19-024 Tolling Agreement, Vallco Property Owner LLC17571.004 4825-6783-8601.3 1
TOLLING AGREEMENT
This Tolling Agreement (the “Agreement”) is entered into as of the date both parties
execute this Agreement, by and between Vallco Property Owner LLC (“Vallco”), on the one
hand, and the City of Cupertino, a municipal corporation (the “City”), on the other. Vallco and
the City are each referred to herein as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, on September 21, 2018, the City, through its City Manager, issued an
approval of the Vallco Town Center SB 35 Project Application submitted to the City by Vallco
(the ”Project Approval”);
WHEREAS, Condition of Approval #5 of the Project Approval (“Condition #5”)
provides as follows:
NON-RESIDENTIAL BELOW MARKET RATE HOUSING PROGRAM
The Applicant… shall comply with the City’s Non-residential BMR program by
paying the required housing mitigation fees per the Housing Mitigation Manual for
any office development payable at the time of building permit issuance.
WHEREAS, Condition of Approval #6 of the Project Approval (“Condition #6”)
provides as follows:
FEES
The Applicant shall pay all applicable fees, taxes and bonds per the
City’s adopted fee schedule and/or Municipal Code, at the time of
building permit issuance including, but not limited to:
a. Building Permit Fees
b. Third-party Consultant Costs plus any administration fees
c. Below Market Rate Housing Mitigation Fees
d. Transportation Impact Fees
e. Parkland Dedication Fees
f. Storm Drain Fees
17571.004 4825-6783-8601.3 2
WHEREAS, Condition of Approval #38 of the Project Approval (“Condition #38”)
provides as follows:
NOTICE OF FEES, DEDICATIONS, RESERVATIONS OR
OTHER EXACTIONS
The determination set forth herein may include certain fees,
dedication requirements, reservation requirements, and other
exactions. Pursuant to Government Code Section 66020(d)(1), these
notes constitute written notice of a statement of the amount of such
fees, and a description of the dedications, reservations, and other
exactions. The Applicant is hereby notified that the 90-day approval
period in which these fees, dedications, reservations, and other
exactions, may be protested pursuant to Government Code
Section 66020(a) begins as of the date of project approval. If the
Applicant fails to file a protest within this 90-day period complying
with all of the requirements of Section 66020, the Applicant will be
legally barred from later challenging such exactions.
WHEREAS, on December 21, 2018, Vallco submitted a letter to the City stating that it
was protesting and challenging imposition or purported imposition of fees in the Project
Approval (the “Fee Protest Letter”), including but not limited to Below Market Rate (“BMR”)
Housing Mitigation Fees, Parkland Dedication Fees, Transportation Impact Fees, and Storm
Drain Fees, and reserving its rights to challenge fees it believes were not yet imposed or for
which it believes the amount had not yet been determined. Vallco stated that the Fee Protest
Letter was sent pursuant to Government Code section 66020;
WHEREAS, the City disagrees with contentions in the Fee Protest letter;
WHEREAS, the arguments set forth in the Fee Protest Letter, and the City’s opposition
thereto, are collectively the “Fee Dispute”;
WHEREAS, on October 16, 2018, Friends of Better Cupertino, et al. filed a legal action
in Santa Clara Superior Court, Friends of Better Cupertino, et al. v. City of Cupertino et. al.,
Case No. 18CV330190 (“the SB 35 Litigation”), claiming that the Project Approval did not meet
the requirements of SB 35 and seeking to have the Project Approval rescinded;
WHEREAS, if the Project Approval were rescinded there would be no need to litigate
the Fee Dispute;
WHEREAS, the City and Vallco wish to defer the filing of any actions or litigation
concerning the Fee Dispute until the trial court issues a decision in the SB 35 Litigation; and.
WHEREAS, Vallco agrees that that it is not entitled to issuance of any building permits
for the SB 35 Project unless and until Vallco has paid the below market rate housing mitigation
fee and all other applicable development impact fees pursuant to the City’s Municipal Code, Fee
Schedule, and Housing Mitigation Manual, as applicable to each permit.
17571.004 4825-6783-8601.3 3
AGREEMENT
NOW, THEREFORE, the Parties agree as follows:
1. Tolling Agreement. Vallco and the City agree that any and all applicable
time-based requirements for initiation of litigation concerning the Fee Dispute, including the
180-day statute of limitations in section 66020(d)(2), any statute of repose, and the doctrines of
laches and estoppel (collectively the “Legal Deadlines”), shall be tolled for the period beginning
on the Effective Date of this Agreement through the earliest of the following: (1) the thirtieth
(30th) day after a final judgment or order of dismissal is entered in the Superior Court in the SB
35 Litigation, (2) December 31, 2019, or (3) thirty (30) days after one of the Parties provides the
other Party with written notice of cancellation of this Agreement. The Tolling Period shall be
excluded from the period which would otherwise be counted for purposes of determining or
calculating the applicable Legal Deadlines.
2. Notwithstanding any provision of this Agreement to the contrary, this Agreement
is not intended to, and shall not, toll, revive, or extend any limitations period that already has
lapsed, or any claim that already was time-barred, as of the date of this Agreement.
3. This Agreement does not modify, release, or waive any of the Parties’ respective
rights, obligations, claim, or defenses, including in the SB 35 Litigation, except as expressly set
forth in paragraph 1, above.
4. Nothing herein shall be deemed or construed as evidence of or an admission of
liability by any Party to this Agreement, and the Parties expressly reserve all rights, claims,
counterclaims, cross-claims, legal and/or equitable defenses, and positions concerning the Fee
Dispute, including under Government Code section 66020, except as expressly set forth in
Paragraph 1, above. The Parties shall have the right to contest the truth and completeness of the
recitals to this Agreement outside the scope and purposes of this Agreement. Nothing herein
shall be admissible in any proceeding as an admission of any factual matter against any Party.
5. This Agreement binds and inures to the benefit of each of the Parties, and their
heirs, successors, and assigns.
6. This Agreement shall be governed by the laws of the State of California.
7. The Parties to this Agreement have authorized their counsel to execute it on their
behalf and, in so doing, to bind them to its terms.
8. This Agreement constitutes the entire agreement between the Parties concerning
the matters set forth herein. This Agreement may not be modified or amended except by a
writing signed by each of the Parties.
9. This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. The Parties agree that facsimile or .pdf signatures will be treated
in all manner and respects as a binding and original document, and the signature of any Party
shall be considered for these purposes as an original signature.
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10. This Agreement was drafted jointly by the Parties, who agree that no presumption
in favor or against any Party shall operate as a result of any role a Party may have had in drafting
the Agreement.
11. Any Party may cancel this Agreement at any time by delivering written notice of
cancellation to the other Party.
Notices to the City shall be delivered to:
Heather M. Minner
City Attorney
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
with a courtesy copy to: Minner@smlaw.com
Notices to Vallco shall be delivered to:
Jonathan R. Bass
Charmaine G. Yu
Katharine Van Dusen
COBLENTZ PATCH DUFFY & BASS LLP
One Montgomery Street, Suite 3000
San Francisco, CA 941104
with courtesy copies to:
jbass@coblentzlaw.com
cyu@coblentzlaw.com
kvandusen@coblentzlaw.com
[Signature page follows]
17571.004 4825-6783-8601.3 5
IN WITNESS HEREOF, each of the Parties has duly executed and delivered this
Agreement as of the day and year written below.
Dated: March ___, 2019 CITY OF CUPERTINO
By:
Name: Timm Borden
Its: Interim City Manager
Approved as to form:
By:
Name: Heather M. Minner
Its: City Attorney
Dated: March 15, 2019 COBLENTZ PATCH DUFFY & BASS LLP
By:
Name: Katharine Van Dusen
Attorneys for Vallco Property Owner LLC
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