Exhibit CC 10-15-13 Item #9 CC-6 Development Agreement Apple Campus 2 ATTACHMENT CC-6 - REDLINES
ORDINANCE NO. 13-2114
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
REPEALING ORDINANCE NO. 1702 AND APPROVING A NEW
DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF
CUPERTINO AND APPLE INC. FOR THE DEVELOPMENT OF A NEW
CORPORATE CAMPUS
WHEREAS, Apple Inc. ("Apple") has a legal and equitable interest in certain real
property consisting of approximately 176 acres located within the City and generally bordered
by East Homestead Road on the north, adjacent: properties to the east of North Tantau Avenue
on the east, Interstate 280 and The Hamptons apartment community on the south, and North
Wolfe Road on the west, as more particularly described in Exhibits DA-la and DA-lb of the
Development Agreement("Property"); and
WHEREAS, Government Code Sections 65864 through 68569.5 provide the statutory
authority for development agreements between municipalities and parties with a fee or
equitable interest in real property; and
WHEREAS, Cupertino Municipal Code ("CMC") § 19.144.010 et seq., establishes
additional procedures for review and approval of proposed development agreements by the
City of Cupertino ("City"); and
WHEREAS, a portion of the Property is currently subject to that certain development
agreement between Apple's predecessor-in-interest, Hewlett-Packard Company, and the City
dated November 6, 1995, approved by City Council Ordinance No. 1702, as amended ("HP
Agreement");and
WHEREAS, the Project (defined below) proposed by Apple to be developed on the
Property is inconsistent with the development project contemplated by the HP Agreement;and
WHEREAS, on or about August 9, 2011, Apple applied for a General Plan amendment
and rezoning of a portion of the Property to accommodate the demolition of approximately 2.66
million square feet of existing office, research and development buildings, parking areas and
ancillary facilities located on the Property; vacation of a portion of Pruneridge Avenue and
vacation of various public easements; and construction of a new approximately 3.42 million
square foot office, research and development campus with associated parking facilities and
ancillary uses including a 50,000 square foot central plant, a 120,000 square foot (1,000 seat)
corporate auditorium, a 100,000 square foot fitness center and other minor ancillary buildings
for security and landscaping; and improvements to adjacent thoroughfares, including street-
widening, landscaped medians, detached sidewalks, buffered bike lanes, widened freeway off-
ramps and trail improvements (collectively, the "Project"); and
WHEREAS, the Project will be constructed in two or more phases. The first phase will
include the construction of a 2.82 million squa:re foot ring-shaped main building with a 2,385
space underground parking facility, a 100,000 square foot fitness center with a 25 space parking
Resolution No. 13-2114 DA-2011-01 October 15,2013
Page CC-3-2
lot, a 120,000 square foot (1,000 seat) auditorium, a 5,870 space main parking structure with
attached central plant, a 765-space auditorium, employee and visitor parking structure with a
25,000 square foot valet parking reception area, 7,000 square foot visitor security reception
structures, 10,000 square feet of landscaping and maintenance buildings, 10,000 square feet of
outdoor food stations, , and ancillary on-site and off-site public and private improvements. The
second phase(s) of construction will include the development of 600,000 square feet of office
and research and development buildings with 1,740 parking stalls and two satellite plants for
energy generation and ancillary on-site and off-site public and private improvements. All
figures are approximate; and
WHEREAS, on August 19, 2011, the City issued Notice of Preparation for an
Environmental Impact Report for the Project. A scoping session was held on September 8, 2011
to provide the public the opportunity to comment on the topics to be studied in the Draft
Environmental Impact Report ("Draft EIR"). Public comments were collected through the
scoping period's conclusion on October 5, 2011; and
WHEREAS, from August 19, 2011 to June 6, 2013 2013, the City's environmental
consultant, LSA, prepared a Draft EIR pursuant to the requirements of the California
Environmental Quality Act (Public Resources Code Section 21000 et seq.) ("CEQA") and the
Guidelines for Implementation of the California Environmental Quality Act (Title 14, Sections
15000 et seq. of the California Code of Regulations) ("CEQA Guidelines");and
WHEREAS, the Draft EIR was released for a 46-day public review/comment period
beginning on June 6, 2013 and ending July 22, 2013. The Notice of Completion of the Draft EIR
was sent to the State Clearinghouse in the Governor's Office of Planning and Research on June
6, 2013 under State Clearinghouse No. 2011082055. The Notice of Availability was filed with the
Santa Clara County Clerk-Recorder on the same day and was also: (1) sent to other potentially
affected agencies as required by CEQA; (2) sent to adjacent property owners as required by
CEQA; and (3) posted at the Project site and at City Hall; and
WHEREAS, on June 26, 2013, the City held a duly noticed public meeting to allow the
public an additional opportunity to provide input on the Draft EIR and received public
testimony; and
WHEREAS, following the close of the public review and comment period on the Draft
EIR, written responses to comments concerning the adequacy of the Draft EIR received during
the public review and comment period have been prepared and compiled in a Response to
Comments Document(which includes revisions to the Draft EIR); and
WHEREAS, the Final Environmental Impact Report ("Final EIR"), consisting of the
Draft EIR (published in June 2013), the Response to Comments Document (published in
September 2013), and all documents incorporated therein was issued on September 23, 2013.
Notice of Availability of the Final EIR was sent to the Santa Clara County Clerk Recorder's
Office, posted at City Hall and the Project site, and sent to 10 local libraries and property
owners, business owners and residents within 1,000 feet of the Project site. A courtesy notice
regarding the availability of the Final EIR was also mailed to all postal customers in the City of
Cupertino and within 1000 feet of the Project site and published in the Mercury News;and
Resolution No.13-2114 DA-2011-01 October 15,2013
Page CC-3-3
WHEREAS, on September 26, 2013, City Staff presented the Final EIR to the
Environmental Review Committee ("ERC") for:review and recommendation. After considering
the Final EIR, all supporting documents, and Staff's presentation, the ERC recommended that
the City of Cupertino City Council approve the Project; and
WHEREAS, the City received comments following the close of the public review and
comment period on the Draft EIR and, although pursuant to Public Resources Code Section
21091(d)(1) and CEQA Guidelines Section 15088(a) written responses are not required,
responses have been provided with staff reports; and
WHEREAS, the Final EIR was presented for review to the Planning Commission and
City Council on October 1, 2013 at a Joint Planning Commission and City Council Study
Session;and
WHEREAS, on October 2, 2013, the Planning Commission held a public hearing and
voted 4-0-1 (1-absent) to recommend that the City Council approve Findings Revision #1
(October 1, 2013) to adopt Mitigation Measure TRANS-23 (Alternate), as amended to delete the
penalty provisions, to allow three left turn lanes out of the project driveway on to N. Wolfe
Road, a Resolution Recommending Certification of an Environmental Impact Report (EIR),
adoption of Findings and a Statement of Overriding Considerations, adoption of Mitigation
Measures, and adoption of a Mitigation Monitoring and Reporting Program in substantially
similar form to the Resolution, as amended (Resolution no. 6727); Approve the General Plan
Amendment, GPA-2011-03, in substantially similar form to the Resolution presented
(Resolution no. 6728);Approve the Zoning Map Amendment, Z-2011-03, in substantially similar
form to the Resolution presented (Resolution no. 6729); Approve the Vesting Tentative Map,
TM-2011-03, in substantially similar form to the Resolution presented (Resolution no. 6732) ;
Approve the Development Permit, DP-2011-04, Use Permit, U-2011-11, Architectural and Site
Approval, ASA-2011-14 and Tree Removal Permit, TR-2011-39, in substantially similar form to
the Resolution presented (Resolution no. 6731); and Approve the Development Agreement, DA-
2011-01, in substantially similar form to the Resolution presented (Resolution no. 6730), adopt
the Findings and Statement of Overriding Considerations for the Project, and make conditions
of approval all of the mitigation measures for the Project that are within the responsibility and
jurisdiction of the City that are identified in Findings; and; and
WHEREAS,Supplemental Text Revisions, Apple Campus 2 Project Final Environmental
Impact Report, which is part of the Final EIR, identifies a third alternative mitigation measure
for Impact TRANS-23, a third alternative mitigation measure for Impact TRANS-27, and
discloses recent amendments to Chapter 6.5 of Division 13 of the Public Resources Code; and
WHEREAS, on October 15, 2013, the City Council held a duly noticed public hearing on
the Final EIR and the Development Agreement; as well as the following Project approvals:
Resolution No. 13-2114 DA-2011-01 October 15,2013
Page CC-3-4
amendments to the General Plan to allow a change in the land use designation of a 1.1 acre area
from Parks and Open Space to Industrial/Residential, a change to figure 2-G to reflect the
relocation of Glendenning Barn, changes to various figures to reflect the vacation of Pruneridge
Avenue, amendments to the text in Policy 2-35, a change to the setback ratio for N. Tantau
Avenue, and other minor related amendments to figures and tables, Rezoning of said 1.1 acre
area from Parks and Recreation (PR) to Planned Industrial Park P(MP), Vesting Tentative Map,
Development Permit, Use Permit, Architectural and Site Approval for Phase 1 of the Project,
Tree Removal Permit, and street and easement vacations; and
WHEREAS, in compliance with the CEQA Guidelines, on October 15, 2013, the City
Council adopted Resolution No. 13-082 to certify the Final EIR for the Project, adopt findings
and a Statement of Overriding Considerations, Mitigation Measures and a Mitigation
Monitoring and Reporting Program; and
WHEREAS, on October 15, 2013, the City Council adopted Resolution No. 13-083
amending the General Plan to accommodate the Project; and
WHEREAS, on October 15, 2013, the City Council introduced an ordinance to rezone 1.1
acres of the Property from Parks and Recreation (PR) to Planned Industrial Park (P(MP))
(Assessor's Parcel Numbers 316-06-050 and 316-06-051); and
WHEREAS, on October 15, 2013, the City Council adopted Resolution Nos. 13-085 and
13-084, approving, respectively, a Vesting Tentative Map and a Development Permit, Use
Permit, Architectural and Site Approval for Phase 1, and Tree Removal Permit for the Project;
and
WHEREAS, on October 15, 2013, the City Council adopted Resolution No.
vacating that certain approximately 4.64 acre portion of Pruneridge Avenue identified in
Exhibit DA-1g to the Development Agreement and approving a sale of the Pruneridge Avenue
vacation area to Apple, subject to satisfaction of certain conditions, including relocation of all
public utilities, for a purchase price of $23,814,257.00, under the terms described in Article 6 of
the Development Agreement attached hereto as Exhibit DA-1 ("Development Agreement"); and
WHEREAS, approval of the Development Agreement will provide Apple with
assurances that its development of the Property in connection with the Project can proceed
without disruption caused by a change in City planning and development policies and
requirements, which assurance will thereby reduce the actual or perceived risk of planning,
financing and proceeding with construction and use of the development and promote the
achievement of the private and public objectives of the development; and
WHEREAS, City desires to enter the Development Agreement in order to: (1) increase
the number of well-paid high-quality jobs in the City for employees who either live in the
community and/or support local businesses; (2) improve the City's quality of life and the built
environment by redeveloping outmoded office buildings with a coherent state-of-the art
corporate campus; (3) support the development of a local corporation that has grown into one
of the world's outstanding high tech firms, thereby stimulating local businesses and the local
economy and supporting the City's fiscal health and ability to provide needed services; (4)
secure a source of substantial tax revenues for the City by encouraging a major corporation to
Resolution No.13-2114 DA-2011-01 October 15,2013
Page CC-3-5
continue its existing operations in the City; and (5) attract visitors who will generate both
additional revenues for local businesses and increased tax revenues for the City, as well as
further the City's visibility worldwide; and
WHEREAS,the terms of the Development Agreement include the following community
benefits funded by Apple:
• An affordable housing contribution equal to twice the otherwise applicable City
affordable housing in-lieu fee for the North Vallco Area.
• Contribution of$8,270,994 for the establishment and maintenance of a 1.1 acre park
at a location within the City to be determined, or transfer by Apple of a 1.1 acre
park site acceptable to the City, together with an improvement, maintenance and
capital replacement fund.
• Installation of a fiber optic conduit along Wolfe Road between the 280 Freeway and
Homestead Road for City use.
• Traffic signal preemption device improvements in an amount up to$320,000.
• Contribution of $250,000 toward the cost of a study for a pedestrian/bicycle trail or
path, including potentially a full Class I separated trail, along the drainage channel
running parallel to southbound 1-280 between North De Anza Boulevard and
Calabazas Creek, and then south along the western bank of Calabazas Creek to
Vallco Parkway.
• Apple's commitment to require its general contractor to comply with a Tax
Localization Plan that would cause sales and use taxes generated from the purchase
of materials, fixtures and equipment for the Project to be allocated to the City.
• Amendment of an Agreement for Consultation Services that may generate
additional sales tax revenue for the City.
• Contribution of $2,644,035 to City if Apple desires to relocate the historic
Glendenning barn off of the Property to other City-owned property.
NOW, THEREFORE,BE IT ORDAINED AS FOLLOWS:
That after careful consideration of the facts, exhibits, testimony and other evidence submitted in
this matter, the City Council based upon the findings described above, the public hearing
record and the Minutes of Planning Commission Meeting of October 2, 2013, and subject to the
conditions specified below:
Section 1. The recitals set forth above are true and correct, and are hereby
incorporated herein by this reference as if fully set forth in their entirety.
Section 2. City Council Ordinance No. 1702 is hereby repealed and the HP
Agreement is hereby canceled in its entirety pursuant to Government Code section 65868.
Section 3. The City Council, having considered the evidence received at the public
hearing duly noticed and held for said proposed Development Agreement, finds as follows:
A. The proposed Development Agreement is consistent with the objectives,
policies, general land uses and programs specified in the General Plan, as amended.
Resolution No. 13-2114 DA-2011-01 October 15,2013
Page CC-3-6
B. The proposed Development Agreement is compatible with the uses
authorized in, and the regulations prescribed for, the land use district in which the Project is
located.
C. The proposed Development Agreement is in conformity with and will
promote public convenience, general welfare, and good land use practice.
D. The proposed Development Agreement will not be detrimental to the
health, safety, or general welfare.
E. The proposed Development Agreement will not adversely affect the
orderly development of property or the preservation of property values.
F. The proposed Development Agreement will promote and encourage the
development of the Project by providing a greater degree of requisite certainty.
Section 4. The City Council hereby approves the Development Agreement in the
form attached subject to such minor technical conforming changes as may be approved by the
City Attorney. This approval is based on the City Council's consideration of and reliance on the
Final EIR and in accordance with the plans, details and descriptions contained therein, and in
the Resolution certifying the Final EIR.
Section 5. This Ordinance shall be effective thirty(30) days following its adoption.
INTRODUCED at an Adjourned Regular Meeting of the City Council of the City of Cupertino
the 15th day of October 2013, and ENACTED at an Adjourned Regular Meeting of the City
Council of the City of Cupertino the day of , 2013,by the following vote:
Vote: Members of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST: APPROVED:
Grace Schmidt, City Clerk Orrin Mahoney, Mayor, City of Cupertino
EXHIBIT DA
RECORD AND WHEN RECORDED
MAIL TO:
RECORD WITHOUT FEE
PURSUANT TO GOVERNMENT CODE
SECTION 6103
City of Cupertino
City Clerk's Office
10300 Torre Avenue
Cu•ertino, CA 95014-3202
(Space Above This Line Reserved For Recorder's Use)
DEVELOPMENT AGREEMENT
BETWEEN
CITY OF CUPERTINO,
a California municipal corporation
AND
APPLE INC.,
a California corporation
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS. 6
ARTICLE 2 EFFECTIVE DATE,TERM AND TERMINATION OF HP DEVELOPMENT
AGREEMENT 10
Section 2.1 Effective Date 10
Section 2.2 Initial Term 10
Section 2.3 Extensions to Term 10
Section 2.4 Apple Termination for Convenience 11
Section 2.5 City Termination In Event of Change in Use 11
Section 2.6 HP Development Agreement Cancellation 11
ARTICLE 3 OBLIGATIONS OF APPLE. 12
Section 3.1 Obligations of Apple Generally 12
Section 3.2 Affordable Housing Contribution 12
Section 3.3 Tax Localization Plan and Requirements 12
Section 3.4 Construction Tax 12
Section 3.5 Tax Consulting Agreement. 13
Section 3.6 Glendenning Barn 13
Section 3.7 Parkland Contribution 14
Section 3.8 Fiber Optic Conduit Installation 14
Section 3.9 Traffic Signal Preemption Devices 15
Section 3.10 I-280 Trail Contribution 15
Section 3.11 Storm Drain Facilities, Storm Drains and Runoff 15
Section 3.12 Real Property Acquisition 15
Section 3.13 Mitigations 16
ARTICLE 4 OBLIGATIONS OF CITY 16
Section 4.1 Obligations of City Generally 16
Section 4.2 Protection of Rights 16
Section 4.3 Development Allocations 16
Section 4.4 Apple's Right to Rebuild 17
Section 4.5 Design of On-Site and Off-Site Improvements. 17
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TABLE OF CONTENTS
(continued)
Page
Section 4.6 Development of the Site 18
Section 4.7 Sequestration of Contributions in the Event of Litigation 18
ARTICLE 5 DEVELOPMENT FEES, EXACTIONS AND DEDICATIONS. 18
Section 5.1 Development Impact Fees, Exactions and Dedications 18
Section 5.2 Cost Recovery Fees. 19
Section 5.3 Retroactive Permits, Fees, and Fines 19
Section 5.4 Connection Fees 19
Section 5.5 Vesting Tentative Map 19
Section 5.6 Fees Imposed by Outside Agencies 20
ARTICLE 6 VACATION OF PRUNERIDGE. 20
Section 6.1 Vacation of Pruneridge Avenue 20
Section 6.2 Purchase of Pruneridge Avenue 20
Section 6.3 Street Closure. 20
ARTICLE 7 COOPERATION-IMPLEMENTATION 20
Section 7.1 Processing Application for Subsequent Approvals 20
Section 7.2 Timely Submittals By Apple 21
Section 7.3 Timely Processing By City 21
Section 7.4 Specific Subsequent Approvals 21
Section 7.5 Other Government Permits 22
Section 7.6 Cooperation with Public Services 22
ARTICLE 8 STANDARDS, LAWS AND PROCEDURES GOVERNING THE PROJECT22
Section 8.1 Vested Right to Develop 22
Section 8.2 Permitted Uses Vested.by This Agreement 22
Section 8.3 Intentionally Omitted 22
Section 8.4 State and Local Building Standards 22
Section 8.5 No Conflicting Enactments 23
Section 8.6 Initiatives and Referenda. 24
Section 8.7 Environmental Review 24
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TABLE OF CONTENTS
(continued)
Page
Section 8.8 Life of Subdivision Maps,Development Approvals, and Permits 25
Section 8.9 State and Federal Law 25
Section 8.10 City's Reservations of Authority 25
Section 8.11 Timing of Project Construction and Completion. 26
Section 8.12 Apple is an Independent Contractor. 26
ARTICLE 9 AMENDMENT 27
Section 9.1 Project Approval Amendments 27
Section 9.2 Amendment of this Agreement 27
ARTICLE 10 ASSIGNMENT, COVENANTS, FORECLOSURE AND NOTICE 28
Section 10.1 Assignment 28
Section 10.2 Covenants Run With The Land 29
Section 10.3 Foreclosure 29
Section 10.4 Sale or Lease of a Portion of the Project Site or Individual Parcels 29
Section 10.5 Notice of Compliance Generally 30
ARTICLE 11 COOPERATION IN THE EVENT OF LEGAL CHALLENGE 30
Section 11.1 Cooperation. 30
Section 11.2 Cure;Preapproval 31
ARTICLE 12 DEFAULT; REMEDIES;TERMINATION 32
Section 12.1 Defaults 32
Section 12.2 Remedies 32
Section 12.3 Periodic Review. 32
Section 12.4 Effect of Termination Upon Apple's Obligations 34
Section 12.5 Enforced Delay;Extension of Time of Performance 34
Section 12.6 California Law;Venue 34
Section 12.7 Compliance with Laws 34
Section 12.8 Resolution of Disputes 35
ARTICLE 13 NO AGENCY,JOINT VENTURE OR PARTNERSHIP 35
ARTICLE 14 MORTGAGEE PROTECTION: CERTAIN RIGHTS OF CURE 35
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TABLE OF CONTENTS
(continued)
Page
Section 14.1 Mortgagee Protection 35
Section 14.2 Mortgagee Obligations 35
Section 14.3 Notice of Default to Mortgagee 36
ARTICLE 15 MISCELLANEOUS 36
Section 15.1 Incorporation of Recitals and Introductory Paragraph 36
Section 15.2 Findings 36
Section 15.3 Severability 36
Section 15.4 Time of Essence 36
Section 15.5 Other Necessary Acts 36
Section 15.6 Construction 36
Section 15.7 Section Headings 37
Section 15.8 No Waiver 37
Section 15.9 Nondiscrimination 37
Section 15.10 No Third-Party Beneficiary 37
Section 15.11 Other Miscellaneous Terms 37
Section 15.12 Notices 37
Section 15.13 Entire Agreement, Counterparts and Exhibits 38
Section 15.14 Covenant of Good Faiih and Fair Dealing 39
Section 15.15 Authority to Execute 39
Section 15.16 Exhibits 39
Section 15.17 Recordation of Development Agreement. 40
-iv-
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT(the "Agreement") is entered into as of
,2013,by and between Apple Inc., a California corporation("Apple"), and the
City of Cupertino, a California municipal corporation("City"), pursuant to California
Government Code§65864 et seq.
RECITALS
Apple and City enter into this Agreement on the basis of the following facts,
understandings and intentions, and the following recitals are a substantive part of this
Agreement:
A. To strengthen the public planning process, encourage private participation in
comprehensive planning and reduce the economic risk of development, the Legislature of the
State of California enacted Sections 65864 through 65869.5 of the California Government Code
("Development Agreement Statute"),which authorize City to establish procedures to enter
into binding development agreements with persons having legal or equitable interests in real
property located within City for development of property.
B. The Cupertino Municipal Code("CMC"), § 19.144.010 et seq., establishes the
authority and procedure for review and approval of proposed development agreements.
C. Apple has a legal and equitable interest in certain real property consisting of
approximately 176 acres located within the City and generally bordered by East Homestead
Road on the north; adjacent properties to the east of North Tantau Avenue on the east;
Interstate 280 and The Hamptons apartment community on the south; and North Wolfe Road
on the west, as more particularly described in Exhibit DA-la (the "Property"), attached hereto,
and as diagrammed in Exhibit DA-lb, attached hereto (the "Project Site"). The Property is
owned by Campus Holdings, Inc. ("CHI"), a Delaware corporation and fly-wholly owned
subsidiary of Apple. CHI and Apple have entered into an agreement for Apple to develop and
occupy the Property. Pruneridge Avenue extended through the Project Site on a roughly
east/west alignment prior to the Project Approvals, and pursuant to the vacation described in
Article 6 most of the former Pruneridge Avenue is now included as part of the Property and
Project Site, as pct forth in Article 6. The Project Site currently contains approximately 2,891,500
square feet of office, research and development and amenity building space (2,657,000 square
feet of which is office and research and development), some of which are occupied by Apple
and some of which were formerly used by Hewlett-Packard. Calabazas Creek crosses the
southeastern portion of the Project Site.
D. Apple intends to develop the Project Site as an office, research and development
campus consistent with the Project Approvals and the Subsequent Approvals (the "Project").
1
E. The Project, including but not limited to the buildings, access and parking
facilities, landscaping, and infrastructure improvements, are all more particularly shown on the
Development Plan("Development Plan") submitted by Apple in connection with its
applications for the Project Approvals (defined in Recital Q(2)below).
F. Through this Agreement, the parties intend to preserve the size and density of
development as set forth in the Development Plan and Project Approvals, as they may be
amended. City and Apple each acknowledge that development and construction of the Project
is a large-scale undertaking involving major investments by Apple and City, and assurances
that the Project can be developed and used in accordance with the terms and conditions set
forth herein and Applicable Law governing development of the Property will benefit both
Apple and City. City is willing to enter into this Agreement for the reasons enumerated in
CMC§§ 19.144.010 and 19.144.020, including but not limited to: (1) strengthening the public
planning process; (2)encouraging private participation in comprehensive planning by
providing a greater degree of certainty; (3) reducing the economic costs of development; (4)
allowing for orderly planning of public improvements and services and the allocation of costs in
order to achieve the maximum utilization of public and private resources in the development
process; (5) ensuring that appropriate measures to enhance and protect the environment are
achieved; and (6) ensuring that all conditions of approval, including the construction of off-site
improvements made necessary by land development, will proceed in an orderly and
economical fashion to City's benefit.
G. In addition to the reasons set fortlienumerated in the CMC and set forth above in
Recital F, City also enters into this Agreement in order to: (1) increase the number of well-paid
high-quality jobs in the City for employees who either live in the community and/or support
local businesses; (2) improve the City's quality of life and the built environment by
redeveloping outmoded office buildings with a coherent state-of-the art corporate headquarters
campus; (3) support the development of a local corporation that has grown into one of the
world's outstanding high tech firms, thereby stimulating local businesses and the local economy
and supporting the City's fiscal health and ability to provide needed services; (4) secure a
source of substantial tax revenues for the City by encouraging a major corporation to continue
its existing operations in the City;and (5) attract visitors who will generate both additional
revenues for local businesses and increased tax revenues for the City, as well as further the
City's visibility worldwide.
H. Apple acknowledges and recognizes that material inducements for City to enter
into this Agreement are: (1) an opportunity to create a corporate headquarters campus; (2) the
occupancy of the Property by Apple Inc. within the City; and (3) the contributions by Apple to
parks, affordable housing and infrastructure. City's willingness to enter into this Agreement is
a material inducement to Apple to implement the Project, and Apple proposes to enter into this
Agreement in order(x) to obtain assurances from City that the Property may be developed,
constructed, completed and used pursuant to this Agreement, and in accordance with
Applicable Law, subject to the exceptions and limitations expressed herein for the Term of this
Agreement; and (y) to provide for a coordinated and systematic approach to funding the cost of
certain public improvements and facilities planned by City, and to establish the timing and
extent of contributions required from Apple for these purposes.
I. Apple and City mutually desire to enter into this Agreement, and proceedings
have been taken in accordance with state law, as set forth below.
J. On October 2, 2013, City's Planning Commission(defined below in Recital Q(1))
held a duly noticed public hearing on this Project and: (1) determined that the CEQA
compliance for the City's consideration of this Project properly relies on the earlier analysis and
assumptions in Cupertino's General Plan 2000-2020 ("General Plan") environmental impact
report and the City's recent preparation of environmental impact report concerning the Project
(entitled Apple Campus 2 Project Environmental Impact Report(the "EIR")), dated September
23, 2013; (2) determined that the Project is consistent with the City's General Plan, as amended
by the General Plan Amendments; and (3) recommended that the City of Cupertino City
Council("City Council") approve this Project.
K. On October 15,2013,the City Council held a duly noticed public hearing on this
Agreement and (1) determined that consideration of this Agreement contained in the EIR
complies in all respects with CEQA; (2) determined that this Agreement is consistent with City's
General Plan, as amended by the General Plan Amendments; (3) conducted all necessary
proceedings in accordance with the City's rules and regulations for the approval of this
Agreement; and (4) introduced Ordinance No. 13-2114, approving this Agreement.
L. On November , 2013, the City Council adopted Ordinance No. 13-2113,
Ienacting approving this Agreement, and the Ordinance became effective thirty(30) days
thereafter(subject to and extended by any subsequent City Council reconsideration hearing) on
("Effective Date").
M. Certain improvements, as set forth in the conditions of approval("Conditions of
Approval"), are necessary to provide infrastructure support for the Project.
N. Apple intends to develop the Project in two or more phases, as described in the
EIR.
O. As of the Effective Date,Apple is City's largest employer, and Apple has been
Ilocated in the City since Apple was established in 1976. Apple's current corporate headquarters
at the 1 Infinite Loop campus (the "IL Campus") is located approximately one mile to the west
of the Project Site. As a major corporate employer experiencing significant growth, Apple seeks
to commence a long-range comprehensive planning process for the Property, in order to ensure
that Apple's future corporate operations will continue to be headquartered and expanded
within the City. Following adoption of General Plan Amendments, the Project will be
consistent with the Cupertino General Plan.
P. In connection with the substantial investment of time and financial resources
required for the long-range comprehensive planning and entitlement of a new corporate
3
headquarters on the Project Site, the parties desire to enter into this Agreement in order to
provide to the Property development allocations for office space available under the General
Plan, and to vest the General Plan and zoning, as amended for the Property, thereby
establishing a reasonable and secure planning basis for the new corporate headquarters.
Q. While this Agreement furthers numerous City goals and policies, there are two
fundamental purposes it is intended to advance. First, from a fiscal standpoint, to ensure that
the City will not incur unfunded costs related to the planning, development,maintenance and
operation of the Project including, among other things, the costs to the City of providing the
Project with public services and facilities and mitigating the Project's environmental impacts.
Second, to provide Apple with the certainty required to make its substantial long term
investment in the Project,by ensuring that it will have a full and vested right to develop,use
and operate the Project and the Project Site under the terms and conditions set forth in this
Agreement. The rights and obligations of the parties to the Agreement shall be construed and
interpreted in such a mariner as shall give full effect to each of these purposes. City has taken
several actions to review and plan for the development of the Project. These include, without
limitation, the following:
(1) Environmental Impact Report. The environmental impacts of the Project,
including the Project Approvals, many of the Subsequent Approvals, and numerous
alternatives to the Project and its location, have properly been reviewed and assessed by City
pursuant to the California Environmental Qualii:y Act,Public Resources Code Section 21000 et
seq.; California Code of Regulations Title 14, Section 15000 et seq. (the "CEQA Guidelines"); and
City's local guidelines promulgated thereunder (collectively, "CEQA"). On October 15, 2013,
pursuant to CEQA and in accordance with the recommendation of the Planning Commission
for the City of Cupertino(the "Planning Commission"), the City Council certified the EIR,by
Resolution No. 13-082 . As required by CEQA, the City adopted written findings, including a
Statement of Overriding Considerations and approved a Mitigation Monitoring and Reporting
Program(the "MMRP") concurrent with its consideration of the Project Approvals.
(2) Planning Commission and City Council Approvals. The Planning
Commission, after a duly noticed public hearing,has reviewed and recommended certification
of the EIR, approval of the General Plan Amend rnents, adoption of the Rezoning, approval of
the various project level entitlements listed below, and approval of this Agreement. Following
review and recommendation by the Planning Commission, and after a duly noticed public
hearing and certification of the EIR, the City Council, by Resolution No.13-083, approved
amendments to the Cupertino General Plan(the "General Plan Amendments"); adoption of
City Ordinance No. 13-2113, rezoning the PR zone, which corresponds to the approximately 1.1-
acre portion of the site designated Parks and Open Space in the General Plan, to P(MP) (the
"Rezoning"); approval of the project level entitlements listed below; and adoption of this
Agreement. The City Council made findings and adopted additional Resolution Nos. 13-085
and 13-084 approving certain project level entitlements, including these additional permits,
agreements and other approvals required for the Project:
i. Pruneridge Vacation and-Area Land Purchase and Sale
Agreement
ii. Vesting Tentative Map effective 30 days after the second reading
of the Development Agreement Ordinance
iii. Conditional Use Permit
iv. Development Permit
v. Tree Removal Permit
vi. Streamside Modification Permit
vii. Architectural Site Approval for Phase 1 (other than the parking
structure on North Tantau Avenue)
Certain improvements as set forth in the Project Approval Conditions of
Approval, including MMRP, are necessary to provide infrastructure support for the Project.
The approvals, Conditions of Approval,permits and development policies described in this
Recital Q(2) are collectively referred to as the "Project Approvals."
R. ACI Holdings, Inc., a California corporation and wholly owned subsidiary of
Apple, and City,entered into an Agreement for Consultation Services dated July 1, 2007, to
provide City with consulting services consisting of the assessment and creation of new sales
and use tax revenue sources for City, to be derived from Apple and its subsidiaries (the "Tax
Consulting Agreement").
S. The City has reviewed and considered the special innovative features and
environmental benefits of the Project, including the designation of the Project as the first
Environmental Leadership Development Project under the "Jobs and Economic Improvement
Through Environmental Leadership Act" in the State of California, as approved by the
Governor, following review by legislative committees and the California Air Resources Board.
Based on these and other considerations, including the contributions identified in this
Agreement, the City determined that the Project presents substantial public benefits and
opportunities that are advanced by the City and Apple entering into this Agreement. This
Agreement will, among other things: (1) reduce uncertainties in planning and provide for the
orderly development of the Project; (2) mitigate many significant environmental impacts;
(3) provide public improvements, infrastructure and community benefits; (4) strengthen the
City's economic base with a variety of high quality long term jobs, in addition to shorter term
construction jobs; (5) provide for and generate substantial revenues for the City in the form of
one time and annual fees and exactions and other fiscal benefits as documented in Keyser
Marston Associates' May 2013 fiscal report entitled "Economic and Fiscal Impacts Generated by
Apple in Cupertino—Current Facilities and Apple Campus 2"; (6) provide an amount equal to
twice the otherwise applicable affordable housing impact fee in furtherance of affordable
housing opportunities; (7) result in the voluntary funding of critical citywide facilities and other
infrastructure improvements; and (8) otherwise achieve the goals and purposes for which the
Development Agreement Statute was enacted.
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T. In exchange for the benefits to the City described in the preceding Recital,
together with the other public benefits that will result from the development of the Project,
Apple will receive by this Agreement assurances that it may proceed with the Project in
accordance with Applicable Law, and therefore desires to enter into this Agreement.
AGREEMENT
NOW, THEREFORE, pursuant to the authority contained in California Government
Code§65864 and following, and CMC§ 17.10.010 and following, and in consideration of the
mutual representations, covenants and promises of the parties, the parties hereto agree as
follows:
ARTICLE 1 DEFINITIONS.
"Administrative Project Amendment" shall have that meaning set forth in Section
9.1(a) of this Agreement.
"Administrative Agreement Amendment" shall have that meaning set forth in Section
9.2(a) of this Agreement.
"Affordable Housing Contribution" shall have that meaning set forth in Section 3.2 of
this Agreement.
"Agreement" means this Agreement.
"Apple" means Apple Inc., a California corporation, and its approved successors and
assigns.
"Applicable City Regulations" means (a) all City ordinances, rules,regulations, official
policies, standards and specifications set forth in this Agreement and the Project Approvals,
including the specific Conditions of Approval adopted with respect to the Project Approvals;
(b) with respect to matters not addressed by this Agreement or the Project Approvals but
governing permitted uses of the Property;building locations, sizes, densities, intensities, design
and heights; lot coverage and open space; parking; and Exactions, those ordinances, rules,
regulations, official policies, standards and specifications in force and effect on the Effective
Date; (c) with respect to all other matters, the ordinances, rules, regulations, official policies,
standards and specifications in force and effect as may be enacted, adopted and amended from
time to time,including new City Laws, except those in conflict with this Agreement or the
Project Approvals; (d) Changes in the Law; and (e) Exempt City Laws.
"Applicable Law" means all State and Federal laws and regulations applicable to the
Property and the Project as enacted, adopted and amended from time to time, and the
Applicable City Regulations.
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"Campus Amenity Space" shall have that meaning set forth in Section 4.3(d) of this
Agreement.
"CEQA" shall have that meaning set forth in Recital Q(1) above.
"CEQA Guidelines" shall have that meaning set forth in Recital Q(1) above.
"Changes in the Law" shall have that meaning set forth in Section 8.9 of this
Agreement.
"CHI" shall have that meaning set forth in Recital C of this Agreement.
"City" means the City of Cupertino, a municipal corporation.
"City Council" shall have that meaning set forth in Recital J above.
"City Law" shall have that meaning set forth in Section 8.5 of this Agreement.
"Completion" shall have that meaning set forth in Section 2.3 of this Agreement.
"Compliance Letter" shall have that meaning set forth in Section 12.3(b).
"Conditions of Approval" shall have that meaning set forth in Recital M above.
"Connection Fees" means those fees charged by City on a citywide basis or by a utility
provider to utility users as a cost for connecting to water, sanitary sewer and other applicable
utilities, except for any such fee or portion thereof that constitutes an Impact Fee, as defined
below.
"Contributions" means, collectively, the Affordable Housing Contribution, the Park
Land Contribution, the Glendenning Barn Relocation Contribution, and the I-280 Trail
Contribution.
"Cost Recovery Fees" shall have that meaning set forth in Section 5.2 of this Agreement.
"CMC" shall have that meaning set forth in Recital B above.
"CPI-U" shall have that meaning set forth in Section 5.1 of this Agreement.
"Default Notice" shall have that meaning set forth in Section 12.1 of this Agreement.
"Deficiencies" shall have that meaning set forth in Section 11.2(a) of this Agreement.
"Development Agreement Statute" shall have that meaning set forth in Recital A of this
Agreement.
"Development Plan" shall have that meaning set forth in Recital E.
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"EIR" shall have that meaning set forth in Recital J of this Agreement.
"Effective Date" shall have that meaning set forth in Recital L of this Agreement.
"Exactions" means exactions that may be imposed by the City as a condition of
developing the Project, including in-lieu payments;requirements for acquisition, dedication or
reservation of land; and obligations to construct on-site or off-site public and private
infrastructure improvements such as roadways, utilities or other improvements necessary to
support the Project, whether such exactions constitute subdivision improvements, mitigation
measures in connection with environmental review of the Project, or impositions made under
Applicable City Regulations.
"Exempt City Laws" shall have that meaning set forth in Section 8.10(c) of this
Agreement.
"Existing Office Space Development Allocations" shall have that meaning set forth in
Section 4.3(b) of this Agreement.
"First Extension" shall have that meaning set forth in Section 2.3 of this Agreement.
"General Plan" shall have that meaning set forth in Recital J.
"General Plan Amendments" shall have that meaning set forth in Recital Q(2) of this
Agreement.
"General Plan Office Space Development Allocations" shall have that meaning set
forth in Section 4.3(a) of this Agreement.
"Glendenning Barn Relocation Contribution" shall have that meaning set forth in
Section 3.6 of this Agreement.
"I-280 Trail Contribution" shall have that meaning set forth in Section 3.10 of this
Agreement.
"IL Campus" shall have that meaning set forth in Recital 0 above.
"Impact Fees" means the monetary amount charged by City in connection with a
development project for the purpose of defraying all or a portion of the cost of mitigating the
impacts of the development project or development of the public facilities related to the
development project, including, any "fee" as that term is defined by Government Code section
66000(b),but not including Cost Recovery Fees.
"Indemnified Parties" shall have that meaning set forth in Section 11.1(a).
"Initial Term" shall have that meaning set forth in Section 2.2 of this Agreement.
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"Judgment" shall have that meaning set forth in Section 11.2(a) of this Agreement.
"MMRP" shall have that meaning set forth in Recital Q(1) of this Agreement.
"Mortgagee" shall have that meaning set forth in Section 14.1 of this Agreement.
"Notice of Compliance" shall have that meaning set forth in Section 10.5 of this
Agreement.
"Office Space Allocation" shall have that meaning set forth in Section 4.3(c) of this
Agreement.
"Park Land Acquisition Amount" shall have the meaning set forth in Section 3.7 of this
Agreement.
"Park Land Contribution" shall have the meaning set forth in Section 3.7 of this
Agreement.
"Periodic Review" shall have i &t-the meaning set forth in Section 12.3(a) of this
Agreement.
"Phase 1" shall mean the construction of the 2,820,000 square foot ring-shaped main
building with a 2,385 space underground parking facility, a 100,000 square foot fitness center, a
120,000 square foot(1,000 seat) auditorium, a 5,870 space main parking structure with attached
central plant, a 765-space auditorium, employee and visitor parking structure with 25,000
square foot valet parking reception area, 7,000 square foot visitor/security reception structures,
a-10,000 square feet of landscaping and maintenance buildings, 10,000 square feet of outdoor
food stations, and ancillary on-site and off-site public and private improvements. All figures
are approximate.
"Phase 2" shall mean all subsequent phase or phases of the Project which are not
included within Phase 1, including the development of 600,000 square feet of office and research
and development buildings with 1,740 parking stalls and two satellite plants for energy
generation and ancillary on-site and off-site public and private improvements. All figures are
approximate.
"Planning Commission" shall have that meaning set forth in Recital Q(1) above.
"Project" shall have that meaning set forth in Recital D above.
"Project Approvals" shall have that meaning set forth in Recital Q(2) above.
"Project Site" shall have that meaning set forth in Recital C above.
"Property" shall have that meaning set forth in Recital C above.
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"Pruneridge Vacation Area" shall have that meaning set forth in Section 6.1.
"Rezoning" shall have that meaning set forth in Recital Q(2) of this Agreement.
"Second Extension" shall have that meaning set forth in Section 2.3 of this Agreement.
"Subsequent Approvals" shall mean all ether land use approvals, entitlements, and
permits other than the Project Approvals that are necessary or desirable for the Project. In
particular, as addressed in the EIR, the parties contemplate that Apple will seek certain
approvals for Phase 2 of the Project,including development permits, conditional use permits
and other discretionary and ministerial permits and approvals in furtherance of the Project
Approvals. The Subsequent Approvals may also include, without limitation, the following:
amendments of the Project Approvals, design review approvals, including architectural site
assessments, improvement agreements, use permits, grading permits,building permits, lot line
adjustments, sewer and water connection permii:s, certificates of occupancy, subdivision maps,
preliminary and final development plans, re-subdivisions, and any amendments to, or
repealing of, any of the foregoing. Subject to the limitations set forth herein, the City retains
discretion on site plan and architectural review for the Phase 1 parking structure located on
North Tantau Avenue and for all of Phase 2. Except as otherwise provided in Section 8.7,
ISubsequent Approvals may not change the Ceonditions of Aapproval previously approved,
unless mutually agreed to in writing by City and Apple in accordance with Section 9.1(a)
hereof.
"Term" shall have that meaning set forth in Section 2.3 of this Agreement.
"Tax Consulting Agreement" shall have that meaning set forth in Recital R of this
Agreement.
"Tax Localization Plan" shall have that meaning set forth in Section 3.3(a) of this
Agreement.
"Traffic Signal Preemption Contribution" shall have that meaning set forth in Section
3.9 of this Agreement.
"Transfer Agreement" shall have that meaning set forth in Section 10.1(b) of this
Agreement.
ARTICLE 2 EFFECTIVE DATE,TERM AND TERMINATION OF HP DEVELOPMENT
AGREEMENT.
Section 2.1 Effective Date. This Agreement shall become effective as specified in
Recital L.
Section 2.2 Initial Term. The initial term of this Agreement shall commence upon the
Effective Date and expire on the sixth (6th) anniversary thereof("Initial Term").
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Section 2.3 Extensions to Term. If Apple completes construction of two million four
hundred thousand (2,400,000) square feet of new office and research and development space on
the Project Site after the Effective Date and prior to the expiration of the Initial Term, this
Agreement shall be automatically extended for an additional six (6) years(the "First
Extension"). If Apple fails to complete construction of this new square footage by the
expiration of the Initial Term, the Agreement will terminate. If the First Extension occurs and if
Apple completes construction of three million(3,000,000) square feet of new office, research and
development, and amenity space from the Effective Date through the twelfth(12th) anniversary
thereof, the Agreement shall be automatically extended for an additional eight(8) years (the
"Second Extension"), for a total term of twenty(20) years from the Effective Date. As used
herein, "Tenn" means the Initial Term and, if applicable, the First Extension and Second
Extension. Apple shall not be obligated to pay a fee or charge for the automatic extensions to
the Initial Term. New square footage means development of any new office and research and
development space in the case of the First Extension, or any new office, research and
development and amenity space, in the case of the Second Extension, and, in both cases,
includes new space replacing all or a portion of the existing square footage in place as of the
Effective Date and new space in excess of such existing square footage. For purposes of this
Section 2.3, "Completion" shall mean issuance to Apple of a temporary or permanent
Certificate of Occupancy, which the City shall not unreasonably withhold, or other reasonable
evidence of completion sufficient for the Project or portion thereof to be used for its intended
purpose. All time periods referenced in this Section(and any termination of the Agreement)
shall automatically be tolled in the event of excusable delay as provided in Section 12.5 below.
Section 2.4 Apple Termination for Convenience. Subject to the terms of this Section
2.4, at any time after the Initial Term, and for any reason,Apple may terminate this Agreement
by written notice to City. The effective date of termination, which shall not be sooner than 3
months following the date of Apple's notice, shall be specified in the notice of termination.
Except as otherwise provided in Section 4.7 below with respect to City's obligation to return
sequestered Contributions funds to Apple if litigation prevents Apple from developing a
campus substantially consistent with the Project contemplated by this Agreement and Project
Approvals, if, for any reason, Apple has not paid City the full amount of each of the
Contributions as of the date of such notice, Apple's termination notice shall be accompanied by
payment of the remaining balance of such unpaid Contributions. Such termination shall be
treated in the same manner as expiration of this Agreement at the end of the Term.
Section 2.5 City Termination In Event of Change in Use. If Apple and/or its
successor desire to use the Property for a purpose other than a corporate campus, and provided
that such use is permitted under the Cupertino Municipal Code, the City may elect to terminate
this Agreement by written notice to Apple. Such termination shall be treated in the same
manner as expiration of this Agreement at the end of the Term.
Section 2.6 HP Development Agreement Cancellation. Apple agrees that as of the
Effective Date, that certain development agreement between Apple's predecessor-in-interest,
Hewlett-Packard Company, and the City dated November 6, 1995, approved by City Council
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Ordinance No. 1702, as amended,has been cancelled pursuant to Government Code Section
65868 and is of no further force or effect.
ARTICLE 3 OBLIGATIONS OF APPLE.
Section 3.1 Obligations of Apple Generally. The parties acknowledge and agree that
the City's agreement to perform and abide by the covenants and obligations set forth in this
Agreement is a material consideration for Apple's agreement to perform and abide by its long
term covenants and obligations, as set forth in this Agreement. The parties acknowledge that
many of Apple's long term obligations set forth in this Agreement are in addition to Apple's
agreement to perform all the mitigation measures identified in the MMRP and Conditions of
Approval.
Section 3.2 Affordable Housing Contribution. As set forth in the EIR,Apple agrees
to pay the City an amount equal to two times the otherwise applicable City affordable housing
in-lieu fee for the North Vallco Area ("Affordable Housing Contribution") to fund the
development of affordable housing in the City. The Affordable Housing Contribution will be
calculated on the increase in square footage of building space,including office, research and
development and Campus Amenity Space, at the contemplated full build out of the Project
(including Phase 1 and Phase 2), over the square footage of building space on the Property as of
the Effective Date(i.e. 2,891,500 sq. ft.), and shall be paid by Apple,in full,no later than thirty-
one (31) days after the Effective Date.
Section 3.3 Tax Localization Plan and Requirements.
(a) Apple shall require the incorporation of requirements substantially in the
form set forth in Exhibit DA-1c in its contracts with general contractors performing work at the
Project Site, in connection with causing sales and use tax arising from purchases of materials,
fixtures or equipment for the Project to be allocated to the City, to the extent allowed by law
(the "Tax Localization Plan"). Apple shall direct its general contractors to comply with the Tax
Localization Plan. In order to monitor compliance with the Tax Localization Plan, Apple shall
designate a representative for the purpose of semiannual review with the City of relevant
documents and filings with the State Board of Equalization.
(b) Subject to the succeeding sentence, as between Apple and City, Apple
shall be responsible for the administrative expenses incurred in connection with the Tax
Localization Plan. Subsequent to receipt by City of the first ten million dollars ($10,000,000) in
sales and use tax under the Tax Localization Plan, City will pay the actual administrative costs
incurred in connection with the Tax Localization.Plan, up to an aggregate amount of six
hundred thousand dollars ($600,000). Such payments shall be made within thirty (30) days,
following City's receipt of invoices from Apple, together with reasonable supporting
documentation of the administrative costs.
Section 3.4 Construction Tax. Pursuant to CMC Chapter 3.32, Apple shall pay City,
on a per-square-foot basis, a one-time construction tax based on the gross building area (as
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defined in CMC Chapter 3.32.020) for industrial, office and commercial space constructed in
connection with the Project, exclusive of non-commercial parking lots. The applicable tax rate
as calculated by City shall be adjusted quarterly. Apple shall pay the construction tax
applicable to the first 2.4 million square feet of development no later than thirty-one (31) days
after the Effective Date. If litigation is filed within applicable challenge periods to the Project
Approvals,Apple may request by written notice to City that City sequester the initial
installment of construction tax in a segregated interest bearing account and defer further
expenditure of such funds until the earlier of(1) the date on which such litigation is resolved in
a manner which allows Apple to develop a campus substantially consistent with the Project
contemplated by this Agreement and the Project Approvals, and (2) the date on which Apple
commences mass grading of the Property in connection with development of the Project. If
Apple has not commenced mass grading of the Property and the litigation is not resolved in a
manner which allows Apple to develop a corporate campus substantially consistent with the
Project contemplated by this Agreement and the Project Approvals, then Apple may terminate
this Agreement and the Development Permit and consent to return of the Property's zoning and
general plan land use designations to the zoning and general plan land use designations in
Iplace immediately prior to approval of the Effective DateProject Approvals, and thereafter City
shall promptly refund the initial installment of the construction tax (and all other unexpended
Contributions), together with all interest thereon, to Apple.
Section 3.5 Tax Consulting Agreement. Apple shall cause its wholly owned
subsidiary,Baz Industries, Inc., a California corporation, the successor to ACI Holdings,Inc., to
amend the Tax Consulting Agreement with the City to provide substantially as follows: So long
as the Development Agreement remains in effect, and regardless of the reason for termination,
Sections 2(c), (d) and (e) shall be deleted and replaced with a new Section 2(c) reading: "If, for
any fiscal year during the term covered by this Agreement,new local tax revenue exceeds Two
Hundred Fifty Thousand Dollars ($250,000), then Consultant shall receive the sum of Sixty Two
Thousand Five Hundred Dollars ($62,500) plus an amount equal to thirty-five percent(35%) of
all such new local tax revenue in excess of Two Hundred Fifty Thousand Dollars ($250,000)."
The Tax Consulting Agreement shall also include provisions that require payments, refunds
and deposits into escrow so that the compensation paid by the City thereunder shall accurately
reflect the tax revenues allocated to and retained by the City. Apple represents that it has not
entered into a tax consulting agreement, similar to the existing Tax Consulting Agreement, with
any other city and/or county in California, and Apple agrees not to do so during the Tterm of
this Agreement. The amendment to the Tax Consulting Agreement shall be effective no later
than thirty-one (31) days after the expiration of all applicable challenge periods to the Project
Approvals, without the filing of litigation. Apple will assist City at Apple's sole expense in
defending against any administrative proceedings instituted by the State Board of Equalization
relating to whether the City is the proper point-of-sale location.
Section 3.6 Glendenning Barn. Consistent with MMRP mitigation CULT-1, Apple, at
its expense,will be responsible for(1) relocating the Glendenning Barn to a new location on the
Project Site acceptable to the City or relocating Glendenning Barn to a location off the Project
Site to be designated by City, and (2) ensuring that the relocated barn meets applicable State
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historic building code requirements. Apple shall substantially complete such relocation work
prior to issuance of the first certificate of occupancy for building space in the Project. If Apple
elects to relocate the Glendenning Barn off the Project Site, it shall notify the City of its election
in writing within ninety(90) days after the Effective Date. In addition,if, and only if, the
I Glendenning Barn is relocated off the Project Site,Apple shall pay Ceity Two Million Six
Hundred Forty Four Thousand and Thirty-Five Dollars ($2,644,035) (the "Glendenning Barn
Relocation Contribution"), which represents the agreed upon costs of acquiring or providing a
relocation site for the Glendenning Barn on City-owned property, the cost of improvements to
the relocation site and the Glendenning Barn,the net present value of annual maintenance
expenses, and additional amounts for capital repair costs anticipated in years ten and twenty.
Apple will pay such amount to City within thirty (30) days after receipt of City's written
demand, which may be given at any time following relocation of the Glendenning Barn;
provided,however, if City opts to acquire a new site for the Glendenning Barn rather than
locate the Glendenning Barn on an existing City-owned site, then Apple will deposit up to
$1,000,000 of the Glendenning Barn Relocation Contribution in the escrow established for City's
purchase of such new site so that the funds can be applied towards the purchase price payable
by City at closing, in which case the balance of the Glendenning Barn Relocation Contribution
will be payable by Apple following relocation of the Glendenning Barn as provided above.
Section 3.7 Parkland Contribution. In connection with Mitigation Measure PLAN-1
in the EIR, the parties agree that the sum of Eight Million Two Hundred Seventy Thousand
Nine Hundred Ninety-Four Dollars($8,270,994) (the "Park Land Contribution") constitutes
sufficient funds to acquire 1.1 acres of park land,improve it with park equipment and provide a
maintenance and capital replacements endowment for twenty (20) years. Apple will pay the
Park Land Contribution into the City's Parks Fund, to be used exclusively for park purposes,
within ninety(90) days after the Effective Date. As an alternative to the payment for acquisition
of the 1.1 acres for parkland and as contemplated by Mitigation Measure PLAN-1, Apple may
purchase, designate and dedicate to the City, 1.1 acres elsewhere in the City as Parks and Open
Space,provided the land is publicly accessible and appropriate for public park use as
determined by City and otherwise acceptable to City in its reasonable discretion. If Apple elects
this option, the Park Land Contribution will be reduced by the amount the parties have
designated as the portion of the aggregate payment reflecting the acquisition of park land (the
"Park Land Acquisition Amount") regardless of the actual amount Apple paid for the
designated parcel. If Apple acquires and conveys a suitable alternative park land site to City
after Apple has paid the Park Land Contribution,but before the City has itself entered into an
agreement to purchase a park land site, then City will refund the Park Land Acquisition
Amount(less reasonable out-of-pocket amounts, if any, that City may have already committed
or expended in connection with site selection and acquisition activities, such as due diligence
review, title review, appraisals, and environmental investigations, and for which City provides
reasonable documentation) concurrently with Apple's transfer of title to the alternative park
land site. To avoid incurring unnecessary and duplicative costs, if either party is in negotiations
or is otherwise preparing to purchase an alternative park parcel, that party shall promptly
notify the other party of that fact.
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Section 3.8 Fiber Optic Conduit Installation. Apple, at its expense, shall install an
additional separate fiber optic conduit along Wolfe Road between the 280 Freeway and
Homestead Road, solely in order to accommodate City's usage. The fiber optic conduit shall be
installed in accordance with plans and specifications approved by the Director of Public Works.
City shall be responsible for installation and maintenance of fiber within the separate conduit.
Section 3.9 Traffic Signal Preemption Devices. In addition to complying with
Mitigation Measure PSU-1, Apple shall fund similar traffic signal preemption throughout the
City at a cost not to exceed Three Hundred Twenty Thousand Dollars($320,000) (the "Traffic
Signal Preemption Contribution"). Apple shall pay amounts requested within thirty (30) days
after receipt of City's invoice, accompanied by reasonable documentation supporting City's
installation of the signal preemption covered by the invoice.
Section 3.10 I-280 Trail Contribution. As provided by Mitigation Measure PLAN-3 in
the EIR, Apple shall contribute Two Hundred Fifty Thousand Dollars($250,000) toward the cost
of a study of a bike and/or pedestrian path, including,potentially, a full Class I separated trail
where rights-of-way are adequate, along the drainage channel that runs parallel to southbound
I-280 between North De Anza Boulevard and Calabazas Creek, and then south along the
western bank of Calabazas Creek to Vallco Parkway (the "I-280 Trail Contribution"). The I-280
Trail Contribution shall be paid no later than thirty-one (31) days after the Effective Date.
Section 3.11 Storm Drain Facilities,Storm Drains and Runoff. This Agreement does
not affect Apple's obligations to pay for or construct improvements in the storm drain system
required to implement the Project, nor does it affect Apple's obligations to meet any applicable
federal, state and local discharge limits and requirements pertaining to storm drain facilities,
storm drains or runoff.
Section 3.12 Real Property Acquisition. Any right-of-way or property right necessary
for the completion of portions of the Project or the implementation of the MMRP or Conditions
of Approval will be Apple's responsibility. The City, at Apple's expense, shall obtain an
appraisal suitable for the purpose of government acquisitions. Apple shall then make diligent
and good faith efforts to acquire all necessary properties. If any of the negotiations for any of
the acquisitions reach impasse, at City's request, Apple shall deposit with City the amount of
the fair market appraisal plus estimated soft acquisition costs and costs of proceeding, including
the costs of obtaining or seeking possession of the property, as City reasonably determines. If
the actual costs of acquisition are greater than the deposit, Apple will provide additional funds
to City upon notice in order to pay all costs of acquisition. City may require that Apple make
periodic payments requested by City to cover costs. Any additional remaining deposit will be
returned to Apple upon conclusion of the acquisition. By entering into this Agreement, City
does not commit to exercising the power of eminent domain to acquire any property, and has
not made any decision or commitment in regard to exercising that power. Under Applicable
Law and under this Agreement, the determination to proceed by way of eminent domain to
acquire any property or interest in property is within the sole and exclusive authority of the
City Council, and City has not waived or relinquished any of its powers to solely decide
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whether, when, and on what terms it may consider, deny, approve, or pursue acquisition by use
of the power of eminent domain.
Section 3.13 Mitigations. Apple agrees to contribute to the costs of public facilities
and services in the amounts set forth in the Development Plan, Project Approvals, MMRP and
Conditions of Approval, as required to mitigate impacts of the development of the Property.
City and Apple recognize and agree that but for Apple's contributions to mitigate the impacts
arising as a result of the entitlements granted pursuant to this Agreement and the Project
Approvals, City would not and could not approve the development of the Property as provided
by this Agreement and the Project Approvals. City's approval of development of the Property
is in reliance upon, and in consideration of,Apple's agreement to make contributions toward
the cost of public improvements and public services as provided to mitigate the impacts of
development of the Property.
ARTICLE 4 OBLIGATIONS OF CITY.
Section 4.1 Obligations of City Generally. The parties acknowledge and agree that
Apple's agreement to perform and abide by its covenants and obligations set forth in this
Agreement, including Apple's decision to process the Project in the City, is a material
consideration for City's agreement to perform and abide by the long term covenants and
obligations of City, as set forth in this Agreement.
Section 4.2 Protection of Rights. To the maximum extent permitted by Applicable
Law, City shall take any and all actions as may be necessary or appropriate to ensure that the
vested rights provided by this Agreement can be enjoyed by Apple and to prevent any City
Law, as defined below, from invalidating or prevailing over all or any part of this Agreement.
City shall cooperate with Apple and shall undertake such actions, at Apple's expense, as may be
necessary to ensure this Agreement remains in fall force and effect. City shall not support,
adopt, or enact any City Law, or take any other action that would violate the express provisions
or intent of the Project Approvals or, when issued, the Subsequent Approvals.
Section 4.3 Development Allocations.
(a) New Office Space Development Allocations. In accordance with the
stated goals of the General Plan encouraging development of corporate headquarters that
positively contribute to the City's fiscal well-being, and to establish a reasonable entitlement
basis enabling Apple to invest substantial resources in the Property, City assigns to the Property
the Office Space Allocations currently available under the General Plan as set forth in
Exhibit DA-1d, attached hereto and incorporated herein (the "General Plan Office Space
Development Allocations").
(b) Preservation of Existing Office Space Development Allocations.
Notwithstanding the vacancy or demolition of any or all of the existing structures on the
Property, City confirms that the gross square footage of the buildings existing on the Property
as of the Effective Date is and shall remain part of the Property's fully entitled existing office
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space allocation (the "Existing Office Space Development Allocations"),which can be used for
realization of the Project.
(c) Office Space Allocation. The General Plan Office Space Development
Allocations and the Existing Office Space Development Allocations together comprise the
"Office Space Allocation." Office space in the Project that will be counted as part of the Office
Space Allocation will be calculated as the gross office area, including the building structure.
Excluded from the Office Space Allocation will be Campus Amenity Space identified in Section
4.3(d),below.
(d) Campus Amenity Space. In order to promote personal enrichment for
Apple's employees, enhance their health and wellness, and provide on-site amenities, thereby
substantially reducing the employees' vehicle trips, City agrees that amenity space planned for
the Project will not be counted as part of the Office Space Allocation. Such spaces shall include
exterior bridges;portions of certain walkways that connect buildings, cafeterias and cafes;
fitness and wellness centers; and an auditorium all as more particularly described in
Exhibit DA-le ("Campus Amenity Space"). Should Apple wish to convert any Campus
Amenity Space to office space or other non-amenity space then Apple shall apply for additional
office allocation space. City reserves full discretion with respect to review and approval of any
proposed conversions. To the extent permitted by Applicable Law, and subject to Section
8.10(a)below, applications to convert Campus Amenity Space shall be processed
administratively and approved by the Community Development Director.
(e) Preservation of Existing Credits, Development Rights. Notwithstanding
the vacancy or demolition of any or all of the existing structures on the Property, City confirms
that Apple can rely on City cooperating to take steps or make such determinations as are
necessary to preserve and retain for Apple's benefit the existing development rights and credits
enjoyed by or applicable to the Property, in particular, infrastructure allocations(including,but
not limited to, traffic, sewer, water and other service capacities or allocations)within or
servicing the Property, to the extent such allocations fall solely within the City's jurisdiction.
Section 4.4 Apple's Right to Rebuild. City agrees that Apple, in its sole discretion,
may renovate or rebuild all or portions of the Project during the Term of this Agreement should
it become necessary due to natural disaster, changes in seismic requirements, changes in
technology, or should the buildings located within the Project become functionally outdated.
However, any such renovation or rebuilding shall be subject to the square footage and height
limitations vested by this Agreement, and shall comply with the Project Approvals, the building
codes existing at the time of such rebuilding or reconstruction, and the requirements of CEQA.
Section 4.5 Design of On-Site and Off-Site Improvements. Except as otherwise
provided below, the City recognizes that the Project Approvals include final architectural and
site approvals for Phase 1 and that no further architectural or design review shall be required
for the full build out of Phase 1. Apple acknowledges that architectural and site approvals still
need to be obtained for the parking structure to be located on North Tantau Avenue.
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•
Architectural and site approvals for the North Tantau Avenue garage are Subsequent
Approvals and shall be subject to review and approval by City as provided in this Agreement.
Development of Phase 2 and certain off-site improvements shall be subject to final architectural
and design review by City in accordance with Applicable Law. The Project Approvals,
including Conditions of Approval and all improvement plans prepared in accordance with the
Conditions of Approval, shall govern the design and scope of all on-site and off-site
improvements benefiting, or to be constructed on the Property, including all street widths and
dedications. Except as otherwise expressly provided herein, the City shall not impose
requirements or conditions upon Project development and construction that are inconsistent
with the Project Approvals. Further, except as expressly provided herein,the City shall not
exercise discretion in determining whether or how to grant Subsequent Approvals in a mariner
that would prevent development of the Project for the uses and to the maximum intensity of
development set forth in the Project Approvals.
Section 4.6 Development of the Site. :[n consideration for City entering into this
Agreement,Apple agrees to perform all of its obligations contained in this Agreement in the
time and manner set forth in the Project Approvals. Notwithstanding any other provision in
this Agreement, City acknowledges that this Agreement does not obligate Apple to build the
Project or any component of the Project.
Section 4.7 Sequestration of Contributions in the Event of Litigation. City shall not
expend or commit to third parties any portion of the Contributions prior to the date which is
sixty five (65) days after the Effective Date. If litigation is filed within applicable challenge
periods to the Project Approvals, Apple may request in writing that City sequester that portion
of the Contributions which have not previously been expended or committed to third parties in
a segregated interest bearing account and defer further expenditure of such funds until the
earlier of(1) the date on which such litigation is resolved in a mariner which allows Apple to
develop a headquarters campus substantially consistent with the Project contemplated by this
Agreement and the Project Approvals, and (2) the date on which Apple commences mass
grading of the Property in connection with development of the Project. If Apple has not
commenced mass grading of the Property and the litigation is not resolved in a manner which
allows Apple to develop a corporate campus substantially consistent with the Project
contemplated by this Agreement and the Project Approvals, then Apple may terminate this
Agreement and the Development Permit and consent to return of the Property's zoning and
general plan land use designations to the zoning and general plan land use designations in
place immediately prior to the Effective Date, an.d thereafter City shall promptly refund the
Contributions, together with all interest thereon, to Apple.
ARTICLE 5 DEVELOPMENT FEES,EXACTIONS AND DEDICATIONS.
Section 5.1 Development Impact Fees, Exactions and Dedications. Except as
otherwise expressly provided herein, during the Term, City shall have the right to impose only
such Impact Fees, Exactions and dedications as City has adopted as of the Effective Date of this
Agreement, including those set forth in the Project Approvals, including Conditions of
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Approval. For convenience of reference, the City Impact Fees in effect as of the Effective Date
are identified in Exhibit DA-1f attached hereto and incorporated herein. Any Impact Fees that
are in existence as of the Effective Date but are inadvertently omitted from Exhibit DA-lf may
still be charged. During the Term, the City may increase the existing City Impact Fees but only
to reflect increases in cost of living expenses, as measured by the cumulative Consumer Price
Index for All Urban Consumers("CPI-U"), as defined in Cupertino's CMC Section 5.04.460 (and
as reflected in the most recent report of consumer prices for the San Francisco/Bay Area
Standard Metropolitan Statistical Area as published by the U.S. Department of Labor,
Bureau of Labor Statistics). Except as otherwise expressly provided in this Agreement, during
the Term no other increases to Impact Fees in existence on the Effective Date and no new City
Impact Fees or Exactions imposed after the Effective Date shall apply to the Project.
Section 5.2 Cost Recovery Fees. During the Term,Apple shall be responsible for the
costs to City of processing any land use approvals, including without limitation,building
permits,plan checks,inspection fees, environmental studies required under CEQA and other
similar requests for City permits and Subsequent Approvals, at the rates in effect from time to
time ("Cost Recovery Fees"). Cost Recovery Fees may be increased if the increase is applicable
citywide and reflects the reasonable cost to City of performing the administrative processing or
other service for which the particular Cost Recovery Fee is charged. Apple shall pay all
applicable Cost Recovery Fees, in effect from time to time at then applicable rates related to the
actual provision of direct services to the Project. Cost Recovery Fees shall be due and payable
on a phase-by-phase basis, so that only those fees applicable to the actual construction of each
phase shall be paid upon the issuance of the applicable permits for that phase. If Apple
requests City to make additional, accelerated, or more frequent inspections than would
otherwise take place in City's ordinary course of business, then City may either hire additional
contract inspectors, plan checkers,engineers or planners or City may hire a full- or part-time
employee(s), subject to Apple's prior written approval. If City hires additional contractors or
consultants, then Apple shall reimburse City the reasonable cost of such additional contractors
or consultants, plus an administrative and overhead charge of ten (10) percent. If City hires a
full or part-time employee(s), then Apple shall reimburse City for a pro rata share of the total
cost of the employee(s), as agreed to by Apple in advance and in writing. This obligation shall
remain in effect for the Term of this Agreement.
Section 5.3 Retroactive Permits, Fees, and Fines. If and to the extent Apple or the
Property is subject to fees or fines for retroactive permits or fees or fines designed to be punitive
in nature, Apple shall pay such fees or fines at the rates in effect at the time such fees or fines
are imposed, as long as those same fees, fines or retroactive permit charges are applicable City-
wide and payable by other developers and builders under the same or similar circumstances.
Section 5.4 Connection Fees. During the Term, Apple shall pay all applicable
Connection Fees at the rates in effect from time to time.
Section 5.5 Vesting Tentative Map. Apple has filed a Vesting Tentative Map.
Notwithstanding the provisions of the Subdivision Map Act, Apple agrees that the rights under
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the Vesting Tentative Map are vested as of the Effective Date and all provisions related to fees
shall be governed by ARTICLE 5 of this Agreement.
Section 5.6 Fees Imposed by Outside Agencies. During the Term, City agrees to
exclude Apple from any and all collection agreements regarding fees, including without
limitation development impact fees, which other public agencies request City to impose at
City's discretion on the Project or the Project Site after the Effective Date. Nothing in this
Section 5.6 shall prohibit the City from imposing on Apple any mandatory fee or obligation that
is imposed by a regional agency in accordance with regional, state or federal requirements and
implemented by the City in cooperation with such regional agency.
ARTICLE 6 VACATION OF PRUNERIDGE.
Section 6.1 Vacation of Pruneridge Avenue. As part of the Project Approvals, City
has determined to vacate and sell to Apple that certain approximately 4.64 acre portion of
Pruneridge Avenue identified in Exhibit DA-1g attached hereto and incorporated herein(the
"Pruneridge Vacation Area"), in exchange for, and concurrent with, Apple's causing its wholly
owned subsidiary, CHI, to purchase the City's fee interest in the Pruneridge Vacation Area. The
area to be vacated and sold to CHI specifically excludes the area necessary to provide continued
public street access to The Hamptons apartment complex. The parties shall cooperate to
implement the street vacation.
Section 6.2 Purchase of Pruneridge Avenue. City's decision to vacate the Pruneridge
Vacation Area, subject to completing the relocation of all utilities and appurtenances within the
roadway area at Apple's expense, was based on Apple agreeing to pay or causing CHI to pay
City Twenty Three Million Eight Hundred Fourteen Thousand Two Hundred Fifty-Seven
Dollars ($23,814,257) for the City's fee interest and all appurtenances, including all public
easements and rights-of-way, in such property. The parties acknowledge that the purchase
price for the Pruneridge Vacation Area includes a substantial premium over fair market value.
Apple's obligation to cause CHI to purchase the Pruneridge Vacation Area upon completion of
the vacation and relocation of existing utilities and appurtenances is set forth in a separate
IPruneridge Vacation Area purchase and sale agreement between City and CHI dated
Section 6.3 Street Closure. The street closure is contingent upon the substantial
relocation of all utilities within the Pruneridge Vacation Area, as reasonably determined by the
Director of Public Works.
ARTICLE 7 COOPERATION—IMPLEMENTATION.
Section 7.1 Processing Application for Subsequent Approvals. City and Apple
anticipate that the Project will be implemented in accordance with the Project Approvals,
including the MMRP and the Conditions of Approval. The foregoing actions and other
necessary or convenient implementation actions shall not require an amendment to this
Agreement. By certifying the EIR, and approving the General Plan Amendments and other
2)
Project Approvals, the City has made a final policy decision that the Project is in the best
interests of the public health, safety and general welfare. Accordingly, the City shall not use its
discretionary authority in considering any application for a Subsequent Approval to change the
policy decisions reflected by the Project Approvals or otherwise to prevent or delay
development of the Project as set forth in the Project Approvals. Instead, the Subsequent
Approvals shall be deemed to be tools to implement those final policy decisions and shall be
issued by City so long as they comply with this Agreement and Applicable Law and are not
inconsistent with the Project Approvals as set forth above.
Apple acknowledges that Applicable Law, the Project Approvals and this
Agreement contemplate further City review of elements or portions of the Project, such as
architectural and site review of the Phase 1 parking garage on North Tantau Avenue and all of
Phase 2, including potential supplemental CEQA compliance, if required. Nothing in this
Agreement shall be deemed to limit City's legal authority with respect to these reviews as
provided by and otherwise consistent with this Agreement. In no event shall such further
review by City revisit the Conditions of Approval, or the Project Approvals or be conditioned
on or require any change in the Project except as otherwise provided in the Project Approvals or
this Agreement or as otherwise required by Applicable Law.
Section 7.2 Timely Submittals By Apple. Apple acknowledges that City cannot
expedite processing Subsequent Approvals until Apple submits complete applications on a
timely basis. Apple shall use its best efforts to: (1) provide to City in a timely manner any and
all documents, applications, plans, and other information necessary for City to carry out its
obligations hereunder; and (2) cause Apple's planners, engineers, and all other consultants to
provide to City in a timely manner all such documents, applications, plans and other necessary
required materials. It is the express intent of Apple and City to cooperate and diligently work
to obtain any and all Subsequent Approvals.
Section 7.3 Timely Processing By City. Upon Apple's submission of all appropriate
applications and Cost Recovery Fees for any Subsequent Approval, City shall promptly and
diligently commence and complete all steps necessary to act on the Subsequent Approval
application including, without limitation: (1) providing at Apple's request and sole expense,
outside building consultants to review plans or otherwise assist City's efforts to expedite City
processing and approval work(Apple shall pay for these outside consultant costs at cost plus
10%for administrative costs incurred); (2) if legally required, providing notice and holding
public hearings; and (3) acting on any such Subsequent Approval applications.
Section 7.4 Specific Subsequent Approvals. The parties acknowledge that Apple has
not filed appropriately detailed plans in order for the City to act on certain Subsequent
Approvals as of the Effective Date, including, among others, site plan and architectural review
of the Phase 1 parking garage on North Tantau Avenue and development permits and
conditional use permits that may be necessary for development of the Phase 2 buildings and
improvements. In addition to the other general covenants concerning processing of Subsequent
Approvals set forth in this Agreement, City shall, to the maximum extent permitted by
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Applicable Law, promptly and diligently commence and complete all steps (including noticing
and public hearings)necessary to act on these contemplated Subsequent Approval applications.
Section 7.5 Other Government Permits. At Apple's sole discretion and in accordance
with Apple's construction schedule, Apple shall apply for such other permits and approvals as
may be required by other governmental or quasi-governmental entities in connection with the
development of, or the provision of services to, the Project. City shall cooperate with Apple in
Apple's efforts to obtain such permits and approvals and shall, from time to time at Apple's
request and at Apple's expense,use its best efforts to enter into binding agreements with any
such entity as may be necessary to ensure the timely availability of such permits and approvals.
Section 7.6 Cooperation with Public Services. To the maximum extent permitted by
Applicable Law and consistent with its authority, City, at Apple's expense, shall cooperate and
assist Apple in Apple's efforts to reserve capacity for sewer and water services from other third
party governmental entities.
ARTICLE 8 STANDARDS,LAWS AND PROCEDURES GOVERNING THE PROJECT.
Section 8.1 Vested Right to Develop. Subject to the fulfillment of the terms and
obligations of this Agreement, for the Term of this Agreement Apple shall have a vested right to
develop the Project on the Project Site in accordance with the Project Approvals and the terms
and conditions of this Agreement. Nothing in this Section shall be deemed to eliminate or
diminish Apple's obligation to obtain any required Subsequent Approvals.
Section 8.2 Permitted Uses Vested by This Agreement. The permitted uses of the
Project Site;the density and intensity of use of the Project Site;the maximum height,bulk and
size of proposed buildings;provisions for reservation or dedication of land for public purposes
and the location of public improvements; the general location of public utilities; and other terms
and conditions of development applicable to the Project, shall be as set forth in the Project
Approvals and, as and when they are issued (but not in limitation of any right to develop as set
forth in the Project Approvals), the Subsequent Approvals. The permitted uses for the Project
are those specified in the Project Approvals and CMC Section 19.72.030.
Section 8.3 Intentionally Omitted.
Section 8.4 State and Local Building`.standards. Except as otherwise provided herein
or as may be required by Applicable Law, the City shall apply to Phase 1 of the Project, all State
and local building standards and City's design and construction standards for road and storm
drain facilities, in effect on the Effective Date. For Phase 2 and off-site improvements, the City
may apply any updated and adopted State and local building standards in effect at the time the
Phase 2 permit or off-site improvement applications, as applicable, are substantially complete
and submitted for plan review to the City Building Department, provided any such standards
have been adopted and uniformly applied by City on a citywide basis and provided further that
no such standards are adopted for the purpose of preventing, frustrating or otherwise limiting
construction of all or any part of the Project.
7.2
Section 8.5 No Conflicting Enactments. City shall not impose on the Project(whether
by action of the City Council or by initiative, referendum or other means) any ordinance,
resolution, rule, regulation, standard, directive, condition or other measure (each individually, a
"City Law") that is in conflict with Applicable Law or this Agreement or that reduces the
development rights or assurances provided by this Agreement. Notwithstanding the preceding
sentence,Apple may consent in its sole discretion and in writing to any new City Law. Without
limiting the generality of the above, any City Law shall be deemed to conflict with Applicable
Law or this Agreement or reduce the development rights provided hereby if it would result in
any of the following, either by specific reference to the Project or as part of a general enactment
which applies to or affects the Project:
(a) Change any land use designation or permitted use of the Project Site;
(b) Limit or control the availability of public utilities, services or facilities or
any privileges or rights to public utilities, services, or facilities (for example, water rights,water
connections or sewage capacity rights, sewer connections and the like) for the Project, provided,
however,nothing herein shall be deemed to exempt the Project or the Project Site from any
City-wide or regional water use rationing requirements that may be imposed from time to time
in the future;
(c) Limit or control the location of buildings, structures, grading,or other
improvements comprising the Project in a manner that is inconsistent with or more restrictive
than the limitations included in the Project Approvals or the Subsequent Approvals(as and
when they are issued);
(d) Limit or control the rate, timing, phasing or sequencing of the approval,
development or construction of all or any part of the Project in any manner;
(e) Apply to the Project any City Law otherwise allowed by this Agreement
that is not uniformly applied on a City-wide basis to all substantially similar types of
development projects and project sites;
(f) Result in Apple having to substantially delay construction of the Project
or require the issuance of additional permits or approvals by the City other than those required
by Applicable Law;
(g) Substantially increase the cost of constructing or developing the Project or
any portion thereof,unless failure to impose such restrictions would place the employees and
workers at the Project or the immediate community in a condition dangerous to their health or
safety;
(h) Impose against the Project any dedication or Exaction not specifically
authorized by this Agreement, the Project Approvals or Applicable Law;or
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(i) Limit the processing or procuring of applications and approvals of
Subsequent Approvals.
Section 8.6 Initiatives and Referenda.
(a) If any City Law is enacted or imposed by initiative or referendum, or by
the City Council directly or indirectly in connection with any proposed initiative or referendum,
which City Law would conflict with Applicable Law or this Agreement or reduce the
development rights provided by this Agreement:and the Project Approvals, such City Law shall
not apply to the Project.
(b) Without limiting the generality of any of the above,no City moratorium
or other limitation(whether relating to the rate, timing,phasing or sequencing of development)
affecting subdivision maps,building permits or other entitlements to use that are approved or
to be approved, issued or granted within the City, or portions of the City, shall apply to the
Project.
(c) To the maximum extent permitted by Applicable Law, City shall
endeavor to prevent any City Law from invalidating or prevailing over all or any part of this
Agreement, and City shall cooperate with Apple and shall undertake such actions, at Apple's
expense, as may be necessary to ensure this Agreement remains in full force and effect.
(d) City, except to submit to vote of the electorate initiatives and referendums
required by Applicable Law to be placed on a ballot, shall not support, adopt or enact any City
Law, or take any other action that would violate the express provisions or spirit and intent of
this Agreement, the Project Approvals or, when issued, the Subsequent Approvals.
(e) Apple reserves the right to challenge in court any City Law that would
conflict with Applicable Law or this Agreement or reduce the development rights provided by
this Agreement.
Section 8.7 Environmental Review. The parties understand that the EIR was
intended to be used in connection with each of the Project Approvals and Subsequent
Approvals needed for the Project. Consistent with the CEQA policies and requirements
applicable to the EIR, City agrees to use the EIR in connection with the processing of any
Subsequent Approvals to the maximum extent allowed by Applicable Law and not to impose
on the Project any mitigation measures or other conditions of approval other than those
specifically imposed by the Project Approvals, including the Conditions of Approval and the
MMRP. In addition, to the extent consistent with CEQA's policies and requirements applicable
to tiered EIR's, City agrees to use the EIR in connection with the processing of Subsequent
Approvals to the extent allowed by Applicable Law. Notwithstanding the foregoing, the parties
acknowledge that certain Subsequent Approvals may legally require additional analysis under
CEQA. For example, a change in the Project could require additional analysis under CEQA if
the triggering conditions identified in CEQA Guidelines section 15162 are met. In the event
supplemental or additional CEQA review is required for a Subsequent Approval, City shall
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limit such supplemental or additional CEQA review to the scope of analysis mandated by
CEQA in light of the scope of City's discretion to be exercised in connection with the
Subsequent Approvals. Apple acknowledges that, if the City determines based upon
supplemental or additional CEQA review that the Project will result in new significant effects or
substantially increase the severity of effects that were identified in the EIR, City may require
additional feasible mitigation measures necessary to mitigate such impacts. In the event further
mitigation measures are identified by such additional environmental review, City may require,
and Apple shall comply at its expense with, all feasible mitigation measures necessary to
substantially lessen new or substantially more severe significant environmental impacts of the
Project, which were not foreseen at the time of execution of this Agreement.
Section 8.8 Life of Subdivision Maps, Development Approvals, and Permits. The
term of any subdivision map or any other map, permit, or other land use entitlement approved
as a Project Approval or Subsequent Approval shall automatically be extended for the longer of
the Term of this Agreement(including any extensions) or the term otherwise applicable to such
Project Approval or Subsequent Approval if this Agreement is no longer in effect.
Section 8.9 State and Federal Law. As provided in California Government Code
§65869.5, this Agreement shall not preclude the application to the Project of changes in laws,
regulations, plans or policies, to the extent that such changes are specifically mandated and
required by changes in state or federal laws or regulations("Changes in the Law"). In the
event Changes in the Law prevent or preclude compliance with one or more provisions of this
Agreement, such provisions of the Agreement shall be modified or suspended, or performance
thereof delayed, as may be necessary to comply with Changes in the Law, and City and Apple
shall take such action as may be required pursuant to this Agreement including, without
limitation, ARTICLE 7(Cooperation-Implementation) and Section 12.5 (Excusable Delays;
Extension of Time of Performance). Nothing in this Agreement shall preclude City from
imposing on Apple any fee specifically mandated and required by regional, state or federal
laws and regulations.
Section 8.10 City's Reservations of Authority. The parties acknowledge and agree that
City is restricted in its authority to limit its police power by contract and that the limitations,
reservations and exceptions contained in this Agreement are intended to reserve to City all of its
police power which cannot be so limited by Applicable Law. Notwithstanding any other
provision of this Agreement to the contrary, the following regulations and provisions shall
apply to the development of the Property:
(a) Procedural regulations relating to hearing bodies, petitions, applications,
notices, records,hearings, reports, recommendations, appeals and any other matter of
procedure, provided such procedures are uniformly applied on a City-wide basis to all
substantially similar types of development projects and properties.
(b) Except as otherwise provided in Section 8.4, those State and local
building standards governing construction standards and specifications, including building,
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plumbing,mechanical, electrical, fire and grading requirements, and all other uniform
construction codes then applicable in City at the time of permit application, including design
and construction standards for road and storm drain facilities.
(c) City Laws which may be in conflict with this Agreement or the Project
Approvals but which are necessary to protect persons or property from dangerous or
hazardous conditions which create a substantial and demonstrable threat to the public health or
safety of residents or users of the Property and the affected surrounding region,based on
findings by the City Council identifying the dangerous or hazardous conditions requiring such
changes in the law and how such changes would alleviate the dangerous or hazardous
condition("Exempt City Laws").
(d) City Laws applicable to the Property, which do not conflict with this
Agreement or the Project Approvals.
Section 8.11 Timing of Project Construction and Completion.
(a) Notwithstanding any provision of this Agreement to the contrary, City
and Apple expressly agree that there is no requirement that Apple initiate or complete
development of the Project or any particular phase of the Project within any particular period of
time, and City shall not impose such a requirement on any Project Approval or Subsequent
Approval. The parties acknowledge that Apple cannot, at this time,predict when or the rate at
which or the order in which phases will be developed. Such decisions depend upon numerous
factors that are not within Apple's control.
(b) In light of the above, the parties agree that Apple shall be able to develop
in accordance with Apple's own time schedule as such schedule may exist from time to time,
and Apple shall determine which part of the Project Site to develop first, and at Apple's chosen
schedule. In particular, and not in limitation of any of the above, the parties desire to avoid the
holding of the California Supreme Court in Pardee Construction Co. v. City of Camarillo,
37 Ca1.3d 465 (1984). In that case, the Court held that the parties' failure to consider and
expressly provide for the timing of development:resulted in a later-adopted initiative restricting
the timing of development. Accordingly, the parties expressly acknowledge that Apple shall
have the right to develop the Project in such order and at such rate and at such times as Apple
deems appropriate within the exercise of its subjective business judgment.
Section 8.12 Apple is an Independent Contractor. Apple is not an agent or employee
of City,but is an independent contractor with full rights to manage its employees subject to
Applicable Law. All persons employed or utilized by Apple in connection with this Agreement
are employees or contractors of Apple_and shall not be considered employees of City in any
respect.
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ARTICLE 9 AMENDMENT.
Section 9.1 Project Approval Amendments. To the extent permitted by Applicable
Law, any Project Approvals or Subsequent Approvals may,from time to time,be amended or
modified in the following manner:
(a) Administrative Project Amendments. Upon Apple's written request for
an amendment or modification to a Project Approval or Subsequent Approval, the Community
Development Director or his/her designee shall determine: (1)whether the requested
amendment or modification is minor when considered in light of the Project as a whole;and
(2) whether the requested amendment or modification is consistent with this Agreement and
Applicable Law. If the Community Development Director or his/her designee finds that the
proposed amendment or modification is minor, consistent with this Agreement and Applicable
Law, and will result in no new significant impacts not addressed and mitigated by the MMRP
or Conditions of Approval, the amendment shall be determined to be an "Administrative
Project Amendment" and the Community Development Director or his/her designee may,
except to the extent otherwise required by Applicable Law, approve such amendment. Upon
approval, any Administrative Project Amendment shall be automatically incorporated into and
vested as part of this Agreement. Subject to Section 8.10(a)below, lot line adjustments,
reductions in the density, intensity, scale or scope of the Project,minor changes in land uses
involving minimal acreage, minor alterations in vehicle circulation patterns or vehicle access
points,minor changes in the amount of parking and parking layout, changes in trail alignments,
substitutions of comparable landscaping for any landscaping shown on any final development
plan or landscape plan, variations in the location of structures that do not substantially alter the
design concepts of the Project, variations in the location or installation of utilities and other
infrastructure connections or facilities that do not substantially alter the design concepts of the
Project, and minor adjustments to the Project Site diagram or Project Site legal description shall
be treated as Administrative Project Amendments.
(b) Non-Administrative Project Amendments. Any request by Apple for an
amendment or modification to a Project Approval or Subsequent Approval which is determined
not to be an Administrative Project Amendment as set forth above shall be subject to review,
consideration and action pursuant to Applicable Law and this Agreement.
Section 9.2 Amendment of this Agreement. This Agreement may be amended from
time to time, in whole or in part, by mutual written consent of the parties or their successors in
interest, as follows:
(a) Administrative Agreement Amendments. Any amendment to this
Agreement which does not substantially affect: (1) the Term of this Agreement; (2) permitted
uses of the Project Site; (3) provisions for the reservation or dedication of land; (4) conditions,
terms, restrictions or requirements for subsequent discretionary actions; (5) the density or
intensity of use of the Project Site or the maximum height or size of proposed buildings; or
(6) monetary contributions by Apple shall be considered an"Administrative Agreement
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Amendment," and the Community Development Director or his or her designee may, except to
the extent otherwise required by Applicable Law, approve the Administrative Agreement
Amendment without notice and public hearing.
(b) Amendment Exemptions. No Subsequent Approval,nor any amendment
of a Project Approval or Subsequent Approval, shall require an amendment to this Agreement,
unless a material term of this Agreement is changed by the Approval or Subsequent Approval.
Instead, any such matter automatically shall be deemed to be incorporated into the Project and
vested under this Agreement.
ARTICLE 10 ASSIGNMENT, COVENANTS, FORECLOSURE AND NOTICE.
Section 10.1 Assignment.
(a) Except as otherwise expressly provided below,neither party shall
convey, assign or transfer any of its interests, rights or obligations under this Agreement
without the prior written consent of the other party, which consent shall not be unreasonably
withheld or delayed. Failure by City to respond within sixty (60) days to any request made by
Apple for such consent shall be deemed to be City's approval of the transfer in question,
provided Apple has clearly indicated in its written request to City that City's failure to respond
within such time period will be deemed approval of the request. Apple may assign its rights
under this Agreement to entities controlling, controlled by or under common control with
Apple Inc. without City's consent;provided,however, any such assignment to an Apple Inc.
affiliate shall be subject to continued compliance with all of Apple's obligations under this
Agreement, including Section 3.5. Assignments to entities which are not affiliates of Apple Inc.
shall be subject to review and approval by City in its reasonable discretion. In addition to any
other reasonable basis, City may withhold its consent upon a determination that the proposed
assignee has insufficient assets or financial ability to complete or manage the Project or carry
out any of the obligations under this Agreement.. Such determination shall be made by the
Community Development Director, and is appealable by Apple to the City Council. Each
approved successor-in-interest to Apple shall be bound by all of the terms and provisions of this
Agreement applicable to that portion of the Property acquired by it. Subject to the preceding
sentence, this Agreement shall be binding upon and inure to the benefit of the parties'
successors, assigns and legal representatives. The terms of this Section 10.1 shall not restrict,
prevent or otherwise affect Apple's ability to lease, sell or convey interests in the Property.
(b) In connection with the transfer or assignment by Apple of all or any
portion of the Project Site or its rights and obligations under this Agreement (other than a
transfer or assignment by Apple to a "Mortgagee" (as defined in Section 14.1)),Apple and the
transferee shall enter into a written agreement(a "Transfer Agreement") regarding the
respective interests, rights and obligations of Apple and the transferee in and under this
Agreement, the Project Approvals, and the Subsequent Approvals. Such Transfer Agreement
may: (1) release Apple and CHI from obligations under the Agreement, the Project Approvals,
or the Subsequent Approvals that pertain to than portion of the Project being transferred, as
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described in the Transfer Agreement,provided that the transferee expressly assumes such
obligations; (2) transfer to the transferee vested rights to improve that portion of the Project
being transferred; and (3) address any other matter deemed by Apple or City to be reasonably
necessary or appropriate in connection with the transfer or assignment. Each Transfer
Agreement shall be in a form reasonably acceptable to the City and shall be recorded in the
Official Records of Santa Clara County.
(c) Any Transfer Agreement shall be binding on Apple, City and the
transferee. Upon recordation of any Transfer Agreement in the Official Records of Santa Clara
County, Apple and CHI shall automatically be released from those obligations assumed by the
transferee therein.
(d) Apple and CHI shall be free from any and all liabilities accruing on or
after the date of any assignment or transfer with respect to those obligations assumed by a
transferee pursuant to a Transfer Agreement. No breach or default hereunder by any person
succeeding to any portion of Apple's obligations under this Agreement shall be attributed to
Apple or CHI, nor may Apple's rights hereunder with respect to the balance of the Property that
is not subject to the assignment or transfer be canceled or diminished in any way by any breach
or default by any such person.
Section 10.2 Covenants Run With The Land. The terms of this Agreement, the
Rezoning, the General Plan Amendments, and this Development Agreement are legislative in
nature, and apply to the Property as regulatory ordinances. All of the provisions, agreements,
rights,powers, standards, terms, covenants and obligations contained in this Agreement shall
run with the land and 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 or entities acquiring the Property, any lot,parcel or any portion
thereof and any interest therein, whether by sale, operation of law or other manner, and shall
inure to the benefit of the parties and their respective successors.
Section 10.3 Foreclosure. Nothing contained in this ARTICLE 10 shall prevent a
Transfer of the Property, or any portion thereof, to a lender as a result of a foreclosure or deed
in lieu of foreclosure, and any lender acquiring the Property, or any portion thereof, as a result
of foreclosure or a deed in lieu of foreclosure shall take such Property subject to the rights and
obligations of Apple under this Agreement;provided,however, in no event shall such lender be
liable for any defaults or monetary obligations of Apple arising prior to acquisition of title to the
Property by such lender, and provided further, in no event shall any such lender or its
successors or assigns be entitled to a building permit or occupancy certificate until all fees due
under this Agreement(relating to the portion of the Property acquired by such lender)have
been paid to City.
Section 10.4 Sale or Lease of a Portion of the Project Site or Individual Parcels. Apple
may not sell or lease the parking lot parcels, or the fitness center, or auditorium parcels
separately from the main building without prior written approval of the City as these parcels
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contain required parking for the main building parcel or do not meet all City requirements for a
standalone parcel.
Section 10.5 Notice of Compliance Generally. Within forty-five (45) days following
any written request which Apple may make from time to time, City shall execute and deliver to
Apple (or to any party requested by Apple) a written"Notice of Compliance," in recordable
form, duly executed and acknowledged by City, that certifies:
(a) This Agreement is unmodified and in full force and effect, or if there have
been modifications hereto, that this Agreement is in full force and effect as modified and stating
the date and nature of such modifications;
(b) There are no current uncured defaults under this Agreement or
specifying the dates and nature of any such default;
(c) The failure to deliver such a statement within such time, unless parties
have agreed to a reasonable extension of time to respond, shall constitute a conclusive
presumption against City that this Agreement is in full force and effect without modification
except as may be represented by Apple and that there are no uncured defaults in the
performance of Apple, except as may be represented by Apple;provided Apple has clearly
indicated in its written request for such statement that City's failure to respond within such
time period will be deemed City's admission with respect to the matters set forth above. Apple
shall have the right, at Apple's sole discretion, to record the Notice of Compliance. Apple shall
cover all reasonable City costs related to responding to the request for a Notice of Compliance,
within thirty (30) days after Apple's receipt of invoices from City, together with reasonable
supporting documentation.
ARTICLE 11 COOPERATION IN THE EVENT OF LEGAL CHALLENGE.
Section 11.1 Cooperation.
(a) If any administrative, legal or equitable action or other proceeding
instituted by any person not a party to this Agreement challenges the validity of the EIR, any
provision of the Agreement or any Project Approval or Subsequent Approval, the parties shall
cooperate in defending such action or proceeding. The parties shall use best efforts to select
mutually agreeable legal counsel to defend such action, and Apple shall pay all compensation
for such legal counsel,following Apple's receipt of invoices from City, together with reasonable
supporting documentation. Such compensation shall include reasonable compensation paid to
Icounsel not otherwise employed as City staff and shall also include City Attorney time and
overhead costs and other City staff overhead costs and any costs directly related to the litigation
reasonably incurred by City. If Apple and the City cannot in good faith agree on joint counsel,
the City shall have the right to retain counsel of its own choosing, separate from Apple's
litigation counsel. Apple shall pay all reasonable fees and costs incurred by City's counsel in
the defense of the litigation, within thirty (30) days following City's written demand therefor,
which may be made from time to time during the course of such litigation. Apple shall
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indemnify, defend, and hold harmless City, its elective and appointive boards, commissions,
officers, agents, and employees (the "Indemnified Parties") from and against any damages,
attorneys' fees or cost awards, including attorneys' fees awarded under Code of Civil Procedure
section 1021.5, assessed or awarded against City by way of judgment, settlement, or stipulation.
To the extent any proposed settlement of a litigation challenge requires the City's cooperation
or any amendment of this Agreement or any Project Approval, then such settlement shall be
subject to City's approval not to be unreasonably withheld, conditioned or delayed. If the terms
of the proposed settlement would constitute an amendment or modification of this Agreement
or any Project Approvals, the settlement shall not become effective unless such amendment or
modification is approved by City in accordance with Applicable Law, and City reserves its full
legislative discretion with respect thereto. If Apple opts not to contest or defend such litigation
challenge, City shall have no obligation to do so.
(b) The parties agree that this ARTICLE 11 shall constitute a separate
agreement entered into concurrently, 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, the parties agree to be bound by the terms of this ARTICLE 11, which shall survive
such invalidation,nullification or setting aside or other expiration or termination of this
Agreement.
Section 11.2 Cure;Preapproval.
(a) If, as a result of any administrative, legal or equitable action or other
proceeding as described in ARTICLE 11, all or any portion of this Agreement,Project
Approvals, or Subsequent Approvals are set aside or otherwise made ineffective by any
judgment(a "Judgment") in such action or proceeding based on procedural, substantive or
other deficiencies (collectively, the "Deficiencies"), the parties agree to use their respective best
efforts to sustain and reenact or readopt this Agreement, Project Approvals, and/or Subsequent
Approvals that the Deficiencies related to, as follows, unless the parties mutually agree in
writing to act otherwise:
(i) If any Judgment requires reconsideration or consideration by City
of this Agreement, a Project Approval, or a Subsequent Approval, then the City shall consider
or reconsider that matter in a manner consistent with the intent of this Agreement, to the extent
permitted by the Judgment. If any such Judgment invalidates or otherwise makes ineffective all
or any portion of this Agreement, a Project Approval, or a Subsequent Approval, then the
parties shall cooperate and shall cure any Deficiencies identified in the Judgment or upon which
the Judgment is based in a manner consistent with the intent of this Agreement. City shall then
readopt or reenact this Agreement, Project Approval, Subsequent Approval, or any portion of
the same, to which the Deficiencies related.
(ii) Acting in a manner consistent with the intent of this Agreement
includes, without limitation, recognizing that the parties intend that Apple may develop an
office, research and development campus and adopting such ordinances, resolutions, and other
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enactments as are necessary to readopt or reenact all or any portion of this Agreement, Project
Approvals, and/or Subsequent Approvals without contravening the Judgment.
(b) The parties agree that this ARTICLE 11 shall constitute a separate
agreement entered into concurrently, 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, the parties agree to be bound by the terms of this Section, which shall survive such
invalidation,nullification or setting aside.
ARTICLE 12 DEFAULT;REMEDIES;TERMINATION.
Section 12.1 Defaults. Failure by either party to perform any material term or
provision of this Agreement shall constitute a default,provided that the party alleging the
default shall give the other Party advance written notice of the default and thirty(30) days to
cure the condition, or, if the nature of the default:is such that it cannot be cured within thirty
(30) days, the party receiving notice shall not be in default if the party commences performance
of its obligations within the thirty (30) day period and diligently completes that performance.
The written notice of default("Default Notice") shall specify in detail the nature of the alleged
failure, and where appropriate, the manner in which said failure might be cured.
Section 12.2 Remedies. The parties acknowledge that City and Apple would not have
entered into this Agreement if City or Apple were to be liable in damages under, or with respect
to, this Agreement or the application thereof. City and Apple shall not be liable in damages to
one another, or to any assignee,transferee or any other person, and both City and Apple
covenant not to sue for or claim damages. Each party shall have the right to (1)bring any
proceeding in the nature of specific performance, injunctive relief or mandamus, and/or
(2)bring any action at law or in equity as may be permitted by law or this Agreement. The
parties acknowledge that monetary damages and remedies at law generally are inadequate
upon the occurrence of a 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 Effective Date of this Agreement and any such equitable remedy shall be available to the
parties.
Section 12.3 Periodic Review.
(a) Conducting the Periodic Review. Throughout the Term of this
Agreement, at least once every twelve (12) months following the Effective Date, City shall
review the extent of good-faith compliance by Apple with the terms of this Agreement. This
review(the "Periodic Review") shall be conducted by the Community Development Director or
his/her designee and shall be limited in scope to compliance with the terms of this Agreement
pursuant to California Government Code Section 65865.1. Apple shall pay reasonable City costs
related to the Periodic Review, within thirty (30) days following Apple's receipt of invoices
from City, together with reasonable supporting documentation.
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(b) Apple's Submittal. If requested by City, and within ninety (90) days
before each anniversary of the Effective Date, Apple shall submit a compliance letter
("Compliance Letter") to the Director along with a copy directed to the City Attorney,
describing Apple's compliance with the terms of the Conditions of Approval, Project Approvals
and this Agreement during the preceding year. The Compliance Letter shall include a
statement that the Compliance Letter is submitted to City pursuant to the requirements of
Government Code§65865.1, this Agreement and the CMC, and that City's failure to respond
within the time periods set forth in this Section 12.3 shall be deemed City's concurrence that
Apple has complied in good faith with the terms and conditions of this Agreement for the
review period in question.
(c) City's Findings. Within sixty (60) days after receipt of the Compliance
Letter, the Community Development Director shall determine whether, for the year under
review,Apple has demonstrated good faith substantial compliance with the terms of this
Agreement. If the Community Development Director finds and determines that Apple has
complied substantially with the terms of this Agreement, or does not determine otherwise
within sixty (60) days after delivery of the Compliance Letter, the annual review shall be
deemed conclusively concluded, Apple shall be deemed to have complied in good faith with
the terms and conditions of this Agreement during the year under review, and this Agreement
shall remain in full force and effect. Upon a determination of compliance,the Community
Development Director shall, if Apple requests, issue a recordable certificate confirming Apple's
compliance through the year under review. Apple may file and record the certificate with the
Santa Clara County Recorder's Office. If the Community Development Director initially
determines the Compliance Letter to be inadequate in any respect, he/she shall provide notice to
that effect to Apple. If, after a duly noticed public hearing thereon, the City Council finds and
determines based on substantial evidence that Apple has not complied substantially in good
faith with the terms of this Agreement for the year under review, the Community Development
Director shall give written notice to Apple specifying the noncompliance and such notice shall
serve as a Default Notice under Section 12.1. If Apple fails to cure the noncompliance within
the time set forth in Section 12.1 above, the City Council, in its discretion,may: (1) grant
additional time for compliance by Apple; or(2) following the hearing described in CMC§
19.144.170, modify this Agreement with Apple's written approval to the extent necessary to
remedy or mitigate the noncompliance; or (3) terminate this Agreement. Except as affected by
the terms hereof, the terms of CMC §_19.116.230 and following, shall govern City's compliance
review process. During the Initial Term, if the Community Development Director has found the
Compliance Letter to be inadequate and yet the City Council does not hold a hearing and make
its determination within one (1) year after delivery of the Compliance Letter for a given year,
then it shall be conclusively deemed that Apple has complied in good faith with the terms and
conditions of this Agreement during such one(1) year period. Following the Initial Term, if the
City Council does not hold a hearing and make its determination within two (2) years after
delivery of the Compliance Letter for a given year, then it shall be conclusively deemed that
Apple has complied in good faith with the terms and conditions of this Agreement during such
two (2) year period.
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Section 12.4 Effect of Termination Upon Apple's Obligations. Termination of this
Agreement as to Apple shall not affect any of Apple's obligations to comply with the City's
General Plan and the terms and conditions of any Project Approvals or Subsequent Approvals
approved with respect to the Project. Any obligations of indemnification and defense relating
to matters arising before termination of this Agreement shall survive termination of this
Agreement.
Section 12.5 Enforced Delay; Extension of Time of Performance. In addition to specific
provisions of this Agreement,neither party shall be deemed to be in default where delays in
performance or failures to perform(other than obligations to make monetary payments which
shall not be subject to this Section 12.5) are due to, and a necessary outcome of, war,
insurrection, strikes or other labor disturbances, walk-outs, riots, floods, earthquakes, fires,
casualties, acts of God, restrictions imposed or mandated by other governmental entities
(including new or supplemental environmental regulations), enactment of conflicting state or
federal laws or regulations,judicial decisions, inability to obtain materials,power or public
facilities (such as water or sewer service) to the Project, or similar basis for excused performance
which is not within the reasonable control of the party to be excused. Litigation attacking the
validity of this Agreement or any of the Project Approvals or Subsequent Approvals, or any
permit, ordinance,entitlement or other action of a governmental agency other than City
necessary for the development of the Project pursuant to this Agreement, shall be deemed to
create an excusable delay. A party's financial inability to perform shall not be a ground for
claiming an excusable delay. The party claiming an excusable delay shall notify the other party
of its intent to claim an excusable delay, the specific grounds of the same and the anticipated
period of the excusable delay within thirty(30) days after the occurrence of the conditions that
establish the grounds for the claim. If notice by i:he party claiming such extension is sent to the
other party more than thirty(30) days after the commencement of the cause, the period shall
commence to run only thirty(30) days prior to the giving of such notice. The period of the
excusable delay shall last no longer than the conditions preventing performance. Upon the
request of either party hereto, an extension of time for the performance of any obligation whose
performance has been so prevented or delayed will be memorialized in writing. The term of
any such extension shall be equal to the period of the excusable delay,or longer, as may be
mutually agreed upon;provided,however, in no event shall any excusable delay extend the
expiration date of the Term beyond the 20th anniversary of the Effective Date.
Section 12.6 California Law;Venue. This Agreement shall be construed and enforced
in accordance with the laws of the State of California, without reference to its choice of laws
provisions, and the exclusive venue for any disputes or legal actions shall be the Superior Court
of California in and for the County of Santa Clara.
Section 12.7 Compliance with Laws. Apple shall comply with all requirements of
state and federal law, in addition to the requirements of this Agreement, including, without
limitation, the payment of prevailing wages, if required.
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Section 12.8 Resolution of Disputes. With regard to any dispute involving
development of the Project, the resolution of which is not provided for by this Agreement or
Applicable Law,Apple shall, at City's request, meet with City. The parties at any such
meetings shall attempt in good faith to resolve any such disputes. Nothing in this Section 12.8
shall in any way be interpreted as requiring that Apple and City and/or City's designee reach
agreement with regard to those matters being addressed,nor shall the outcome of these
meetings be binding in any way on City or Apple unless expressly agreed to by the parties to
such meetings. If any dispute is not resolved within thirty (30) days after the parties first meet,
or such longer period as the parties mutually agree, then each party may pursue all legal and
equitable remedies available it.
ARTICLE 13 NO AGENCY,JOINT VENTURE OR PARTNERSHIP.
It is specifically understood and agreed to by and between the parties hereto that:
(1) the subject development is a private development; (2) City has no interest or responsibilities
for, or duty to, third parties concerning any public improvements until such time, and only
until such time, that City accepts the same pursuant to the provisions of this Agreement or in
connection with the various Project Approvals or Subsequent Approvals; (3)Apple shall have
full power over and exclusive control of the Project, subject only to the limitations and
obligations of Apple under this Agreement, the Project Approvals, Subsequent Approvals, and
Applicable Law; and (4) City and Apple hereby renounce the existence of any form of agency
relationship,joint venture or partnership between City and Apple and agree that nothing
contained herein or in any document executed in connection with this Agreement shall be
construed as creating any such relationship between City and Apple.
ARTICLE 14 MORTGAGEE PROTECTION: CERTAIN RIGHTS OF CURE.
Section 14.1 Mortgagee Protection. This Agreement shall be superior and senior to all
liens placed upon the Property or any portion thereof after the date on which this Agreement or
a memorandum thereof is recorded, including the lien of any deed of trust or mortgage
("Mortgage"). Notwithstanding the above,no breach hereof shall defeat, render invalid,
diminish or impair the lien of any Mortgage made in good faith and for value,but all of the
terms and conditions contained in this Agreement shall be binding upon and effective against
all persons and entities, including all deed of trust beneficiaries or mortgagees(each a
"Mortgagee") who acquire title to the Property or any portion thereof by foreclosure, trustee's
sale, deed in-lieu-of foreclosure, voluntary transfer or otherwise.
Section 14.2 Mortgagee Obligations. City,upon receipt of a written request from a
foreclosing Mortgagee, shall permit the Mortgagee to succeed to the rights and obligations of
Apple under this Agreement, so long as all defaults by Apple that are reasonably susceptible of
being cured are cured by the Mortgagee as soon as reasonably possible, provided, however, that
in no event shall such Mortgagee personally be liable for any of Apple's defaults or monetary
obligations arising prior to acquisition of possession of such Property by such Mortgagee. The
foreclosing Mortgagee shall have the right to find a substitute for Apple to assume Apple's
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obligations,which substitute shall be considered for approval by City pursuant to ARTICLE 10
of this Agreement,but shall not, itself,be required to comply with all of the provisions of this
Agreement.
Section 14.3 Notice of Default to Mortgagee. If City receives notice from a Mortgagee
requesting a copy of any notice of default given i:o Apple and specifying the address for service
thereof, City shall endeavor to deliver to the Mortgagee, concurrently with service thereof to
Apple, all notices given to Apple describing all claims by City that Apple has defaulted
hereunder. If City determines that Apple is not in compliance with this Agreement, City also
shall endeavor to serve notice of noncompliance on the Mortgagee concurrently with service on
Apple. Each Mortgagee shall have the right,but not the obligation, during the same period
available to Apple to cure or remedy, or to commence to cure or remedy, the condition of
default claimed or the areas of noncompliance set forth in City's notice.
ARTICLE 15 MISCELLANEOUS.
Section 15.1 Incorporation of Recitals and Introductory Paragraph. The Recitals
contained in this Agreement, and the introductory paragraphs preceding the Recitals, are
hereby incorporated into this Agreement as if fully set forth herein.
Section 15.2 Findings. City hereby finds and determines that execution of this
Agreement furthers public health, safety and general welfare and that the provisions of this
Agreement are consistent with the General Plan.
Section 15.3 Severability. If any term or provision of this Agreement, or the
application of any term or provision of this Agreement to a particular situation, is held by a
court of competent jurisdiction to be invalid,void or unenforceable, the remaining terms and
provisions of this Agreement, or the application of this Agreement to other situations, shall
continue in full force and effect unless amended or modified by mutual consent of the parties.
Section 15.4 Time of Essence. Time is of the essence in the performance of each and
every covenant and obligation to be performed by the parties hereunder.
Section 15.5 Other Necessary Acts. Each party shall execute and deliver to the other
all such other further instruments and documeni:s as may be reasonably necessary to carry out
the Project Approvals, Subsequent Approvals and this Agreement and to provide and secure to
the other party the full and complete enjoyment of its rights and privileges of this Agreement.
Section 15.6 Construction. The language in this Agreement in all cases shall be
construed as a whole and in accordance with its fair meaning. Each reference in this Agreement
to this Agreement or any of the Project Approvals or Subsequent Approvals shall be deemed to
refer to the Agreement, Project Approval or Subsequent Approval as it may be amended from
time to time, whether or not the particular reference refers to such possible amendment. This
Agreement has been reviewed and revised by legal counsel for both City and Apple, and no
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presumption or rule that ambiguities shall be construed against the drafting party shall apply to
the interpretation or enforcement of this Agreement.
Section 15.7 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this Agreement.
Section 15.8 No Waiver. No delay or omission by either party in exercising any right
or power accruing upon the other party's noncompliance or failure to perform under the
provisions of this Agreement shall impair or be construed to waive any right or power. A
waiver by either party of any of the covenants or conditions to be performed by Apple or City
shall not be construed as a waiver of any succeeding breach of the same or other covenants and
conditions
Section 15.9 Nondiscrimination. Neither party shall discriminate,in any way, against
any person on the basis of race, color,national origin, gender, marital status, sexual orientation,
age, creed, religion or disability in connection with or related to the performance of this
Agreement.
Section 15.10 No Third-Party Beneficiary. This Agreement shall not be construed or
deemed to be an Agreement for the benefit of any third-party or parties, and no third-party or
parties shall have any claim or right of action hereunder for any cause whatsoever.
Section 15.11 Other Miscellaneous Terms. The singular shall include the plural;the
masculine gender shall include the feminine; "shall" is mandatory; "may" is permissive. The
words "includes" and "including" shall be interpreted as though followed by the words
"without limitation." If there is more than one signer of this Agreement, the signer obligations
are joint and several.
Section 15.12 Notices. Any notice or communication required hereunder between City
or Apple must be in writing, and may be given either personally,by registered or certified mail
(return receipt requested), or by FedEx or other similar courier promising overnight delivery. If
personally delivered, a notice shall be deemed to have been given when delivered to the party
to whom it is addressed. If given by registered or certified mail, such notice or communication
shall be deemed to have been given and received on the first to occur of(1) actual receipt by any
of the addressees designated below as the party to whom notices are to be sent, or(2) two
(2) days after a registered or certified letter containing such notice,properly addressed, with
postage prepaid, is deposited in the United States mail. If given by Federal Express or similar
courier, a notice or communication shall be deemed to have been given and received on the date
delivered as shown on a receipt issued by the courier. Any party may at any time,by giving
ten (10) days written notice to the other party, designate any other address in substitution of the
address to which such notice or communication shall be given. Such notices or communications
shall be given to the parties at their addresses set forth below:
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If to City,to: City Clerk
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3202
Telephone: (408)777-3200
with Copies to: City Attorney
City of Cupertino
20410 Town Center Lane, Suite 210
Cupertino, CA 95014
Telephone: (408)777-3200
and: City Manager
City of Cupertino
10300 Tone Avenue
Cupertino, CA 95014-3202
Telephone: (408)777-3200
If to Apple, to: Apple Inc.
1 Infinite Loop,M/S 47-2 REF
Cupertino, California 95014
Attention: Apple Campus 2 Project Manager
with Copies to: Apple Inc.
1 Infinite Loop, M/S 4 DLAW
Cupertino, California 95014
Attention: Real Estate Counsel
Telephone: (408) 862-6012
and:
Morrison&Foerster LLP
425 Market Street
San Francisco, CA 94105
Attention: David Gold
Telephone: (415) 268-7000
The provisions of this Section shall be deemed directive only and shall not detract from the
validity of any notice given in a mariner that would be legally effective in the absence of this
Section.
Section 15.13 Entire Agreement, Counterparts and Exhibits. This Agreement and all
exhibits attached to it and[-0r incorporated herein, together with the Pruneridge Vacation Area
purchase and sale agreement, the extension of agreement for consultation services,the
38
Development Plan, MMRP, and the Project Approvals, including Conditions of Approval, are
the sole and entire aAgreement between the parties concerning the subject matter hereof. The
parties acknowledge and agree that they have not made any representation with respect to the
subject matter of this Agreement or any representations inducing the execution and delivery,
except representations set forth herein, and each party acknowledges that it has relied on its
own judgment in entering this Agreement. The parties further acknowledge that all statements
or representations that previously may have been made by either of them to the other are void
and of no effect, and that neither of them has relied thereon in its dealings with the other. To
the extent that there is any conflict between the Project Approvals and this Agreement, the
Project Approvals shall govern the parties' respective rights and obligations.
Section 15.14 Covenant of Good Faith and Fair Dealing. Neither party to this
Agreement shall do anything that shall have the effect of harming or injuring the right of the
other Party to receive benefits of this Agreement. Each party shall refrain from doing anything
that would render its performance under this Agreement impossible. Each party shall do
everything this Agreement contemplates to accomplish the objectives and purpose of this
Agreement.
Section 15.15 Authority to Execute. The person or persons executing this Agreement
on behalf of City warrant and represent that they have the authority to execute this Agreement
on behalf of City, and further represent that they have the authority to bind City to the
performance of its obligations in this Agreement. The person or persons executing this
Agreement on behalf of Apple warrant and represent that they have the authority to execute
this Agreement on behalf of Apple, that all corporate approvals have been obtained including
from CHI which are necessary to bind Apple to the performance of its obligations in this
Agreement, and that they have the authority to bind Apple to the performance of its obligations
in this Agreement.
Section 15.16 Exhibits. The following exhibits are attached to this Agreement and
incorporated herein for all purposes:
(a) EXHIBIT DA-la: Property Description
(b) EXHIBIT DA-1b: Project Site Diagram
(c) EXHIBIT DA-1c: Tax Localization Plan
(d) EXHIBIT DA-1d: General Plan Office Space Development
Allocations
(e) EXHIBIT DA-le: Campus Amenity Space
(f) EXHIBIT DA-1f: Impact Fees
(g) EXHIBIT DA-1g: Pruneridge Avenue Vacation
39
This Agreement is hereby acknowledged and
consented to:
CHI:
CAMPUS HOLDINGS,INC., a California
corporation
By:
Name:
Its:
4
Section 15.17 Recordation of Development Agreement. Pursuant to California
Government Code§65868.5, no later than ten(10) days after the Effective Date, the City Clerk
shall record an executed copy of this Agreement in the Official Records of Santa Clara County.
This Agreement has been entered into by and between Apple and City as of the day and
year first above written.
CITY:
CITY OF CUPERTINO, a
California municipal corporation
By:
Name:
Its:
ATTEST:
By:
Grace Schmidt, City Clerk
APPROVED AS TO FORM:
By:
Carol Korade, City Attorney
APPLE:
APPLE INC., a
California corporation
By:
Name:
Its:
Signatures continued on next page
40
No changes to Exhil2its DA-la — DA-1f
Change to Exhibit DA-1g presented as separate desk item
/011,143
ATTACHMENT CC-6 - CLEAN I
ORDINANCE NO. 13-2114
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
REPEALING ORDINANCE NO.1702 AND APPROVING A NEW
DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF
CUPERTINO AND APPLE INC. FOR THE DEVELOPMENT OF A NEW
CORPORATE CAMPUS
WHEREAS, Apple Inc. ("Apple") has a legal and equitable interest in certain real
property consisting of approximately 176 acres located within the City and generally bordered
by East Homestead Road on the north, adjacent properties to the east of North Tantau Avenue
on the east, Interstate 280 and The Hamptons apartment community on the south, and North
Wolfe Road on the west, as more particularly described in Exhibits DA-la and DA-1b of the
Development Agreement("Property"); and
WHEREAS, Government Code Sections 65864 through 68569.5 provide the statutory
authority for development agreements between municipalities and parties with a fee or
equitable interest in real property; and
WHEREAS, Cupertino Municipal Code ("CMC") § 19.144.010 et seq., establishes
additional procedures for review and approval of proposed development agreements by the
City of Cupertino ("City"); and
WHEREAS, a portion of the Property is currently subject to that certain development
agreement between Apple's predecessor-in-interest, Hewlett-Packard Company, and the City
dated November 6, 1995, approved by City Council Ordinance No. 1702, as amended ("HP
Agreement"); and
WHEREAS, the Project (defined below) proposed by Apple to be developed on the
Property is inconsistent with the development project contemplated by the HP Agreement; and
WHEREAS, on or about August 9, 2011. Apple applied for a General Plan amendment
and rezoning of a portion of the Property to accommodate the demolition of approximately 2.66
million square feet of existing office, research and development buildings, parking areas and
ancillary facilities located on the Property; vacation of a portion of Pruneridge Avenue and
vacation of various public easements; and construction of a new approximately 3.42 million
square foot office, research and development campus with associated parking facilities and
ancillary uses including a 50,000 square foot central plant, a 120,000 square foot (1,000 seat)
corporate auditorium, a 100,000 square foot fitness center and other minor ancillary buildings
for security and landscaping; and improvements to adjacent thoroughfares, including street-
widening, landscaped medians, detached sidewalks, buffered bike lanes, widened freeway off-
ramps and trail improvements(collectively, the "Project"); and
WHEREAS, the Project will be constructed in two or more phases. The first phase will
include the construction of a 2.82 million square foot ring-shaped main building with a 2,385
space underground parking facility, a 100,000 square foot fitness center with a 25 space parking
Resolution No. 13-2114 DA-2011-01 October 15,2013
Page CC-3-2
lot, a 120,000 square foot (1,000 seat) auditorium, a 5,870 space main parking structure with
attached central plant, a 765-space auditorium, employee and visitor parking structure with a
25,000 square foot valet parking reception area, 7,000 square foot visitor security reception
structures, 10,000 square feet of landscaping and maintenance buildings, 10,000 square feet of
outdoor food stations, , and ancillary on-site and off-site public and private improvements. The
second phase(s) of construction will include the development of 600,000 square feet of office
and research and development buildings with 1,740 parking stalls and two satellite plants for
energy generation and ancillary on-site and off-site public and private improvements. All
figures are approximate;and
WHEREAS, on August 19, 2011, the City issued Notice of Preparation for an
Environmental Impact Report for the Project. A scoping session was held on September 8, 2011
to provide the public the opportunity to comment on the topics to be studied in the Draft
Environmental Impact Report ("Draft EIR"). Public comments were collected through the
scoping period's conclusion on October 5,2011;and
WHEREAS, from August 19, 2011 to June 6, 2013 2013, the City's environmental
consultant, LSA, prepared a Draft EIR pursuant to the requirements of the California
Environmental Quality Act (Public Resources Code Section 21000 et seq.) ("CEQA") and the
Guidelines for Implementation of the California Environmental Quality Act (Title 14, Sections
15000 et seq. of the California Code of Regulations) ("CEQA Guidelines");and
WHEREAS, the Draft EIR was released for a 46-day public review/comment period
beginning on June 6, 2013 and ending July 22, 2013. The Notice of Completion of the Draft EIR
was sent to the State Clearinghouse in the Governor's Office of Planning and Research on June
6, 2013 under State Clearinghouse No. 2011082055. The Notice of Availability was filed with the
Santa Clara County Clerk-Recorder on the same day and was also: (1) sent to other potentially
affected agencies as required by CEQA; (2) sent to adjacent property owners as required by
CEQA; and (3) posted at the Project site and at City Hall; and
WHEREAS, on June 26, 2013, the City held a duly noticed public meeting to allow the
public an additional opportunity to provide input on the Draft EIR and received public
testimony; and
WHEREAS, following the close of the public review and comment period on the Draft
EIR, written responses to comments concerning the adequacy of the Draft EIR received during
the public review and comment period have been prepared and compiled in a Response to
Comments Document(which includes revisions to the Draft EIR); and
WHEREAS, the Final Environmental Impact Report ("Final EIR"), consisting of the
Draft EIR (published in June 2013), the Response to Comments Document (published in
September 2013), and all documents incorporated therein was issued on September 23, 2013.
Notice of Availability of the Final EIR was sent to the Santa Clara County Clerk Recorder's
Office, posted at City Hall and the Project site, and sent to 10 local libraries and property
owners, business owners and residents within 1,000 feet of the Project site. A courtesy notice
regarding the availability of the Final EIR was also mailed to all postal customers in the City of
Cupertino and within 1000 feet of the Project site and published in the Mercury News; and
Resolution No.13-2114 DA-2011-01 October 15,2013
Page CC-3-3
WHEREAS, on September 26, 2013, City Staff presented the Final EIR to the
Environmental Review Committee ("ERC") for review and recommendation. After considering
the Final EIR, all supporting documents, and Staff's presentation, the ERC recommended that
the City of Cupertino City Council approve the Project; and
WHEREAS, the City received comments following the close of the public review and
comment period on the Draft EIR and, although pursuant to Public Resources Code Section
21091(d)(1) and CEQA Guidelines Section 15088(a) written responses are not required,
responses have been provided with staff reports; and
WHEREAS, the Final EIR was presented for review to the Planning Commission and
City Council on October 1, 2013 at a Joint Planning Commission and City Council Study
Session; and
WHEREAS, on October 2, 2013, the Planning Commission held a public hearing and
voted 4-0-1 (1-absent) to recommend that the City Council approve Findings Revision #1
(October 1, 2013) to adopt Mitigation Measure TRANS-23 (Alternate), as amended to delete the
penalty provisions, to allow three left turn lanes out of the project driveway on to N. Wolfe
Road, a Resolution Recommending Certification of an Environmental Impact Report (EIR),
adoption of Findings and a Statement of Overriding Considerations, adoption of Mitigation
Measures, and adoption of a Mitigation Monitoring and Reporting Program in substantially
similar form to the Resolution, as amended (Resolution no. 6727); Approve the General Plan
Amendment, GPA-2011-03, in substantially similar form to the Resolution presented
(Resolution no. 6728);Approve the Zoning Map Amendment, Z-2011-03, in substantially similar
form to the Resolution presented (Resolution no. 6729); Approve the Vesting Tentative Map,
TM-2011-03, in substantially similar form to the Resolution presented (Resolution no. 6732) ;
Approve the Development Permit, DP-2011-04, Use Permit, U-2011-11, Architectural and Site
Approval, ASA-2011-14 and Tree Removal Permit, TR-2011-39, in substantially similar form to
the Resolution presented (Resolution no. 6731); and Approve the Development Agreement, DA-
2011-01, in substantially similar form to the Resolution presented (Resolution no. 6730), adopt
the Findings and Statement of Overriding Considerations for the Project, and make conditions
of approval all of the mitigation measures for the Project that are within the responsibility and
jurisdiction of the City that are identified in Findings; and; and
WHEREAS,Supplemental Text Revisions, Apple Campus 2 Project Final Environmental
Impact Report, which is part of the Final EIR, identifies a third alternative mitigation measure
for Impact TRANS-23, a third alternative mitigation measure for Impact TRANS-27, and
discloses recent amendments to Chapter 6.5 of Division 13 of the Public Resources Code; and
WHEREAS, on October 15, 2013, the City Council held a duly noticed public hearing on
the Final EIR and the Development Agreement; as well as the following Project approvals:
Resolution No. 13-2114 DA-2011-01 October 15,2013
Page CC-3-4
amendments to the General Plan to allow a change in the land use designation of a 1.1 acre area
from Parks and Open Space to Industrial/Residential, a change to figure 2-G to reflect the
relocation of Glendenning Barn, changes to various figures to reflect the vacation of Pruneridge
Avenue, amendments to the text in Policy 2-35, a change to the setback ratio for N. Tantau
Avenue, and other minor related amendments to figures and tables, Rezoning of said 1.1 acre
area from Parks and Recreation (PR) to Planned Industrial Park P(MP), Vesting Tentative Map,
Development Permit, Use Permit, Architectural and Site Approval for Phase 1 of the Project,
Tree Removal Permit, and street and easement vacations; and
WHEREAS, in compliance with the CEQA Guidelines, on October 15, 2013, the City
Council adopted Resolution No. 13-082 to certify the Final EIR for the Project, adopt findings
and a Statement of Overriding Considerations, Mitigation Measures and a Mitigation
Monitoring and Reporting Program; and
WHEREAS, on October 15, 2013, the City Council adopted Resolution No. 13-083
amending the General Plan to accommodate the Project; and
WHEREAS,on October 15, 2013, the City Council introduced an ordinance to rezone 1.1
acres of the Property from Parks and Recreation (PR) to Planned Industrial Park (P(MP))
(Assessor's Parcel Numbers 316-06-050 and 316-06-051); and
WHEREAS, on October 15, 2013, the City Council adopted Resolution Nos. 13-085 and
13-084, approving, respectively, a Vesting Tentative Map and a Development Permit, Use
Permit, Architectural and Site Approval for Phase 1, and Tree Removal Permit for the Project;
and
WHEREAS, on October 15, 2013, the City Council adopted Resolution No.
vacating that certain approximately 4.64 acre portion of Pruneridge Avenue identified in
Exhibit DA-1g to the Development Agreement and approving a sale of the Pruneridge Avenue
vacation area to Apple, subject to satisfaction of certain conditions, including relocation of all
public utilities, for a purchase price of $23,814,257.00, under the terms described in Article 6 of
the Development Agreement attached hereto as Exhibit DA-1 ("Development Agreement");and
WHEREAS, approval of the Development Agreement will provide Apple with
assurances that its development of the Property in connection with the Project can proceed
without disruption caused by a change in City planning and development policies and
requirements, which assurance will thereby reduce the actual or perceived risk of planning,
financing and proceeding with construction and use of the development and promote the
achievement of the private and public objectives of the development; and
WHEREAS, City desires to enter the Development Agreement in order to: (1) increase
the number of well-paid high-quality jobs in the City for employees who either live in the
community and/or support local businesses; (2) improve the City's quality of life and the built
environment by redeveloping outmoded office buildings with a coherent state-of-the art
corporate campus; (3) support the development of a local corporation that has grown into one
of the world's outstanding high tech firms, thereby stimulating local businesses and the local
economy and supporting the City's fiscal health and ability to provide needed services; (4)
secure a source of substantial tax revenues for the City by encouraging a major corporation to
Resolution No.13-2114 DA-2011-01 October 15,2013
Page CC-3-5
continue its existing operations in the City; and (5) attract visitors who will generate both
additional revenues for local businesses and increased tax revenues for the City, as well as
further the City's visibility worldwide; and
WHEREAS, the terms of the Development Agreement include the following community
benefits funded by Apple:
• An affordable housing contribution equal to twice the otherwise applicable City
affordable housing in-lieu fee for the North Vallco Area.
• Contribution of$8,270,994 for the establishment and maintenance of a 1.1 acre park
at a location within the City to be determined, or transfer by Apple of a 1.1 acre
park site acceptable to the City, together with an improvement, maintenance and
capital replacement fund.
• Installation of a fiber optic conduit along Wolfe Road between the 280 Freeway and
Homestead Road for City use.
• Traffic signal preemption device improvements in an amount up to$320,000.
• Contribution of $250,000 toward the cost of a study for a pedestrian/bicycle trail or
path, including potentially a full Class I separated trail, along the drainage channel
running parallel to southbound I-280 between North De Anza Boulevard and
Calabazas Creek, and then south along the western bank of Calabazas Creek to
Vallco Parkway.
• Apple's commitment to require its general contractor to comply with a Tax
Localization Plan that would cause sales and use taxes generated from the purchase
of materials, fixtures and equipment for the Project to be allocated to the City.
• Amendment of an Agreement for Consultation Services that may generate
additional sales tax revenue for the City.
• Contribution of $2,644,035 to City if Apple desires to relocate the historic
Glendenning barn off of the Property to other City-owned property.
NOW, THEREFORE, BE IT ORDAINED AS FOLLOWS:
That after careful consideration of the facts, exhibits, testimony and other evidence submitted in
this matter, the City Council based upon the findings described above, the public hearing
record and the Minutes of Planning Commission Meeting of October 2, 2013, and subject to the
conditions specified below:
Section 1. The recitals set forth above are true and correct, and are hereby
incorporated herein by this reference as if fully set forth in their entirety.
Section 2. City Council Ordinance No. 1702 is hereby repealed and the HP
Agreement is hereby canceled in its entirety pursuant to Government Code section 65868.
Section 3. The City Council, having considered the evidence received at the public
hearing duly noticed and held for said proposed Development Agreement, finds as follows:
A. The proposed Development Agreement is consistent with the objectives,
policies, general land uses and programs specified in the General Plan, as amended.
Resolution No. 13-2114 DA-2011-01 October 15,2013
Page CC-3-6
B. The proposed Development Agreement is compatible with the uses
authorized in, and the regulations prescribed for, the land use district in which the Project is
located.
C. The proposed Development Agreement is in conformity with and will
promote public convenience, general welfare, and good land use practice.
D. The proposed Development Agreement will not be detrimental to the
health, safety, or general welfare.
E. The proposed Development Agreement will not adversely affect the
orderly development of property or the preservation of property values.
F. The proposed Development Agreement will promote and encourage the
development of the Project by providing a greater degree of requisite certainty.
Section 4. The City Council hereby approves the Development Agreement in the
form attached subject to such minor technical conforming changes as may be approved by the
City Attorney. This approval is based on the City Council's consideration of and reliance on the
Final EIR and in accordance with the plans, details and descriptions contained therein, and in
the Resolution certifying the Final EIR.
Section 5. This Ordinance shall be effective thirty(30) days following its adoption.
INTRODUCED at an Adjourned Regular Meeting of the City Council of the City of Cupertino
the 15th day of October 2013, and ENACTED at an Adjourned Regular Meeting of the City
Council of the City of Cupertino the day of , 2013,by the following vote:
Vote: Members of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST: APPROVED:
Grace Schmidt, City Clerk Orrin Mahoney, Mayor, City of Cupertino
EXHIBIT DA
RECORD AND WHEN RECORDED
MAIL TO:
RECORD WITHOUT FEE
PURSUANT TO GOVERNMENT CODE
SECTION 6103
City of Cupertino
City Clerk's Office
10300 Torre Avenue
Cu sertino, CA 95014-3202
(Space Above This Line Reserved For Recorder's Use)
DEVELOPMENT' AGREEMENT
BETWEEN
CITY OF CUPERTINO,
a California municipal corporation
AND
APPLE INC.,
a California corporation
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS. 6
ARTICLE 2 EFFECTIVE DATE, TERM AND TERMINATION OF HP DEVELOPMENT
AGREEMENT 10
Section 2.1 Effective Date 10
Section 2.2 Initial Term 10
Section 2.3 Extensions to Term 10
Section 2.4 Apple Termination for Convenience 11
Section 2.5 City Termination In Event of Change in Use 11
Section 2.6 HP Development Agreement Cancellation 11
ARTICLE 3 OBLIGATIONS OF APPLE. 12
Section 3.1 Obligations of Apple Generally 12
Section 3.2 Affordable Housing Contribution 12
Section 3.3 Tax Localization Plan and Requirements 12
Section 3.4 Construction Tax 12
Section 3.5 Tax Consulting Agreement. 13
Section 3.6 Glendenning Barn 13
Section 3.7 Parkland Contribution 14
Section 3.8 Fiber Optic Conduit Installation 14
Section 3.9 Traffic Signal Preemption Devices 15
Section 3.10 I-280 Trail Contribution 15
Section 3.11 Storm Drain Facilities, Storm Drains and Runoff 15
Section 3.12 Real Property Acquisition 15
Section 3.13 Mitigations 16
ARTICLE 4 OBLIGATIONS OF CITY 16
Section 4.1 Obligations of City Generally 16
Section 4.2 Protection of Rights 16
Section 4.3 Development Allocations 16
Section 4.4 Apple's Right to Rebuild 17
Section 4.5 Design of On-Site and Off-Site Improvements. 17
-i-
TABLE OF CONTENTS
(continu_ed)
Page
Section 4.6 Development of the Site. 18
Section 4.7 Sequestration of Contributions in the Event of Litigation 18
ARTICLE 5 DEVELOPMENT FEES, EXACTIONS AND DEDICATIONS. 18
Section 5.1 Development Impact Fees, Exactions and Dedications 18
Section 5.2 Cost Recovery Fees. 19
Section 5.3 Retroactive Permits, Fees', and Fines 19
Section 5.4 Connection Fees 19
Section 5.5 Vesting Tentative Map 19
Section 5.6 Fees Imposed by Outside Agencies 20
ARTICLE 6 VACATION OF PRUNERIDGE. 20
Section 6.1 Vacation of Pruneridge Avenue 20
Section 6.2 Purchase of Pruneridge Avenue 20
Section 6.3 Street Closure. 20
ARTICLE 7 COOPERATION—IMPLEMENTATION 20
Section 7.1 Processing Application for Subsequent Approvals 20
Section 7.2 Timely Submittals By Apple 21
Section 7.3 Timely Processing By City 21
Section 7.4 Specific Subsequent Approvals 21
Section 7.5 Other Government Permits 22
Section 7.6 Cooperation with Public Services 22
ARTICLE 8 STANDARDS, LAWS AND PROCEDURES GOVERNING THE PROJECT.22
Section 8.1 Vested Right to Develop 22
Section 8.2 Permitted Uses Vested by This Agreement 22
Section 8.3 Intentionally Omitted.... 22
Section 8.4 State and Local Building Standards 22
Section 8.5 No Conflicting Enactments 22
Section 8.6 Initiatives and Referenda. 24
Section 8.7 Environmental Review 24
-ii-
TABLE OF CONTENTS
(continued)
Page
Section 8.8 Life of Subdivision Maps, Development Approvals, and Permits 25
Section 8.9 State and Federal Law 25
Section 8.10 City's Reservations of Authority 25
Section 8.11 Timing of Project Construction and Completion. 26
Section 8.12 Apple is an Independent Contractor. 26
ARTICLE 9 AMENDMENT 27
Section 9.1 Project Approval Amendments 27
Section 9.2 Amendment of this Agreement 27
ARTICLE 10 ASSIGNMENT, COVENANTS,FORECLOSURE AND NOTICE 28
Section 10.1 Assignment. 28
Section 10.2 Covenants Run With The Land 29
Section 10.3 Foreclosure 29
Section 10.4 Sale or Lease of a Portion of the Project Site or Individual Parcels 29
Section 10.5 Notice of Compliance Generally 30
ARTICLE 11 COOPERATION IN THE EVENT OF LEGAL CHALLENGE 30
Section 11.1 Cooperation. 30
Section 11.2 Cure;Preapproval 31
ARTICLE 12 DEFAULT;REMEDIES;TERMINATION 32
Section 12.1 Defaults 32
Section 12.2 Remedies 32
Section 12.3 Periodic Review. 32
Section 12.4 Effect of Termination Upon Apple's Obligations 34
Section 12.5 Enforced Delay; Extension of Time of Performance 34
Section 12.6 California Law;Venue 34
Section 12.7 Compliance with Laws 34
Section 12.8 Resolution of Disputes 35
ARTICLE 13 NO AGENCY,JOINT VENTURE OR PARTNERSHIP 35
ARTICLE 14 MORTGAGEE PROTECTION: CERTAIN RIGHTS OF CURE 35
-111-
TABLE OF CONTENTS
(continued)
Page
Section 14.1 Mortgagee Protection 35
Section 14.2 Mortgagee Obligations 35
Section 14.3 Notice of Default to Mortgagee 36
ARTICLE 15 MISCELLANEOUS 36
Section 15.1 Incorporation of Recitals and Introductory Paragraph 36
Section 15.2 Findings 36
Section 15.3 Severability 36
Section 15.4 Time of Essence. 36
Section 15.5 Other Necessary Acts 36
Section 15.6 Construction 36
Section 15.7 Section Headings 37
Section 15.8 No Waiver 37
Section 15.9 Nondiscrimination 37
Section 15.10 No Third-Party Beneficiary 37
Section 15.11 Other Miscellaneous Terms 37
Section 15.12 Notices 37
Section 15.13 Entire Agreement, Counterparts and Exhibits 38
Section 15.14 Covenant of Good Faith and Fair Dealing 39
Section 15.15 Authority to Execute... 39
Section 15.16 Exhibits 39
Section 15.17 Recordation of Development Agreement. 40
-iv-
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT(the "Agreement") is entered into as of
,2013,by and between Apple Inc., a California corporation("Apple"), and the
City of Cupertino, a California municipal corporation("City"),pursuant to California
Government Code§65864 et seq.
RECITALS
Apple and City enter into this Agreement on the basis of the following facts,
understandings and intentions, and the following recitals are a substantive part of this
Agreement:
A. To strengthen the public planning process, encourage private participation in
comprehensive planning and reduce the economic risk of development, the Legislature of the
State of California enacted Sections 65864 through 65869.5 of the California Government Code
("Development Agreement Statute"), which authorize City to establish procedures to enter
into binding development agreements with persons having legal or equitable interests in real
property located within City for development of property.
B. The Cupertino Municipal Code ("CMC"), § 19.144.010 et seq., establishes the
authority and procedure for review and approval of proposed development agreements.
C. Apple has a legal and equitable interest in certain real property consisting of
approximately 176 acres located within the City and generally bordered by East Homestead
Road on the north; adjacent properties to the east of North Tantau Avenue on the east;
Interstate 280 and The Hamptons apartment community on the south; and North Wolfe Road
on the west, as more particularly described in Exhibit DA-la (the "Property"), attached hereto,
and as diagrammed in Exhibit DA-1b, attached hereto (the"Project Site"). The Property is
owned by Campus Holdings, Inc. ("CHI"), a Delaware corporation and wholly owned
subsidiary of Apple. CHI and Apple have entered into an agreement for Apple to develop and
occupy the Property. Pruneridge Avenue extended through the Project Site on a roughly
east/west alignment, and pursuant to the vacation described in Article 6 most of the former
Pruneridge Avenue is now included as part of the Property and Project Site. The Project Site
currently contains approximately 2,891,500 square feet of office, research and development and
amenity building space (2,657,000 square feet of which is office and research and development),
some of which are occupied by Apple and some of which were formerly used by Hewlett-
Packard. Calabazas Creek crosses the southeastern portion of the Project Site.
D. Apple intends to develop the Project Site as an office, research and development
campus consistent with the Project Approvals and the Subsequent Approvals (the "Project").
E. The Project, including but not limited to the buildings, access and parking
facilities, landscaping, and infrastructure improvements, are all more particularly shown on the
1
Development Plan("Development Plan") submitted by Apple in connection with its
applications for the Project Approvals (defined in Recital Q(2)below).
F. Through this Agreement, the parties intend to preserve the size and density of
development as set forth in the Development Plan and Project Approvals, as they may be
amended. City and Apple each acknowledge that development and construction of the Project
is a large-scale undertaking involving major investments by Apple and City, and assurances
that the Project can be developed and used in accordance with the terms and conditions set
forth herein and Applicable Law governing development of the Property will benefit both
Apple and City. City is willing to enter into this Agreement for the reasons enumerated in
CMC§§ 19.144.010 and 19.144.020, including but riot limited to: (1) strengthening the public
planning process; (2) encouraging private participation in comprehensive planning by
providing a greater degree of certainty; (3) reducing the economic costs of development; (4)
allowing for orderly planning of public improvements and services and the allocation of costs in
order to achieve the maximum utilization of public and private resources in the development
process; (5)ensuring that appropriate measures to enhance and protect the environment are
achieved; and (6)ensuring that all conditions of approval,including the construction of off-site
improvements made necessary by land development, will proceed in an orderly and
economical fashion to City's benefit.
G. In addition to the reasons enumerated in the CMC and set forth above in Recital
F, City also enters into this Agreement in order to: (1) increase the number of well-paid high-
quality jobs in the City for employees who either live in the community and/or support local
businesses; (2) improve the City's quality of life and the built environment by redeveloping
outmoded office buildings with a coherent state-of-the art corporate headquarters campus; (3)
support the development of a local corporation that has grown into one of the world's
outstanding high tech firms, thereby stimulating local businesses and the local economy and
supporting the City's fiscal health and ability to provide needed services; (4) secure a source of
substantial tax revenues for the City by encouraging a major corporation to continue its existing
operations in the City; and (5) attract visitors who will generate both additional revenues for
local businesses and increased tax revenues for the City, as well as further the City's visibility
worldwide.
H. Apple acknowledges and recognizes that material inducements for City to enter
into this Agreement are: (1) an opportunity to create a corporate headquarters campus; (2) the
occupancy of the Property by Apple Inc. within the City; and (3) the contributions by Apple to
parks, affordable housing and infrastructure. City's willingness to enter into this Agreement is
a material inducement to Apple to implement the Project, and Apple proposes to enter into this
Agreement in order (x) to obtain assurances from City that the Property may be developed,
constructed,completed and used pursuant to this Agreement, and in accordance with
Applicable Law, subject to the exceptions and limitations expressed herein for the Term of this
Agreement; and (y) to provide for a coordinated and systematic approach to funding the cost of
certain public improvements and facilities planned by City, and to establish the timing and
extent of contributions required from Apple for these purposes.
2
I. Apple and City mutually desire to enter into this Agreement, and proceedings
have been taken in accordance with state law, as set forth below.
J. On October 2, 2013, City's Planning Commission(defined below in Recital Q(1))
held a duly noticed public hearing on this Project and: (1) determined that the CEQA
compliance for the City's consideration of this Project properly relies on the earlier analysis and
assumptions in Cupertino's General Plan 2000-2020 ("General Plan") environmental impact
report and the City's recent preparation of environmental impact report concerning the Project
(entitled Apple Campus 2 Project Environmental Impact Report(the "EIR")), dated September
23, 2013; (2) determined that the Project is consistent with the City's General Plan, as amended
by the General Plan Amendments; and (3) recommended that the City of Cupertino City
Council("City Council") approve this Project.
K. On October 15,2013, the City Council held a duly noticed public hearing on this
Agreement and (1) determined that consideration of this Agreement contained in the EIR
complies in all respects with CEQA; (2) determined that this Agreement is consistent with City's
General Plan, as amended by the General Plan Amendments; (3) conducted all necessary
proceedings in accordance with the City's rules and regulations for the approval of this
Agreement; and (4) introduced Ordinance No. 13-2114, approving this Agreement.
L. On November 2013, the City Council adopted Ordinance No. 13-2113,
approving this Agreement, and the Ordinance became effective thirty (30) days thereafter
(subject to and extended by any subsequent City Council reconsideration hearing) on
("Effective Date").
M. Certain improvements, as set forth in the conditions of approval("Conditions of
Approval"), are necessary to provide infrastructure support for the Project.
N. Apple intends to develop the Project in two or more phases, as described in the
EIR.
O. As of the Effective Date,Apple is City's largest employer, and Apple has been
located in the City since Apple was established in 1976. Apple's current corporate headquarters
at the 1 Infinite Loop campus (the "IL Campus") is located approximately one mile to the west
of the Project Site. As a major corporate employer experiencing significant growth, Apple seeks
to commence a long-range comprehensive planning process for the Property, in order to ensure
that Apple's future corporate operations will continue to be headquartered and expanded
within the City. Following adoption of General Plan Amendments, the Project will be
consistent with the Cupertino General Plan.
P. In connection with the substantial investment of time and financial resources
required for the long-range comprehensive planning and entitlement of a new corporate
headquarters on the Project Site, the parties desire to enter into this Agreement in order to
provide to the Property development allocations for office space available under the General
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Plan, and to vest the General Plan and zoning, as amended for the Property, thereby
establishing a reasonable and secure planning basis for the new corporate headquarters.
Q. While this Agreement furthers numerous City goals and policies, there are two
fundamental purposes it is intended to advance. First, from a fiscal standpoint, to ensure that
the City will not incur unfunded costs related to the planning, development, maintenance and
operation of the Project including, among other things, the costs to the City of providing the
Project with public services and facilities and mitigating the Project's environmental impacts.
Second, to provide Apple with the certainty required to make its substantial long term
investment in the Project,by ensuring that it will have a full and vested right to develop,use
and operate the Project and the Project Site under the terms and conditions set forth in this
Agreement. The rights and obligations of the parities to the Agreement shall be construed and
interpreted in such a manner as shall give full effect to each of these purposes. City has taken
several actions to review and plan for the development of the Project. These include, without
limitation,the following:
(1) Environmental Impact Report. The environmental impacts of the Project,
including the Project Approvals, many of the Subsequent Approvals, and numerous
alternatives to the Project and its location,have properly been reviewed and assessed by City
pursuant to the California Environmental Quality Act, Public Resources Code Section 21000 et
seq.;California Code of Regulations Title 14, Section 15000 et seq. (the "CEQA Guidelines"); and
City's local guidelines promulgated thereunder(collectively, "CEQA"). On October 15, 2013,
pursuant to CEQA and in accordance with the recommendation of the Planning Commission
for the City of Cupertino (the "Planning Commission"), the City Council certified the EIR,by
Resolution No. 13-082 . As required by CEQA, the City adopted written findings, including a
Statement of Overriding Considerations and approved a Mitigation Monitoring and Reporting
Program(the "MMRP") concurrent with its consideration of the Project Approvals.
(2) Planning Commission and City Council Approvals. The Planning
Commission, after a duly noticed public hearing, has reviewed and recommended certification
of the EIR, approval of the General Plan Amendments, adoption of the Rezoning, approval of
the various project level entitlements listed below, and approval of this Agreement. Following
review and recommendation by the Planning Commission, and after a duly noticed public
hearing and certification of the EIR, the City Council,by Resolution No.13-083, approved
amendments to the Cupertino General Plan (the "General Plan Amendments"); adoption of
City Ordinance No. 13-2113, rezoning the PR zone, which corresponds to the approximately 1.1-
acre portion of the site designated Parks and Open Space in the General Plan, to P(MP) (the
"Rezoning");approval of the project level entitlements listed below;and adoption of this
Agreement. The City Council made findings and adopted additional Resolution Nos. 13-085
and 13-084 approving certain project level entitlements, including these additional permits,
agreements and other approvals required for the Project:
i. Pruneridge Vacation Area Purchase and Sale Agreement
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ii. Vesting Tentative Map effective 30 days after the second reading
of the Development Agreement Ordinance
iii. Conditional Use Permit
iv. Development Permit
v. Tree Removal Permit
vi. Streamside Modification Permit
vii. Architectural Site Approval for Phase 1 (other than the parking
structure on North Tantau Avenue)
Certain improvements as set forth in the Project Approval Conditions of
Approval, including MMRP, are necessary to provide infrastructure support for the Project.
The approvals, Conditions of Approval, permits and development policies described in this
Recital Q(2) are collectively referred to as the "Project Approvals."
R. ACI Holdings, Inc., a California corporation and wholly owned subsidiary of
Apple, and City, entered into an Agreement for Consultation Services dated July 1,2007, to
provide City with consulting services consisting of the assessment and creation of new sales
and use tax revenue sources for City, to be derived from Apple and its subsidiaries(the "Tax
Consulting Agreement").
S. The City has reviewed and considered the special innovative features and
environmental benefits of the Project, including the designation of the Project as the first
Environmental Leadership Development Project under the "Jobs and Economic Improvement
Through Environmental Leadership Act" in the State of California, as approved by the
Governor, following review by legislative committees and the California Air Resources Board.
Based on these and other considerations, including the contributions identified in this
Agreement, the City determined that the Project presents substantial public benefits and
opportunities that are advanced by the City and Apple entering into this Agreement. This
Agreement will, among other things: (1) reduce uncertainties in planning and provide for the
orderly development of the Project; (2)mitigate many significant environmental impacts;
(3) provide public improvements, infrastructure and community benefits; (4) strengthen the
City's economic base with a variety of high quality long term jobs, in addition to shorter term
construction jobs; (5) provide for and generate substantial revenues for the City in the form of
one time and annual fees and exactions and other fiscal benefits as documented in Keyser
Marston Associates' May 2013 fiscal report entitled "Economic and Fiscal Impacts Generated by
Apple in Cupertino—Current Facilities and Apple Campus 2"; (6) provide an amount equal to
twice the otherwise applicable affordable housing impact fee in furtherance of affordable
housing opportunities; (7) result in the voluntary funding of critical citywide facilities and other
infrastructure improvements; and (8) otherwise achieve the goals and purposes for which the
Development Agreement Statute was enacted.
T. In exchange for the benefits to the City described in the preceding Recital,
together with the other public benefits that will result from the development of the Project,
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Apple will receive by this Agreement assurances i:hat it may proceed with the Project in
accordance with Applicable Law, and therefore desires to enter into this Agreement.
AGREEMENT
NOW,THEREFORE, pursuant to the authority contained in California Government
Code§65864 and following, and CMC§ 17.10.010 and following, and in consideration of the
mutual representations, covenants and promises of the parties, the parties hereto agree as
follows:
ARTICLE 1 DEFINITIONS.
"Administrative Project Amendment" shall have that meaning set forth in Section
9.1(a) of this Agreement.
"Administrative Agreement Amendment:" shall have that meaning set forth in Section
9.2(a) of this Agreement.
"Affordable Housing Contribution" shall have that meaning set forth in Section 3.2 of
this Agreement.
"Agreement" means this Agreement.
"Apple" means Apple Inc., a California corporation, and its approved successors and
assigns.
"Applicable City Regulations" means (a) all City ordinances,rules, regulations, official
policies, standards and specifications set forth in this Agreement and the Project Approvals,
including the specific Conditions of Approval adopted with respect to the Project Approvals;
(b) with respect to matters not addressed by this Agreement or the Project Approvals but
governing permitted uses of the Property;building locations, sizes, densities,intensities, design
and heights;lot coverage and open space;parking; and Exactions, those ordinances, rules,
regulations, official policies, standards and specifications in force and effect on the Effective
Date; (c) with respect to all other matters, the ordinances, rules, regulations, official policies,
standards and specifications in force and effect as may be enacted, adopted and amended from
time to time, including new City Laws, except those in conflict with this Agreement or the
Project Approvals; (d) Changes in the Law; and (e) Exempt City Laws.
"Applicable Law" means all State and Federal laws and regulations applicable to the
Property and the Project as enacted, adopted and amended from time to time, and the
Applicable City Regulations.
"Campus Amenity Space" shall have that meaning set forth in Section 4.3(d) of this
Agreement.
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"CEQA" shall have that meaning set forth in Recital Q(1) above.
"CEQA Guidelines" shall have that meaning set forth in Recital Q(1) above.
"Changes in the Law" shall have that meaning set forth in Section 8.9 of this
Agreement.
"CHI" shall have that meaning set forth in Recital C of this Agreement.
"City" means the City of Cupertino, a municipal corporation.
"City Council" shall have that meaning set forth in Recital J above.
"City Law" shall have that meaning set forth in Section 8.5 of this Agreement.
"Completion" shall have that meaning set forth in Section 2.3 of this Agreement.
"Compliance Letter" shall have that meaning set forth in Section 12.3(b).
"Conditions of Approval" shall have that meaning set forth in Recital M above.
"Connection Fees" means those fees charged by City on a citywide basis or by a utility
provider to utility users as a cost for connecting to water, sanitary sewer and other applicable
utilities, except for any such fee or portion thereof that constitutes an Impact Fee, as defined
below.
"Contributions" means, collectively, the Affordable Housing Contribution, the Park
Land Contribution, the Glendenning Barn Relocation Contribution, and the I-280 Trail
Contribution.
"Cost Recovery Fees" shall have that meaning set forth in Section 5.2 of this Agreement.
"CMC" shall have that meaning set forth in Recital B above.
"CPI-U" shall have that meaning set forth in Section 5.1 of this Agreement.
"Default Notice" shall have that meaning set forth in Section 12.1 of this Agreement.
"Deficiencies" shall have that meaning set forth in Section 11.2(a) of this Agreement.
"Development Agreement Statute" shall have that meaning set forth in Recital A of this
Agreement.
"Development Plan" shall have that meaning set forth in Recital E.
"EIR" shall have that meaning set forth in Recital J of this Agreement.
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"Effective Date" shall have that meaning set forth in Recital L of this Agreement.
"Exactions" means exactions that may be imposed by the City as a condition of
developing the Project, including in-lieu payments; requirements for acquisition, dedication or
reservation of land; and obligations to construct on-site or off-site public and private
infrastructure improvements such as roadways,utilities or other improvements necessary to
support the Project, whether such exactions constitute subdivision improvements, mitigation
measures in connection with environmental review of the Project, or impositions made under
Applicable City Regulations.
"Exempt City Laws" shall have that meaning set forth in Section 8.10(c) of this
Agreement.
"Existing Office Space Development Allocations" shall have that meaning set forth in
Section 4.3(b) of this Agreement.
"First Extension" shall have that meaning set forth in Section 2.3 of this Agreement.
"General Plan" shall have that meaning set forth in Recital J.
"General Plan Amendments" shall have that meaning set forth in Recital Q(2) of this
Agreement.
"General Plan Office Space Development Allocations" shall have that meaning set
forth in Section 4.3(a) of this Agreement.
"Glendenning Barn Relocation Contribution" shall have that meaning set forth in
Section 3.6 of this Agreement.
"I-280 Trail Contribution" shall have that meaning set forth in Section 3.10 of this
Agreement.
"IL Campus" shall have that meaning set forth in Recital 0 above.
"Impact Fees" means the monetary amount charged by City in connection with a
development project for the purpose of defraying all or a portion of the cost of mitigating the
impacts of the development project or development of the public facilities related to the
development project, including, any "fee" as that term is defined by Government Code section
66000(b),but not including Cost Recovery Fees.
"Indemnified Parties" shall have that meaning set forth in Section 11.1(a).
"Initial Term" shall have that meaning set forth in Section 2.2 of this Agreement.
"Judgment" shall have that meaning set forth in Section 11.2(a) of this Agreement.
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"MMRP" shall have that meaning set forth in Recital Q(1) of this Agreement.
"Mortgagee" shall have that meaning set forth in Section 14.1 of this Agreement.
"Notice of Compliance" shall have that meaning set forth in Section 10.5 of this
Agreement.
"Office Space Allocation" shall have that meaning set forth in Section 4.3(c) of this
Agreement.
"Park Land Acquisition Amount" shall have the meaning set forth in Section 3.7 of this
Agreement.
"Park Land Contribution" shall have the meaning set forth in Section 3.7 of this
Agreement.
"Periodic Review" shall have the meaning set forth in Section 12.3(a) of this Agreement.
"Phase 1" shall mean the construction of the 2,820,000 square foot ring-shaped main
building with a 2,385 space underground parking facility, a 100,000 square foot fitness center, a
120,000 square foot(1,000 seat) auditorium, a 5,870 space main parking structure with attached
central plant, a 765-space auditorium, employee and visitor parking structure with 25,000
square foot valet parking reception area, 7,000 square foot visitor/security reception structures,
10,000 square feet of landscaping and maintenance buildings, 10,000 square feet of outdoor food
stations, and ancillary on-site and off-site public and private improvements. All figures are
approximate.
"Phase 2" shall mean all subsequent phase or phases of the Project which are not
included within Phase 1, including the development of 600,000 square feet of office and research
and development buildings with 1,740 parking stalls and two satellite plants for energy
generation and ancillary on-site and off-site public and private improvements. All figures are
approximate.
"Planning Commission" shall have that meaning set forth in Recital Q(1) above.
"Project" shall have that meaning set forth in Recital D above.
"Project Approvals" shall have that meaning set forth in Recital Q(2) above.
"Project Site" shall have that meaning set forth in Recital C above.
"Property" shall have that meaning set forth in Recital C above.
"Pruneridge Vacation Area" shall have that meaning set forth in Section 6.1.
"Rezoning" shall have that meaning set forth in Recital Q(2) of this Agreement.
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"Second Extension" shall have that meaning set forth in Section 2.3 of this Agreement.
"Subsequent Approvals" shall mean all land use approvals, entitlements,and permits
other than the Project Approvals that are necessary or desirable for the Project. In particular, as
addressed in the EIR, the parties contemplate that Apple will seek certain approvals for Phase 2
of the Project, including development permits, conditional use permits and other discretionary
and ministerial permits and approvals in furtherance of the Project Approvals. The Subsequent
Approvals may also include,without limitation, the following: amendments of the Project
Approvals, design review approvals, including architectural site assessments, improvement
agreements,use permits, grading permits,building permits, lot line adjustments, sewer and
water connection permits, certificates of occupancy, subdivision maps, preliminary and final
development plans,re-subdivisions, and any amendments to, or repealing of, any of the
foregoing. Subject to the limitations set forth herein, the City retains discretion on site plan and
architectural review for the Phase 1 parking structure located on North Tantau Avenue and for
all of Phase 2. Except as otherwise provided in Section 8.7, Subsequent Approvals may not
change the Conditions of Approval previously ap proved,unless mutually agreed to in writing
by City and Apple in accordance with Section 9.1(a) hereof.
"Term" shall have that meaning set forth in Section 2.3 of this Agreement.
"Tax Consulting Agreement" shall have that meaning set forth in Recital R of this
Agreement.
"Tax Localization Plan" shall have that meaning set forth in Section 3.3(a) of this
Agreement.
"Traffic Signal Preemption Contribution" shall have that meaning set forth in Section
3.9 of this Agreement.
"Transfer Agreement" shall have that meaning set forth in Section 10.1(b) of this
Agreement.
ARTICLE 2 EFFECTIVE DATE,TERM AND TERMINATION OF HP DEVELOPMENT
AGREEMENT.
Section 2.1 Effective Date. This Agreement shall become effective as specified in
Recital L.
Section 2.2 Initial Term. The initial term of this Agreement shall commence upon the
Effective Date and expire on the sixth(6th) anniversary thereof("Initial Term").
Section 2.3 Extensions to Term. If Apple completes construction of two million four
hundred thousand (2,400,000) square feet of new office and research and development space on
the Project Site after the Effective Date and prior to the expiration of the Initial Term, this
Agreement shall be automatically extended for an additional six(6) years (the"First
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Extension"). If Apple fails to complete construction of this new square footage by the
expiration of the Initial Term, the Agreement will terminate. If the First Extension occurs and if
Apple completes construction of three million (3,000,000) square feet of new office,research and
development, and amenity space from the Effective Date through the twelfth (12th) anniversary
thereof, the Agreement shall be automatically extended for an additional eight(8) years (the
"Second Extension"), for a total term of twenty (20) years from the Effective Date. As used
herein, "Tenn" means the Initial Term and, if applicable, the First Extension and Second
Extension. Apple shall not be obligated to pay a fee or charge for the automatic extensions to
the Initial Term. New square footage means development of any new office and research and
development space in the case of the First Extension, or any new office, research and
development and amenity space, in the case of the Second Extension, and, in both cases,
includes new space replacing all or a portion of the existing square footage in place as of the
Effective Date and new space in excess of such existing square footage. For purposes of this
Section 2.3, "Completion" shall mean issuance to Apple of a temporary or permanent
Certificate of Occupancy, which the City shall not unreasonably withhold, or other reasonable
evidence of completion sufficient for the Project or portion thereof to be used for its intended
purpose. All time periods referenced in this Section (and any termination of the Agreement)
shall automatically be tolled in the event of excusable delay as provided in Section 12.5 below.
Section 2.4 Apple Termination for Convenience. Subject to the terms of this Section
2.4, at any time after the Initial Term, and for any reason,Apple may terminate this Agreement
by written notice to City. The effective date of termination,which shall not be sooner than 3
months following the date of Apple's notice, shall be specified in the notice of termination.
Except as otherwise provided in Section 4.7 below with respect to City's obligation to return
sequestered Contributions funds to Apple if litigation prevents Apple from developing a
campus substantially consistent with the Project contemplated by this Agreement and Project
Approvals, if, for any reason, Apple has not paid City the full amount of each of the
Contributions as of the date of such notice,Apple's termination notice shall be accompanied by
payment of the remaining balance of such unpaid Contributions. Such termination shall be
treated in the same mariner as expiration of this Agreement at the end of the Term.
Section 2.5 City Termination In Event of Change in Use. If Apple and/or its
successor desire to use the Property for a purpose other than a corporate campus, and provided
that such use is permitted under the Cupertino Municipal Code, the City may elect to terminate
this Agreement by written notice to Apple. Such termination shall be treated in the same
manner as expiration of this Agreement at the end of the Term.
Section 2.6 HP Development Agreement Cancellation. Apple agrees that as of the
Effective Date, that certain development agreement between Apple's predecessor-in-interest,
Hewlett-Packard Company, and the City dated November 6, 1995, approved by City Council
Ordinance No. 1702, as amended,has been cancelled pursuant to Government Code Section
65868 and is of no further force or effect.
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ARTICLE 3 OBLIGATIONS OF APPLE.
Section 3.1 Obligations of Apple Generally. The parties acknowledge and agree that
the City's agreement to perform and abide by the covenants and obligations set forth in this
Agreement is a material consideration for Apple's agreement to perform and abide by its long
term covenants and obligations, as set forth in this Agreement. The parties acknowledge that
many of Apple's long term obligations set forth in this Agreement are in addition to Apple's
agreement to perform all the mitigation measures identified in the MMRP and Conditions of
Approval.
Section 3.2 Affordable Housing Contribution. As set forth in the EIR,Apple agrees
to pay the City an amount equal to two times the otherwise applicable City affordable housing
in-lieu fee for the North Vallco Area ("Affordable Housing Contribution") to fund the
development of affordable housing in the City. The Affordable Housing Contribution will be
calculated on the increase in square footage of building space, including office, research and
development and Campus Amenity Space, at the contemplated full build out of the Project
(including Phase 1 and Phase 2), over the square footage of building space on the Property as of
the Effective Date (i.e. 2,891,500 sq. ft.), and shall be paid by Apple, in full,no later than thirty-
one (31) days after the Effective Date.
Section 3.3 Tax Localization Plan and Requirements.
(a) Apple shall require the incorporation of requirements substantially in the
form set forth in Exhibit DA-lc in its contracts with general contractors performing work at the
Project Site, in connection with causing sales and use tax arising from purchases of materials,
fixtures or equipment for the Project to be allocated to the City, to the extent allowed by law
(the "Tax Localization Plan"). Apple shall direct its general contractors to comply with the Tax
Localization Plan. In order to monitor compliance with the Tax Localization Plan, Apple shall
designate a representative for the purpose of semiannual review with the City of relevant
documents and filings with the State Board of Equalization.
(b) Subject to the succeeding sentence, as between Apple and City, Apple
shall be responsible for the administrative expenses incurred in connection with the Tax
Localization Plan. Subsequent to receipt by City of the first ten million dollars ($10,000,000) in
sales and use tax under the Tax Localization Plan, City will pay the actual administrative costs
incurred in connection with the Tax Localization Plan, up to an aggregate amount of six
hundred thousand dollars ($600,000). Such payments shall be made within thirty (30) days,
following City's receipt of invoices from Apple, together with reasonable supporting
documentation of the administrative costs.
Section 3.4 Construction Tax. Pursuant to CMC Chapter 3.32, Apple shall pay City,
on a per-square-foot basis, a one-time construction tax based on the gross building area (as
defined in CMC Chapter 3.32.020) for industrial, office and commercial space constructed in
connection with the Project, exclusive of non-commercial parking lots. The applicable tax rate
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as calculated by City shall be adjusted quarterly. Apple shall pay the construction tax
applicable to the first 2.4 million square feet of development no later than thirty-one(31) days
after the Effective Date. If litigation is filed within applicable challenge periods to the Project
Approvals, Apple may request by written notice to City that City sequester the initial
installment of construction tax in a segregated interest bearing account and defer further
expenditure of such funds until the earlier of(1) the date on which such litigation is resolved in
a manner which allows Apple to develop a campus substantially consistent with the Project
contemplated by this Agreement and the Project Approvals, and (2) the date on which Apple
commences mass grading of the Property in connection with development of the Project. If
Apple has not commenced mass grading of the Property and the litigation is not resolved in a
manner which allows Apple to develop a corporate campus substantially consistent with the
Project contemplated by this Agreement and the Project Approvals, then Apple may terminate
this Agreement and the Development Permit and consent to return of the Property's zoning and
general plan land use designations to the zoning and general plan land use designations in
place immediately prior to approval of the Project Approvals, and thereafter City shall
promptly refund the initial installment of the construction tax (and all other unexpended
Contributions), together with all interest thereon, to Apple.
Section 3.5 Tax Consulting Agreement. Apple shall cause its wholly owned
subsidiary, Baz Industries, Inc., a California corporation, the successor to ACI Holdings, Inc., to
amend the Tax Consulting Agreement with the City to provide substantially as follows: So long
as the Development Agreement remains in effect, and regardless of the reason for termination,
Sections 2(c), (d) and (e) shall be deleted and replaced with a new Section 2(c) reading: "If, for
any fiscal year during the term covered by this Agreement,new local tax revenue exceeds Two
Hundred Fifty Thousand Dollars ($250,000), then Consultant shall receive the sum of Sixty Two
Thousand Five Hundred Dollars ($62,500) plus an amount equal to thirty-five percent(35%) of
all such new local tax revenue in excess of Two Hundred Fifty Thousand Dollars ($250,000)."
The Tax Consulting Agreement shall also include provisions that require payments, refunds
and deposits into escrow so that the compensation paid by the City thereunder shall accurately
reflect the tax revenues allocated to and retained by the City. Apple represents that it has not
entered into a tax consulting agreement, similar to the existing Tax Consulting Agreement, with
any other city and/or county in California, and Apple agrees not to do so during the Term of
this Agreement. The amendment to the Tax Consulting Agreement shall be effective no later
than thirty-one (31) days after the expiration of all applicable challenge periods to the Project
Approvals, without the filing of litigation. Apple will assist City at Apple's sole expense in
defending against any administrative proceedings instituted by the State Board of Equalization
relating to whether the City is the proper point-of-sale location.
Section 3.6 Glendenning Barn. Consistent with MMRP mitigation CULT-1, Apple, at
its expense, will be responsible for(1) relocating the Glendenning Barn to a new location on the
Project Site acceptable to the City or relocating Glendenning Barn to a location off the Project
Site to be designated by City, and (2) ensuring that the relocated barn meets applicable State
historic building code requirements. Apple shall substantially complete such relocation work
prior to issuance of the first certificate of occupancy for building space in the Project. If Apple
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elects to relocate the Glendenning Barn off the Project Site, it shall notify the City of its election
in writing within ninety(90) days after the Effective Date. In addition,if, and only if, the
Glendenning Barn is relocated off the Project Site,Apple shall pay City Two Million Six
Hundred Forty Four Thousand and Thirty-Five Dollars ($2,644,035) (the "Glendenning Barn
Relocation Contribution"), which represents the agreed upon costs of acquiring or providing a
relocation site for the Glendenning Barn on City-owned property, the cost of improvements to
the relocation site and the Glendenning Barn, the net present value of annual maintenance
expenses, and additional amounts for capital repair costs anticipated in years ten and twenty.
Apple will pay such amount to City within thirty (30) days after receipt of City's written
demand, which may be given at any time following relocation of the Glendenning Barn;
provided,however, if City opts to acquire a new site for the Glendenning Barn rather than
locate the Glendenning Barn on an existing City-owned site, then Apple will deposit up to
$1,000,000 of the Glendenning Barn Relocation Contribution in the escrow established for City's
purchase of such new site so that the funds can be applied towards the purchase price payable
by City at closing, in which case the balance of the Glendenning Barn Relocation Contribution
will be payable by Apple following relocation of the Glendenning Barn as provided above.
Section 3.7 Parkland Contribution. In connection with Mitigation Measure PLAN-1
in the EIR, the parties agree that the sum of Eight Million Two Hundred Seventy Thousand
Nine Hundred Ninety-Four Dollars($8,270,994) (the "Park Land Contribution") constitutes
sufficient funds to acquire 1.1 acres of park land, improve it with park equipment and provide a
maintenance and capital replacements endowment for twenty (20) years. Apple will pay the
Park Land Contribution into the City's Parks Fund, to be used exclusively for park purposes,
within ninety (90) days after the Effective Date. As an alternative to the payment for acquisition
of the 1.1 acres for parkland and as contemplated by Mitigation Measure PLAN-1,Apple may
purchase, designate and dedicate to the City, 1.1 acres elsewhere in the City as Parks and Open
Space,provided the land is publicly accessible and appropriate for public park use as
determined by City and otherwise acceptable to City in its reasonable discretion. If Apple elects
this option, the Park Land Contribution will be reduced by the amount the parties have
designated as the portion of the aggregate payment reflecting the acquisition of park land (the
"Park Land Acquisition Amount") regardless of the actual amount Apple paid for the
designated parcel. If Apple acquires and conveys a suitable alternative park land site to City
after Apple has paid the Park Land Contribution, but before the City has itself entered into an
agreement to purchase a park land site, then City will refund the Park Land Acquisition
Amount(less reasonable out-of-pocket amounts, if any, that City may have already committed
or expended in connection with site selection and acquisition activities, such as due diligence
review, title review, appraisals, and environmental investigations, and for which City provides
reasonable documentation) concurrently with Apple's transfer of title to the alternative park
land site. To avoid incurring unnecessary and duplicative costs, if either party is in negotiations
or is otherwise preparing to purchase an alternative park parcel, that party shall promptly
notify the other party of that fact.
Section 3.8 Fiber Optic Conduit Installation. Apple, at its expense, shall install an
additional separate fiber optic conduit along Wolfe Road between the 280 Freeway and
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Homestead Road, solely in order to accommodate City's usage. The fiber optic conduit shall be
installed in accordance with plans and specifications approved by the Director of Public Works.
City shall be responsible for installation and maintenance of fiber within the separate conduit.
Section 3.9 Traffic Signal Preemption Devices. In addition to complying with
Mitigation Measure PSU-1, Apple shall fund similar traffic signal preemption throughout the
City at a cost not to exceed Three Hundred Twenty Thousand Dollars ($320,000) (the "Traffic
Signal Preemption Contribution"). Apple shall pay amounts requested within thirty(30) days
after receipt of City's invoice, accompanied by reasonable documentation supporting City's
installation of the signal preemption covered by the invoice.
Section 3.10 I-280 Trail Contribution. As provided by Mitigation Measure PLAN-3 in
the EIR,Apple shall contribute Two Hundred Fifty Thousand Dollars ($250,000) toward the cost
of a study of a bike and/or pedestrian path, including, potentially, a full Class I separated trail
where rights-of-way are adequate, along the drainage channel that runs parallel to southbound
I-280 between North De Anza Boulevard and Calabazas Creek, and then south along the
western bank of Calabazas Creek to Vallco Parkway (the "I-280 Trail Contribution"). The I-280
Trail Contribution shall be paid no later than thirty-one(31) days after the Effective Date.
Section 3.11 Storm Drain Facilities, Storm Drains and Runoff. This Agreement does
not affect Apple's obligations to pay for or construct improvements in the storm drain system
required to implement the Project,nor does it affect Apple's obligations to meet any applicable
federal, state and local discharge limits and requirements pertaining to storm drain facilities,
storm drains or runoff.
Section 3.12 Real Property Acquisition. Any right-of-way or property right necessary
for the completion of portions of the Project or the implementation of the MMRP or Conditions
of Approval will be Apple's responsibility. The City, at Apple's expense, shall obtain an
appraisal suitable for the purpose of government acquisitions. Apple shall then make diligent
and good faith efforts to acquire all necessary properties. If any of the negotiations for any of
the acquisitions reach impasse, at City's request, Apple shall deposit with City the amount of
the fair market appraisal plus estimated soft acquisition costs and costs of proceeding, including
the costs of obtaining or seeking possession of the property, as City reasonably determines. If
the actual costs of acquisition are greater than the deposit, Apple will provide additional funds
to City upon notice in order to pay all costs of acquisition. City may require that Apple make
periodic payments requested by City to cover costs. Any additional remaining deposit will be
returned to Apple upon conclusion of the acquisition. By entering into this Agreement, City
does not commit to exercising the power of eminent domain to acquire any property, and has
not made any decision or commitment in regard to exercising that power. Under Applicable
Law and under this Agreement, the determination to proceed by way of eminent domain to
acquire any property or interest in property is within the sole and exclusive authority of the
City Council, and City has not waived or relinquished any of its powers to solely decide
whether, when, and on what terms it may consider, deny, approve, or pursue acquisition by use
of the power of eminent domain.
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Section 3.13 Mitigations. Apple agrees i:o contribute to the costs of public facilities
and services in the amounts set forth in the Development Plan,Project Approvals,MMRP and
Conditions of Approval, as required to mitigate impacts of the development of the Property.
City and Apple recognize and agree that but for Apple's contributions to mitigate the impacts
arising as a result of the entitlements granted pursuant to this Agreement and the Project
Approvals, City would not and could not approve the development of the Property as provided
by this Agreement and the Project Approvals. City's approval of development of the Property
is in reliance upon, and in consideration of,Apple's agreement to make contributions toward
the cost of public improvements and public services as provided to mitigate the impacts of
development of the Property.
ARTICLE 4 OBLIGATIONS OF CITY.
Section 4.1 Obligations of City Generally. The parties acknowledge and agree that
Apple's agreement to perform and abide by its covenants and obligations set forth in this
Agreement, including Apple's decision to process the Project in the City, is a material
consideration for City's agreement to perform and abide by the long term covenants and
obligations of City, as set forth in this Agreement.
Section 4.2 Protection of Rights. To the maximum extent permitted by Applicable
Law, City shall take any and all actions as may be necessary or appropriate to ensure that the
vested rights provided by this Agreement can be enjoyed by Apple and to prevent any City
Law, as defined below,from invalidating or prevailing over all or any part of this Agreement.
City shall cooperate with Apple and shall undertake such actions, at Apple's expense, as may be
necessary to ensure this Agreement remains in full force and effect. City shall not support,
adopt, or enact any City Law, or take any other action that would violate the express provisions
or intent of the Project Approvals or, when issued, the Subsequent Approvals.
Section 4.3 Development Allocations.
(a) New Office Space Development Allocations. In accordance with the
stated goals of the General Plan encouraging development of corporate headquarters that
positively contribute to the City's fiscal well-being, and to establish a reasonable entitlement
basis enabling Apple to invest substantial resources in the Property, City assigns to the Property
the Office Space Allocations currently available under the General Plan as set forth in
Exhibit DA-1d, attached hereto and incorporated herein (the "General Plan Office Space
Development Allocations").
(b) Preservation of Existing Office Space Development Allocations.
Notwithstanding the vacancy or demolition of any or all of the existing structures on the
Property, City confirms that the gross square foo cage of the buildings existing on the Property
as of the Effective Date is and shall remain part of the Property's fully entitled existing office
space allocation (the "Existing Office Space Development Allocations"), which can be used for
realization of the Project.
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(c) Office Space Allocation. The General Plan Office Space Development
Allocations and the Existing Office Space Development Allocations together comprise the
"Office Space Allocation." Office space in the Project that will be counted as part of the Office
Space Allocation will be calculated as the gross office area, including the building structure.
Excluded from the Office Space Allocation will be Campus Amenity Space identified in Section
4.3(d),below.
(d) Campus Amenity Space. In order to promote personal enrichment for
Apple's employees, enhance their health and wellness, and provide on-site amenities, thereby
substantially reducing the employees' vehicle trips, City agrees that amenity space planned for
the Project will not be counted as part of the Office Space Allocation. Such spaces shall include
exterior bridges;portions of certain walkways that connect buildings, cafeterias and cafes;
fitness and wellness centers; and an auditorium all as more particularly described in
Exhibit DA-le ("Campus Amenity Space"). Should Apple wish to convert any Campus
Amenity Space to office space or other non-amenity space then Apple shall apply for additional
office allocation space. City reserves full discretion with respect to review and approval of any
proposed conversions. To the extent permitted by Applicable Law, and subject to Section
8.10(a) below, applications to convert Campus Amenity Space shall be processed
administratively and approved by the Community Development Director.
(e) Preservation of Existing Credits, Development Rights. Notwithstanding
the vacancy or demolition of any or all of the existing structures on the Property, City confirms
that Apple can rely on City cooperating to take steps or make such determinations as are
necessary to preserve and retain for Apple's benefit the existing development rights and credits
enjoyed by or applicable to the Property, in particular, infrastructure allocations(including,but
not limited to, traffic, sewer, water and other service capacities or allocations) within or
servicing the Property, to the extent such allocations fall solely within the City's jurisdiction.
Section 4.4 Apple's Right to Rebuild. City agrees that Apple, in its sole discretion,
may renovate or rebuild all or portions of the Project during the Term of this Agreement should
it become necessary due to natural disaster, changes in seismic requirements, changes in
technology, or should the buildings located within the Project become functionally outdated.
However, any such renovation or rebuilding shall be subject to the square footage and height
limitations vested by this Agreement, and shall comply with the Project Approvals, the building
codes existing at the time of such rebuilding or reconstruction, and the requirements of CEQA.
Section 4.5 Design of On-Site and Off-Site Improvements. Except as otherwise
provided below, the City recognizes that the Project Approvals include final architectural and
site approvals for Phase 1 and that no further architectural or design review shall be required
for the full build out of Phase 1. Apple acknowledges that architectural and site approvals still
need to be obtained for the parking structure to be located on North Tantau Avenue.
Architectural and site approvals for the North Tantau Avenue garage are Subsequent
Approvals and shall be subject to review and approval by City as provided in this Agreement.
Development of Phase 2 and certain off-site improvements shall be subject to final architectural
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and design review by City in accordance with Applicable Law. The Project Approvals,
including Conditions of Approval and all improvement plans prepared in accordance with the
Conditions of Approval, shall govern the design and scope of all on-site and off-site
improvements benefiting, or to be constructed on the Property, including all street widths and
dedications. Except as otherwise expressly provided herein, the City shall not impose
requirements or conditions upon Project development and construction that are inconsistent
with the Project Approvals. Further, except as expressly provided herein,the City shall not
exercise discretion in determining whether or how to grant Subsequent Approvals in a manner
that would prevent development of the Project for the uses and to the maximum intensity of
development set forth in the Project Approvals.
Section 4.6 Development of the Site. In consideration for City entering into this
Agreement, Apple agrees to perform all of its obligations contained in this Agreement in the
time and manner set forth in the Project Approvals. Notwithstanding any other provision in
this Agreement, City acknowledges that this Agreement does not obligate Apple to build the
Project or any component of the Project.
Section 4.7 Sequestration of Contributions in the Event of Litigation. City shall not
expend or commit to third parties any portion of the Contributions prior to the date which is
sixty five (65) days after the Effective Date. If litigation is filed within applicable challenge
periods to the Project Approvals, Apple may request in writing that City sequester that portion
of the Contributions which have not previously been expended or committed to third parties in
a segregated interest bearing account and defer further expenditure of such funds until the
earlier of(1) the date on which such litigation is resolved in a manner which allows Apple to
develop a headquarters campus substantially consistent with the Project contemplated by this
Agreement and the Project Approvals, and (2) the date on which Apple commences mass
grading of the Property in connection with development of the Project. If Apple has not
commenced mass grading of the Property and the litigation is not resolved in a manner which
allows Apple to develop a corporate campus substantially consistent with the Project
contemplated by this Agreement and the Project Approvals, then Apple may terminate this
Agreement and the Development Permit and consent to return of the Property's zoning and
general plan land use designations to the zoning and general plan land use designations in
place immediately prior to the Effective Date, and thereafter City shall promptly refund the
Contributions, together with all interest thereon, to Apple.
ARTICLE 5 DEVELOPMENT FEES,EXACTIONS AND DEDICATIONS.
Section 5.1 Development Impact Fees, Exactions and Dedications. Except as
otherwise expressly provided herein, during the Term, City shall have the right to impose only
such Impact Fees, Exactions and dedications as City has adopted as of the Effective Date of this
Agreement, including those set forth in the Project Approvals, including Conditions of
Approval. For convenience of reference, the City Impact Fees in effect as of the Effective Date
are identified in Exhibit DA-1f attached hereto and incorporated herein. Any Impact Fees that
are in existence as of the Effective Date but are inadvertently omitted from Exhibit DA-1f may
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still be charged. During the Term, the City may increase the existing City Impact Fees but only
to reflect increases in cost of living expenses, as measured by the cumulative Consumer Price
Index for All Urban Consumers("CPI-U"), as defined in Cupertino's CMC Section 5.04.460 (and
as reflected in the most recent report of consumer prices for the San Francisco/Bay Area
Standard Metropolitan Statistical Area as published by the U.S. Department of Labor,
Bureau of Labor Statistics). Except as otherwise expressly provided in this Agreement, during
the Term no other increases to Impact Fees in existence on the Effective Date and no new City
Impact Fees or Exactions imposed after the Effective Date shall apply to the Project.
Section 5.2 Cost Recovery Fees. During the Term,Apple shall be responsible for the
costs to City of processing any land use approvals, including without limitation,building
permits,plan checks, inspection fees, environmental studies required under CEQA and other
similar requests for City permits and Subsequent Approvals, at the rates in effect from time to
time ("Cost Recovery Fees"). Cost Recovery Fees may be increased if the increase is applicable
citywide and reflects the reasonable cost to City of performing the administrative processing or
other service for which the particular Cost Recovery Fee is charged. Apple shall pay all
applicable Cost Recovery Fees, in effect from time to time at then applicable rates related to the
actual provision of direct services to the Project. Cost Recovery Fees shall be due and payable
on a phase-by-phase basis, so that only those fees applicable to the actual construction of each
phase shall be paid upon the issuance of the applicable permits for that phase. If Apple
requests City to make additional, accelerated, or more frequent inspections than would
otherwise take place in City's ordinary course of business, then City may either hire additional
contract inspectors, plan checkers,engineers or planners or City may hire a full-or part-time
employee(s), subject to Apple's prior written approval. If City hires additional contractors or
consultants, then Apple shall reimburse City the reasonable cost of such additional contractors
or consultants,plus an administrative and overhead charge of ten (10)percent. If City hires a
full or part-time employee(s), then Apple shall reimburse City for a pro rata share of the total
cost of the employee(s), as agreed to by Apple in advance and in writing. This obligation shall
remain in effect for the Term of this Agreement.
Section 5.3 Retroactive Permits, Fees, and Fines. If and to the extent Apple or the
Property is subject to fees or fines for retroactive permits or fees or fines designed to be punitive
in nature, Apple shall pay such fees or fines at the rates in effect at the time such fees or fines
are imposed, as long as those same fees,fines or retroactive permit charges are applicable City-
wide and payable by other developers and builders under the same or similar circumstances.
Section 5.4 Connection Fees. During the Term, Apple shall pay all applicable
Connection Fees at the rates in effect from time to time.
Section 5.5 Vesting Tentative Map. Apple has filed a Vesting Tentative Map.
Notwithstanding the provisions of the Subdivision Map Act, Apple agrees that the rights under
the Vesting Tentative Map are vested as of the Effective Date and all provisions related to fees
shall be governed by ARTICLE 5 of this Agreement.
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Section 5.6 Fees Imposed by Outside Agencies. During the Term, City agrees to
exclude Apple from any and all collection agreements regarding fees, including without
limitation development impact fees, which other public agencies request City to impose at
City's discretion on the Project or the Project Site after the Effective Date. Nothing in this
Section 5.6 shall prohibit the City from imposing on Apple any mandatory fee or obligation that
is imposed by a regional agency in accordance with regional, state or federal requirements and
implemented by the City in cooperation with such regional agency.
ARTICLE 6 VACATION OF PRUNERIDGE.
Section 6.1 Vacation of Pruneridge Avenue. As part of the Project Approvals, City
has determined to vacate that certain approximately 4.64 acre portion of Pruneridge Avenue
identified in Exhibit DA-1g attached hereto and incorporated herein(the "Pruneridge Vacation
Area"), in exchange for, and concurrent with,Apple's causing its wholly owned subsidiary,
CHI, to purchase the City's fee interest in the Pruneridge Vacation Area. The area to be vacated
and sold to CHI specifically excludes the area necessary to provide continued public street
access to The Hamptons apartment complex. The parties shall cooperate to implement the
street vacation.
Section 6.2 Purchase of Pruneridge Avenue. City's decision to vacate the Pruneridge
Vacation Area, subject to completing the relocation of all utilities and appurtenances within the
roadway area at Apple's expense, was based on Apple agreeing to pay or causing CHI to pay
City Twenty Three Million Eight Hundred Fourteen Thousand Two Hundred Fifty-Seven
Dollars ($23,814,257) for the City's fee interest and all appurtenances, including all public
easements and rights-of-way, in such property. The parties acknowledge that the purchase
price for the Pruneridge Vacation Area includes a substantial premium over fair market value.
Apple's obligation to cause CHI to purchase the Pruneridge Vacation Area upon completion of
the vacation and relocation of existing utilities and appurtenances is set forth in a separate
Pruneridge Vacation Area purchase and sale agreement between City and CHI dated
Section 6.3 Street Closure. The street closure is contingent upon the substantial
relocation of all utilities within the Pruneridge Vacation Area, as reasonably determined by the
Director of Public Works.
ARTICLE 7 COOPERATION—IMPLEMENTATION.
Section 7.1 Processing Application for Subsequent Approvals. City and Apple
anticipate that the Project will be implemented in accordance with the Project Approvals,
including the MMRP and the Conditions of Approval. The foregoing actions and other
necessary or convenient implementation actions shall not require an amendment to this
Agreement. By certifying the EIR, and approving the General Plan Amendments and other
Project Approvals, the City has made a final policy decision that the Project is in the best
interests of the public health, safety and general welfare. Accordingly, the City shall not use its
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discretionary authority in considering any application for a Subsequent Approval to change the
policy decisions reflected by the Project Approvals or otherwise to prevent or delay
development of the Project as set forth in the Project Approvals. Instead, the Subsequent
Approvals shall be deemed to be tools to implement those final policy decisions and shall be
issued by City so long as they comply with this Agreement and Applicable Law and are not
inconsistent with the Project Approvals as set forth above.
Apple acknowledges that Applicable Law,the Project Approvals and this
Agreement contemplate further City review of elements or portions of the Project, such as
architectural and site review of the Phase 1 parking garage on North Tantau Avenue and all of
Phase 2, including potential supplemental CEQA compliance, if required. Nothing in this
Agreement shall be deemed to limit City's legal authority with respect to these reviews as
provided by and otherwise consistent with this Agreement. In no event shall such further
review by City revisit the Conditions of Approval, or the Project Approvals or be conditioned
on or require any change in the Project except as otherwise provided in the Project Approvals or
this Agreement or as otherwise required by Applicable Law.
Section 7.2 Timely Submittals By Apple. Apple acknowledges that City cannot
expedite processing Subsequent Approvals until Apple submits complete applications on a
timely basis. Apple shall use its best efforts to: (1) provide to City in a timely manner any and
all documents, applications,plans, and other information necessary for City to carry out its
obligations hereunder; and (2) cause Apple's planners, engineers, and all other consultants to
provide to City in a timely manner all such documents, applications, plans and other necessary
required materials. It is the express intent of Apple and City to cooperate and diligently work
to obtain any and all Subsequent Approvals.
Section 7.3 Timely Processing By City. Upon Apple's submission of all appropriate
applications and Cost Recovery Fees for any Subsequent Approval, City shall promptly and
diligently commence and complete all steps necessary to act on the Subsequent Approval
application including, without limitation: (1) providing at Apple's request and sole expense,
outside building consultants to review plans or otherwise assist City's efforts to expedite City
processing and approval work(Apple shall pay for these outside consultant costs at cost plus
10%for administrative costs incurred); (2) if legally required, providing notice and holding
public hearings; and (3) acting on any such Subsequent Approval applications.
Section 7.4 Specific Subsequent Approvals. The parties acknowledge that Apple has
not filed appropriately detailed plans in order for the City to act on certain Subsequent
Approvals as of the Effective Date, including, among others, site plan and architectural review
of the Phase 1 parking garage on North Tantau Avenue and development permits and
conditional use permits that may be necessary for development of the Phase 2 buildings and
improvements. In addition to the other general covenants concerning processing of Subsequent
Approvals set forth in this Agreement, City shall, to the maximum extent permitted by
Applicable Law, promptly and diligently commence and complete all steps (including noticing
and public hearings) necessary to act on these contemplated Subsequent Approval applications.
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Section 7.5 Other Government Permits. At Apple's sole discretion and in accordance
with Apple's construction schedule,Apple shall apply for such other permits and approvals as
may be required by other governmental or quasi-governmental entities in connection with the
development of, or the provision of services to, the Project. City shall cooperate with Apple in
Apple's efforts to obtain such permits and approvals and shall,from time to time at Apple's
request and at Apple's expense,use its best efforts to enter into binding agreements with any
such entity as may be necessary to ensure the timely availability of such permits and approvals.
Section 7.6 Cooperation with Public Services. To the maximum extent permitted by
Applicable Law and consistent with its authority, City, at Apple's expense, shall cooperate and
assist Apple in Apple's efforts to reserve capacity for sewer and water services from other third
party governmental entities.
ARTICLE 8 STANDARDS,LAWS AND PROCEDURES GOVERNING THE PROJECT.
Section 8.1 Vested Right to Develop. Subject to the fulfillment of the terms and
obligations of this Agreement, for the Term of this Agreement Apple shall have a vested right to
develop the Project on the Project Site in accordance with the Project Approvals and the terms
and conditions of this Agreement. Nothing in this Section shall be deemed to eliminate or
diminish Apple's obligation to obtain any required Subsequent Approvals.
Section 8.2 Permitted Uses Vested by This Agreement. The permitted uses of the
Project Site; the density and intensity of use of the Project Site; the maximum height,bulk and
size of proposed buildings;provisions for reservation or dedication of land for public purposes
and the location of public improvements; the general location of public utilities;and other terms
and conditions of development applicable to the Project, shall be as set forth in the Project
Approvals and, as and when they are issued (but not in limitation of any right to develop as set
forth in the Project Approvals), the Subsequent Approvals. The permitted uses for the Project
are those specified in the Project Approvals and C'MC Section 19.72.030.
Section 8.3 Intentionally Omitted.
Section 8.4 State and Local Building Standards. Except as otherwise provided herein
or as may be required by Applicable Law, the City shall apply to Phase 1 of the Project, all State
and local building standards and City's design and construction standards for road and storm
drain facilities, in effect on the Effective Date. For Phase 2 and off-site improvements, the City
may apply any updated and adopted State and local building standards in effect at the time the
Phase 2 permit or off-site improvement applications, as applicable, are substantially complete
and submitted for plan review to the City Building Department, provided any such standards
have been adopted and uniformly applied by City on a citywide basis and provided further that
no such standards are adopted for the purpose of preventing, frustrating or otherwise limiting
construction of all or any part of the Project.
Section 8.5 No Conflicting Enactments. City shall not impose on the Project(whether
by action of the City Council or by initiative, referendum or other means) any ordinance,
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resolution,rule, regulation, standard, directive, condition or other measure(each individually, a
"City Law") that is in conflict with Applicable Law or this Agreement or that reduces the
development rights or assurances provided by this Agreement. Notwithstanding the preceding
sentence, Apple may consent in its sole discretion and in writing to any new City Law. Without
limiting the generality of the above, any City Law shall be deemed to conflict with Applicable
Law or this Agreement or reduce the development rights provided hereby if it would result in
any of the following, either by specific reference to the Project or as part of a general enactment
which applies to or affects the Project:
(a) Change any land use designation or permitted use of the Project Site;
(b) Limit or control the availability of public utilities, services or facilities or
any privileges or rights to public utilities, services, or facilities (for example, water rights, water
connections or sewage capacity rights, sewer connections and the like) for the Project, provided,
however,nothing herein shall be deemed to exempt the Project or the Project Site from any
City-wide or regional water use rationing requirements that may be imposed from time to time
in the future;
(c) Limit or control the location of buildings, structures, grading, or other
improvements comprising the Project in a mariner that is inconsistent with or more restrictive
than the limitations included in the Project Approvals or the Subsequent Approvals (as and
when they are issued);
(d) Limit or control the rate,timing, phasing or sequencing of the approval,
development or construction of all or any part of the Project in any manner;
(e) Apply to the Project any City Law otherwise allowed by this Agreement
that is not uniformly applied on a City-wide basis to all substantially similar types of
development projects and project sites;
(f) Result in Apple having to substantially delay construction of the Project
or require the issuance of additional permits or approvals by the City other than those required
by Applicable Law;
(g) Substantially increase the cost of constructing or developing the Project or
any portion thereof,unless failure to impose such restrictions would place the employees and
workers at the Project or the immediate community in a condition dangerous to their health or
safety;
(h) Impose against the Project any dedication or Exaction not specifically
authorized by this Agreement, the Project Approvals or Applicable Law;or
(i) Limit the processing or procuring of applications and approvals of
Subsequent Approvals.
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Section 8.6 Initiatives and Referenda.
(a) If any City Law is enacted or imposed by initiative or referendum, or by
the City Council directly or indirectly in connection with any proposed initiative or referendum,
which City Law would conflict with Applicable Law or this Agreement or reduce the
development rights provided by this Agreement and the Project Approvals, such City Law shall
not apply to the Project.
(b) Without limiting the generality of any of the above,no City moratorium
or other limitation (whether relating to the rate, timing, phasing or sequencing of development)
affecting subdivision maps,building permits or other entitlements to use that are approved or
to be approved, issued or granted within the City, or portions of the City, shall apply to the
Project.
(c) To the maximum extent permitted by Applicable Law, City shall
endeavor to prevent any City Law from invalidating or prevailing over all or any part of this
Agreement, and City shall cooperate with Apple and shall undertake such actions, at Apple's
expense, as may be necessary to ensure this Agreement remains in full force and effect.
(d) City, except to submit to vote of the electorate initiatives and referendums
required by Applicable Law to be placed on a ballot, shall not support, adopt or enact any City
Law, or take any other action that would violate the express provisions or spirit and intent of
this Agreement, the Project Approvals or, when issued, the Subsequent Approvals.
(e) Apple reserves the right to challenge in court any City Law that would
conflict with Applicable Law or this Agreement or reduce the development rights provided by
this Agreement.
Section 8.7 Environmental Review. The parties understand that the EIR was
intended to be used in connection with each of the Project Approvals and Subsequent
Approvals needed for the Project. Consistent with.the CEQA policies and requirements
applicable to the EIR, City agrees to use the EIR in connection with the processing of any
Subsequent Approvals to the maximum extent allowed by Applicable Law and not to impose
on the Project any mitigation measures or other conditions of approval other than those
specifically imposed by the Project Approvals, including the Conditions of Approval and the
MMRP. In addition, to the extent consistent with CEQA's policies and requirements applicable
to tiered EIR's, City agrees to use the EIR in connection with the processing of Subsequent
Approvals to the extent allowed by Applicable Law. Notwithstanding the foregoing, the parties
acknowledge that certain Subsequent Approvals may legally require additional analysis under
CEQA. For example, a change in the Project could require additional analysis under CEQA if
the triggering conditions identified in CEQA Guidelines section 15162 are met. In the event
supplemental or additional CEQA review is required for a Subsequent Approval, City shall
limit such supplemental or additional CEQA review to the scope of analysis mandated by
CEQA in light of the scope of City's discretion to be exercised in connection with the
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Subsequent Approvals. Apple acknowledges that, if the City determines based upon
supplemental or additional CEQA review that the Project will result in new significant effects or
substantially increase the severity of effects that were identified in the EIR, City may require
additional feasible mitigation measures necessary to mitigate such impacts. In the event further
mitigation measures are identified by such additional environmental review, City may require,
and Apple shall comply at its expense with, all feasible mitigation measures necessary to
substantially lessen new or substantially more severe significant environmental impacts of the
Project, which were not foreseen at the time of execution of this Agreement.
Section 8.8 Life of Subdivision Maps, Development Approvals, and Permits. The
term of any subdivision map or any other map, permit, or other land use entitlement approved
as a Project Approval or Subsequent Approval shall automatically be extended for the longer of
the Term of this Agreement(including any extensions) or the term otherwise applicable to such
Project Approval or Subsequent Approval if this Agreement is no longer in effect.
Section 8.9 State and Federal Law. As provided in California Government Code
§65869.5, this Agreement shall not preclude the application to the Project of changes in laws,
regulations, plans or policies, to the extent that such changes are specifically mandated and
required by changes in state or federal laws or regulations ("Changes in the Law"). In the
event Changes in the Law prevent or preclude compliance with one or more provisions of this
Agreement, such provisions of the Agreement shall be modified or suspended, or performance
thereof delayed, as may be necessary to comply with Changes in the Law, and City and Apple
shall take such action as may be required pursuant to this Agreement including, without
limitation,ARTICLE 7(Cooperation-Implementation) and Section 12.5 (Excusable Delays;
Extension of Time of Performance). Nothing in this Agreement shall preclude City from
imposing on Apple any fee specifically mandated and required by regional, state or federal
laws and regulations.
Section 8.10 City's Reservations of Authority. The parties acknowledge and agree that
City is restricted in its authority to limit its police power by contract and that the limitations,
reservations and exceptions contained in this Agreement are intended to reserve to City all of its
police power which cannot be so limited by Applicable Law. Notwithstanding any other
provision of this Agreement to the contrary, the following regulations and provisions shall
apply to the development of the Property:
(a) Procedural regulations relating to hearing bodies, petitions, applications,
notices, records, hearings, reports, recommendations, appeals and any other matter of
procedure, provided such procedures are uniformly applied on a City-wide basis to all
substantially similar types of development projects and properties.
(b) Except as otherwise provided in Section 8.4, those State and local
building standards governing construction standards and specifications, including building,
plumbing,mechanical, electrical, fire and grading requirements, and all other uniform
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construction codes then applicable in City at the time of permit application, including design
and construction standards for road and storm drain facilities.
(c) City Laws which may be in conflict with this Agreement or the Project
Approvals but which are necessary to protect persons or property from dangerous or
hazardous conditions which create a substantial and demonstrable threat to the public health or
safety of residents or users of the Property and the affected surrounding region,based on
findings by the City Council identifying the dangerous or hazardous conditions requiring such
changes in the law and how such changes would alleviate the dangerous or hazardous
condition("Exempt City Laws").
(d) City Laws applicable to the Property, which do not conflict with this
Agreement or the Project Approvals.
Section 8.11 Timing of Project Construction and Completion.
(a) Notwithstanding any provision of this Agreement to the contrary, City
and Apple expressly agree that there is no requirement that Apple initiate or complete
development of the Project or any particular phase of the Project within any particular period of
time, and City shall not impose such a requirement on any Project Approval or Subsequent
Approval. The parties acknowledge that Apple cannot, at this time, predict when or the rate at
which or the order in which phases will be developed. Such decisions depend upon numerous
factors that are not within Apple's control.
(b) In light of the above, the parties agree that Apple shall be able to develop
in accordance with Apple's own time schedule as such schedule may exist from time to time,
and Apple shall determine which part of the Project Site to develop first, and at Apple's chosen
schedule. In particular, and not in limitation of any of the above, the parties desire to avoid the
holding of the California Supreme Court in Pardee Construction Co. v. City of Camarillo,
37 Ca1.3d 465 (1984). In that case, the Court held that the parties' failure to consider and
expressly provide for the timing of development resulted in a later-adopted initiative restricting
the timing of development. Accordingly, the parties expressly acknowledge that Apple shall
have the right to develop the Project in such order and at such rate and at such times as Apple
deems appropriate within the exercise of its subjective business judgment.
Section 8.12 Apple is an Independent Contractor. Apple is not an agent or employee
of City,but is an independent contractor with full rights to manage its employees subject to
Applicable Law. All persons employed or utilized by Apple in connection with this Agreement
are employees or contractors of Apple and shall not be considered employees of City in any
respect.
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ARTICLE 9 AMENDMENT.
Section 9.1 Project Approval Amendments. To the extent permitted by Applicable
Law, any Project Approvals or Subsequent Approvals may, from time to time,be amended or
modified in the following manner:
(a) Administrative Project Amendments. Upon Apple's written request for
an amendment or modification to a Project Approval or Subsequent Approval, the Community
Development Director or his/her designee shall determine: (1) whether the requested
amendment or modification is minor when considered in light of the Project as a whole; and
(2) whether the requested amendment or modification is consistent with this Agreement and
Applicable Law. If the Community Development Director or his/her designee finds that the
proposed amendment or modification is minor, consistent with this Agreement and Applicable
Law, and will result in no new significant impacts not addressed and mitigated by the MMRP
or Conditions of Approval, the amendment shall be determined to be an "Administrative
Project Amendment" and the Community Development Director or his/her designee may,
except to the extent otherwise required by Applicable Law, approve such amendment. Upon
approval, any Administrative Project Amendment shall be automatically incorporated into and
vested as part of this Agreement. Subject to Section 8.10(a)below, lot line adjustments,
reductions in the density, intensity, scale or scope of the Project, minor changes in land uses
involving minimal acreage, minor alterations in vehicle circulation patterns or vehicle access
points, minor changes in the amount of parking and parking layout, changes in trail alignments,
substitutions of comparable landscaping for any landscaping shown on any final development
plan or landscape plan, variations in the location of structures that do not substantially alter the
design concepts of the Project, variations in the location or installation of utilities and other
infrastructure connections or facilities that do not substantially alter the design concepts of the
Project, and minor adjustments to the Project Site diagram or Project Site legal description shall
be treated as Administrative Project Amendments.
(b) Non-Administrative Project Amendments. Any request by Apple for an
amendment or modification to a Project Approval or Subsequent Approval which is determined
not to be an Administrative Project Amendment as set forth above shall be subject to review,
consideration and action pursuant to Applicable Law and this Agreement.
Section 9.2 Amendment of this Agreement. This Agreement may be amended from
time to time, in whole or in part,by mutual written consent of the parties or their successors in
interest, as follows:
(a) Administrative Agreement Amendments. Any amendment to this
Agreement which does not substantially affect: (1) the Term of this Agreement; (2) permitted
uses of the Project Site; (3) provisions for the reservation or dedication of land; (4) conditions,
terms, restrictions or requirements for subsequent discretionary actions; (5) the density or
intensity of use of the Project Site or the maximum height or size of proposed buildings;or
(6) monetary contributions by Apple shall be considered an "Administrative Agreement
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Amendment," and the Community Development Director or his or her designee may, except to
the extent otherwise required by Applicable Law, approve the Administrative Agreement
Amendment without notice and public hearing.
(b) Amendment Exemptions. No Subsequent Approval,nor any amendment
of a Project Approval or Subsequent Approval, shall require an amendment to this Agreement,
unless a material term of this Agreement is changed by the Approval or Subsequent Approval.
Instead, any such matter automatically shall be deemed to be incorporated into the Project and
vested under this Agreement.
ARTICLE 10 ASSIGNMENT,COVENANTS, FORECLOSURE AND NOTICE.
Section 10.1 Assignment.
(a) Except as otherwise expressly provided below,neither party shall
convey, assign or transfer any of its interests,rights or obligations under this Agreement
without the prior written consent of the other party, which consent shall not be unreasonably
withheld or delayed. Failure by City to respond within sixty (60) days to any request made by
Apple for such consent shall be deemed to be City's approval of the transfer in question,
provided Apple has clearly indicated in its written request to City that City's failure to respond
within such time period will be deemed approval_of the request. Apple may assign its rights
under this Agreement to entities controlling, controlled by or under common control with
Apple Inc. without City's consent;provided,however, any such assignment to an Apple Inc.
affiliate shall be subject to continued compliance with all of Apple's obligations under this
Agreement, including Section 3.5. Assignments to entities which are not affiliates of Apple Inc.
shall be subject to review and approval by City in its reasonable discretion. In addition to any
other reasonable basis, City may withhold its consent upon a determination that the proposed
assignee has insufficient assets or financial ability to complete or manage the Project or carry
out any of the obligations under this Agreement. Such determination shall be made by the
Community Development Director, and is appealable by Apple to the City Council. Each
approved successor-in-interest to Apple shall be bound by all of the terms and provisions of this
Agreement applicable to that portion of the Property acquired by it. Subject to the preceding
sentence, this Agreement shall be binding upon and inure to the benefit of the parties'
successors, assigns and legal representatives. The terms of this Section 10.1 shall not restrict,
prevent or otherwise affect Apple's ability to lease, sell or convey interests in the Property.
(b) In connection with the transfer or assignment by Apple of all or any
portion of the Project Site or its rights and obligations under this Agreement(other than a
transfer or assignment by Apple to a "Mortgagee" (as defined in Section 14.1)), Apple and the
transferee shall enter into a written agreement(a "Transfer Agreement") regarding the
respective interests, rights and obligations of Apple and the transferee in and under this
Agreement, the Project Approvals, and the Subsequent Approvals. Such Transfer Agreement
may: (1) release Apple and CHI from obligations under the Agreement, the Project Approvals,
or the Subsequent Approvals that pertain to that portion of the Project being transferred, as
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described in the Transfer Agreement, provided that the transferee expressly assumes such
obligations; (2) transfer to the transferee vested rights to improve that portion of the Project
being transferred; and (3) address any other matter deemed by Apple or City to be reasonably
necessary or appropriate in connection with the transfer or assignment. Each Transfer
Agreement shall be in a form reasonably acceptable to the City and shall be recorded in the
Official Records of Santa Clara County.
(c) Any Transfer Agreement shall be binding on Apple, City and the
transferee. Upon recordation of any Transfer Agreement in the Official Records of Santa Clara
County, Apple and CHI shall automatically be released from those obligations assumed by the
transferee therein.
(d) Apple and CHI shall be free from any and all liabilities accruing on or
after the date of any assignment or transfer with respect to those obligations assumed by a
transferee pursuant to a Transfer Agreement. No breach or default hereunder by any person
succeeding to any portion of Apple's obligations under this Agreement shall be attributed to
Apple or CHI, nor may Apple's rights hereunder with respect to the balance of the Property that
is not subject to the assignment or transfer be canceled or diminished in any way by any breach
or default by any such person.
Section 10.2 Covenants Run With The Land. The terms of this Agreement, the
Rezoning, the General Plan Amendments, and this Development Agreement are legislative in
nature, and apply to the Property as regulatory ordinances. All of the provisions, agreements,
rights, powers, standards, terms, covenants and obligations contained in this Agreement shall
run with the land and 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 or entities acquiring the Property, any lot, parcel or any portion
thereof and any interest therein, whether by sale, operation of law or other manner, and shall
inure to the benefit of the parties and their respective successors.
Section 10.3 Foreclosure. Nothing contained in this ARTICLE 10 shall prevent a
Transfer of the Property, or any portion thereof, to a lender as a result of a foreclosure or deed
in lieu of foreclosure, and any lender acquiring the Property, or any portion thereof, as a result
of foreclosure or a deed in lieu of foreclosure shall take such Property subject to the rights and
obligations of Apple under this Agreement;provided,however, in no event shall such lender be
liable for any defaults or monetary obligations of Apple arising prior to acquisition of title to the
Property by such lender, and provided further, in no event shall any such lender or its
successors or assigns be entitled to a building permit or occupancy certificate until all fees due
under this Agreement(relating to the portion of the Property acquired by such lender)have
been paid to City.
Section 10.4 Sale or Lease of a Portion of the Project Site or Individual Parcels. Apple
may not sell or lease the parking lot parcels, or the fitness center, or auditorium parcels
separately from the main building without prior written approval of the City as these parcels
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contain required parking for the main building parcel or do not meet all City requirements for a
standalone parcel.
Section 10.5 Notice of Compliance Generally. Within forty-five(45) days following
any written request which Apple may make from i:ime to time,City shall execute and deliver to
Apple (or to any party requested by Apple) a written "Notice of Compliance," in recordable
form, duly executed and acknowledged by City, that certifies:
(a) This Agreement is unmodified and in full force and effect, or if there have
been modifications hereto, that this Agreement is in full force and effect as modified and stating
the date and nature of such modifications;
(b) There are no current uncured defaults under this Agreement or
specifying the dates and nature of any such default;
(c) The failure to deliver such a statement within such time,unless parties
have agreed to a reasonable extension of time to respond, shall constitute a conclusive
presumption against City that this Agreement is in full force and effect without modification
except as may be represented by Apple and that there are no uncured defaults in the
performance of Apple, except as may be represented by Apple;provided Apple has clearly
indicated in its written request for such statement that City's failure to respond within such
time period will be deemed City's admission with respect to the matters set forth above. Apple
shall have the right, at Apple's sole discretion, to record the Notice of Compliance. Apple shall
cover all reasonable City costs related to responding to the request for a Notice of Compliance,
within thirty (30) days after Apple's receipt of invoices from City, together with reasonable
supporting documentation.
ARTICLE 11 COOPERATION IN THE EVENT OF LEGAL CHALLENGE.
Section 11.1 Cooperation.
(a) If any administrative, legal or equitable action or other proceeding
instituted by any person not a party to this Agreement challenges the validity of the EIR, any
provision of the Agreement or any Project Approval or Subsequent Approval, the parties shall
cooperate in defending such action or proceeding. The parties shall use best efforts to select
mutually agreeable legal counsel to defend such action, and Apple shall pay all compensation
for such legal counsel, following Apple's receipt of invoices from City, together with reasonable
supporting documentation. Such compensation shall include reasonable compensation paid to
counsel not otherwise employed as City staff and shall also include City Attorney time and
overhead costs and other City staff overhead costs and any costs directly related to the litigation
reasonably incurred by City. If Apple and the City cannot in good faith agree on joint counsel,
the City shall have the right to retain counsel of its own choosing, separate from Apple's
litigation counsel. Apple shall pay all reasonable fees and costs incurred by City's counsel in
the defense of the litigation, within thirty (30) day:;following City's written demand therefor,
which may be made from time to time during the course of such litigation. Apple shall
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indemnify, defend, and hold harmless City, its elective and appointive boards, commissions,
officers, agents, and employees (the "Indemnified Parties") from and against any damages,
attorneys' fees or cost awards,including attorneys' fees awarded under Code of Civil Procedure
section 1021.5, assessed or awarded against City by way of judgment, settlement, or stipulation.
To the extent any proposed settlement of a litigation challenge requires the City's cooperation
or any amendment of this Agreement or any Project Approval, then such settlement shall be
subject to City's approval not to be unreasonably withheld, conditioned or delayed. If the terms
of the proposed settlement would constitute an amendment or modification of this Agreement
or any Project Approvals, the settlement shall not become effective unless such amendment or
modification is approved by City in accordance with Applicable Law, and City reserves its full
legislative discretion with respect thereto. If Apple opts not to contest or defend such litigation
challenge, City shall have no obligation to do so.
(b) The parties agree that this ARTICLE 11 shall constitute a separate
agreement entered into concurrently, 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, the parties agree to be bound by the terms of this ARTICLE 11, which shall survive
such invalidation,nullification or setting aside or other expiration or termination of this
Agreement.
Section 11.2 Cure;Preapproval.
(a) If, as a result of any administrative, legal or equitable action or other
proceeding as described in ARTICLE 11, all or any portion of this Agreement,Project
Approvals, or Subsequent Approvals are set aside or otherwise made ineffective by any
judgment(a "Judgment") in such action or proceeding based on procedural, substantive or
other deficiencies (collectively, the "Deficiencies"), the parties agree to use their respective best
efforts to sustain and reenact or readopt this Agreement, Project Approvals, and/or Subsequent
Approvals that the Deficiencies related to, as follows, unless the parties mutually agree in
writing to act otherwise:
(i) If any Judgment requires reconsideration or consideration by City
of this Agreement, a Project Approval, or a Subsequent Approval, then the City shall consider
or reconsider that matter in a manner consistent with the intent of this Agreement, to the extent
permitted by the Judgment. If any such Judgment invalidates or otherwise makes ineffective all
or any portion of this Agreement, a Project Approval, or a Subsequent Approval, then the
parties shall cooperate and shall cure any Deficiencies identified in the Judgment or upon which
the Judgment is based in a manner consistent with the intent of this Agreement. City shall then
readopt or reenact this Agreement, Project Approval, Subsequent Approval, or any portion of
the same, to which the Deficiencies related.
(ii) Acting in a manner consistent with the intent of this Agreement
includes, without limitation, recognizing that the parties intend that Apple may develop an
office, research and development campus and adopting such ordinances, resolutions, and other
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enactments as are necessary to readopt or reenact all or any portion of this Agreement,Project
Approvals, and/or Subsequent Approvals without contravening the Judgment.
(b) The parties agree that this ARTICLE 11 shall constitute a separate
agreement entered into concurrently, 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, the parties agree to be bound by the terms of this Section,which shall survive such
invalidation,nullification or setting aside.
ARTICLE 12 DEFAULT; REMEDIES;TERMINATION.
Section 12.1 Defaults. Failure by either party to perform any material term or
provision of this Agreement shall constitute a default, provided that the party alleging the
default shall give the other Party advance written notice of the default and thirty(30) days to
cure the condition, or,if the nature of the default is such that it cannot be cured within thirty
(30) days, the party receiving notice shall not be in default if the party commences performance
of its obligations within the thirty (30) day period and diligently completes that performance.
The written notice of default("Default Notice") shall specify in detail the nature of the alleged
failure, and where appropriate, the manner in which said failure might be cured.
Section 12.2 Remedies. The parties acknowledge that City and Apple would not have
entered into this Agreement if City or Apple were to be liable in damages under, or with respect
to, this Agreement or the application thereof. City and Apple shall not be liable in damages to
one another, or to any assignee, transferee or any other person, and both City and Apple
covenant not to sue for or claim damages. Each party shall have the right to (1)bring any
proceeding in the nature of specific performance, injunctive relief or mandamus, and/or
(2)bring any action at law or in equity as may be permitted by law or this Agreement. The
parties acknowledge that monetary damages and remedies at law generally are inadequate
upon the occurrence of a 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 Effective Date of this Agreement and any such equitable remedy shall be available to the
parties.
Section 12.3 Periodic Review.
(a) Conducting the Periodic Review. Throughout the Term of this
Agreement, at least once every twelve (12) months following the Effective Date, City shall
review the extent of good-faith compliance by Apple with the terms of this Agreement. This
review(the "Periodic Review") shall be conducted by the Community Development Director or
his/her designee and shall be limited in scope to compliance with the terms of this Agreement
pursuant to California Government Code Section 65865.1. Apple shall pay reasonable City costs
related to the Periodic Review, within thirty (30) days following Apple's receipt of invoices
from City, together with reasonable supporting documentation.
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(b) Apple's Submittal. If requested by City, and within ninety(90) days
before each anniversary of the Effective Date,Apple shall submit a compliance letter
("Compliance Letter") to the Director along with a copy directed to the City Attorney,
describing Apple's compliance with the terms of the Conditions of Approval, Project Approvals
and this Agreement during the preceding year. The Compliance Letter shall include a
statement that the Compliance Letter is submitted to City pursuant to the requirements of
Government Code§65865.1, this Agreement and the CMC, and that City's failure to respond
within the time periods set forth in this Section 12.3 shall be deemed City's concurrence that
Apple has complied in good faith with the terms and conditions of this Agreement for the
review period in question.
(c) City's Findings. Within sixty (60) days after receipt of the Compliance
Letter, the Community Development Director shall determine whether, for the year under
review,Apple has demonstrated good faith substantial compliance with the terms of this
Agreement. If the Community Development Director finds and determines that Apple has
complied substantially with the terms of this Agreement, or does not determine otherwise
within sixty (60) days after delivery of the Compliance Letter, the annual review shall be
deemed conclusively concluded, Apple shall be deemed to have complied in good faith with
the terms and conditions of this Agreement during the year under review, and this Agreement
shall remain in full force and effect. Upon a determination of compliance, the Community
Development Director shall, if Apple requests, issue a recordable certificate confirming Apple's
compliance through the year under review. Apple may file and record the certificate with the
Santa Clara County Recorder's Office. If the Community Development Director initially
determines the Compliance Letter to be inadequate in any respect,he/she shall provide notice to
that effect to Apple. If, after a duly noticed public hearing thereon, the City Council finds and
determines based on substantial evidence that Apple has not complied substantially in good
faith with the terms of this Agreement for the year under review, the Community Development
Director shall give written notice to Apple specifying the noncompliance and such notice shall
serve as a Default Notice under Section 12.1. If Apple fails to cure the noncompliance within
the time set forth in Section 12.1 above, the City Council, in its discretion,may: (1) grant
additional time for compliance by Apple; or(2) following the hearing described in CMC §
19.144.170, modify this Agreement with Apple's written approval to the extent necessary to
remedy or mitigate the noncompliance; or(3) terminate this Agreement. Except as affected by
the terms hereof, the terms of CMC §_19.116.230 and following, shall govern City's compliance
review process. During the Initial Term, if the Community Development Director has found the
Compliance Letter to be inadequate and yet the City Council does not hold a hearing and make
its determination within one (1) year after delivery of the Compliance Letter for a given year,
then it shall be conclusively deemed that Apple has complied in good faith with the terms and
conditions of this Agreement during such one(1) year period. Following the Initial Term, if the
City Council does not hold a hearing and make its determination within two (2) years after
delivery of the Compliance Letter for a given year, then it shall be conclusively deemed that
Apple has complied in good faith with the terms and conditions of this Agreement during such
two (2) year period.
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Section 12.4 Effect of Termination Upon Apple's Obligations. Termination of this
Agreement as to Apple shall not affect any of Apple's obligations to comply with the City's
General Plan and the terms and conditions of any Project Approvals or Subsequent Approvals
approved with respect to the Project. Any obligations of indemnification and defense relating
to matters arising before termination of this Agreement shall survive termination of this
Agreement.
Section 12.5 Enforced Delay;Extension of Time of Performance. In addition to specific
provisions of this Agreement,neither party shall be deemed to be in default where delays in
performance or failures to perform(other than obligations to make monetary payments which
shall not be subject to this Section 12.5) are due to, and a necessary outcome of, war,
insurrection, strikes or other labor disturbances, walk-outs, riots, floods,earthquakes, fires,
casualties, acts of God, restrictions imposed or mandated by other governmental entities
(including new or supplemental environmental regulations), enactment of conflicting state or
federal laws or regulations,judicial decisions, inability to obtain materials,power or public
facilities (such as water or sewer service) to the Project, or similar basis for excused performance
which is not within the reasonable control of the party to be excused. Litigation attacking the
validity of this Agreement or any of the Project Approvals or Subsequent Approvals, or any
permit, ordinance, entitlement or other action of a governmental agency other than City
necessary for the development of the Project pursuant to this Agreement, shall be deemed to
create an excusable delay. A party's financial inability to perform shall not be a ground for
claiming an excusable delay. The party claiming an excusable delay shall notify the other party
of its intent to claim an excusable delay, the specific grounds of the same and the anticipated
period of the excusable delay within thirty (30) days after the occurrence of the conditions that
establish the grounds for the claim. If notice by the party claiming such extension is sent to the
other party more than thirty (30) days after the commencement of the cause, the period shall
commence to run only thirty (30) days prior to the giving of such notice. The period of the
excusable delay shall last no longer than the conditions preventing performance. Upon the
request of either party hereto, an extension of time for the performance of any obligation whose
performance has been so prevented or delayed will be memorialized in writing. The term of
any such extension shall be equal to the period of the excusable delay, or longer, as may be
mutually agreed upon;provided,however, in no event shall any excusable delay extend the
expiration date of the Term beyond the 20th anniversary of the Effective Date.
Section 12.6 California Law;Venue. This Agreement shall be construed and enforced
in accordance with the laws of the State of California, without reference to its choice of laws
provisions, and the exclusive venue for any disputes or legal actions shall be the Superior Court
of California in and for the County of Santa Clara.
Section 12.7 Compliance with Laws. Apple shall comply with all requirements of
state and federal law, in addition to the requirements of this Agreement, including, without
limitation, the payment of prevailing wages, if required.
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Section 12.8 Resolution of Disputes. With regard to any dispute involving
development of the Project, the resolution of which is not provided for by this Agreement or
Applicable Law,Apple shall, at City's request, meet with City. The parties at any such
meetings shall attempt in good faith to resolve any such disputes. Nothing in this Section 12.8
shall in any way be interpreted as requiring that Apple and City and/or City's designee reach
agreement with regard to those matters being addressed,nor shall the outcome of these
meetings be binding in any way on City or Apple unless expressly agreed to by the parties to
such meetings. If any dispute is not resolved within thirty(30) days after the parties first meet,
or such longer period as the parties mutually agree, then each party may pursue all legal and
equitable remedies available it.
ARTICLE 13 NO AGENCY,JOINT VENTURE OR PARTNERSHIP.
It is specifically understood and agreed to by and between the parties hereto that:
(1) the subject development is a private development; (2) City has no interest or responsibilities
for, or duty to, third parties concerning any public improvements until such time, and only
until such time, that City accepts the same pursuant to the provisions of this Agreement or in
connection with the various Project Approvals or Subsequent Approvals; (3) Apple shall have
full power over and exclusive control of the Project, subject only to the limitations and
obligations of Apple under this Agreement, the Project Approvals,Subsequent Approvals, and
Applicable Law; and (4) City and Apple hereby renounce the existence of any form of agency
relationship,joint venture or partnership between City and Apple and agree that nothing
contained herein or in any document executed in connection with this Agreement shall be
construed as creating any such relationship between City and Apple.
ARTICLE 14 MORTGAGEE PROTECTION: CERTAIN RIGHTS OF CURE.
Section 14.1 Mortgagee Protection. This Agreement shall be superior and senior to all
liens placed upon the Property or any portion thereof after the date on which this Agreement or
a memorandum thereof is recorded, including the lien of any deed of trust or mortgage
("Mortgage"). Notwithstanding the above, no breach hereof shall defeat, render invalid,
diminish or impair the lien of any Mortgage made in good faith and for value,but all of the
terms and conditions contained in this Agreement shall be binding upon and effective against
all persons and entities, including all deed of trust beneficiaries or mortgagees (each a
"Mortgagee") who acquire title to the Property or any portion thereof by foreclosure, trustee's
sale, deed in-lieu-of foreclosure, voluntary transfer or otherwise.
Section 14.2 Mortgagee Obligations. City, upon receipt of a written request from a
foreclosing Mortgagee, shall permit the Mortgagee to succeed to the rights and obligations of
Apple under this Agreement, so long as all defaults by Apple that are reasonably susceptible of
being cured are cured by the Mortgagee as soon as reasonably possible, provided, however, that
in no event shall such Mortgagee personally be liable for any of Apple's defaults or monetary
obligations arising prior to acquisition of possession of such Property by such Mortgagee. The
foreclosing Mortgagee shall have the right to find a substitute for Apple to assume Apple's
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obligations,which substitute shall be considered for approval by City pursuant to ARTICLE 10
of this Agreement,but shall not, itself,be required to comply with all of the provisions of this
Agreement.
Section 14.3 Notice of Default to Mortgagee. If City receives notice from a Mortgagee
requesting a copy of any notice of default given to Apple and specifying the address for service
thereof, City shall endeavor to deliver to the Mortgagee, concurrently with service thereof to
Apple, all notices given to Apple describing all claims by City that Apple has defaulted
hereunder. If City determines that Apple is not in compliance with this Agreement, City also
shall endeavor to serve notice of noncompliance on the Mortgagee concurrently with service on
Apple. Each Mortgagee shall have the right,but not the obligation, during the same period
available to Apple to cure or remedy, or to commence to cure or remedy, the condition of
default claimed or the areas of noncompliance set forth in City's notice.
ARTICLE 15 MISCELLANEOUS.
Section 15.1 Incorporation of Recitals and Introductory Paragraph. The Recitals
contained in this Agreement, and the introductory paragraphs preceding the Recitals, are
hereby incorporated into this Agreement as if fully set forth herein.
Section 15.2 Findings. City hereby finds and determines that execution of this
Agreement furthers public health, safety and general welfare and that the provisions of this
Agreement are consistent with the General Plan.
Section 15.3 Severability. If any term o:r provision of this Agreement, or the
application of any term or provision of this Agreement to a particular situation,is held by a
court of competent jurisdiction to be invalid,void or unenforceable, the remaining terms and
provisions of this Agreement, or the application of this Agreement to other situations, shall
continue in full force and effect unless amended or modified by mutual consent of the parties.
Section 15.4 Time of Essence. Time is of the essence in the performance of each and
every covenant and obligation to be performed by the parties hereunder.
Section 15.5 Other Necessary Acts. Each party shall execute and deliver to the other
all such other further instruments and documents as may be reasonably necessary to carry out
the Project Approvals, Subsequent Approvals and this Agreement and to provide and secure to
the other party the full and complete enjoyment of its rights and privileges of this Agreement.
Section 15.6 Construction. The language in this Agreement in all cases shall be
construed as a whole and in accordance with its lair meaning. Each reference in this Agreement
to this Agreement or any of the Project Approvals or Subsequent Approvals shall be deemed to
refer to the Agreement, Project Approval or Subsequent Approval as it may be amended from
time to time, whether or not the particular reference refers to such possible amendment. This
Agreement has been reviewed and revised by legal counsel for both City and Apple, and no
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presumption or rule that ambiguities shall be construed against the drafting party shall apply to
the interpretation or enforcement of this Agreement.
Section 15.7 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this Agreement.
Section 15.8 No Waiver. No delay or omission by either party in exercising any right
or power accruing upon the other party's noncompliance or failure to perform under the
provisions of this Agreement shall impair or be construed to waive any right or power. A
waiver by either party of any of the covenants or conditions to be performed by Apple or City
shall not be construed as a waiver of any succeeding breach of the same or other covenants and
conditions
Section 15.9 Nondiscrimination. Neither party shall discriminate,in any way, against
any person on the basis of race, color,national origin, gender, marital status, sexual orientation,
age, creed,religion or disability in connection with or related to the performance of this
Agreement.
Section 15.10 No Third-Party Beneficiary. This Agreement shall not be construed or
deemed to be an Agreement for the benefit of any third-party or parties, and no third-party or
parties shall have any claim or right of action hereunder for any cause whatsoever.
Section 15.11 Other Miscellaneous Terms. The singular shall include the plural; the
masculine gender shall include the feminine; "shall" is mandatory; "may" is permissive. The
words "includes" and "including" shall be interpreted as though followed by the words
"without limitation." If there is more than one signer of this Agreement, the signer obligations
are joint and several.
Section 15.12 Notices. Any notice or communication required hereunder between City
or Apple must be in writing, and may be given either personally,by registered or certified mail
(return receipt requested), or by FedEx or other similar courier promising overnight delivery. If
personally delivered, a notice shall be deemed to have been given when delivered to the party
to whom it is addressed. If given by registered or certified mail, such notice or communication
shall be deemed to have been given and received on the first to occur of(1) actual receipt by any
of the addressees designated below as the party to whom notices are to be sent, or(2) two
(2) days after a registered or certified letter containing such notice,properly addressed, with
postage prepaid, is deposited in the United States mail. If given by Federal Express or similar
courier, a notice or communication shall be deemed to have been given and received on the date
delivered as shown on a receipt issued by the courier. Any party may at any time,by giving
ten (10) days written notice to the other party, designate any other address in substitution of the
address to which such notice or communication shall be given. Such notices or communications
shall be given to the parties at their addresses set forth below:
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If to City,to: City Clerk
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3202
Telephone: (408)777-3200
with Copies to: City Attorney
City of Cupertino
20410 Town Center Lane, Suite 210
Cupertino, CA 95014
Telephone: (408)777-3200
and: City Manager
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3202
Telephone: (408)777-3200
If to Apple, to: Apple Inc.
1 Infinite Loop, M/S 47-2 REF
Cupertino, California 95014
Attention: Apple Campus 2 Project Manager
with Copies to: Apple Inc.
1 Infinite Loop, M/S 4 DLAW
Cupertino, California 95014
Attention: Real Estate Counsel
Telephone: (408) 862-6012
and:
Morrison &Foerster LLP
425 Market Street
San Francisco, CA 94105
Attention: David Gold
Telephone: (415) 268-7000
The provisions of this Section shall be deemed directive only and shall not detract from the
validity of any notice given in a manner that would be legally effective in the absence of this
Section.
Section 15.13 Entire Agreement, Counterparts and Exhibits. This Agreement and all
exhibits attached to it and/or incorporated herein, together with the Pruneridge Vacation Area
purchase and sale agreement, the extension of agreement for consultation services, the
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Development Plan, MMRP, and the Project Approvals, including Conditions of Approval, are
the sole and entire agreement between the parties concerning the subject matter hereof. The
parties acknowledge and agree that they have not made any representation with respect to the
subject matter of this Agreement or any representations inducing the execution and delivery,
except representations set forth herein, and each party acknowledges that it has relied on its
own judgment in entering this Agreement. The parties further acknowledge that all statements
or representations that previously may have been made by either of them to the other are void
and of no effect, and that neither of them has relied thereon in its dealings with the other. To
the extent that there is any conflict between the Project Approvals and this Agreement, the
Project Approvals shall govern the parties' respective rights and obligations.
Section 15.14 Covenant of Good Faith and Fair Dealing. Neither party to this
Agreement shall do anything that shall have the effect of harming or injuring the right of the
other Party to receive benefits of this Agreement. Each party shall refrain from doing anything
that would render its performance under this Agreement impossible. Each party shall do
everything this Agreement contemplates to accomplish the objectives and purpose of this
Agreement.
Section 15.15 Authority to Execute. The person or persons executing this Agreement
on behalf of City warrant and represent that they have the authority to execute this Agreement
on behalf of City, and further represent that they have the authority to bind City to the
performance of its obligations in this Agreement. The person or persons executing this
Agreement on behalf of Apple warrant and represent that they have the authority to execute
this Agreement on behalf of Apple, that all corporate approvals have been obtained including
from CHI which are necessary to bind Apple to the performance of its obligations in this
Agreement, and that they have the authority to bind Apple to the performance of its obligations
in this Agreement.
Section 15.16 Exhibits. The following exhibits are attached to this Agreement and
incorporated herein for all purposes:
(a) EXHIBIT DA-la: Property Description
(b) EXHIBIT DA-1b: Project Site Diagram
(c) EXHIBIT DA-1c: Tax Localization Plan
(d) EXHIBIT DA-1d: General Plan Office Space Development
Allocations
(e) EXHIBIT DA-le: Campus Amenity Space
(f) EXHIBIT DA-1f: Impact Fees
(g) EXHIBIT DA-1g: Pruneridge Avenue Vacation
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Section 15.17 Recordation of Development Agreement. Pursuant to California
Government Code§65868.5,no later than ten (10) days after the Effective Date,the City Clerk
shall record an executed copy of this Agreement in the Official Records of Santa Clara County.
This Agreement has been entered into by and between Apple and City as of the day and
year first above written.
CITY:
CITY OF CUPERTINO, a
California municipal corporation
By:
Name:
Its:
ATTEST:
By:
Grace Schmidt, City Clerk
APPROVED AS TO FORM:
By:
Carol Korade, City Attorney
APPLE:
APPLE INC., a
California corporation
By:
Name:
Its:
Signatures continued on next page
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This Agreement is hereby acknowledged and
consented to:
CHI:
CAMPUS HOLDINGS,INC., a California
corporation
By:
Name:
Its:
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