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HomeMy WebLinkAbout02/15/2005, BUS 2 - CONSIDERATION OF A REIMBURSEMENT AGREEMENT WITH COSTCO WHOLESALE CORPORATION FOR REALIGNMENT OF CAL council °°° 2-15-05 j acEnaa aEpont CITY OF SAN LUIS OBISPO FROM: Ken Hampian, City Administrative Officer Jonathan Lowell, City Attorney Prepared By: Shelly Stanwyck, Economic Development Manager &V-Y SUBJECT: CONSIDERATION OF A REIMBURSEMENT AGREEMENT WITH COSTCO WHOLESALE CORPORATION FOR REALIGNMENT OF CALLE JOAQUIN SOUTH CAO RECOMMENDATION Approve a reimbursement agreement with Costco Wholesale Corporation for realignment of Calle Joaquin south of Los Osos Valley Road and authorize the Mayor to execute the agreement. DISCUSSION Project History Costco Wholesale Corporation (Costco) has received all of its necessary City planning entitlements and, upon payment of its building permit fee, may begin construction of a new 140,000 square foot warehouse store and service station off Los Osos Valley Road (LOVR), next to Home Depot. The Final Environmental Impact Report for the Costco/Froom Ranch Development (the Costco EIR) was certified by Council on November 4, 2003. Included in the Costco EIR were traffic mitigation measures including Mitigation Measure TR/mm-2a, which requires that Calle Joaquin-South be realigned with Calle-Joaquin-North to improve traffic flow (the Calle Joaquin realignment). Because of permit delays by other agencies relating to the possible presence of Vernal Pool Fairy Shrimp on the property, the Council revised this mitigation measure on November 16, 2004 in the Addendum to the Costco EIR to allow Costco to complete the mitigation after the store opens Why is a.Reimbursement Agreement needed for the Realignment of Calle Joaquin? On October 7, 2003,.the Council established a "sub-area" fee to assist in funding improvements to the LOVR/US 101 Interchange (the LOUR sub-area fee program). The LOVR sub-area fee program allows the City to pass-on appropriate costs for interchange improvements to development projects located near the interchange through a fair share contribution program. The program assumes the successful receipt of grants for about half of the total project cost when all improvements are constructed. The remainder of the costs will be covered by the sub-area fees and a pro rata share of city-wide transportation impact fees (TIF). Based on the LOVR sub-area fee program, it was determined that Costco's sub-area fee is $910,000. As required by the Costco EIR, Costco must construct the Calle Joaquin realignment to mitigate various project impacts; simply paying the sub-area fee alone will not satisfy the EIR a = � I Reimbursement Agreement with Costco for Realignment of Calle Joaquin Page 2 requirements. Because the Calle Joaquin realignment qualifies as part of the LOVR interchange improvements, Costco's costs in excess of its sub-area fee are reimbursable by other properties in the sub-area. A reimbursement agreement between Costco and the City is, therefore, necessary to define costs eligible for reimbursement. The Reimbursement Agreement Attachment 1 is the proposed reimbursement agreement for the Calle Joaquin realignment. The agreement covers costs incurred for acquiring right-of way, project design, obtaining permits, construction and wetlands mitigations associated with the realignment. It is based on the following four basic principles: 1. Costco is responsible for making and funding all Calle Joaquin realignment improvements, including related costs for design, permitting and environment mitigation costs. 2. Costco is responsible for its "fair share" of these costs: $910,000. 3. However, since Costco is responsible for advancing all costs (estimated at about $3.1 million), it is eligible for reimbursement from future development for all costs reasonably incurred by it in making these improvements in excess of its allocated share of costs. 4. Reimbursements will come solely from subsequent sub-area fee collections: there will be no other source of repayment. What costs are included in the reimbursement agreement? 1. Design and Permitting Costs Section 1(a) of the agreement discusses the design and permitting costs incurred to date, as well as future costs (which are capped and discussed below). The design and permitting costs include all engineering and architectural fees; right-of-way acquisition support work;encroachment work with Caltrans; and all environmental permitting (the permits and the costs incurred in obtaining them). Eligible design and permitting costs incurred to-date of$1,050,090 are shown on Exhibit B of the agreement. The estimated future design and permitting costs are shown on the same exhibit and are capped at $185,875. Before committing to the inclusion of these costs in the agreement, staff from several departments thoroughly evaluated work scopes of contracts, actual invoices for expenses to date and estimates for construction and future consulting work for validity and appropriateness. Even so, the estimated final cost of the realignment project has risen from $1.8 million to $3.1 million, driven mostly by costs relating to necessary land acquisitions and required permits (in particular the Army Corps of Engineers). 2.Acquisition Costs Land acquisition costs are included with the design and permitting costs but are discussed more thoroughly in Section 1(b) of the agreement. The acquisition of the Hansen property for necessary right-of-way has been appraised at a cost of $186,000, subject to adjustment by the a-� Reimbursement Agreement with Costco.for Realignment of Calle Joaquin Page 3 courts, which is outside the City's or Costco's control. The property necessary for the wetland mitigation is being provided by the Madonna Family, in exchange for possible future sub-area fee credit to be negotiated at a later date by the City and the Madonna Family. The agreement acknowledges that all other necessary land costs can be accomplished through exchanges of land and/or construction of replacement improvements. 3. Mitigation Monitoring The Army Corps of Engineers has tentatively indicated to Natural Resources Manager that it will allow the City to perform all mitigation monitoring of both the Calle Joaquin wetland and the Vernal Pool Fairy Shrimp (if necessary). If the Army Corps of Engineers requires outside consultants to perform the work, those future costs would be reimbursable as described in Section 1(c) of the agreement. If the City is allowed to monitor the Calle Joaquin wetland mitigation, and if no mitigation work is required because of the Vernal Fairy Shrimp, $202,210 in additional future costs will be avoided. City staff will be able to accommodate the mitigation monitoring within the Natural Resources program. 4. Construction Costs Pursuant to Section 1(d), of the agreement, construction costs for the Calle Joaquin realignment, mitigation wetland construction at Boysen Ranch and necessary utility work total $1,856,443. This amount includes a contingency of 7% ($117,912.13) and an inflation factor of 3% ($54,071.13). The inflation factor will only be necessary if the work cannot be done this year and instead occurs in 2006 (it is anticipated at this time that an Army Corps of Engineers permit will issue for construction during the 2005 dry season). How are future costs controlled? There are two ways that the agreement controls costs. 1. Capping Costs. Future costs associated with the design and permitting process have been limited in Section 1(a) of the agreement. For instance, reimbursement for the remaining legal work necessary to obtain the Army Corps of Engineers permits cannot exceed the maximum agreed upon amount. 2. Case-By-Case Change Order Approval by the City. The second way costs are controlled is through the change order process. Section 2 of the Reimbursement Agreement defines the change order procedure that will be followed. The procedure is consistent with existing City practices and assures that the City will review all change orders. The City has the ability to deny change order requests if they are not related to unforeseen conditions or City-initiated changes. Change orders in excess of$100,000 or in excess of the agreed upon contingency, require Council approval. How will payments be made to Costco? When other participating properties in the LOVR sub-area fee program develop, they will pay their sub-area fees to the City upon issuance of a building permit. The City will reimburse Costco only from fees collected (some properties may have credits associated with in-kind improvements) within 30 days of receiving the sub-area fees. Disputes over reimbursable costs Reimbursement Agreement with Costco for Realignment of Calle Joaquin Page 4 will be subject to resolution in the same manner that the City resolves claims for other constructions projects. The process is described in Section 5 of the agreement. As set forth in Section 6 of the agreement, Costco has the right to assign its reimbursement payments upon written approval by the City. Timing Considerations Costco is contractually obligated to close escrow on the Madonna Family's Froom Ranch property by February 25, 2005, but must first have a reimbursement agreement in place for the Calle Joaquin realignment. Costco has entered into a construction contract with Ledcor to begin construction of the warehouse store on March 1, 2005. Ledcor cannot hold its costs past this date. Ledcor is also under contract to construct the offsite mitigation measures required by the Costco EIR, including the Calle Joaquin realignment. To date, no Vernal Pool Fairy Shrimp have been discovered in the study area near the Calle Joaquin realignment. If all continues favorably, an Army Corps of Engineers permit could be issued this spring, thereby allowing the realignment work to be completed during the upcoming dry season. Work in the realignment area must be completed by October 1 or be put off until the next dry period(Spring 2006). CONCURRENCES In establishing the costs eligible for reimbursement in the proposed agreement, many City staff members reviewed and revised information provided by Costco. The Natural Resources Manager and Public Works Department are in concurrence with the eligible costs and proposed agreement. The proposed agreement has also been discussed with the Madonna Family (which owns a majority of the developable property in the LOVR sub-area fee program) and they also concur with the agreement as proposed. FISCAL IMPACT There is no General Fund impact associated with the proposed agreement. However, because the costs of realigning Calle Joaquin, summarized in Exhibit B of the agreement, are substantially higher than were estimated in establishing the LOVR sub-area fee program ($3.1 million compared with $1.8 million), staff will need to return to the Council with revisions to the LOVR sub-area fee program and the TIF program to better reflect currently estimated costs. Staff has already engaged in discussions with the major sub area fee property owner, the Madonna Family, and they are prepared to work with the City in resolving the future funding challenges. Following this Council action, staff will also begin notifying other property owners in the sub area of the fee increases. ALTERNATIVES 1. Revise the Agreement. Significant substantive changes are not recommended because the proposed agreement has been negotiated and evaluated extensively by both parties. However, refinements to the proposed agreement may be necessary as identified by Council in its review. Council could direct staff to make those refinements and proceed with the transactions. a . � Reimbursement Agreement with Costco for Realignment of Calle Joaquin Page 5 2. Disapprove the Agreement. The Council could choose not to approve the proposed agreement. Without clear ground rules in place for how it will be reimbursed for costs that are significantly in excess of its allocated share, it is highly unlikely that Costco will go forward with a store in San Luis Obispo. ATTACHMENT Reimbursement Agreement for Realignment of Calle Joaquin South G:Admin\SLdMtauwyck\Couacil Agenda Report—Costco RA Draft 2 a - � I i REIMBURSEMENT AGREEMENT FOR REALIGNMENT OF CALLE JOAQUIN SOUTH THIS REIMBURSEMENT AGREEMENT (this "Agreement") is made and entered into this day of , 2005, by and among the CITY OF SAN LUIS OBISPO, a charter city and municipal corporation of the State of California, herein referred to as "City", COSTCO WHOLESALE CORPORATION, a Washington Corporation, herein referred to as "Costco'. A. Costco desires to construct a new retail building comprised of approximately 140,000 square feet located on Parcel 2 of Parcel Map SLO-00-041, commonly known as 1540 Froom Ranch Way, in the City of San Luis Obispo, County of San Luis Obispo State of California (the "Costco Project"). The Costco Project and proposed development by others at 1500 and 1521 Froom Ranch Way are referred to herein as the "Shopping Center Project." B. The City has undertaken, pursuant to the California Environmental Quality Act ("CEQA"), the required analysis of the environmental effects which would be caused by the Shopping Center Project and has determined those mitigation measures which will eliminate, or reduce to an acceptable level, those of the environmental impacts which may be so mitigated, has adopted findings of overriding considerations for those of the impacts that cannot be so mitigated, and has certified the Final Environmental Impact Report (the "FEIR"), with those mitigation measures and findings of overriding considerations, pursuant to City Resolution No. 9502 (2003 Series). Mitigation measure TR/mm-2a has been modified by an Addendum to the FEIR, adopted by City Council Minute Order of November 16, 2004. C. The City has found in connection with its review and consideration of this Agreement that no subsequent or supplemental Environmental Impact Report is necessary or required under CEQA because the terms and conditions of this Agreement are consistent with and within the scope of and contemplated by the FEIR and the Addendum thereto as required for implementation of the mitigation measures thereunder. D. Specifically with regard to Calle Joaquin South, the subject matter of this Agreement, the FEIR concluded that the current configuration whereby Calle Joaquin South and the Highway 101 southbound on-ramp share an intersection at Los Osos Valley Road would result in that intersection operating at Level of Service ("LOS") E during the PM peak and Saturday peak hours when traffic from the Costco Project was added to the existing conditions and at LOS F when traffic from the combined Shopping Center Project was added to existing conditions. The mitigation measure to resolve this impact is to realign Calle Joaquin South to a position on Los Osos Valley Road opposite the existing Calle Joaquin North (the "Calle Joaquin Realignment"), with a subsequent traffic study of the actual traffic after Costco opens to be conducted when Parcels 1 and 3 are to be developed, which study is to determine if additional measures may be required. For purposes of this Agreement, it is understood that the term "Calle Joaquin Realignment" includes related work necessary to the realignment, including without aA0 limitation, relocation of the Motel 6 driveway and frontage improvements and any wetlands mitigation required by the Army Corps of Engineers as a condition of issuance of a permit allowing the Calle Joaquin Realignment(the "Wetlands Mitigation"). E. The City has established a Los Osos Valley Road/Highway 101 interchange sub-area traffic impact fee program to assess costs of improvements specified in that program (the "Interchange Improvements") to projects that develop on properties within that sub-area (the `Benefited Properties"). The Benefited Properties are designated on the Reimbursement Map and Rate Sheet attached as Exhibit A hereto, which exhibit is incorporated by reference herein. Pursuant to that program, the City determined that the Costco Project's assessment is $910,000.00 (the "Costco Sub-Area TIF"). F. The Calle Joaquin Realignment qualifies as part of the Interchange Improvements, and it is anticipated that the costs to be incurred in connection with the Calle Joaquin Realignment will exceed the Costco Sub-Area TIF. Therefore, the City has agreed that the amount by which the costs of acquiring right of way, designing, obtaining permits for, and constructing the Calle Joaquin Realignment, including any wetlands mitigation necessary for the Calle Joaquin Realignment, exceeds the Costco Sub-Area TIF shall be reimbursed from Sub-Area TIF fees collected from other Benefited Properties (the "Reimbursement Payments"). H. Costco shall receive the Reimbursement Payments from the Sub-Area TIF fees assessed against and actually collected by the City from owners of the Benefited Properties, and City agrees to administer the Reimbursement Payments as set forth herein. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, it is agreed as follows: 1. Costs of the Calle Joaquin Realignment and Wetlands Mitigation. (a) Design and Permitting Costs. Costco has submitted, and the City approves, the design, permitting and acquisition costs incurred or quantified to date for the Calle Joaquin Realignment in the amount shown on line 24 of the Calle Joaquin Off- site Reimbursement Agreement Costs Spreadsheet attached hereto as Exhibit B (the "Spreadsheet"). Additionally, Costco anticipates incurring future costs for such purposes the amount shown on line 36 of the Spreadsheet. Line Items 28 through 31 are maximum amounts not to be exceeded for reimbursement purposes, except pursuant to mutually-approved change orders as provided in Section 2 below. Line Item 32 is a maximum amount not to be exceeded, subject only to the contingency amount in Line Item 35 and the limited change orders provided in Section 2 below. Line Item 33 is for fees to City consultants advanced by Costco for future reimbursement from the City in Reimbursement Payments, and the City is in control of the amounts to be expended by these consultants. 2 � . � (b) Acquisition Costs. (i) The parties acknowledge that Line Item 18 of the Spreadsheet is an amount for acquisition of right of way based on an appraisal of interests to be acquired from one affected landowner and is subject to adjustment beyond the control of the City or Costco. (ii) The lands required for the Calle Joaquin Realignment from another affected landowner are designated as wetlands and would not be available for use for right of way or for development by the landowner without mitigation for the lost wetlands. That landowner has agreed to provide lands for wetlands mitigation elsewhere so that the land required for the Calle Joaquin Realignment is developable. That landowner also has agreed to accept a value per square foot for the right of way acquired for the Calle Joaquin Realignment as determined by future negotiation between the City and such landowner, at a full fee value of not to exceed Five Dollars ($5.00) per square foot, less the costs incurred under Line Item 3 and any portions of Line Items 6 and 7 attributable to Line Item 3 to construct the wetlands mitigation, and less the amount of Line Item 53 for monitoring the wetlands mitigation. Costco and the City shall arrange for any resulting net amount to be compensated to.said landowner in the form of Sub- Area TIF credits ("Sub-Area TIF Credits") rather than cash. (iii) Accordingly, acquisition costs are based on the assumption that all other interests may be acquired through property exchanges and construction of replacement improvements, without payment of monetary compensations if this is not possible, acquisition may require eminent domain actions. The parties also acknowledge that acquisition costs of properties acquired through eminent domain may be subject to increase and that on-going acquisition and permitting work and possible design revisions also shall increase the foregoing amount. (c) Mitigation Monitoring. The net total of the Reimbursement Payments, per Line Item 43 of the Spreadsheet is based on the further assumption that the Army Corps of Engineers (ACOE) will approve the City undertaking and performing all mitigation monitoring required in connection with the Calle Joaquin Realignment. If the ACOE approves the City performing the mitigation monitoring, Costco shall pay for any bond required by the ACOE, as indicated at Line Item 23 of the Spreadsheet, with the City being the obligor whose performance is assured by the bond. The parties understand that if the ACOE does not approve the City as the person responsible for such monitoring, Costco will be required to retain consultants to perform the monitoring, and Costco or its consultant(s) shall be the obligor under the bond. Furthermore, if Costco is required to retain consultants, the Reimbursement Payments would be expected to increase by the amounts shown on Line 55 if fairy shrimp are determined to be present and by the amounts shown on Lines 53 if no fairy shrimp mitigation is required. These amounts are estimates and would be subject to determination in the same manner as the Wetlands Budget as provided in Section 1(d) below and to change orders as provided in Section 2 below. 3 � _� (d) Construction Costs. Costco has submitted to the City's Public Works Department, and the City approves, the construction budget provided by Costco to construct the Calle Joaquin Realignment in the amounts shown as Line Items 2 and 4 on the Spreadsheet (and applicable portions of Line Items 6 and 7) (the "Calle Joaquin Construction Budget") and the estimate shown as Line Item 3 (and applicable portions of Line Items 6 and 7) to construct the Wetlands Mitigation (the "Wetlands Estimate"). Upon obtaining a construction budget prepared by the licensed general contractor(s) contracted or to be contracted by Costco to construct the Wetlands Mitigation (the "Wetlands Construction Budget"), Costco shall present the same to the City. If the Wetlands Construction Budget varies by more than 5% from the Wetlands Estimate, it shall be treated as a change order proposal by Costco to the City. The parties acknowledge that each of the Budgets also may be subject to subsequent change orders, which, if approved by Costco and the City pursuant to Section 2 below, shall result in adjustment of the respective Budget. 2. Change Order Procedure. Following determination of the Wetlands Budget pursuant to Section 1 above, there shall be no increase in cost from the respective Calle Joaquin Construction Budget (Line 2) and Wetlands Budget amounts or from the Line Item 36 amount unless the increase is reflected in a change order approved by Costco and City or excepted from such approval pursuant hereto. The only change orders excepted from City approval are (a) those in which Costco shifts cost savings from one line item of a component of a Budget to another line item, and (b) those for which Costco does not seek reimbursement from the City. Furthermore, Costco and the City Engineer together may approve a cost change order (as opposed to a design change order) if the cost increase is Twenty-Five Thousand Dollars ($25,000) or less and the net total of the change orders theretofore approved does not exceed applicable contingency and inflation factors from Lines 6 and 7 of the Spreadsheet. Costco and the City Administrative Officer together may approve a cost change order (as opposed to a design change order) if the cost increase is One Hundred Thousand Dollars ($100,000) or less and the net total of the change orders theretofore approved does not exceed applicable contingency and inflation factors from Lines 6 and 7 of the Spreadsheet. Any change order in excess of $100,000 or in excess of the applicable amounts from Lines 6 and 7 shall be submitted to the City Council for its consideration. If Costco is prepared to approve a change order not excepted from City approval pursuant to the foregoing, Costco shall submit the change order proposal to the City for approval with a categorization of those changes necessitated by unforeseen conditions and those necessitated by City-initiated conditions. The City's approval shall not be unreasonably withheld, delayed or conditioned; provided it shall be reasonable for the City to deny any change order resulting from a cause other than unforeseen conditions or City-initiated changes. The City shall accompany any rejection with a written statement of the basis therefor. To the extent the change order does not require City approval of a design revision, Costco may proceed with the work covered by the change order pending City approval of the change order, or even after City rejection of the change order, but Costco shall do so at its own risk to the extent that the City raises valid objections to the change order proposal. Any change order that is submitted to the City for approval shall be deemed accepted if not accepted or rejected by 4 � _n the City within ten (10) days of such submittal, however, any change order submitted to the City Council for consideration shall be deemed accepted if not accepted or rejected by the City Council within fifteen (15) days of such submittal. 3. Collection of Sub-Area TIF Fees. At the time the City first issues a building permit or any discretionary permit, approval or license for each Benefited Property after the date of this Agreement, the City shall collect the Sub-Area TIF fee from the owner of such Benefited Property, except to the extent Sub-Area TIF Credits are applied to Benefited Properties or the City accepts in-kind improvements that otherwise would be funded at some point under the Sub-Area TIF in lieu of Sub-Area TIF fees. Such Sub-Area TIF fee shall be the amount for each Benefited Property indicated on the Reimbursement Map and Rate Sheet, attached hereto as Exhibit A, adjusted in accordance with Section 4 below. To any extent that the cost of in-kind improvements accepted by the City in lieu of Sub-Area TIF fees exceed the Sub-Area TIF fees required of the party providing such improvements and such party may be reimbursed from future collection of Sub-Area TIF fees, such party's reimbursement shall be subordinate to the Reimbursement Payments under this Agreement. 4. Appreciation Factor. Without limiting any right of the City otherwise to modify the Sub-Area TIF program, the Sub-Area TIF fees for each Benefited Property (other than the Costco Sub-Area.TIF), the Sub-Area TIF Credits, and the Reimbursement Payments shall be adjusted by multiplying the outstanding balance of each of them as of the date of adjustment by the percentage change in the Consumer Price Index for Urban Consumers, All Items, All Urban Consumers (CPI-U) for the San Francisco-Oakland-San Jose Region (1982-1984=100) presently published by the United States Department of Labor, Bureau of Labor Statistics (the "Index"), calculated by determining the ratio of the latest value for the Index published prior to the date the Sub-Area TIF fee is to be collected or the Sub-Area TIF Credit or Reimbursement Payment is to be made and the value for the Index as of(i) the date of City approval of the Sub-Area TIF fee program, in the case of each Sub-Area TIF fee, and (ii) the date of completion of the Calle Joaquin Realignment, in the case of the Sub-Area TIF Credits and the Reimbursement Payments. In the event the Index shall hereafter be converted to a different standard reference base or otherwise revised, the determination of the percentage increase shall be made with the use of such conversion factor, formula or table for converting the Index as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then with the use of such conversion factor, formula or table as may be published by Prentice Hall, Inc., or, failing such publication, by any other nationally recognized publisher of similar statistical information. In the event the Index and/or a conversion factor shall cease to be published, then, for the purposes of this Agreement, there shall be substituted for the Index such other index as Costco and the City shall agree upon. 5. Time of _Reimbursement. City shall disburse the Reimbursement Payments to Costco within thirty (30) days of receipt of Sub-Area TIF fees. The Reimbursement Payments shall be the first priority application of all Sub-Area TIF fees collected until the Reimbursement Payments and the appreciation factor thereon pursuant to Section 6 hereof have been paid in full, and only then shall any of the Sub-Area TIF 5 fees be used for other aspects of the Interchange Improvements. Notwithstanding any other provision of this Agreement, if for any reason City has not theretofore disbursed to Costco any Reimbursement Payments that were to have been collected and disbursed to Costco in accordance with this Agreement during a calendar year, City shall disburse such amounts to them by December 31 of that year. The foregoing notwithstanding, final payment of the Reimbursement Payments and the handling of any claims arising out of a dispute as to reimbursements.shall, irrespective of the dollar amount on any such claim, be subject to Sections 20104 et seq. of the California Public Contract Code, or their successor provisions. 6. Right to Reimbursement; Assignment Thereof. The right to receive Reimbursement Payments shall be personal to Costco and shall continue notwithstanding the subsequent sale or transfer by Costco of any portion or all of its Benefited Property, unless Costco expressly in writing assigns its right to Reimbursement Payments to some other person or entity, either in connection with the sale or transfer of Benefited Property or independently of any real property transfer. The right to designate the application of the Sub-Area TIF Credits shall be personal to the landowner to whom they initially are granted and shall continue notwithstanding the subsequent sale or transfer of any of such landowner's Benefited Properties; provided, however that the Sub-Area TIF Credits may be applied only against Sub-Area TIF fees of Benefited Properties; and provided further that such landowner s shall have the right to assign all or any portion of the Sub-Area TIF Credits to the transferee in connection with the sale or other transfer of any of their Benefited Properties by providing City with thirty (30) days written notice of such assignment. Costco shall have no obligation to monitor City's collection of Sub-Area TIF fees from the Benefited Properties. Costco hereby directs that Reimbursement Payments due it shall be payable to and mailed its address for notice set forth below or to such address as it may specify from time to time. The assignment of Reimbursement Payments and Sub-Area TIF Credits shall be subject to prior written approval by the City, which approval shall not be unreasonably withheld, denied, conditioned or delayed. 7. Notices. Any notice or other communication hereunder shall be in writing and shall be hand delivered or sent by United States registered or certified mail, postage prepaid, return receipt requested, addressed to the appropriate party at its address set forth below, or at such other address as such party shall have last designated by notice to the other parties. The same shall be deemed given when delivered or three days after mailing; provided, however, that if any such notice or other communication shall also be sent by telecopy or fax machine, such notice shall be deemed given at the time and on the date of machine transmittal if the sending party receives a written send verification on its machine and forwards a copy thereof with its mailed or courier delivered notice or communication. The addresses for notices are as follows: If to City: City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401-3249 Attention: City Administrative Officer Fax No.: (805) 781-7409 6 � - � I If to Costco: Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027 Attention: Legal &Real Estate Department Fax No: (425) 313-8114 With a Copy to: Berg &Parker LLP 4 Embarcadero Center, Suite 1400 San Francisco, CA 94111 Attention: David B. Franklin Fax No.: (415) 397-9449 8. Attorneys Fees. In the event any party hereto brings or commences litigation for a declaration of the rights of the parties under this Agreement, for injunctive relief, or for an alleged breach or default of this Agreement, or any other action arising out of this Agreement, the prevailing party in any such action shall be entitled to an award of reasonable attorneys' fees and any court costs incurred in such action or proceeding, in addition to any other damages or relief awarded, regardless of whether such action proceeds to final judgment. 9. Entire Agreement; No Oral Modifications. This Agreement and the exhibits hereto constitute the final and complete agreement and supersede all prior correspondence, memoranda or agreements. This Agreement cannot be changed or modified other than by a written agreement executed by all of the parties. 10. Successors Bound. The provisions of this Agreement shall extend to, bind and inure to the benefit of the parties hereto and their respective personal representatives, heirs, successors, and assigns. . 11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 12 Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 13. Severability. If any term or provision of this Agreement shall, to any extent, be held invalid or unenforceable, the remaining terms and provisions of this Agreement shall not be affected thereby, but each remaining term and provision shall be valid and enforced to the fullest extent permitted by law. 14. Captions. The captions of this Agreement are inserted solely for convenience of reference only and do not define, describe or limit the scope or intent of this Agreement or any term hereof. [SIGNATURES BEGIN ON NEXT PAGE] THIS AGREEMENT is executed as of the date and year first above written. CITY: CITY OF SAN LUIS OBISPO By: Ken Hampian City Administrative Officer ATTEST: Audrey Hooper, City Clerk APPROVED AS TO FORM: n P. Lowell, City Attorney COSTCO: COSTCO WHOLESALE CORPORATION a Washington corporation By: Its: 8 EXHIBIT A REIMBURSEMENT MAP AND RATE SHEET p puq C7iq + r j , 1111111�. _-. I '•'.-•: t1111t11 �1111tt11.=•��� ■. 1 . 11111111 i_ __ • x.111111.1 __ .�, 11111111111111 „1' ' •F i s -: • . .: =��1111► : �, ,41 • ;�,�\101111111/1111111 � i e � Q:ice.i,� ♦♦moi Lv�moi♦♦♦i�1O � `diA a i� TRANSPORTATION IMPACT FEES .LOS OSOS VALLEY ROADIUS 101 INTERCHANGE SUB AREA FEES Current Discounted City-Wide City-Wide LOVR Land Use Basis TIF TIF(1)- __Int6rdLange, Total Retail Very High(2) _ Per 1,000 sq ft $2,353 $1,988 $18;500 $20,488 Retail High Per 1,000 sq ft 2,353 1,988 9,260 119248 Retail Strip Per 1,000 sq ft 2,353 1,988 6,620 8,608 Retail Specialty Per 1,000 sq ft 2,353 1,988 6,370 8;358 Retail Auto Per 1,000 sq ft 2,353 1,988 4,150 6,138 Retail Medium Per 1,000 sq ft 2,353 1,988 3,780 5,768 Hotel Per room 692 585 1,217 1,802 Single Family Residential Per dwelling unit 1,491 .1,260 927 2,187 Multi-Family Residential Per dwelling unit 1,323 1,118 569 1,687 Other(3) Per.ADT/PM trip-_ _ 139/ADT 117 2,186/PM trip Total/rri 1. Discounted at 153%to reflect portion of the LOVR/US 101 interchange in the City-wide TIF program. 2. Use is for fast food type commercial without drive thru facilities. 3. ADT:Average Daily Trip. ��iLp EXHIBIT B CALLE JOAQUIN OFF-SITE REIMBURSEMENT AGREEMENT COSTS SPREADSHEET Calle Joaquin Off `e Reimbursement Agreemt „Costs Spreadsheet Exhibit B A B 1 Construction Related Costs Amount 2 Calle Joaquin Realignment construction $1,564,582.00 3 Wetland construction (Boysen Ranch site) $97,877.00 4 PGE&SBC Utility Construction $22,000.00 5 Construction Subtotal $1,684,459.00 6 79k Construction Contingency $117,912.13 7 3%Inflation Factor $54,071.13 8 Construction Total $1,856,443.00 9 10 Soft Costs 11. . - _ _ _ (Billed To Costco To Date) _-- __ _ _ __- _Amount - 12 Berg& Parker $120,184.50- 13 120,184.5013 MulvannyG2 Architecture $26,119.00 14 Morro Group $71,952.03 15 Cannon Associates (Civil Engineering Services, Planning & Permitting Services) $453,282.07 16 Property Acquisition Consultants(City) $3,055.09 17 Property Acquisition Consultants for private offers (Costco) $31,387.50 18 Property Acquisition (Hansen parcel) $186,000.00 19 Rick's Tree Service $11,600.00 20 City of San Luis Obispo permit $125,834.00 21 Ca. Dept. of Fish &Game: Streambed Alteration Agreement/Operation of Law Letter $1,400.00 2-2 Ca. Regional Water Quality Control Board: Section 401 permit (Water Quality) $4,523.00 23 JACOE Wetland Bond $15,562.50- 24 Totall $1,050,900.00 25 26 Soft Costs "Not to Exceed" 27 (Estimated Future Expenses to ACOE Permit Issuance) Amount 28 l Berg &Parker $20,000.06- 29 MulvannyG2 Architecture $8,800.00 30 Morro Group $22,019.75 31 Cannon Associates (Civil Engineering Services, Planning & Permitting Services) $7,000.00 32 Cannon Associates (Civil Engineering Construction Administration Services) $73,000.00 33 Property Acquisition Consultants (City) _ $49,944.91 34 Construction Subtotal $180,764.66 351 70%Construction Contingency(applies to Line 31 only) $5,110.00 36 Total $185,875.00 37 38 39 Total of Above Costs $35093,218.00 40 41 Less TIF Obfi ation to Ci_ _ $9109000.00- 42 IQI Net Reimbursement Amount $25183,218.00 ,a- 1� 02/04/2005 C:\DOCUME-1\slouser\LOCALS-1\Temp\SLO Reimbursement Exhibit 01-27-05 Page 1 of 2 Calle Joaquin Off. `e Reimbursement AgreemIL' Costs Spreadsheet Exhibit B A B 44 Fairy Shrimp Mitigation Construction& Mitigation Amount 45 Fairy Shrimp mitigation construction (unknown site) $70,000.00 46 Fairy Shrimp 5-yr. post construction monitoring $65,000.00 47 Total $135,000.00 48 49Calle Joaquin Wetland Mitigation Monitoring Amount_ 50 Wetland 5-yr. post construction monitoring $40,210.00 3-year monitoring of revegetation in temp. disturbed wetland area of the Calle Joaquin 51 right-of-way realignment. $9,000.00 52 Calle Joaquin wetland impact monitoring,during construction $18,000.00 53 Total $67,210.00 54 Total of Future Soft Costs _- (Additional Reimbursements if cost required to be incurred by Costco- 55 _ - .- -- Lines 47&53) _ $202,21.0.00 a- 19 02/04/2005 C:\D000ME-1\slouser\LOCALS-1\Temp\SLO Reimbursement.Exhibit 01-27-05 Page 2 of 2