11-021 Public Infrastructure Agreement, Redevelopment Agency, Vallco Shopping Mall, LLC. PUBLIC INFRASTRUCTURE AGREEMENT
This Public Infrastructure Agreement, dated as of February 15, 2011, is entered
into by and among the City of Cupertino Redevelopment Agency, a public body,
corporate and politic (the "Agency "), the City of Cupertino, a municipal corporation (the
"City "), and Vallco Shopping Mall, LLC, a California limited liability company (the
"Developer "), with reference to the following recitals.
RECITALS
A. Pursuant to the California Community Redevelopment Law (Health and
Safety Code Section 33000 et seq.; the "Redevelopment Law "), the City Council of the
City has adopted and the Agency is responsible for implementing the Redevelopment
Plan (the "Redevelopment Plan ") for the Cupertino Vallco Redevelopment Project Area
(the "Project Area ").
B. To assist in implementing the Redevelopment Plan, the Agency has
adopted an implementation plan (the "Implementation Plan ") pursuant to Section 33490
of the Redevelopment Law.
C. Pursuant to Health and Safety Code Section 33220(b) and (c), the City is
authorized to enter into this Agreement to assist the Agency in causing public
infrastructure to be installed in the Project Area.
D. Cupertino Square, LLC and the City have previously entered into
Improvement Agreement concerning development of public infrastructure at 10123
North Wolfe Road, dated as of November, 9, 2006 ( "Improvement Agreement "). The
public infrastructure to be installed under the Improvement Agreement is required in
connection with the private improvements the Developer intends to make at the Vallco
Shopping Mall in the City of Cupertino (the "Project "). Developer is the successor of
Cupertino Square, LLC.
E. The parties desire that the Developer will undertake the construction of
public infrastructure described in Exhibit A to this Agreement (the "Public
Infrastructure "), which includes the public infrastructure required under the Improvement
Agreement as well as other improvements, to ensure full accessibility for the disabled
and to make other important health and safety traffic and storm drainage improvements
in the area more rapidly than is currently projected and as required by the performance
requirements in the new Municipal Regional Permit for storm water ( "NPDES Permit ").
The City and Agency have requested and the Developer has agreed that the Developer
will perform the Public Infrastructure work in accordance with the City and NPDES
Permit standards and the City will reimburse the Developer from Agency funds for the
costs associated with such work, other than installation of the trash recapture devices
which the Developer shall install at its cost up to a certain dollar limit as set forth in
Section 1.11 of this Agreement. K �
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F. The Project and the Public Infrastructure improvements are located within
the Cupertino ValIco Redevelopment Project Area ( "Project Area ").
G. The Public Infrastructure improvements and the Project are consistent
with the City's General Plan, applicable zoning requirements, the Implementation Plan
and the Redevelopment Plan, and will promote the goals and objectives of the
Redevelopment Plan to revitalize the Project Area.
H. The Developer has represented that it has the necessary experience, skill,
and ability to carry out the commitments contained in this Agreement.
I. Prior to execution of this Agreement, the City found that the Public
Infrastructure improvements are exempt from the California Environmental Quality Act
pursuant to CEQA Guideline 15304.
J. Pursuant to Health and Safety Code Sections 33421.1 and 33445, the
Agency and the City Council have found that the Public Infrastructure improvements are
of benefit to the Project Area, that the Public Infrastructure improvements are consistent
with the Redevelopment Plan and the Agency's Implementation Plan, that there are no
other reasonable means of financing the Public Infrastructure available to the
community and that the public financial assistance for the Public Infrastructure will
assist in the elimination of blight conditions in the Project Area. These findings are
based on the information contained in the staff report and other information provided to
the Agency and the City Council.
K. 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, and that the construction of the
Public Infrastructure pursuant to this 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.
NOW, THEREFORE, for good and valuable consideration as set forth herein, the
parties agree as follows:
AGREEMENT
ARTICLE 1.
CONSTRUCTION REQUIREMENTS
Section 1.1 Public Infrastructure.
The Developer agrees to install two storm sewer trash capture devices ( "TCDs ")
as further directed by the City Public Works Director and as listed in the first bullet point
on the attached Exhibit A in sufficient time and in good order such that the City is in a
position to accept the installation prior to October 31, 2012. The City will work with the
Developer and their engineer to facilitate the most efficient, economical and technically k____
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appropriate locations for the devices as possible. The City will work with the Developer
and their engineer to facilitate decisions during construction and to attempt to resolve
conflicts with utility companies, to the best of its ability. The Developer also agrees to
construct the remaining Public Infrastructure improvements described in the attached
Exhibit A no later than July 31, 2013. Due to potential complexities with this
construction, the City's engineer and inspector will attend a pre- construction meeting to
address questions concerning City requirements and expectations.
As the TCDs will become City owned and maintained upon Acceptance, ValIco will
provide any necessary easements for access and maintenance of the system.
Section 1.2 Construction Contract.
The Developer shall enter into contracts for the construction of the Public
Infrastructure with reputable general contractors. Those contracts shall provide for the
Public Infrastructure work to be performed for fixed and specified maximum amounts
pursuant to the Vallco Parkway Offsite Improvement Plans, dated 10/23/06, and
approved by the City on 11/08/06 ( "Final Construction Plans ") and for installation of the
TCDs as further directed by the City Public Works Director. Prior to starting
construction, the Developer shall make available for review by the City and the Agency
on a confidential basis a copy of each construction contract for purposes of determining
the following: (a) that the scope and cost of work have been clearly fixed and
determined and are consistent with the scope and cost set forth in the Final
Construction Plans and this Agreement; (b) that the contract conforms or will conform to
the requirements of this Agreement, including without limitation the prevailing wages
requirements in Section 1.10; and (c) that no changes to the contract that would cause
the contract to be out of compliance with this Agreement may be made without the prior
written consent of the City and the Agency. Unless the Agency and City notify the
Developer in writing within seven (7) days of review of a contract that the contract has
been disapproved, it shall be deemed approved.
Section 1.3 Surety and Improvement Agreement.
Prior to the date of this Agreement, the Developer shall deliver to the City and the
Agency a letter of credit in the amount of One Million Three Hundred Seventy Thousand
Dollars ($1,370,000) as security for the performance of Developer's obligations under
this Agreement. The letter of credit must be issued by a reputable financial institution,
provide that the Agency and the City may draw on it without condition and be in a form
approved by the City Attorney. As an alternative, the Developer can deliver labor and
material bonds and performance bonds issued by a reputable insurance company
licensed to do business in California, each in a penal sum of not less than one hundred
percent (100 %) of the scheduled cost of construction of the Public Infrastructure. The
bonds shall name the City and Agency as co- obligees. Upon City and Agency
acceptance of the surety provided for in this Section the bonds posted under the
Improvement Agreement will be released by i:he City. At the Developer's option, the
letter of credit can be divided into two letters of credit in the amounts of Nine Hundred b ....,
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Seventy Thousand Dollars ($970,000) and Four Hundred Thousand Dollars ($400,000),
respectively, so that the smaller letter of credit can be released upon acceptance of the
TCD installation work. If bonds are secured, 100% of the scheduled cost for each of the
two elements of the Public Infrastructure work can also be divided into two sets of
bonds. Nothing in this Agreement modifies the terms of the Improvement Agreement,
except with regard to the payment for certain specified improvements and the
substitution of surety, and the Improvement Agreement remains in full and force effect.
In the event of termination of this Agreement without the completion of the Public
Infrastructure as called for in this Agreement, the Improvement Agreement remains in
full force and effect, unmodified in any of its terms.
Section 1.4 Evidence of Availability of Funds.
Prior to starting construction, the Developer shall submit to the Agency evidence
reasonably satisfactory to the Agency that sufficient funds will be available for
constructing the Public Infrastructure. With respect to any funds to be provided from
any source other than a commercial lender (including the Developer itself), the evidence
shall include evidence that the funds to be provided have been set aside in an account
or accounts restricted for construction of the Public Infrastructure.
Section 1.5 Insurance.
Prior to starting construction, the Developer shall submit to the Agency evidence
that the insurance requirements of Section 3.8 have been satisfied.
Section 1.6 Completion of the Construction.
Subject to extension of time for enforced delay pursuant to Section 3.3, the
Developer shall diligently prosecute to completion the construction of the Public
Infrastructure as provided in Section 1.1 of this Agreement.
Section 1.7 Construction Pursuant to Plans.
Unless modified by operation of Section 1.8, all work of construction of the Public
Infrastructure shall be done in accordance with the approved Final Construction Plans.
Section 1.8 Material Change in Plans.
(a) If the Developer desires to make any material change in the Final
Construction Plans, the Developer shall submit the proposed change to the City for its
approval. A change is "material" if it, by itself, has a cost consequence of greater than
Five Thousand Dollars ($5,000), or if it, cumulatively with previous changes, has a cost
consequence of greater than Five Thousand Dollars ($5,000), or if it alters the number
or configuration of parking spaces, or if it is reasonably likely to shorten the useful life of
the Public Infrastructure or increase the maintenance cost of the Public Infrastructure.
(b) Unless such proposed change is rejected by the City within thirty
(30) days, it shall be deemed approved. If rejected within such time period, the
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previously approved Final Construction Plans shall continue to remain in full force and
effect.
Section 1.9 Development In Compliance With Law.
(a) The Developer shall cause all construction to be performed in
compliance with (a) all applicable laws, ordinances, rules and regulations of federal,
state, county or municipal governments or agencies now in force or that may be
enacted hereafter, and (b) all directions, rules and regulations of any fire marshal,
health officer, building inspector, or other officer of every governmental agency now
having or hereafter acquiring jurisdiction. The work shall proceed only after
procurement of each permit, license, or other authorization that may be required by any
governmental agency having jurisdiction, and the Developer shall be responsible to the
City and the Agency for the procurement and maintenance thereof, as may be required
of the Developer and all entities engaged in work on the Public Infrastructure and /or the
Project.
(b) The City and Agency approve the Developer's construction of the
Public Infrastructure without undertaking a competitive bidding process. Because of the
scope and location of the Public Infrastructure and the Project, there is an integral
relationship between the Public Infrastructure and the Project, and using a single
general contractor for the Public Infrastructure and the Project avoids disruptive and
costly duplication of many construction activities that are necessary to construct the
Public Infrastructure and the Project.
Section 1.10 Prevailing Wages.
The Developer shall cause its contractors and subcontractors to pay prevailing
wages in the construction of the Public Infrastructure as those wages are determined
pursuant to Labor Code Section 1720 et seq. and implementing regulations of the
Department of Industrial Relations (the "DIR"), to employ apprentices pursuant to Labor
Code Section 1777.5 et seq. and implementing regulations of the DIR, and to comply
with other applicable provisions of Labor Code Section 1720 et seq. and the
implementing regulations of the DIR. The Developer shall and shall cause its
contractors and subcontractors to keep and retain such records as are necessary to
determine if such prevailing wages have been paid as required pursuant to Labor Code
Section 1720 et seq and that apprentices have been employed as required by Labor
Code Section 1777.5. During the construction of the Public Infrastructure, the
Developer shall or shall cause the contractor to post at the Project site the applicable
prevailing rates of per diem wages. The Developer shall indemnify, hold harmless and
defend (with counsel reasonably selected by the City) the Agency and the City against
any claim for damages, compensation, fines, penalties or other amounts arising out of
the failure or alleged failure of any person or entity (including Developer, its contractor
and subcontractors) to pay prevailing wages as determined pursuant to Labor Code
Sections 1720 et seq., and implementing regulations of the DIR, to employ apprentices
pursuant to Labor Code Sections 1777.5 et seq., or to comply with the other applicable
provisions of Labor Code Sections 1720 et seg., and the implementing regulations of
the DIR in connection with the construction of the Public Infrastructure or any other work
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undertaken or in connection with the Public Infrastructure. The Developer's obligation to
indemnify under this Section 1.10 shall be interpreted broadly to apply to any legal or
administrative proceeding, arbitrations, or enforcement action.
Section 1.11 Reimbursement.
The City, upon completion and acceptance of all the Public Infrastructure by the
City, shall reimburse the Developer for all costs incurred by the Developer in
constructing the Public Infrastructure in an amount not to exceed of Four Hundred
Eighty -Five Thousand Dollars ($485,000) from Agency funds the City is holding for
payment for this work. Developer shall provide the City with copies of invoices and
payment records as well as lien releases from all contractors and subcontractors prior to
the City disbursing any funds to the Developer. Once all of these documents are
received from Developer, the City will submit payment to Developer within forty -five (45)
days. Additionally, if the cost of the installation of the TCDs (including the cost of the
preparation of plans and City permits) exceeds Two Hundred Thousand Dollars
($200,000) as reasonably determined by the City Public Works Director based on
invoices and payment records provided by the Developer, the City agrees to reimburse
the Developer for the amount such installation exceeds Two Hundred Thousand Dollars
($200,000) up to a maximum amount of One Hundred Fifty Thousand Dollars
($150,000). Costs elgible for inclusion in the Developer's $200,000 would include costs
for engineering and permitting specific to the TCD installation.
ARTICLE 2.
REMEDIES
Section 2.1 Application of Remedies.
The provisions of this Article 2 shall govern the parties' remedies for breach or
failure under this Agreement.
Section 2.2 Events of Default.
Upon a material breach of this Agreement by any party, the non - breaching
parties) shall first notify the breaching party in writing of its purported breach or failure,
and the breaching party shall have thirty (30) days from receipt of such notice to cure
such breach or failure. If the breaching party does not cure within such period, then the
event shall constitute an "Event of Default" and the non - breaching porgies) shall be
entitled to any rights afforded it in law or in equity.
Section 2.3 Survival.
Upon termination of this Agreement, the indemnification obligation in Section 3.7
shall survive (along with all other sections whose survival is reasonably necessary to
carry out the sections' clear intent). This Section 2.3 exists for reference purposes only,
and does not alter the scope or nature of the surviving provisions.
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ARTICLE 3.
GENERAL PROVISIONS
Section 3.1 Notices, Demands and Communications.
Formal notices, demands, and communications among the Agency, the City and
the Developer shall be sufficiently given if, and shall not be deemed given unless,
secured personally, or dispatched by certified mail, return receipt requested, or by
facsimile transmission or reputable overnight delivery service with a receipt showing
date of delivery, to the principal offices of the Agency, the City and the Developer as
follows:
Agency: City of Cupertino Redevelopment Agency
10300 Torre Avenue
Cupertino, CA 95014
Attn: Executive Director
City: City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
Attn: City Manager
Developer: Vallco Shopping Mall, LLC
10123 N. Wolf Road Suite 1095
Cupertino, CA 95014
Attn: Mike Rohde, General Manager
Such written notices, demands and communications may be sent in the same manner
to such other addresses as the affected party may from time to time designate by mail
as provided in this Section 3.1. Delivery shall be deemed to have occurred at the time
indicated on the receipt for delivery or refusal of delivery.
Section 3.2 Non - Liability of Officials, Employees and Agents.
No member, official, employee or agent of the Agency or the City shall be
personally liable to the Developer, or any successor in interest, in the event of any
default or breach by the Agency or the City or for any amount which may become due to
the Developer or successor or on any obligation under the terms of this Agreement.
Section 3.3 Enforced Delay.
In additional to specific provisions of this Agreement, performance by any party
shall not be deemed to be in default where delays or defaults are due to war;
insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; quarantine restrictions;
freight embargoes; lack of transportation; or court order; or any other similar causes
(other than lack of funds or the Developer's inability to finance the construction of the
Public Infrastructure) beyond the control or without the fault of the party claiming an
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extension of time to perform. An extension of time for any cause will be deemed
granted if notice by the party claiming such extension is sent to the other parties within
ten (10) days of the event giving rise to extension. Times of performance under this
Agreement also be extended by written agreement of the Agency, the City and the
Developer.
Section 3.4 Time of the Essence.
Time is of the essence in this Agreement.
Section 3.5 Inspection of Books and Records.
The Agency and the City have the right at all reasonable times to inspect on a
confidential basis the books, records and all other documentation of the Developer
pertaining to its obligations under this Agreement. The Developer also has the right at
all reasonable times to inspect the books, records and all other documentation of the
Agency and the City pertaining to their obligations under this Agreement as set forth in
the public records laws.
Section 3.6 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for
convenience of reference only and shall be disregarded in interpreting any of its
provisions.
Section 3.7 Indemnity.
The Developer shall indemnify, defend and hold the Agency and the City, and
their respective officers and employees, harmless against all claims made against them
which arise out of or in connection with the construction of the Public Infrastructure by
the Developer, However, this indemnity shall not extend to any claim arising solely from
the Agency's or the City's gross negligence or the Agency's or the City's failure to
perform its obligations under this Agreement.
Section 3.8 Liability Insurance.
The Developer shall cause to have in full force and effect during the construction
of the Public Infrastructure, liability insurance with limits of not less than Two Million
Dollars ($2,000,000) per occurrence and Five Million Dollars ($5,000,000) combined
which insurance shall name the Agency and City as additional insureds.
Section 3.9 Rights and Remedies Cumulative.
Except as otherwise expressly stated in this Agreement, the rights and remedies
of the Parties are cumulative, and the exercise or failure to exercise one or more of
such rights or remedies by any party shall not preclude the exercise by it, at the same
time or different times, of any right or remedy for the same default or any other default
by another party.
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Section 3.10 Applicable Law.
This Agreement shall be interpreted under the laws of the State of California.
Section 3.11 Severability.
If any term, provision, covenant or condition of this Agreement is held in a final
disposition by a court of competent jurisdiction to be invalid, void or unenforceable, then
the remainder of the provisions shall continue in full force and effect unless the rights
and obligations of the parties have been materially altered or abridged by such holding
of invalidity.
Section 3.12 Legal Actions.
In the event legal action is commenced by a third party or parties, the effect of
which is to directly or indirectly challenge or compromise the enforceability, validity, or
legality of this Agreement and /or the power and ability of the Agency and the City to
enter into this Agreement or perform their obligations hereunder, any of the City, the
Agency or the Developer may (but shall have no obligation to) defend such action.
Upon commencement of any such action, the Agency, the City and the Developer shall
meet in good faith to seek to establish a mutually acceptable method of defending such
action. If, thirty (30) days after the commencement of any such action, a mutually
acceptable method of defense has not been established, the Developer may (but shall
have no obligation to) provide written notice of its intention to defend such action.
Section 3.13 Equal Opportunity.
For purposes of this Agreement and Developer's obligations hereunder, the
Developer and its successors, assigns, contractors and subcontractors will not
discriminate against any employee or applicant for employment because of race, color,
religion, sex, sexual orientation, national origin, veteran's status or physical or mental
disability. Such action will include and apply to the employment of contractors,
subcontractors, and applicants for employment. The Developer and its contractors and
subcontractors agree to post in conspicuous places, available to all employees and
applicants for employment, notices setting forth the provisions of this non - discrimination
clause.
Section 3.14 Identity and Authority.
The person executing this Agreement on behalf of the Developer does hereby
covenant and warrant that the Developer is a duly authorized and existing California
limited liability company; that the Developer has, is and shall remain in good standing
and qualified to do business in the State of California; that the Developer has full right,
power and authority to enter into this Agreement and to carry out all actions on its part
contemplated by this Agreement; that the execution and delivery of this Agreement
were duly authorized by proper action of the Developer and no consent, authorization or
approval of any person is necessary in connection with such execution and delivery or
to carry out all actions on the Developer's part contemplated by this Agreement, except
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as have been obtained and are in full force and effect; that the persons executing this
Agreement on behalf of the Developer have full authority to do so; and that this
Agreement constitutes the valid, binding and enforceable obligation of the Developer.
Section 3.15 Binding Upon Successors; Covenants to Run With Land.
This Agreement shall be binding upon and inure to the benefit of the heirs,
administrators, executors, successors in interest, and assigns of each of the parties.
Any reference in this Agreement to a specifically named party shall be deemed to apply
to any successor, heir, administrator, executor, successor, or assign of such party who
has acquired an interest in compliance with the terms of this Agreement or under law.
Section 3.16 Parties Not Co- Venturers.
Nothing in this Agreement is intended to or does establish the parties as partners
or co- venturers.
Section 3.17 Entire Understanding of the Parties.
This Agreement (including the exhibits constitutes the entire understanding and
agreement of the parties with respect to the construction and use of the Public
Infrastructure.
Section 3.18 Approvals.
(a) Whenever this Agreement calls for Agency approval, consent, or
waiver, the written approval, consent, or waiver of the Agency Executive Director shall
constitute the approval, consent, or waiver of the Agency, without further authorization
required from the Agency Board. The Agency hereby authorizes the Agency's
Executive Director to deliver such approvals or consents as are required by this
Agreement, or to waive requirements under this Agreement, on behalf of the Agency.
(b) Whenever this Agreement calls for City approval, consent, or
waiver, the written approval, consent, or waiver of the City Manager shall constitute the
approval, consent, or waiver of the City, without further authorization required from the
City Council. The City hereby authorizes the City Manager to deliver such approvals or
consents as are required by this Agreement, or to waive requirements under this
Agreement, on behalf of the City.
(c) All approvals under this Agreement shall be subject to a
reasonableness standard, except where a sole discretion standard is specifically
provided.
(d) The Developer acknowledges that nothing in this Agreement limits
the City's discretion in considering requested land use approvals.
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Section 3.19 Amendments.
The parties can amend this Agreement only by means of a writing signed by all
parties.
Section 3.20 Multiple Originals; Counterparts.
This Agreement may be executed in multiple originals, each of which is deemed
to be an original, and may be signed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CITY:
APPROVED AS TO FORM: CITY OF CUPERTINO REDEVELOPMENT
AGENCY, a public body, corporate and politic
By: B
Y• By: SIA.2.‘.0
cy Counsel
Name: _L t L AP
Its: C Z
CITY:
APPROVED AS TO FORM: CITY OF CUPERTINO, a municipal corporation
By: 4 .. . , By: LA)
Y• � 1i� Y•
'fy Attorney ,
Name: ,9A4/t 0 v✓ Zitll4PP
Its: ka-w9r-v
DEVELOPER:
VALLCO SHOPPING MALL LLC, a California limited
liability company
By:
Name: 141
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EXHIBIT A
PUBLIC INFRASTRUCTURE
The Public Infrastructure to be installed under this Agreement includes the following:
• Installation of two storm sewer trash capture devices (TCDs) which have been
purchased by the City as directed by City Public Works Director.
• All the Public Infrastructure required under and to be built in accordance with the
Improvement Agreement, pursuant to the Vallco Parkway Offsite Improvement
Plans, dated October 23, 2006, and approved by the City on November 8, 2006.
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