CC Resolution No. 8520
REmI"l'l'Iœ 00. 8520
A ¡æ.cnrl1'1'Iœ œ 'DIE CITY CXXH:IL œ 'DIE CITY OF CUPER!l'IN)
JW'DDUZDG EXIOCUTIœ OF ŒVEIDI.'HI!:NT J\GREJ.M!:N'l' BY AND
BE'D£EN 'DIE CITY œ CUPER!l'IN) AND WESU.I\ND PRQtoISKJ.'a;S, INC.
AND WESU.I\ND SllPPDG CENŒR L.P. RErATIVE 'IO 'DIE ~
1QIHf AS VALI.CX> FASHIœ PARK CENŒR
WHEREAS, the City council of the City of CUpertino on JUly 15, 1991,
enacted 0:I:dinanœ No. 1540 ~oving ~lication I-DA-90, Devel,¥,é(¡,t
Agl:eement bet\leen the City of CUpertino and Westfield, Inc. i and
WHEREAS, said Deve~...tt AgreeJ(leht has been J?r~_1l.ed to the City
Council for review and aamwali
N:W, 'lHEREFŒE, BE IT RESOLVED that the City Council of the City of
CUpertino hereby authorizes the Mayer am City Clerk to execute the
Developnent Agreement on behalf of the City of CUpertino.
PASSED AND Ai.Ot".IJ!òL at a
City of CUpertino this 7th
vote:
regular meeting of the City council of the
day of October , 1991 by the following
Y2t§ -.n..... of the City Council
AYES: Goldman, Rogers, Sorensen, Szabo, Koppel
NtES: None
ABSENT: None
~: None
ATlES'l': APPRaJE[):
/s/ Dorothy Cornelius
City Clerk
/s/ Barb Koppel
Mayer, City of CUpertino
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF CUPERTINO
AND WESTLAND PROPERTIES, INC. AND
WESTLAND SHOPPING CENTER L.P.
RELATIVE TO THE DEVELOPMENT KNOWN AS
VALLCO FASHION PARK CENTER
THIS DEVELOPMENT AGREEMENT ("Agreement") is entered into this
15th day of August, 1991 (the "Effective Date"), by and between
WESTLAND PROPERTIES, INC., a Delaware corporation and WESTLAND
SHOPPING CENTER L.P., a California limited partnership (collec-
tively "Westland"), and THE CITY OF CUPERTINO, a municipal cor-
poration ("city").
RECITALS
A. The Legislature of the State of California adopted
Section 65864 ã sea. of the Government Code (the "Development
Agreement Statute"), which authorizes City to enter into a
property development agreement. The City has adopted Ordinance
No. 1256 (part) setting forth requirements and procedures for
development agreements with City ("Development Agreement Ordi-
nance") .
B. Westland has a legal or equitable interest in that real
property outlined in Exhibit "A-1" (the "Property") which is a
portion of the Vallco Fashion Park Shopping Center (the "Shopping
Center") which is outlined in Exhibit "A-2" , and that real pro-
perty outlined in Exhibit "A-1" designated as the "Rose Bowl" and
is a "Qualified Applicant" as defined in Section 20.l2.0l0(H) of
the Development Agreement Ordinance.
C. On July 16, 1974, the City Council approved Application
6-U-73, which provided for the development of 1,028,426 net
rentable square feet of retailing space, including store stock
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room space at the Shopping Center. Application 6-U-73 was amended
pursuant to Application 7-U-76 by the City Council on May 17, 1976
to 1,020,000 net rentable square feet of retailing space,
including store stock room space at the Shopping Center. To date,
not all of this allocation has been used.
D. Under both the prior and current zoning regulations, the
Rose Bowl may be developed with office buildings with a Floor Area
Ratio ("F.A.R.") of .37 or with commercial buildings with a F.A.R.
of .25.
E. On December 5, 1983, the City Council adopted Ordinance
No. 1250, approving an amendment to zoning application 1-Z-83
establishing a Planned Development which was consistent with
City's amended General Plan and which included the Shopping Center
and Rose Bowl. The amendment established permitted land use types
and intensity, set design standards, established conditions of
development applicable to the Shopping Center and Rose Bowl,
authorized commercial building space of 300,000 square feet in
addition to the 1,020,000 square feet approved for the Shopping
Center and the approximately 65,100 square feet available for
development of the Rose Bowl. The approvals for the 300,000
square feet and 65,100 square feet of building space for develop-
ment pertain exclusively to the Property and the "Rose Bowl" or
such other areas of the Shopping Center as Westland may deem
appropriate. These approvals and development pOlicies are refer-
red to as the "Existing Approvals."
F. On July 1, 1991, the city Council approved the following
Applications:
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(i) General Plan Amendment 2 - GPA-89 by Resolution No.
8251. General Plan Amendment 2 - GPA-89 increased the designated
development capacity of the Shopping Center by adding 260,000
square feet of additional net rentable square feet. Taken
together with the existing available building capacity under
Existing Approvals, the Amendment provides for 535,000 square feet
of future development in the Property and the Rose Bowl or such
other areas of the Shopping Center as Westland may deem appropri-
ate, for a total build-out of net rentable space, including store
stock room space, of 1,645,700 square feet;
(ii) Application 7-Z-90, by Ordinance No. 1539.
Application 7-Z-90 provides for rezoning of the Rose Bowl to P{CG,
ML, Office, Hotel, Regional Shopping) Intent to achieve
consistency with the zoning for the remainder of the Shopping
Center. However, the P(CG, ML, Office, Hotel, Regional Shopping)
designation for the Rose Bowl shall retain the office, industrial
use option and the hotel use option available under the prior
planned development zoning for the Rose Bowl parcel. Subject to
the terms of this Agreement, Westland, in its sole discretion, may
develop the Rose Bowl consistent with the P (Regional Shopping)
Intent zoning applicable to the remainder of the Shopping Center,
or Westland may develop the Rose Bowl for office, industrial use
or hotel use, as set forth in the General Plan, the Vested
Elements and this Agreement.
(iii) Application No. 9-U-90, Application 9-U-90 which
links the additi?nal 260,000 square feet of net rentable square
feet capacity approved pursuant to General Plan Amendment 2-GPA-89
to the terms of the existing Master Use Permit for the Shopping
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Center, approves development of a cinema complex subject to the
conditions more fully described in the approved Application 9-U-90
and in Section 2.6 hereinbelow, and also modifies provisions of
the existing Master Use Permit, as stated in Application 9-U-90
(the existing Master Use permit, as modified by Application 9-U-90
is hereinafter referred to as the "Master Use Permit").
(iv) Application NO.'S ASAC 51,908.1 and ASAC 51,908.2
setting forth revised signage criteria for the Shopping Center and
authorizing westland to construct a pylon sign(s) in accordance
with conditions set forth therein. Applications ASAC 51,908.1 and
ASAC 51,908.2 are hereinafter collectively referred to as the
"ASAC Applications".
These approvals and development policies are referred to as
the "Project Approvals" and pertain exclusively to the Property
and the "Rose Bowl" or such other areas of the Shopping Center as
Westland may deem appropriate.
G. The improvements allowed pursuant to the Existing
Approvals and the Project Approvals are referred to collectively
as the "Project."
H. The Project and the Project Approvals were subject to an
Initial Study as required by the California Environmental Quality
Act and were found to have no significant environmental impact.
On July 1, 1991, the City Council granted a Negative Declaration
for the Project and the Project Approvals.
I. Westland and City have determined that the Project is a
development for ~hich this Agreement is appropriate in order to
achieve the goals and objectives of the City's land use planning
policies including the maintenance of the current ice rink located
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at the Shopping Center and to provide appropriate assurances to
Westland regarding its ability to complete the Project. This
Agreement will eliminate uncertainty in planning for and securing
orderly development of the Project, assure progressive installa-
tion of necessary improvements, provide for pUblic services
appropriate to each stage of development of the Project, insure
attainment of the maximum effective utilization of resources
within City at the least economic cost to its citizens, and
otherwise achieve the goals and purposes for which the Development
Agreement Statute was enacted. In exchange for these benefits to
City, Westland desires to receive the assurance that it may
proceed with the Project in accordance with the existing General
Plan, ordinances, resolutions and regulations, subject to the
terms and conditions contained in this Agreement, in order to
implement the intent of the City in enacting the Development
Agreement Ordinance.
J. City has found and determined that execution of this
Agreement is in the best interests of the public health, safety
and general welfare and that the provisions of this Agreement are
consistent with the General Plan and provide balanced and
diversified land uses in order to maintain the overall quality of
life and of the environment within the City. The City believes
that the orderly development of the Project will provide many
public benefits to city through the collection of increased tax
revenues resulting in fiscal benefits to City, construction of
beneficial urban in-fill between already developed properties at a
location serviced by major local thoroughfares and regional trans-
portation systems, and the creation of job opportunities through
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the construction and development of the Project and the location
of businesses therein, as well as the maintenance of the present
ice rink located at the Shopping Center which serves unique recre-
ational needs within the City.
K. On July 1, 1991, after due review of and report on
Westland's application for this Agreement by all concerned City
agencies and departments, and consideration of all other evidence
heard and submitted at a duly noticed pUblic hearing pursuant to
the Development Agreement Ordinance, the City Council found and
determined that the Parties have complied with all requirements
regarding their entry into this Agreement and that this Agreement
is consistent with the objectives, pOlicies, general plan uses and
programs specified in the General Plan and the Existing Approvals;
it is compatible with the uses authorized in and regulations
prescribed for the land use district in which the Project is
located; is in conformity with and will promote pUblic
convenience, general welfare and good land use practices; will not
be detrimental to the health, safety and general welfare of the
City or the regions surrounding the City; will not adversely
affect the orderly development of property or the preservation of
property values within the City and will promote the same; and
will promote and encourage the development of the Project by
providing a greater degree of requisite certainty with respect
thereto.
L. Thereafter, on July 15, 1991, the City Council adopted
Ordinance No. 1540 (the "Enacting Ordinance") enacting this
Agreement as its legislative act and such ordinance became effec-
tive August 15, 1991.
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AGREEMENT
1. General Provisions.
1.1 Covenants. This Agreement is intended to be a
covenant which runs with the Property and the Rose Bowl and the
burdens and benefits of the Agreement shall bind and inure to the
benefit of all successors in interest to the parties.
1.2 ~. The term of this Agreement ("Term") shall
commence upon the Effective Date of this Agreement, which is the
same as the effective date of the Enacting Ordinance (provided
that in no event shall the Effective Date be earlier than thirty
(30) days from the date General Plan Amendment 2-GPA-89 becomes
effective) and shall continue for a term of fifteen (15) years,
unless terminated, modified or extended as set forth in this
Agreement or by the mutual agreement of the parties hereto. Upon
expiration of the Term, or the earlier termination of this Agree-
ment, this Agreement shall be of no further force or effect,
provided, however, termination shall not effect the rights of
Westland which may arise from entitlements or approvals for
development of the Shopping Center which were approved prior to,
concurrent with or subsequent to the approval of this Agreement.
1.3 Amendment. This Agreement may be amended from time
to time by mutual consent of the parties in accordance with the
provisions of the City's Development Agreement Ordinance. West-
land shall have the right to apply for modifications and/or
amendments to this Agreement subject to the express written
approval of City. Such application shall not be deemed a waiver
of any term or provision of this Agreement unless so stated in the
application.
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1.3.1 Upon the written request of Westland for a
minor amendment or modification to the Master Use Permit, Design
Objectives Narrative (a copy of which is attached hereto as
ADDendix I), the Project Development Map, or this Agreement,
including but not limited to, (a) the location of buildings and
other physical facilities, (b) conditions of operation of the
Shopping Center, or (c) the design or configuration of the
Project, the Director of Community Development shall determine
whether the requested amendment or modification is consistent with
this Agreement, the General Plan and applicable provisions of the
Project Approvals. For purposes of this Agreement, the determina-
tion of whether such amendment or modification is minor shall
refer to whether the amendment or modification is minor in context
of the overall Shopping Center. Upon receipt of a written request
for a minor modification or amendment from Westland, the Director
of community Development shall (i) approve the proposed amendment
without notice and public hearing, if the Director finds that the
proposed amendment is both minor and consistent with this Agree-
ment, the General Plan and the Project approvals, or (ii) disap-
prove (in writing, with an explanation of the basis for
disapproval) the proposed amendment if the Director finds that the
proposed amendment is not minor or consistent with this Agreement,
the General Plan and the Project Approvals, in which case Westland
may refer such disapproval to the City Council for reconsidera-
tion, or (iii) the Director may independently refer such proposed
amendment directly to the City Council. If the City Council finds
that the proposed amendment is both minor and consistent with this
Agreement, the General Plan, and the Project Approvals, the City
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Council may approve the proposed amendment without notice and
public hearing. In the event the proposed amendment is submitted
to the City Council, either upon referral by Westland or by direct
referral by the Director, the approval of the City Council for
such proposed amendment or modification shall not be unreasonably
withheld or delayed. For purposes of this Agreement, any amend-
ments or modifications which are treated as minor amendments or
modifications as described in the Master Use Permit shall be
deemed minor amendments or modifications hereunder. Amendments or
modifications approved pursuant to this paragraph 1.3.1 shall not
constitute subsequent discretionary approvals subject to further
CEQA review.
2. General DeveloDment.
2.1 DeveloDment and Control of DeveloDment. Westland
shall be permitted to develop the Project and City shall approve
the development of the Project in accordance with this Agreement.
2.2 Vested Elements. The permitted uses of the
Property, the "Rose Bowl" or such areas of the Shopping Center as
Westland may deem appropriate from time to time, the density and
intensity of use, the maximum height and size of the proposed
buildings, existing codes and other provisions for reservation or
dedication of land for pUblic purposes, traffic mitigation
measures and provisions for public improvements, and other terms
and conditions of development applicable to the Property, the
"Rose Bowl" or such other areas of the Shopping Center as Westland
may deem appropr~ate, as set forth in:
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(a) The General Plan for commercial, office and
hotel designation as of the date of the Enacting
Ordinance for this Agreement; and
(b) The "Existing Approvals" and the "Project
Approvals" as set forth hereinabove; and
(c) Application 24-U-87; which previously approved
construction of a parking deck on the portion of the
Shopping Center specified therein.
are hereby incorporated herein and are vested subject to the
provisions of this Agreement (the "Vested Elements").
In the event Westland elects, in its sole discretion, to
develop the Project on areas or portions of the Shopping Center
other than the Property or the Rose Bowl, then Westland may
allocate its rights under this Agreement to such property without
the consent of City, provided that the development of the Project
on such property shall be expressly subject to the terms and
conditions of this Agreement regarding the construction, design,
materials, maximum height and size of the proposed buildings
(including provisions which relate to said issues in the Project
Approvals, Exhibit B, Accendix I and Accendix II attached hereto
and incorporated herein) and further provided that Westland or its
successor shall remain obligated by the terms of this Agreement.
In addition, Westland agrees that, except as otherwise provided
herein, any development of the Project on any portion of the
Shopping Center other than the Property or Rose Bowl will be
generally consistent with the Definitive Development Plan set
forth in Application 7-Z-90.
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2.2.1 Location of DeveloDment. In the event
Westland wishes to develop a portion of the Project in an area of
the Shopping Center other than those areas of the Shopping Center
which are designated on the Shopping Center map attached hereto as
Exhibit "B" and incorporated herein ("Project Development Map"),
as areas of "approved future development" for the Project, any
development of the Project outside of those areas shall be subject
to the terms and conditions of this Agreement and the Vested
Elements. In addition, any such development outside the areas
designated for "approved future development" on Exhibit "B" shall
be subject to separate use permit review procedure by City. City
acknowledges that development of the Project in areas not shown on
the Project Development Map involve only a change in location and
design from the construction of net rentable square footage
approved under the Vested Elements and is not additional develop-
ment. Therefore, City's use permit review procedure shall not,
except as expressly set forth herein, require any additional
payments (other than payment of standard fees for such use permit
application), exactions or impact fees from Westland as a condi-
tion of approval. Notwithstanding the foregoing, City may impose
additional impact fees or exactions as specific mitigation
measures which are conditions of approval of such use permit
application, provided that such impact fee or exaction shall only
be imposed to mitigate a specific, identifiable impact arising
directly as a result of that portion of the development which is
in a new location outside the approved areas shown in Exhibit "B",
and provided further, that Westland is unable or has elected not
to exercise its right to cure or mitigate such specific impact
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through independent mitigation measures to be implemented by
Westland, with the prior approval of City (which approval shall
not be unreasonably withheld or delayed). City shall provide
assurance to Westland that the impact fee or exaction payment paid
by Westland will only be used to mitigate the specific impact for
which the fee or exaction was imposed. If City fails to so use
such impact fee or exaction payments as required by the current
provisions of Government Code S6600 et. seq., then the fee or
exaction will be refunded to Westland, with interest, as provided
in the current provisions of Government Code S660l. The restric-
tions on City's use of such impact fee or exaction payments set
forth herein shall continue in effect, notwithstanding any future
changes or repeal of Government Code S6600 et seq. Except as
allowed above, City may not impose any additional impact fees,
exactions or charges as a condition of approval of such use permit
application.
All parking structures which are shown on Exhibit "B" hereto
in the areas designated as "areas for future parking structures"
shall be deemed to be included within the term "Project" as used
in this Agreement. All provisions in this Agreement regarding
approvals, timing and application of the Vested Elements
pertaining to the Project shall be considered to apply equally to
parking structures to be constructed at the request of Westland.
Any development of the Project or of the Shopping Center pursuant
to the terms of Vested Elements or this Agreement shall be subject
to the Parking Ratio set forth in Section 2.9 herein.
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Westland's failure to develop the Project shall not result in
liability to Westland except as may otherwise result from a
failure to comply with sections 2.3, 2.4 or 2.5.
2.3 Conditions with Reaard to the Ice Rink Facilitv.
Westland agrees to operate and maintain, or cause to be operated
and maintained, the ice rink facility within the city of Cupertino
at no cost to the City in a physical condition which equals, or is
superior to, the physical condition of the present ice rink
facility. In the event that Westland completes construction of
and receives a certificate of occupancy for expansion of at least
100,000 square feet of new net rentable space during the Term of
this Agreement, then the continued operation of the ice rink shall
become a permanent condition of operation of the Shopping Center
under the Master Use Permit. If Westland does not complete
construction of, and receive a certificate of Occupancy for,
expansion of at least 100,000 square feet of new net rentable
space during the term of this Agreement, then Westland shall only
be obligated to continue maintenance and operation of the ice rink
during the Term of this Agreement. Westland may elect in the
future, in its sole and absolute discretion, to close the entire
Shopping Center, and if Westland does so elect, this Agreement
shall terminate and Westland shall be released from any obligation
under this Agreement or the Master User Permit to continue to
operate the ice rink as well as its obligations under paragraphs
2.4 and 2.5 herein. Further, nothing herein shall be deemed to
operating the ice rink facility at a profit
control over Westland's operation of such
expressly set forth in this Agreement.
prohibit Westla~d from
and City shall have no
facility other than as
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Westland agrees that, subject to the foregoing, it will use good
faith efforts, to operate and maintain, or cause to be operated
and maintained, the ice rink facility in a manner which does not
unreasonably restrict public access to the ice rink facility.
City agrees to cooperate with Westland in processing any applica-
tions for expansion, alterations or improvements to the ice rink
facility and/or its ancillary uses, provided City shall not be
required to contribute any money to such expansion. City further
agrees that the net rentable square footage occupied by the ice
rink facility and any ancillary uses appurtenant thereto,
including any expansion of the ice rink or its ancillary uses,
shall be excluded from calculation of the floor area allocation of
the 1,645,700 net rentable square feet authorized under 2-GPA 89.
2.4 Conditions with Reaard to Park and Ride and Transit
Facilities. At the request of the Santa Clara County
Transportation Agency ("S.C.C.T.A."), Westland agrees to enter
into an agreement with S.C.C.T.A. to establish parking spaces for
a shared use park and ride parking area suitable for up to
seventy-five (75) spaces ("Park and Ride Agreement"). The shared
use park and ride area shall be located in a single location in
the Shopping Center parking areas within anyone of the following
locations, determined in Westfield's discretion: (i) within 750
feet of any bus turnout location (either currently existing or
which may be built) on either the westerly or easterly side of
Wolfe Road and south of Vallco Parkway, or (ii) such other loca-
tion as may be a9reed between Westland and S.C.C.T.A. In the
event Westland completes construction of, and receives a certifi-
cate of Occupancy for, expansion of at least 100,000 square feet
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of new net rentable space during the Term of this Agreement, then
operation of the park and ride facility shall become a permanent
condition of operation of the Shopping Center under the Master Use
Permit, unless the Park and Ride Agreement is terminated by the
mutual consent of S.C.C.T.A. and Westland. If Westland does not
complete construction of, and receive a Certificate of Occupancy
for, expansion of at least 100,000 square feet of new net rentable
space during the Term of this Agreement, then Westland shall only
be obligated to allow operation of the park and ride facility
during the Term of this Agreement, unless the Park and Ride Agree-
ment is earlier terminated by the mutual consent of S.C.C.T.A. and
Westland. The spaces designated for park and ride use shall be
included as available Shopping Center parking spaces for purposes
of determining the Shopping Center's compliance with applicable
parking ratio requirements and Westland shall not be required to
provide additional parking spaces to compensate for the spaces
designated for park and ride use. The park and ride spaces shall
be designated as such upon a weekday and non-public holiday only
basis. The Park and Ride Agreement shall provide that the park
and ride spaces shall be available exclusively for parking by
commuters during the 6:00 a.m. to 9:00 a.m. time period. After
9:00 a.m. the park and ride spaces shall be equally available to
both commuters and non-commuter Shopping Center users on a first
come first served basis. The Park and Ride Agreement shall
provide that S.C.C.T.A., City or another appropriate agency or
authority shall be responsible for liability, maintenance and any
other matters directly related to the operation of the shared use
park and ride.
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City agrees that in the event City wishes to construct new
bus stops, located on the easterly and westerly sides of Wolfe
Road between Vallco Parkway and stevens Creek Boulevard, City
shall construct such bus stops entirely within the current Wolfe
Road right of way and Westland shall have no obligation to dedi-
cate or transfer any portion of the Shopping Center to City in
connection with such bus stops. Westland shall have no obligation
to pay any amount to City to acquire any additional property
necessary to construct such bus stops, except as expressly set
forth in this Agreement.
This section 2.4 and section 2.7 sets forth all of Westland's
obligations with regard to bus transfer or other transportation
facilities or programs and upon satisfaction of the obligations
set forth herein, Westland shall have no further obligations
concerning bus transfer or other transportation facilities or
programs under the Existing Approvals, the Project Approvals or
any other approvals or consents granted in the future pursuant to
this Agreement.
2.5 Conditions with Reaard to child Care Facilities.
Westland and City agree that Westland shall continue to maintain
or operate, or cause to be maintained or operated a child care
facility within the Shopping Center during the term of this
Agreement. Notwithstanding such agreement, Westland agrees that
in the event City adopts and implements a city-wide child care
plan or policy applicable to new developments, Westland shall
either, (i) participate in such plan or pOlicy, with Westland's
participation in such plan or policy being based upon the 260,000
square feet of additional gross leasable area authorized by
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General Plan Amendment 2-GPA-89; or (ii) Westland may elect, in
lieu of such participation, to continue to operate and maintain or
cause to be operated and maintained, at Westland's discretion, the
child care facility currently located in the Shopping Center, or a
similar type operation of a similar size (based on the number of
net rentable square feet occupied by the facility currently
located in the Shopping Center), for the remaining Term of this
Agreement, provided however, this obligation shall terminate if
Westland is unable to obtain, despite reasonable efforts, a tenant
who is a qualified, licensed operator to operate such child care
facility in compliance with all applicable regulations and
requirements. In either event, Westland shall receive any
benefits or bonuses to which it is entitled under such plan or
policy adopted by the City. City agrees that the net rentable
square footage occupied by the Child Care Facility and any ancil-
lary uses appurtenant thereto shall be excluded from calculation
of the floor area allocation of the 1,645,700 net rentable square
feet authorized under 2-GPA-89.
2.6 Conditions with Reaard to the Master Use Permit.
The provisions of the Master Use Permit for the Shopping Center
will apply to currently existing uses and to any proposed uses
which may occupy the Shopping Center, including unbuilt floor area
authorized hereunder, as follows: (i) proposed uses located east
of Wolfe Road which are not otherwise required to obtain separate
use permit review and approval under the terms of the Master Use
Permit and this Agreement will not be subject to separate use
permit review and approval solely because such proposed use will
operate between the hours of 11:00 p.m. and 7:00 a.m.;
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(ii) existing approved uses or future approved uses located
anywhere in the Shopping Center may remain open to the public
between 11:00 p.m. and 7:00 a.m. on an occasional basis for
special marketing and promotional events subject to prior written
approval from the City's Community Development Director. Such
approval may be granted, in the Community Development Director's
discretion, for events involving the entire Shopping Center,
events involving a group of the Shopping Center Occupants and
events involving a single Shopping Center occupant, subject to a
finding by the Community Development Director that adequate steps
have been taken to minimize the disturbance resulting from opera-
tion during such hours to property owners adjoining the Shopping
Center; (iii) proposed uses located west of Wolfe Road which wish
to operate between the hours of 11:00 p.m. and 7:00 a.m. shall
remain subject to separate use permit approval. Notwithstanding
the foregoing, pursuant to the provisions of the Master Use Permit
and this Agreement, a cinema complex may be built and operated in
one of the following locations, without a separate use permit
application, subject to the conditions set forth in the Master Use
Permit:
2.6.1 Westland may elect to build a cinema complex
of up to 2,500 seats on the site adjacent to the Sears store shown
on Exhibit "B" (the "Wests ide Site").
2.6.2 Westland may elect to build a cinema complex
of up to 3,500 seats on the Westside Site, provided that if
Westland elects to build a 3,500 seat cinema complex, the total
build out to 1,645,700 square feet of gross leasable area for the
Shopping Center authorized under General Plan Amendment 2-GPA-89
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and this Agreement shall be reduced by 100,000 square feet of
gross leasable area, thus reducing the total build out authorized
under the Master Use Permit to 1,545,700 square feet of gross
leasable area.
2.6.3 Westland may elect to build a cinema complex
of up to 3,500 seats at either the site shown on Exhibit "B"
located between the penneys' store and the proposed site for the
Sports Connection facility, or anywhere on the Rose Bowl (collec-
tively, the "Eastside Sites"). If Westland elects to build a
3,500 seat cinema complex on one of the Eastside Sites, the total
build out to 1,645,700 square feet of gross leasable area author-
ized hereunder shall be reduced to a total build out of 1,600,000
square feet of gross leasable area.
If Westland elects to build a cinema complex pursuant to the
provisions of 2.6.1, 2.6.2 or 2.6.3 above, said use may operate
during hours of operation customary to the cinema industry. The
parties acknowledge that the reduction in the total build out of
gross leasable square footage specified in paragraphs 2.6.2 and
2.6.3 is a negotiated measure intended to mitigate potential
traffic impacts of the cinema use and that the approval for a
cinema use specified herein is not intended to limit or restrict
Westland's right to pursue development of additional space for
cinema use, in any location in the Shopping Center, in accordance
with the provisions of this Agreement and the Vested Elements.
Approval of additional space for cinema use shall be subject to
separate use perm~t application.
City agrees that it will not impose any tax, fee or surcharge
on cinema admission revenues as a condition of the construction of
-19-
the cinema facility or of the cinema's operation. However, City
retains the right to adopt a city-wide admissions tax, fee or
surcharge in the future and Westland agrees not to oppose such
action by City. Any building permit application for such cinema
shall be subject to review as set forth in paragraph 2.8.3
hereinbelow.
2.6.4 Conditions with Reaard to Sinale User SDace.
Westland agrees that at least 80,000 square feet of the total
260,000 square feet of additional net rentable square feet
authorized by General Plan Amendment 2-GPA-89, when completely
constructed, will be reserved for use by a "Single User". For
purposes of this Agreement, a "Single User" shall mean a depart-
ment store, specialty store, major retail attraction or major
attraction, which is subject to the control of a single management
entity or lessee and which operates as or appears to the public to
operate as a single entity or user, even if some areas within such
space are operated by other parties. In the event Westland
requests a proposed use for the Single User space which does not
satisfy all the criteria set forth herein, such proposed use shall
be allowed, subject to approval by a majority of the City Council.
Westland may request approval by submitting a written request to
the Director of Planning specifying the alternative proposed use
for the Single User Space and Westland shall provide any addi-
tional information reasonably requested by City. The Director of
Planning shall submit the request to the City Council for
approval. City Council shall schedule a pUblic hearing pursuant
to the City's procedural ordinance and thereafter shall vote to
approve or disapprove such request within sixty (60) days from
-20-
delivery of the written request from Westland. City may continue
the request for one additional thirty (30) day period, with
Westland's prior consent, which consent shall not be unreasonably
withheld. Failure of the City Council to approve or disapprove
Westland's request within such sixty (60) day period (or ninety
(90) day period, if extended as set forth above) shall be deemed
approval.
2.7 Grant of Easements. In consideration of the
payments to be made by Westland under section 2.7.1, City shall
grant and deliver to Westland, in recordable form, contemporan-
eously with the execution of this Agreement, an easement agreement
whereby City grants to Westland perpetual air, surface and subter-
ranean easements running with the land, which will provide the
Project with easements for additional pedestrian and/or vehicular
access for ingress and egress over and under Wolfe Road and Vallco
Parkway. The tunnel easements granted under Wolfe Road and Vallco
Parkway shall be used only for internal traffic circulation within
the Shopping Center. The form and substance of such easement
agreement shall be in the form attached as Exhibit "c" and incor-
porated herein. Said easement agreement shall also contain a
termination and quitclaim of easement rights previously granted
City over those portions of the Shopping Center described in
Exhibit "C" attached hereto.
2.7.1 In consideration of the granting of such
easements by City to Westland and the termination of City's
existing easement rights, Westland agrees, subject to the terms of
paragraphs 2.7.2 and 2.7.3 below, to pay City the base amount of
One Hundred Thousand Dollars ($100,000) per year (which base
-21-
amount will be subject to adjustment as set forth in para-
graph 2.7.2(a». The base amount of $100,000, as adjusted, is
hereinafter referred to as the "Annual Payment". The Annual
Payment shall commence on the dates set forth below and will
continue thereafter for a period of fifteen (15) years. The
parties acknowledge that Westland is currently obligated to make
annual payments of $67,000 to City pursuant to the terms of that
certain agreement between City and Vallco Park Ltd., a California
limited partnership, dated October 8, 1974, as amended ("Easement
Agreement"). Westland's obligation to pay the sum of $67,000 per
year shall terminate in 1994 and nothing contained herein shall be
deemed to extend such obligation past the dates set forth in the
Easement Agreement. Notwithstanding the foregoing, in the event
Westland commences payment of the Annual Payment amount prior to
termination of its obligation to pay such $67,000 annual amount,
payment of the Annual Payment amount shall supersede and be in
lieu of payment of such $67,000 amount. Under no circumstances
shall Westland be obligated to pay both the Annual Payment amount
and the $67,000 annual payment required under the Easement Agree-
ment during the same year. The Easement Agreement shall be
amended as set forth in Exhibit "c" to incorporate the provisions
of this section 2.7.
The Annual Payment, together with the payments previously
received by city under the Easement Agreement, shall be utilized
by City in a manner as approved by the City Council to enhance the
environmental quality of the city. The City Council shall give
priority to environmental problems in the vicinity of the Shopping
Center. In consideration of this Agreement and the Annual Payment
-22-
to city, Westland shall not be obligated at any time to partici-
pate in or pay any amounts required under any environmentally
related programs affecting or relating to the Shopping Center or
Westland's operation of the Shopping Center, including without
limit traffic, transportation, parking, air quality and sewage
programs (collectively "Environmental Programs") currently in
effect or which may be adopted in the future by City, except as
expressly set forth in this Agreement. Notwithstanding the
foregoing, Westland shall participate in and pay any amounts
required under any Environmental Program mandated by and paid to
the State of California or the United States Government or any
direct agencies thereof.
2.7.2 Westland's obligation to begin payment of
the Annual Payment shall not commence until Westland has completed
expansion of the Shopping Center consisting of at least 200,000
square feet of additional net rentable space. Such 200,000 square
feet of additional net rentable space shall be deemed completed
when City has issued Certificates of Occupancy for such new
construction and development within the Shopping Center, such that
the total available net rentable square footage within the
Shopping Center immediately available for occupancy is at least
1,310,700 square feet. The 1,310,700 square feet of available net
rentable space shall be hereinafter referred to as the "Payment
Threshold". Upon reaching the Payment Threshold, Westland's
obligation to pay the Annual Payment amount shall commence and
shall continue yearly thereafter for a period of fifteen (15)
years. Once the Payment Threshold has been reached, the obliga-
tion to make such payments shall survive the earlier termination
-23-
of this Agreement. The amount of the Annual Payment shall be
determined at the time the Payment Threshold is reached in the
following manner:
(a) The amount of the Annual Payment shall be
calculated by multiplying the sum of $100,000 by a fraction the
numerator of which is the "cpr" (as defined in paragraph 10)
published nearest and preceding the Payment Threshold date and the
denominator of which is the cpr pUblished nearest and following
the Effective Date of this Agreement. The amount so calculated
shall be the Annual Payment, provided that in no event shall the
amount of the Annual Payment when calculated exceed $150,000.
2.7.3 The amount of the Annual Payment shall be
increased on the fifth (5th) and tenth (loth) anniversary of the
Payment Threshold date. The amount of each increase shall be
equal to the "Adjustment Amount", which shall be calculated in the
following manner:
(a) The Adjustment Amount shall be determined
when the Payment Threshold is reached, at the same time as when
the amount of the Annual Payment is determined, and shall be
calculated by multiplying the sum of $25,000 by a fraction, the
numerator of which is the cpr published nearest and preceding the
Payment Threshold date and the denominator of which is the cpr
published nearest and following the Effective Date of this Agree-
ment. The amount so calculated shall be the Adjustment Amount,
provided that in no event will the Adjustment Amount when so
calculated exceed $37,500. Once the amount of the Annual Payment
and the Adjustment Amount are determined, neither amount shall be
subject to any further cpr adjustment.
-24-
2.7.4 The Annual Payment shall be paid by Westland
in two (2) equal installments. The installments shall be due on
March 1 and September 1, of each year, commencing after the
Payment Threshold has been reached and Westland's obligation to
pay the Annual Payment shall only apply to installment payments
which become due after the date the Payment Threshold is attained.
2.8 Rules. Reaulations and Official Policies.
2.8.1 Development of the Project shall be subject
to all standards in the General Plan, the zoning codes, and other
rules, regulations, ordinances and official policies applicable to
such development on the Effective Date (collectively called the
"Existing Ordinances"). True and correct copies of the Existing
Ordinances on the Effective Date are attached as Exhibit "D". To
the extent any changes in the EXisting Ordinances or any provi-
sions of future General Plans, zoning codes or other rules,
ordinances, regulations or policies, adopted on a city-wide basis,
are applicable to the Project and are in conflict with, or prevent
the implementation of the Vested Elements or the benefits to
Westland derived thereunder, the Vested Elements shall prevail.
To the extent any provisions of future General Plans, zoning codes
or other rules, ordinances, regulations or policies, adopted on a
city-wide basis, are applicable to the Project and do not conflict
with or prevent the implementation of the Vested Elements or the
benefits to Westland derived thereunder, such General Plan, zoning
codes or other rules, ordinances, regulations or policies shall be
applicable. Further, to the extent any provisions of future
General Plans, zoning codes or other rules, ordinances, regula-
tions or pOlicies, adopted on a city-wide basis, are applicable to
-25-
the Project and are less restrictive than those General Plans,
zoning codes or other rules, ordinances, regulations or policies
in effect as of the Effective Date, then Westland may file an
application with the City council to be governed by such future
General Plan, zoning codes, or other rules, ordinances, regula-
tions or policies and city Council's consent to such application
shall not be unreasonably withheld or delayed.
2.8.2 This section shall not preclude the applica-
tion to development of the Project of changes in City laws,
regulations, plans or policies, the terms of which are specifical-
ly mandated or required by changes in state or Federal laws or
regulations. In the event state or Federal laws or regulations
enacted after the Effective Date of this Agreement or action by
any governmental jurisdiction other than the City prevent or
preclude compliance with one or more provisions of this Agreement
or require changes in plans, maps or permits approved by the city,
this Agreement shall be modified, extended or suspended as
required pursuant to sections 3.4 (Enforced Delay; Extension of
Time of Performance) and 6 (Cooperation - Implementation) of this
Agreement in a manner so as to preserve to the fullest extent
possible the intent of the parties as set forth herein. In
addition, City shall cooperate with Westland in the event that
Westland elects to contest either the lawfulness or the applica-
bility of the changed law or regulation to Westland, the Shopping
Center, or this Agreement.
2.8.3 Nothing set forth herein shall impair the
right of City to require the processing of building permits as
required by law and to conduct design review of any specific
-26-
improvements proposed for the Project. However, in connection
with such review the City shall not impose any condition which
would be inconsistent with any term or provision of this Agreement
or the Vested Elements and City shall not unreasonably withhold or
delay review or approval of proposed improvements. The City's
design review shall be limited to review by the Director of
Community Development to determine whether the plans, drawings and
specifications for proposed construction are consistent with the
Design Objectives Narrative and Use Permit conditions approved by
City as part of Application 9-U-90 and the signage criteria
approved by the City as part of the ASAC Applications. A copy of
the Design Objectives Narrative is attached hereto as Appendix I
is incorporated herein by reference. A copy of the ASAC Applica-
tions as approved by City, are attached hereto as Appendix II and
incorporated herein. Upon receipt of a complete building permit
application, the Director of Community Development shall (i)
approve the building permit application without notice and pUblic
hearing, unless the Director finds that the plans, drawings and
specifications submitted with such building permit application
materially depart from the architectural and design elements and
signage criteria for the Project set forth in the Design Objec-
tives Narrative, the ASAC Applications and the Vested Elements, or
(ii) disapprove (in writing, with an explanation of the basis for
disapproval) the building permit application if the Director finds
that the plans, drawing and specifications submitted with building
permit application materially depart from the architectural and
design elements and signage criteria for the Project set forth in
the Design Objectives Narrative, the ASAC Applications and the
-27-
Vested Elements, in which case Westland may refer such disapproval
to the City Council for reconsideration, or (iii) the Director may
independently refer such bUilding permit application directly to
the City Council. If the City Council finds that the building
permit application does not materially depart from the architec-
tural and design elements and signage criteria for the Project set
forth in the Design Objections Narrative, the ASAC Applications
and the Vested Elements, the City Council shall approve the
building permit application without notice and pUblic hearing and
such approval shall not be unreasonably withheld. In the event
the building permit application is submitted to the City Council,
either upon referral by Westland or by direct referral by the
Director, the City Council shall give Westland notice of approval
or disapproval (with an explanation of the basis for disapproval)
of the building permit application within sixty (60) days from the
date of referral. Such sixty (60) day period may be extended by
City for an additional thirty (30) day period with the prior
consent of Westland. Failure of the city Council to approve or
disapprove the building permit application within such time period
shall be deemed approval.
2.8.4 All applications for City approvals, permits
and entitlements shall be subject to the development and process-
ing fees, charges and taxes within the control of the City which
are in force and effect as of the time of granting of such
approvals, permits or entitlement. Notwithstanding the foregoing,
Westland shall not be required to pay new fees, or fees or charges
that are in addition to or greater than the fees in existence as
of the Effective Date except as follows:
-28-
(a) city may increase eXisting fees and
charges based on any increase in the estimated reasonable cost to
City for performing the work for which the particular fee or
charge is paid, by an amount which will compensate City for the
estimated reasonable costs and increases incurred, as permitted
pursuant to Government Code Sections 66013 et seq.
(b) Any new exactions, dedications, impact
fees or regulations enacted or adopted by City shall only apply to
the Project if all of the following conditions are met. (i) such
new exactions, dedications, impact fees or regulations apply to
all new development in the City and do not discriminate against
the Project, (ii) there is a direct nexus between the new exac-
tion, dedication, impact fee or regulation and a specific impact
arising directly as a result of the development of the Project and
City provides assurance to Westland that the impact fee or exac-
tion payment paid by Westland will only be used to mitigate the
specific impact for which it was imposed and (iii) the area of the
impact addressed by such new exactions dedications, impact fees or
regulations is not already mitigated, as provided under the terms
of this Agreement.
2.8.5 Notwithstanding any provisions contained in
any Vested Element in this Agreement to the contrary, codes, ordi-
nances and regulations relating to health, safety, fire, sewer,
water or construction standards or permits shall apply as of the
time of each applicable permit is granted. Upon complying with
the applicable co~ditions established in the Existing and Project
Approvals, Westland shall have the right to apply for any neces-
sary permits or approvals under the City's then presently existing
-29-
building and fire codes. Upon application by Westland, City shall
review the application and, within a reasonable time issue all
necessary permits, occupancy certificates, or other required
permits for the construction, use and occupancy of the Project, or
any portion of it, including connection to all utility systems
under the City's jurisdiction.
Notwithstanding any provision of this section to the con-
trary, in event of a sewer connection moratorium ordered by the
Regional or State Water Quality Control Board, or in the event of
restrictions on additional water connections or restrictions on
the availability of other utilities or scarce resources imposed by
the United States Government, the state of California or the
County of Santa Clara, or in the event of any other event beyond
the control of the City of Cupertino, which restricts or prohibits
the issuance of building permits, the obligations of City
contained in this section to issue building or occupancy permits
shall be suspended until the City is legally able to issue said
permits; provided, however, that to the extent possible and
provided such priority shall not negatively impact any immediate
and legitimate health and safety needs of City for new pUblic
facilities, City shall grant to Westland a priority in the pro-
cessing and issuance of building permits requested by Westland to
enable Westland to receive said permits as soon as the City is
legally able to issue said permits. said suspension shall not
constitute a breach of this Agreement and shall not relieve the
parties from their obligations under the remaining provisions of
this Agreement. In the event the obligation of City to issue said
permits is suspended because of an actual shortage in the avail-
-30-
ability of utility capacity necessary to service the Project or
because of r..trictions on availability of utility capacity or
other allocated resources or entitlements imposed by the United
states Government, the state of California, County of Santa Clara
or other governmental entity (other than City) then City agrees
that in the event city has discretion or authority to ration such
utility capacity or other allocated resource or entitlement,
Westland shall be entitled to receive a fixed annual allocation of
available capacity equal to (i) at least thirty percent (30t) of
the total water and sewer allocations available for new develop-
ment in the City of CUpertino during the calendar year in which
Westland has applied for such building permit, and (ii) as to any
other allocated resources, City shall use its best efforts to
allocate and secure sufficient allocations of resources to allow
development of the Project to go forward and the parties hereto
acknowledge it is the intent of City to assist Westland as much as
possible in getting the Project completed as expeditiously as
possible. The precise plan for implementation of the fixed
allocation of total available capacity for the benefit of Westland
shall be determined if and when an actual shortage or restriction
of available utility capacity actually occurs.
2.8.6 The City and Westland recognize that the
success of the contemplated expansion of the Project is substan-
tially dependent upon the timing of the construction of the
improvements coinciding with the market demand for the additional
space, and that the market demand is beyond the reasonable control
of either City or Westland. The inability to make a timely
response to market demand may result in the permanent loss of the
-31-
economic opportunity otherwise available to City and Westland.
Further, the City will receive a substantial economic benefit from
the success of the expansion. Therefore, City agrees that this
Agreement shall preclude application to the Project of any future
building moratorium or similar ordinance, whether enacted pursuant
to California Government Code Section 65858, or otherwise.
2.8.7 City shall cooperate to the fullest extent
with Westland in establishing assessment districts, issuing bonds,
and providing such other pUblic financing mechanisms as may be
appropriate for the Project.
2.9 Construction Phasina for New Parkina. Due to the
fact that construction of the Project by Westland will be deter-
mined by market demand and conditions, the decision to expand the
Shopping Center as authorized herein and the timing of construc-
tion of the Project, shall be within Westland's sole discretion.
However to ensure that adequate parking will be available,
Westland shall provide additional parking to accommodate the
development of the Project. New parking for the Project shall be
provided at a ratio of one (1) parking space for every 248 square
feet of gross leasable floor area of retail space ("Parking
Ratio"). The parties acknowledge that it is Westland's goal that
construction of the additional parking facilities required to
maintain the Parking Ratio shall be phased to coincide with the
construction of the Project so that upon completion of new con-
struction on the Rose Bowl or upon completion of new construction
elsewhere in the Shopping Center, Westland shall provide or
construct additional parking spaces in reasonable proximity to the
new construction, in order to maintain the total number parking
-32-
spaces in compliance with the Parking Ratio. Notwithstanding the
foregoing, City and Westland acknowledge that development of the
Project may occur incrementally, with development of smaller
portions occurring first, and that construction of new parking
structures to accommodate parking for such development may not be
feasible or economical. During construction of the Project,
Westland shall be deemed to continue to be in compliance with the
Parking Ratio as long as the total number of parking spaces
provided by Westland for the Shopping Center are not more than 200
parking spaces below the total number of spaces required under the
Parking Ratio (the "Parking Threshold"). If available parking
falls below the Parking Threshold, Westland shall commence con-
struction of new parking facilities to provide the required number
of additional parking spaces. Westland shall also proceed in good
faith to obtain cooperative shared offsite parking to offset short
term parking deficit conditions which may occur during the
"Christmas" shopping season, which shall mean the period from
Thanksgiving through December 27. Upon completion of the entire
Project, new parking facilities will be provided to maintain
parking for the Shopping Center in compliance with the Parking
Ratio. For purposes of this Agreement new parking spaces shall be
deemed to be in "reasonable proximity" to newly constructed retail
space if such new parking is located within reasonable proximity
to a mall entrance to the Shopping Center.
2.10 DeveloDment of ·Non-Retail Uses". City and
Westland agree ~hat Westland may build all or a portion of the
Project for "Non-Retail Uses", subject to the provisions of
paragraphs 2.10.1 and 2.10.2 hereinbelow. For purposes of this
-33-
Aqreement, the terms "Non-Retail Use" or "Non-Retail Uses" shall
mean any use which is authorized under the General Plan and zoninq
for the Shoppinq Center or the Rose Bowl as set forth in the
Vested Elements and which is not included in the list of "Retail
Uses" set forth on Exhibit "E" attached hereto and incorporated
herein. The term "Existinq Non-Retail Uses" shall mean any Non-
Retail Uses which are located in the Shoppinq Center as of the
Effective Date of this Aqreement. The terms "Retail Use" or
"Retail Uses" shall mean one or more of the uses which are listed
on Exhibit "E".
2.10.1 In the event Westland elects to develop the
Rose Bowl or other areas of the Shoppinq Center for Non-Retail
Use, then such new development shall be subject to a separate use
permit application by Westland. City aqrees that as a condition
of approval of such use permit application City may not require,
except as expressly set forth herein, any additional payments
(other than standard use permit application fees), exactions or
impact fees, from Westland and that city may not require a traffic
study as a condition of such use permit until the new space built
for Non-Retail Uses exceeds 65,100 square feet. Notwithstandinq
the foreqoinq, City may impose new impact fees or exactions as
specificmitiqation measures which are conditions of approval of
such use permit application provided that such impact fee or
exaction shall only be imposed to mitiqate a specific identifiable
impact arisinq directly as a result of the development of space
for Non-Retail Us~., as opposed to space for Retail Uses, and
provided further that Westland is unable or has elected not to
exercise its riqht to cure or remedy such specific impact throuqh
-34-
independent mitigation measures to be implemented by Westland,
with the prior approval of city (which approval shall not be
unreasonably withheld or delayed).
city shall provide assurances to Westland that the impact
fee, or exaction paid by Westland will only be used to mitigate
the specific impact for which the fee or exaction was imposed. If
city fails to use such impact fee or exaction payments as required
by the current provisions of Government Code 56600 et seq., the
fee or exaction will be refunded to Westland, with interest, as
provided in the current provisions of Government Code 56601. The
restrictions on City's use of such impact fee or exaction payments
set forth herein shall continue in effect notwithstanding any
future changes or repeal of Government Code 56600 et seq. Except
as allowed above, City may not impose any additional impact fees,
exactions or charges as a condition of such use permit approval.
City and Westland agree that for each one (1) net rentable
square foot of new space constructed for Non-Retail Use above the
New Non-Retail Use Threshold, the total build out of net rentable
space to 1,645,700 approved hereunder shall be reduced by one (1)
square foot. An example of the application of this formula is as
follows: If 20,000 square feet of net rentable square footage
above the New Non-Retail Use Threshold is built for Non-Retail
Use, the total build out of net rentable square footage for the
Shopping Center approved by City shall be reduced by 20,000 square
feet to a total of 1,625,700 square feet.
The parties hereto acknowledge that shopping centers
naturally consist of a small amount of Non-Retail Uses and there-
fore, the in-lieu fee (described below) shall apply only to net
-35-
rentable square footage of new space constructed which is used for
Non-Retail Use to the extent that the total of such new square
footage occupied by Non-Retail Uses exceeds the lesser of: seven
percent (7') of the total of all net rentable square feet allowed
to be constructed pursuant to this Agreement or, seven percent
(7') of the total of all net rentable square feet actually built
pursuant to this Agreement at the time the new Non-Retail Use
takes occupancy ("New Non-Retail Use Threshold").
For each square foot of new net rentable space built for
Non-Retail Use in excess of the New Non-Retail Use Threshold
during the term of this Agreement, Westland shall pay City an
annual "in-lieu fee". The in-lieu fee will be calculated by
totaling the sales tax revenue received by City from taxable sales
occurring in the Shopping Center in the year prior to commencement
of construction of the space for Non-Retail Use (the "base tax
year"). The total amount of the base tax year sales taxes revenue
to City generated by the Shopping Center shall then be divided by
the total number of net rentable square feet in the Shopping
Center during the base tax year, to determine the sales tax per
square foot generated by the Shopping Center for the base tax
year. The in-lieu fee shall be equal to the sales tax revenue to
city per square foot of net rentable space generated by the
Shopping Center in the base tax year.
The in-lieu fee shall only apply to new space built for Non-
Retail Use when such space is occupied by a tenant. If any new
space built by Westland for Non-Retail Use is later converted by
Westland to a Retail Use or is vacated by the tenant, the in-lieu
fee as to such space shall be terminated from the date such space
-36-
is converted or vacated. The amount of the in-lieu fee shall be
calculated annually, as described above, based on the sales tax
revenue to City per net rentable square foot, generated by the
Shopping Center during the prior calendar year. The amount of the
in-lieu fee for any given year shall be determined by City within
a reasonable time from when the information necessary to calculate
the sales tax revenue to city per net rentable square foot gener-
ated by the Shopping Center becomes available. All such informa-
tion necessary to calculate said in-lieu fee shall be delivered to
Westland as soon as it becomes available to the City. The in-lieu
fee for such space shall be payable annually for as long as such
space is occupied by Non-Retail Uses, which may continue beyond
the term of this Agreement.
If new rentable space is built for Retail Uses, Westland may
thereafter convert such space to Non-Retail Uses and such space
shall be subject to the in-lieu fee, as provided in this paragraph
2.10.1, provided, however, the in-lieu fee shall only apply to new
space converted from Retail Uses to Non-Retail Uses to the extent
the total amount of net rentable square feet of such new space
converted from Retail Uses to Non-Retail Uses when added to
existing Non-Retail Uses in the new space exceeds the New Non-
Retail Use Thre.hold.
2.10.2 Conversion of Existina Snace to Non-Retail
~. Westland shall have the right to convert to Non-Retail Uses
all or a portion of the currently existing net rentable square
feet occupied by Retail Uses in the Property (the "Existing Retail
Space"). Westland's right to convert such Existing Retail Space
shall not be subject to separate use permit application, but shall
-37-
be conditioned upon Westland payinq to the City the annual in-lieu
fee described in paraqraph 2.10.1 above, for each square foot of
Existinq Retail Space converted to Non-Retail Uses. Provided,
however, that such in-lieu fee shall not apply to any Existinq
Retail Space converted to Non-Retail Uses until such time as the
total amount of net rentable space in the Shoppinq Center
(excludinq any new net rentable space built as provided herein)
occupied by Non-Retail Uses exceeds the amount of net rentable
space in the Shoppinq Center currently occupied by Existinq Non-
Retail Uses as of the Effective Date plus 65,100 square feet (the
"Existinq Non-Retail Threshold"). Once the EXistinq Non-Retail
Threshold is reached, the in-lieu fee shall thereafter apply to
Existinq Retail Space converted to Non-Retail Use when such space
is occupied by a tenant. If any Existinq Retail Space converted
to Non-Retail Uses is later converted back to Retail Uses or is
vacated by the Non-Retail Use tenant, the in-lieu fee as to such
space shall terminate. If payment of the in-lieu fees described
in paraqraph 2.10.1 and this paragraph 2.10.2 causes economic
hardship to Westland, then Westland may apply to the City Council
for a waiver of the in-lieu fee and the City Council shall not
unreasonably withhold or delay its approval to such request. Upon
approval fro. the City Council the in-lieu fee shall be waived for
as lonq aa such econoaic hardship continues. The total amount of
the annual in-lieu fee described in paragraphs 2.10.1 and 2.10.2
for any calendar year shall be due on or before the 1st of March,
followinq the end of such calendar year. The total amount of the
annual in-lieu fee for such calendar year shall be calculated by
multiplyinq the annual in-lieu fee per square foot (calculated as
-38-
set forth in paragraph 2.10.1) times the total number of net
rentable square feet subject to the in-lieu fee durinq such
calendar year. The amount of the in-lieu fee described in para-
graphs 2.10.1 and 2.10.2, for space which is only occupied by a
Non-Retail Use tenant for a portion of such calendar year shall be
prorated based on amount of time the space was actually occupied
by such Non-Retail Use tenant. The in-lieu fee described in
paraqraphs 2.10.1 and 2.10.2 shall not apply and shall not be due
for any space built for or converted to Non-Retail Use after the
term of this Aqreement. Notwithstandinq anythinq to the contrary
set forth herein, in no event shall the space occupied currently
or in the future by the Sears store, the Penney's store, the
Emporium store, the ice rink facility or the child care facility,
or any uses ancillary thereto or any successors thereof, be
subject to the in-lieu fee described in paragraph 2.10.1 or
2.10.2.
2.10.3 Modification of the In-Lieu Fee. In the
event Westland converts Existinq Retail Space to Non-Retail Use
such that the amount of Existinq Retail Space converted to and
occupied by Non-Retail Uses exceeds the amount specified below
(the "Adjustment Threshold"), then the formula for determininq the
annual in-lieu fe. per square foot shall be subject to reevalua-
tion by Westland and city. Upon conversion of Existinq Retail
Space over and above the Adjustment Threshold, either City or
Westland may call for a meetinq to review data reqardinq the
effect of the conversion of Existinq Retail Space to Non-Retail
Uses on Westland, City and the in-lieu fee paid pursuant to this
paragraph 10. Westland and City shall thereafter attempt to
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determine a mutually aqreeable adjustment or modification to the
in-lieu tee. Durinq the period of time between the date the
Adjustment Threshold is passed and the date a final resolution of
a moditication to the in-lieu fee is reached, the in-lieu fee
payable by Westland shall be equal to the averaqe of the annual
in-lieu fee per square feet paid durinq the prior five (5)
calendar years. If this period of review by Westland and City
exceeds one (1) year, then City may elect to continue the amount
of the in-lieu fee per square feet paid durinq the prior year or
elect to have the in-lieu fee per square foot payable after such
first year be equal to the averaqe of the in-lieu fee per square
feet paid durinq the most recent prior five (5) calendar years
(includinq the most recent calendar year). It City and Westland
are unable to reach a mutually agreeable position reqardinq a
modification of the in-lieu fee per square foot within 12 months
from the date the Adjustment Threshold is reached, then either
city or Westland may submit written notice to the other party
requestinq that the issue be submitted to the City Council, as
provided in paraqraph 14 herein.
2.10.4 The Adjustment Threshold shall be reached
when the total amount ot Existinq Retail Space converted to space
occupied by Non-Retail Use tenants exceeds twenty percent (20%) of
the total aaount of the "Conversion Base Amount." The term
"Conversion Base Amount· shall mean the total amount of net
rentable square feet available in the Shoppinq Center as of the
Effective Date, less the total net rentable square feet occupied
by Sears, penneys and the Emporium space and the net rentable
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square feet occupied by the ice rink facility and its ancillary
users.
2.11 Conditions with Reqard to Housinq Mitiqation
Measures. In order to completely and fully mitigate the effect of
the Project on the supply of affordable housing in the City,
Westland shall be required to implement one (1) of the following
housing mitigation measures (collectively the "housing mitigation
options") :
2.11.1 Subject to paragraph 2.11.6, Westland may
elect to build or cause to be built at least fifty (50) units of
"affordable housing" located within the Shopping Center property.
In the event Westland elects to implement this housing mitigation
option, City shall cooperate with Westland in authorizing and
approving any zoning approvals, subdivision of the Shopping
Center, use permit applications or other entitlements or
approvals necessary to build such housing units on the Shopping
Center property. For purposes of this paragraph 2.11, the term
"affordable housing" shall mean any type of housing that would
qualify to be included in the City's supply of low income housing
units, including without limit, single resident occupancy units
("SRO's") apartments or attached housing. Such housing shall
reserve occupancy by low income persons according to the terms of
a supplemental agreement approved by the City Council and by the
City Attorney prior to recordation. Said supplemental agreement
shall restrict occupancy of said units for a minimum period of 30
years. To eliminate displacement of residents, at the end of 30
years, upon prior approval by the City, existing residents in the
affordable units will be able to remain there at affordable rates
October 3, 1991 3:30 p.m.
-41-
until they choose to leave or are evicted for just cause. Afford-
able rates charged shall not exceed 25 percent of gross income of
eligible low income persons and eligibility of potential tenants
will be based on incomes not exceeding HUD low income limits for
the San Jose Primary Metropolitan Statistical Area. Any residen-
tial units built by Westland on the Shopping Center property will
be in addition to, and will not be included as part of, the
535,000 square feet of additional net rentable space authorized
under the Project Approvals.
2.11.2 Subject to paragraph 2.11.6, Westland may
elect to build or cause to be built at least fifty (50) units of
"affordable housing", to be located somewhere in the City, other
than the Shopping Center Property. In the event Westland elects
to implement this housing mitigation option, City shall cooperate
with Westland in authorizing and approving any zoning approvals,
subdivisions, use permit applications or other entitlements or
approvals necessary to build such housing units. The housing
units described in this paragraph 2.11.2 and paragraph 2.11.1
above may be built, owned and/or managed by Westland in conjunc-
tion with City, other public or private non-profit housing groups,
or other private developers. If Westland does not directly build
such units, the determination of whether Westland "caused" such
units to be built will be made by the Director of Community
Development, in the same manner as set forth in paragraph 1.3.1
hereinabove for approval of proposed amendments.
2.11.3 Westland may elect to pay a one time
housing mitigation fee of up to Five Hundred Thousand dollars
($500,000) (the "Housing Fee"). The Housing Fee shall be subject
October 3, 1991 3:30 p.m.
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I
I
I
to adjustment, as described in subparagraph 2.ll.3(a) below, and
shall be paid pro-rata, in installments, as the Project is built.
The amount of each installment shall be calculated at the time
Westland receives a building permit for construction of a portion
of the Project. The amount of such installment shall be equal to
the sum of $500,000 times a fraction, the numerator of which is
the number of rentable square feet of space authorized under the
building permit received by Westland and the denominator of which
is 535,000. grovided. however. that if. at the time such Housina
Fee is due. Westland has received a buildina germit to build a
3.500 seat cinema comDlex in the "Wests ide site" (as defined in
section 2.6 hereinabove). then the denominator of the fraction
shall be 435.000. If Westland has received a buildina germit to
build a 3.500 seat cinema comDlex in one of the "Basts ide Sites"
(as defined in section 2.6 hereinabove). then the denominator of
the fraction shall be 489.300. Such installment shall be due and
payable by Westland when the Certificate of Occupancy for such
space is issued. If requested by City, Westland shall post a
bond or other reasonably similar security for the payment of such
installment at the time Westland receives the building permit on
which such installment is based (the "Building Permit). The
amount of each installment of the Housing Fee to be paid by
Westland shall be adjusted as follows:
(a) The amount of each Housing Fee install-
ment payment determined as set forth hereinabove shall be multi-
plied by a fråction, the numerator of which is the "CPI" (as
defined in paragraph 10) published nearest and preceding the date
on which the Building Permit is issued (the "Adjustment Date") and
,..
October 3, 1991 3:30 p.m.
-43-
..
the denominator of which is the CPI published nearest and
following the Effective Date of this Agreement.
2.11.4 Westland may elect to participate in and
comply with any housing mitigation program enacted by the City and
in effect at the time a building permit for a portion of the
Project is received by Westland. If City has not enacted a
housing mitigation program within two (2) years from the Effective
Date of this Agreement, then City will be deemed to have no
housing mitigation program for purposes of this Agreement and
Westland shall have no obligation to implement any housing mitiga-
tion options or pay any housing mitigation fee for any building
permits received after such two (2) year period. If during such
two (2) year period Westland receives a building permit and City
has not enacted a housing mitigation program, Westland shall be
required to implement one of the other housing mitigation options
as to the pro-rata portion of the Project approved under such
building permit. If a housing mitigation program has been enacted
by City within such two (2) year period, Westland may thereafter
elect to implement this option. If a housing mitigation program
is not enacted within such two (2) year period, Westland shall not
receive a refund of any Housing Fees previously paid.
2.11.5 Any alternative housing mitigation measures
which are mutually acceptable to Westland and the city. Approval
and implementation of such alternative measures shall not be
considered an amendment to this Agreement and shall not require a
public hearing to approve such alternative measures.
2.11.6 Administration of Housina Mitiaation
Options. The fifty (50) housing units specified in paragraphs
October 3, 1991 3:30 p.m.
-44-
2.11.1 and 2.11.2 above and the sum of $500,000 (as adjusted)
specified in paragraph 2.11.3 above shall be the maximum number of
units or the maximum Housing Fee, as the case may be, required
hereunder and is based on a complete build out by Westland of all
535,000 square feet of Feft~aBle spaee tuture develooment approved
ReFe~ftàeF under the Vested Elements and this Aareement. In the
event westland builds out less than all of such 535,000 square
feet during the term of this Agreement, then Westland's obligation
to implement one of the housing mitigation options shall be
reduced by the same ratio that the number of rentable square feet
actually completed by Westland during the term of this Agreement
bears to the total of 535,000 square feet of Feft~aBle s~aee
aooroved tuture develooment authorized hereunder. orovided
however. the total ot 535.000 sauare teet ot aODroved future
develooment used tor ourDoses ot calculatina t~e ratio shall be
reduced to Ii) 435.000 sauare teet it Westland builds a 3.500 seat
cinema comolex in the "Wests ide site" loursuant to the orovisions
ot section 2.6.2 hereinabove). or Iii) reduced to 489.300 sauare
teet it Westland builds a 3.500 seat cinema comolex in one ot the
"Bast. ide sites") (oursuan't to the arovl.ions of section 2.6.3
hereinabove). Westland may elect to implement anyone of the
housing mitigation options as to each building permit received by
Westland and implementation of such option shall fully satisfy
Westland's housing mitigation obligation as to the space autho-
rized by such building permit. Westland shall notify City as to
which housing mitigation option will be implemented for each
building permit at the time Westland applies for such building
permit. In the event Westland elects to implement the housing
October 3, 1991 3:30 p.m.
-45-
,
mitigation options set forth in paragraphs 2.11.1 or 2.11.2, with
regard to a specific building permit, Westland shall be obligated
to complete the required pro rata number of housing units by the
time Westland receives a certificate of Occupancy for the rentable
space built pursuant to such building permit.
The parties hereto acknowledqe that in the event the total of
535.00 square feet of future development authorized hereunder is
reduced pursuant to the provisions of section 2.6. Westland's
obliqation to implement one of the housinq mitiqation options
based on a total build out of 535.000 square feet of rentable
space will not be correspondinqlY reduced and Westland will be
required to implement housinq mitiqation measures for UP to
100.000 square feet of space that Westfield did not develop.
city aCknowledqes that an issue exists as to whether Westland
should receive a Housinq Mitiqation exemption which could be
applied to future development of 100.000 square feet in excess of
that currentlY allowed herein. Such an exemption ~culd allow said
100.000 square feet to be built without the developer beinq
required to pay additional fees or provide additional affordable
housinq to satisfY any affordable housinq requirements. Due to
time constraints. the issue has been discussed but not resolved in
this Aqreement. The parties hereto aqree that Westland reserves
the riqht to applY to the city in the future. without preiudice.
for a Housinq Mitiqation exemption. in consideration of the
additional housinq mitiqation requirements currentlY set forth in
this Aqreement.
October 3, 1991 3:30 p.m.
-46-
provision of this Agreement for a period of thirty (30) days after
written notice thereof from the party alleging a default shall
constitute a default under this Agreement, subject to extensions
of time by mutual consent in writing. said notice shall specify
the nature of the alleged default and the manner in which said
default may be satisfactorily cured. If the nature of the alleged
default is such that it cannot reasonably be cured within such 30-
day period, the commencement of the cure within such time period
and the diligent prosecution to completion of the cure shall be
deemed a cure within such period.
Subject to the foregoing, after notice and expiration of the
30-day period without cure, the other party to this Agreement, at
its option, may institute legal proceedings pursuant to this
Agreement and/or give notice of intent to terminate the Agreement
pursuant to Government Code Section 65868. Following notice of
intent to terminate, the matter shall be scheduled for considera-
tion and review by the City within thirty (30) calendar days in
the manner set forth in Government Code Sections 65865, 65867 and
65868.
Following consideration of the evidence presented in said
review before the city Council, the party alleging the default by
the other party may give written notice of termination of this
Agreement to the other party.
Evidence of default may also arise in the course of regularly
scheduled annual review of this Agreement as described in Section
3.2 below.
3.2 Annual Review. Each year beginning in 1993, City
shall review the extent of good faith compliance by Westland with
-47-
the terms of this Agreement. Such annual review shall be
conducted in accordance with the City Development Agreement
Ordinance. The timing of the construction of the improvements
contemplated by this Agreement shall remain in the sole and
absolute discretion of Westland based upon its own determination
of the advisability of its commencing construction based upon its
analysis of existing and projected market conditions and the
advisability of the allocation of its time and capital to the
Property. city recognizes that Westland has greater expertise in
the area of jUdging market conditions and is willing to defer to
Westland's jUdgement in this matter. Nothing in this Agreement
shall require Westland to commence construction of any of the
improvements during the term of this Agreement, and Westland shall
not be deemed to not be in good faith compliance with this agree-
ment for not planning or commencing the construction of the
improvements contemplated by this Agreement.
3.3 Default bv Citv. In the event City does not
accept, review, approve or issue necessary development permits,
entitlement or other land use or building approvals for use in a
timely fashion as provided in this Agreement, or as otherwise
agreed to by the parties, or City otherwise defaults under the
terms of this Agreement, Westland shall have all rights and
remedies provided herein or under applicable law.
3.4 Enforced Delav: Extension of Time of Performance.
In addition to specific provisions of this Agreement, performance
by either party hereunder shall not be deemed to be in default
where delays or defaults are due to war, insurrection, strikes,
walk-outs, riots, floods, earthquakes, fires, casualties, acts of
-48-
God, governmental restrictions imposed or mandated by governmental
entities other than City, enactment of conflicting state or
federal laws or regulations, judicial decisions or similar basis
for excused performance which is not within the reasonable control
of the party to be excused. If written notice of such delay is
given to either party within thirty (30) days of the commencement
of such delay, an extension of time for such cause will be granted
in writing for the period of the enforced delay, or longer as may
be mutually agreed upon.
3.5 Leaal Action. Either party may, in addition to any
other right or remedies, institute legal action to cure, correct
or remedy any default, enforce any covenant or agreement herein,
enjoin any threatened or attempted violation or enforce by
specific performance the obligations and rights of the parties
hereto.
3.6 ADDlicable Law. This Agreement shall be construed
and enforced in accordance with the laws of the state of
California.
4. Hold Harmless Aareement. Westland hereby agrees to, and
shall defend, save and hold City and its elected an appointed
councils, comaissions, officers, agents and employees harmless
from, any and all claims, costs and liability for any damages,
personal injury or death, which are caused by, directly or
indirectly, Westland's or Westland's contractors', subcontrac-
tors', agents' or employees' operations under this Agreement,
whether such operations be by Westland or by any of Westland's
contractor, subcontractors, by anyone or more persons directly or
indirectly employed by, or acting as agent for Westland.
-49-
5. No Joint Venture or PartnershiD. city and Westland
hereby renounce the existence of any form of joint venture or
partnership between them, and agree that nothing contained herein
or in any document executed in connection with this Agreement
shall be construed as making City and Westland joint venturers or
partners.
6. CooDeration-ImDlementation.
6.1 processina. City agrees to cooperate with Westland
in implementing all of the conditions of the Existing Approvals
and the Project approvals. In addition, City shall cooperate with
Westland in the processing and checking of all maps, plans,
building plans and specifications and other plans relating to the
development of the Shopping center, filed by Westland. In this
regard, Westland will, in a timely manner, provide City with all
documents, applications, plans and other information necessary for
City to carry out its obligations hereunder and cause Westland's
planners, engineers and all other consultants to submit in a
timely manner all required materials and documents therefor.
6.2 Other Governmental Permits. In addition, Westland
shall apply in a timely manner for such other permits and
approvals as may be required from other governmental or quasi-
governmental agencies having jurisdiction over the Project as may
be required for the development of, or provision of services to,
the Project. City shall cooperate with Westland in its endeavors
to obtain such permits and approvals and shall, from time to time
at the request of westland, attempt with due diligence and in good
faith to enter into binding agreements with any such entity in
order to assure the availability of such permits and approvals or
-50-
services, provided such agreements are reasonable and not detri-
mental to city. To the extent allowed by law, Westland shall be a
party to any such agreement, or a third party beneficiary thereof.
Westland shall reimburse City for all costs and expenses incurred
in connection with seeking and entering into any such agreement,
provided that Westland has requested same. Westland shall defend
city in any challenge by any person to any such agreement, and
shall reimburse city for any costs and expenses incurred by city
in enforcing any such agreement.
7. CooDeration in the Event of Leaal Challenae. In the
event of any legal action instituted by a third party or other
governmental entity or official challenging the validity of any
provision of this Agreement, the parties hereby agree to cooperate
and to both use their best efforts in defending said action. Each
party shall bear its own costs with respect to such challenge,
unless the parties otherwise agree in writing.
8. Mortaaae Protection: certain Riahts of CUre.
8.1 Mortaaae Protection. This Agreement shall be
superior and senior to any lien placed upon the Shopping Center,
or any portion, after the date of recording this Development
Agreement, including the lien of any deed of trust or mortgage
("New Mortgage"). This Agreement shall be subject to and subordi-
nate to any lien placed upon the Shopping Center or any portion
thereof and recorded prior to the recording of this Development
Agreement, including the lien of any deed of trust or mortgage
("Existing Mortgage"). This Agreement shall be binding upon and
effective against any person or entity, including any deed of
trust beneficiary or mortgagee ("MortgageeA) who acquires title to
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the Property, or any portion thereof, by foreclosure, trustee's
sale, deed in lieu of foreclosure, or otherwise pursuant to the
lien of a New Mortgage. However, no breach of this Agreement
shall defeat, render invalid or impair the lien of any New
Mortgage made in good faith and for value.
8.2 Mortaaaee Not Obliaated. No Mortgagee shall have
any obligation or duty under this Agreement to construct or
complete the construction of improvements, or to guarantee such
construction or completion. A Mortgagee that acquires title
through foreclosure, trustee's sale, deed in lieu of foreclosure,
or otherwise pursuant to the lien of a New Mortgage, shall have no
personal liability under this Agreement, and recourse, if any,
under this Agreement shall be limited to the Mortgagee's equity in
the Project.
8.3 Notice of Default to Mortaaaee. If city receives
notice from a Mortgagee requesting a copy of any notice of default
given Westland hereunder and specifying the address for service
thereof, then City shall deliver to such Mortgagee, concurrently
with service to Westland, any notice given to Westland with
respect to any claim by city that Westland has committed an event
of default. If City makes a determination of noncompliance with
this Agreement, City shall likewise serve notice of intent to
terminate on such Mortgagee concurrently with service thereof on
Westland. Each Mortgagee shall have the right during the thirty
(30) day period following service of the notice of default upon
the Mortgagee, and a thirty (30) day period following service of
the notice of intent to terminate upon the Mortgagee to cure or
-52-
remedy, or to commence to cure or remedy, the event of default
claimed or the areas of noncompliance set forth in city's notice.
9. General.
9.1 city and Westland agree that unless this Agreement
is amended or terminated pursuant to the provisions of this Agree-
ment, this Agreement shall be enforceable by any party hereto
notwithstanding any change hereafter in any applicable General
Plan, Specific Plan, zoning ordinance, controlled growth ordinance
or any other land use ordinances or building ordinances, resolu-
tions or other regulations adopted by City which changes, alters
or amends the rules, regulations and policies applicable to the
development of the Shopping Center at the time of the approval of
this Agreement. This Agreement shall not prevent City from
applying new rules, regulations and pOlicies which do not conflict
with, or prevent the implementation of those rules, regulations
and policies, and the benefits thereof, applicable to the Project
as set forth in the Vested Elements or this Agreement.
9.2 If any term, provision, covenant or condition of
this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions of this
Agreement shall continue in full force and effect.
9.3 Each party shall execute and deliver to the other
all such other further instruments and documents as may be reason-
ably necessary to carry out this Agreement in order to provide and
secure to the other party the full and complete enjoyment of its
rights and privileges hereunder.
10. ~: The term "CPIA shall mean the Consumer Price
Index, All Urban Consumers All Items, San Francisco-Oakland-San
-53-
Jose Metropolitan Area (1982-84=100), now beinq published by the
United stat.. Department of Labor, Bureau of Labor Statistics. If
the CPI is chanqed so that the base year is altered from that used
as of the Effective Date, then the CPI shall be converted in
accordance with the conversion factor published by the United
States Department of Labor, Bureau of Labor Statistics, to obtain
the same result that would have been obtained had the base year
not been chanqed. If no conversion factor is available, or if the
CPI is otherwise chanqed, revised or discontinued for any reason,
there shall be substituted in lieu thereof the term "CPI" shall
thereafter refer to the most nearly comparable official price
index of the United states Government in order to obtain substan-
tially the same result for any adjustment required by this Aqree-
ment as would have been obtained had the oriqinal CPI not been
discontinued, revised or chanqed.
11. Assianment. This Aqreement shall be bindinq upon and
inure to the benefit of the heirs, successors, and assiqns of the
parties. This Aqreement shall only be assignable by Westland with
the consent of the City, which consent shall not be unreasonably
delayed or withheld. Any such assignment shall contain an assump-
tion by the proposed assignee of all the current and future
obliqation. of We.tland hereunder. Upon such assumption, Westland
shall have no further obliqations or liability under this Aqree-
ment. If the assignee has sufficient economic resources to
reasonably assure the continued operation of the ice rink as
required by Paraqr~ph 2.3 of this Aqreement, City shall consent to
the assiqnment. An assignment by Westland to an affiliate of
Westland, or to an affiliate of the parent of Westland, shall not
-54-
require the consent of the City, provided that Westland shall not
be released fro. any obliqation concerninq the continued operation
of the ice rink. For purposes of this provision, an affiliate
shall be an entity in which Westland, or its parent, retains at
least a 25' leqal or equitable interest.
12. BankruDtcv or ReceivershiD. In the event Westland seeks
protection from its creditors by the filinq of any petition in the
united states Bankruptcy Court or is subject to involuntary
proceedinqs by its creditors or is made subject to any receiver-
ship proceedinqs in state court, the City, may, terminate this
Aqreement upon ten (10) days written notice if (1) the Trustee
does not affirm this Aqreement within one hundred twenty (120)
days of the commencement of the proceedinq, and (2) Westland fails
to continue to operate the ice rink in the manner required by this
Aqreement. For purposes of this provision, the term "Westland"
shall refer to the then record owner of the Project, and not to
any former owner.
13. Notices. AI1y notice or communication required hereunder
between City or Westland must be in writinq, and may be qiven by
reqistered or certified mail, return receipt requested. The
notice shall be deemed to have been qiven and received on the
first to occur of (i) actual receipt by any of the addresses
desiqnated below as the party to whom notices are to be sent, or
(ii) five (5) days after a reqistered or certified letter contain-
inq such notice, properly addressed, with postaqe prepared, is
deposited in the United states mail. AI1y party hereto may at any
time, by qivinq ten (10) days' written notice to the other party
desiqnate any other address in substitution of the address to
-55-
which such notice or communication shall be given. Such notices
or communications shall be given to the parties at their addresses
set forth below:
If to City:
City of CUpertino
10300 Torre Avenue
CUpertino, CA 95014
Attn: Director of Community Development
If to Westland:
c/o Westfield, Inc.
11111 Santa Monica Boulevard, Suite 1400
Los Angeles, CA 90025-3348
Attn: John Endicott
14. Arbitration. In the event the issue of modification of
the in-lieu fee described in paragraph 2.10.3 herein is to be
submitted to the City Council, such issue shall be determined
pursuant to the provisions of this paragraph. Either party may
request a hearing before the City Council by giving the notice
described in paragraph 2.10.3 hereinabove. The hearing before the
city Council shall take place not less than sixty (60) days nor
more than ninety (90) days from the date either party submits
notice of request for a hearing. At the hearing the City Council
shall receive evidence presented by Westland and/or City, or their
designated agents, attorneys, accountants, contractors or
employees and the general public. Westland may request, as a
matter of right, to have the hearing continued to the next
regularly scheduled City Council meeting and Westland may review
the Videotape of the initial hearing and present additional
relevant evidence at the continued hearing. At the conclusion of
the hearing, the City Council shall render a decision after
evaluating the evidence presented. In evaluating the evidence the
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city council shall consider the intent of the parties hereto that
the in-lieu fee is intended to discourage development of Non-
Retail Use. within the Shopping Center, but also that the in-lieu
fee was not intended to cause economic hardships to Westland and
if economic conditions require Westland to seek Non-Retail Uses
for space in the Shopping center, such Non-Retail Uses are prefer-
able to vacancy or other economic hardships to Westland and City
resulting from lack of viable Retail Uses. At the hearing before
the City Council Westland and City may present any evidence
relevant to the issues to be decided by the City Council. Such
hearing shall be videotaped by City (and by Westland if Westland
elects to videotape the hearing) and each party shall be provided
with a copy of the other party's videotape.
If Westland objects to the decision of the City Council,
Westland shall deliver written notice to city within thirty (30)
days from the date of the City Council's decision, requesting that
the issue of modification of the in-lieu fee be submitted to
arbitration. Such arbitration shall be conducted pursuant to the
provisions of the laws of the state of California then in force,
with the rules of procedure to be those of the American Arbitra-
tion Association or its successor insofar as said rules of proce-
dure do not conflict with the laws of the state of California then
in force. Once notice to arbitrate has been given, Westland and
City shall jointly, within thirty (30) days of such notice, select
one arbitrator, or if they cannot agree on one arbitrator then
each party shall select an arbitrator within forty (40) days of
delivery of said notice and the two (2) chosen arbitrators shall
select a third arbitrator. If the two (2) arbitrators are unable
-57-
to agree on a third arbitrator then the third arbitrator shall be
appointed by the presiding jUdge of the Superior Court of the
State of california, County of Santa Clara. The three (3)
arbitrators so selected shall Convene as soon as practicable and
review the evidence that was presented at the City Council
hearing. Such evidence shall be limited to the videotape, any
documentary evidence presented at the City Council hearing, any
confidential evidence reviewed ~ the City Council and if Westland
was not allowed an opportunity to present relevant evidence at the
hearing, Westland may present such evidence directly to the
arbitrator(s). Except as set forth herein, neither party may
present new evidence or conduct a new presentation of the evidence
presented at the City Council hearing. The arbitrator(s) shall
independently review the evidence without any presumption
regarding any findings of the City Council and by majority vote,
render a decision regarding modification of the in-lieu fee. Such
decision may approve, modify or disapprove the decision of the
City Council and such decision shall be binding upon the parties
hereto. The cost of arbitration shall be borne equally by
Westland and City. In the event either party fails to appoint an
arbitrator within the time required by this paragraph, then upon
application of either party, the arbitrator shall be appointed by
the American Arbitration Association, or if there be no American
Arbitration Association, or if it shall refuse to perform this
function, then at the request of the other party such arbitrator
shall be appointed by the then presiding judge of the Superior
Court of the State of California for the County of Santa Clara.
-58-
15. CounterDarts. This Aqreement is executed in three
duplicate oriqinals, each of which is deemed to be an oriqinal.
This Agreement consists of fifty nine (59) paqes and six (6)
exhibits and two (2) appendices which constitute the entire
understandinq and aqreement of the parties. Said exhibits and
appendices are identified as follows:
Exhibit "A-l" Map of Property and "Rose Bowl"
Exhibit "A-2" Map of Shoppinq Center
Exhibit "B" Project Development Map
Exhibit "C" Easement Agreement
Exhibit AD" Existinq Ordinances
Exhibit "E" List of "Retail Uses"
Appendix I Desiqn Objectives Narrative
Appendix II ASAC Applications
-59-
IN WITNESS WHEREOF, Westland and city have executed this
Agreement a. of the date first hereinabove written.
CITY OF CUPERTINO,
a Municipal Corporation
WESTLAND SHOPPING CENTER L.P., a
California limited partnership
By:
By: WESTLAND PROJECTS, INC., a
California corporation, its
GENERAL PARTNER
Attest:
By:
Its:
R020.GM
10/2/91
WESTLAND PROPERTIES, INC., a
Delaware corporation
By:
Its:
-60-
EXHIBIT E
RETAIL USES
The followinq uses shall be deemed to be "Retail Uses" under
the provisions of this Paraqraph 2.10 of this Agreement:
1. Retail businesses, such as food stores (excludinq
convenience markets), druq stores, apparel shops,
variety stores, and hardware stores.
2. Banks, financial institutions, insurance and real estate
aqencies, travel aqencies, photographic and similar
studies whose primary function is to serve the public
directly.
3. Lodqes and restricted membership clubs as subordinate
uses in buildinqs intended primarily for uses specified
on this Exhibit E.
4. Limited repair services, such as jewelry, domestic
appliances, typewriter and business machine repair
shops.
5. Personal service establishments such as barber shops,
beauty parlors, shoe repair shops, and tailor shops.
6. commercial Entertainment Centers usinq, amonq other
equipment, video qame machines, family entertainment
centers, ice rinks and health clubs/sports connection
facility.
7. Hotels.
8. Full service restaurants with or without a separate bar
facility, fast food restaurants, with or without a
separate bar facility and any entertainment activities
(e.q. dancinq, live music) in association with a full
service or fast food restaurant.
9. cinemas and indoor theaters.
10. Child care centers, day nurseries and playgrounds
accessible to a commercial establishment.
11. Other uses which, in the opinion of the city's Planninq
Commission, are consistent with the character of a
General commercial (CG) Zone, are of the same qeneral
character as the uses listed in the above Sections 1
throuqh 10 and are not objectionable by reason of odor,
dust, smoke, qlare, fumes, radiation, vibration, noise,
traffic, or litter.
paqe 1 of 2
12. AI1y retail or commercial uses which are located now or
in the future in regional shopping centers, the
operation of which generates sales tax revenue or
.i.ilar or equivalent type revenues.
Page 2 of 2
RECORDING REQUB8TBD BY AND
1fJIBN RECORDBD RETURN TO I
Westland Shopping Center L.P.
c/o Ferrari, Alvarez, Olsen & Ottoboni
333 W. Santa Clara Street, suite 700
San Jose, CA 95113
Attn: James J. Eller, Esq.
THIRD AMBRDMBHT AND 8uppr.RInHT TO AGREBMBHT
This Third Amendment and Supplement to Agreement ("Third
Amendment") made and entered into as of
1991 by and between the CITY OF CUPERTINO, a municipal
corporation of the State of California ("CityA) and WESTLAND
SHOPPING CENTER L.P., a California limited partnership
("Westland").
. I T N B 8 8 B T .1
A. City and Vallco Park, Ltd., a California limited
partnership ("Vallco") entered into that certain Agreement dated
October 8, 1974, recorded October 17, 1974 in Book B 135 of the
Official Records of Santa Clara County, California at page 370
(the "Original Agreement");
B. The Original Agreement was amended by that certain
Supplement to Agreement dated August 5, 1975, by and between City
and Vallco and recorded August 20, 1975 in Book B 571 of the
Official Records of Santa Clara County, California at page 724
("Supplement"). The Original Agreement was further amended by
that certain Second Amendment to Agreement dated March 1, 1976,
by and between City and Vallco recorded September 14, 1976 in
Book C280 of the Official Records of Santa Clara County,
California at page 236 (the "Second Amendment"). The Original
Agreement, together with the Supplement and Second Amendment, are
hereinafter referred to as the "Existing Agreement";
C. Westland i. the successor in interest to Vallco. City
and Westland desire to supplement and amend the Existing
Agreement pursuant to the provisions of paragraph 7 of the
Original Agreement, to cause to be granted by City to Westland
certain additional perpetual and exclusive easements for
pedestrian walkways and buildings and for vehicular and
pedestrian tunnels and appurtenances thereto, all as described in
more detail hereinbelow and to amend the Existing Agreement to
provide for the termination of certain rights granted to City
under the Existing Agreement.
D. The supplements, modifications and amendments to the
Existing Agreement are desired to allow expansion and
construction of additional improvements for the Vallco Fashion
Park regional shopping center ("Shopping Center") pursuant to the
terms and conditions of that certain Development Agreement dated
August 15, 1991 by and between the City of Cupertino and Westland
Properties Inc. and Westland Shopping Center L.P. relative to the
development known as Vallco Fashion Park (the "Development
Agreement"). The parties agree and acknowledge that the
supplements, modifications and amendments set forth herein will
benefit the city and Westland.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein set forth, and for other valuable
consideration, it is agreed as follows:
1. City hereby grants to Westland for the benefit of,
and appurtenant to, and running with the land in favor of, the
property owned by Westland which is shown on Exhibit "A" attached
hereto and incorporated herein by reference, the following:
a. The perpetual and exclusive easement to
construct, to maintain in place, and to maintain, repair,
replace, reconstruct and to use buildings, structures and
improvements, including without limit retail shops, restaurants,
and other uses found in regional shopping centers, from time to
time, above a plane fifteen (15) feet above the highest point of
the traveled surface of Vallco Parkway, crossing Vallco Parkway,
a dedicated public street, in the location shown on Exhibit "A-l"
attached hereto and by this reference incorporated herein;
together with perpetual and exclusive easements for the
construction, maintenance in place, and maintenance, repair,
replacement, reconstruction and use of columns, supports,
footings, and foundations for said buildings, structures and
improvements to be located in, below and above the public right-
of-way of Vallco Parkway, except that such columns, supports,
footings and foundations may not be located upon or within the
traveled surface of said dedicated public street.
b. The perpetual and exclusive easement to
construct, to maintain in place, and to maintain, repair,
replace, reconstruct and to use buildings, structures and
improvements, including without limit retail shops, restaurants
and other uses found in regional shopping centers, from time to
time, above a plane fifteen (15) feet above the highest point of
the traveled surface of Wolfe Road, crossing Wolfe Road, a
dedicated public street, in the location shown on Exhibit "A-2"
attached hereto and by this reference incorporated herein;
together with perpetual and exclusive easements for the
construction, maintenance in place, and maintenance, repair,
replacement, reconstruction and use of columns, supports,
footings, and foundations for said buildings, structures and
-2-
improvements to be located in, below and above the public right-
of-way of Wolfe Road, except that such columns, supports,
footings and foundations may not be located upon or within the
traveled surface of said dedicated public street.
c. The perpetual and exclusive easement to
construct, to maintain in place, and to maintain, repair,
replace, reconstruct and use a vehicular and pedestrian tunnel
under Vallco Parkway and appurtenances thereto not in excess of
seventy (70) feet in width, to be constructed within the area
shown on Exhibit "A-3" hereto;
d. The perpetual and exclusive easement to
construct, to maintain in place, and to maintain, repair,
replace, reconstruct and use a vehicular and pedestrian tunnel
under Wolfe Road and appurtenances thereto not in excess of
seventy (70) feet in width, to be constructed within the area
shown on Exhibit "A-4" hereto;
e. city will initiate appropriate proceedings to
vacate or abandon any public street rights in or to the air space
or subterranean space which is subject to the easements herein
granted by City, if requested by Westland to do so.
2. At the request of either party, the parties hereto
shall join in the execution of a recordable instrument
supplementing this Third Amendment so as to describe with
particularity the area with respect to which the easements
granted herein are located to the extent such easements are not
described particularly in the Exhibits hereto.
3. The parties wish to amend and modify the Existing
Agreement to terminate any and all rights granted to City in
paragraph 1 of the Original Agreement relating to th.'real
property described as that portion of the real property shown
shaded on Exhibit B to the Original Agreement. City agrees to
execute a separate document in recordable form ("Quitclaim Deed")
quitclaiming, remising and releasing to Westland all of its
right, title and interest under the Existing Agreement in and to
the real property which is shown shaded on Exhibit B to the
Original Agreement.
4. As additional consideration of the execution of
this Third Amendment, Westland agrees to pay to city the amounts
set forth (at the times set forth) in Section 2.7 of the
Development Agreement. Such sums shall be utilized by City in
the manner set forth in Section 2.7 of the Development Agreement.
The parties hereto acknowledge and agree that the payments
described in paragraph 12 of the Original Agreement shall
terminate in 1994.
-3-
5.
deleted in its
in its place:
Paragraph 5 of the Original Agreement is hereby
entirety and the following paragraph is inserted
"5.
hereunder
and shall
certified
addressed
All notices and other communications given
by either party to the other shall be in writing
be deemed given when mailed, postage prepaid, by
or registered mail, return receipt requested,
as follows:
If To citv:
Ci ty of CUpertino
10300 Torre Avenue
Cupertino, CA 95014
Attn: City Manager
If To Westland: c/o Westfield, Inc.
11111 Santa Monica Blvd., Suite 1700
Los Angeles, CA 90025-3348
Attn: President"
6.
hereto, their
assigns.
This Amendment shall benefit and bind the parties
respective successors, successors-in-interest and
7. Except as hereby supplemented and amended, the
Existing Agreement shall remain in full force and effect and, as
hereby supplemented and amended, is ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment and Supplement to Agreement as of the day and year
first above written.
CITY OF CUPERTINO, a municipal
corporation
By
Mayor, city of CUpertino
ATTEST:
City Clerk
WESTLAND SHOPPING CENTER, L.P.
By:
Westland Projects, Inc., a
California corporation,
General Partner
By
Its
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