation Costs promptly
after written request by NDG. City shall have the right from
time to time to reasonably estimate the amount it expects to
incur in connection with such action, and to demand from NDG an
additional deposit for such amounts, which additional deposit
shall be paid to the City within ten (10) days after written
demand. Upon the final conclusion of such action, any unused
deposit provided by NDG shall be returned to NDG. Nothing
contained herein shall be construed to limit the discretion of
City, in the interest of the public welfare, to settle, defend or
appeal, or to decline settlement or to terminate or forego
defense or appeal of, such legal action. In no event shall City
be required to continue litigation, although City shall have the
right to do so, in the event NDG fails to pay any amounts owing
to the City pursuant to this Section within the time required by
this Section. In no event shall City have any obligation or
liability to NDG in connection with Citys defense of such
action, including without limitation the outcome thereof, or in
the event the City elects not to defend such action or terminates
said defense.
13958:6343404.2 -26-
5.2. Insurance. Until full and final completion of
the Public Improvements pursuant to Article IV above, NDG shall
maintain in effect (i) a policy of commercial general liability
insurance with a combined single limit of not less than
$5,000,000.00 per occurrence and general aggregate, and
(ii) Workers' Compensation Insurance covering all individuals
employed by NDG for work at the Project site or on the Public
Improvements, with coverage in the minimum amount required by
Laws. NDG shall also cause each general contractor and
subcontractor performing work at the Project site or on the Pubic
Improvements to carry Workers' Compensation Insurance with
coverage of at least the minimum amount required by Laws. NDG's
commercial general liability insurance under clause (i) above
shall name City, its elected and appointed boards, commissions,
officers, agents and employees, as additional insureds, and shall
include either a severability of interest clause or cross -
liability endorsement. NDG shall furnish City certificates of
insurance evidencing that NDG's insurance required to be carried
under clauses (i) and (ii) above is in effect and providing that
City shall receive at least thirty (30) days prior written notice
of the cancellation or reduction in coverage of any insurance
policy issued pursuant to clauses (i) or (ii) above.
ARTICLE VI
ANNUAL REVIEW OF COMPLIANCE
6.1. Annual Review. City and NDG may annually
review this Agreement, and all actions taken pursuant to the
terms of this Agreement with respect to the Project, in
accordance with the provisions of Section 65865.1 of the
Development Agreement Legislation, Section 6 of the Development
Agreement Ordinance, and this Article VI.
6.2. NDGs Submittal . Promptly after receipt from
City of any decision to undertake an annual review under this
Article VI, NDG shall submit a report to the City Administrator
13958:6343404.2 -27-
describing NDGs good faith substantial
of this Agreement during the preceding
include a statement that the report is
to the requirements of Section 65865.1
Agreement Legislation and Section 6 of
Ordinance.
compliance with the terms
year. Such report shall
submitted to City pursuant
of the Development
the Development Agreement
6.3. Finding of Compliance. Within thirty (30) days
after NDG submits its report hereunder, the City Administrator
shall review NDGs submission to ascertain whether NDG has
demonstrated good faith substantial compliance with the terms of
this Agreement. If the City Administrator finds and determines
that NDG has in good faith substantially complied with the terms
of this Agreement or does not determine otherwise within thirty
(30) days after delivery of NDGs report under Section 6.2 above,
the annual review shall be deemed concluded. If the City
Administrator initially determines that such report is inadequate
in any respect, he or she shall provide written notice to that
effect to NDG, and NDG may supply such additional information or
evidence as may be necessary to demonstrate good faith
substantial compliance with the terms of this Agreement. If the
City Administrator concludes that NDG has not demonstrated good
faith substantial compliance with the terms of this Agreement, he
or she shall so notify NDG prior to the expiration of the 30 -day
period herein specified and prepare a staff report to the City
Council with respect to the City Administrators conclusions and
the contentions of NDG with respect thereto.
6.4. Hearing Before City Council to Determine
Compliance. After submission of the City Administrators staff
report, the City Council shall conduct a noticed public hearing
pursuant to Section 6 of the Development Agreement Ordinance to
determine the good faith substantial compliance by NDG with the
terms of this Agreement. At least five (5) business days prior
to such hearing, the City Administrator shall provide to the City
Council, NDG and to all other interested Persons requesting the
same, copies of all staff reports and other information
13958:6343404.2 - 2 8-
concerning NDGs good faith, substantial compliance with the
terms of this Agreement and the conclusions and recommendations
of the City Administrator. At such hearing, NDG and any other
interested Person shall be entitled to submit evidence, orally or
in writing, and address all the issues raised in the staff report
on, or with respect or germane to the issue of, NDGs good faith
substantial compliance with this Agreement. If, after receipt of
any written or oral response of NDG, and after considering all of
the evidence at such public hearing, the City Council finds and
determines, on the basis of substantial evidence, that NDG has
not substantially complied in good faith with the terms and
conditions of this Agreement, then the City Council shall specify
to NDG the respects in which NDG has failed to comply, and shall
also specify a reasonable time for NDG to meet the terms of
compliance, which time shall be not less than thirty (30) days
and shall be reasonably related to the time necessary adequately
to bring NDGs performance into good faith substantial compliance
with the terms of this Agreement. If the areas of noncompliance
specified by the City Council are not corrected within the time
limits prescribed by the City Council hereunder, then the City
Council may by subsequent action extend the time for compliance
for such period as the City Council may determine (with
conditions, if deemed appropriate), Terminate or modify this
Agreement, or take such other actions as may be specified in the
Development Agreement Legislation and the Development Agreement
ordinance. Any notice to NDG of a determination of noncompliance
by NDG hereunder, or of a failure by NDG to perfect the areas of
noncompliance hereunder, shall specify in reasonable detail, the
grounds therefor, and a summary of the facts demonstrating such
noncompliance or failure, so that NDG may address the issues
raised in the notice of noncompliance or failure on a point -by-
point basis in any hearing held by the City Council hereunder.
6.5. Certificate of Compliance. If the City
Administrator (or the City Council, if applicable) finds good
faith substantial compliance by NDG with the terms of this
13958:6343404.2 -29-
Agreement, the City Administrator shall promptly after written
request by NDG issue a certificate of compliance within ten (10)
days thereafter, certifying NDGs good faith compliance with the
terms of this Agreement through the period of the applicable
annual review. Such certificate of compliance shall be in
recordable form and shall contain such information as may be
necessary in order to impart constructive record notice of the
finding of good faith compliance hereunder. NDG shall have the
right to record the certificate of compliance in the Official
Records of the County of Santa Clara.
ARTICLE VII
PERMITTED DELAYS; SUPERSEDURE BY SUBSEQUENT LAWS
7.1. Permitted Delays. Performance by a Party of
its obligations hereunder shall be excused during, and extended
for a period of time equal to, any period of Force Majeure delay.
Performance by a Party of its obligations under this Agreement
shall be excused during, and extended on account of, a Force
Majeure delay under this Section 7.1 for the period for which the
cause of such permitted delay is in effect.
7.2. Supersedure by Subsequent Laws.
7.2.1. Effect of Conflicting Law. If any Law
made or enacted after the Effective Date prevents or precludes
compliance with one or more provisions of this Agreement, or any
provision or condition of approval contained in any other City
Approval, or requires changes in any of the plans, maps or
permits encompassed within the City Approvals, then upon request
of either Party after enactment of any such new Law, the Parties
shall meet and confer in good faith in a reasonable attempt to
modify or suspend this Agreement to comply with such Law. Any
such modification or suspension of this Agreement shall be
effective only if approved by the City Council. If such
modification or suspension is deemed infeasible in NDG's
reasonable business judgment, then NDG may elect either (i) to
13958:6343404.2 -30-
Terminate this Agreement by written notice to City, or (ii) to
contest such Law pursuant to Section 7.2.2 below. The effect of
any Termination pursuant to clause (i) above shall be governed by
the provisions of Section 3.6 above.
7.2.2. Contest of New Law. Either Party shall
have the right to contest the Law preventing compliance with the
terms of this Agreement, any City Approval, or any plans, maps or
permits thereunder and, in the event such challenge is
successful, this Agreement shall remain unmodified and in full
force and effect.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES; ATTORNEYS' FEES; CERTIFICATES
8.1. Events of Default. Subject to the provisions
of Articles VI and VII, any failure by a Party to perform any
material term or provision of this Agreement shall constitute an
Event of Default, (i) if such defaulting Party does not cure
such failure within thirty (30) days following notice of default
from the other Party, where such failure is of a nature that it
can be cured within such 30 -day period, or (ii) if such failure
is not of a nature which can be cured within such 30 -day period,
the defaulting Party does not within such 30 -day period commence
substantial efforts to cure such failure, or thereafter does not
within a reasonable time prosecute to completion with diligence
and continuity the curing of such failure. Any notice of an
Event of Default given hereunder shall specify in reasonable
detail the nature of the failures in performance which the
noticing party claims constitute the Event of Default and the
manner in which such Event of Default may be satisfactorily cured
in accordance with the terms and conditions of this Agreement.
Proceedings under Article VI or VII shall be governed exclusively
by the provisions of those Articles and not by the provisions of
this Article VIII.
8.2. Remedies.
13958:6343404.2 -3 1-- .
8.2.1. Specific Performance. Except as otherwise
specifically provided in this Section 8.2, upon the occurrence of
an Event of Default, each Party shall have the right, in addition
to all other rights and remedies available under this Agreement,
to (i) bring any proceeding in the nature of specific
performance, injunctive relief or mandamus, and /or (ii) bring any
action at law or in equity as may be permitted by Laws or this
Agreement. Notwithstanding the foregoing, neither Party shall
have the right to any monetary damages (whether direct,
consequential or otherwise) on account of any Event of Default of
a Party under this Agreement, claims of breach of contract
related to this Agreement, or claims in the nature of tort
related to this Agreement (such as fraud in the inducement),
except that a Party shall have the right to bring an action at
law against the other Party for the breach by such other Party of
an obligation of such other Party for the payment of money under
this Agreement. The Parties intend, by the provisions of this
Section 8.2, that neither Party shall have any liability for
damages arising out of an Event of Default under this Agreement,
except for the right to bring an action to enforce an obligation
of a Party to pay monies due under this Agreement as specifically
provided in this Section 8.2. Accordingly, except for the right
to enforce such monetary obligations, each Party hereby waives,
releases and relinquishes, after .full and complete advice by
counsel chosen by each Party, such Party's right to any claim or
right to damages on account of an Event of Default of a Party
under this Agreement. The Parties acknowledge that monetary
damages and remedies at law generally are inadequate upon the
occurrence of an Event of Default. Therefore, specific
performance or other extraordinary equitable relief (such as
injunction) is an appropriate remedy for the enforcement of this
Agreement, other remedies at law being inadequate under all the
circumstances pertaining as of the date of this Agreement and any
such equitable remedy shall be available to the Parties. The
Parties acknowledge that neither Party would have entered into
13958:6343404.2 -32-
this Agreement but for the limitations on monetary damages and
the acknowledgments and waivers contained in this Section 8.2.
8.2.2. Limitation on Remedy. Notwithstanding the
foregoing, the Parties do not intend that the equitable relief
contemplated hereby shall include, nor shall City be entitled to
bring an action that shall purport to require NDG or any owner of
any portion of the Project constituting Phase II to complete
development of the Project, or require NDG to acquire any portion
of the property containing the Project that is not owned by NDG
on the date of this Agreement, if NDG shall reasonably determine
that such continued development of the Project is economically
infeasible or if NDG determines not to acquire such property. If
an Event of Default occurs under this Agreement as a result of
NDGs or such owners refusal to develop the Project according to
the Project Development Schedule for the foregoing reasons, the
City may Terminate this Development Agreement under Article 6,
with respect to any portions of the Project that have not been
constructed as of the date such Event of Default occurs, subject,
however, to Section 10.5 hereof, if any portion of the Project
has been the subject of a Transfer.
8.3. Waiver; Remedies Cumulative. Failure by a
Party to insist upon the strict performance of any of the
provisions of this Agreement by the other Party, irrespective of
the length of time for which such failure continues, shall not
constitute a waiver of such Partys right to demand strict
compliance by such other Party in the future. No waiver by a
Party of an Event of Default shall be effective or binding upon
such Party unless made in writing by such Party, and no such
waiver shall be implied from any omission by a Party to take any
action with respect to such Event of Default. No express written
waiver of any Event of Default shall affect any other Event of
Default, or cover any other period of time, other than any Event
of Default and /or period of time specified in such express
waiver. One or more written waivers of an Event of Default under
any provision of this Agreement shall not be deemed to be a
13958:6343404.2 -33-
waiver of any subsequent Event of Default, and the performance of
the same or any other term or provision contained in this
Agreement.
8.4. Litigation Expenses. If a Party brings an
action or proceeding (including any cross - complaint,
counterclaim, or third -party claim) against the other Party by
reason of an Event of Default, the prevailing Party in such
action or proceeding shall be entitled to its costs and expenses,
including reasonable attorneys fees and attorneys fees on any
appeal.
8.5. Limitations on Actions. Unless otherwise
provided by Laws, any action by any third Person to attack,
review, set aside, void or annul any action or decision taken by
a Party under this Agreement shall not be maintained by such
Person unless such action or proceeding is commenced within
ninety (90) days after the date such decision or action is made
or taken hereunder.
8.6. Estoppel Certificate. Either Party may, at any
time, and from time to time, deliver written notice to the other
Party requesting such other Party to certify in writing that
(i) this Agreement is in full force and effect and a binding
obligation of the Parties, (ii) this Agreement has not been
amended or modified either orally or in writing, and if so
amended, identifying the amendments, and (iii) to the knowledge
of such other Party, no Party has committed an Event of Default
under this Agreement, or if an Event of Default has to such other
Partys knowledge occurred, to describe the nature of any such
Event of Default. A Party receiving a request hereunder shall
execute and return such certificate within twenty (20) days
following the receipt thereof. The City Administrator, as to
City, shall execute certificates requested by NDG hereunder.
Each Party acknowledges that a certificate hereunder may be
relied upon by Transferees and Mortgagees. No Party shall,
however, be liable to the requesting Party, or third Person
13958:6343404.2 -34-
requesting or receiving a certificate hereunder, on account of
any information therein contained, notwithstanding the omission
for any reason to disclose correct and /or relevant information,
but such Party shall be estopped with respect to the requesting
Party, or such third Person, from asserting any right or
obligation, or utilizing any defense, which contravenes or is
contrary to any such information.
8.7. Nonliability of Officials and Employees of
City. No member, official or employee of City shall be
personally liable to NDG in the event of any Event of Default by
City or for any amount which may become due to NDG, or for any
obligations under the terms of this Agreement, or for any claims
of breach of contract related to this Agreement, or for any
claims in the nature of tort related to this Agreement (such as
fraud in the inducement). NDG hereby waives and releases any
claim it may have against the members, officials or employees of
City with respect to any Event of Default by City or for any
amount which may become due to NDG, or on any obligations under
the terms of this Agreement
8.8. Nonliability of Members and Other Individuals
Affiliated with NDG. No member or employee of NDG shall be
personally liable to City in the event of any Event of Default
by NDG or for any amount which may become due to City, or for
any obligations under the terms of this Agreement, or for any
claims of breach of contract related to this Agreement, or for
any claims in the nature of tort related to this Agreement (such
as fraud in the inducement). City hereby waives and releases
any claim it may have against the members or employees of NDG
with respect to any Event of Default by NDG or for any amount
which may become due to City, or for any obligations of NDG
under the terms of this Agreement.
13958:6343404.2 -3 5
ARTICLE IX
MORTGAGEE PROTECTION; CERTAIN RIGHTS OF CURE
9.1. Mortgagee Protection. This Agreement shall be
superior and senior to the lien of any Mortgage encumbering any
interest in the Project. Notwithstanding the foregoing, no Event
of Default shall defeat, render invalid, diminish or impair the
lien of any Mortgage made for value, but, subject to the
provisions of Section 9.2 below, all of the terms and conditions
contained in this Agreement shall be binding upon and effective
against any Person (including any Mortgagee) who acquires title
to the Project, or any portion thereof or interest therein or
improvement thereon, by foreclosure, trustees sale, deed in lieu
of foreclosure, or termination of the Mortgage.
9.2. Mortgagee Not Obligated; Mortgagee as
Transferee. No Mortgagee shall have any obligation or duty under
this Agreement, except that nothing contained in this Agreement
shall be deemed to permit or authorize any Mortgagee to undertake
any new construction or improvement project, or to otherwise have
the benefit of any rights of NDG, or to enforce any obligation of
City under this Agreement, unless and until such Mortgagee has
become a Transferee in the manner specified in Article X below.
In the event a Mortgagee takes possession of the Property but
elects not to become a Transferee and complete the Project in
accordance with the applicable provisions of this Agreement, then
NDG or any Occupant which has received a City Financial
Contribution shall be obligated to reimburse City, but only to
the extent of the benefit received by any of them, for any
portion of the City Financial Contribution, if any, paid to NDG
relating to the Building Groups acquired or possessed by such
Mortgagee pursuant to Section 4.3, as of the date such Mortgagee
so elects by written notice to City, if the conditions to payment
of such City Financial Contribution are never satisfied.
13958:6343404.2 -36-
9.3. Notice of Default to Mortgagee; Right of
Mortgagee to Cure. If City receives notice from a Mortgagee
requesting a copy of any notice of an Event of Default given NDG
hereunder and specifying the address for service thereof, then
City shall deliver to such Mortgagee, concurrently with service
thereon to NDG, any notice given to NDG with respect to any claim
by City that NDG has committed an Event of Default. If City
makes a determination of noncompliance under Article VI above,
City shall likewise serve notice of such noncompliance on such
Mortgagee concurrently with service thereof on NDG. Such
Mortgagee shall have the right (but not the obligation) to cure
or remedy, or to commence to cure or remedy, the Event of Default
claimed or the areas of noncompliance set forth in Citys notice
within the applicable time periods for cure specified in this
Agreement. If, however, the Event of Default or such
noncompliance is of a nature which can only be remedied or cured
by such Mortgagee upon obtaining possession of the Project, or
portion thereof, if such Mortgagee shall elect to cure such Event
of Default, such Mortgagee shall seek to obtain possession with
diligence and continuity through a receiver or otherwise, and
shall thereafter remedy or cure the Event of Default or
noncompliance as soon as reasonably possible after obtaining
possession. So long as such Mortgagee is pursuing cure of the
Event of Default or noncompliance in conformance with the
requirements of this Section 9.3 and /or diligently pursuing an
action to obtain possession of the Project by receiver or
otherwise, City shall not exercise any right or remedy under this
Agreement on account of such Event of Default or noncompliance.
ARTICLE X
TRANSFERS AND ASSIGNMENTS
10.1. Right to Transfer. NDG shall have the right to
Transfer any right or interest under this Agreement in accordance
with the provisions of this Article X.
13958:6343404.2 -37-
10.2. Conditions on NDG Right to Transfer. Except as
otherwise provided in this Article X, NDG shall have the right to
effect a Transfer, subject to and upon fulfillment of the
following terms and conditions:
10.2.1. No Event of Default. No Event of Default
by NDG shall be outstanding and uncured as of the effective date
of the proposed Transfer, unless City has received adequate
assurances reasonably satisfactory to City that such Event of
Default shall be cured in a timely manner either by NDG or the
Transferee under the Transfer.
10.2.2. Assumption Agreement. NDG or the proposed
Transferee has delivered to City an executed and acknowledged
assumption agreement in recordable form, reasonably acceptable to
City. Such assumption agreement shall include provisions
regarding (i) the portion or portions or interest in the Project
proposed to be Transferred and the concomitant rights of NDG that
the proposed Transferee is to assume, (ii) the obligations of NDG
under this Agreement that the proposed Transferee will assume,
and (iii) the proposed Transferees acknowledgment that such
Transferee has reviewed and agrees to be bound by this Agreement
and all Applicable City Regulations and City Approvals. The
assumption agreement shall also include the name, form of entity,
and address of the proposed Transferee, and may provide that the
Transferee assumes certain obligations of NDG to be assumed by
the Transferee in connection with the proposed Transfer. Without
limiting the provisions of Section 10.1, City acknowledges that
NDG may assign or delegate to any such assuming Transferee only a
portion of its obligations and rights in connection with any
Building Group and may retain, among other things (a) the
obligation to make any and all Public Improvements associated
with the Project, including the Public Improvements allocated or
allocable to any relevant Building Group, and (b) the right to
receive any City Financial Contribution in connection with the
development of the Building Group that is the subject of any
transfer. Any assumption agreement shall designate the party to
13958:6343404.2 -3 8-
whom the City Financial Contribution is to be paid. The
assumption agreement shall be recorded in the Official Records of
the County of Santa Clara concurrently with the consummation of
the Transfer, and a copy thereof, certified by the County
Recorder as a duplicate copy of the approved assumption agreement
with recording information, shall be delivered to City within
three (3) days after consummation of the Transfer.
10.2.3. Right of NDG to Cure. In the event of a
partial assignment of this Agreement, pursuant to an assumption
agreement, City will not declare an Event of Default hereunder,
without giving NDG notice of such Event of Default, which shall
be given concurrently with the transmittal of notice to such
Transferee, and a reasonable opportunity to cure the relevant
default. City acknowledges that in connection with the curing of
any relevant default, NDG may be required to bring a legal action
for specific performance and /or other legal action to remedy the
relevant default. Therefore, notwithstanding Section 8.1 of this
Agreement, NDG shall be granted a commercially reasonable period
in addition to the cure period specified in Section 8.1, which
shall not exceed one hundred eighty (180) days, in order to cure
any relevant default of any Transferee who may assume the
obligations of NDG under this Agreement.
10.3. Limitations and Exceptions on NDG Right to
Transfer. NDGs right to Transfer any right or interest under
this Agreement shall be subject to the following limitations and
exceptions.
10.3.1. Transfer to Affiliate. NDG shall have the
right to Transfer any right or interest under this Agreement to
an Affiliate, as to which Transfer the condition specified in
Section 10.2.1 shall not apply. Such Affiliate shall become a
Transferee upon (i) the acquisition by such Affiliate of the
interest Transferred, and (ii) delivery to City of an assumption
agreement pursuant to Section 10.2.2 above assuming, from and
after the date such Affiliate so acquires its interest, all of
13958:6343404.2 -39-
the rights, duties and obligations pertaining to such interest
under this Agreement. Unless approved by City, and except as
provided in Section 10.3.3 below for Occupants, NDG shall not
have the right to effect a Transfer of any right or interest
under this Agreement except to an Affiliate prior to the issuance
by City of the first (1s9 Certificate of Occupancy for a
Building Group in the Project.
10.3.2. Transfer to Non - Affiliate. NDG shall have
the right to Transfer any right or interest under this Agreement
concurrently with, or after issuance by City of, the first
Certificate of Occupancy for a Building Group if the condition
specified in Section 10.2.1 above is fulfilled. Such third
Person shall become a Transferee upon W the acquisition by such
third Person of the interest Transferred, and (ii) delivery to
City of an assumption agreement pursuant to Section 10.2.2 above
assuming, from and after the date such third Person so acquires
its interest, all of the rights, duties and obligations
pertaining to such interest under this Agreement.
10.3.3. Transfers to Occupants; Occupants not
Obligated Under Agreement. Notwithstanding anything to the
contrary contained in this Article X, NDG shall have the right to
Transfer portions of the Project (including space in Building
Group) to Occupants pursuant to Occupant Transfers. No Occupant
to whom a Transfer is made pursuant to this Section 10.3.3 shall
have any obligation or liability under this Agreement and the
conditions specified in Section 10.2 above shall not apply to any
such Occupant Transfer, unless such Occupant expressly assumes
the obligations of NDG under this Agreement as provided in
Section 10.2, above.
10.4. Mortgagee as Transferee. No Mortgage
(including the execution and delivery thereof to the Mortgagee)
shall constitute a Transfer. A Mortgagee shall be a Transferee
when such Mortgagee has complied with the provisions of Section
10.2.2 above.
13958:6343404.2 -40-
10.5. Effect of Transfer. Except as otherwise
provided in Section 10.3.3 for an Occupant Transfer thereunder,
the Transferee shall become a Party to this Agreement only with
respect to the interest Transferred to it under the Transfer to
the extent set forth in the assumption agreement delivered under
Section 10.2.2 above. Each Transferee, to the extent set forth
in such assumption agreement, shall observe and fully perform all
of the duties and obligations of NDG contained in this Agreement,
but only with respect to the relevant Building Group covered by
such Occupant Transfer. No such Transfer shall release NDG from
its obligations under this Agreement, including, without
limitation its obligations to complete any improvements required
by the Additional Conditions, subject, however to any limitations
on NDGs obligations or liability contained in this Agreement.
However, in the case of any Occupant Transfer occurring after
completion of the Public Improvements, if any Transferee shall
default on any obligations to complete the portion of the Project
covered by such Occupant Transfer in accordance with the Project
Development Schedule, such failure to comply shall not affect any
ability of NDG or any other Transferee pursuant to an Occupant
Transfer to realize the benefits of this Agreement, so long as
NDG or such Occupant shall comply with all other obligations
under this Agreement.
ARTICLE XI
AMENDMENT AND TERMINATION
11.1. Amendment or Cancellation. Except as provided
in Articles VI and VIII above, this Agreement may be Terminated,
modified or amended only by mutual consent of the Parties in
writing, and then only in the manner provided for in Section
65868 of the Development Agreement Legislation. Notwithstanding
that this Agreement is a legislative act of City, the provisions
of this Section 11.1, and Article VI, prescribe the sole and only
means pursuant to which this Agreement may be Terminated,
modified, or amended and neither this Agreement nor any term,
13958:6343404.2 -41-
covenant, condition or provision herein contained shall be
subject to initiative after the Effective Date.
ARTICLE XII
NOTICES
12.1. Procedure. All formal notices to a Party shall
be in writing and given by delivering the same to such Party in
person or by sending the same by registered or certified mail, or
Express Mail, return receipt requested, with postage prepaid, or
by overnight courier delivery, to such Partys mailing address.
The respective mailing addresses of the Parties are, until
changed as hereinafter provided, the following:
City: 7351 Rosanna Street
Gilroy, California 95020 -6190
Attention: City Administrator
NDG: Newman Development Group of Gilroy, LLC
2255 Van Ness Avenue, Suite 102
San Francisco, CA 94109
With a
copy to: Newman Development Group of Gilroy, LLC
P.O. Box 678
Vestal, NY 13851
Notices and communications with respect to technical matters in
the routine performance and administration of this Agreement
shall be given by or to the appropriate representative of a Party
by such means as may be appropriate to ensure adequate
communication of the information, including written confirmation
of such communication where necessary or appropriate. All formal
notices under this Agreement shall be deemed given, received,
made or communicated on the date personal delivery is effected
or, if mailed or sent by courier, on the delivery date or
attempted delivery date shown on the return receipt or courier
records.
13958:6343404.2 -42-
12.2. Change of Notice Address. A Party may change
its mailing address at any time by giving formal written notice
of such change to the other Party in the manner provided in
Section 12.1 at least ten (10) days prior to the date such change
is effected.
ARTICLE XIII
COVENANTS RUNNING WITH THE LAND
13.1. Covenants Running With The Land. Except as
specifically provided in Section 10.3.3 above with respect to an
Occupant Transfer thereunder, all of the provisions, agreements,
rights, powers, standards, terms, covenants and obligations
contained in this Agreement shall be binding upon the Parties and
their respective heirs, successors (by merger, consolidation, or
otherwise) and assigns, devisees, administrators,
representatives, lessees, and all other Persons acquiring NDGs
interest in the Project, or any portion thereof, or any interest
therein, or any improvement thereon, whether by operation of Laws
or in any manner whatsoever, and shall inure to the benefit of
the Parties and their respective heirs, successors (by merger,
consolidation or otherwise) and permitted assigns as Transferees,
as covenants running with the land pursuant to Section 65868.5 of
the Development Agreement Legislation. This Agreement and the
covenants shall run in favor of City, without regard to whether
either City has been, remains or is an owner of any land or
interest in the Property, any parcel or subparcel thereof.
13.2. Interests of Other Owners. If any Property
covered by this Agreement shall not be owned by NDG as of the
date this Agreement shall be recorded, NDG shall obtain a consent
of the owner of such portion of the Property to the recording of
this Agreement against such owners property, which shall be in
recordable form (an Owner Consent), on or before the date
this Agreement is recorded, and such Owners Consent shall be
recorded concurrently with the recordation of this Agreement.
13958:6343404.2 -43-
ARTICLE XIV
MISCELLANEOUS
14.1. Negation of Partnership. The Parties
specifically acknowledge that the Project is a private
development, that no Party is acting as the agent of the others
in any respect hereunder, and that each Party is an independent
contracting entity with respect to the terms, covenants and
conditions contained in this Agreement. None of the terms or
provisions of this Agreement shall be deemed to create a
partnership between or among the Parties in the businesses of
NDG, or the affairs of City, or otherwise, or cause them to be
considered joint venturers or members of any joint enterprise.
This Agreement is not intended and shall not be construed to
create any third Party beneficiary rights in any Person who is
not a Party; and nothing in this Agreement shall limit or waive
any rights NDG may have or acquire against any third Person with
respect to the terms, covenants or conditions of this Agreement.
14.2. Approvals. Unless otherwise provided in this
Agreement, whenever approval, consent or satisfaction (herein
collectively referred to as an approval) is required of a
Party pursuant to this Agreement, it shall not be unreasonably
withheld or delayed. If a Party shall disapprove, the reasons
therefor shall be stated in reasonable detail in writing.
Approval by a Party to or of any act or request by the other
Party shall not be deemed to waive or render unnecessary approval
to or of any similar or subsequent acts or requests. Whenever,
under this Agreement, the term approve (or any grammatical
variant thereof, such as approved or approval) is used in
connection with the right, power or duty of City, or any
representative board, commission, committee or official of City,
to act in connection with any City Approval, such approval shall
be made in accordance with the applicable terms, standards and
conditions of this Agreement.
13958:6343404.2 -44-
14.3. Not A Public Dedication; NDG Acknowledgements.
Except for Exactions made in accordance with this Agreement and
the Project Approvals, and then only when made to the extent so
required, nothing herein contained shall be deemed to be a gift
or dedication of the Project, or portion thereof, to the general
public, for the general public, or for any public use or purpose
whatsoever, it bung the intention and understanding of the
Parties that this Agreement be strictly limited to and for the
purposes herein expressed for the development of the Project as
private property. Notwithstanding the foregoing provisions, NDG
acknowledges that (i) a reasonable relationship exists between
all Dedications and Exactions imposed by the City Approvals
listed on Exhibit C and the impact of the Project upon City, and
(ii) the direct and indirect impacts of the Project warrant and
require the terms and conditions of this Agreement, and but for
the acknowledgements of NDG contained in the foregoing clauses
(i) and (ii), City would not have entered into this Agreement.
14.4. Severability. Invalidation of any of the
provisions contained in this Agreement, or of the application
thereof to any Person, by judgment or court order shall in no way
affect any of the other provisions hereof or the application
thereof to any other Person or circumstance and the same shall
remain in full force and effect, unless enforcement of this
Agreement as so invalidated would be unreasonable or grossly
inequitable under all the circumstances or would frustrate the
purposes of this Agreement.
14.5. Exhibits. The Exhibits listed below, to which
reference is made herein, are deemed incorporated into this
Agreement in their entirety by reference thereto:
Exhibit A _ City Development Fees Schedule
Exhibit B _ City Standards
Exhibit C _ City Approvals
Exhibit D _ project Development Schedule
13958:6343404.2 -45-
Exhibit E - Description of Property
Exhibit F _ List of Public Improvements
Exhibit G - Site Plan
Exhibit H - [Intentionally Deleted]
Schedule I- Additional Conditions
14.6. Entire Agreement. This written Agreement and
the Exhibits hereto, and any administrative implementation
memoranda entered into pursuant to Section 3.7, contain all the
representations and the entire agreement between the Parties with
respect to the subject matter hereof. Except as otherwise
specified in this Agreement, any prior correspondence, memoranda,
agreements, warranties or representations are superseded in total
by this Agreement and Exhibits hereto, and such administrative
implementation memoranda. Neither the conduct or actions of the
Parties, nor the course of dealing or other custom or practice
between the Parties, shall constitute a waiver or modification of
any term or provision of this Agreement; and this Agreement may
be modified or amended only in the manner specified in this
Agreement.
14.7. Construction of Agreement. All of the
provisions of this Agreement have been negotiated at arms - length
between the Parties and after advice by counsel and other
representatives chosen by each Party, and the Parties are fully
informed with respect thereto. Therefore, this Agreement shall
not be construed for or against either Party by reason of the
authorship or alleged authorship of any provisions hereof, or by
reason of the status of either Party. The provisions of this
Agreement and the Exhibits hereto shall be construed as a whole
according to their common meaning and not strictly for or against
any Party and consistent with the provisions hereof, in order to
Achieve the objectives and purpose of the Parties hereunder. The
captions preceding the text of each Article, Section and the
Table of Contents hereof are included only for convenience of
13958:6343404.2 -46-
reference and shall be disregarded in the construction and
interpretation of this Agreement.
14.8. Mitigation of Damages. In all situations
arising out of this Agreement, each Party shall use commercially
reasonable efforts to mitigate the damages resulting from the
conduct of the other Party. Each Party shall take all reasonably
necessary measures to effectuate the provisions of this
Agreement.
14.9. Further Assurances; Covenant to Sign Documents.
Each Party shall take all actions and do all things, and execute,
with acknowledgment or affidavit if required, any and all
documents and writings, which may be necessary or proper to
achieve the purposes and objectives of this Agreement.
14.10. Covenant of Good Faith and Fair Dealin . No
Party shall do anything which shall have the effect of harming or
injuring the right of the other Party to receive the benefits of
this Agreement; each Party shall refrain from doing anything
which would render its performance under this Agreement
impossible; and each Party shall do everything which this
Agreement contemplates that such Party shall do in order to
accomplish the objectives and purposes of this Agreement. The
Parties intend by this Agreement to set forth their entire
understanding with respect to the terms, covenants, conditions
and standards for the development, use and occupancy of the
Project and by which the performance of the rights, duties and
obligations of the Parties hereunder shall be measured or judged.
14.11. Governing Law. This Agreement, and the rights
and obligations of the Parties, shall be governed by and
interpreted in accordance with the Laws of the State.
14.12. References; Terminology. Unless otherwise
specified, whenever in this Agreement, reference is made to the
Table of Contents, any Article or Section, or any defined term,
such reference shall be deemed to refer to the Table of Contents,
13958:6343404.2 -47-
Article or Section or defined term of this Agreement. The use in
this Agreement of the words including, such as or words of
similar import, when following any general term, statement or
matter, shall not be construed to limit such statement, term or
matter to specific items or matters, whether or not language of
nonlimitation, such as without limitation or but not
limited to, or words of similar import, are used with reference
thereto, but rather shall be deemed to refer to all other items
or matters that could reasonably fall within the broadest
possible scope of such statement, term or matter. '
14.13. Irregularity in Proceeding. No action,
inaction or recommendation by a Party pursuant to this Agreement,
or of City in connection with a City Approval, shall be held void
or invalid, or be set aside by a court on the grounds of improper
admission or rejection of evidence, or by reason of any error,
irregularity, informality, neglect or omission (collectively, an
error), as to any matter pertaining to petition, application,
notice, finding, record, hearing, report, recommendation or any
matters of procedure whatsoever, unless after an examination of
the entire record with respect to such error, including the
evidence, the court finds that the error complained of was
prejudicial, and that by reason of the error, the complaining
Party, or third Person, sustained and suffered substantial
injury, and that a different result would have been probable if
the error had not occurred or existed. No presumption shall
arise that an error is prejudicial, or that injury resulted from
an error, solely as a result of a showing that error occurred.
14.14. Judicial Proceeding To Challenge Termination.
Any challenge made by NDG to Citys Termination of this Agreement
pursuant to a right so to do granted by this Agreement, shall be
subject to review in the Superior Court of the County of Santa
Clara pursuant to California Code of Civil Procedure Section
1094.5 as a case in which a vested right is affected.
13958:6343404.2 _48
14. 15. Signature Pages. For convenience, the
signatures of the Parties to this Agreement may be executed and
acknowledged on separate pages which, when attached to this shall
constitute this as one complete Agreement.
14.16. Time. Time is of the essence of this Agreement
and of each and every term and condition hereof.
IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the day and year first above written by the Authorized
Signatures attached hereto.
13958:6343404.2 -49-
AUTHORIZED SIGNATURE OF CITY TO AGREEMENT
City of Gilroy, a California
By
Its City Mayor
Approved as to form:
By,
�2a_"t -� •�1
Its City Attorney
STATE OF CALIFORNIA )
ss.
COUNTY OF SANTA CLARA )
On -St "? V1 'o -1 , oe 3 before me
Notary Public, personally appeared
personally known to me �
to be the person.(z-)-- whose name, is/are
subscribed to the within instrument and acknowledged to me that
he /are /they executed the same in his /her /the -i-r authorized
capacity(a:e-s), and that by his /he- r /t.hei-r signature(-Bt on the
instrument the person(2) , or the entity upon behalf of which the
person �61 acted, executed the instrument.
Witness my hand and
RHONOA PEUIN
Commission 8 1305815
Z Notary Public - Cat'rfont
Sar to Clara Courrla►
MY Comm B oirm Jut 19.2006
�.
(Seal)
official seal.
Notary Public
13958:6343404.2 -50-
AUTHORIZED SIGNATURE OF NDG TO AGREEMENT
NEWMAN DEVELOPMENT GROUP OF GILROY, LLC,
a California limited liability company
By: QfA4
Ma aging Member
STATE OF CALIFORNIA )
_ ) ss.
COUNTY OF
On Wttj -) 1. Ll' `? before me, �t Vi q ��4 ^(,�i(_ W%uK
Notary Public, personally appeared
personally known to me (or proved to me o the basis of
satisfactory evidence) to be the person(s) whose name(s) is /are
subscribed to the within instrument and acknowledged to me that
he /she /they executed the same in his /her /their authorized
capacity(ies), and that by his /her /their signature(s) on the
instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
Witness my hand and official seal.
(Seal)
Notary Public
13958:6343404.2 —5 1—
KARIN MARIE LOMAX�
U
comm, *1360233 (j
U
NOTARY PUBLIC • CALIFORNIA
SAN FRANCISCO COUNTY
My Comm, EXPIM June 8, 2009
(Seal)
Notary Public
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Public improvements shall be constructed in accordance with the City of Gilroy Community
Development Department Standard Specifications (cover sheet attached). The improvements are to be
constructed in accordance with the standards that are in place at the time of the approval of the public
improvement plans. The City of Gilroy agrees to cooperate in the distribution of the Standard
Specifications prior to commencement of the work.
CITY OF GILROY
CONDAUNITY DEVELOPMENT DEPARTMENT
STANDARD SPECIFICATIONS
The standard details and provisions contained in this manual have been prepared for the
purpose of establishing the minimum and uniform requirements to be used by engineers,
contractors and developers for the preparation of plans and the construction of public
improvements under the jurisdiction of the City of Gilroy. These standards shall be used in
conjunction with the latest revision of the State of California Department of Transportation
(Caltrans) Standard Specifications. In case of conflict between Caltrans Specifications and the
City of Gilroy Standard Details and Provisions, the City of Gilroy Standard Details and Provisions
shall apply.
Any deviation from the Standard Details or the Standard Specifications must be approved
in writing by the City Engineer of the City of Gilro California.
Rick Smelser
City Engineer
Exhibit C
City Approvals
A. Existing Entitlements. The land use entitlements and
approvals which have heretofore be granted by City for the
Project on the Adoption Date are as follows:
(i) By Resolution No. 93 -12, dated March 15, 1993, the
Gilroy City Council adopted the Gilroy General Plan General
Services Commercial land use designation for the Property.
(ii) By Resolution No. 2001 -74, dated November 5, 2001,
the Gilroy City Council approved a tentative parcel map for the
Property pursuant to Application TM 01 -02 (the "Tentative Map ").
(iii)The Gilroy City Council approved a Final Mitigated
Negative Declaration and Mitigation Monitoring Plan covering the
Project and certain other property on October 15, 2001 in
compliance with Application TM 01 -02.
(iv) By the Enacting Ordinance, the Gilroy City Council
authorized City to enter this Development Agreement with NDG.
B. Subsequent Approvals. The land use entitlements and
approvals which have yet to be granted by City for the Project on
the Adoption Date, including, without limitation:
(i) All approvals, other than those specified in
Paragraph A, above, required by the Zoning Ordinance of the City
of Gilroy, the Subdivision Ordinance of the City of Gilroy, the
Existing Entitlements, as enumerated in subparagraph A, above, or
the provisions of this Development Agreement for any future
development of the Project.
Project. (ii) Design review of any future development of the
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EXHIBIT E
DESCRIPTION OF PROPERTY
Phase 1 -A
Real property in the City of Gilroy, County of Santa Clara, State of California described
as follows:
Lots 2, 4 and 5 as shown on that certain map entitled "Tract No. 9401, Highway 152
Retail Center, Gilroy, California" filed for the record in the office of the Recorder for the
County of Santa Clara, State of California on August 16, 2002 in Book 751 of Maps,
pages 12 and 13, Santa Clara County Records.
Phase 1 -B
Lots 1, 2 and 3 as shown on that certain map entitled "Parcel Map No. for
Pacheco Pass Retail Center, Gilroy, California" filed for the record in the office of the
Recorder for the County of Santa Clara, State of California on , in
Book of Maps, page , Santa Clara County Records.
Phase 1 -B to be completed based on final recorded Map.
Phase 2
Lot A as shown on that certain map entitled "Tract No. 9401, Highway 152 Retail Center
Gilroy, California" filed for the record in the office of the Recorder for the County of
Santa Clara, State of California on August 16, 2002 in Book 751 of Maps, pages 12 and
15, Santa Clara County Records.
February 5, 2003
EXHIBI -r F
PACHECO PASS RETAIL CENTER
GILROY, CALIFORNIA
Engineers Opinion of Probable Construction Cost
Phase I
Includes Camino Arroyo, Renz Lane West of Camino Arroyo, and the Storm Drain system for
the entire site.
Item Quantity Unit
C &G
6,017
LF
Vertical Curb
4,481
LF
Sidewalk
17,249
SF
Street Paving
258,340
SF
Street Grading
352,080
SF
10" SS
2,689
LF
6" SS Lat.
587
LF
SSMH
12
EA
15" SD
1,202
LF
18" SD
607
LF
21" SD
61
LF
24" SD
1,173
LF
36" SD
1,157
LF
48" SD
2,306
LF
54" SD
87
LF
Curb Inlet
18
EA
Flate Grate Inlet
4
EA
SDMH
25
EA
SD Outfall
1
EA
12" DIP (Water)
3,092
LF
Domestic Service
11
EA
Fire Service
14
EA
Fire Hydrant
10
EA
Irrigation Service
14
EA
Electrolier
27
EA
Joint Trench
3,320
LF
Traffic Signal (Camino & Renz)
1
EA
PG &E Transmission Line Relocation
1
EA
Striping
13,200
LF
Handicap Ramps
14
EA
2of5
Phase l (Cont.)
Item Quantity Unit
PCC Bus Pad 4 EA
Lanscaping 45,000 SF
Median Landscaping 14,930 SF
Underground Electrical Lines Across 1 LS
Highway 152 (Phase 1 B)
Phase ll
Includes Renz Lane East of Camino Arroyo
Item Quantity Unit
Curb & Gutter
2,541
LF
Sidewalk
11,434
SF
Street.Paving
76,240
SF
Street Grading
111,750
SF
Striping
5,552
LF
loll VCP
1,158
LF
6" SS Lat
288
LF
SSMH
5
EA
15" SD
466
LF
Curb Inlet
10
EA
Flate Grate Inlet
1
EA
12" DIP (Water)
1,241
LF
Fire Service
5
EA
Domestic Service
4
EA
Irrigation Service
6
EA
Fire Hydrant
5
EA
Electrolier
8
EA
Joint Trench
1,300
LF
Traffic Signal
2
EA
Landscaping
15,250
SF
Underground Communication Lines
1
LS
Across Highway 152
3 of 5
HWY 152
Includes HWY 152 Frontage Improvements
Item Quantity Unit
Curb & Gutter
969
LF
Vertical Curb
161
LF
Sidewalk - Project Frontage
3,375
EA
Sidewalk - Extension to Bridge
2,790
EA
Curb Inlet
2
EA
Street Paving
8,260
SF
Street Grading
18,905
SF
Striping
1,130
LF
Lanscaping
4,920
SF
Reimbursable Improvements
Includes the center two lanes (one in each direction), left turn pockets, and median area on
Camino Arroyo.
Item Quantity Unit
Vertical Median Curb 3,300 LF
5" AC on 10 "AB w/ Lime Treatment 75,500 SF
Sidewalk - Extension to Bridge 2,790 EA
Median Landscaping 14,930 SF
Summary of Costs
PHASE
PHASE II
HIGHWAY 152
REIMBURSABLE IMPROVEMENTS
4of5
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Schedule I
Additional Conditions
1.0 Additional Traffic Conditions.
1.0.1. Supplemental Traffic Study. NDG shall pay for the
preparation of a supplemental traffic study, for
review and approval by the City Engineer, which
shall be completed during the month of September,
2003 and shall identify the phased implementation
of improvements required for future build -out of
the Project based on current knowledge of future
projections of traffic impacts generated by the
Project.
1.0.2. Yearly Monitoring Program. NDG shall pay for or
establish a fund to pay for the implementation of
a yearly monitoring program (the Yearly Monitoring
Program), and shall implement the improvements
according to the phasing plan when such Yearly
Monitoring Program indicates improvements will be
required within the next year and /or prior to the
issuance of the building permit for the square
foot area that causes the impact, whichever occurs
first. The improvements referenced in the
subparagraph are only those that have already been
identified, and the purpose of the Yearly
Monitoring Program with respect to such
improvements is to determine the timing of
implementation of the improvements.
1.0.3. Possible Additional Improvements. The Yearly
Monitoring Program may yield interim or partial
improvements that were not in the original traffic
study. These alternative improvements may be
implemented if they are acceptable to the City
Engineer and only if these improvements continue
to substantially mitigate the relevant significant
impact and do not create any new significant
environmental effects. Notwithstanding the
foregoing, in no event will any such recommended
improvements include, nor shall NDG be required to
construct a bridge on the north side of the
Project over Ronan Channel, pursuant to this
paragraph. However, in the case that full build -
out of the improvements in the supplemental
traffic study no longer mitigates the impact,
additional improvements shall be required. The
parties acknowledge that such improvements may be
13958:6316445.17 - 1 -
1.1
required not because of any inadequacy of analysis
of the Project as originally proposed, but rather
because delays in implementation of the Project
may mean that traffic conditions in the area have
changed from those originally analyzed. Thus,
additional improvements may be required to ensure
orderly development of the area. The City shall
provide notice to NDG of any additional
improvements that may be required under this
paragraph, together with a reasonable basis for
its requirement of any such improvements. NDG and
the City will use good faith efforts to agree on
the scope of any such improvements. City agrees
to meet with NDG to discuss the need for any such
improvements, or their potential scope, if NDG
disputes the need for such additional
improvements.
Specific Phasing of Improvements.
1.1.1. Phase IA. Prior to the occupancy of the first
building in Phase IA, the following shall be
completed:
CalTrans acceptance of improvements along Highway
152.
Grading and on -site and off -site improvements
certified as completed by Developers Civil
Engineer.
Emergency Vehicle Preemption Transponders
installed in CHP units or approval letter from
CHP.
City acceptance of Public Improvements related to
Phase IA, with full bonding for pavement
restoration, if necessary.
1.1.2. Phase IB. Prior to occupancy of the first
building in Phase IB the following shall be
completed.
Construct sidewalk along Highway 152 at frontage
to the bridge structure atop of overpass on
Highway 101.
Provide additional right -of -way dedication along
Highway 152 for ultimate build -out of Highway 152
from Camino Arroyo to and through, if needed, APN
841 -10 -047.
13958:6316445.17 -2-
Construct fence along Highway 152 from Camino
Arroyo to CalTrans right -of -way.
Complete parcel map covering area designated as
Phase IB.
Complete Renz abandonment, subject to terms and
conditions of this Agreement.
Construct PG &E utilities underground and bond for
communications undergrounding.
Complete emergency vehicle access.
Complete pavement restoration to the Citys
satisfaction, Camino Arroyo from Highway 152 north
to the Ronan Channel and Renz Lane west to the
conform with existing pavement, provided, however
compliance with the foregoing will be required
before the issuance of a building permit for any
portions of the construction, other than
foundation or grading in connection with the first
Building in Phase IB.
Additional considerations may be added at the time
of architectural site review, new mapping, etc.,
in accordance with City Standards and this
Agreement.
1.1.3. Phase II. Prior to occupancy of the first
building in Phase II the following shall be
completed:
Complete construction of all utilities
underground, including communications.
Construct fence along the Ronan Channel along
frontage of Phase 2 with Ronan Channel and at the
right -of -way terminus of Camino Arroyo with the
Ronan Channel.
Additional considerations may be added at the time
of architectural site review, new mapping, Phase
II improvement plan submittals, etc., in
accordance with City Standards and this Agreement.
1.2 Fire Protection Considerations.
1.2.1. Radio Infrastructure. In order to ensure proper
Public Safety radio communication, expansion of
the Citys Public Safety Radio System will be
necessary. Newman shall pay the incremental cost
associated with the City of Gilroy Fire Department
integration of the Fire Radio System into the
13958:6316445.17 -3 -
Police Simulcast Radio System infrastructure. The
cost shall be as specified by the Fire Department,
but shall not exceed $ 52,000.00 and shall be due
and payable prior to a certificate of occupancy
for the first building for which such improvements
are necessary in the reasonable determination of
the Fire Department.
1.2.2. Aerial Apparatus. NDG shall pay specified
incremental cost, subject to the reasonable
determination of the Fire Department, for the
accelerated purchase by the City of Gilroy Fire
Department of additional specialized tools and
equipment for the aerial truck apparatus. Such
costs shall be as specified by the Fire
Department, but shall not exceed $ 55,000 and
shall be due and payable prior to a certificate of
occupancy for the first building for which such
improvements are necessary in the reasonable
determination of the Fire Department.
13958:6316445.17 -4-