Loading...
HomeMy WebLinkAboutR-11305 approving a Reimbursement Agreement with Covelop, Inc for the 600 Tank Farm Mixed-Use Development Project (PR-0005-2021, ARCH-0406-2021; SBDV-0407-2021; GENP-0814-2019; SPEC-0407-2020)R 11305 RESOLUTION NO. 11305 (2022 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING A REIMBURSEMENT AGREEMENT WITH COVELOP, INC. FOR SPECIFIC INFRASTRUCTURE COSTS THAT ARE BEYOND THE 600 TANK FARM MIXED-USE DEVELOPMENT PROJECT’S FAIR SHARE REQUIREMENTS, AS REPRESENTED IN THE CITY COUNCIL AGENDA REPORT AND ATTACHMENTS DATED FEBRUARY 1, 2022 (600 TANK FARM ROAD, PR-0005-2021, ARCH-0406-2021; SBDV-0407-2021; GENP-0814-2019; SPEC-0407-2020; EID-0608-2020) WHEREAS, the City Council of the City of San Luis Obispo conducted a web based teleconference hearing on February 1, 2022, adopting the Final Environmental Impact Report and granting design approval of the 600 Tank Farm Mixed-Use project, pursuant to a proceeding instituted under ARCH-0406-2021, SBDV-0407-2021, GENP- 0814-2019, SPEC-0407-2020, and EID-0608-2020, Covelop Inc., applicant; and WHEREAS, Covelop, Inc., has applied for the approval of an “Infrastructure Reimbursement Agreement” (Exhibit A) concerning the development of the mix -use project; and WHEREAS, Covelop, Inc., has secured City approval to construct said mixed-use development subject to conditions of approval that require the orderly and timely completion of public infrastructure improvements to support the approved project; and WHEREAS, the City has an established a Citywide Transportation Impact Fee Program that allows new development projects to pay a fair share fee towards transportation infrastructure needs throughout the City; and WHEREAS, there are certain public improvements associated with the 600 Tank Farm Mixed-Use project that include public improvements that must be installed and are greater in size and capacity than required to serve only the project (“Excess Public Improvements”), qualifying said Excess Public Improvements for reimbursement as set forth in San Luis Obispo Municipal Code Section 16.20.110; and WHEREAS, Covelop, Inc., has presented estimates of the costs to design, permit and construct said Excess Public Improvements, and fair share proportionality of the properties that may benefit from the installation of the Excess Public Improvements; and WHEREAS, the approval of a Reimbursement Agreement will assist in the orderly and timely completion of public infrastructure; and DocuSign Envelope ID: 79E0542E-F7DB-476A-9DAD-F58BED36AB9F Resolution No. 11305 (2022 Series) Page 2 R 11305 WHEREAS, the City Council of the City of San Luis Obispo has duly considered all evidence, including the testimony of the applicant, interested parties, and evaluation and recommendations by staff, presented at the hearing; and WHEREAS, notices of said public hearings were made at the time and in the manner required by law. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: SECTION 1. The “Reimbursement Agreement,” attached to this Resolution as Exhibit A, is hereby approved, and the Mayor is authorized to approve minor revisions and execute this Agreement on behalf of the City. SECTION 2. The Finance Director is authorized to administer and implement the Reimbursement Agreement as provided therein. SECTION 3. The Mayor and City staff are authorized to take any actions necessary to carry out the intent of this Resolution. DocuSign Envelope ID: 79E0542E-F7DB-476A-9DAD-F58BED36AB9F Resolution No. 11305 (2022 Series) Page 3 R 11305 SECTION 4. The 600 Tank Farm Mixed-Use Development Plan and associated Final Environmental Impact Report (FEIR) were approved and certified by the City Council on February 1, 2022. Installation of the public improvements were identified as required mitigation measures to address significant transportation impacts resulting from the development proposal. The Reimbursement Agreement relates only to the financial mechanism by which the developer’s costs in excess of fair share will be reimbursed and does not implicate any physical change to the project or the environment . Therefore, no further environmental review is required for this action. On motion by Vice Mayor Christianson, seconded by Council Member Marx and on the following roll call vote: AYES: Council Member Marx, Pease, Shoresman, Vice Mayor Christianson, and Mayor Stewart NOES: None ABSENT: None The foregoing resolution was passed and adopted this 1st day of February 2022. ___________________________ Mayor Erica A. Stewart ATTEST: _________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington City Clerk DocuSign Envelope ID: 79E0542E-F7DB-476A-9DAD-F58BED36AB9F 2/15/2022 | 2:24 PM PST - 1 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) REIMBURSEMENT AGREEMENT FOR 600 TANK FARM ROAD This Agreement (the “Agreement”) is made on _____________________________, by and between the City of San Luis Obispo, a charter city and a municipal corporation (the “City”) and Covelop, Inc., a California corporation, or its successor(s)-in-interest, (the “Developer”), and collectively referred to as the “Parties.” RECITALS WHEREAS Developer is the owner of certain real property consisting of approximately 11.7 acres of land located at 600 Tank Farm Road in the City, which is more particularly described in attached Exhibit 1 incorporated herein by this reference (the “Property”); and WHEREAS the City Council of the City has approved a residential mixed-use project, including 280 residential units, as well as commercial, recreational park land, and open space uses on the Property, which is within the Airport Area Specific Plan (the “AASP”), through a series of actions and approved entitlements (collectively referred to as the “Project”) as follows: (1) The Final Environmental Impact Report and associated Mitigation Monitoring and Reporting Plan (including all mitigation measures therein) for the Project certified and adopted by Resolution No. 11304 (2022 Series), on February 1, 2022; (2) An amendment to the General Plan (Resolution No. 11304), adopted on February 1, 2022, including amendments to the Land Use/Circulation Element (“LUCE Update”) adopted by Resolution No. 10586 (2014 Series) on December 14, 2014; (3) The AASP as amended by Ordinance No. 1708 (2022 Series), on March 1, 2022; (4) The City’s Zoning Ordinance as amended by Ordinance No. 1708 (2022 Series), on March 1, 2022; (5) The Vesting Tentative Map SBDV-0407-2021 approved on February 1, 2022; and WHEREAS, Appendix A of the adopted Citywide Transportation Impact Fee (the “TIF”) Program, attached hereto as Exhibit 2 to this Agreement, identifies the portion of transportation improvements to be constructed by Developer, Citywide Transportation Impact Fees (TIF), General Funds, and/or private reimbursement agreements, and the Citywide TIF identifies other improvements that are reimbursable by virtue of their inclusion in the TIF programs; and WHEREAS, Exhibit 3 to this Agreement identifies certain Transportation Improvements Eligible for Reimbursement (the “Infrastructure Improvements”); and WHEREAS, in order for Developer to incur the Developer Costs, the City agrees to appropriate any General Fund amounts and TIF amounts as part of the City’s Financial Plan. A schedule showing an Estimate of Developer Costs is provided in Exhibit 4; and DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 2/18/2022 | 11:13 AM PST - 2 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) WHEREAS, 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 adopted for the Project. THEREFORE, for good and valuable consideration, the Parties agree as follows: AGREEMENT 1. Terms. The foregoing recitals are deemed by both Parties to be a material part of this Agreement and are incorporated herein and binding on the Parties by this reference. 2. Capitalized Terms. Capitalized Terms used in this Agreement have the following meanings: (a) “Agreement” is this agreement as executed by the Developer and the City of San Luis Obispo. (b) “Approved Plans” are the plans for each Transportation Infrastructure Improvement set forth in Section 2(i) as approved by the City or County, including any modifications thereof including modifications directed during construction. (c) “Benefiting Properties” includes those properties shown in Exhibit 5, and including 250 Tank Farm Road, 660 Tank Farm Road, 3985 Broad Street, and 650 Tank Farm Road. (d) “City” is the City of San Luis Obispo, a municipal corporation and charter city. (e) “Conditions of Approval” are the Conditions of Approval for the February 1, 2022 Project Approvals approved by Resolution, including the conditions of approval for Vesting Tentative Tract Map SBDV-0407-2021. (f) “County” is the County of San Luis Obispo. (g) “Developer” is Covelop, Inc., a California corporation, or its successor(s)- in-interest. (h) “Developer Costs” are the actual costs of designing, permitting, and constructing each of the Infrastructure Improvements listed on Exhibit 4. Developer Costs shall include eligible Developer hard and soft costs. Soft costs shall include all direct costs related to the project, including design, inspection, City plan check and inspection fees, supervision, and survey. Developer Costs shall also include the cost of all right-of-way acquisitions secured by Developer, if any. (i) “Eligible Fees” are the following fees and sources used to reimburse Developer for Developer Costs: DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 - 3 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) (i) Citywide Transportation Impact Fees (the “Citywide TIF”) as adopted by the respective City Council ordinance(s). Exhibit 4 identifies Citywide TIF funds from projects that directly benefit from the Transportation Infrastructure Improvements (“Benefitting Properties”). Fees from the Benefitting Properties are to be reserved for the exclusive purpose of providing reimbursement for the Transportation Infrastructure Improvements. Citywide TIF Fees collected from other development projects may also be prioritized for payment of Eligible Fees at the City’s discretion. (ii) Any Ad Hoc or Project Specific Mitigation Fees levied and collected by the City for the Infrastructure Improvements in Exhibit 3 to this Agreement, if any. (iii) General Fund amounts as identified in Attachment B to Exhibit 4 appropriated specifically for reimbursement for eligible Infrastructure Improvements and approved by the City Council. The City agrees to appropriate such funds in a timely way to ensure funding of necessary reimbursements. (iv) Citywide TIF fees from the Project. (v) Other Citywide TIF fees as deemed necessary by the City. (j) “Environmental Impact Report” (“EIR”) is an environmental report prepared to inform decision -makers and the public about the potential environmental impacts of the proposed Project and to reduce and mitigate those environmental impacts to the greatest extent feasible. (k) “Final Environmental Impact Report” (“FEIR”) is the approved environmental report. (l) “Infrastructure Improvements” is those improvements identified in Exhibit 3 to this Agreement. Infrastructure Improvements are referred to individually as “Infrastructure Improvement.” (m) “TIF Fees” is the Citywide transportation impact fees as defined under California Government Code Section 66000(b) as adopted by the City of San Luis Obispo on April 3, 20l8, as amended July 16, 2019. (n) “VTTM” is Vesting Tentative Tract Map SBDV-0407-2021 approved on February 1, 2022. (o) “Substantial Completion” is the time at which the engineer of record determines that work is substantially complete in accordance with the City engineering standards and specifications, with the concurrence of the City Engineer, which concurrence shall be provided within thirty (30) working days and shall not unreasonably be withheld. In addition, documentation of corresponding expenditures as provided in Section 3(c) has been submitted to the City. Substantial Completion shall be required only for the purposes of release of reimbursement for the final ten percent (10%) of Developer Costs pursuant to Section 5 of this Agreement. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 - 4 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) 3. City’s Obligations. In consideration of Developer’s agreement to design and construct the Infrastructure Improvements, the City agrees to the following: (a) To budget and appropriate the necessary Eligible Fees to provide reimbursements, including, but not limited to timely appropriation of General Fund amounts, and reservation of any Citywide TIF fees paid by Benefitting Properties. To this end, the City has appropriated $715,000 in the 2021-2023 Financial Plan that will cover design and the Tank Farm Bike Path Plans, Specifications and Estimates (PS&E), and the City Manager presently intends to recommend that the City, subject to the City Council’s plenary discretion in the exercise of its budgeting authority, appropriate at least an additional One Million Five Hundred Forty-Four Thousand Six Hundred ($1,544,600) during or prior to adoption of the 2022 Supplement to the Financial Plan to cover the costs of needed rights of way. (b) To reasonably cooperate with and respond to requests from Developer to review contractor bids in a timely manner to confirm that the work proposed conforms to Approved Plans. (c) To provide to Developer, no later than sixty (60) days prior to the date that Developer advises City that the work is to be commenced, a written description (the “City Description”) of the nature and extent of bills, invoices, contracts, and other documents necessary to evidence payment in order to be eligible for reimbursement pursuant to below Section 6 (the “Required Documentation of Expenditures”) or to request additional information to document costs. If Developer complies with a request by the City for additional documentation of costs, City may request additional information only insofar as it relates to the additional documentation provided. (d) Upon Developer’s completion of each Infrastructure Improvement as specified in the Approved Plans, and upon notification to the City, the City shall inspect the Infrastructure Improvement to determine compliance with Approved Plans and engineering standards. If the Infrastructure Improvement is determined by the City to be constructed in accordance with the Approved Plans and Specifications for the Infrastructure Improvement, the City shall approve each Infrastructure Improvement and accept it in accordance with below Section 8 of this Agreement. Regarding the roundabout, the City will assist the Developer in coordinating with the County on the design and construction. (e) The City shall provide reimbursement for the cost of the Infrastructure Improvement, in accordance with this Agreement. (f) To reimburse Developer for all the costs to design the bike path along Tank Farm Road, as described in Exhibit 3. (g) To reserve 100% of the Citywide TIF fees from the Project and from the Benefitting Properties to fund the TIF portion of the reimbursements until the reimbursement is complete. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 - 5 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) 4. Developer’s Obligations. In consideration of the City’s entering into the Agreement, Developer agrees to the following: (a) In order to assure that the costs of construction of the Infrastructure Improvements are reasonable, prior to commencing construction of the Infrastructure Improvements, Developer shall obtain at least three (3) non-collusive bids for construction of the Infrastructure Improvements for all general or subcontracted work and provide copies to City. City shall review and comment on the completeness of the bids. Developer may select any bid that is within ten percent (10%) of the low bid, as long as those bids within ten percent (10%) of the low bid are also within the Engineer’s Estimate for the Improvement; provided, however, that Developer is not required to accept any particular bid, including the low bid. If Developer accepts a bid which is (i) more than ten percent (10%) higher than the lowest bidder, or (ii) above the Engineer’s Estimate for the Improvement, Developer must reasonably justify its selection to the City Public Works Director, which justification must be accepted or rejected by the City within fifteen (15) business days of submission. If the City rejects the justification, it must set forth in writing its reasoning for the rejection and meet and confer with Developer to discuss the rejection. City may not unreasonably reject Developer’s bid selection. If Developer wishes to proceed with a bid that is more than ten percent (10%) above the low bid, Developer shall not be eligible for any reimbursements which exceed one hundred ten percent (110%) of the low bid. (b) To provide the Required Documentation of Expenditures required in Section 3(c) of this Agreement. Developer shall organize the Documentation according to Infrastructure Improvement and shall reasonably correlate Documentation to the work required for each Infrastructure Improvement. (c) To respond to City’s reasonable requests for additional information to resolve discrepancies provided such additional information falls within the scope of the City’s Required Documentation of Expenditures. (d) To construct each Infrastructure Improvement according to the Approved Plans & Specifications and the City’s Standard Specification and Engineering Standards. (e) To construct each Infrastructure Improvement in the phases identified in the Conditions of Approval. (f) To complete the preliminary planning and engineering tasks and related deliverables associated with the future bike path along Tank Farm Road, as described in Exhibit 3. 5. Reimbursement. Developer is entitled to reimbursement of one hundred percent (100%) of eligible Developer Costs pursuant to the terms of this Agreement. Reimbursement for eligible Developer Costs shall come from the combination sources described in Exhibit 4. Reimbursement from eligible fee programs shall not exceed the amount collected by those fee programs. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 - 6 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) (a) For the portion of the improvements funded by on site TIF credits then up to ninety percent (90%) of the Developer Costs eligible for reimbursement via impact fee credits shall be approved within thirty (30) days of Developer submitting to the City proof of obtaining a bond in a form acceptable to the City for completion of the improvement or shall apply when building permits are issued or fees are otherwise due. (b) For the portion of the improvements funded by TIF reimbursement from benefitting developments or General Fund reimbursement then up to ninety percent (90%) of the Developer Costs eligible for reimbursement via impact fees collected from other benefiting developments or from General Fund appropriations, as described in Exhibit 4, shall be reimbursed within thirty (30) days of City approval of Developer’s Documentation of Expenditures for actual costs incurred, but only to the extent the City has actually collected eligible TIF fees and appropriated eligible General Fund contributions. (c) The remaining ten percent (10%) of eligible Developer Costs shall be reimbursed within thirty (30) days of the City’s acceptance of substantial completion of each Improvement, again only to the extent the City has actually collected eligible TIF fees and appropriated eligible General Fund contributions. Upon completion of each improvement, Developer shall submit the Required Documentation of Expenditures requested by the City pursuant to above Section 3(c) to City for verification, and the City shall reconcile and issue final confirmation of the amount of eligible fee credits/reimbursements and General Fund reimbursements. If final actual Developer Costs increase or decrease pursuant to accepted bid amounts, approved change orders, or other modifications directed by the City Public Works Director, the creditable and reimbursable Developer Costs shall increase or decrease proportionately, and City staff shall seek corresponding adjustments to the respective fee programs and/or General Fund apportionments. If funds from the corresponding adjustments are not available and budgeted, then reimbursement shall be made consistent with Chapter 16.20 et seq of the City of San Luis Obispo Municipal Code. (d) As part of the City’s normal process for submitting budget requests, City staff shall request the City Council appropriate the amounts identified in Exhibit 4 and Section 3(a) above. (e) The Developer may submit request for progress payments for incremental completion of each Infrastructure Improvement, but no more frequently than once a calendar quarter. Developer shall submit Required Documentation of Expenditures in the form identified pursuant to Section 3(c) of this Agreement to the City Public Works Director for verification. The City shall verify the validity and acceptability of the payment request, or shall submit a request in writing to the Developer for additional information deemed necessary by the City to verify Developer Costs within thirty (30) days after submittal. Such additional information shall be submitted by the Developer to the City within thirty (30) days from receipt of the written request by the City. If Developer complies with a request by the City for additional documentation of costs, City may request more additional information only insofar as it relates to the additional documentation provided. After the Required Documentation of Expenditures is deemed complete by the City, the City shall provide payment of eligible reimbursements within thirty (30) days. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 - 7 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) 6. Scope of Agreement. This Agreement shall not be construed to limit the right of the City to modify the Infrastructure Improvements, provided such changes are within the scope of the Conditions of Approval. It is understood that any changes to the Infrastructure Improvement, including changes directed in the field, may result in corresponding adjustments to the Developer Costs and the amount of eligible reimbursements as set forth in the Agreement. (a) Any increase or decrease in cost from the Developer Cost must be reflected in the Contractor bid or change orders submitted by Developer and approved by the City or vice versa. The only change orders excepted from City approval are (i) those in which Developer shifts cost savings from one-line item of an Infrastructure Improvement to another line item within the same Infrastructure Improvement excluding use of project contingency, or (ii) those for which Developer does not seek reimbursement from the City. (b) Developer and the City Engineer, together, may approve any individual change order, above and behind any contingency amounts, for any individual Infrastructure Improvement if the total Developer Cost increase is Forty-Five Thousand Dollars ($45,000) or less and the net total of the change orders theretofore approved does not exceed the contingency amount for the Infrastructure Improvement. Developer and the City Manager together may approve any individual change order for any individual Infrastructure Improvement if the cost increase is One Hundred Seventy-Five Thousand Dollars ($175,000) or less and the net total of the change orders theretofore approved does not exceed the contingency amount. Such change orders shall not require City Council approval. Any individual change order for any individual Infrastructure Improvement in excess of One Hundred Seventy-Five Thousand Dollars ($175,000) above the Development Costs, may require City Council approval as determined by the City Manager. Any change orders for additional work that is directed by the City Manager shall be conclusively deemed to have been reviewed and approved, and such work including an allowance for supervision, indirect expenses, overhead shall be outside of the amounts identified in this Section 6(b). (c) The City’s approval of a change order 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 for work that does not meet the Approved Plans, City Engineering Standards, or does not meet the workmanship that is customary for the region. The City shall accompany any rejection with a written statement of the basis therefore. To the extent the change order requires City approval, Developer 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 Developer 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 the City within twenty (20) working days of such submittal. Any change order submitted that requires City Council approval shall schedule the hearing date for Council consideration within thirty (30) days after the change order request has been deemed complete by the City Engineer. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 - 8 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) 7. Indemnification. Developer shall indemnify, defend and hold City, its officials, officers, employees, and agents harmless from and against any and all liability, claims, suits, actions, damages, and causes of action arising out of any personal injury, bodily injury, loss of life, or damage to property, or any violation of any federal, state or municipal law or ordinance, including, but not limited to, the Developer’s failure to pay prevailing wages (which may apply) when required, or other cause in connection with the acts or omissions of Developer, its employees, subcontractors, or agents, or on account of the performance or character of construction and installation of the Infrastructure Improvements, except where such liability, claims, suits, actions, damages, and causes of action result from the negligence or willful misconduct of the City. Such indemnification by Developer shall cease for any claims made with respect to each Infrastructure Improvement upon which occurred after acceptance of that Infrastructure Improvements by the City. It is understood that the duty of Developer to indemnify and hold City harmless includes the duty to defend City as set forth in California Civil Code Section 2778. Within fifteen (15) days of City’s notice that it has been made a party to an action arising out of Developer’s acts or omissions under this Agreement, Developer shall provide a defense to the City in that action, with legal counsel acceptable to City. In the event Developer fails to provide such a defense to City, Developer shall be liable to the City for its attorneys’ fees and litigation costs incurred to defend itself beginning on the sixteenth (16th) day from the date of the City’s notice and request for a defense. Acceptance of insurance certificates and endorsements required under this Agreement does not relieve Developer from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply whether or not such insurance policies shall have been determined to be applicable to any of such damages or claims for damages. 8. Acceptance of the Infrastructure Improvements. Each Infrastructure Improvement to be constructed shall become the sole exclusive property of the City, or County, upon acceptance. Developer shall notify City in writing when each Infrastructure Improvement is complete. Each notice shall be submitted to the City by personal delivery and shall be deemed received by the City on the date of delivery. Such written notification shall include a request that the City accept each Infrastructure Improvement. As soon as practicable but no later than sixty (60) days of receipt of such notification of completion of an Infrastructure Improvement, the City shall determine whether the Infrastructure Improvement was constructed in accordance with the Approved Plans for that Infrastructure Improvement and engineering standards. Within sixty (60) days of when the City determines the Infrastructure Improvement was constructed in accordance with the Approved conditions, plans and engineering standards the City shall schedule the reasonably soonest Council Hearing Date for consideration of accepting the Infrastructure Improvements. If the City determines that an Infrastructure Improvement was not constructed in accordance with the Approved Plans and engineering standards, then the City will provide written notice to Developer. Written notice shall include details of the identified deficiencies. The City shall meet and confer with Developer to discuss these deficiencies within ten (10) business days of Developer’s request to do so. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 - 9 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) 11. Force Majeure. The Term of this Agreement and the time within which Developer shall be required to perform any act under this Agreement shall be extended by a period of time equal to the number of days during which performance of such act is delayed unavoidably beyond the reasonable control of Developer by: strikes, lock- outs, acts of god, failure or inability to secure materials or labor by reason of priority or similar regulations or order of any governmental or regulatory body, initiative or referenda, moratoria, litigation filed attacking execution, or performance of this Agreement, enemy action, civil disturbances, fire, or unavoidable casualties. 12. Successors and Assigns. Each and every provision of this Agreement shall be binding and inure to the benefit of the successors-in-interest of the Parties hereto. 13. Term. This Agreement shall expire upon the earlier of fifteen (15) years from the date of execution of this Agreement, or when reimbursements for all improvements constructed by Developer identified in this Agreement are completed. 14. Integration. This is an integrated agreement containing all of the consideration, understandings, promises, and covenants exchanged between the Parties for purposes of identifying reimbursement and credits, other than those identified in the Private Reimbursement Agreement, and other administrative processes within the scope of Infrastructure Improvements as identified in Exhibit 2 of this Agreement, notwithstanding the Developer’s obligations as specified in the approved Conditions of Approvals, and the VTIM. 15. Construction and Interpretation. It is agreed and acknowledged by the Parties that the provisions of this Agreement have been arrived at through negotiation, and that the Parties have had a full and fair opportunity to revise the provisions of this Agreement and to have such provisions reviewed by legal counsel. Therefore, the normal rule of construction that any ambiguities are to be resolved against the drafting party shall not apply in construing or interpreting this Agreement. 16. Jurisdiction. Any action by any Party to this Agreement shall be brought in the appropriate court of competent jurisdiction within the County of San Luis Obispo, State of California, notwithstanding any other provision of law which may provide that such action may be brought in some other location. 17. Choice of Law. This Agreement is made under and in all respects will be interpreted, enforced and governed by the laws of the State of California. 18. Amendment. This Agreement cannot be altered, amended, or modified in any way without the express written consent of each party hereto or their authorized successor-in-interest. 19. Time is of Essence. Time is of the essence for this Agreement. 20. Notices. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the Party to receive such notice at the addresses set forth below: DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 - 10 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) TO THE CITY: City of San Luis Obispo Community Development Department 919 Palm Street San Luis Obispo, CA 93401-3249 Attn: Community Development Director WITH COPY TO: City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 Attn: City Attorney TO THE DEVELOPER: Covelop, Inc. 1135 Santa Rosa Street, #210 San Luis Obispo, California 93401 Any notice shall be deemed delivered on the first business day that delivery is attempted or upon receipt, whichever is sooner. As used herein, “business day” means any day other than a Saturday, Sunday, or any state or federal holiday on which financial institutions in San Luis Obispo County are authorized or required to close for observance thereof. Any Party may change the address to which notices are to be sent by notifying the other Parties of the new address, in the manner set forth above. 21. 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 a single agreement. 22. Severability. If any one or more of the provisions contained in this Agreement shall be found to be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions shall not, in any way, be affected or impaired. 23. Authority. The Parties hereby represent that the persons executing this Agreement are expressly authorized to do so for and on behalf of the Parties. 24. Captions. The captions of the Sections of this Agreement are for convenience and reference only and are not intended and shall not be construed to define or limit the provision to which they relate. 25. Recitals and Exhibits. The Recitals first set forth herein and all Exhibits attached hereto are incorporated in this Agreement. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 - 11 - Credit and Reimbursement Agreement 600 Tank Farm Road (01-14-2022) IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the day and year first above written. DEVELOPER: Covelop, Inc. By: ________________________ Damien Mavis Its: Managing Member CITY: City of San Luis Obispo, a California charter city and municipal corporation By: ________________________ Michael Codron, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: By: ________________________ J. Christine Dietrick, City Attorney DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Exhibit 1 Property DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Exhibit 2 DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Appendix A of the adopted Citywide Transportation Impact Fee (the “TIF”) Program DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Exhibit 3 Transportation Improvements Eligible for Reimbursement This Agreement covers four major Transportation Improvement elements that are to be reimbursed: 1) Oversizing of an onsite 6’ sidewalk along Acacia Creek to a Class I “Acacia Creek” bike path connecting Tank Farm Road to the Damon-Garcia Sports Park; 2) the 14-foot center turn lane portion of Santa Fe Road, as described in the alternative street section in the Airport Area Specific Plan and as illustrated in Attachment A to this Exhibit 3; 3) planning and design for the Tank Farm Road Class I bike path connecting Santa Fe Road to Windmill Road west to Santa Fe Road; and 4) the TIF-funded portions of Tank Farm Road to be installed by the project as shown as Area 4 in Attachment B to this Exhibit 3 (including the Tank Farm/Santa Fe Roundabout). The Project may also install portions of Tank Farm Road and Santa Fe Road that are the responsibility of other private developers and landowners, and the reimbursement for those improvements will be covered under a separate Private Reimbursement Agreement. Tank Farm Road and Santa Fe Improvements. The Construction Delineation Exhibit in Attachment B shows a delineation of the following segments and portions of Santa Fe and Tank Farm Road Transportation Improvement areas, as follows: Area 1: The portion of the Tank Farm Road public rights of way frontage that are the responsibility of Developer. This includes sidewalk, landscape parkway, bike lane/shoulder, curb and gutter, and the adjacent travel lane. These improvements include the extension of water and recycled water improvements, dry utilities, and a proportionate share of the street storm drainage improvements. These improvements are not eligible for reimbursement. Area 2: The portion of the Santa Fe Road public rights of way frontage that are the responsibility of Developer. This includes sidewalk, landscape parkway, bike lane/shoulder, curb and gutter, and the adjacent travel lane. These improvements include the extension of water and recycled water improvements, dry utilities, and a proportionate share of the street storm drainage improvements. These improvements are not eligible for reimbursement. Area 3: The portion of Santa Fe Road that is to be paid for from with General Fund contributions or TIF funds as described in TIF Project 16a as shown in Exhibit 2 of this Agreement. This includes the center 14 feet of the roadway as shown in Attachment A of this Exhibit 3. The allocated cost includes a proportionate share of the planning, environmental, and preliminary engineering work performed as part of the project’s entitlement, as well as a proportionate share of the street storm drainage improvements, and the improvements to the 14-foot-wide center turn lane and median. Area 4: The portion of the Tank Farm Road that is the responsibility of the TIF fund (Project 14), General Fund, or other communitywide source, and includes the median, additional through lanes, the roundabout, drainage improvements, additional rights of way needed for the improvements. The improvements and allocated cost include a proportionate share of the planning, environmental, and preliminary engineering work, as well as a proportionate share of the street storm drainage improvements. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Area 5: This area is the portion of the Santa Fe Road frontage that would be the responsibility of the property owner west of Santa Fe Road. These improvements include additional sidewalk, land- scape parkway, bike lane/shoulder, curb and gutter, and the adjacent travel lane. These improvements include the extension of water and recycled water improvements, dry utilities, and a proportionate share of the street storm drainage improvements. Tank Farm Bike Path. The planning and design for the Tank Farm Bike Path are to be developed at a sufficient level of detail to provide for an accurate determination of construction quantities, necessary rights of way to be acquired, grading, and to a level sufficient to conduct a project-level environmental assessment. Such level of detail is described as a “65% level of detail” and is equivalent to Caltrans specifications and requirements for a Plans, Specifications and Estimates (“PS&E”) and as contained and described in Chapter 2, Section 2-1 through Section 2-2, of Caltrans’ Plans Preparation Manual, and in accordance with the City’s Improvement Standards and Standard Specifications. The environmental documentation shall document relevant environmental analysis/concerns provided in previous environmental reviews conducted to date (including the Project EIR and the Chevron EIR), describe level of CEQA review anticipated to be required, and provide applicable technical studies to support the City’s subsequent preparation of a formal CEQA document. The design shall provide horizontal and vertical alignments, utility conflicts, drainage strategy, grading needs, and the approach to creek/stream crossings. The rights of way analysis and scope of work shall define the right-of-way needed to construct the path, provide ROW exhibits and legal descriptions to help guide future negotiations between the City and property owner(s). This level of design requires a physical survey of the property, environmental studies such as biology, soils, wetlands, cultural resources, and other, and a detailed set of plans with accurate vertical and horizontal design elements, structural calcs, and accurate survey data. Notable deliverables include the following: 1. Three alternative alignments and approaches for consideration and review by the City. The City shall participate in the selection of these three alternatives. These alternatives will be at a “schematic” level of detail with general horizontal and vertical locations. After City comments (which may include City Advisory body involvement to be managed by the City), the three alternatives shall be refined and resubmitted to the City for selection of one alternative. The relevant technical studies shall be submitted to the City at this stage to inform City review, and for their comment and approval by the City. 2. A refined alignment shall be presented to the City which reflects the further development of the selected alternative. The level of detail shall be sufficient to estimate construction quantities, structural design elements, rights of way for the improvement, construction elements, earthwork calculations and balance, and utility locations. An OPIC shall be prepared. This plan set shall be submitted for City review and comment. City shall provide plan check comments in a consistent, non-contradictory format for all relevant departments and reviewers (Planning, Utilities, Engineering, Natural Resources, etc.). DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 3. An environmental assessment and initial study shall be prepared based on the selected alignment. The assessment shall include relevant technical studies, evaluation of each environmental subject area contained in the most current version of Appendix G of the CEQA Guidelines, analysis of the compliance with the City’s VMT regulations for transportation construction projects, and compliance with city development policies and regulations that have been adopted for the purpose of environmental impact regulation and mitigation. 4. A final set of plans shall be prepared with the form and content in Section 1.1 of Division 1010 of the Engineering Standards. A final OPIC shall be prepared. No plan check or final permit is anticipated. Acacia Creek Bike Path. The Acacia Creek Bike Path Transportation Improvement is a 12- foot concrete path (Option 2 of Improvement Standard 7040) from the approximately mid-line of the project adjacent to Acacia Creek north approximately 750 lineal feet to the north property line, and extending 200 feet north of the north property line on the Damon-Garcia Sports Park to a tie-in point with the Damon-Garcia Sports Park Bike Path. This Class I bike path is considered and “oversizing” of the 6-foot sidewalk that would have normally been installed by the developer. The project’s “fair share” of the Class I bike path costs is the cost of the onsite 6-foot bike path, currently estimated at $197,500 of the $573,500 total cost. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Attachment A to Exhibit 3 Santa Fe Road Airport Area Specific Plan Road Improvement Areas and Responsibilities DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Attachment B to Exhibit 3 Construction Delineation Exhibit DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Exhibit 4 Estimate of Developer Costs and Reimbursement Revenues Attachment A of this Exhibit 4 shows the estimate of Developer Costs for the Transportation Improvements. Attachment B of this Exhibit 4 shows how these improvements are intended to be funded from a combination funding from the General Fund, TIF Credits from the project, TIF fees from Benefitting Properties, Developer Contributions, and other sources. Actual costs may vary, and the cost estimate in Attachment A is provided for illustration of the scope and potential costs of the Transportation Improvements and not provided by way limitation of the specific cost elements, total costs, or quantities. Attachment B is provided for illustration of the potential magnitude and timing of General Fund obligations, and revenues from projects benefitting from the Transportation Improvements. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Attachment A to Exhibit 4 Developer Cost Estimate Total City Share, Reimburseable Total Total Area Street Area 10,464 9,805 10,882 90,105 3,306 Pcnt Street Area Description Units Quantity Estimated Cost Quantity Estimated Cost Quantity Cost w/Prevailing Wage Quantity Cost w/Prevailing Wage Quantity Estimated Cost Quantity Estimated Cost Quantity Estimated Cost Demolition and Earthwork LS 60,122.00$ 22,460.00$ 1 47,024.86$ 1 427,080.00$ 1 9,238.00$ 565,924.86$ 474,104.86$ Erosion Controls LS 5,000.00$ 5,000.00$ 1 8,650.00$ 1 15,000.00$ 1 5,000.00$ 7,500.00$ 38,650.00$ 31,150.00$ Water -$ -$ Fittings/Valves LS 1 4,500.00$ 1 4,500.00$ 9,000.00$ -$ Water Lines LF 600 24,000.00$ 375 15,000.00$ 39,000.00$ -$ Recycled Water Lines LF 600 24,000.00$ 375 15,000.00$ 39,000.00$ -$ Fire Hydrants Each 2 11,000.00$ 2 11,000.00$ 22,000.00$ -$ Sewer Lines -$ -$ Sewer Lines LF 375 25,500.00$ 25,500.00$ -$ Service Main Each 1 5,000.00$ 5,000.00$ -$ Manholes Each 1 5,500.00$ 5,500.00$ -$ Storm Drainage Allocation (See detail below)32,363$ 30,325.46$ 33,656.32$ 278,680.66$ 10,224.94$ 385,250.00$ 312,336.99$ Street Improvements -$ -$ Curb and Gutter LF 600 13,200.00$ 500 11,000.00$ 100 3,800.00$ 1,650 62,700.00$ 90,700.00$ 66,500.00$ Curbs (Mow)LF 600 9,600.00$ 680 10,880.00$ 1,671 41,775.00$ 62,255.00$ 41,775.00$ ADA Access Ramps Each 1 1,750.00$ 1 2,500.00$ 2 17,732.50$ 21,982.50$ 20,232.50$ Street Lights Each 2 11,000.00$ 2 11,000.00$ 3 28,500.00$ 50,500.00$ 28,500.00$ Joint Trench LF 360 6,300.00$ 8,500 148,750.00$ 6,300.00$ 148,750.00$ Sidewalks SF 2,160 25,920.00$ 4,960 59,520.00$ 85,440.00$ -$ Street Striping LS 1 2,500.00$ 1 2,500.00$ 1 4,325.00$ 1 4,325.00$ 1 5,000.00$ 18,650.00$ 8,650.00$ Asphalt Paving Tons 300 39,000.00$ 275 35,750.00$ 241 36,150.00$ 1,845 276,750.00$ 85 11,050.00$ 398,700.00$ 312,900.00$ Class II Road Base Tons 1,150 46,000.00$ 1,000 40,000.00$ 942 65,940.00$ 7,190 503,300.00$ 332 13,280.00$ 668,520.00$ 569,240.00$ Landscaping -$ -$ Trees Each 10 2,750.00$ 10 2,750.00$ 5,500.00$ -$ Planting and Irrigation SF 2,840 14,200.00$ 2,400 12,000.00$ 10,900 95,375.00$ 3,400 25,500.00$ 121,575.00$ 120,875.00$ Subtotal 326,904.62$ 330,985.46$ 202,046.18$ 1,751,218.16$ 53,792.94$ 181,750.00$ -$ 2,664,947.36$ 2,135,014.35$ -$ -$ Traffic Control LS 100,000.00$ -$ 100,000.00$ 100,000.00$ Right of Way Acquisition SF 2,990 37,375.00$ 41,960 525,500.00$ 1,010 12,625.00$ 575,500.00$ 562,875.00$ Cost Increase to Construction (2023)10.00%32,690.46$ 33,098.55$ 20,204.62$ 175,121.82$ 5,379.29$ 18,175.00$ 266,494.74$ 213,501.43$ Environmental Technical Studies 40,000.00$ -$ 40,000.00$ Design, Inspection and Construction Admin -$ -$ Engineering Design 12.50%40,863.08$ 41,373.18$ 25,255.77$ 218,902.27$ 6,724.12$ 22,718.75$ 100,000.00$ 333,118.42$ 366,876.79$ Construction Engineering/Survey 2.50%8,172.62$ 8,274.64$ 5,051.15$ 43,780.45$ 1,344.82$ 4,543.75$ 25,000.00$ 66,623.68$ 78,375.36$ Insurance 1.50%4,903.57$ 4,964.78$ 3,030.69$ 26,268.27$ 806.89$ 2,726.25$ 1,875.00$ 39,974.21$ 33,900.22$ City Plan Check (Per Fee Schedule)12,667.55$ 12,825.69$ 4,546.04$ 39,402.41$ 2,084.48$ 4,089.38$ -$ 71,526.16$ 48,037.82$ City Construction Inspection (Per Fee Schedule)26,675.42$ 27,008.41$ 13,133.00$ 113,829.18$ 4,389.50$ 11,813.75$ -$ 185,035.52$ 138,775.93$ Bonding 1.50%4,903.57$ 4,964.78$ 3,030.69$ 26,268.27$ 806.89$ 2,726.25$ 1,875.00$ 39,974.21$ 33,900.22$ Administration/Developer Ovhd 10.00%32,690.46$ 33,098.55$ 20,204.62$ 175,121.82$ 5,379.29$ 18,175.00$ 12,500.00$ 266,494.74$ 226,001.43$ Supervision 5.00%16,345.23$ 16,549.27$ 10,102.31$ 87,560.91$ 2,689.65$ 9,087.50$ 6,250.00$ 133,247.37$ 113,000.72$ Contingencies 20.00%65,380.92$ 66,197.09$ 40,409.24$ 350,243.63$ 10,758.59$ 36,350.00$ 25,000.00$ 532,989.47$ 452,002.87$ Subtotal 245,292.88$ 248,354.94$ 182,343.14$ 1,881,999.03$ 52,988.53$ 130,405.63$ 212,500.00$ 2,610,978.52$ 2,407,247.79$ Total 572,197.50$ 579,340.39$ 384,389.32$ 3,633,217.20$ 106,781.47$ 312,155.63$ 212,500.00$ 5,275,925.88$ 4,542,262.14$ Storm Drainage Note:All costs are estimates. Reimbursement to be based on actual costs. 18" SD Lines 660 108.00$ 71,280.00$ Eligible Developer Costs include all direct and indirect costs, including 10% Admin/Overhead Curb Inlet 4 6,750.00$ 27,000.00$ Earthwork 833 30.00$ 25,000.00$ Stormwater Treatment 3,500 43.25$ 151,375.00$ Flared End Sections 1 2,595.00$ 2,595.00$ Manholes 3 4,750.00$ 14,250.00$ Subtotal 291,500.00$ ROW 7,500 12.50$ 93,750.00$ Total 385,250.00$ Estimated Developer Costs City Responsibility; Public Reimbursement Agreement Acacia Creek Bike Path Class I Bike Path Connection Tank Farm Bike Path Planning "PAED" Level Planning, Engineering and Environmental Study 97,605 3,306 8.4%7.9%8.7%72.3%2.7% Area 5 Frontage Improvements (Private Reimbursements) Private Responsibility; No Reimbursement Agreement City Responsibility; Public Reimbursement Agreement Private Responsibility, Private Reimbursement Agreement Santa Fe (Covelop Frontage Improvements) Area 1 Tank Farm (Covelop Frontage Improvements) Area 3 Santa Fe (TIF Reimburseable) Area 4 Tank Farm (TIF Reimburseable Area 2 17,300 16,211 10,882 DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Attachment B to Exhibit 4 Estimated Cost and Funding Sources If sufficient Off-Site TIF fees from Benefiting Properties have not yet been collected at time of reimbursement request, then Developer may either wait until those fees are collected for reimbursement or apply Onsite TIF Credits for reimbursement. Uses Santa Fe Road (Area 3)1 Tank Farm Road (Area 4)2 Acacia Creek Bike Path3 Tank Farm Bike Path PSE4 Total Design $ 30,306.93 $ 262,682.72 $ 36,024.83 $ 189,750.00 $ 518,764.49 Rights of Way $ 37,375.00 $ 525,500.00 $ - $ 562,875.00 Direct Expense $ 316,159.86 $ 2,837,596.79 $ 475,468.73 $ 3,691,275.04 Contingency $ 40,409.24 $ 350,243.63 $ 62,049.67 $ 37,950.00 $ 490,652.54 Total $ 424,251.02 $ 3,976,023.14 $ 573,543.23 $ 227,700.00 $ 5,201,517.39 Sources General Fund $ 254,550.61 $ 1,560,656.94 $ 376,005.65 $ 68,310.00 $ 2,259,523.21 Offsite Paid TIF5 $ 120,555.17 $ 1,715,876.15 $ 159,390.00 $ 1,995,821.32 $ 197,537.58 $ 197,537.58 Onsite TIF (Credits) $ 49,145.24 $ 699,490.05 $ 748,635.29 Total $ 424,251.02 $ 3,976,023.14 $ 573,543.23 $ 227,700.00 $ 5,201,517.39 4 30% of Costs from GF 1 60% of cost from GF; Balance from TIF 2 30% of Direct and Indirect Project Cost from GF; 100% of ROW from GF 3 100% of Non-Project Contributions from GF 5 Projected Fees from 660 Tank Farm and 3985 Broad Street Retail Pads Plusn 100% from 650 Tank Farm Road Direct Project Contribution DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 Exhibit 5 Benefitting Properties 3895 South Broad Street APN: 053-421-003 660 Tank Farm Road (AKA 666 Tank Farm Road) APN: 053-421-004 650 Tank Farm Road APN: 053-421-005 250 Tank Farm Road APNs: 053-251-057 through 053-251-084, inclusive. DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67 3985 South Broad Street, 666 Tank Farm Road, 650 Tank Farm Road 250 Tank Farm Road DocuSign Envelope ID: A216B580-FC66-4518-9D6B-EB8CDE2D4A67