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HomeMy WebLinkAboutOrd 22-12 Community Benefit Kingsmill Gr ORDINANCE NO. 22 - 12 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING A COMMUNITY BENEFIT/DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DUBLIN AND DIAMOND HEIGHTS INVESTMENTS IV, LLC. FOR A MIXED-USE RETAIL/RESIDENTIAL PROJECT PLPA-2012-00060 THE CITY COUNCIL OF THE CITY OF DUBLIN DOES HEREBY ORDAIN AS FOLLOWS: Section 1. RECITALS A. A request has been made by the Kingsmill Group/Diamond Heights Investments ("Applicant") to enter into a Community Benefit/Development Agreement with the City of Dublin for the property known as the former Crown Chevrolet site, comprised of APNs 941-1500-015-09 and 941- 1500-032-02, a 6.34-acre site; and B. The project is located within the Downtown Dublin Specific Plan area; and C. The Kingsmill Group/Diamond Heights Investments is proposing to construct 314 residential units with 17,000 square feet of commercial/retail space on a 4.9-acre site and a 76-unit affordable housing project with preference for households with military veterans on a 1.37-acre site within the Downtown Dublin Specific Plan area; and D. The Applicant is requesting approval of a Community Benefit/Development Agreement in advance of the consideration of project approvals in order to meet upcoming funding cycles for affordable housing at the State; and E. The project is located within the Downtown Dublin Specific Plan area, which was the subject of an Environmental Impact Report (EIR), State Clearinghouse number 20100022005. The Downtown Dublin Specific Plan Final EIR was certified by City Council Resolution No. 08-11 dated February. 1, 2011 . Pursuant to the California Environmental Quality Act (CEQA) Guidelines section 15168, the Community Benefit/Development Agreement is within the scope of the project analyzed in the Specific Plan EIR and no further CEQA review or document is required. A Community Benefit Agreement/Development Agreement to allocate residential development is authorized under the DDSP. The environmental impacts of the residential development authorized by such an allocation were analyzed in the Specific Plan EIR. There is no substantial evidence in the record that any of the conditions triggering supplemental environmental review under CEQA Guidelines section 15162 exists; and F. The Applicant has applied for a Community Benefit/Development Agreement which will vest the Site Development Review and allocation from the Downtown Dublin Development Pool; and G. The Planning Commission held a public hearing on the proposed Community Benefit/Development Agreement on November 13, 2012 for which public notice was given by law; and Page 1 of 3 H. The Planning Commission made its recommendation to the City Council for approval of the Community Benefit/Development Agreement by Resolution; and I. A public hearing on the proposed Community Benefit/Development Agreement was held before the City Council on December 4, 2012 for which public notice was given as provided by law; and J. The City Council has considered the recommendation of the Planning Commission, including the Planning Commission's reasons for its recommendation, the Staff Report, all comments received in writing, and all testimony received at the public hearing. Section 2. FINDINGS AND DETERMINATIONS Therefore, on the basis of: (a) the foregoing Recitals which are incorporated herein, (b) the City of Dublin General Plan; (c) the Downtown Dublin Specific Plan, (d) the Downtown Dublin EIR; (e) the Staff Report and on the basis of the specific conclusions set forth below, the City Council finds and determines that: 1. The Community Benefit/Development Agreement is consistent with the objectives, policies, general land uses and programs specified and contained in the City's General Plan, and in the Downtown Dublin Specific Plan in that: (a) the General Plan and Specific Plan land use designation for the site is Downtown Dublin — Transit Oriented District; (b) the proposed project is consistent with the designated land uses; and (c) the project is consistent with the fiscal policies of the General Plan and Specific Plan with respect to the provision of infrastructure and public services. 2. The Community Benefit/Development Agreement is compatible with the uses authorized in, and the regulations prescribed for, the land use districts in which the real property is located. 3. The Community Benefit/Development Agreement is in conformity with public convenience, general welfare, and good land use policies in that the Developer's project will implement land use guidelines set forth in the Downtown Dublin Specific Plan and the General Plan. 4. The Community Benefit/Development Agreement will not be detrimental to the health, safety, and general welfare in that the Developer's proposed project will proceed in accordance with all the programs and policies of the General Plan, Downtown Dublin Specific Plan, Project Approvals and any Conditions of Approval for the Project. 5. The Community Benefit/Development Agreement will not adversely affect the orderly development of property or the preservation of property values in that the project will be consistent with the General Plan, the Downtown Dublin Specific Plan, and Project Approvals. 6. The project is located within the Downtown Dublin Specific Plan area, which was the subject of an Environmental Impact Report (EIR), State Clearinghouse number 20100022005. The Downtown Dublin Specific Plan Final EIR was certified by City Council Resolution No. 08-11 dated February 1 , 2011. Pursuant to the CEQA Guidelines section 15168, the City finds that the Community Benefit/Development Agreement is within the scope of the project analyzed in the Specific Plan EIR and no further CEQA review or document is required. A Community Benefit Agreement/Development Agreement to allocate residential development is authorized under the DDSP. The environmental impacts of the residential development authorized under the Agreement Page 2 of 3 were analyzed in the Specific Plan EIR. The City finds that there is no substantial evidence in the record that any of the conditions triggering supplemental environmental review under CEQA Guidelines section 15162 exists. The environmental impacts of the Community Benefit/Development Agreement will not result in new or substantially more severe significant impacts than those identified and analyzed in the Downtown Dublin EIR. There is no substantial evidence showing new information of substantial importance or substantial changes in circumstances that would result in new or substantially more severe impacts or meet any other standards in Public Resources Code Section 21166 and related CEQA Guidelines Sections 15162 and 15163. Therefore, no further environmental review is required under CEQA for the Community Benefit/Development Agreement. Section 3. APPROVAL The City Council hereby approves the Community Benefit/Development Agreement (Exhibit A to the Ordinance) and authorizes the City Manager to execute it. Section 4. RECORDATION Within ten (10) days after the Development Agreement is fully executed by all parties, the City Clerk shall submit the Agreement to the County Recorder for recordation. Section 5. EFFECTIVE DATE AND POSTING OF ORDINANCE This Ordinance shall take effect and be in force thirty (30) days from and after the date of its passage. The City Clerk of the City of Dublin shall cause the Ordinance to be posted in at least three (3) public places in the City of Dublin in accordance with Section 36933 of the Government Code of the State of California. PASSED, APPROVED AND ADOPTED this 18th day of December, 2012 by the following vote: AYES: Councilmembers Biddle, Hart, Haubert, Swalwell, and Mayor Sbranti NOES: None ABSENT: None ABSTAIN: None EST Mayor ATT "�I/ is(?0zo City Clerk Ord No. 22-12, Adopted 12-18-12, Item 4.5 Page 3 of 3 RECORDING REQUESTED BY: CITY OF DUBLIN When Recorded Mail To: City Clerk City of Dublin 100 Civic Plaza Dublin, CA 94568 Fee Waived per GC 27383 . Space above this line for Recorder's use COMMUNITY BENEFIT AGREEMENT AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBLIN AND DIAMOND HEIGHTS INVESTMENTS IV, LLC RELATING TO THE DEVELOPMENT OF THE CROWN CHEVROLET SITE WITHIN THE DOWNTOWN DUBLIN SPECIFIC PLAN • THIS COMMUNITY BENEFIT AGREEMENT AND DEVELOPMENT AGREEMENT ("Development Agreement" and sometimes "Agreement") is made and entered in the City of Dublin on this day of , 2012, by and between the CITY OF DUBLIN, a Municipal Corporation (hereafter "CITY") and Diamond Heights Investment IV, LLC, a California limited liability company (hereafter "DEVELOPER") pursuant to the authority of §§65864 et seq. of the California Government Code and the Dublin Municipal Code, Chapter 8.56. CITY and DEVELOPER are, from time-to-time, individually referred to in this Agreement as a "Party," and are collectively referred to as the "Parties." NOW, THEREFORE, with reference to the Recitals below, and in consideration of the mutual promises, obligations and covenants herein contained, CITY and DEVELOPER agree as follows: RECITALS A. California Government Code §§65864 et seq. ("Development Agreement Statute") and Chapter 8.56 of the Dublin Municipal Code (hereafter "Chapter 8.56") authorize the CITY to enter into a Development Agreement for the development of real property with any person having a legal or equitable interest in such property in order to establish certain development rights in such property. B. DEVELOPER desires to develop and holds an equitable interest in, in that it has the right to purchase, certain real property consisting of approximately 6.34 acres of land, located in the City of Dublin, County of Alameda, State of California, which is more particularly described in Exhibit A attached hereto and incorporated herein by this reference, and which real property is hereafter called the "Property." As shown in detail on Exhibit A, the Property is comprised of two separate but adjacent parcels: (i) "Parcel A," which consists of approximately 4.97 acres; and (ii) "Parcel B," which consists of approximately 1.37 acres. C. In 2011, the City Council adopted the. Downtown Dublin Specific Plan by Resolution No. 9-11 ("Specific Plan"), which Specific Plan is applicable to the Property. The Specific Plan contemplates a "Community Benefit Agreement" whenever residential allocations are given by City out of the residential allocation "pool" established by the Specific Plan. This Agreement includes such a Community Benefit Agreement. D. DEVELOPER proposes the development of the Property into two separate . but related project components: (i) The development of Parcel A with 314 market-rate residential rental units and approximately 17,000 square feet of general commercial uses on the first floor of the residential structure(s), along the Dublin Boulevard frontage (as required by Specific Plan); and (ii) The development of Parcel B with approximately 76 units of affordable rental housing (collectively the "Project"). E. DEVELOPER anticipates that, upon, or in anticipation of, receiving all entitlements, it will transfer DEVELOPER's interest in Parcel A to Fairfield Residential .. Company LLC (or its affiliated entity) ("Fairfield Residential"), and it will transfer • -2- DEVELOPER's interest in Parcel B to Eden Housing Inc., a California non-profit public benefit corporation (or its controlled affiliate, or similar affordable housing provider) ("Eden"). F. DEVELOPER has applied for, and CITY is processing, various land use approvals in connection with the development of the Project, including, without limitation, a Site Development Review approval, applicable to Parcel A, and a Site • Development Review approval, applicable to Parcel B. All such approvals collectively, together with any approvals or permits now or hereafter issued with respect to the Project are referred to as the "Project Approvals." G. Additionally, development of the Property by DEVELOPER may be subject to other future discretionary and non-discretionary CITY approvals, which, if granted by CITY, shall automatically become part of the Project Approvals. H. CITY desires the timely, efficient, orderly and proper development of the Project and the Property. The City Council has found that, among other attributes, this Development Agreement is consistent with its General Plan and the Specific Plan and has been reviewed and evaluated in accordance with the Development Agreement Statute and Chapter 8.56 Dublin Municipal Code and Inclusionary Zoning Regulations Chapter 8.68. J. CITY and DEVELOPER have reached agreement and desire to express herein a Community Benefit Agreement and Development Agreement that will facilitate development of the Project subject to conditions set forth herein. K. The Project is subject to and in compliance with the Specific Plan, for which a Specific Plan a Program EIR was certified by CITY in Resolution No. 8-11 ("Specific Plan EIR") pursuant to the California Environmental Quality Act, and the CEQA Guidelines promulgated thereunder (collectively, "CEQA"). Pursuant to CEQA Guidelines section 15168, this Agreement is within the scope of the project analyzed.in the Specific Plan EIR and no further CEQA review or document is required. The Project is subject to further discretionary approvals by the City. The City will determine the environmental review required under CEQA for those future Project Approvals at the time it considers those Approvals. This Agreement does not impede, impair or otherwise seek to truncate or limit the City discretion in considering those future Project Approvals or conducting any future CEQA review as required by applicable law. L. On , 2012, the City Council of the City of Dublin adopted Ordinance No. approving this Community Benefit Agreement and Development Agreement ("Approving Ordinance"). The Approving Ordinance will take effect on ("Approval Date"). . • • -3- • • TERMS AND CONDITIONS • 1. Description of Property. The Property which is the subject of this Development Agreement is described in the Recitals. • 2. Interest of DEVELOPER. The DEVELOPER has a legal or equitable interest in the Property. 3. Relationship of CITY and DEVELOPER. This Agreement has been negotiated and voluntarily entered into by CITY and DEVELOPER. The DEVELOPER is not an agent of CITY. The CITY is not the agent of the DEVELOPER. The CITY and DEVELOPER hereby renounce the existence of any form of joint venture or partnership between them, and agree that nothing contained herein or in any document executed in connection herewith shall be construed as making the CITY and DEVELOPER joint venturers or partners. 4. Effective Date and Term. 4.1 Effective Date. The effective date of this Agreement ("Effective Date") shall be the Approval Date of the Approving Ordinance as defined in Recital L. 4.2 Term of Agreement. The "Term" of this Development Agreement shall commence on the Effective Date and shall continue for five (5) years from the Effective Date, unless otherwise extended or terminated as provided in Section 4.2. 4.2.1 Optional Extension. Prior to the termination of this Development Agreement, as provided in Section 4.2, DEVELOPER may extend the term of the Development Agreement. To do so, DEVELOPER shall give CITY written notice at least 90 days prior to the termination date of the Development Agreement. At the time DEVELOPER provides such notice, DEVELOPER shall make a contribution to . CITY in the amount of One Hundred Thousand Dollars ($100,000) for each year of extension requested under this provision. Upon receipt of the notice and the contribution, the City Manager shall approve the extension and shall notify the DEVELOPER in writing that the term of the Development Agreement has been automatically extended for an additional time period equal to the time period requested by Developer under this provision, commencing on the date the Development Agreement would otherwise have terminated; provided DEVELOPER may exercise its option to extend the Development Agreement no more than five times, for a maximum total term of the Development Agreement of ten years. Provided there is an extension period remaining Developer may request the.extension for multiple years including the payment due. The total contribution for the maximum extension will be Five Hundred Thousand Dollars ($500,000). From and after the time Parcel B is transferred to Eden, Eden shall have the right to extend the term of the Development Agreement as it • applies to Parcel B and Eden as set forth in this subsection 4.2.1 but without the payment of any extension contribution. 4.3 Term of Project Approvals. Pursuant to the Subdivision Map Act (Gov't Code § 66410 et seq.), and in particular, Government Code Section 66452.6(a), the term of any subdivision map (parcel, tentative or otherwise) shall be extended automatically for the Term of this Agreement, and shall also be extended by any other extension(s) granted under the Subdivision Map Act and/or CITY ordinance consistent with the Subdivision Map Act. 4.4 Term of Residential Allocations. 4.4.1 Consistent with Section 6 of this Agreement, the "Residential Allocation Term" for the "Residential Allocations" (as that term is defined by this Agreement) provided by the Community Benefit Agreement provisions of this Agreement shall be two (2) years from the Effective Date as defined in Section 4.1 Notwithstanding the foregoing, it is acknowledged that DEVELOPER shall not have a right to the Residential Allocations until such time as it has sold Parcel B in accordance with Subsection 6.2. 4.4.2 However, if a building permit for a residential structure has been issued by CITY, and if the construction of a structure related to residential uses . has been commenced on Parcel A and/or Parcel B within said two-year Residential Allocation Term, then the Residential Allocation Term for the development on the particular parcel for which the permit was issued shall be extended for the life of the building permit and any extensions thereto up to the Term of this Agreement. 5. Vested Rights/Use of the Property/Applicable Law/Processing. 5.1 Right to Develop. DEVELOPER shall have the vested right to develop the Project on the Property in accordance with, and subject only to, the terms and conditions of this Agreement, the Project Approvals (as and when issued), and any amendments to any of them as shall, from time to time, be approved pursuant to this Agreement, and the CITY's ordinances, codes, resolutions, rules, regulations and official policies governing the development, construction, occupancy and use of the Project and the Property including, without limitations, the permitted uses of the Property, density and intensity of use of the Property and the maximum height, bulk.and size of proposed buildings, that are in force and effect on the Effective Date of this Agreement (collectively, "Applicable Law"). In exercising its discretion when acting upon the Project Approvals, CITY shall apply the then-existing Applicable Law as the controlling body of law (within which Applicable Law such discretion shall be exercised). 5.2 Fees, Exactions, Dedications. CITY and DEVELOPER agree that this Agreement does not limit the CITY's discretion to impose or require payment of any fees in connection with the development of the Project for purposes of mitigating environmental and other impacts of the Project, dedication of any land, or construction -5- • of any public improvement or facilities, except that the City may not apply to the Project any development impact fee that it first enacted after the Effective Date. 5.3 Construction Codes. Notwithstanding the provisions of Section 5.1 above, to the extent Applicable Law includes requirements under the state or locally adopted building, plumbing, mechanical, electrical and fire codes (collectively the "Codes"), the Codes included shall be those in force and effect at the time the DEVELOPER submits its application for the relevant building, grading, or other construction permits to CITY. In the event of a conflict between such Codes and the Project Approvals, the Project Approvals shall, to the maximum extent allowed by law, prevail. For construction of public infrastructure, the Codes applicable to such construction shall be those in force and effect at the time of execution of an improvement agreement between CITY and DEVELOPER pursuant to Chapter 9.16 of the Dublin Municipal Code. 5.4 Rights Under Vesting Tentative Map. Except as otherwise specified (as for example in Subsection 5.2), this Agreement shall not supersede any rights DEVELOPER obtains pursuant to DEVELOPER'S application for and the CITY's subsequent approval of a vesting tentative map(s) for the Project, or any portion thereof; provided Developer in its sole discretion may waive in whole or part the application of the foregoing provision. 5.5 New Rules and Regulations. During the term of this Agreement, the CITY may apply new or modified ordinances, resolutions, rules, regulations and official policies of the CITY to the Property which were not in force and effect on the Approval Date and which are not in conflict with the Applicable Law. In addition to any other conflicts that may occur, each of the following new or modified ordinances, resolutions, rules, regulations or official policies shall be considered a per se conflict with the Applicable Law: 5,5.1 Any application or requirement of such new or modified ordinances, resolutions, rules, regulations or official policies that would cause or impose a substantial financial burden on, or materially delay development of the Property as . otherwise contemplated by this Agreement or the Project Approvals; and/or 5.5.2 If any of such ordinances, resolutions, rules, regulations or official policies do not have general (City-wide) applicability. 5.6 Moratorium Not Applicable. Notwithstanding anything to the contrary contained herein, if an ordinance, resolution, policy, directive or other measure is enacted or becomes effective, whether by action of CITY, by initiative, referendum, or otherwise, and if it imposes a building moratorium which affects all or any part of the Project, CITY agrees that such ordinance, resolution or other measure shall not apply to the Project, the Property, this Agreement or the Project Approvals unless the building moratorium is imposed as part of a declaration of a local emergency or state of emergency as defined in Government Code section 8558, provided that to the extent a -6- moratorium applies to all or any part of the Project then the Term shall automatically be extended for a period of time equal to the Moratorium period. 5.7 Revised Application Fees. Notwithstanding section 5.2 above, any existing application, processing and inspection fees that are revised during the Term of • this Agreement shall apply to the Project provided that (1) such fees have general applicability, (2) the application of such fees to the Property is prospective, and (3) the application of such fees would not prevent, impose a substantial financial burden on, or materially delay development of the Project in accordance with this Agreement. By so agreeing, DEVELOPER does not waive its rights to challenge the legality of any such application, processing and/or inspection fees. 5.8 New Taxes. This Agreement shall not prohibit the application of any subsequently enacted city-wide taxes to the Project provided that (1) the application of such taxes to the Property is prospective, and (2),the application of such taxes would not prevent development in accordance with this Agreement. By so agreeing, DEVELOPER does not waive its rights to challenge the legality of any such taxes. 5.9 Phasing, Timing. Except as specified in Section 6, this Agreement contains no requirements that DEVELOPER must initiate or complete development of the Project within any period of time set by CITY. It is the intention of this provision that DEVELOPER be able to develop the Property in accordance with its own time schedules and the Project Approvals. 5.10 Processing. 5.10.1 Nothing in this Agreement shall be construed to limit the authority or obligation of CITY to hold necessary public hearings, nor to limit the discretion of CITY or any of its officers or officials with regard to those Project Approvals that require the exercise of discretion by CITY; provided that such discretion shall be exercised consistent with the laws contained with the Applicable Law. 5.10.2 At its approval and execution, this Agreement does not provide DEVELOPER with any right to develop or construct any project or to secure any •Project Approval; instead, it simply provides for example certain rights and responsibilities regarding approvals already given for the Specific Plan, provides certain vested rights to laws and approvals already in place, provides a protocol by which later Project Approvals may be processed by DEVELOPER and later included into this Agreement, if applicable — if and only if such Project Approvals are compliant With all . controlling California law (including proper Planning and Zoning Law and CEQA compliance), have secured approval of the Parties, and are adopted/approved by the CITY. 6. Community Benefit Agreement. 6.1 Generally. As stated above, the Specific Plan contemplates a "Community Benefit Agreement" whenever Residential Allocations are given by 'CITY • out of the Residential Allocation "Pool" established by the Specific Plan. This Section 6 • of the Agreement contains that Community Benefit Agreement. The term "Residential Allocation" as used in the Agreement means an allocation of the right to construct residential units from the Residential Allocation Pool established by the Specific Plan. • • 6.2 Affordable Housing. 6.2.1 Nominal-Price Sale of Parcel B. DEVELOPER shall sell Parcel B for a "Nominal Price" to Eden Housing, Inc. or one of its affiliates (or another entity on City Manager approval) to facilitate the development of Parcel B as described in Recital D with affordable rental housing units primarily intended for households with veterans of the United States Armed Forces. For the purposes of this Agreement, a "Nominal Price" shall be any sales price that is one-thousand dollars ($1000) or less (not including, and not limiting, the purchaser's share of escrow fees, title insurance costs, transfer taxes, prorated taxes and assessments and other customary closing costs). 6.2.2 Use Restriction on Parcel B. Concurrently with the recording of the grant deed transferring Parcel B to Eden (or other transferee approved by the City), Eden (or other approved transferee) and the City shall record a use restriction in favor of the City that restricts the use of Parcel B to the provision of affordable housing for low-income households whose incomes do not exceed eighty percent (80%) of the area medium income as adjusted for actual household size for a period of at least fifty- five (55) years from the date a certificate of occupancy is issued for the improvements on Parcel B, regardless of who shall be the owner of Parcel B. 6.2.3 Compliance with Inclusionary Zoning Regulations for Development on Parcel A. Chapter 8.68 of the Dublin Municipal Code, known as the Inclusionary Zoning Regulations ("the Regulations"), requires that residential projects with 20 or more units contain 12.5% affordable units as defined. Forty percent of a development's obligation may be satisfied through the payment of a fee in lieu of construction, and the remainder of the obligation (7.5% of the units in the project) must be satisfied through the on-site or off-site production of the units, land dedication, or the use of credits. Under the Regulations, if DEVELOPER constructs the maximum number of units on Parcel A contemplated by this Agreement, its affordable housing requirement would be 39 units. DEVELOPER intends to fully satisfy its obligations by way of the nominal-price sale of land required by this Section 6. The City agrees that this nominal- price sale shall' be deemed to satisfy DEVELOPER's affordable housing obligations under the Inclusionary Zoning Regulations for the development of up to 314 units on Parcel A. More specifically, pursuant to section 8.68.040.0 of the Dublin Municipal Code, the DEVELOPER's affordable unit obligation with respect to the residential development of up to 314 market-rate units proposed on Parcel A will be satisfied by virtue of the proposed nominal-price sale. Any development on Parcel A in excess of 314 units will be subject to the requirements of Chapter 8.68 of the Dublin Municipal Code: The City Council has separately made the findings required by Section • 8.68.040.0 or has waived such requirements in whole or part under Section 8.68.040 E. • s 6.2.4 Treatment of Affordable Unit Credits Created by Develop- ment on Parcel B. The parties agree that any "affordable unit credits" created by virtue of the construction of affordable housing on Parcel B shall accrue to CITY. In further- ance of this agreement, DEVELOPER shall take reasonable efforts to create the "affordable unit credits" pursuant to section 8.68.060 of the Dublin Municipal Code and any such credits shall be deemed immediately transferred to CITY once they ha ve been • created. 6.3 Community Benefit From Affordable Housing. CITY recognizes that DEVELOPER'S sale of Parcel B for a Nominal Price to Eden for the use described above is a qualifying "Community Benefit" under the Specific Plan, as it will assist Eden , or its successor, to pursue successfully the development of affordable rental housing units primarily for veterans and low income households on Parcel B. The Dublin community and the specific plan area will benefit significantly from the provision of such affordable housing, as set forth in greater detail in the Dublin General Plan's Housing Element. No other Community Benefit payments or requirements shall be imposed on DEVELOPER in exchange for the residential allocations specified in Section 6.4 below. 6.4 Grant of Residential Allocations. As of the Effective Date, as defined in Section 4.1, and for the term specified in Section 4.4, CITY shall grant the following Residential Allocations out of the Residential Allocation Pool established by the Specific Plan. Notwithstanding the foregoing, Developer shall not have a right to use the allocations until the sale contemplated under Section 6.2 above has dosed and discretionary Project Approvals are approved by the City. CITY may make the right to construct residential units under the Project Approvals conditional upon the sale of Parcel B, as contemplated under Subsection 6.2 above. 6.4.1 Parcel A. Parcel A shall receive an allocation of the residential units proposed thereon in the Project Approvals, not to exceed 314. 6.4.2 Parcel B. Parcel B shall receive an allocation of residential units proposed thereon in the Project Approvals, not to exceed 76. 7. Amendment or Cancellation. 7.1 Modification Because of Conflict with State or Federal Laws. If state or federal laws or regulations enacted after the Effective Date of this Agreement prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the CITY, the Parties shall meet . and confer in good faith in a reasonable attempt to modify this Agreement to comply with such federal or state laws or regulations. Any such amendment of the Agreement shall be consented to by DEVELOPER and approved by the City Council On accordance with Chapter 8.56). 7.2 Amendment by Mutual Consent. This Agreement may be amended (in whole or part) in writing from time to time by mutual consent of the Parties hereto (or their successors), and in accordance with the procedures of State law and Chapter -9- • • 8.56. When a Party seeking such an amendment owns only a portion of the whole of the Property ("Portion"), then such Party may only seek amendment of this Agreement as directly relates to the Portion, and the Party owning the other Portion shall not be required or entitled to be a signatory or to consent to an amendment that affects only the other Party's Portion. If any Portion of the Property is subject to a document which creates an association which oversees common areas and any construction or reconstruction on or of the same, then the association shall be deemed to be the "owner" of that Portion of the Property for the purpose of amending this Agreement. 7.3 Insubstantial Amendments. Notwithstanding the provisions of the preceding section 7.2, any amendments to this Agreement which do not relate to (a) the term of the Agreement as provided in section 4.2; (b) the permitted uses of the Property as provided in section 5.1; (c) provisions for "significant" reservation or dedication of land as provided in Exhibit B; (d) conditions, terms, restrictions or requirements for subsequent discretionary actions; (e) the density or intensity of use of the Project; (f) the maximum height or size of proposed buildings; or (g) monetary contributions by DEVELOPER as provided in this Agreement, shall not, except to the extent otherwise required by law, require notice or public hearing before either the Planning Commission or the City Council before the parties may execute an amendment hereto. CITY's Public Works Director shall determine whether a reservation or dedication is "significant". 7.4 Cancellation by Mutual Consent. Except as otherwise permitted herein: this Agreement may be canceled in whole or in part only by an amendment which complies with Section 7.2. Any fees paid pursuant to Paragraph 5.3 of this Agreement prior to the date of cancellation shall be retained by CITY. 8. Annual Review. 8.1 Review Date. The annual review date for this Agreement shall be • between July 15 and August 15, 2013 and each July 15 to August 15 thereafter. 8.2 Initiation of Review. The CITY's Community Development Director shall initiate the annual review, as required under Section 8.56.140 of Chapter 8.56, by giving to DEVELOPER at least thirty (30) days' written notice that the CITY intends to undertake such review. DEVELOPER" shall provide evidence to the Community Development Director prior to the hearing on the annual review, as and when reasonably determined necessary by the Community Development Director, to demonstrate good faith efforts to comply with the provisions of this Agreement. The burden of proof, by substantial evidence, is upon the DEVELOPER. • 8.3 Staff Reports. To the extent practical, CITY shall deposit in the mail and fax to DEVELOPER a copy of all staff reports, and related exhibits concerning contract performance at least five (5) days prior to any annual review. 8.4 Costs. Costs reasonably incurred by CITY in connection with the annual review shall be paid by DEVELOPER in accordance with the CITY's schedule of -10- • fees in effect at the time of review. From and after the time Parcel B is transferred to Eden, this subdivision 8.4 shall not apply to Parcel B or Eden. 9. Default. 9.1 Other Remedies Available. Upon the occurrence of an event of default, the Parties may pursue all other remedies at law or in equity which are not otherwise 'provided for in this Agreement or in CITY's regulations governing development agreements, expressly including, without limitation, the remedy of specific performance of this Agreement; provided the non-defaulting Party has complied with the provisions of Section 9.2 hereof. From and after the transfer of Parcel B to Eden or other approved transferee, there shall be no cross defaults between the owner of Parcel A and the owner of Parcel B. A default by Developer, Developer's successor or transferee for Parcel A and/or a condition affecting only Parcel A shall not constitute a default by the owner of Parcel B and no action, remedy, attorney's fees or other costs may be sought against the owner of Parcel B or Parcel B. Similarly, after Parcel A and Parcel be owned by different Parties, a default by owner of Parcel B or a condition affecting only Parcel B shall not constitute a default by the owner of Parcel A and no action, remedy, attorney's fees or other costs may be sought against the owner of Parcel A or Parcel A. From and after the time that Parcel A and Parcel B are owned by different Parties, there shall be no joint or several liability between or among the different owners. 9.2 Notice and Cure. Upon the occurrence of an event of default by any Party, the nondefaulting Party shall serve written notice of such default upon.the defaulting Party. If the default is not cured by the defaulting Party within thirty (30) days after service of such notice of default, the nondefaulting Party may then commence any legal or equitable action to enforce its rights under this Agreement; provided, however, that if the default cannot be cured within such thirty (30) day period, the nondefaulting party shall refrain from any such legal or equitable action so long as the defaulting party begins to cure such default within such thirty (30) day period and diligently pursues such cure to completion. Failure to give notice shall not constitute a waiver of any default. 9.3 No Damages Against CITY. In no event shall damages ,be awarded against CITY upon an event of default or upon termination of this Agreement • except as otherwise expressly provided herein. 10. Estoppel Certificate. 10.1 Any Party may, at any time, and from time to time, request written notice from the other Party requesting such party to certify in writing that, (a) this Agreement is in full force and effect and a binding obligation of the Parties, (b) this Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments, and (c) to the knowledge of the certifying Party the requesting Party is not in default in the-performance of its obligations under this • Agreement, or if in default, to describe therein the nature and amount of any such defaults. • -11- 10.2 A Party receiving a request hereunder shall execute and return such certificate within twenty (20) days following the receipt thereof, or such longer period as may reasonably be agreed to in writing by the Parties. City Manager of CITY shall be authorized to execute any certificate requested by DEVELOPER. The certificate shall be addressed to and may be relied upon by the requesting Party. 11. Mortgagee Protection; Certain Rights of Cure. 11.1 Mortgagee Protection. This Agreement shall be superior and senior to any lien placed upon the Property, or any portion thereof after the date of recording this Agreement, including the lien for any deed of trust or mortgage ("Mortgage"). Notwithstanding the foregoing, no breach hereof shall defeat, render invalid, diminish or impair the lien of any Mortgage made in good faith and for value, but all the terms and conditions contained in this Agreement shall be binding upon and effective against any person or entity, including any deed of trust beneficiary or mortgagee ("Mortgagee") who acquires title to the Property, or any portion thereof, by foreclosure, trustee's sale, deed in lieu of foreclosure, or otherwise. • 11.2 Mortgagee Not Obligated. Notwithstanding the provisions of Section 11.1 above, no Mortgagee shall have any obligation or duty under this Agreement, before or after foreclosure or a deed in lieu of foreclosure, to construct or complete the construction of improvements, or to guarantee such construction of improvements, or to guarantee such construction or completion, or to pay, perform or provide any fee, dedication, improvements or other exaction or imposition; provided, however, that a Mortgagee shall not be entitled to devote the Property to any uses or to construct any improvements thereon other than those uses or improvements provided for or authorized by the Project Approvals or by this Agreement or as may be otherwise authorized by the City. 11.3 Notice of Default to Mortgagee and Extension of Right to Cure. If CITY receives.notice from a Mortgagee requesting a copy of any notice of default given DEVELOPER hereunder and specifying the address for service thereof, then CITY shall deliver to such Mortgagee, concurrently with service thereon to DEVELOPER, any notice given to DEVELOPER with respect to any claim by CITY that DEVELOPER has committed an event of default. 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 set forth in the CITY's notice. CITY, through its City Manager, may extend the thirty-day cure period provided in section 9.2 for not more than an additional sixty (60) days upon request of DEVELOPER or a Mortgagee. -12- • 12. Severability; Conflict. The unenforceability, invalidity or illegality (collectively, "illegality" or "illegal") of any provisions, covenant, condition or term of this Agreement (collectively, "provision(s)") shall not render the other provisions of this Agreement illegal, and shall be considered "severed" from this Agreement. In the event of a conflict between this Agreement or any provision hereof and the Project Approvals or any provision thereof this Development Agreement shall control. 13. Attorneys' Fees and Costs. 13.1 If CITY or DEVELOPER initiates any action at law or in equity to enforce or to interpret the terms and conditions of this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys' fees and costs in addition to any other relief to which it may otherwise be entitled. If any person or entity not a party to this Agreement initiates an action at law or in equity to challenge the validity of any provision of this Agreement, the Parties shall cooperate in defending such action. DEVELOPER shall bear its own costs of defense as a real party in interest in any such action, and shall reimburse CITY for all reasonable.court costs and attorneys' fees expended by the City in defense of any such action. 14. Transfers and Assignments. 14.1 Agreement Runs with the Land. All of the provisions, rights, terms, covenants, and obligations contained in this Agreement shall be binding upon the parties and their respective heirs, successors and assignees, representatives, lessees, and all other persons acquiring the Property, or any portion thereof, or any interest therein, whether by operation of law or in any manner whatsoever. All of the provisions of this Agreement shall be enforceable as equitable servitudes and shall constitute covenants running with the land pursuant to applicable laws, including, but not limited to, Section 1468 of the Civil Code of the State of California. Each covenant to do, or refrain from doing, some act on all or any part of the Property, (a) is a burden upon such property, (b) is for the benefit of each other portion of the Property, (c) runs with such properties, and (d) is binding upon each Party and each successive owner during its ownership of such properties or any portion thereof, and shall be a benefit to and a burden upon each Party and its property hereunder and each other person succeeding to an interest in such properties. The provisions of this Section 14.1 are subject and subordinate to the provisions of Section 7.2 which permit amendment of this Agreement. 14.2 DEVELOPER's Right to Assign. All of DEVELOPER'S rights, interests and obligations hereunder (or any portion of such rights which DEVELOPER wishes to transfer) may be transferred, sold or assigned in conjunction with the transfer, sale, or assignment of the Property subject hereto, or any portion thereof, at any time during the term of this Agreement, provided that no transfer, sale or assignment of DEVELOPER's rights, interests and obligations hereunder shall occur without the prior written notice to CITY and approval by the City Manager, which approval shall not be unreasonably withheld or delayed. The City Manager shall consider and decide the matter within ten (10) business days, after DEVELOPER's notice provided and receipt -13- • by City Manager of all necessary documents, certifications and other information required by City Manager to decide the matter. In considering the request, the City Manager shall base the decision upon the proposed assignee's reputation, experience, financial resources and access to credit and capability to successfully carry out the development of the Property to completion. The City Manager's approval shall be for the purposes of: a) providing notice to CITY; b) assuring that all obligations of DEVELOPER are allocated as between DEVELOPER and the proposed purchaser, transferee or assignee as provided by this Agreement; and c) assuring CITY that the proposed purchaser, transferee or assignee is financially capable of performing the DEVELOPER's obligations hereunder not withheld by DEVELOPER. 14.3 Notwithstanding the foregoing, provided-notice is given as specified in Section 19, no CITY approval shall be required for any transfer, sale, or assignment of this Agreement to: (1) any entity which is an affiliate or subsidiary of DEVELOPER; (2) any Mortgagee for Parcel A or Parcel B or a tax credit investor for Parcel B; (3) any transferee of a Mortgagee for Parcel A or Parcel B or a tax credit investor for Parcel B; (4) Fairfield Residential in conjunction with the sale of Parcel A, provided that DEVELOPER has, at the time of the transfer, complied with all obligations of this Agreement then outstanding or provided evidence satisfactory to the City Manager demonstrating that the remaining obligations have been allocated between DEVELOPER and its transferee; or (5) Eden Housing Inc., its affiliates or a limited partner of which the general partner is an affiliate of Eden ("Eden"), in conjunction with the sale of Parcel B. 14.4 Release Upon Transfer. Upon the transfer, sale, or assignment of Parcel A DEVELOPER's rights, interests and obligations hereunder pursuant to sections 14.2 or 14.3 of this Agreement, DEVELOPER shall be released from the obligations under this Agreement, with respect to the Property transferred, sold, or assigned; provided, that the transferee, purchaser, or assignee expressly assumes all of the rights, interests and obligations of DEVELOPER under this Agreement, pertaining to the portion or all of the Property transferred to such transferee, purchaser or assignee. In any event, the transferee, purchaser, or assignee shall be subject to all the provisions hereof pertaining to the portion of the Property transferred to such transferree, purchaser or assignee, and shall provide all necessary documents, certifications and other necessary information prior to City Manager approval if required by the provisions of this Agreement. 14.5 DEVELOPER's Right to Retain Specified Rights or Obligations. DEVELOPER may withhold from a sale, transfer or assignment of this Agreement or any portion of the Property transferred, certain rights, interests and/or obligations which DEVELOPER wishes to retain, provided that DEVELOPER specifies such rights, interests and/or obligations in a written document to be appended to this Agreement and recorded with the Alameda County Recorder prior to the sale, transfer or assignment of the Property. DEVELOPER's purchaser, transferee or assignee shall then have no interest or obligations for.such rights, interests and obligations and this Agreement shall remain applicable to DEVELOPER with respect to such retained rights, interests and/or obligations. -14- 15. Bankruptcy. • • The obligations of this Agreement shall not be dischargeable in bankruptcy. 16. Indemnification. DEVELOPER agrees to indemnify, defend and hold harmless CITY, and its elected and appointed councils, boards, commissions, officers, agents, employees, and representatives from any and all claims, costs (including legal fees and costs) and liability for any personal injury or property damage which may arise directly or indirectly as a result of any actions or inactions by the DEVELOPER, or any actions or inactions of DEVELOPER's contractors, subcontractors, agents, or employees in connection with the construction, improvement, operation, or maintenance of the Project, provided that DEVELOPER shall have no obligation under this Section 16 with respect to negligence or wrongful conduct of CITY, its contractors, subcontractors, agents or employees or with respect to the maintenance, use or condition of any improvement after the time it has been delivered or dedicated to and accepted by the CITY or another public entity (except as provided in an improvement agreement or maintenance bond). If CITY is named as a party to any legal action for which DEVELOPER has a duty to defend or indemnify CITY then CITY will cooperate with DEVELOPER, will appear in such action and will not unreasonably withhold approval of a settlement otherwise acceptable to DEVELOPER. Notwithstanding anything to.the contrary set forth in this Section 16 or elsewhere in this Agreement, it is understood that each Party or successor or transferee of Developer is providing the indemnities described in this Section 16 as to its respective development on its respective Portion only. 17. Insurance. 17.1 Public Liability and Property Damage Insurance. At all times that DEVELOPER is constructing any improvements that will become public improvements, DEVELOPER shall maintain in effect a policy of commercial general liability insurance with a per-occurrence combined single limit of not less than one million dollars ($1,000,000.00) and a deductible of not more than ten thousand dollars ($10,000.00) per claim. The policy so maintained by DEVELOPER shall name the CITY as an additional insured and shall include either a severability of interest clause or cross- liability endorsement. 17.2 Workers' Compensation Insurance. At all times that DEVELOPER is constructing any improvements that will become public improvements, DEVELOPER shall maintain Workers' Compensation insurance for all persons employed by DEVELOPER for work at the Project site. DEVELOPER shall require each contractor and subcontractor similarly to provide Workers' Compensation insurance for its respective employees. DEVELOPER agrees to indemnify the CITY for any damage resulting from DEVELOPER's failure to maintain any such insurance. 17.3 Evidence of Insurance. Prior to commencement of construction of any improvements which will become public improvements, DEVELOPER shall furnish -15- CITY satisfactory evidence of the insurance required in Sections 17.1 and 17.2 and evidence that the carrier is required to give the CITY at least fifteen (15) days prior written notice of the cancellation or reduction in coverage of a policy. 18. Sewer and Water. • DEVELOPER acknowledges that the Project requires water and sewer permits from the Dublin San Ramon Services District ("DSRSD") which is another public agency not within the control of CITY. 19. Notices. All notices required or provided for under this Agreement shall be in writing. Notices required to be given to CITY shall be addressed as follows: City Manager City of Dublin 100 Civic Plaza Dublin, CA 94568 Fax No: 925.833.6651 Notice required to be given to DEVELOPER shall be addressed as follows: Diamond Heights Investment IV, LLC do The Kingsmill Group 4900 Hopyard Rd., Suite 100 Pleasanton, CA 94588 Attn: Keith Fichtner E-mail keithfichtner @thekingsmillgroup.com Phone: 925-463-4880 With copies to: Steven L. Hammond Hammond Law Group, PC One Ernbarcadero Center Suite 2360 San Francisco, CA 94111 Attn: Steven L. Hammond, Esq. Facsimile No.: 415-955-1976 Telephone: 415-955-1915 Email: sh @hammondlg.com And Eden Housing, Inc. 22645 Grand Street Hayward, CA 94541-5031 Attention: President -16- A party may change address by giving notice in writing to the other party and thereafter all notices shall be addressed and transmitted to the new address. Notices shall be deemed given and received upon personal delivery, or if mailed, upon the expiration of 48 hours after being deposited in the United States Mail. Notices may also be given by overnight courier which shall be deemed given the following business day or by facsimile transmission which shall be deemed given upon verification of receipt. 20. Recitals. The foregoing Recitals are true and correct and are made a part hereof. 21. Agreement is Entire Understanding. " - This Agreement constitutes the entire understanding and agreement of the parties with respect to this Agreement. 22. Exhibits. The following documents are referred to in this Agreement and are attached hereto and incorporated herein as though set forth in full: Exhibit A Legal Description of Property 23. Counterparts. This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. 24. Recordation. CITY shall record a copy of this Agreement within ten days of DEVELOPER providing CITY notice that a grant deed conveying the Property from the owner of record as of the Effective Date to DEVELOPER is recorded in the Official Records of Alameda County. 25. Separate Agreement Upon Transfer of Parcel B. Notwithstanding any other provision to the contrary contained herein, the Parties acknowledge and agree that upon transfer of Parcel B to Eden or other approved transferee, the covenants, obligations and liabilities applicable to Parcel A or the_owner of Parcel A shall be separate and independent from the covenants, obligations and liabilities applicable to Parcel B or the owner of Parcel B, as if there were two separate agreements for Parcel A and Parcel B. Nothing herein is intended or shall be construed as making the owner of Parcel A and the owner of Parcel. B agents of the other or joint venturers or partners. -17- • IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written. CITY OF DUBLIN DEVELOPER Diamond Heights Investments IV, LLC, By: a California limited liability company Joni Pattillo, City Manager By: Seagirt Management, LLC, Attest: a California limited liability company Its: Manager Caroline Soto, City Clerk By: Keith Fichtner Approved as to form Its President John Bakker, City Attorney -18- • A r q Title No. 11-59039605-A-SC �tB�L�I.. Locate No. CACfI7701-7707-2385-0059038605 LEGAL DESCRIPTION EXHIBIT"A" THE LAND REFERRED TO HEREIN BELOW IS SITUATED CITY OF DUBLIN,COUNTY OF ALAMEDA,STATE OF CALIFORNIA,AND IS DESCRIBED AS FOLLOWS: Beginning at the intersection of the Northeastern line of the land described as Parcel 2 In the Deed by J. Clayton Orr,etal.,to Motel Interstate Systems,Inc.,dated April 30,1959,recorded June 8, 1959 in Book 9052 of Official Records of Alameda County Page 82,Instrument No.AQ/67605,with a line drawn parallel with the center line of Dublin Boulevard, formerly Dublin Road, 60 feet in width,and distant Southeasterly 42 feet, measured at right angles therefrom, running thence along said parallel line,South 69° 08' 15"West 355.82 feet;thence tangent to the last named line Southwesterly along a curve to the left having a radius of 42 feet, through an angle of 90°,a distance of 65.97 feet;thence tangent to the last named curve,South 20°51'45' East 502.50 feet; thence North 69° 08' 15" East 400 feet to said Northeastern line of said land;and thence along the last named line, North 21°05'30"West 544.50 feet to the point of beginning. Excepting therefrom that portion described in the Final Order of Condemnation recorded April 8, 1997 as Instrument No. 97090524. APN: 941-1500-015-09 • • 2 AIXA Cammilmcnt-2006 Copyright American Land Title Association.All rights reserved.The use of this Forth Is restricted to ." ALTA licensees and ALTA members In geed stetting as of the date of use.All other uses are prohibited.Reprinted under n'":' license from the American Land Title Association. . u • PARCEL B Title No. 1 2-5 9 0416 37-A-SC Ail, Locate No.CACT]7701-7707-2386-0059041637 LEGAL DESCRIPTION EXHIBIT"A" THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF DUBLIN, COUNTY OF ALAMEDA, STATE OF CALIFORNIA,AND IS DESCRIBED AS FOLLOWS: Parcel D, Parcel Map 2621, recorded December 20, 1978, Parcel Map Book 107, Page 50,Alameda County • Records. • Excepting therefrom that portion described in the Deeds to the County of Alameda recorded February 14, 2002, as Instruments Nos. 2002073438 and 2002073439. APN: 941-1500-032-02 • 2 . ALTA Commhlment-Zep6 Copyright American Land True Association.All rights reserved.The use of this Form Is restricted to """"" ALTA licensees and ALTA members In good standing as of the date of use.All other uses are prohibited.Reprinted under license from the American Land Title Assodahan.