CC Ordinance No. 19-2186 Approving a Development Agreement for the Development of a New 5-Story, 185 Room Hotel with Associated Site and Landscaping Improvements Located at 10801 and 10805 North Wolfe Rd ORDINANCE NO. 19-2186
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
APPROVING A DEVELOPMENT AGREEMENT FOR THE DEVELOPMENT OF A
NEW 5-STORY, 185 ROOM HOTEL WITH ASSOCIATED SITE AND
LANDSCAPING IMPROVEMENTS LOCATED AT 10801 AND 10805 NORTH
WOLFE ROAD (APN: 316-45-017 AND 316-05-56)
SECTION I: PROTECT DESCRIPTION
Application No.: DA-2017-01
Applicant: Kimco Realty (Michael Strahs)
Property Owner: Cupertino Village, LP
Location: 10801 and 10805 North Wolfe Road (APN: 316-45-017 and 316-05-56)
SECTION II: FINDINGS FOR DEVELOPMENT AGREEMENT
WHEREAS, the City of Cupertino received an application on December 8, 2017 for a
General Plan Amendment,Development Permit,Development Agreement,Architectural
and Site-Approval,Use Permit, and Tree Removal permits to allow the development of a
new 5-story, 185 room hotel with associated site and landscaping improvements, and j
associated environmental review ("Project"); and,
WHEREAS, Cupertino Village, LP has a legal and equitable interest in certain real
property consisting of approximately 1.72 acres located within the City and generally
borderd by North Wolfe Road to the east,Pruneridge Avenue to the south,APN#316-45-
016 (Arioso Apartments) to the west, and APN #316-05-056 (Cupertino Village Shopping
Center) to the north, as more particularly described in Exhibit A, the Development
Agreement ("Property"); and
WHEREAS, Government Code Sections 65864 through 68569.5 provide the statutory
authority for development agreements between municipalities and parties with a fee or
equitable interest in real property; and
WHEREAS, Cupertino Municipal Code § 19.144.010 et seq., establishes additional
procedures for review and approval of proposed development agreements by the City of
Cupertino; and
WHEREAS, in December 2017, Cupertino Village, LP requested that the City consider l
entering into a Development Agreement for development of the Project; and
WHEREAS, the terms of the Development Agreement include the following community
benefits funded by Cupertino Village, LP:
Ordinance No.19-2186
Page 2
1. Community Amenity Funding, $1,850,000
WHEREAS, the Development Agreement will include additional terms regarding
transportation demand management program, preferential hiring, shuttle service,
meeting rooms, reduced rates, internships, transient occupancy tax, and upscale hotel;
and
WHEREAS, the Development Agreement will be consistent with the City's General Plan
land use map, proposed uses and surrounding uses as amended and the applicable
zoning designation; and
WHEREAS, approval of the Development Agreement will provide Cupertino Village,LP
with assurances that its development of the Property in connection with the Project can
proceed without disruption caused by a change in City planning and development
policies and requirements, which assurance will thereby reduce the actual or perceived
risk of planning,financing and proceeding with construction and use of the development
and promote the achievement of the private and public objectives of the development;
and
WHEREAS, the project is additionally described and analyzed in the May 30, 2019 "The
Cupertino Village Hotel Project" Final Draft Initial Study ("Draft IS/MND"); and
WHEREAS, on December 13, 2018, prior to making any recommendation regarding the
adoption of the Draft IS/MND, the City of Cupertino's Environmental Review Committee
held a duly noticed public hearing to receive public testimony where it reviewed and
considered the information contained in the Draft IS/MND, voted 5-0-0 to recommend
that the City Council to adopt the Draft IS/MND (EA-2017-06) and mitigation measures
with their motion; and
WHEREAS,the necessary notices were given and the comment period for the application
was provided as required by the Procedural Ordinance, Chapter 19.12 of the City of
Cupertino's Municipal Code, and the Planning Commission has held at least one public
hearing in regard to this application; and
WHEREAS, on June 11, 2019, the Planning Commission, after considering the
administrative record and the public hearing, exercised its independent judgment and
recommended adoption of the Final Draft IS/MND (EA-2017-06) for the Project on a 4-0-
1 vote, which incorporated all the identified mitigation measures as conditions of
approval for the Project prior to taking final action on the Project; and
WHEREAS,on June 11, 2019 the Planning Commission recommended on a 4-0-1 vote that
the City Council approve the General Plan Amendment (GPA-2017-05), in substantially
similar form to the Resolution presented(Resolution no.6876), approve the Development
Permit(DP-2018-04) in substantially similar form to the Resolution presented (Resolution
No. 6877), approve the Architectural and Site Approval Permit (ASA-2017-09) in
Ordinance No.19-2186
Page 3
substantially similar form to the Resolution presented (Resolution No. 6879), approve a
Use Permit (U-2018-03) in substantially similar form to the Resolution presented
(Resolution No. 6881), approve the Tree Removal Permit (TR-2017-46) in substantially
similar form to the Resolution presented (Resolution no. 6880) and approve a
Development Agreement (DA-2017-01) in substantially similar form to the Ordinance
presented (Resolution No. 6878); and
WHEREAS, on July 16, 2019, upon due notice, the City Council has held at least one,
public hearing to consider the Development Agreement; and
WHEREAS, the City Council of the City of Cupertino is the decision-making body for
this Ordinance;
WHEREAS, after consideration of evidence contained in the entire administrative record,
on July 16, 2019, the City Council adopted Resolution No. 19-090 adopting the Final
Mitigated Negative Declaration, Mitigation Measures, and adopting a Mitigation
Monitoring and Reporting Program; and
WHEREAS, prior to taking action on this Ordinance, the City Council has exercised its
independent judgment in carefully considering the information in the Final Mitigated
Negative Declaration and finds that the scope of this Ordinance falls within the adopted
Mitigated Negative Declaration, in that the aspects of the Development Agreement
proposed in this Ordinance.that have the potential for resulting in either a direct physical
change in the environment or a reasonably foreseeable indirect physical change in the
environment have been examined in the Final Mitigated Negative Declaration; therefore,
no recirculation of the Final Mitigated Negative Declaration is required; and
WHEREAS, after a duly noticed public hearing on July 16, 2019, after consideration of
evidence contained in the entire administrative record, prior to consideration of the
Development Agreement, the City Council adopted Resolution No. 19-090 adopting the
Draft IS/MND, Resolution No. 19-091 adopting the General Plan Amendment,
Resolution19-092 approving the Development Permit, Resolution no. 19-093 approving
the Architectural and Site Approval Permit, Resolution no. 19-095 approving the Use
Permit and Resolution no. 19-094 approving the Tree Removal Permit;
WHEREAS, the applicant has met the burden of proof required to support said
application; and
WHEREAS, approval of the Development Agreement will provide Cupertino Village, LP
with assurances that its development of the Property in connection with the Project can
proceed without disruption caused by a change in City planning and development
policies and requirements, which assurance will thereby reduce the actual or perceived
risk of planning,financing and proceeding with construction and use of the development
Ordinance No.19-2186
Page 4
and promote the achievement of the private and public objectives of the development;
and
NOW, THEREFORE,BE IT ORDAINED AS FOLLOWS:
Section 1. The recitals set forth above are true and correct, and are hereby
incorporated herein by this reference as if fully set forth in their entirety.
Section 2. The City Council, having considered the staff report to the City
Council for the meeting of July 16, 2019, evidence received at the public hearing duly
noticed and held for the proposed Development Agreement, and all other facts, exhibits,
testimony, information and other evidence submitted in this matter or in the record of
this proceeding, finds as follows:
A. The proposed Development Agreement is consistent with the
objectives, policies, general land uses and programs specified in the General Plan, as
amended.
B. The proposed Development Agreement is compatible with the uses
authorized in, and the regulations prescribed for,the land use district in which the Project
is located.
C. The proposed Development Agreement is in conformity with and
will promote public convenience, general welfare, and good land use practice.
D. The proposed Development Agreement will not be detrimental to
the health, safety, or general welfare.
E. The proposed Development Agreement will not adversely affect the
orderly development of property or the preservation of property values.
F. The proposed Development Agreement will promote and encourage
the development of the Project by providing a greater degree of requisite certainty.
Section 3. The City Council hereby approves the Development Agreement in
the form attached as Exhibit DA-1 subject to such minor technical conforming changes as
may be approved by the City Attorney.
Section 4. This approval is based on the City Council's independent
judegement in the consideration of and reliance on the Final IS/MND and in accordance
with the plans, details and descriptions contained therein, and in the Resolution adopting
the Final IS/MND.
Section 5. The City Council hereby authorizes the City Manager to execute the
Development Agreement on behalf of the City.
Ordinance No.19-2186
Page 5
Section 6. The City Council directs the Director of Community Development
to file a Notice of Determination with the Santa Clara County Recorder in accordance
with CEQA guidelines. ,
Section 7. This Ordinance shall be effective thirty (30) days following its
adoption.
a
INTRODUCED at a Regular Meeting of the Cupertino City Council on 16th day of July,
2019, AND ENACTED at a regular meeting of the Cupertino City Council on the 20th
day of August, 2019, by the following roll call vote:
Vote: Members of the City Council:
AYES: Scharf, Chao, Paul, Sinks, Willey
NOES: None
ABSENT: None
ABSTAIN: None
SIGNED:
Steven Scharf, Mayor Date
City of Cupertino
ATTEST:
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Grace Schmidt, City Clerk Date
APPROVED AS TO FORM:
Heather Minner, City Attorney Date
STATE OF CALIFORNIA )
COUNTY OF SANTA CLARA )
CITY OF CUPERTINO )
I, GRACE SCHMIDT, City Clerk and ex-officio Clerk of the City
Council of the City of Cupertino, California, do hereby certify the attached
to be a true and correct copy of Ordinance No. 19-2186, which was
enacted on August 20, 2019, and that it has been published or posted
pursuant to law (G.C. 40806).
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 4th day of September, 2019.
GRACE SCHMIDT, City Clerk and Ex-officio Clerk
of the City Council of the City of Cupertino, California
EXHIBIT DA-1
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3202
Attention: City Manager
Record for the Benefit of
The City of Cupertino
Pursuant to Government Code
Section 27383
Space Above Reserved for Recorder's Use Only J
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DEVELOPMENT AGREEMENT
FOR THE CUPERTINO VILLAGE BOUTIQUE HOTEL
BY AND BETWEEN
CITY OF CUPERTINO
AND
CUPERTINO VILLAGE LP
a California Limited Partnership
Effective Date:
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TABLE OF CONTENTS
Page
ARTICLE1 DEFINITIONS....................................................................................................... 3
1.1 Definitions.............................................................................................................. 3
ARTICLE 2 EFFECTIVE DATE AND TERM......................................................................... 7
2.1 Effective Date ........................................................................................................ 8
2.2 Tenn of Agreement................................................................................................ 8
2.3 City Representations and Warranties..................................................................... 8
2.4 Developer Representations and Warranties........................................................... 8
ARTICLE 3 DEVELOPMENT OF THE PROPERTY.............................................................. 9
3.1 Vested Rights......................................................................................................... 9
3.2 Life of Approvals................................................................................................... 9
3.3 Permitted Uses.......................................................................................................9
3.4 Applicable City Regulations................................................................................ 10
3.5 Timing of Development....................................................................................... 10
3.6 Compliance with Laws ........................................................................................ 11
3.7 No Conflicting Enactments.................................................................................. 11
3.8 Changes in the Law.............................................................................................. 11
3.9 Initiatives and Referenda..................................................................................... 12
3.10 Regulation by Other Public Agencies.................................................................. 12
3.11 No Reservation of Sanitary Sewer or Potable Water Capacity............................ 12
ARTICLE4 FEES .................................................................................................................... 13
4.1 Impact Fees.......................................................................................................... 13
4.2 Processing Fees.................................................................................................... 13
4.3 Other Agency Fees............................................................................................... 13
4.4 Taxes and Assessments........................................................................................ 13
4.5 Connection Fees................................................................................................... 13
ARTICLE5 PUBLIC BENEFITS............................................................................................ 14
5.1 Public Benefits Obligations................................................................................. 14
5.2 Transient Occupancy Tax Requirement............................................................... 17
5.3 Upscale Hotel....................................................................................................... 17
5.4 Ongoing Obligations............................................................................................ 17
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TABLE OF CONTENTS
(continued)
Page
5.5 City of Cupertino Business License..................................................................... 18
5.6 Sales Tax Point of Sale Designation.................................................................... 18
ARTICLE6 ANNUAL REVIEW............................................................................................ 19
6.1 Annual Review..................................................................................................... 19
ARTICLE 7 COOPERATION AND IMPLEMENTATION...................................................20
7.1 Subsequent Approvals .........................................................................................20
7.2 Scope of Review of Subsequent Approvals.........................................................20
7.3 Processing Applications for Subsequent Approvals............................................21
7.4 Other Agency Subsequent Approvals; Authority of City....................................21
ARTICLE 8 AMENDMENT OF AGREEMENT AND PROJECT APPROVALS................22
8.1 Amendment by Written Consent.........................................................................22
8.2 Project Approval Amendments............................................................................22
8.3 Amendment of this Agreement............................................................................23
8.4 Amendments to Development Agreement Statute............................................... 23
ARTICLE 9 INSURANCE, INDEMNITY AND COOPERATION IN THE EVENT
OF LEGAL CHALLENGE.................................................................................24
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9.1 Insurance Requirements.......................................................................................24 1
9.2 Indemnity and Hold Harmless.............................................................................24
9.3 Defense and Cooperation in the Event of a Litigation Challenge ....................... 24
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ARTICLE 10 ASSIGNMENT, TRANSFER AND NOTICE .......... 25
..........................................
10.1 Assignment
10.2 Release of Transferring Developer...................................................................... 26
10.3 Assignment to Financial Institutions or Mortgagee............................................. 26
10.4 Successive Assignment........................................................................................ 27
ARTICLE 11 MORTGAGEE PROTECTION .......................................................................... 27
11.1 Mortgagee Protection........................................................................................... 27
11.2 Mortgagee Not Obligated.................................................................................... 27
11.3 Notice of Default to Mortgagee...........................................................................28
11.4 No Supersedure....................................................................................................28
11.5 Mortgagee Requested Amendments....................................................................28
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TABLE OF CONTENTS
(continued)
Page
ARTICLE 12 DEFAULT; REMEDIES; TERMINATION ....................................................... 28
12.1 Breach and Default .............................................................................................. 28
12.2 Withholding of Pen-nits........................................................................................ 29
12.3 Termination..........................................................................................................29
12.4 Specific Performance for Violation of a Condition.............................................29
12.5 Legal Actions.......................................................................................................29
12.6 Rights and Remedies Are Cumulative................................................................. 30
12.7 No Damages......................................................................................................... 30
12.8 Resolution of Disputes......................................................................................... 30
12.9 Surviving Provisions............................................................................................. 30
ARTICLE13 GENERAL PROVISIONS .................................................................................. 31
13.1 Condemnation...................................................................................................... 31
13.2 Covenants Binding on Successors and Assigns and Run with Land...................31
13.3 Notice................................................................................................................... 31
13.4 Permitted Delays..................................................................................................32
13.5 Counterparts......................................................................................................... 33
13.6 Waivers................................................................................................................33
13.7 Construction of Agreement.................................................................................. 33
13.8 Headings ..............................................................................................................33
13.9 Severability..........................................................................................................33
13.10 Time is of the Essence......................................................................................... 33
13.11 Extension of Time Limits....................................................................................34
13.12 Other Necessary Acts........................................................................................... 34
13.13 Signatures.............................................................................................................34
13.14 Entire Agreement................................................................................................. 34
13.15 Estoppel Certificate.............................................................................................. 34
13.16 Recordation of Termination.................................................................................35
13.17 City Approvals and Actions................................................................................. 35
13.18 Negation of Partnership.......................................................................................35
13.19 No Third Party Beneficiaries...............................................................................35
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(continued)
Page
13.20 Governing State Law........................................................................................... 35
13.21 Exhibits................................................................................................................ 35
LIST OF EXHIBITS
Exhibit A: Property Legal Description
Exhibit B: Property Boundary and Depiction of the Project
Exhibit C: Description of the Project
Exhibit D: Existing Impact Fees
Exhibit E: TDM Program
Exhibit F: Annual Review Form
Exhibit G: Form of Assignment and Assumption Agreement
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DEVELOPMENT AGREEMENT
This Development Agreement("Agreement"), dated as of ("Effective
Date"), is entered into pursuant to the Development Agreement Law,by and between the CITY
OF CUPERTINO, a California municipal corporation("City") and CUPERTINO VILLAGE LP,
a California limited partnership ("Developer"). Developer and City are referred to individually
in this Agreement as a"Party" and collectively as the"Parties."
RECITALS
This Agreement is entered into on the basis of the following facts, understandings and
intentions of the Parties. The following recitals are a substantive part of this Agreement;
capitalized terms used herein and not otherwise defined are defined in Article 1 of this
Agreement.
A. In order to strengthen the public planning process, encourage private participation
in comprehensive planning, and reduce the economic costs and risks of development,the
Legislature of the State of California enacted section 65864 et seq. of the Government Code
("Development Agreement Statute")which authorizes a city and a developer having a legal or
equitable interest in real property to enter into a binding, long-term development agreement
establishing certain development rights in the property.
B. In accordance with the Development Agreement Statute, the City Council of the
City of Cupertino enacted Municipal Code section 19.144.010 et seq. ("Development
Agreement Regulations"),which authorize the execution of development agreements and set
forth the required contents and form of those agreements. The provisions of the Development
Agreement Statute and the City's Development Agreement Regulations are collectively referred
to herein as the"Development Agreement Law."
C. Developer is the owner of that certain real property consisting of approximately
1.72 acres (74,979 square feet) in size("Property") more particularly described in Exhibit A
and depicted in Exhibit B,both attached hereto and incorporated herein. The Property is
currently developed with a commercial building, restaurant building and parking lot owned and
leased by Developer. This Agreement applies only to the Property and does not affect or burden
any other real property owned by Developer and/or its Affiliated Parties
D. Developer submitted applications to the City for a General Plan text amendment
(GPA-2017-05) ("General Plan Amendment"), a Development Permit(DP-2018-04)
("Development Permit"), an Architectural and Site Approval Permit(ASA-2017-09) (the
"Architectural and Site Approval Permit"), a Use Permit(U-2018-03) ("Use Permit"), a Tree
Removal Permit (TR-2017-46) ("Tree Removal Permit"), an Exception Permit(EXC-2018-03)
("Exception Permit"),and a Development Agreement(DA-2017-01). These applications are in
furtherance of the request by Developer to remove the existing structures and facilities and
develop on the Project Site a new full-service boutique hotel comprising five stories above
ground plus two levels of underground parking, containing 185 hotel rooms, meeting rooms, a
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restaurant and associated amenities, facilities and infrastructure (the "Project"). The Project is
described in more detail in Exhibit C, attached hereto and incorporated herein.
E. The Project is the subject of a Mitigated Negative Declaration(EA 2017-06)
("MND")prepared pursuant to the California Environmental Quality Act ("CEQA") (Public
Resources Code section 21000 et seq.). The MND is tiered from the General Plan EIR in
accordance with Sections 15152 and 15168 of the CEQA Guidelines and CEQA Section 21094.
F. After a duly noticed public hearing, the Planning Commission on June 11, 2019
recommended to the City Council adoption of the MND, and approval of the General Plan
Amendment, Development Permit,Architectural and Site Approval Permit, Use Permit, Tree
Removal Permit, and this Development Agreement.
G. Prior to or concurrently with approval of this Agreement, the City has taken the
following actions to review and plan for the future development and use of the Project
(collectively, the"Existing Approvals"):
1. Adoption of the MND by Resolution No. No.19-090 adopted by the City
Council on July 16, 2019;
2. Approval of the General Plan Amendment by Resolution No. No.19-091
adopted by the City Council on July 16, 2019;
3. Approval of the Development Permit by Resolution No. 19-092 adopted
by the City Council on July 16, 2019;
4. Approval of the Architectural and Site Approval Permit by Resolution No.
19-093 adopted by the City Council on July 16, 2019;
5. Approval of the Use Permit by Resolution No. 19-095 adopted by the City
Council on July 16, 2019;
6. Approval of the Tree Removal Permit by Resolution No. 19-094 adopted
by the City Council on July 16, 2019;and
H. It is the intent of City and Developer to establish certain conditions and
requirements related to review, approval, development and operation of the Project, which are or
will be the subject of this Agreement and possibly subsequent development applications and land
use entitlements if found to be desired or required.
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I. City specifically finds, as required by Municipal Code section 19.144.110 and as
reflected in the Enacting Ordinance, that approving this Agreement for the Project will promote
orderly growth and quality development in accordance with the goals and policies set forth in the
General Plan; is compatible with the uses authorized in, and the regulations prescribed for, the
district in which the Property is located; will promote the public convenience, general welfare,
and good land use practice; will promote development which is not detrimental to the health,
safety and general welfare; will not adversely affect the orderly development of property or the I
preservation of property value; and will promote and encourage development of the Project by
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providing a greater degree of requisite certainty. City also finds that the Project will provide
substantial public benefits as described in this Agreement.
J. City and Developer have reached mutual agreement and desire to voluntarily
enter into this Agreement to facilitate development and operation of the Project subject to the
conditions and requirements set forth herein.
K. City has given the required notice of its intention to adopt this Agreement and has
conducted public hearings thereon pursuant to Government Code section 65867 and Municipal
Code section 19.144.090. City has reviewed and evaluated this Agreement in accordance with
the Development Agreement Law and found that the provisions of this Agreement and its
purposes are consistent with the Development Agreement Law and the goals,policies, standards
and land use designations specified in the General Plan.
L. Following a duly noticed public hearing, on July 16, 2019 the City Council
introduced Ordinance No. 19-2186 approving this Agreement and authorizing its execution, and
adopted that Ordinance on August 20, 2019 ("Enacting Ordinance").
AGREEMENT
NOW,THEREFORE,in consideration of the mutual covenants and promises contained
herein and other valuable consideration, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions.
"Administrative Agreement Amendment"is defined in Section 8.3.3.
"Administrative Project Amendment"is defined in Section 8.2.1.
"Affiliated Party"is defined in Section 10.1.2.
"Agreement"or "Development Agreement" shall mean this Development Agreement
between City and Developer,including all Exhibits hereto.
"Annual Review Form"is defined in Section 6.1.2.
"Annual TMA Fee"is defined in Section 5.1.2.
"Applicable City Regulations"is defined in Section 3.4.
"Applicable Law"means the Applicable City Regulations and all State and Federal laws
and regulations applicable to the Property and the Project as such.State and Federal laws and
regulations may be enacted, adopted and amended from time to time, as more particularly
described in Section 3.8 (Changes in the Law).
"Architectural and Site Approval Permit"is defined in Recital D.
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"Assignee"is defined in Section 10.1.1.
"Assignment"is defined in Section 10.1.3.
"Building Permit"means a building permit issued by the City for the vertical
construction of any building(or buildings)within the Project, and shall not include any
demolition permit, grading permit, or building pen-nit issued for a foundation or subterranean
parking garage.
"CEQA"means the California Environmental Quality Act, California Public Resources
Code section 21000, et seq., as amended from time to time.
"CEQA Guidelines"means the State CEQA Guidelines (California Code of Regulations,
Title 14, section 15000, et seq.), as amended from time to time.
"Certificate"is defined in Section 6.1.4.
"Changes in the Law"is defined in Section 3.8.
"City"means the City of Cupertino.
"City Council"means to the City Council of the City of Cupertino.
"City Manager"means the City's City Manager or his or her designee.
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"City Parties."means and includes City and its elected and appointed officials, officers,
employees, contractors and representatives.
"Claims"means liabilities, obligations, orders, claims, damages, fines, penalties and
expenses, including attorneys' fees and costs. i
"Community Amenity Payment"is defined in Section 5.1.1.
"Connection Fees"means those fees charged by City on a citywide basis or by a utility
provider to utility users as a cost for connecting water, sanitary sewer, and other applicable
utilities, except for any such fee or portion thereof that constitutes an Impact Fee.
"Construction Tax"is defined in Section 4.4.
"Consumer Price Index"shall mean the cumulative Consumer Price Index for All
Urban Consumers (CPI-U), as defined in Cupertino's CMC Section 5.04.460 (and as reflected in {
the most recent report of consumer prices for the San Francisco/Bay Area Standard Metropolitan
Statistical Area as published by the U.S. Department of Labor, Bureau of Labor Statistics) or if
such index is no longer available by a comparable index as reasonably selected by City.
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"Default"is defined in Section 12.1.
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"Developer"means Cupertino Village LP, a California limited partnership and its
permitted successors, assigns and Affiliated Parties (as defined in Section 10.1.2).
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"Development Agreement"or"Agreement'means this Development Agreement
between City and Developer, including all Exhibits hereto.
"Development Agreement Law"is defined in Recital B.
"Development Agreement Regulations"is defined in Recital B.
"Development Agreement Statute"is defined in Recital A.
"Development Permit"is defined in Recital D.
"Development Project"means a development project as defined by section 65928 of the
California Government Code. Notwithstanding section 65928 of the California Government
Code, Development Project shall also include all ministerial approvals required to carry out,
construct,reconstruct, and occupy such a development project.
"Effective Date"means the date that this Agreement becomes effective as determined
under Section 2.1.
"Enacting Ordinance"refers to the Ordinance identified in Recital L.
"Exactions"means exactions that may be imposed by the City as a condition of
developing the Project, including requirements for acquisition, dedication or reservation of land;
and obligations to construct on-site or off-site public and private infrastructure improvements
such as roadways, utilities or other improvements necessary to support the Project, whether such
exactions constitute subdivision improvements,mitigation measures in connection with
environmental review of the Project, or impositions made under Applicable City Regulations.
For purposes of this Agreement, Exactions do not include Impact Fees.
"Exception Permit"is defined in Recital D.
"Existing Approvals"means and includes those permits and approvals for the Project
granted by City to Developer as of the Effective Date as set forth in Recital G.
"Existing Impact Fees".is defined in Section 4.1.
"General Plan"means City's Cupertino General Plan: Community Vision 2015-2040, as
amended through the Effective Date.
"General Plan Amendment"is defined in Recital D.
"General Plan EIR"means the General Plan Amendment, Housing Element Update,
and Associated Rezoning Environmental Impact Report(EIR)that was certified by the City
Council in December 2014 and the addendum to that EIR that was approved by the City Council
in October 2015.
"Impact Fees"means the monetary amount charged by City in connection with a
Development Project for the purpose of defraying all or a portion of the cost of mitigating the
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impacts of the Development Project or development of the public facilities related to the
Development Project, including, any"fee" as that term is defined by Government Code section
66000(b). For purposes of this Agreement, a fee that meets both the definitions of an Impact Fee
and an Exaction will be considered to be an Impact Fee. Impact Fees do not include Other
Agency Fees.
"Internships"is defined in Section 5.1.7.
"Litigation Challenge"is defined in Section 9.3.
"Major Agreement Amendment"is defined in Section 8.3.2. i
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"Major Project Amendment"is defined in Section 8.2.2.
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"Material Condemnation"is defined in Section 13.1.
"Meeting Room Benefit"is defined in Section 5.1.5.
"Minimum Hotel Standard"is defined in Section 5.3.
"MND"or Mitigated Negative Declaration is defined in Recital E.
"Mortgage"means any mortgage, deed of trust, security agreement, and other like
security instrument encumbering all or any portion of the Property or any of the Developer's
rights under this Agreement.
"Mortgagee"means the holder of any Mortgage, and any successor, assignee or
transferee of any such Mortgage holder.
"Municipal Code"means and refers to the City of Cupertino's Municipal Code, as
amended from time to time.
"New City Laws"means and includes any ordinances,resolutions, orders, rules, official
policies, standards, specifications, guidelines or other regulations,which are promulgated or
adopted by the City(including but not limited to any City agency,body, department, officer or
employee) or its electorate(through their power of initiative or otherwise) after the Effective
Date.
"Notice of Breach"is defined in Section 12.1.
"Other Agency Fees"is defined in Section 4.3.
"Other Agency Subsequent Approvals"means approvals, entitlements and permits
required for development or use of the Project to be obtained from entities other than the City.
"Parties"shall mean City and Developer.
"Permitted Delay"is defined in Section 13.4.
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"Planning Commission"means the City of Cupertino Planning Commission.
"Preferential Employment Program"is defined in Section 5.1.3.
"Prevailing Wage Laws"is defined in Section 9.2.
"Processing Fees"means all fees for processing Development Project applications,
including any required supplemental or other further environmental review, plan checking and
inspection and monitoring for land use approvals, design review, grading and building permits,
General Plan maintenance fees, and other permits and entitlements required to implement the
Project, which are in effect at the time those permits, approvals or entitlements are applied for,
and which are intended to cover the actual costs of processing the foregoing.
"Project Approvals"means the Existing Approvals and all Subsequent Approvals.
"Project"is defined in Recital D.
"Property"is defined in Recital C.
"Public Benefits Covenants"is defined in Section 5.4.
"Reduced Rate Benefit" is defined in Section 5.1.6.
"Shuttle Service"is defined in Section 5.1.4.
"STY"or Smith Travel Research is defined in Section 5.3.
"Subsequent Approvals"is defined in Section 7.1.
"Term"is defined in Section 2.2.
"TDMProgram"is defined in Section 5.1.2.
"TMA"or Transportation Management Association is defined in Section 5.1.1.4.
"TOT'or Transient Occupancy Tax is defined in Section 5.2.
"TOT In-lieu Payment"is defined in Section 5.2.
"TOT Law"is defined in Section 5.2.
"TOT Requirement"is defined in Section 5.2.
"Tree Removal Permit"is defined in Recital D.
"Use Permit"is defined in Recital D.
ARTICLE 2
EFFECTIVE DATE AND TERM
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2.1 Effective Date. The Effective Date of this Agreement shall be the later of(a)the
date that is thirty(30) days after the date the Enacting Ordinance is adopted, or(b) the date this
Agreement is fully executed by the Parties. The Effective Date is inserted at the beginning of
this Agreement. The Parties acknowledge that section 65868.5 of the Development Agreement
Statute requires that this Agreement be recorded with the County Recorder no later than ten(10)
days after the City enters into this Agreement, and that the burdens of this Agreement shall be i
binding upon, and the benefits of this Agreement shall inure to, all permitted successors in
interest to the Parties to this Agreement. The City Clerk shall cause such recordation.
2.2 Term of Agreement. The"Term"of this Agreement shall commence on the
Effective Date and shall expire on the fifth(5th) anniversary of the Effective Date,unless earlier r
terminated or extended by mutual written consent of the Parties hereto in accordance with the
requirements of Section 8.1,below. j
2.3 City
and Warranties. City represents and warrants to Developer
that, as of the Effective Date:
2.3.1 City is a municipal corporation, and has all necessary powers under the
laws of the State of California to enter into and perform the undertakings and obligations of City
under this Agreement.
2.3.2 The execution and delivery of this Agreement and the performance of the
obligations of the City hereunder have been duly authorized by all necessary City Council action
and all necessary City approvals have been obtained.
2.3.3 This Agreement is a valid obligation of City and is enforceable in
accordance with its terms.
During the Term of this Agreement, City shall, upon learning of any fact or
condition which would cause of any of the warranties and representations in this Section 2.3 not
to be true, immediately give written notice of such fact or condition to Developer.
2.4 Developer Representations and Warranties. Developer represents and warrants to
City that, as of the Effective Date:
2.4.1 Developer is duly organized and validly existing under the laws of the
State of California, and is in good standing and has all necessary powers under the laws of the
State of California to own property interests and in all other respects enter into and perform the
undertakings and obligations of Developer under this Agreement.
2.4.2 The execution and delivery of this Agreement and the performance of the
obligations of Developer hereunder have been duly authorized by all necessary partnership
action and all necessary partner approvals have been obtained.
2.4.3 This Agreement is a valid obligation of Developer and is enforceable in
accordance with its terms.
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2.4.4 Developer has not(a)made a general assignment for the benefit of
creditors; (b) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary
petition by Developer's creditors; (c) suffered the appointment of a receiver to take possession of
all, or substantially all, of Developer's assets; (d) suffered the attachment or other judicial seizure
of all, or substantially all, of Developer's assets; or(e)admitted in writing its inability to pay its
debts as they come due.
2.4.5 Developer and/or its Affiliated Parties are in the business of developing
and owning real estate. Developer and its Affiliated Parties have sufficient financial resources to
undertake development of the Project and thereafter operate or cause the hotel to be operated as
described in Section 5.3 and as otherwise intended by this Agreement. The entity that operates
the hotel,whether Developer, one of its Affiliated Parties, or any third-party entity that
Developer arranges for such purpose, shall satisfy the qualifications for an Assignee as described
in Section 10.1.1 to the extent applicable.
During the Term of this Agreement, Developer shall,upon learning of any fact or
condition which would cause any of the warranties and representations in this Section 2.4 not to
be true, immediately give written notice of such fact or condition to City.
ARTICLE 3
DEVELOPMENT OF THE PROPERTY
3.1 Vested Rights. The Property is hereby made subject to the provisions of this
Agreement. Developer shall have the vested right to develop the Property and the Project in
conformance with the Existing Approvals,the Subsequent Approvals, Applicable Law and this
Agreement, as may be amended from time to time pursuant to this Agreement,which shall
control the permitted uses, density and intensity of use of the Property and the maximum height
and size of buildings on the Property.
3.2 Life of Approvals. Pursuant to Government Code section 66452.6(a) and this
Agreement, the life of the Project Approvals shall automatically be extended to and until the later
of the following: (1) the end of the Term of this Agreement; or(2)the end of the term or life of
any such Project Approval. Notwithstanding the foregoing, the vested elements secured by
Developer under this Agreement shall have a life no greater than the Term of this Agreement.
3.3 Permitted Uses. The permitted uses for the Property and the Project are those set
forth in the Project Approvals, and include the following:
3.3.1 Up to 185 hotel rooms in one building of five above-grade stories with a
fitness facility and amenities customary for a hotel meeting the Minimum Hotel Standard;
3.3.2 below-grade parking;
3.3.3 a restaurant/bar with an outdoor patio, to be open to the general public;
3.3.4 a rooftop lounge and/or bar; and
3.3.5 rooms suitable for meetings, conferences,banquets and similar uses.
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The details for each component are subject to the Project and Agreement amendment processes
as set forth in Sections 8.2 and 8.3 herein. In the event of a conflict between the Existing
Approvals and the terms of this Section 3.3,the Existing Approvals shall govern.
3.4 Applicable City Regulations. The laws,rules,regulations, official policies,
standards and specifications of City applicable to the development,use and operation of the
Property and the Project shall be(collectively, "Applicable City Regulations"):
3.4.1 Those rules,regulations, official policies, standards and specifications of
the City set forth in the Project Approvals and this Agreement; l
3.4.2 With respect to matters not addressed by and not otherwise inconsistent
with the Project Approvals and this Agreement,those laws,rules,regulations, official policies,
standards and specifications (including City ordinances and resolutions) governing permitted j
uses,building locations, timing and manner of construction, densities, intensities of uses,
maximum heights and sizes, design, set-backs, lot coverage and open space,parking,
landscaping, requirements for on- and off-site infrastructure and public improvements and
Exactions, in each case only to the extent in full force and effect on the Effective Date;
3.4.3 Except as may be addressed in the Project Approvals,New City Laws that
relate to hearing bodies, petitions, applications,notices, findings, records, hearings,reports,
recommendations, appeals and any other matter of procedure imposed at any time,provided such
New City Laws are uniformly applied on a City-wide basis to all substantially similar types of j
Development Projects and properties, and such procedures are not inconsistent with procedures
set forth in this Agreement;
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3.4.4 New City Laws that revise City's uniform construction codes, including
City's building code, plumbing code,mechanical code, electrical code, fire code, grading code
and other uniform construction codes, as of the date of permit issuance, provided such New City
Laws are uniformly applied on a City-wide basis to all substantially similar types of
Development Projects and properties;
3.4.5 New City Laws that are necessary to protect physical health and safety of
the public,provided such New City Laws are uniformly applied on a City-wide basis to all
substantially similar types of Development Projects and properties;
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3.4.6 New City Laws that do not conflict with this Agreement or the Project
Approvals, provided such New City Laws are uniformly applied on a City-wide basis to all
substantially similar types of Development Projects and properties; and
3.4.7 New City Laws that do not apply to the Property and/or the Project due to
the limitations set forth above,but only to the extent that such New City Laws are accepted in
writing by Developer in its sole discretion.
3.5 Timing of Development. Developer shall have no obligation to develop the
Project or any component of the Project. Without any limitation of the foregoing, it is the desire
of the Parties hereto to avoid the result in Pardee Construction Co. v. City of Camarillo, 37
Ca1.3d 465 (1984), in which the California Supreme Court held that the failure of the parties
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therein to consider, and expressly provide for, the timing of development resulted in a later-
adopted initiative restricting the timing of development to prevail over such parties' agreement.
Therefore, notwithstanding the adoption of any initiative after the Effective Date by City's
electorate to the contrary, the Parties acknowledge that, except as otherwise provided for in this
Agreement, Developer shall have the vested right during the Term and any extensions thereof to
develop the Project at such time as Developer deems appropriate in the exercise of its sole and
subjective business judgment.
3.6 Compliance with Laws. Developer, at its sole cost and expense, shall comply
with the requirements of, and obtain all permits and approvals required by local, State and
Federal agencies having jurisdiction over the Property or Project. Furthermore, Developer shall
carry out the Project work in conformity with all Applicable Law, including applicable state
labor laws and standards; Applicable City Regulations; and all applicable disabled and
handicapped access requirements, including the Americans With Disabilities Act, 42 U.S.C.
section 12101, et seq., Government Code section 4450, et seq., Government Code section 11135,
et seq., and the Unruh Civil Rights Act, Civil Code section 51, et seq.
3.7 No Conflicting Enactments. Except as otherwise provided in this Agreement,
City shall not impose on the Project(whether by action of the City Council or by initiative,
referendum or other means, including development moratorium or additional Project conditions
on Subsequent Approvals) any New City Law that is in conflict with this Agreement or the
Existing Approvals or, once approved, the Subsequent Approvals. Without limiting the
generality of the foregoing, except as otherwise provided herein, City shall not (a) apply to the
Property any change in land use designation or permitted use, density or intensity of
development of the Property; (b) apply to the Property any change in off-site infrastructure or
utility requirements or limit or control the availability of or ability to obtain public utilities,
services, or facilities (provided, however, nothing herein shall be deemed to exempt the Project
or the Property from any water use rationing requirements that may be imposed from time to
time in the future and nothing herein shall be deemed a commitment to reserve potable water or
sanitary sewer capacity which the Parties acknowledge City does not control); (c)modify or
control building setbacks, square footages or heights; the location of buildings and structures;
parking requirements; or grading in a manner that is inconsistent with or more restrictive than the
terms included in the Existing Approvals or this Agreement; or(d) limit or control the rate,
timing,phasing or sequencing of the approval, development or construction of all or any part of
the Project.
3.8 Changes in the Law. As provided in section 65869.5 of the Development
Agreement Law, this Agreement shall not preclude the applicability to the Project of changes in
laws,regulations,plans or policies, to the extent that such changes are specifically mandated and
required by changes in State or Federal laws or by changes in laws, regulations, plans or policies
of special districts or other governmental entities, other than the City, created or operating
pursuant to the laws of the State of California("Changes in the Law"). In the event Changes in
the Law prevent or preclude compliance with one or more provisions of this Agreement,the
Parties shall meet and confer in good faith in order to determine whether such provisions of this
Agreement shall be modified or suspended, or performance thereof delayed, as may be necessary
to comply with Changes in the Law. Nothing in this Agreement shall preclude Developer from
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contesting by any available means (including administrative or judicial proceedings)the
applicability to the Project of any such Changes in the Law.
3.9 Initiatives and Referenda. If any New City Law is enacted or imposed by
initiative or referendum, or by the City Council directly or indirectly in connection with any
proposed initiative or referendum, which New City Law would conflict with this Agreement or
reduce the development rights provided by this Agreement and the Project Approvals, such New
City Law shall not apply to the Project. No moratorium or other limitation(whether relating to
the rate, timing,phasing, density, height or sequencing of development) affecting subdivision
maps,building permits or other entitlements to use that are approved or to be approved, issued or
granted within the City, or portions of the City, shall apply to the Project. City, except to submit
to vote of the electorate initiatives and referendums required by Applicable Law to be placed on
a ballot, shall not adopt or enact any New City Law, or take any other action which would violate
the express provisions of this Agreement or the Project Approvals. Developer reserves the right
to challenge in court any New City Law that would conflict with this Agreement or reduce the 1
vested development rights provided by this Agreement. Notwithstanding the foregoing, the
Parties acknowledge that City's approval of this Agreement is a legislative action subject to
referendum. Developer further acknowledges and agrees that City does not have authority or
jurisdiction over any other public agency's ability to grant governmental approvals or permits or
to impose a moratorium or other limitation that may affect the Project.
3.10 Regulation by Other Public Agencies. Developer acknowledges that other public
agencies not within the control of City possess authority to regulate aspects of the development
of the Property separately from or jointly with City, and this Agreement does not limit the
authority of such other public agencies. Developer will, at the time required in accordance with
Developer's project and construction schedule, apply for all such other permits and approvals as
may be required by other governmental or quasi-governmental entities in connection with.the
development of, or the provision of services to, the Project. Developer acknowledges that City
does not control the amount of any fees imposed by such other agencies. In the event that such
fees are imposed upon Developer and are in excess of those allowed by Applicable Law and
Developer wishes to object to such fees, Developer may pay such fees under protest. City agrees
not to delay issuance of permits or other Subsequent Approvals and entitlements under these
circumstances, provided Developer provides City with proof of payment of such fees.
3.11 No Reservation of Sanitary Sewer or Potable Water Capacity. City has found the
Project to be consistent with the General Plan which anticipates that there will be sufficient
potable water and sanitary sewer capacity to serve future development contemplated by the
General Plan, including the Project,through the Term. However,nothing in this Agreement is
intended to provide any reservation of potable water or sanitary sewer capacity.
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ARTICLE 4
FEES
4.1 Impact Fees. Except as otherwise expressly provided herein, during the Term and
any extension thereof City shall have the right to impose and Developer shall pay only such
Impact Fees as City has adopted as of the Effective Date, including those set forth in the Project
Approvals ("Existing Impact Fees"). For convenience of reference, the Existing Impact Fees
are identified in Exhibit D attached hereto and incorporated herein. Any Existing Impact Fees
that are in existence as of the Effective Date but are inadvertently omitted from Exhibit D may
still be charged. In the event of such inadvertent omission, the Parties shall revise Exhibit D to
correct such error. Payment of the Existing Impact Fees shall be at the rates in effect when such
fees are due. Notwithstanding the above and subject to Developer's right to protest and/or
pursue a challenge in law or equity to any new or increased Impact Fees, if City elects in its sole
discretion to approve any extension to the Term, in addition to the Existing Impact Fees it may ;
impose any new or increased Impact Fees City may have duly adopted as of the date of such
approval.
4.2 Processing Fees. Subject to Developer's right to protest and/or pursue a challenge
in law or equity to any new or increased Processing Fee, City may charge and Developer agrees
to pay all Processing Fees for processing Development Project applications, including but not
limited to any required supplemental or other further environmental review,plan checking and
inspection and monitoring for land use approvals, design review, grading and building permits,
General Plan maintenance fees, and other permits and entitlements required to implement the
Project, at the rates which are in effect on a City-wide basis at the time those permits, approvals,
entitlements, reviews or inspections are applied for,requested or required. Without limiting the
above,by entering into this Agreement Developer accepts and shall not protest or challenge
imposition of the types and amounts of Processing Fees in effect as of the Effective Date.
4.3 Other Agency Fees. Nothing in this Agreement shall preclude City from
collecting fees from Developer that are lawfully imposed on the Project by another agency
having jurisdiction over the Project,which the City is required to collect on behalf of such other
agencies ("Other Agency Fees").
4.4 Taxes and Assessments. City may impose and Developer agrees to pay any and
all existing, new,modified or increased taxes and assessments imposed in accordance with the
laws in effect as of the date due, at the rate in effect at the time of payment, including without
limitation,the construction taxes imposed by Chapter 3.32 of the Municipal Code
("Construction Tax").
4.5 Connection Fees. Subject to Developer's right to protest and/or pursue a
challenge in law or equity to any new or increased Connection Fee, City may charge and
Developer shall pay any Connection Fee that is lawfully adopted.
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ARTICLE 5
PUBLIC BENEFITS
5.1 Public Benefits Obligations. In consideration of the rights and benefits conferred
by City to Developer under this Agreement, Developer shall perform the public benefit
obligations and pay to City the contributions set forth in this Article 5 all within the times set
forth herein.
5.1.1 Community Amenity Funding. Developer agrees to pay City Ten
Thousand Dollars ($10,000.00) for each hotel room constructed for an estimated total of One
Million Eight Hundred Fifty Thousand Dollars ($1,850,000.00) in installments as described
below, for City's use in the City Council's discretion subject to the following suggested
guidelines ("Community Amenity Payment"), which payment shall be in addition to any
Impact Fees otherwise due. Once paid, each installment of the Community Amenity Payment j
shall be nonrefundable, except as provided in Section 5.1.1.2 below. In the event City actions or
conditions (including,but not limited to, conditions of the Project Approvals, interpretations of
City ordinances, regulations and/or policies, and imposition of applicable building code f
requirements)regarding the Project Approvals cause the Project to be finally approved with
fewer than 185 hotel rooms, the total Community Amenity Payment shall be Ten Thousand
Dollars ($10,000.00) multiplied by the number of hotel rooms approved for construction;
provided, the Community Amenity Payment shall not be reduced if Developer elects to
voluntarily reduce the number of hotel rooms.
5.1.1.1. The Community Amenity Payment shall be made in
installments as follows:
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(1) Within ninety(90) days of the Effective Date, Developer
shall pay City a first installment of the Community Amenity Payment in
the amount of Fifty Thousand Dollars ($50,000.00).
(2) On or before December 15t of each year,beginning on the
first December 1 st after the Effective Date, until the Community Amenity
Payment is paid in full, as part of each annual review and together with
submission of the Annual Review Form, Developer shall pay City an
installment of the Community Amenity Payment in the amount of Fifty
Thousand Dollars ($50,000.00).
(3) At the time of issuance of the first Building Permit for the
Project, Developer shall pay twenty-five percent(25%) of the remainder
of the Community Amenity Payment.
(4) At the time of issuance of the first Certificate of Occupancy
for the Project, Developer shall pay the remainder of the Community
Amenity Payment.
(5) In the event of a Litigation Challenge(described below in
Section 9.3), all Community Amenity Payment installments shall be
postponed until final resolution of the Litigation Challenge.
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5.1.1.2 Except as specified herein, Community Benefit Payment
installments paid to City shall be nonrefundable even if the Project is not built or occupied, and
Developer acknowledges that such installments and the timing of their payment constitute partial
consideration for City entering into this Agreement and are paid at Developer's risk. i
Notwithstanding the above, if this Agreement is terminated or the Project is not constructed due
to bad faith action or failure to act by City regarding the Project Approvals leading to an uncured
Default,which is not resolved after completion of the dispute resolution process in Section 12.8,
then upon final judgment by a court of competent jurisdiction in Developer's favor such
payments shall be refundable to Developer.
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5.1.1.3 Funds may be used in any part of the City to benefit residents,
businesses, and visitors, including on projects that will enhance and enrich the experience of the
most proximate City residents, retail and restaurant customers, and hotel guests.
5.1.1.4 Without limiting City's discretion in its use of the Community
Amenity Payment, the following types of uses or activities have been identified as candidates:
(1) Local transportation facilities, such as the I-280 Trail,
bicycle lanes, the I-280/Wolfe Road Interchange project, projects
identified in the 2016 Cupertino Bicycle Transportation Plan, or projects
identified in the 2018 Cupertino Pedestrian Transportation Plan(without
replacing fair-share impact fees also owed by Developer);
(2) Start-up costs for the Transportation Management
Association ("TMA");
(3) Permanent local public art projects or temporary exhibits
(in addition to any public art installation or payment otherwise owed); and
(4) Landscaping beautification improvements in public parks,
parkways or roadway medians.
5.1.2 Transportation Demand Management (TDM) Program. Developer shall
fund and fully implement the "TDM Program"described in Exhibit E attached hereto and
incorporated herein. In addition, if at any time a TMA is formed whose coverage and service
area includes the Property, Developer agrees to participate in the TMA in addition to funding and
implementing the TDM Program. In the event a TMA is formed, Developer commits to pay an
annual participation fee, which initially shall not exceed Ten Thousand Dollars ($10,000.00) (the
"TMA Fee"). Developer shall have the right to participate in any process established for
formation of the TMA including,but not limited to, the right to comment on the scope and nature
of the proposed TMA's coverage and service area and the amount of the annual participation fee.
The annual TMA Fee paid by Developer may increase each year based on any increase in the
Consumer Price Index over the prior one-year period,beginning the year after the year in which
the TMA is formed
5.1.3 Preferential Hiring. Developer shall establish a program giving preference
to Cupertino residents for employment in the Project in all positions, during initial staffing and
on an ongoing basis as openings occur("Preferential Employment Program"). The program
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shall be subject to approval by the City Manager in his/her reasonable discretion. The Annual
Review Form submitted by Developer pursuant to Section 6.1 shall include a report on
Developer's outreach and hiring efforts and results during the preceding year.
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5.1.4 Shuttle Service. In order to reduce automobile use in Cupertino, with the
attendant effects on traffic and air quality, Developer shall provide access to a shuttle service
available for the following purposes (the"Shuttle Service"):
5.1.4.1 for hotel guests traveling between the hotel and San Jose
International Airport, Caltrain, BART, VTA, major employment centers and other destinations in
the area;
5.1.4.2 for people traveling to or from the hotel related to using the
Project's meeting rooms for functions; and
5.1.4.3 subject to availability, for nearby residents,businesses and the j
general public to travel between the hotel and area destinations.
5.1.5 Meeting Rooms. Developer shall allow City to use the Project's meeting j
rooms on a complimentary basis for official City business purposes ("Meeting Room Benefit").
The City shall request reservations for the Meeting Room Benefit at least fifteen (15) days in
advance of any proposed use, and there shall be no caps on the amount of such use. Such use
shall be subject to availability, but an existing City reservation cannot be canceled in favor of a
paying user. Catering services for such uses shall be made available at a twenty-five percent
(25%) discount from regular charges (provided, however, that to the extent the discount results in
a charge less than the actual costs of the catering services,user shall be required to pay the actual
costs),but the user will not be required to use the Project's catering.
5.1.6 Reduced Rates. Subject to availability, Developer shall establish a
program to rent rooms in the hotel at a reduced rate to people visiting Cupertino for official
business with City, and to dignitaries visiting for City purposes and events ("Reduced Rate
Benefit Program"). The program shall be subject to approval by the City Manager in his/her
reasonable discretion and shall include hotel rates at least ten percent(10%) lower than the
hotel's lowest rate otherwise offered by the hotel through its available annual discount programs.
In each case the City Manager shall confirm that a visitor qualifies for the Reduced Rate Benefit,
and the City Manager may from time to time provide a list of persons who are pre-qualified.
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5.1.7 Internships. Developer shall offer non-paid educational internships for
students from Fremont Unified High School District, De Anza College or other local colleges
interested in careers in the hospitality industry("Internships"). Subject to hotel staffing needs
and the availability of trained supervisors, internships shall be available to between one and five
students at a time, during the summer and during the school year. Developer retains flexibility in
arranging the duration of Internships, and anticipates 10-week terms involving 10-20 hours per
week of onsite work that will provide a varied, interesting and educational experience in the
Project's hotel, catering, meeting and other activities. Developer shall solicit applications from
local schools; first preference for at least one-half of the Internships at any given time shall be
given to City of Cupertino residents.
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5.2 Transient Occupancy Tax Requirement. In consideration of the rights and
benefits conferred by City to Developer under this Agreement, and in recognition that the
transient occupancy tax ("TOT")to be generated by the hotel is a significant incentive for City
to enter into this Agreement, any hotel or similar business operating on the Property shall abide
by the provisions of California Revenue and Taxation Code section 7280, Municipal Code
section 3.12 and any other applicable law (collectively, "TOT Law"), as they may change from
time to time, so as to assure that the TOT may be collected from each person occupying a room
at the hotel ("TOT Requirement"). Without limiting the foregoing, to the extent permitted by
law Developer shall not allow any person to occupy a particular room for longer than thirty
consecutive calendar days, counting portions of days as full days, and shall require any person
desiring to stay longer to check out and check back in, or otherwise as may be required by the
TOT Law, so as to preserve the ability to collect the TOT from such person. Developer shall
collect the TOT from all persons unless such person has been exempted by City and has
documented such exemption as may be required by the TOT Law. Developer shall charge the
TOT at the rate adopted by City, as it may change from time to time, and remit the TOT to City
as required by City regulations. To the extent that any person's stay extends beyond the time
allowed under the TOT Law for collection of TOT, so that Developer may no longer collect TOT
for the additional days, Developer shall pay City an amount equivalent to the TOT that otherwise
might have been collected (the"TOT In-lieu Payment"), remitted along with TOT collected.
5.3 Upscale Hotel. Developer has represented to City that the Project will provide a
facility described as an"upper upscale boutique hotel", which City interprets in part to mean that
the hotel will charge higher rates and will provide better amenities than most hotels, which in
turn means that the hotel will generate more TOT and add to Cupertino's prestige. City has
relied on this characterization and benefits as an incentive to enter into this Agreement.
Therefore, any hotel or similar business operating on the Property shall meet or exceed the
standards to qualify as"Upper Upscale" as promulgated by Smith Travel Research("STR"), or
if the STR rating system no longer is available then another similar source of hotel rating
mutually acceptable to the Parties (the "Minimum Hotel Standard").
5.4 Ongoing Obligations. The following public benefit obligations are ongoing
obligations that shall continue in effect during and after the Term of this Agreement and after
termination of this Agreement in accordance with the following criteria, and the ongoing nature
of the obligations shall be memorialized in one or more recorded documents binding on the
Property and its uses, the form(s) of which shall be prepared and mutually agreed upon by the
Parties no later than and as a condition to issuance of the first Building Permit for the Project
(collectively,the"Public Benefits Covenants").
5.4.1 The TDM Program shall remain in effect so long as and whenever a hotel
or other business operates on the Property; provided, a change in the type of business may
require changes to the TDM Program as needed to recognize different transportation-related
effects and needs.
5.4.2 Payment of the Annual TMA Fee, once started, shall continue so long as
the TMA is in existence, so long as and whenever a hotel or other business operates on the
Property.
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5.4.3 The Preferential Employment Program shall remain in effect so long as
and whenever a hotel or other business operates on the Property.
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5.4.4 The Shuttle Service, Reduced Rate Benefit, Internships, TOT Requirement '
(including the TOT In-lieu Payment), Meeting Room Benefit and Minimum Hotel Standard shall
remain in effect so long as and whenever a hotel or similar type of business operates on the 1
Property.
5.5 Cityof f Cupertino Business License. Developer, at its expense, shall obtain and
maintain a City of Cupertino business license at all times, and shall include a provision in all 1
general contractor agreements for the Project requiring each such general contractor to obtain
and maintain a City of Cupertino business license during performance of the work of
construction.
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5.6 Sales Tax Point of Sale Designation. Developer shall use good faith, diligent
efforts to the extent allowed by law to require all persons and entities providing bulk lumber,
concrete, structural steel and pre-fabricated building components, such as roof trusses, to be used
in connection with the construction and development of, or incorporated into, the Project, to (a)
obtain a use tax direct payment permit; (b) elect to obtain a subcontractor permit for the job site
of a contract valued at Five Million Dollars ($5,000,000) or more; or (c) otherwise designate the
Property as the place of use of material used in the construction of the Project in order to have
the local portion of the sales and use tax distributed directly to City instead of through the 1
county-wide pool. Developer shall instruct its general contractor(s) for the Project to, and shall
cause such general contractor(s) to instruct its/their subcontractors to, cooperate with City to
ensure the local sales/use tax derived from construction of the Project is allocated to City to the
fullest extent possible. To assist City in its efforts to ensure that such local sales/use tax is so dl
allocated to City, Developer shall on an annual basis, or more frequently upon City's request,
provide City with such information as shall be reasonably requested by City regarding
subcontractors working on the Project with contracts in excess of the amount set forth above,
including a description of all applicable work and materials and the dollar value of such
subcontracts, and,if applicable, evidence of their designation, such as approvals or applications
for the direct payment permit, of City as the place of use of such work and materials. City may
use such information to contact each subcontractor who may qualify for local allocation of use
taxes to City.
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ARTICLE 6
ANNUAL REVIEW
6.1 Annual Review.
6.1.1 Purpose. As required by California Government Code section 65865.1
and Municipal Code section 19.144.060(H), City and Developer shall review this Agreement and
all actions taken pursuant to the terms of this Agreement with respect to the development of the
Project every twelve (12)months to determine good faith compliance with this Agreement.
Specifically, City's annual review shall be conducted for the purposes of determining
compliance by Developer with its obligations under this Agreement and document the status of
Project development. Annual review shall continue after the Term, so City may determine
compliance with the ongoing public benefit obligations described in Article 5.
6.1.2 Conduct of Annual Review. The annual review shall be conducted as
provided in this Section 6.1.2. By December 1 st of each year, Developer shall provide
documentation of its good faith substantial compliance with this Agreement and the terms of the
Public Benefits Covenants during the previous calendar year, including a completed Annual
Review Form in the form provided in Exhibit F and such other information as may reasonably
be requested by the City Manager. If the City Manager finds good faith compliance by
Developer with the terms of this Agreement and the Public Benefits Covenants,Developer shall
be notified in writing and the review for that period shall be concluded. If the City Manager is
not satisfied that Developer is performing in accordance with the terms and conditions of this
Agreement or one or more of the Public Benefits Covenants, the City Manager shall prepare a
written report specifying why the Developer may not be in good faith compliance, refer the
matter to the City Council, and notify Developer in writing at least fifteen(15)business days in
advance of the time at which the matter will be considered by the City Council. This notice shall
include the time and place of the City Council's public hearing to evaluate good faith compliance
with this Agreement and the Public Benefits Covenants, a copy of the City Manager's report and
recommendations, if any, and any other information reasonably necessary to inform Developer
of the nature of the proceeding. The City Council shall conduct a public hearing at which
Developer must submit evidence that it has complied in good faith with the terms and conditions
of this Agreement and the Public Benefits Covenants. Developer shall be given an opportunity
to be heard at the hearing. The findings of the City Council on whether Developer has complied
in good faith for the period under review shall be based upon substantial evidence in the record.
If the City Council determines,based upon substantial evidence,that Developer has complied in
good faith with the terms and conditions of this Agreement and the Public Benefits Covenants,
the review for that period shall be concluded. If the City Council determines,based upon
substantial evidence in the record,that Developer has not complied in good faith with one or
more terms and conditions of this Agreement or the Public Benefits Covenants, or there are
significant questions as to whether Developer has substantially complied in good faith, the City
Council, at its option,may continue the hearing and may notify Developer of the City's intent to
meet and confer with Developer within thirty(30) days of such determination,prior to taking
further action. Following such meeting,the City Council shall resume the hearing in order to
further consider the matter and to make a determination regarding Developer's good faith
compliance. In the event the City Council determines Developer is not in good faith compliance
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with the terms and conditions of this Agreement, City may give the Developer a written Notice
of Breach, in which case the provisions of Section 12.1,below, shall apply.
6.1.3 Failure to Conduct Annual Review. Failure of City to conduct an annual
review shall not constitute a waiver by the City of its rights to otherwise enforce the provisions
of this Agreement nor shall Developer have or assert any defense to such enforcement by reason
of any such failure to conduct an annual review.
6.1.4 Certificate of Compliance. If, at the conclusion of the annual review
described in Section 6.1.2, the Developer is found to be in good faith compliance with this
Agreement and the Public Benefits Covenants, City shall,upon request by Developer, issue a
Certificate of Compliance("Certificate")to Developer stating that after the most recent annual
review and based upon the information actually known to an appropriate official of City
specified in such Certificate that: (a) this Agreement remains in effect(for the remainder of the
Term), and (b) the Developer is not in Default of this Agreement or the Public Benefits
Covenants. The Certificate shall be in a recordable form, shall contain information necessary to
communicate constructive record notice of the fmding of compliance, and shall state the j
anticipated date of commencement of the next annual review. Developer may record the
Certificate at its sole cost and expense without cost or expense to City.
ARTICLE 7
COOPERATION AND IMPLEMENTATION
7.1 Subsequent Approvals. Certain subsequent land use approvals, entitlements, and
permits other than the Existing Approvals,will be necessary or desirable for implementation of
the Project ("Subsequent Approvals"). The Subsequent Approvals may include,without
limitation, the following: amendments of the Existing Approvals, demolition and grading
permits, excavation permits,building permits, design review permits, sign permits, sewer and
water connection permits, encroachment permits, certificates of occupancy, lot line adjustments
or lot merger, site plans, development plans, land use plans,building plans and specifications,
and any amendments to, or repealing of, any of the foregoing. Except as otherwise expressly
provided herein, the City shall not impose requirements or conditions upon the development and
construction of the Project that are inconsistent with the Existing Approvals, including the terms
and conditions of this Agreement, and any Subsequent Approvals as may be obtained from time
to time.
7.2 Scope of Review of Subsequent Approvals. City, in approving the Existing {
Approvals and vesting the Project through this Agreement, is limiting its future discretion with
respect to the Project and Subsequent Approvals to determining whether the application for a
Subsequent Approval is consistent with and meets the criteria set forth in the Applicable City
Regulations, Existing Approvals, and where applicable, other Project Approvals previously S
granted. Subject to the foregoing, City reserves discretion to impose appropriate Exactions in
connection with issuance of Subsequent Approvals, as necessary to bring the Subsequent
Approval into compliance with Applicable Law and Existing Approvals. At such time as any
Subsequent Approval applicable to the Property is approved by City, then such Subsequent
Approval shall become subject to all the terms and conditions of this Agreement applicable to
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Project Approvals and shall be automatically vested and treated as a"Project Approval"under
this Agreement.
7.3 Processing Applications for Subsequent Approvals.
7.3.1 Timely Submittals by Developer. Developer acknowledges that City
cannot begin processing applications for Subsequent Approvals until Developer submits
complete applications on a timely basis. Developer shall use diligent good faith efforts to
(a)provide to City in a timely manner any and all documents, applications,plans, and other
information necessary for City to carry out its obligations hereunder; and (b) cause Developer's
planners, engineers, and all other consultants to provide to City in a timely manner all such
documents, applications, plans and other materials required under Applicable Law. It is the
express intent of Developer and City to cooperate and diligently work to obtain any and all
Subsequent Approvals.
7.3.2 Timely Processing by City. Upon submission by Developer of all
appropriate applications and Processing Fees for any pending Subsequent Approval, City shall,
to the full extent allowed by Applicable Law,promptly and diligently, subject to City
ordinances,policies and procedures regarding hiring and contracting, commence and complete
all steps necessary to act on Developer's currently pending Subsequent Approval applications
including: (a)providing at Developer's expense and subject to Developer's request and prior
approval, reasonable overtime staff assistance, additional staff and/or staff consultants for
concurrent, expedited planning and processing of each pending Subsequent Approval
application; (b) if legally required,providing notice and holding public hearings; and(c) acting
on any such pending Subsequent Approval application. To the greatest extent permitted by the
Existing Approvals or Applicable Law, Subsequent Approvals will be processed administratively
by City staff. Developer's obligation to pay for the processing of Subsequent Approvals,
including staff time,materials and third-party consultants, shall be based on the City's actual out-
of-pocket costs,plus a fifteen percent(15%)markup of consultant costs,per existing policy, to
cover City's costs of managing such third-party consultants and administering their contracts.
7.3.3 CEQA. In connection with its consideration and approval of Existing
Approvals,the City prepared and adopted the N4ND, which evaluated the environmental effects
of the Existing Approvals for the Project, and has adopted mitigation measures to reduce the
significant environmental effects therefrom. The Parties acknowledge that certain Subsequent
Approvals may legally require additional analysis under CEQA. Nothing contained in this
Agreement is intended to prevent or limit the City from complying with CEQA. In acting on
Subsequent Approvals, City will rely on the MND to the fullest extent permissible by CEQA as
determined by City in the exercise of its independent judgment. In the event additional
environmental review is required for a Subsequent Approval, City shall limit such additional
review to the scope of analysis mandated by CEQA and shall not adopt new mitigation measures
except as legally required, all as determined by the City as the lead agency under CEQA in the
exercise of its independent judgment.
7.4 Other Agency Subsequent Approvals; Authority of City. City shall cooperate
with Developer, to the extent appropriate and as permitted by Applicable Law, in Developer's
efforts to obtain, as may be required, Other Agency Subsequent Approvals. Notwithstanding the
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issuance to Developer of Other Agency Subsequent Approvals, Developer agrees that City shall
have the right to review, modify, approve and/or reject any and all submissions subject to the
Other Agency Subsequent Approvals which,but for the authority of the other governmental or
quasi-governmental entities issuing the Other Agency Subsequent Approvals, would otherwise
require City approval. Developer agrees that City may review, modify, approve and/or reject
any such materials or applications to ensure consistency with this Agreement and the Project
Approvals and Developer shall incorporate any and all changes required by City prior to
submitting such materials and applications to the other governmental or quasi-governmental
entities for review and/or approval.
ARTICLE 8
AMENDMENT OF AGREEMENT AND PROJECT APPROVALS
8.1 Amendment by Written Consent. Except as otherwise expressly provided herein
(including Section 6.1 relating to City's annual review and Section 12.3 relating to termination in
the event of a breach),this Agreement may be terminated, modified or amended only by mutual
written consent of the Parties hereto or their successors in interest or assignees and in accordance
with the provisions of Government Code sections 65967, 65867.5 and 65868.
8.2 Project Approval Amendments. To the extent permitted by Applicable Law,
Project Approvals may, from time to time,be amended in the following manner:
8.2.1 Administrative Project Amendments. Upon Developer's written request !
for an amendment or modification to the Project Approvals or Subsequent Approvals, the City
Manager shall determine: (i)whether the requested amendment or modification is minor when
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considered in light of the Project as a whole; and(ii)whether the requested amendment or
modification is consistent with this Agreement and Applicable Law. If the City Manager or
his/her designee finds, in his or her sole discretion, that the proposed amendment or modification
is minor, consistent with this Agreement and Applicable Law, and will result in no new
significant impacts not addressed and mitigated in the MND, the amendment or modification
shall be determined to be an"Administrative Project Amendment" and shall not require an
amendment to this Agreement. Upon the City Manager's approval, any Administrative Project
Amendment shall be automatically incorporated into the applicable Project Approvals and this
Agreement. Without limiting the foregoing, and by way of example, after City approval of the
Existing Approvals, Developer requests for lot line adjustments, minor changes in improvement
plans,minor changes in land uses involving minimal acreage,minor alterations in vehicle
circulation patterns or vehicle access points,minor changes in the amount of parking and parking
layout, changes in pathway alignments, substitutions of comparable landscaping for any
landscaping shown on any final development plan or landscape plan, variations in the location of
structures that do not substantially alter the infrastructure connections or facilities that do not
substantially alter the design concepts of the Project, and minor adjustments to the Site Map or
Property Description may be treated as Administrative Project Amendments.
8.2.2 Major Project Amendments. Any amendment to the Project Approvals
which is determined not to be an Administrative Project Amendment as set forth above in
Section 8.2.1 shall be deemed a"Major Project Amendment." A Major Project Amendment
shall be processed in the same manner and require the same approvals as the original Project
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Approval, including, where so required, giving of notice and a public hearing before the
Planning Commission and City Council in accordance with Applicable Law. The City Manager
or his or her designee shall have the authority to determine if an amendment is a Major Project
Amendment subject to this Section 8.2.2 or an Administrative Project Amendment subject to
Section 8.2.1.
8.3 Amendment of this Agreement. This Agreement may be amended from time to
time, in whole or in part, by mutual written consent of the Parties or their successors in interest,
as follows:
8.3.1 Administrative Agreement Amendments. Any amendment to this
Agreement which does not substantially affect(a) the Term; (b)permitted uses of the Property;
(c)provisions for the reservation or dedication of land; (d) conditions, terms, restrictions or
requirements for Subsequent Approvals; (e)increases in the density or intensity of the use of the
Property or the maximum height or size of proposed buildings; (f)monetary contributions by
Developer; or(g) the provision of public benefits described in Article 5, shall be deemed an
"Administrative Agreement Amendment" and the City Manager or his or her designee, except
to the extent otherwise required by Applicable Law,may approve the Administrative Agreement
Amendment without notice and public hearing.
8.3.2 Major Agreement Amendments. Any amendment to this Agreement
which is determined not to be an Administrative Agreement Amendment as set forth above in
Section 8.3.1 shall be deemed a"Major Agreement Amendment" and shall require giving of
notice and a public hearing before the Planning Commission and City Council in accordance
with Applicable Law. The City Manager or his or her designee shall have the authority in her or
her sole discretion to determine if an amendment is a Major Agreement Amendment subject to
this Section 8.3.2 or an Administrative Agreement Amendment subject to Section 8.3.1.
8.3.3 Requirement for Writing. No modification, amendment or other change to
this Agreement or any provision hereof shall be effective for any purpose unless specifically set
forth in a writing which refers expressly to this Agreement and is signed by duly authorized
representatives of both Parties or their successors in interest. A copy of any change shall be
provided to the City Council within thirty(30) days of its execution.
8.4 Amendments to Development Agreement Statute. This Agreement has been
entered into in reliance upon the provisions of the Development Agreement Statute as those
provisions existed as of the date of execution of this Agreement. No amendment or addition to
those provisions which would materially affect the interpretation or enforceability of this
Agreement shall be applicable to this Agreement, unless such amendment or addition is
specifically required by the California State Legislature, or is mandated by a court of competent
jurisdiction. If such amendment or change is permissive(as opposed to mandatory), this
Agreement shall not be affected by same unless the Parties mutually agree in writing to amend
this Agreement to permit such applicability.
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ARTICLE 9
INSURANCE, INDEMNITY AND COOPERATION IN THE EVENT OF
LEGAL CHALLENGE
9.1 Insurance Requirements. Prior to commencement of construction activities
(including demolition) and through completion of all construction activities for the Project,
Developer shall procure and maintain, or cause its contractor(s)to procure and maintain, a
commercial general liability policy in an amount not less than Five Million Dollars ($5,000,000)
combined single limit, including contractual liability together with a comprehensive automobile
liability policy in the amount of Two Million Dollars ($2,000,000), combined single limit. Such
policy or policies shall be written on an occurrence forin. Developer's insurance shall be placed
with insurers with a current A.M. Best's rating of no less than A-:VII or a rating otherwise
approved by the City in its sole discretion. Developer shall furnish at City's request appropriate
certificate(s) of insurance evidencing the insurance coverage required hereunder, and City Parties j
shall be named as additional insured parties in such policies. The certificate of insurance shall s
contain a statement of obligation on the part of the carrier to notify City of any material change,
cancellation or termination of the coverage at least thirty(30) days in advance of the effective '
date of any such material change, cancellation or termination(ten(10)days advance notice in the
case of cancellation for nonpayment of premiums) where the insurance carrier provides such
notice to the Developer. Coverage provided hereunder by Developer shall be primary insurance
and shall not be contributing with any insurance, self-insurance or joint self-insurance
maintained by City, and the policy shall contain such an endorsement. The insurance policy or
the endorsement shall contain a waiver of subrogation for the benefit of City. 1
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9.2 Indemnity and Hold Harmless. Developer shall indemnify, defend(with counsel
reasonably acceptable to City) and hold harmless City Parties from and against any and all
Claims,including Claims for any bodily injury, death, or property damage, resulting directly or
indirectly from the development or construction of the Project and, if applicable from
compliance with the terms of this Agreement, and/or from any other acts or omissions of
Developer under this Agreement, whether such acts or omissions are by Developer or any of
Developer's contractors, subcontractors, agents or employees; provided that Developer's
obligation to indemnify and hold harmless (but not Developer's duty to defend)may be limited
to the extent such Claims are found to arise from the active negligence or willful misconduct of
any City Party. This Section 9.2 includes any and all present and future Claims arising out of or
in any way connected with Developer's or its contractors' obligations to comply with any
applicable State Labor Code requirements and implementing regulations of the Department of 1
Industrial Relations pertaining to "public works"(collectively, "Prevailing Wage Laws"),
including all claims that may be made by contractors, subcontractors or other third party
claimants pursuant to Labor Code sections 1726 and 1781. Developer's obligations under this
Section 9.2 shall survive expiration or earlier termination of this Agreement.
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9.3 Defense and Cooperation in the Event of a Litigation Challenge. City and
Developer shall cooperate in the defense of any court action or proceeding instituted by a third
parry or other governmental entity or official challenging the validity of any provision of this
Agreement, or the Project Approvals ("Litigation Challenge"), and the Parties shall keep each
other informed of all developments relating to such defense, subject only to confidentiality
requirements that may prevent the communication of such information. To the extent Developer
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desires to contest or defend such Litigation Challenge, (a) Developer shall take the lead role
defending such Litigation Challenge and may, in its sole discretion, elect to be represented by the
legal counsel of its choice, with the costs of such representation, including Developer's
administrative,legal and court costs, paid solely by Developer; (b) City may, in its sole
discretion, elect to be separately represented by the legal counsel of its choice in any such action
or proceeding with the costs of such representation including City's administrative, legal, and
court costs and City Attorney oversight expenses, paid by Developer; and(c) Developer shall
indemnify, defend, and hold harmless City Parties from and against any damages, attorneys' fees
or cost awards, including attorneys' fees awarded under Code of Civil Procedure section 1021.5, j
assessed or awarded against City by way of judgment, settlement,or stipulation. Any proposed
settlement of a Litigation Challenge shall be subject to City's and Developer's approval not to be
unreasonably withheld, conditioned or delayed. If the terms of the proposed settlement would
constitute an amendment or modification of this Agreement or any Project Approvals, the
settlement shall not become effective unless such amendment or modification is approved by
City and Developer in accordance with Applicable Law, and City reserves its full legislative
discretion with respect to any such City approval. If Developer opts not to contest or defend
such Litigation Challenge, City shall have no obligation to do so. Developer shall reimburse
City for its costs incurred in connection with the Litigation Challenge within ten(10)business
days following City's written demand therefor, which may be made from time to time during the
course of such litigation. Developer's obligations under this Section 9.3 shall survive expiration
or earlier termination of this Agreement.
ARTICLE 10
ASSIGNMENT,TRANSFER AND NOTICE
10.1 Assignment. Material consideration and incentive for City agreeing to enter into
this Agreement are those public benefits described in Article 5 that are dependent on the
Property being developed and operated on a long-term basis as an"Upper Upscale"hotel as
described in Section 5.3. For that reason, certain restrictions on the right of Developer to assign
or transfer its interest under this Agreement with respect to the Property during the Term are
necessary in order to assure the achievement of the goals, objectives and public benefits of the
Project and this Agreement. Developer agrees to and accepts the restrictions set forth in this
Section 10.1 as reasonable and as a material inducement for City to enter into this Agreement.
10.1.1 Assignment Criteria. Developer shall have the right to sell or transfer its
fee interest, or ground lease its interests in the Property, or convey or assign or its right to operate
a hotel or similar business on the Property, or enter into a contract for operation of a hotel or
similar business, to any person, partnership,joint venture, firm, company, corporation or other
entity(any of the foregoing, an"Assignee") subject to the written consent of City, which shall
not be unreasonably withheld, delayed or conditioned to the reasonable satisfaction of the City
Manager, if Developer or the Assignee satisfies the following conditions:
10.1.1.1 The proposed Assignee provides acceptable and verifiable
documentation that it is in the business of developing, owning and/or operating"Upper Upscale"
hotels as described in Section 5.3 and has substantial experience in such hotel operations, such
experience being at a minimum developing, owning and/or operating two or more such hotels
within the preceding ten years;
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10.1.1.2 The proposed Assignee provides acceptable and verifiable
documentation that it has sufficient financial resources to undertake development and/or
operation of the Property as an"Upper Upscale"hotel and perform the obligations of Developer
under this Agreement, including meeting the Public Benefit Covenants;
10.1.1.3 Developer is not in Default under this Agreement or under any
Public Benefit Covenant, or the Assignee agrees to cure any Default promptly after the
assignment;
10.1.2 Affiliate Assi ing Went. Notwithstanding the foregoing, Developer may
assign its rights under this Agreement without the consent of City(but after providing City the
notice and Assignee's assumption agreement pursuant to Section 10.1.3)to any corporation,
limited liability company,partnership or other entity which is controlling of, controlled by, or
under common control with Developer, and "control," for purposes of this definition,means
effective management and control of the other entity, subject only to major events requiring the
consent or approval of the other owners of such entity("Affiliated Party"). j
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10.1.3 Notice. At least thirty(30) days prior to Developer's desired assignment
date, Developer shall provide City with written notice of any proposed transfer or assignment of
Developer's rights or obligations.hereunder(each, an"Assignment")together with such 1
information needed to document satisfaction of the conditions in Section 10.1 required for an
Assignment, and request City's consent to such Assignment as provided herein. Each such
notice shall be accompanied by evidence of Assignee's assumption of Developer's obligations
hereunder in the form of Exhibit G, which shall be recorded in the Official Records of Santa
Clara County(assuming City approves the Assignment) concurrent with transfer to the Assignee.
City shall provide its written consent or other response within thirty(30) days of City's receipt of
the notice and required documentation.
10.1.4 Payment of Costs. Developer shall pay the actual costs borne by City in
connection with its review of the proposed Assignment, including costs of attorney review.
10.2 Release of Transferring Developer. Except with respect to a permitted transfer
and assignment to an Affiliated Party, notwithstanding any sale, transfer or assignment of the
Property, Developer shall continue to be obligated under this Agreement as to all of the Property
so transferred unless City has consented to the assignment as provided above and receives and
records Assignee's assumption agreement.
10.3 Assignment to Financial Institutions or Mortgagee.
10.3.1 Notwithstanding any other provision of this Agreement, Developer may
assign all or any part of its rights and duties under this Agreement to any financial institution or
Mortgagee from which Developer has borrowed funds for use in constructing the Project or
otherwise developing the Property and neither such assignment nor the financing shall require
consent from City;provided, City shall be given notice of such intended assignment at least ten
business days beforehand, and before such assignment may take effect such financial institution
or Mortgagee shall give City confirmation acknowledging and agreeing that its interest in the
Property is subject to this Agreement and,both during and after the Term, to the Public Benefit
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Covenants. Developer shall provide a copy of the deed of trust to City within ten(10)business
days following execution thereof. A conditional assignment or other transfer by a financial
institution or Mortgagee back to Developer as part of any financing transaction shall not require
City's consent.
10.3.2 Any person acquiring title or taking possession of the Property from a
financial institution or Mortgagee following a foreclosure or deed in lieu of foreclosure must
satisfy the criteria for an Assignee in Section 10.1.1, with documentation of such satisfaction
provided to City before transfer of title or possession.
10.4 Successive Assignment. In the event there is more than one Assignment under
the provisions of this Article 10, the provisions of this Article 10 shall apply to each successive
Assignment and Assignee.
ARTICLE 11
MORTGAGEE PROTECTION
11.1 Mortgagee Protection. Neither entering into this Agreement nor a breach hereof
shall defeat,render invalid, diminish or impair the lien of any Mortgage made in good faith and
for value. Nothing in this Agreement shall prevent or limit Developer, at its sole discretion, from
granting one or more Mortgages encumbering all or a portion of Developer's interest in the
Property or portion thereof or improvement thereon as security for one or more loans or other
financing,but all of the terms and conditions contained in this Agreement shall be binding upon
and effective against and shall run to the benefit of Mortgagee who acquires title or possession to
the Property, or any portion thereof,by foreclosure, trustee's sale, deed in lieu of foreclosure or
otherwise. Any Mortgage shall be subject and subordinate to the Public Benefits Covenants,
even if the document extending the Public Benefits Covenants past the Term has not yet been
recorded. Developer shall provide the City with a copy of the deed of trust or mortgage within
ten(10) days after its recording in the official records of Santa Clara County so as to demonstrate
its subordination to the Public Benefits Covenants; provided, however, that Developer's failure
to provide such document shall not affect any Mortgage, including without limitation,the
validity,priority or enforceability of such Mortgage.
11.2 Mortgagee Not Obligated. No Mortgagee(including one who acquires title or
possession to the Property, or any portion thereof,by foreclosure, trustee's sale, deed in lieu of
foreclosure or otherwise) shall have any obligation to construct or complete construction of
improvements, or to guarantee such construction or completion; provided,however, that a
Mortgagee shall not be entitled to devote the Property to any use except in full compliance with
this Agreement and the other Project Approvals nor to construct any improvements thereon or
institute any uses other than those uses or improvements provided for or authorized by this
Agreement, or otherwise under the Project Approvals. Except as otherwise provided in this
Section 11.2, all of the terms and conditions contained in this Agreement and the other Project
Approvals shall be binding upon and effective against and shall run to the benefit of any person
or entity,including any Mortgagee, or its transferee, who acquires title or possession to the
Property, or any portion thereof.
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11.3 Notice of Default to Mortgagee. If City receives a notice from a Mortgagee
requesting a copy of any Notice of Default given Developer hereunder and specifying the
address for service thereof, then City agrees to use its diligent, good faith efforts to deliver to
such Mortgagee, concurrently with service thereon to Developer, any Notice of Default given to
Developer. Each Mortgagee shall have the right during the same period available to Developer
to cure or remedy, or to commence to cure or remedy, the event of Default claimed or the areas
of noncompliance set forth in City's Notice of Default. If a Mortgagee is required to obtain
possession in order to cure any Default, the time to cure shall be tolled so long as the Mortgagee
is attempting to obtain possession, including by appointment of a receiver or foreclosure,but in
no event may this period exceed 120 days from the date the City delivers the Notice of Default to i
Developer.
11.4 No Supersedure. Nothing in this Article 11 shall be deemed to supersede or
release a Mortgagee or modify a Mortgagee's obligations under any subdivision or public
improvement agreement or other obligation incurred with respect to the Project outside this
Agreement, nor shall any provision of this Article 11 constitute an obligation of City to such
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Mortgagee, except as to the notice requirements of Section 11.3.
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11.5 Mortgagee Requested Amendments. The Parties agree that they will make
reasonable amendments to this Agreement, at the expense of Developer, to meet the
requirements of any lender or Mortgagee for the Project. For the purposes of this Section 11.5, a
reasonable amendment is one that does not relieve Developer of any of its material obligations
under this Agreement or impair the ability of the City to enforce the terms of this Agreement.
The Parties further agree that any reasonable amendments to the Mortgagee protection provisions
of this Agreement required to conform to current industry practice, as determined by City, would
qualify as an Administrative Agreement Amendment and may be processed in accordance with
the provisions of Article 8 of this Agreement.
i
ARTICLE 12
DEFAULT; REMEDIES; TERMINATION
12.1 Breach and Default. Subject to a Permitted Delay in Section 13.4 or a mutual
extension pursuant to Section 13.11, except as otherwise provided by this Agreement, breach of, fi
failure, or delay by either Party to perform any term or condition of this Agreement shall
constitute a"Default." In the event of any alleged Default of any term, condition, or obligation
of this Agreement, the Party alleging such Default shall give the defaulting Party notice in
writing specifying the nature of the alleged Default and the manner in which the Default may be
satisfactorily cured ("Notice of Breach"). The defaulting Party shall cure the Default within
thirty(30) days following receipt of the Notice of Breach, provided,however, if the nature of the
alleged Default is non-monetary and such that it cannot reasonably be cured within such thirty
(30) day period, then the commencement of the cure within such time period, and the diligent
prosecution to completion of the cure thereafter at the earliest practicable date, shall be deemed I
to be a cure,provided that if the cure is not so diligently prosecuted to completion, then no
additional cure period shall be required to be provided. If the alleged failure is cured within the I
time provided above, then no Default shall exist and the noticing Party shall take no further
action to exercise any remedies available hereunder. If the alleged failure is not cured, then a
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Default shall exist under this Agreement and the non-defaulting Party may exercise any of the
remedies available under this Agreement.
12.2 Withholding of Permits. In the event of a Default by Developer, or following.
City sending a Notice of Breach to Developer pursuant to Section 12.1 above and during the cure
period provided therein, upon a finding by the City Manager that Developer is in breach, City
shall have the right to refuse to issue any permit or other Subsequent Approval to which
Developer would otherwise have been entitled pursuant to this Agreement until such Default or
breach is cured. This provision is in addition to and shall not limit any actions that City may take j
to enforce the conditions of the Project Approvals.
12.3 Termination. In the event of a Default by a Party,the non-defaulting Party shall
have the right to terminate this Agreement upon giving notice of intent to terminate pursuant to
Government Code section 65868 and regulations of City implementing such section. Following
notice of intent to terminate, the matter shall be scheduled for consideration and review in the
manner set forth in Government Code section 65867 and City regulations implementing said
section. Following consideration of the evidence presented in said review before the City
Council, a Party alleging Default by the other Party may give written notice of termination of
this Agreement to the other Party. Termination of this Agreement shall be subject to the
provisions of Section 12.9 hereof.
12.4 Specific Performance for Violation of a Condition. If City issues a Project
Approval pursuant to this Agreement in reliance upon a specified condition being satisfied by
Developer in the future, and if Developer then fails to satisfy such condition, City shall be
entitled to an award of specific performance for the purpose of causing Developer to satisfy such
condition.
12.5 Legal Actions.
12.5.1 Institution of Legal or Equitable Actions. In addition to any other rights or
remedies, a Party may institute legal or equitable action for mandamus, specific performance or
other injunctive or declaratory relief to cure, correct or remedy any Default,to enforce any
covenants or agreements herein,to enjoin any threatened or attempted violation thereof, or to
obtain any other remedies consistent with the purpose and terms of this Agreement. Any such
legal action shall be brought in the Superior Court for Santa Clara County, California, except for
actions that include claims in which the Federal District Court for the Northern District of the
State of California has original jurisdiction, in which case the Northern District of the State of
California shall be the proper venue.
12.5.2 Acceptance of Service of Process. In the event that any legal action is
commenced by Developer against City, service of process on City shall be made by personal
service upon the City Clerk of City or in such other manner as may be provided by law. In the
event that any legal action is commenced by City against Developer, service of process on
Developer shall be made by personal service upon Developer's General Counsel, Developer's
registered agent for service of process, or in such other manner as may be provided by law.
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12.6 Rights and Remedies Are Cumulative. The rights and remedies of the Parties are
cumulative, and the exercise by a Party of one or more of such rights or remedies shall not
preclude the exercise by it, at the same or different times, of any other rights or remedies for the
same Default or any other Default by the other Party, except as otherwise expressly provided
herein.
12.7 No Damages. In no event shall a Party, or its boards, commissions, officers,
agents or employees,be liable in damages for any Default under this Agreement, it being
expressly understood and agreed that the sole legal remedy available to a Party for a breach or
violation of this Agreement by the other Party shall.be an action in mandamus, specific
performance or other injunctive or declaratory relief to enforce the provisions of this Agreement 1
by the other Party, or to terminate this Agreement. This limitation on damages shall not preclude
actions by a Party to enforce payments of monies or fees or the performance of obligations
requiring an obligation of money from the other Party under the terms of this Agreement
including,but not limited to, obligations to pay the Community Amenity Payment,Annual TMA
Fee, attorneys' fees and obligations to advance monies or reimburse monies. In connection with
the foregoing provisions, each Party acknowledges, warrants and represents that it has been fully
informed with respect to, and represented by counsel of such Party's choice in connection with,
the rights and remedies of such Party hereunder and the waivers herein contained, and after such
advice and consultation has presently and actually intended,with full knowledge of such Party's
rights and remedies otherwise available at law or in equity,to waive and relinquish such rights
and remedies to the extent specified herein, and to rely solely on the remedies provided for
herein with respect to any breach.of this Agreement by the other Party.
12.8 Resolution of Disputes. With regard to any dispute involving the Project, the
resolution of which is not provided for by this Agreement or Applicable Law, a Party shall, at the
request of another Party,meet with designated representatives of the requesting Party promptly
following its request. The Parties to any such meetings shall attempt in good faith to resolve any
such disputes. In the event the Parties are unable to resolve the issue and reach an agreement
within thirty(30) days, either Party may initiate non-binding mediation of the dispute by
submitting a request to the other Party. The Parties will select a mutually acceptable mediator
with knowledge and experience in project development and construction issues of the type at
issue,within fourteen (14) days, or if unable to agree on a mediator within said period, either
party may submit the matter to mediation at JAMS or other mediation service mutually
acceptable to the Parties in accordance with its then applicable rules and policies, with each Party
being responsible for its own fees, costs and expenses of any mediation, including fifty percent
(50%) of the mediator's fees, costs and expenses The Parties will take all practicable steps to
complete any mediation within ninety(90) days. Nothing in this Section 12.8 shall in any way
be interpreted as requiring that Developer or City reach agreement with regard to those matters
being addressed, nor shall the outcome of these meetings be binding in any way on City or
Developer unless expressly agreed to in writing by the Parties to such meetings.
12.9 Surviving Provisions. In the event this Agreement is terminated, neither Party
shall have any further rights or obligations hereunder, except for those obligations of Developer
which by their terms survive expiration or termination hereof,including but not limited to those
obligations set forth in Sections 9.2 and 9.3.
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ARTICLE 13
GENERAL PROVISIONS
13.1 Condemnation. As used herein, "Material Condemnation"means a
condemnation of all or a portion of the Property that will have the effect of materially impeding
or preventing development of the Project in accordance with this Agreement and the Project
Approvals. In the event of a Material Condemnation, Developer may(a) request the City to
amend this Agreement in accordance with the Development Agreement Statute and/or to amend
the Project Approvals, which amendment shall not be unreasonably withheld; (b) decide, in its
sole discretion, to challenge the condemnation; or(c)request that City agree to terminate this
Agreement by mutual agreement, which agreement shall not be unreasonably withheld,by giving
a written request for termination to the City. If the condemnation is not a Material
Condemnation, Developer shall have no right to request termination of this Agreement pursuant
to this Section 13.1. Nothing in this Agreement shall be, or deemed to be, any waiver or release
by Developer of any compensation or damages awarded pursuant to a Material Condemnation.
13.2 Covenants Binding on Successors and Assigns and Run with Land. Except as
otherwise more specifically provided in this Agreement,this Agreement and all of its provisions,
rights,powers, standards, terms, covenants and obligations, shall be binding upon the Parties and
their respective successors (by merger, consolidation, or otherwise) and assigns, lessee, and all
other persons or entities acquiring the Property, or any interest therein, whether by operation of
law or in any manner whatsoever, and shall inure to the benefit of the Parties and their respective
successors and assigns, as provided in Government Code section 65868.5, and shall be
enforceable as equitable servitudes and constitute covenants running with the land pursuant to
applicable laws.
13.3 Notice. Any notice,demand or request which may be permitted, required or
desired to be given in connection herewith shall be given in writing and directed to the City and
Developer as follows:
If to the City: City Clerk
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3202
with a copy to: City Attorney
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3202
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and a copy to: City Manager
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3202
If to Developer: Cupertino Village LP
c/o Kimco Realty Corporation
Attn: Legal Department
1621-B South Melrose Drive
Vista, CA 92081
with a copy to: Kimco Realty Corporation
Attn: Legal Department
3333 New Hyde Park Road
Suite 100, P.O. Box 5020
New Hyde Park,NY 11042-0020
Notices to be deemed effective shall be delivered by certified mail,return receipt requested, or
commercial courier, with delivery to be effective upon verification of receipt. Any Party may
change its respective address for notices by providing written notice of such change to the other
Parties.
13.4 Permitted Delays.
13.4.1 Performance by either of the Parties of an obligation hereunder shall be
excused during any period of Permitted Delay. "Permitted Delay" shall mean delay beyond the
reasonable control of a Party caused by an inability to perform caused by(a) calamities,
including without limitation earthquakes, floods, and fire; (b) civil commotion; (c)riots or
terrorist acts; (d) lockouts, strikes or other forms of material labor disputes; (e)material
shortages of labor, equipment, facilities, materials or supplies; (f)vandalism; (g) failure of
transportation or freight embargos; (g) vandalism; (h) condemnation or requisition; (i) litigation
challenge,referendum or initiative; 0) orders of governmental, civil, military or naval authority,
including any development, water or sewer moratorium; (k)the failure of any governmental
agency,public utility or communication provider to issue a permit, authorization consent or
approval required for development, construction,use or operation of the Project or portion
thereof within typical, standard or customary timeframes; or(1)unusually severe weather,but
only to the extent that such weather or its effects (including, without limitation, dry out time)
result in delays that cumulatively exceed twenty(20) days for any winter season. A Party's
financial inability to perform or obtain financing or adverse economic conditions generally shall
not be grounds for claiming a Permitted Delay.
13.4.2 The Party claiming a Permitted Delay shall notify the other Party of its
intent to claim a Permitted Delay, the specific grounds of the same and the anticipated period of
the Permitted Delay. An extension of time for any such cause shall be for the period of the
Permitted Delay and shall commence to run from the time of the commencement of the cause, if
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Notice by the Party claiming such extension is sent within thirty(30) days of the commencement
of the claimed cause. If Notice is sent after such thirty(30) day period, then the extension shall
commence to ran no sooner than thirty(30) days prior to the giving of such Notice. The period
of Permitted Delay shall last no longer than the conditions preventing performance.
Notwithstanding any other provision hereof to the contrary, the Term of this Agreement shall not
be extended by the period of any Permitted Delay.
13.5 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original,but all of which together shall constitute one and the same
instrument.
13.6 Waivers. Notwithstanding any other provision in this Agreement, any failures or
delays by any Party in asserting any of its rights and remedies under this Agreement shall not
operate as a waiver of any such rights or remedies, or deprive any such Party of its right to
institute and maintain any actions or-proceedings which it may deem necessary to protect, assert
or enforce any such rights or remedies. A Party may specifically and expressly waive in writing
any condition or breach of this Agreement by the other Party,but no such waiver shall constitute
a further or continuing waiver of any preceding or succeeding breach of the same or any other
provision. Consent by one Party to any act by the other Party shall not be deemed to imply
consent or waiver of the necessity of obtaining such consent for the same or similar acts in the
future.
13.7 Construction of Agreement. All Parties have been represented by counsel in the
preparation and negotiation of this Agreement, and this Agreement shall be construed according
to the fair meaning of its language. The rule of construction to the effect that ambiguities are to
be resolved against the drafting party shall not be employed in interpreting this Agreement.
Unless the context clearly requires otherwise, (a) the plural and singular numbers shall each be
deemed to include the other; (b)the masculine, feminine, and neuter genders shall each be
deemed to include the others; (c) "shall,""will,"or"agrees"are mandatory, and"may"is
permissive; (d) "or"is not exclusive; (e) "includes" and"including" are not limiting; and
(f) "days"means calendar days unless specifically provided otherwise.
13.8 Headings. Section headings in this Agreement are for convenience only and are
not intended to be used in interpreting or construing the terms, covenants, or conditions of this
Agreement.
13.9 Severability. If any term or provision of this Agreement, or the application of any
term or provision of this Agreement to a specific situation, is found to be invalid, or
unenforceable, in whole or in part for any reason, the remaining terms and provisions of this
Agreement shall continue in full force and effect unless an essential purpose of this Agreement
would be defeated by loss of the invalid or unenforceable provisions, in which case any Party
deprived of an essential benefit thereunder shall have the option to terminate this Agreement
from and after such determination by providing written notice thereof to the other Party.
13.10 Time is of the Essence. Time is of the essence of this Agreement. All references
to time in this Agreement shall refer to the time in effect in the State of California.
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13.11 Extension of Time Limits. The time limits set forth in this Agreement may be
extended by Permitted Delays or mutual consent in writing of the Parties in accordance with the
provisions of this Agreement.
13.12 Other Necessary Acts. Each Party shall in good faith do all things as may
reasonably be necessary or appropriate to carry out this Agreement, and the Project Approvals,
and to execute with acknowledgment or affidavit if required and deliver to the other, file or
submit all such further information, instruments and documents as may be reasonably necessary
to carry out the purposes and objectives of the Project Approvals and this Agreement and to
provide and secure to the other Party the full and complete enjoyment of its rights and privileges
under this Agreement.
13.13 Signatures. The individuals executing this Agreement represent and warrant that
they have the right, power, legal capacity, and authority to enter into and to execute this
Agreement on behalf of the respective legal entities of Developer and the City.
13.14 Entire Agreement. This Agreement(including all Recitals and all exhibits
attached hereto, each of which is fully incorporated herein by reference),integrates all of the
terms and conditions mentioned herein or incidental hereto, and constitutes the entire
understanding of the Parties with respect to the subject matter hereof, and all prior or
contemporaneous oral agreements,understandings, representations and statements, and all prior 1
written agreements, understandings,representations, and statements are terminated and
superseded by this Agreement.
13.15 Estoppel Certificate. Developer or its lender may, at any time, and from time to
time, deliver written notice to City requesting City to certify in writing to Developer or any
Mortgagee(a) that this Agreement is in full force and effect; (b) that this Agreement has not
been amended or modified or, if so amended or modified, identifying the amendments or
modifications, or terminated or if terminated the subject of termination; (c) that Developer is not
in Default of the performance of its obligations, or if in Default, to describe therein the nature
and extent of any such Defaults; (d) those obligations under this Agreement that have been
satisfied since the date of the last annual review and those obligations under this Agreement that
remain unsatisfied; and (e) such other information or matters relating to this Agreement and/or
the Project as may be reasonably requested by Developer. Developer shall pay, within thirty
(30) days following receipt of City's invoice, the actual costs borne by City in connection with
its review of the proposed estoppel certificate, including the costs of attorney review. The City
Manager shall be authorized to execute any certificate requested by Developer hereunder. The
form of estoppel certificate shall be in a form reasonably acceptable to the City Attorney. The
City Manager shall execute and return such certificate within thirty(30)days following
Developer's request therefor. Developer and City acknowledge that a certificate hereunder may
be relied upon by tenants, transferees, investors,partners,bond counsel,underwriters,bond
holders and Mortgagees. The request shall clearly indicate that failure of the City to respond
within the thirty-day period will lead to a second and final request. Failure to respond to the
second and final request within fifteen(15) days of receipt thereof shall be deemed approval of
the estoppel certificate.
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13.16 Recordation of Termination. Upon completion of the Project and Developer's
payment of all Impact Fees under Article 4 and Developer's completion of the requirements,
obligations and payments under Article 5 and recordation of the Public Benefits Covenants, or
upon any earlier tennination of this Agreement upon the mutual written consent of the Parties or
as otherwise expressly provided herein, a written statement acknowledging Developer's
satisfaction of all obligations under this Agreement or such termination, in form and content
reasonably satisfactory to the Parties, shall be provided by City to be executed by the Parties and
recorded by City or Developer in the Official Records of Santa Clara County.
13.17 City Approvals and Actions. Whenever a reference is made herein to an action or
approval to be undertaken by City, the City Manager or his or her designee is authorized to act
on behalf of City,unless specifically provided otherwise or the context requires otherwise.
13.18 Negation of Partnership. The Parties specifically acknowledge that the Project is
a private development,that no Party to this Agreement is acting as the agent of any other in any
respect hereunder, and that each Party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this Agreement. None of the terms or provisions of
this Agreement shall be deemed to create a partnership between or among the Parties in the
businesses of Developer, the affairs of the City, or otherwise, or cause them to be considered
joint venturers or members of any joint enterprise.
13.19 No Third Party Beneficiaries. This Agreement is made and entered into for the
sole protection and benefit of the signatory Parties and their successors and assigns, including
Mortgagees. No other person shall have any right of action based upon any provision in this
Agreement.
13.20 Governing State Law. This Agreement shall be construed in accordance with the
laws of the State of California, without reference to its choice of law provisions.
13.21 Exhibits. The following exhibits are attached to this Agreement and are hereby
incorporated herein by this reference for all purposes as if set forth herein in full:
Exhibit A: Property Legal Description
Exhibit B: Property Boundary and Depiction of the Project
Exhibit C: Description of the Project
Exhibit D: Existing Impact Fees
Exhibit E: TDM Program
Exhibit F: Annual Review Form
Exhibit G: Form of Assignment and Assumption Agreement
If the recorder refuses to record any exhibit, the City Clerk may replace it with a single
sheet bearing the exhibit identification letter, stating the title of the exhibit, the reason it is not
being recorded, and that the original, certified by the City Clerk, is in the possession of the City
Clerk and will be reattached to the original when it is returned by the recorder to the City Clerk.
[SIGNATURES ON FOLLOWING PAGE]
35
OAK#4820-8554-1516 v2
IN WITNESS WHEREOF, the City and Developer have executed this
Agreement as of the Effective Date.
r
CITY:
CITY OF CUPERTINO, a municipal corporation
By:
Deborah L. Fang, City Manager
[Signature must be notarized]
ATTEST:
1
By:
Grace Schmidt, City Clerk
APPROVED AS TO FORM:
By:
Heather Minner, City Attorney
DEVELOPER:
j
9
CUPERTINO VILLAGE LP,
a California limited partnership
By:
Name:
Its:
1
By:
Name:
Its:
[Signatures must be notarized]
f
36
OAK#4820-8554-1516 Q
ACKNOWLEDGMENTS
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
ss
County of )
On ,before me,
(Name of Notary)
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
Acknowledgments
OAK#4820-8554-1516 v2
15231443.1
ACKNOWLEDGMENTS
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
ss
County of )
On , before me, ,
(Name of Notary)
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
Acknowledgments
OAK#4820-8554-1516 v2
15231443.1
EXHIBIT A
PROPERTY DESCRIPTION
Real property in the City of Cupertino, County of Santa Clara, State of California, described as
follows:
BEING ALL OF PARCEL THREE AS SAID PARCEL IS DESCRIBED IN THAT CERTAIN GRANT DEED
RECORDED ON MARCH 10,2006 AS DOCUMENT NUMBER 18838564,OFFICIAL RECORDS OF
SATA CLARA COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEING A PORTION OF PARCEL A, AS SHOWN ON THAT CERTAIN MAP FILED FOR RECORD IN
MAP BOOK 406, PAGE 27,SANTA CLARA COUNTY RECORDS, MORE PARTICULARLY DESCRIBED
AS FOLLOWS:
BEGINNING AT THE NORTHEASTERLY CORNER OF SAID PARCEL A,
THENCE ALONG THE EASTERLY AND SOUTHERLY LINES OF SAID PARCEL A,THE FOLLOWING
FOUR COURSES:
SOUTH 0011 35'45"WEST,229.24 FEET; SOUTHWESTERLY ALONG A TANGENT CURVE TO THE
RIGHT WITH A RADIUS OF 37.50 FEET THROUGH A CENTRAL ANGLE OF 90'00' 00' FOR AN ARC
LENGTH OF 58.90 FEET;SOUTH 00'35'45'WEST, 13.75 FEET;AND NORTH 89'24' 15"WEST,
235.50 FEET TO AN INTERIOR CORNER OF SAID PARCEL A;
THENCE NORTH OY 35'45" EAST, 274.79 FEET TO THE NORTHERLY LINE OF SAID PARCEL A;
THENCE NORTH 890 24' 02"EAST, 273.06 FEET ALONG SAID NORTHERLY LINE TO THE TRUE
POINT OF BEGINNING.
CONTAINING 74,979 SQUARE FEET OR 1.7213 ACHES OF LAND, MORE OR LESS.
KIER RIGHT VIL ENGINEERS& SURVEYORS, INC.
JOS H .T O� PSON, LS 8121 DATE
`'4�yy THU?,q�yS
'{
NO,81=21 0
OF CA��F����
Exhibit A
OAK#4820-8554-1516 v2
EXHIBIT B
SITE MAP AND DEPICTION OF PROJECT
LECEN D D.T s
rye
O'R OFFICIAL RECORD O O
PDB POINT OF BEGINNING No. 8121
RS RECORD OF SAVEY 12-31-20 = 1^0'
m MAP
�T Scale 1
C,4Lt _ I
1
PARCEL A
2z RS 10
I
N8924'02"E 273,06'
Ppp
PROPOSED BUILDING
rI :�
cv
C\i " CN rt o
' PARCEL THREE
w
18838564 f}.R.
AREA= 1.7213f ACRES
i
r
r rr
N89'24'15"W 235,50' *r
50'35'45"W
I 13.75'
PRUNERIDGE AVE.
KIER & WRIGHT EXHIBIT B DATE FEB.
L J
" CIVIL ENGINEERS&SURVEYORS, INC. PARCEL THREE SCALE
II auk
28SO Coll lor Canyon Road Phmne(925)245-87$S LEGAL DESCRIPTION
Urermore,Callfornla 94551 Fax(925)245--9795 JOB w. A07208-1
www,klergrl9ht.rom CUPERTINO, CALIFORNIA SHEET 1 OF 1
Exhibit B
OAK#4820-8554-1516 Q
EXHIBIT C
DESCRIPTION OF PROJECT
Cupertino Village LP,the project applicant, is proposing the Cupertino Village Hotel Project
("proposed project')that would involve the construction of a boutique hotel on a 1.72-acre•site.
The site is currently developed with two commercial buildings, one of which is occupied. The
proposed project would involve demolishing the existing commercial b><xildings and redeveloping
the site with a new 185-room boutique hotel, including event meeting rooms,restaurant, and
bars. The proposed project would establish a five-story hotel with below-grade parking.
The building would have a maximum height of 60 feet, subject to applicable requirements in the
General Plan.
Exhibit C
OAK N4820-8554-1516 v2
EXHIBIT D
EXISTING IMPACT FEES
1. Housing Mitigation Fee—City Code Chapter 19.172
2. Public Art Contribution—City Code Chapter 19.148
3. Citywide Transportation Impact Fee—City Code Chapter 14.02
4. Parkland Dedication In-lieu Fee—City Code Chapter 13.08 (not applicable because hotel
use is considered non-residential)
Exhibit D
OAK#4820-8554-1516 v2
EXHIBIT E
TDM PROGRAM
1. TDM Management and Marketing Structure
a. Transportation Coordinator. A Transportation Coordinator will be assigned with
the authority to implement TDM strategies and oversee the management and
marketing of TDM programs. The Transportation Coordinator will be responsible
for developing information materials, managing transportation services offered as
part of the TDM program (i.e. websites,transit passes etc.),monitoring results,
and coordinating with City/VTA staff and on-site representatives as needed. The
Transportation Coordinator will also be responsible for providing annual reports
on implementation of the TDM strategies and programs in coordination with the
annual review of the Development Agreement.
2. TDM Program Content
a. TDM Communications. Information on transportation options and/or links to the
appropriate website or app will be conveyed to all prospective employees who
receive an offer to work within the Project,to all hotel guests, and to all persons
renting meeting rooms (to be made available to meeting attendees).
b. Transit Passes. Annual VTA Eco Passes shall be made available to each
employee.
c. Transportation Information Boards and Website. The Project will have a location
at which employees, guests and meeting attendees can obtain the above
information on alternative transportation services. At a minimum, information
posted at these sites will include a link to the website and contact information for
the Transportation Coordinator and Representatives. Information may also
include train and bus schedules, information on the 511 Rideshare program and
transit pass programs.
d. Rideshare Facilitation. The TDM Coordinator or TDM Representative will assist
employees in identifying other employees who may be able to carpool to the site
together. The TDM Coordinator or TDM Representative will assist with carpool
and vanpool formation by finding suitable partners with similar work schedules,
origins, and destinations. The TDM Coordinator or TDM Representative will
assist the employee in registering for ridematching services such as those offered
by 511.org.
e. Development of Transportation Materials. The Transportation Coordinator will
be responsible for developing materials that provide information on how to get to
and from the site using alternative modes. This may include:
i. Transit passes available through transit agencies
Exhibit E
OAK#4820-8554-1516 v2
ii. Walking and biking routes within the area including estimated times
iii. Bike parking facilities available on-site
iv. Links to the schedules including train and bus schedules
3. TDM Design Features and Amenities
a. Bicycle Facilities. At least ten(10)bike storage spaces will be provided for
employees, guests and visitors in the garage.
b. Bikesharing. Bike share systems provide a network of public bicycles from self-
service bike share stations located in different places. Similar to carsharing,
members can check out a bicycle,ride to their destination and return the bicycle
to any bike share pod in the system. Bike share systems can provide real time
information on the status of available bikes and empty docks through the web,
kiosk and mobile application. A bikeshare program will be looked into for the
Project in conjunction with other nearby commercial properties.
c. Carpool and vanpool spaces. A certain number of parking spaces for carpool or
vanpool vehicles will be provided and can encourage ridesharing. Parking spaces
will be clearly marked and located in highly visible areas.
s
4. TDM Program Compliance.
a. Implementation, Monitoring and Enforcement. Ongoing monitoring is needed to
ensure compliance with the TDM Program, in conjunction with the project design
features and proximity to transit. As a result of periodic review, this TDM
Program may be modified, with the prior approval of the City Planning Director,
from time to time to include alternate equally or more effective measures. If a
TMA is formed and the Project is part of the TMA, the City Planning Director
shall, annually, review the TDM Program to minimize duplicative efforts that are
provided by the TMA.
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Exhibit E
OAK#4820-8554-1516 v2
EXHIBIT F
ANNUAL REVIEW FORM
[TO BE SUBMITTED BYDECEMBER 1ST OF EACH YEAR)
This Annual Review Form is submitted to the City of Cupertino ("City")by Cupertino
Village LP ("Developer")pursuant to the requirements of California Government Code
section 65865.1 and Chapter 19.144 of the City's Municipal Code regarding Developer's good
faith compliance with its obligations under the Development Agreement between the City and
Developer having an Effective Date of ("Development Agreement"). All
Article and Section references are to the Development Agreement.Any capitalized terms not
otherwise defined herein shall have the meanings assigned to them in the Development
Agreement.
Annual Review Period: to
Generally summarize the status of Developer's efforts and progress in processing permit
applications and constructing the Project.
Generally summarize specific strategies to be followed in the coming year intended to
facilitate the processing of permits and/or Project construction.
Specify whether Developer's compliance with any of the following agreements have
been satisfied during this annual review period:
• ?
Specify whether applicable Existing Impact Fees,processing fees, connection fees and/or
other fees due and payable under Article 4 have been paid during this annual review period,
including but not limited to the following:
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• Housing Mitigation Fees.
• Public Art Contribution.
• Transportation Impact Fees.
Describe Developers compliance with the following Public Benefits under Article 5
during this annual review period:
• Community Amenity Payment pursuant to Section 5.1.1.
• TDM Program pursuant to Section 5.1.2.
• Participation in TMA and payment of annual TMA Fee pursuant to Section 5.1.2.
Exhibit F
OAK#4820-8554-1516 Q
• Preferential Employment Program pursuant to Section 5.1.3.
• Shuttle Service pursuant to Section 5.1.4.
• Meeting Room Benefit pursuant to Section 5.1.5.
• Reduced Rate Benefit pursuant to Section 5.1.6.
• Internships pursuant to Section 5.1.7.
• Transient Occupancy Tax Requirement, including any TOT In-lieu Payment,
pursuant to Section 5.2.
• Minimum Hotel Standard pursuant to Section 5.3.
Describe whether other applicable Development Agreement obligations were completed
during this annual review period.
Describe any extension of the time limits or deadlines in the Development Agreement as
a result of Permitted Delay pursuant to Section 13.4.
Specify whether Developer has assigned the Development Agreement or otherwise
conveyed the Property during this annual review period.
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The undersigned representative confirms that Developer is: {
In good faith compliance with its obligations under the Development Agreement for this j
annual review period.
Not in good faith compliance with its obligations under the Development Agreement for
this annual review period, in response to which Developer is taking the actions set forth in the
attachment hereto.
IN WITNESS WHEREOF, Developer has executed this Annual Review Form as of this
day of , 20_.
DEVELOPER:
CUPERTINO VILLAGE LP, j
a California limited partnership
By:
Name:
Title:
Exhibit F
OAK#4820-8554-1516 Q
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Attention:
Exempt from Recording Fee per
Government Code Section 27383
Space Above This Line for Recorder's Use Only
ASSIGNMENT OF RIGHTS AND OBLIGATIONS UNDER
DEVELOPMENT AGREEMENT
This Assignment of Rights and Obligations under Development Agreement(this
"Assignment") is entered into this day of ,20_("Effective Date"),
by and between , a I
("Assignor") and , a
("Assignee"). Assignor and Assignee are collectively referred to herein as the"Parties."
RECITALS
A. Assignor and the City of Cupertino, a California municipal corporation("City")
have entered into that certain Development Agreement dated as of ("DA")
which was recorded in the Official Records of Santa Clara County on as
Instrument No.
B. Assignor[has requested approval from the City of the assignment to Assignee
described herein pursuant to Section 10.1 of the DA] OR [has the right to make the
assignment to Assignee under Section 10.1 of the DA.]
C. [City has consented to the assignment described herein pursuant to Section 10.1
of the DA.] OR[Assignor has provided the City with documentation establishing that the
assignment is appropriate pursuant to Article 10 of the DA because .J
AGREEMENTS
NOW, THEREFORE, in exchange for the mutual covenants set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties hereby agree as follows:
Exhibit G
OAK#4820-8554-1516 v2
1. Assignment and Assumption of Interest. Assignor hereby transfers, assigns and
conveys to Assignee, all of Assignor's right,title and interest in and to, and all obligations,
duties, responsibilities, conditions and restrictions under, the DA (the"Rights and
Obligations"). Assignee, for itself and its successors and assigns,hereby accepts the foregoing
assignment, assumes all such Rights and Obligations, and expressly agrees for the benefit of
City, to pay,perform and discharge all obligations of Assignor under the DA and to comply with
all covenants and conditions of Assignor arising from or under the DA.
2. Governing Law; Venue. This Assignment shall be interpreted and enforced in
accordance with the laws of the State of California without regard to principles of conflicts of
laws. Any action to enforce or interpret this Assignment shall be filed and litigated exclusively
in the Superior Court of Santa Clara County, California or in the Federal District Court for the
Northern District of California.
3. Entire Agreement/Amendment. This Assignment constitutes the entire agreement
among the Parties with respect to the subject matter hereof, and supersedes all prior written and
oral agreements with respect to the matters covered by this Assignment. This Assignment may
not be amended except by an instrument in writing signed by each of the Parties and consented
to in writing by City.
4. Further Assurances. Each Parry shall execute and deliver such other certificates,
agreements and documents and take such other actions as may be reasonably required to '
consummate.or implement the transactions contemplated by this Assignment and the DA.
5. Benefit and Liability. Subject to the restrictions on transfer set forth in the DA,
this Assignment and all of the terms, covenants, and conditions hereof shall extend to the benefit
of and be binding upon the respective successors and permitted assigns of the Parties.
6. Rights of City. All rights of City under the DA and all obligations to City under
the DA which were enforceable by City against Assignor prior to the Effective Date of this
Assignment shall be fully enforceable by City against Assignee from and after the Effective Date
of this Assignment.
I!,
7. Rights of Assi nee. All rights of Assignor and obligations to Assignor under the
DA which were enforceable by Assignor against City prior to the Effective Date of this
Assignment shall be fully enforceable by Assignee against City from and after the Effective Date
of this Assignment.
i
8. Release. As of the Effective Date, Assignor hereby relinquishes all rights under
the DA, and all obligations of Assignor under the DA shall be terminated as to, and shall have no
more force or effect with respect to, Assignor, and Assignor is hereby released from any and all
obligations under the DA.
9. Attorneys' Fees. In the event of any litigation pertaining to this Assignment, the
losing party shall pay the prevailing party's litigation costs and expenses, including without
limitation reasonable attorneys' fees.
Exhibit G
OAK#4820-8554-1516 Q
10. City Consent; City Is A Third-Party Beneficiary. City's countersignature below is
for the limited purposes of indicating consent to the assignment and assumption and release set
forth in this Assignment(if necessary under the DA)pursuant to Sections 10.1 and 10.2 of the
DA, and for clarifying that there is privity of contract between City and Assignee with respect to
the DA. The City is an intended third-party beneficiary of this Assignment, and has the right,but
not the obligation, to enforce the provisions hereof.
11. Recordation. Assignor shall cause this Assignment to be recorded in the Official
Records of Santa Clara County, and shall promptly provide conformed copies of the recorded
Assignment to City and Assignee.
12. Address for Notices. Assignee's address for notices, demands and
communications under the DA is as follows:
13. Captions; Interpretation. The section headings used herein are solely for
convenience and shall not be used to interpret this Assignment. The Parties acknowledge that
this Assignment is the product of negotiation and compromise on the part of both Parties, and the
Parties agree, that since both have participated in the negotiation and drafting of this Assignment,
this Assignment shall not be construed as if prepared by one of the Parties, but rather according
to its fair meaning as a whole, as if both Parties had prepared it.
14. Severability. If any term,provision, condition or covenant of this Assignment or
its application to any parry or circumstances shall be held by a court of competent jurisdiction, to
any extent, invalid or unenforceable,the remainder of this Assignment, or the application of the
term,provision, condition or covenant to persons or circumstances other than those as to whom
or which it is held invalid or unenforceable, shall not be affected, and shall be valid and
enforceable to the fullest extent permitted by law unless the rights and obligations of the Parties
have been materially altered or abridged thereby.
15. Counterparts. This Assignment may be executed in counterparts, each of which
shall, irrespective of the date of its execution and delivery, be deemed an original, and the
counterparts together shall constitute one and the same instrument.
[SIGNATURES START ON NEXT PAGE.]
Exhibit G
OAK#4820-8554-1516 Q
IN WITNESS WHEREOF Assignor and Assignee have executed this Assignment as of the date
first set forth above.
ASSIGNOR:
, a
By: FORM—DO NOT SIGN
Name:
Its:
ASSIGNEE:
, a
By: FORM—DO NOT SIGN
Name:
Its:
[NOTE: The presence of the signature blocks below in this form shall not be deemed to
require the consent of the City to any assignment that does not otherwise require the
consent of City under the DA.]
i
City of Cupertino, a California municipal corporation,hereby
consents to the assignment and assumption described in the
foregoing Assignment and Assumption Agreement.
CITY:
CITY OF CUPERTINO, a
California municipal corporation
By: FORM—DO NOT SIGN
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
Exhibit G
OAK#4820-8554-1516 Q
ACKNOWLEDGMENTS
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
ss
County of )
On , before me, ,
(Name of Notary)
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
ature)
Acknowledgements
OAK#4820-8554-1516 v2
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
ss
County of )
On ,before me, ,
(Name of Notary)
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same y
in his/her/their authorized capacity(ies), and that by his/her/their signature(s)on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
Acknowledgements
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OAK#4820-8554-1516 v2