Exhibit CC 02-15-2011 Item No. 20 Staff Report Vallco
PUBLIC WORKS DEPARTMENT
CITY HALL
10 10UPERTINO, CA 95014-3255
TELEPHONE: (408) 777-3354 www.cupertino.org
CITY COUNCIL/REDEVELOPMENT AGENCY STAFF REPORT
Meeting: February 15, 2011
Subject
Public Infrastructure Agreement with the Cupertino Redevelopment Agency, City of Cupertino
and Vallco Shopping Mall
Recommended Action
A. Redevelopment Agency action - Adopt Resolution No. 11-03
B. City Council action - Adopt Resolution No. 11-025
Description
1. Authorize the City Manager to negotiate and execute of an Agreement with Vallco Shopping
Mall (Vallco) that is substantially similar to the form agreement attached hereto to provide for:
the construction of public street improvements by Vallco
the reimbursement for public street improvements by the Redevelopment Agency upon
successful completion of those improvements by Vallco for an amount not to exceed
$485,000, and
the installation of storm sewer trash capture devices, with a maximum $150,000
Redevelopment Agency contribution towards costs that exceed $200,000
2. Increase Redevelopment Agency project area expenditure budget by $635,000.
Discussion
The City entered into an Improvement Agreement with Vallco on November 9, 2006. This
agreement was required for improvements related to a parking structure and 36,000 square feet
agreement required
public improvements including construction and installation of street modifications, access
ramps, drainage facilities, and street trees.
Vallco has not been able to move forward with the construction of these improvements due
mainly to the economic recession. These improvements are within the Cupertino
Redevelopment Agency boundaries and meet redevelopment law criteria regarding funding of
public infrastructure. In order to provide a potential catalyst to development in the
Redevelopment area, it is recommended that the Agency reimburse Vallco up to $485,000 for
these improvements after successful completion of the improvements by Vallco.
has agreed to install two storm sewer trash capture devices (TCDs) at a cost to them of up to
$200,000, which is the estimated cost of this work. The installation of these TCDs are necessary
for the City to meet performance requirements in the new Municipal Regional Permit for storm
water (NPDES Permit), which is required prior to July, 2014. The purpose of these devices isto
prevent trash from entering creeks and ultimately the Bay. The Permit specifies an acreage of
retail zoned property to be treated by these devices, and the Redevelopment area is an
appropriately zoned and sized location.Although the installation construction is estimated at
$200,000, since the installation of the devices has not yet been designed,
installation is recommended to be initially limited to $200,000. If the construction exceeds
$200,000, then it is recommended that the Redevelopment Agency reimburse Vallco for the
additional amount up to $350,000. If the installation should exceed $350,000, then Vallco would
be responsible for that additional amount.
Additional differences between the new agreement and the 2006agreement are that:
The work will now be required to be performed according to Prevailing Wage law. This
is due to public funds being used for the public improvements.
Faithful Performance Labor and Material Bonds, Letters of Credit, or other approved
financial documents in the amount totaling $1,370,000 would be required to be submitted
by Vallco to secure the agreement. Each security would be in the amount of $685,000,
which includes the estimated cost for the public street improvements plus the estimated
cost for the trash capture device installation.
The subject public street improvements assist the Agency to accomplish goals in the
Redevelopment Plan and its current Implementation Plan. The reconfiguration of Vallco Parkway
and the provision of improved sidewalks will greatly enhance pedestrian safety, mobility and access
to this commercial area. The Redevelopment Plan calls for street improvements and other public
infrastructure as a means to meet many of its goals and objectives such as the elimination of blight
and deterioration, increase the use of underutilized properties, and the elimination of environmental
deficiencies such as insufficient parking. At this time, there are no other reasonable means
available for financing the estimated cost of these public improvements.
Pursuant to Health and Safety Code Section 33445, the Agency and the City Council must find
that the publicly owned infrastructure improvements listed in the Agreement and shown in the
approved plans incorporated into the Agreement are of benefit to the Redevelopment Project Area
by helping to eliminate blight within the Project Area. The appropriation and payment of funds by
the Agency for the cost of the public improvements listed in the Agreement that are publicly owned
is consistent with the Agency's current Implementation Plan. The Implementation Plan specifically
expansion and revitalization of the Vallco Mall, certain infrastructure improvements will be
and streetscape improvements.
The Agency and City have determined that it is impractical from an architectural, engineering
and construction standpoint to separately construct the Public Infrastructure improvements
because of their physical interrelationship with the Project improvements to be constructed by
the Developer. Construction of the Public Infrastructure pursuant to the Agreement would result
in a lower public cost and greater benefit than if such Public Infrastructure were separately bid
and constructed by the Agency or City. The Developer has site control and the ability to bid out
the project in conjunction with other related projects. The Developer can construct the
improvements with minimal interference to Vallco and to vehicular traffic on adjacent public
roadways.
Sustainability Impact:N/A
Fiscal Impact
The $635,000 expenditure budget increase for the public street improvement reimbursement and,
if needed, the TCD installation will be funded out of Agency property taxes received in 2010-11
for public improvements.
_____________________________________
Prepared by:Timm Borden, Director of Public Works
Approved for Submission by:David W. Knapp, City Manager
Attachments:Public Infrastructure Agreement