HomeMy WebLinkAbout7.3 Sales Tax Reimb Amendor
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DATE: May 7, 2013
TO:
FROM:
STAFF REPORT
CITY COUNCIL
Honorable Mayor and City Councilmembers
Joni Pattillo City Manager""'
CITY CLERK
File #600 -30
SUBJECT: Amendments to the Sales Tax Reimbursement Agreement and a Parking Land
Lease with Bicentennial Square Partners
Prepared by Linda Smith, Economic Development Director /Public Information
Officer and Hazel Wetherford, Economic Development Analyst
EXECUTIVE SUMMARY:
The property owner of 11501 Dublin Blvd., Bicentennial Square Partners, has made two
requests of the City. First, Bicentennial wishes to amend and restate the existing Sales Tax
Reimbursement Agreement to update its maximum reimbursement amount and to update the
current ownership partner information from Ring Properties to Bicentennial Square Partners.
Second, Bicentennial has asked the City to lease its excess right of way adjacent to the property
in order to construct an approximately 60 -space parking lot for the Center. This additional
parking will provide for future growth and employment opportunities at the Center and will also
result in improved aesthetics along this section of Dublin Blvd.
FINANCIAL IMPACT:
The proposed amendments to the Sales Tax Reimbursement Agreement would increase the
reimbursement amount by $365,000 over the term of the Agreement, which will expire
September 30, 2015. The proposed land lease would have a base rental rate of $3,000 a year
(50 -year lease term) payable to the City of Dublin, an amount consistent with other
public /private land lease transactions researched in the area. However, Staff is recommending
approval of an Agreement that would waive the rental payment for any calendar year during
which the cumulative amount of taxable sales from this business address is forty million dollars
($40,000,000) or greater.
RECOMMENDATION:
Staff recommends that the City Council take the following actions: 1) Adopt a Resolution
Amending and Restating the Sales Tax Reimbursement Agreement with Bicentennial Partners;
and 2) Adopt a Resolution Approving the Parking Land Lease with Bicentennial Square
Partners.
Page 1 of 4 ITEM NO. 7.3
l
Submitted By
Economic Development Director
DESCRIPTION:
�?14
Reviewed By
Assistant City Manager
Amendments to the Sales Tax Reimbursement Program Agreement
In January 2009, the City entered into a Sales Tax Reimbursement Agreement with the Ring
Family Revocable Trust doing business as Ring Properties relating to tenant and site
improvements at 11501 Dublin Blvd., commonly known as 580 Executive Center (Attachment
1). The Agreement includes two phases, the first for tenant allowance, building, interior and
exterior improvements, and the second for site and right -of -way work associated with the
development of additional parking to accommodate future needs and growth of Graybar. Each
phase of the Agreement has a separate five -year reimbursement term. The phase one term is
October, 1, 2009 — September 30, 2014 and the phase two term is October 1, 2010 —
September 30, 2015. The owner was unable to initiate the improvements concurrently due to
ongoing Dublin Blvd. improvements relating to the Schaffer Ranch development at the time the
Agreement was entered into.
Under the existing Agreement, the property owner proposed to construct a lower terrace parking
area, consisting of 12 parking spaces, incorporating the use of the City's unused public right -of-
way that is currently being maintained as a landscape area. Since the adoption of the
Agreement, Staff has been working with the owner on tenant, building, site and right -of -way
improvements. Following the completion of the Dublin Blvd. right -of -way improvements, Staff
began discussions with Bicentennial Square Partners on possible alternative parking
improvements.
The Dublin Blvd. improvements created an opportunity to provide substantially more parking (63
spaces) on the property's upper terrace (Attachment 2), also utilizing the City's unused public
right -of -way. While both parking options (12 spaces on the lower terrace or 63 spaces on the
upper terrace) were in excess of the office building's parking requirements of one space per 400
square feet of building, the creation of even more parking would: 1) further solidify growth
opportunities for Graybar, in terms of both space requirements and employee growth within
existing space; and 2) provide even more parking for the executive suites that cater to smaller
businesses in the building.
Staff presented this requested amendment to the City Council's standing Economic
Development Committee (Mayor Sbranti and Vice Mayor Biddle) on January 15, 2013. The
Committee supported the request and asked Staff to bring this forward to the entire City Council
for consideration.
On April 23, 2013, the Community Development Director approved a Site Development Review
and a Mitigated Negative Declaration for the construction of the upper terrace parking lot and
associated landscaping.
Bicentennial Square Partners is seeking a $365,000 adjustment to the maximum reimbursement
amount in found in the existing Agreement. This adjustment is due primarily to five -fold increase
in parking and the related environmental work necessary to develop the area, coupled with
Page 2 of 4
actual exterior improvement costs completed. During the construction of the phase one
improvements, additional accessibility improvements were necessary that were not estimated as
part of the existing Agreement.
This adjustment would increase the overall maximum reimbursement amount in the Agreement
from $632,500 to $997,500. To date, the owner has been reimbursed approximately $520,000
of the original amount. Staff anticipates that, with the proposed changes to the Agreement,
Bicentennial Square Partners will be fully reimbursed for the balance of the improvements by
the end of 2014. Following the completion of this reimbursement, the City will receive 100
percent of the sales tax revenue generated by Graybar.
Staff believes that the requested amendments will result in several benefits to the City. First,
the improvements will provide better aesthetics along that segment of Dublin Blvd., which is
currently not maintained. The site improvements to the property that belongs to Bicentennial
Square Partners will improve the value of the property and will likely be reflected in future
property tax revenue to the City. The amendments also ensure an abundance of parking at the
property, greater more opportunities for job growth at Graybar and job creation at the 580
Executive Center suites located within the building. Job growth and job creation leads to
additional indirect benefits, including more local spending in the Dublin community. Lastly,
these parking improvements will likely solidify Graybar's long term real estate needs, resulting in
a long -term sales tax revenue stream for the City.
Staff recommends that the City Council approve, by Resolution (Attachment 3), the amended
and restated Sales Tax Reimbursement Agreement (Exhibit A to Attachment 3) with
Bicentennial Square Partners.
Parking Land Lease
The additional parking to 11501 Dublin Blvd. requires the use of the City's unused public right -
of -way; therefore a land lease agreement is necessary.
Under the proposed Lease, Bicentennial Square Partners would utilize 17,132 square feet of
public right -of -way for purposes of assembling an undeveloped area on the west side of the
property. The proposed lease would have a base rental rate of $3,000 a year (50 -year lease
term) payable to the City of Dublin. This amount is consistent with similar public /private land
lease transactions researched in the area, based on Staff research. Bicentennial Square
Partners would improve the public right -of -way and the annual lease payments would be subject
to a 2.5% annual Consumer Price Index adjustment. However, the Agreement recommended
for approval by Staff has been drafted so that that the lease payment will be forgiven for any
calendar year during the term of the Agreement when the cumulative amount of taxable sales
from this business address is forty- million dollars ($40,000,000) or greater. Additionally, a
clause has been added to the Lease that if Bicentennial Square Partners constructs any new
building on its property, the property owner would need to acquire in fee title the right -of -way
lands from the City at the its fair market value at the time of the purchase.
On November 26, 2012, Staff presented the standing Economic Development Committee
(Mayor Sbranti and Vice Mayor Biddle) with the proposed lease terms. The Committee provided
Staff direction to work with Bicentennial Square Partners on the Lease and bring the item to the
entire City Council for consideration.
Page 3 of 4
Consistent with the reasons outlined in amending the Sales Tax Reimbursement Agreement,
Staff believes that the proposed Lease will result in a greater public benefit to the City than what
was originally anticipated, including the creation a more aesthetically pleasing portion of the
Dublin Blvd. corridor; the provision for the property to house more small businesses and
employees, both at Graybar and for other tenants at 580 Executive Center; as well as the
additional local spending resulting from more businesses and employees at this location.
NOTICING REQUIREMENTS /PUBLIC OUTREACH:
N/A
ATTACHMENTS: 1. Original Staff Report - May 2009
2. Map of Proposed Parking Area - Aerial Map
3. Resolution Amending and Restating a Sales Tax Reimbursement
Agreement with Bicentennial Square Partners
4. Exhibit A to the Resolution: Amended and Restated Sales Tax
Reimbursement Agreement
5 Resolution Approving a Parking Land Lease with Bicentennial
Square Partners
6. Exhibit A to the Resolution: Parking Land Lease Agreement
Page 4 of 4
MAI1Do
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SUBJECT:
ATTACHMENTS:
CITY CLERK
File #[:][&] [01 FO-1 -3❑F0
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: May 5, 2009
RECOMMENDATION:
s
FINANCIAL STATEMENT:
Sales Tax Reimbursement Program Agreement with Ring Properties
Report Prepared by: Linda Maurer,
Assistant to the City Manager
1. Resolution 09 -09 dated January 6, 2009 Adopting a Sales
Tax Reimbursement Program
2. Resolution with Proposed Agreement attached as Exhibit A
That the City Council adopt the proposed Resolution Approving an
Agreement for Reimbursement of Sales and Use Tax Revenue with
Ring Properties Relating to Improvements to be performed on a
property located at 11501 Dublin Boulevard
The proposed agreement would be revenue positive to the City.
DESCRIPTION: At the December 2, 2008 City Council Meeting, the City Council
discussed the creation of an Economic Incentive program for Fiscal Year 2008 -09. During the discussion,
Mayor Sbranti outlined a number of ideas including: Fee Deferral Program, Priority Permit Processing,
Tenant Improvement (Loans /Grants), Low Interest Loans and Tax Sharing Agreements. At the January 6,
2009 City Council meeting, the City Council approved the Sales Tax Reimbursement Program as the first
element of the Economic Incentive Program (see Attachment 1).
The current worldwide economic slowdown has impacted the City of Dublin's revenues, and in an attempt
to attract new businesses that will provide additional jobs and generate additional tax revenues for the
City, the City Council adopted the Sales Tax Reimbursement Program. The Program establishes certain
conditions under which the City may agree to enter into an agreement to reimburse property owners and
businesses for the costs they incur in making certain interior and exterior building improvements, as well
as site improvements provided that certain conditions are met.
Staff was approached by commercial property owner Kevin Ring, of Ring Properties, in late 2008 prior to
the formal adoption of the Sales Tax Reimbursement Program. Mr. Ring was seeking assistance to attract
a new tenant — Graybar Electric, Inc. — to his property at 11501 Dublin Boulevard. Staff informed Mr.
Ring of the City's intent to bring forward a Sales Tax Reimbursement Program for approval to the City
COPY TO:
Page 1 of 3 e
ITEM NO. _
G:\Linda Maurer \Sales Tax Reimbursement Program 20090NAL Documents \Ring Properties Reimbursement Agreement Staff Report 4-24- 09.DOC Q
Council. Mr. Ring, upon adoption of the formal Program by the City Council in January, requested to
participate. Over the past several months, Staff has worked closely with Kevin Ring in good faith to bring
forward an agreement to the City Council for consideration.
Agreement Overview
The proposed Agreement between the City of Dublin and Ring Properties is to accommodate the
improvement needs for a new tenant, Graybar Electric, Inc., a Fortune 500 company that specializes in
supply chain management services and the distribution of high - quality components, equipment and
materials for the electrical and telecommunications industries.
Mr. Ring has entered into a 10 -year lease with Graybar Electric, Inc. to occupy approximately 21,000
square feet at 11501 Dublin Boulevard. Graybar will have more than 50 employees working at the new
Dublin location. The lease agreement between Mr. Ring and Graybar includes a tenant improvement
allowance of $300,000 to Graybar to offset the cost of tenant improvements they will be making in order
to occupy the facility.
In addition to the tenant improvement allowance, Mr. Ring anticipates the need for other interior, exterior,
site and right -of -way improvements to accommodate Graybar as the tenant. These improvements may
happen at once, or be separated into two phases, as outlined in the Agreement. Ring Properties has
provided a summary of these proposed improvements and related costs as an exhibit to the Sales Tax
Reimbursement Agreement. The total cost of these improvements, including the tenant improvement
allowance, is estimated at $632,500. This amount will be the maximum contribution by the City allowed
under this Agreement and subject to the criteria outlined in the Sales Tax Reimbursement Program.
Because a portion of these improvements may involve the use of the City's right -of -way as identified in
the exhibit to the Agreement, the City Council would need to authorize those improvements as a separate
action at a later date once plans for such improvements have been finalized. Additionally, if the City's
right -of -way is used and those improvements are made, Ring Properties agrees, in Section 2.14, that such
improvements will be considered "public works" as defined in Section 1720 of the California Labor Code
and Ring Properties will ensure that all work in the public right -of -way is performed in compliance with
all prevailing wage requirements in Section 1720 of the California Labor Code.
The proposed Agreement would provide Ring Properties with fifty (50) percent of the new sales taxes
generated by Graybar for a period of five (5) years or, if the improvements are performed in two phases as
described above, for a five (5) year period for each phase. However, no payments will be made if Graybar
does not generate at least one hundred thousand dollars ($100,000) of new sales tax revenue each of those
years. The Agreement, as proposed, meets the criteria established in the Sales Tax Reimbursement
Program. First, Graybar does not currently have office space in Dublin. Second, the property owner is
proposing to make interior and exterior improvements to an existing Dublin office building. Third,
Graybar has furnished documentation establishing the ability to generate at least ten million dollars
($10,000,000) in annual taxable sales transactions from this location, resulting in at least one hundred
thousand dollars ($100,000) of new sales tax revenue to the City annually.
In addition to meeting the Program criteria, there are other financial benefits to the City. First, the City
will be receiving, even after the sales tax reimbursement, a new, ongoing source of sales tax revenue that
is likely to persist beyond the time -frame of the proposed agreement. Additionally, the improvements to
the property will result in a reassessment of the property's value, increasing the City's property tax
revenue.
W%
The California Constitution prohibits the Legislature from making a gift of public funds. However, where
public funds are used for a public purpose, such an expenditure is constitutionally permissible, even if a
private person benefits. The Sales Tax Reimbursement Program was designed to ensure that the sales tax
reimbursement agreements will be for the public benefit, thus ensuring that the reimbursement of tax
proceeds does not constitute a gift.
In addition to the tax benefits to the City and its residents, this agreement will also result in improvements
to the facade of the property, thtis enhancing the appearance and character of the neighborhood, to the
benefit of City residents. Finally, the new business may generate new jobs for City residents, and Graybar
employees are likely to spend money at other business establishments in the City, thus generating
additional sales tax revenue for the City.
RECOMMENDATION: Staff recommends that the City Council adopt the proposed Resolution
approving an Agreement for Reimbursement of Sales and Use Tax Revenue with Ring Properties relating
to improvements to be performed on a property located at 11501 Dublin Boulevard.
RESOLUTION NO. 9- 09 1 14
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING THE SALES TAX REIMBURSEMENT PROGRAM
WHEREAS, the current worldwide economic slowdown has impacted the City of Dublin's revenues;
and
WHEREAS, for decades, state and local government have used Economic development incentives to
attract or retain jobs and/or improve a local tax base; and
WHEREAS, the Government Finance Officers Association (GFOA) has recommended that any
proposed incentive program has specific goals and criteria that serve to define the economic benefit to both the
government and the entities receiving the incentives expect to gain from the incentives, the conditions under
which the incentives are to be granted, and the actions to be taken should the actual benefits differ from the
planned benefits; and
WHEREAS, in an attempt to attract new businesses that will provide additional jobs and generate
additional tax revenues for the City, Staff is requesting City Council consideration of a program to stimulate
reinvestment in the community through a Sales Tax Reimbursement Program; and
WHEREAS, the objective of the proposed Sales Tax Reimbursement program would be to: (1)
improve the aesthetic nature and physical appearance of existing buildings and promote site improvements to
commercial properties in the existing commercial/office/industrial areas of Dublin and (2) target existing
buildings throughout the community with the goal of improving the existing building stock and also lowering
long -term vacancy rates in the community; and
WHEREAS, the program would use the concept of reimbursement through sales tax revenues to assist
and encourage property owners /tenants to reinvest in, reconstruct, rehabilitate and renovate their properties; and
WHEREAS, the proposed program would allow property owners and/or tenants, through a written
agreement with the City, to recover over time a portion of the cost of improvements (internal and external) made
to the property. The reimbursement would be limited to the actual costs incurred by the owner /tenant for
improvements to structures and the property site. Eligible costs would include exterior improvements (painting,
facade repair, replacement signage), interior improvements (tenant improvements), and site improvements
(parking lots, driveways, landscaping, etc.). Reimbursement for demolition of existing buildings and
replacement with new buildings may be considered on a case -by -case basis. Land acquisition costs would be
excluded from eligible expenses; and
WHEREAS, the program would be made available to businesses that would generate over $100,000 in
new sales tax each year (this requires annual taxable sales of $10 million). Businesses would need to certify, by
providing copies of sales tax returns to the State Board of Equalization (SBOE) that based on previous
operations that this threshold has been met; and
WHEREAS, the program would be made available to new, not existing businesses. An exception
would be considered on a case -by -case basis for existing Dublin businesses that might relocate /expand within
Page 1 of
ATTACHMENT 1
2crbl +
the City, if their move / expansion results in additional sales tax revenues that would meet the target ($100,000
or more) established for the program; and
WHEREAS, the program would require that all improvements considered under this program must be
approved by the City and subject to all laws and regulations; and
WHEREAS, the program would calculate and distribute the reimbursement as follows:
1. The amount of eligible improvements will be established and certified with documentation of the
expenses.
2. Once retail sales begin to be paid based on reported sales transactions at a location within the City of
Dublin, no more than fifty percent (50 %) of the net new sales tax would be calculated and considered as
the amount of reimbursement subject to the following limitations:
a. The cumulative maximum reimbursements paid to the business cannot exceed the total
established in number 1 above.
b. Reimbursements would be made on an annual basis.
c. Reimbursements would continue until the full amount in number 1 above was
reimbursed or for a period five (5) years, whichever occurs first.
WHERAS, the program would require that all Sales Tax Reimbursement agreements be negotiated by
Staff and approved by the City Council.
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Dublin does hereby
approve the Sales Tax Reimbursement Program for a period of two (2) years.
BE IT FURTHER RESOLVED that the City Council of the City of Dublin will revisit the program at
the end of the two -year period and determine if the program should be continued based upon the economic
conditions at that time.
PASSED, APPROVED AND ADOPTED this 6th day of January, 2009, by the following vote:
AYES: Councilmembers Biddle, Hart, Hildenbrand, Scholz, and Mayor Sbranti
NOES: None
ABSENT: None
ABSTAIN: None
ATTE T:
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City Clerk
Reso No. 9 -09, Adopted 1 -6 -09, Item 7.1 Page 2 of 2
6� 'U'l,
Mayor
RESOLUTION NO. -09
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING AN AGREEMENT FOR REIMBURSEMENT OF SALES AND USE TAX
REVENUE WITH RING PROPERTIES RELATING TO IMPROVEMENTS TO BE
PERFORMED ON A PROPERTY LOCATED AT 11501 DUBLIN BOULEVARD
WHEREAS, the current worldwide economic slowdown has negatively impacted the
City of Dublin's revenues; and
WHEREAS, for decades, state and local governments have used economic development
incentives to attract or retain jobs and/or improve the local tax base; and
WHEREAS, on January 6, 2009, the City Council of the City of Dublin adopted
Resolution No. 9 -09, establishing a Sales Tax Reimbursement Program ( "the Program ") intended
to attract new businesses to the City; and
WHEREAS, the Program established certain conditions under which the City may agree
to enter into an agreement to reimburse property owners and businesses for costs they incur in
making certain internal and external building improvements, as well as site improvements
provided that certain conditions are met; and
WHEREAS, Ring Properties ( "the Owner ") owns certain real property located at 11501
Dublin Boulevard ( "the Property "), located in the City; and
WHEREAS, the Owner has entered into an 10 -year lease agreement with Graybar
Electric Company, Inc. ( "the Tenant "), and the Owner has furnished the City with documentation
establishing that the Tenant will generate more than one hundred thousand dollars ($100,000) of
sales tax revenue for the City each year; and
WHEREAS, the Owner wishes to perform certain interior, exterior and site
improvements, and to avail itself of the benefits of the Program by entering into an agreement
with the City to receive reimbursement from the City to be paid out of sales tax revenue
generated by the Tenant; and
WHEREAS, the City Council finds that it is in the public interest to enter into this
agreement because the City and its residents will benefit from increased revenue received from
both sales tax revenue that it may not otherwise receive, and from the increase in the property
taxes owed by the Owner due to the increased value of the property from the improvements; and
WHEREAS, the City Council finds that it is in the public interest to enter into this
agreement because the City and its residents will benefit from the aesthetic improvements to the
neighborhood that will occur due to the exterior improvements to be made to the structure; and
ATTACHMENT 2
q-cb I
WHEREAS, the City Council further finds that the City and its residents may also
benefit from the creation of new jobs in the City that will occur when the Tenant establishes its
business here.
NOW, THEREFORE, BE IT RESOLVED that the City Council of Dublin approves
the Sales Tax Reimbursement Agreement (attached as Exhibit A and titled "Agreement for
Reimbursement of Sales and Use Tax Revenue between the City of Dublin and Ring Properties."
BE IT FURTHER RESOLVED that the City Manager is authorized to execute the
agreement substantially in the form attached hereto and to undertake such further action as may
be necessary and desirable to carry out the intent of this resolution.
PASSED, APPROVED AND ADOPTED this _ day of , 2009.
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
City Clerk
2
Mayor
EXHIBIT A TO ATTACHMENT 2
AGREEMENT FOR REIMBURSEMENT OF SALES AND USE TAX REVENUE
BETWEEN THE CITY OF DUBLIN AND RING PROPERTIES
THIS AGREEMENT is made and entered into this th day of , 2009, by and between
the City of Dublin ( "City "), a municipal corporation, and the Ring Family Revocable Trust and the Davies Family
Revocable Trust, both revocable trusts doing business as Ring Properties. The Ring Family Revocable Trust
and the Davies Family Revocable Trust dba Ring Properties, are hereafter referred to as "Owner."
RECITALS
WHEREAS, the City Council of the City of Dublin adopted Resolution No. 9 -09 on January 6, 2009
establishing a Sales Tax Reimbursement Program ( "Program ") for a period of two years; and
WHEREAS, the Program authorizes the City of Dublin to enter into agreements with property owners
and businesses, in certain circumstances, wherein the City agrees to reimburse the owner or business for the
actual costs of certain pre- approved improvements to business properties. The reimbursement is made in
annual payments over five years or until the owner or business has recouped its actual expenses for the
improvements, whichever comes first. The annual payment is capped at fifty percent (50 %) of the sales and
use tax revenue (hereafter "sales tax ") generated by the business in the preceding year; and
WHEREAS, provided certain circumstances are met, the Program allows property owners to recover,
over time, a portion of the costs of interior, exterior and site improvements made to their property through a
partial reimbursement from the City of sales tax generated from the property; and
WHEREAS, Owner owns certain real property located at 11501 Dublin Boulevard ("the Property'),
located in the City; and
WHEREAS, Owner has entered into a ten (10) year lease agreement for office space at the Property,
with Graybar Electric Company ("Tenant"), which does not currently rent office space elsewhere in the City; and
WHEREAS, the lease agreement is for a space that has a total area of seventy -five thousand (75,000)
square feet or less, and Owner has furnished the City with documentation establishing that Tenant is expected
to have at least ten million dollars ($10,000,000) in annual retail sales transactions attributable to operations
conducted at the Property, which would result in at least one hundred thousand dollars ($100,000) of sales tax
for the City each year; and
WHEREAS, Owner and Tenant have agreed that Tenant will conduct certain tenant improvements to
the property and Owner will pay Tenant up to three hundred thousand dollars ($300,000) for said tenant
improvements; and
WHEREAS, Owner will perform additional interior improvements, exterior improvements and site
improvements to the Property, and wishes to utilize the Program to receive reimbursement from the City for the
costs it incurs in improving the Property.
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NOW, THEREFORE, for and in consideration of the mutual advantages to be derived therefrom, and in
consideration of the mutual covenants herein contained, it is agreed by and between the Parties hereto as
follows:
EXHIBIT A TO ATTACHMENT 2
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1. DEFINITIONS
1.1 "Exterior Improvements" means all improvements made to the exterior of the physical
structure of the office building identified in Exhibit A of this Agreement.
1.2 "Improvements" means all Tenant Improvements, Exterior Improvements, Interior
Improvements, Site Improvements and Public Right -of -Way Improvements identified in
Exhibit A and Exhibit B of this Agreement.
1.3 "Interior Improvements" means all improvements made to the interior office space to be
occupied by the Tenant and identified in Exhibit A of this Agreement.
1.4 "Reporting Year' means any twelve month period for which Owner provides an accounting
of Tenant's sales tax payments, which payments are subject to possible reimbursement.
1.5 "Right -of -Way Improvements" means all improvements made to the City's public right -of-
way identified in Exhibit A of this Agreement.
1.6 "Site Improvements" means all improvements made to the Property that are not Exterior
Improvements, Interior Improvements or Right -of -Way Improvements identified in Exhibit A
of this Agreement.
1.7 "Tenant Improvements" means all physical improvements made to the interior office space
to be occupied by Tenant that are contracted and paid for by Tenant and identified in
Exhibit B of this Agreement.
2. OWNER'S DUTIES UNDER THIS AGREEMENT
2.1 Owner wishes to perform certain Exterior Improvements, Interior Improvements, Right -of-
Way Improvements and Site Improvements substantially as described in Exhibit A of this
Agreement. Furthermore, Tenant intends to perform certain Tenant Improvements
substantially as described in Exhibit B of this Agreement for which Owner will provide
partial reimbursement pursuant to the provisions of the lease agreement between Owner
and Tenant.
2.2 Prior to commencement of construction of the Improvements or any portion thereof, Owner
shall provide City with a copy of its agreement with Tenant requiring Owner to pay Tenant
three hundred thousand dollars ($300,000) to cover a portion of the cost of the Tenant
Improvements.
2.3 Owner has provided City with a description of all proposed improvements and a cost
estimate for the proposed improvements hereto as Exhibit A. The total cost estimate for
these improvements is three hundred thirty -two thousand five hundred dollars ($332,500).
This amount, plus three hundred thousand dollars ($300,000) which Owner is required to
pay Tenant as described in Section 2.2 of this Agreement constitute the Maximum
Compensation Amount of six hundred thirty -two thousand five hundred dollars ($632,500).
Absent an amendment to this Agreement and subject to approval by the City Council of the
EXHIBIT A TO ATTACHMENT 2
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City of Dublin, in no event shall City pay Owner more than the Maximum Compensation
Amount.
Prior to commencement of construction of the Improvements or any portion thereof, Owner
shall submit to City all plans and specifications for the Improvements for City review and
approval, including the plans, specifications and cost estimates for the Tenant
Improvements identified in Exhibit B of this Agreement. Nothing in this Agreement shall
affect the need for Owner and Tenant to obtain any approvals from the City for the
Improvements as required by any City rules, regulations, ordinances or resolutions.
2.4 Following City approval of the plans, specifications and cost estimates pursuant to Section
3.2, and in the event that Owner desires to modify the specifications for any of the
Improvements or if change orders are required, Owner shall submit said modifications and
change orders to City for approval. Failure to do so shall relieve the City of any obligation
to pay for any Improvements not constructed as approved, pursuant to Section 3.1.
2.5 Owner may, in its discretion, arrange to have all of the Improvements constructed at one
time, or to have the Improvements constructed in the following two phases: 1) all Tenant
Improvements, Interior Improvements and Exterior Improvements ( "Phase One "), 2) all Site
Improvements and Right -of -Way Improvements ( "Phase 2 ").
2.6 In the event that Owner does not elect to construct the Improvements in phases pursuant
to Section 2.5, Owner shall provide the City with all invoices, receipts and evidence of
payment for the Exterior Improvements, Interior Improvements, Right -of -Way
Improvements and Site Improvements by the end of the first Reporting Year in which
Tenant pays sales taxes based on its operations in Dublin. Said bills and evidence of
payment shall also include a cover sheet summarizing the information contained therein,
including the original approved estimate amount and the amount paid to each vendor.
In the event that Owner elects to construct the Improvements in phases pursuant to
Section 2.5 of this Agreement the cover sheet shall clearly identify whether any submitted
invoice, receipt and payment corresponds to Phase One or to Phase Two. Owner must
submit said bills, receipts and evidence of payment for Phase One by the end of the first
Reporting Year in which Tenant pays sales taxes based on its operations in Dublin.
Once Owner submits the first Phase Two invoices, receipts and evidence of payment, this
will trigger the five year repayment window for Phase Two.
2.7 Owner shall provide the City with evidence of all payments made by Owner to Tenant
pursuant to the lease agreement between those parties described in Section 2.2 of this
Agreement, within thirty (60) days of making said payments.
2.8 Once Tenant begins paying sales taxes on its operations within the City, Owner shall
provide City with an annual report by a duly authorized representative of Tenant, showing
the amount of sales tax Tenant paid for transactions occurring in the City in the preceding
Reporting Year. The report shall include a breakdown of the amount of sales tax
payments made in each quarter of the Reporting Year.
EXHIBIT A TO ATTACHMENT 2
I
The first Reporting Year shall begin with the first full calendar quarter in which Tenant pays
sales taxes on its operations in City. For example, if Tenant begins operations in February
of any given year, Owner shall send to City an accounting of the amount of sales tax
Tenant paid from April of that year through the following March, broken down by calendar
quarter. Owner shall provide City with this report within ninety (90) days of the conclusion
of the fourth calendar quarter of each reporting year.
a. In the event that Owner does not elect to construct the Improvements in phases
pursuant to Section 2.5, Owner shall provide City with a total of five (5) annual reports, beginning with the
first full calendar quarter in which Tenant pays sales taxes on its operations in City, of the sales taxes paid
by Tenant, covering a total of five consecutive (5) Reporting Years.
b. In the event Owner elects to construct the Improvements in phases pursuant to
Section 2.5 of this Agreement, Owner shall follow the procedure described above, providing City with a total
of five (5) annual reports for each individual phase. The first Reporting Year for Phase One shall begin with
the first full calendar quarter in which Tenant pays sales taxes on its operations in City. The first Reporting
Year for Phase Two shall begin with the first full calendar quarter after Owner submits any bills or evidence
of payment for any Phase Two Improvements, pursuant to Section 2.6 of this Agreement. Once Owner
submits any such bills or evidence of payment for Phase Two, Owner shall provide City with a total of five
(5) annual reports of the sales taxes paid by Tenant covering a total of five (5) consecutive Reporting Years
for Phase Two.
2.9 The actual cost of the Improvements for which evidence of payment has been submitted to
City pursuant to Section 2.6 of this Agreement, plus the total amount of payments made by
Owner to Tenant and reported to City pursuant to Section 2.7 of this Agreement shall
constitute the Eligible Compensation Amount. Each time Owner submits evidence of
payment pursuant to Section 2.6, or reports a payment to Tenant pursuant to Section 2.7
of this Agreement, the Eligible Compensation Amount shall be adjusted to reflect the
amounts paid by Owner.
In the event Owner elects to construct the Improvements in phases pursuant to Section 2.5
of this Agreement, there shall be two separate Eligible Compensation Amounts, one for the
first phase, and one for the second phase. All payments to Tenant reported pursuant to
Section 2.7 shall be added to the Eligible Compensation Amount for the first phase.
2.10 In the event that Owner performs improvements to interior spaces of the Property in
addition to the Interior Improvements, as defined in Section 1.3 of this Agreement, Owner
shall cause all such improvements to be billed and paid for separately from the
Improvements described in Exhibit A.
2.11 A representative of the City shall have the right, at the City's sole -discretion, to inspect all
Improvement work performed to ensure that said work was performed substantially as
approved by the City pursuant to Section 3.1 of this Agreement. This right of inspection
shall be in addition to any inspection performed by City staff as required or permitted by
any other City rules, regulations, ordinances or resolutions.
EXHIBIT A TO ATTACHMENT 2
'i V ► �{
2.12 In the event that Tenant, during the term of this Agreement, opens an additional business
operation in the City that will pay sales. taxes, Owner shall ensure that the report of
Tenant's annual sales tax it submits to City, pursuant to Section 2.6 of this Agreement
includes only that portion of the sales tax attributable to business conducted by Tenant at
the Property.
2.13 In the event that City determines, pursuant to Section 3.10 of this Agreement, that it
overpaid Owner due to a miscalculation or misallocation of sales tax payments, and if City
is not obligated to make any additional payments to Owner pursuant to this Agreement, or
the amount of any additional payments owed by City is insufficient to compensate City for
its prior overpayment, Owner shall pay to City the amount City overpaid within sixty (60)
days of notification by City of the overpayment.
2.14 Owner agrees that the Right -of -Way Improvements constitute "public works" as that term is
defined in Section 1720 of the California Labor Code. Owner shall ensure that all work on
the Right -of -Way Improvements is performed in compliance with all prevailing wage
requirements contained in Section 1720 et seq. of the California Labor Code.
2.15 Owner acknowledges that it has had the opportunity to consult with an attorney regarding
the terms of this Agreement.
3. CITY'S DUTIES UNDER THIS AGREEMENT
3.1 Upon receipt of the plans and specifications for the Improvements pursuant to Section 2.3
of this Agreement, City shall review said materials to determine the extent to which they
represent work that is consistent with the intent of the Program. City shall inform Owner in
writing either that the Improvements have been approved, or that they have been
approved with exceptions, which exceptions shall also be in writing.
3.2 Within thirty (30) days of receipt of receipt of evidence of payment for the Improvements,
any individual phase of the Improvements pursuant to Section 2.6 of this Agreement, or of
payments made to Tenant pursuant to Section 2.7 of this Agreement, City shall provide
Owner with an updated statement of the Eligible Compensation Amount. Where Owner
elects to construct the Improvements in phases pursuant to Section 2.5 of this Agreement,
City shall provide Owner with an updated statement of the Eligible Compensation Amount
for the relevant phase.
3.3 City shall verify the accuracy of Owner's report of sales tax delivered to City pursuant to
Section 2.8 of this Agreement. City shall, within one hundred twenty (120) days after the
end of the last calendar quarter covered by the report, and subject to the provisions of
Sections 3.4, 3.5, 3.6, 3.7, 3.8 and 3.9 of this Agreement, pay to Owner an amount equal
to fifty percent (50 %) of the sales tax paid by Tenant.
In the event that the City is unable to verify the accuracy of Owner's report of sales tax
delivered to City pursuant to Section 2.8 of this Agreement, City shall so inform Owner.
Owner shall have sixty (60) days from such notification by City to deliver a revised report of
sales tax in the form described in Section 2.8. If City is able to verify the accuracy of any
such new report, City shall, subject to the provisions of Sections 3.4, 3.5, 3.6, 3.7, 3.8 and
EXHIBIT A TO ATTACHMENT 2
to ibl+
3.9 of this Agreement, pay to Owner an amount equal to fifty percent (50 %) of the sales
tax paid by Tenant. If Owner does not submit a revised report within sixty (60) days of
notification, or if City is unable to verify the accuracy of the revised report, City shall make
no payment to Owner for that Reporting Year until the matter is resolved to the satisfaction
of the City.
3.4 Should Owner fail to timely submit to City the information as required in Section 2.6 of this
Agreement, City shall be under no obligation to make any payment to Owner for that year.
3.5 In no event shall City make any payment to Owner for any year in which the total sales tax
paid by Tenant is less than one hundred thousand dollars ($100,000).
3.6 At no time shall the cumulative amount of City's payments be more than the Eligible
Compensation Amount then in effect.
3.7 If Owner does not elect to construct the Improvements in phases pursuant to Section 2.5,
in no event shall City be obligated to pay Owner based on sales tax generated more than
five (5) years after the first quarter covered by the report of sales tax submitted to City
pursuant to Section 2.8 of this Agreement.
In the event that Owner has elected to construct the Improvements in phases pursuant to
Section 2.5 of this Agreement, in no event shall City be obligated to pay Owner for any
individual phase based on sales tax generated more than five (5) years after the first
quarter covered by the report of sales tax for that same phase submitted to City pursuant
to Section 2.8 of this Agreement.
3.8 In the event that the actual cost of the Improvements, or any phase thereof, is less than
the estimates approved by City pursuant to Section 3.1 of this Agreement, City shall be
responsible only for cumulative payments equal to the actual amount of the Improvements.
3.9 In the event that Tenant terminates its lease agreement or otherwise vacates the Property
before submitting five (5) annual reports of sales tax payments, City's obligation to pay
Owner shall be based only on the amount of sales tax generated by Tenant while
occupying the Property.
3.10 In the event that City learns that Tenant's sales tax payments were incorrectly calculated
or allocated to the City, and if the result of the incorrect calculation or allocation is that City
paid Owner more or less than it would have been required to pay pursuant to Section 3.3
of this Agreement, City shall determine the amount of overpayment or underpayment.
If the City is obligated to make any subsequent annual payment to Owner pursuant to this
Agreement, City shall adjust the subsequent payment to reflect any overpayment or
underpayment it may have made for the period in question.
If City determines that it underpaid Owner, but is not obligated to make any additional
payments to Owner pursuant to this Agreement, City shall pay owner the amount it
underpaid, provided that the total payments to Owner do not then exceed the Maximum
EXHIBIT A TO ATTACHMENT 2
Compensation Amount. This payment shall be made within sixty (60) of City's discovery of
the amount of the underpayment.
If City determines that it overpaid Owner, but is either not obligated to make any additional
payments to Owner pursuant to this Agreement, or the amount of any additional payments
is insufficient to compensate City for its prior overpayment, Owner shall pay City the
amount City overpaid in compliance with Section 2.13 of this Agreement.
4. Indemnification
Owner shall defend City, its officers, employees and officials, against any claims or actions
(including declaratory or injunctive relief) concerning Owner's construction of the Improvements,
including the Right -of -Way Improvements, and shall indemnify and hold City harmless from any
damages, charges, fees or penalties that may be awarded or imposed against City and /or Owner in
connection with, or on account of, Owner's construction of the Improvements, including the Right -
of -Way Improvements, and /or City's failure to enforce or comply with any applicable laws.
5. Amendments to Agreement
No part of this Agreement shall be altered or amended without written agreement of the signatory
Parties. Any amendment to the Maximum Reimbursement Amount shall require prior approval by
the City Council of the City of Dublin.
6. Assignment
The rights and obligations of the Parties under this agreement are not assignable and shall not be
delegated without the prior written approval of the other Party.
7. Exhibits.
The following Exhibit is attached hereto and incorporated as if fully set forth herein:
Exhibit A: Description of Improvements.
Exhibit B: Description of Tenant Improvements
IN WITNESS WHEREOF, the Parties execute this agreement hereto on the day and the year first written
above.
APPROVED AS TO FORM AND CONTENT:
John D. Bakker, City Attorney, City of Dublin
ADOPTED BY:
CITY OF Dublin, a Municipal Corporation
Date:
EXHIBIT A TO ATTACHMENT 2
Ia0b ) t
Joni Pattillo, City Manager
The Ring Family Revocable Trust as to an undivided two - thirds (2/3) interest in the Property and the Davies
Family Revocable Trust as to an undivided one -third (1/3) interest in the Property
Date:
Date:
1192643.13
The Ring Family Revocable Trust
By:
Kevin Ring, trustee under trust agreement dated
March 23, 1993
The Davies Family Revocable Trust
By:
Caroline Davies, trustee under trust agreement dated
February 24, 1992
13� J+
Exhibit A
MAXIMUM COMPENSATION AMOUNT:
$632,500
Tenant Improvements
o Tenant Improvement Allowance for work conducted by Graybar (see Exhibit B for
description)
o Cost: $300,000
Interior Improvements:
o Remodel 1 st floor (Graybar's) restrooms. Includes new counter tops, sinks, faucets, low
flow toilets, partitions, tile, and paint
o Estimated Cost: $25,500
Exterior Improvements:
o Paint on north and east sides (visible from Dublin Blvd)
o Estimated Cost: $12,000
Site and Right -of -Way Improvements:
o Improvements as necessary to connect the existing parking area to the new access that
will be constructed off Dublin Blvd.
o Construct additional parking for Graybar on the excess right -of -way area.
o Improvements will include grading, paving (new and repair), concrete curbing and stairs
and/or sidewalks, parking lot sealing and striping, signage numbering, and landscaping.
o Costs will include fees for civil engineers, a landscape architect, city plan check and
permits, and as well as factoring in labor costs under prevailing wage for the right -of -way
improvements.
o Estimated costs: $295,000 (plans cannot be prepared until the Dublin Blvd. expansion
plans are completed)
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Exhibit B
TENANT IMPROVEMENTS — GRAYBAR ELECTRIC, INC.
DESCRIPTION
Tenant Improvement Summary
o Demolition of existing executive suite space
o Installation of new carpets
o Upgrades to disability access
o Addition of a conference room
o Remodel of remaining offices
o New lighting/rewiring of electrical system
o New mechanical duct work
o New heat pumps
o Painting of walls
Tenant Improvement Allowance for work conducted by Graybar - Cost: $300,000 (valuation
of the improvements — approx. $700,000)
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New Project �V,s'` �.
4 Site
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Interstate E SC - -
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Proposed Parking Area (Red)
Initial Parking Area (Green)
Attachment 1
RESOLUTION NO. -13
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
AMENDING AND RESTATING THE SALES TAX REIMBURSEMENT AGREEMENT WITH
BICENTENNIAL SQUARE PARTNERS
WHEREAS, the City Council of the City of Dublin adopted Resolution No. 9 -09 on
January 6, 2009 establishing a Sales Tax Reimbursement Program ( "Program ") for a period of
two years; and
WHEREAS, the City Council adopted Resolution No. 149 -09 on October 6, 2009,
revising and restating the Program to permit the option of a ten (10) year reimbursement period
for participants that generate $500,000 in sales tax revenue for the City each year; and
WHEREAS, the City Council adopted Resolution No. 135 -12 on July 17, 2012, revising
and restating the Program to include improvement costs made by businesses that are
constructing new structures on undeveloped property sites or that may be tenants in such new
structures, and which Resolution provided that the Program shall terminate on January 5, 2015;
and
WHEREAS, the Program authorizes the City of Dublin to enter into agreements with
property owners and businesses, in certain circumstances, wherein the City agrees to reimburse
the owner or business for the actual costs of certain pre- approved improvements to business
properties. The reimbursement is made in annual payments over five (5) or ten (10) years or
until the owner or business has recouped its actual expenses for the improvements, whichever
comes first. The annual payment is capped at fifty percent (50 %) of the sales and use tax
revenue (hereafter "sales tax ") generated by the business in the preceding four quarter year;
and
WHEREAS, provided certain circumstances are met, the Program allows property
owners to recover, over time, a portion of the costs of interior, exterior and site improvements
made to their property through a partial reimbursement from the City of sales tax generated from
the property; and
WHEREAS, in May 2009, by Resolution 56 -09, the City entered into a Sales Tax
Reimbursement Agreement with Ring Properties, owner of 11501 Dublin Blvd. ( "the Property "),
to recoup improvements costs associated with the tenanting of Graybar Electric Company
( "Tenant "), which at the time, did not rent office space elsewhere in the City; and
WHEREAS, since that time ownership of the Property has been transferred to
Bicentennial Square Partners; and
WHEREAS, in order to reflect this change in ownership, and in order to ensure the
continuing presence of Tenant in the City and the concomitant benefits derived by the City from
said presence, Owner and City wish to amend the Agreement to modify the nature of site
improvements to be constructed and to increase the total amount eligible for reimbursement.
WHEREAS, the amended and restated Agreement will result in public benefits to the
City, including a more aesthetically pleasing portion of the Dublin Blvd. corridor; the likelihood of
job growth at Graybar and additional job creation with the building's executive suites, 580
Executive Center; the likelihood for increased property values associated with site expansion
and development; the provision of a long -term real estate solution for Graybar that will generate
ongoing sales tax revenue to the City; and additional local spending by these new employees in
Dublin.
NOW, THEREFORE BE IT RESOLVED that the City Council approves the Amended and
Restated Agreement with Bicentennial Square Partners attached hereto as Exhibit A.
BE IT FURTHER RESOLVED that the City Manager is authorized to execute the
Amended and Restated Agreement substantially in the form attached hereto.
PASSED, APPROVED AND ADOPTED this 7th day of May, 2013, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
City Clerk
Mayor
AMENDED AND RESTATED AGREEMENT FOR REIMBURSEMENT OF SALES AND USE TAX
REVENUE BETWEEN THE CITY OF DUBLIN AND BICENTENNIAL SQUARE PARTNERS
THIS AMENDED AND RESTATED AGREEMENT is made and entered into this th day of May,
2013, by and between the City of Dublin ( °City"), a municipal corporation, and Bicentennial Square Partners, a
California general partnership ( "Owner').
RECITALS
WHEREAS, the City Council of the City of Dublin adopted Resolution No. 9 -09 on January 6, 2009
establishing a Sales Tax Reimbursement Program ( "Program ") for a period of two years; and
WHEREAS, the City Council adopted Resolution No. 149-09 on October 6, 2009, revising and restating
the Program to permit the option of a ten (10) year reimbursement period for participants that generate
$500,000 in sales tax revenue for the City each year; and
WHEREAS, the City Council adopted Resolution No, 135-12 on July 17, 2012, revising and restating
the Program to include improvement costs made by businesses that are constructing new structures on
undeveloped property sites or that may be tenants in such new structures, and which Resolution provided that
the Program shall terminate on January 5, 2015; and
WHEREAS, the Program authorizes the City of Dublin to enter into agreements with property owners
and businesses, in certain circumstances, wherein the City agrees to reimburse the owner or business for the
actual costs of certain pre- approved improvements to business properties. The reimbursement is made in
annual payments over five years or until the owner or business has recouped its actual expenses for the
improvements, whichever comes first. The annual payment is capped at fifty percent (50 %) of the sales and
use tax revenue (hereafter "sales tax ") generated by the business in the preceding year and
WHEREAS, provided certain circumstances are met, the Program allows property owners to recover,
over time, a portion of the costs of interior, exterior and site improvements made to their property through a
partial reimbursement from the City of sales tax generated from the property; and
WHEREAS, Owner owns certain real property located at 11501 Dublin Boulevard ("the Property'),
located in the City; and
WHEREAS, Owner has entered into a ten (10) year lease agreement for office space at the Property,
with Graybar Electric Company ( "Tenant "), which does not currently rent office space elsewhere in the City; and
WHEREAS, the lease agreement is for a space that has a total area of seventy -five thousand (75,000)
square feet or less, and Owner has furnished the City with documentation establishing that Tenant is expected
to have at least ten million dollars ($10,000,000) in annual retail sales transactions attributable to operations
conducted at the Property, which would result in at least one hundred thousand dollars ($100,000) of sales tax
for the City each year; and
WHEREAS, Owner and Tenant have agreed that Tenant will conduct certain tenant improvements to
the property and Owner will pay Tenant up to three hundred thousand dollars ($300,000) for said tenant
improvements; and
WHEREAS, on May 5, 2009 City entered into that certain Agreement for Reimbursement of Sales and
use Tax Revenue between the City of Dublin and Ring Properties, which was entered into with the Ring Family
Revocable Trust and the Davies Family Revocable Trust, which trusts were, at that time, the owners of the
Property; and
WHEREAS, since that time ownership of the Property has been transferred to Owner; and
WHEREAS, in order to reflect this change in ownership, and in order to ensure the continuing presence
of Tenant in the City and the concomitant benefits derived by the City from said presence, Owner and City wish
to amend the Agreement to modify the nature of site improvements to be constructed and to increase the total
amount eligible for reimbursement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual advantages to be derived therefrom, and in
consideration of the mutual covenants herein contained, Parties hereto enter into this Amended and Restated
Agreement for Reimbursement of Sales and Use Tax Revenue Between the City of Dublin and Bicentennial
Square Partners to read as follows:
1. DEFINITIONS
1.1 "Exterior Improvements" means all improvements made to the exterior of the physical
structure of the office building identified in Exhibit A of this Agreement.
1.2 "Improvements" means all Tenant Improvements, Exterior Improvements, Interior
Improvements, Site Improvements and Public Right- of-Way Improvements identified in
Exhibit A and Exhibit B of this Agreement.
1.3 "Interior Improvements" means all improvements made to the interior office space to be
occupied by the Tenant and identified in Exhibit A of this Agreement.
1.4 "Reporting Year" means any twelve month period for which Owner provides an accounting
of Tenant's sales tax payments, which payments are subject to possible reimbursement.
1.5 "Right -of -Way Improvements" means all improvements made to the City's public right -of-
way identified in Exhibit A of this Agreement.
1.6 "Site Improvements" means all improvements made to the Property that are not Exterior
Improvements, Interior Improvements or Right -of -Way Improvements identified in Exhibit A
of this Agreement.
1.7 "Tenant Improvemente means all physical improvements made to the interior office space
to be occupied by Tenant that are contracted and paid for by Tenant and identified in
Exhibit B of this Agreement.
2. OWNER'S DUTIES UNDER THIS AGREEMENT
2.1 Owner wishes to perform certain Exterior Improvements, Interior Improvements, Right-of-
Way Improvements and Site Improvements substantially as described in Exhibit A of this
Agreement. Furthermore, Tenant intends to perform certain Tenant Improvements
substantially as described in Exhibit B of this Agreement for which Owner will provide
partial reimbursement pursuant to the provisions of the lease agreement between Owner
and Tenant.
2.2 Prior to commencement of construction of the Improvements or any potion thereof, Owner
shall provide City with a copy of its agreement with Tenant requiring Owner to pay Tenant
three hundred thousand dollars ($300,000) to cover a portion of the cost of the Tenant
Improvements.
2.3 Owner has provided City with a description of all proposed improvements and a cost
estimate for the proposed improvements hereto as Exhibit A. The total cost estimate for
these improvements is Six Hundred and Ninety Seven Thousand Five Hundred Dollars
($697,500). This amount, plus three hundred thousand dollars ($300,000) which Owner is
required to pay Tenant as described in Section 2.2 of this Agreement constitute the
Maximum Compensation Amount of Nine Hundred and Ninety Seven Thousand Five
Hundred Dollars ($997,500). Absent an amendment to this Agreement and subject to
approval by the City Council of the City of Dublin, in no event shall City pay Owner more
than the Maximum Compensation Amount.
Prior to commencement of construction of the Improvements or any portion thereof, Owner
shall submit to City all plans and specifications for the Improvements for City review and
approval, including the plans, specifications and cost estimates for the Tenant
Improvements identified in Exhibit B of this Agreement. Nothing in this Agreement shall
affect the need for Owner and Tenant to obtain any approvals from the City for the
Improvements as required by any City rules, regulations, ordinances or resolutions.
2.4 Fallowing City approval of the plans, specifications and cost estimates pursuant to Section
3.2, and in the event that Owner desires to modify the specifications for any of the
Improvements or if change orders are required, Owner shall submit said modifications and
change orders to City for approval. Failure to do so shall relieve the City of any obligation
to pay for any Improvements not constructed as approved, pursuant to Section 3.1.
2.5 Owner may, in its discretion, arrange to have all of the Improvements constructed at one
time, or to have the Improvements constructed in the following two phases: 1) all Tenant
Improvements, Interior Improvements and Exterior Improvements ( "Phase Onen), 2) all Site
Improvements and Right -of -Way Improvements (Phase 2u).
2.6 In the event that Owner does not elect to construct the Improvements in phases pursuant
to Section 2.5, Owner shall provide the City with all invoices, receipts and evidence of
payment for the Exterior Improvements, Interior Improvements, Right -of -Way
Improvements and Site Improvements by the end of the first Reporting Year in which
Tenant pays sales taxes based on its operations in Dublin. Said bills and evidence of
payment shall also include a cover sheet summarizing the information contained therein,
including the original approved estimate amount and the amount paid to each vendor.
In the event that Owner elects to construct the Improvements in phases pursuant to
Section 2.5 of this Agreement the cover sheet shall clearly identify whether any submitted
invoice, receipt and payment corresponds to Phase One or to Phase Two. Owner must
submit said bills, receipts and evidence of payment for Phase One by the end of the first
Reporting Year in which Tenant pays sales taxes based on its operations in Dublin.
Once Owner submits the first Phase Two invoices, receipts and evidence of payment, this
will trigger the five year repayment window for Phase Two.
2.7 Owner shall provide the City with evidence of all payments made by Owner to Tenant
pursuant to the lease agreement between those parties described in Section 2.2 of this
Agreement, within sixty (60) days of making said payments.
2.8 Once Tenant begins paying sales taxes on its operations within the City, Owner shall
provide City with an annual report, signed by a duly authorized representative of Tenant,
showing the amount of sales tax Tenant paid for transactions occurring in the City in the
preceding Reporting Year. The report shall include a breakdown of the amount of sales
tax payments made in each quarter of the Reporting Year.
The first Reporting Year shall begin with the first full calendar quarter in which Tenant pays
sales taxes on its operations in City. For example, if Tenant begins operations in February
of any given year, Owner shall send to City an accounting of the amount of sales tax
Tenant paid from April of that year through the following March, broken down by calendar
quarter. Owner shall provide City with this report within ninety (90) days of the conclusion
of the fourth calendar quarter of each reporting year.
a. In the event that Owner does not elect to construct the Improvements in phases
pursuant to Section 2.5, Owner shall provide City with a total of five (5) annual reports, beginning with the
first full calendar quarter in which Tenant pays sales taxes on its operations in City, of the sales taxes paid
by Tenant, covering a total of five consecutive (5) Reporting Years.
b. In the event Owner elects to construct the Improvements in phases pursuant to
Section 2.5 of this Agreement, Owner shall follow the procedure described above, providing City with a total
of five (5) annual reports for each individual phase. The first Reporting Year for Phase One shall begin with
the first full calendar quarter in which Tenant pays sales taxes on its operations in City. The first Reporting
Year for Phase Two shall begin with the first full calendar quarter after Owner submits any bills or evidence
of payment for any Phase Two Improvements, pursuant to Section 2.6 of this Agreement. Once Owner
submits any such bills or evidence of payment for Phase Two, Owner shall provide City with a total of five
(5) annual reports of the sales taxes paid by Tenant covering a total of five (5) consecutive Reporting Years
for Phase Two.
2.9 The actual cost of the Improvements for which evidence of payment has been submitted to
City pursuant to Section 2.6 of this Agreement, plus the total amount of payments made by
Owner to Tenant and reported to City pursuant to Section 2.7 of this Agreement shall
constitute the Eligible Compensation Amount. Each time Owner submits evidence of
payment pursuant to Section 2.6, or reports a payment to Tenant pursuant to Section 2.7
of this Agreement, the Eligible Compensation Amount shall be adjusted to reflect the
amounts paid by Owner.
In the event Owner elects to construct the Improvements in phases pursuant to Section 2.5
of this Agreement, there shall be two separate Eligible Compensation Amounts, one for the
first phase, and one for the second phase. All payments to Tenant reported pursuant to
Section 2.7 shall be added to the Eligible Compensation Amount for the first phase.
2.10 In the event that Owner performs improvements to interior spaces of the Property in
addition to the Interior Improvements, as defined in Section 1.3 of this Agreement, Owner
shall cause all such improvements to be billed and paid for separately from the
Improvements described in Exhibit A.
2.11 A representative of the City shall have the right, at the City's soie discretion, to inspect all
Improvement work performed to ensure that said work was performed substantially as
approved by the City pursuant to Section 3.1 of this Agreement. This right of inspection
shall be in addition to any inspection performed by City staff as required or permitted by
any other City rules, regulations, ordinances or resolutions.
2.12 In the event that Tenant, during the term of this Agreement, opens an additional business
operation in the City that will pay sales taxes, Owner shall ensure that the report of
Tenant's annual sales tax it submits to City, pursuant to Section 2.6 of this Agreement
includes only that portion of the sales tax attributable to business conducted by Tenant at
the Property.
2.13 the event that City determines, pursuant to Section 3.10 of this Agreement, that it overpaid
Owner due to a miscalculation or misallocation of sales tax payments, and if City is not
obligated to make any additional payments to Owner pursuant to this Agreement, or the
amount of any additional payments owed by City is insufficient to compensate City for its
prior overpayment, Owner shall pay to City the amount City overpaid within thirty (30) days
of notification by City of the overpayment.
2.14 Owner agrees that the Right -of -Way Improvements constitute "public works" as that term is
defined in Section 1720 of the California tabor Code. Owner shall ensure that all work on
the Right -of -Way Improvements is performed in compliance with all prevailing wage
requirements contained in Section 1720 et seq, of the California tabor Code.
2.15 Owner acknowledges that it has had the opportunity to consult with an attorney regarding
the terms of this Agreement.
3. CITY'S DUTIES UNDER THIS AGREEMENT
3.1 Upon receipt of the plans and specifications for the Improvements pursuant to Section 23
of this Agreement, City shall review said materials to determine the extent to which they
represent work that is consistent with the intent of the Program. City shall inform Owner in
writing either that the Improvements have been approved, or that they have been
approved with exceptions, which exceptions shall also be in writing.
3.2 Within thirty (30) days of receipt of receipt of evidence of payment for the Improvements,
any individual phase of the Improvements pursuant to Section 2.6 of this Agreement, or of
payments made to Tenant pursuant to Section 2.7 of this Agreement, City shall provide
Owner with an updated statement of the Eligible Compensation Amount. Where Owner
elects to construct the Improvements in phases pursuant to Section 2.5 of this Agreement,
City shall provide Owner with an updated statement of the Eligible Compensation Amount
for the relevant phase.
3.3 City shall verify the accuracy of Owner's report of sales tax delivered to City pursuant to
Section 2.6 of this Agreement. City shall, within one hundred twenty (120) days after the
end of the last calendar quarter covered by the report, and subject to the provisions of
Sections 3.4, 3.5, 3.6, 3.7, 3.8 and 3.9 of this Agreement, pay to Owner an amount equal
to fifty percent (50 %) of the sales tax paid by Tenant.
In the event that the City is unable to verify the accuracy of Owner's report of sales tax
delivered to City pursuant to Section 2.6 of this Agreement, City shall so inform Owner.
Owner shall have sixty (60) days from such notification by City to deliver a revised report of
sales tax in the form described in Section 2.6. if City is able to verify the accuracy of any
such new report, City shall, subject to the provisions of Sections 3.4, 15, 3.6, 3.7, 3.8 and
3.9 of this Agreement, pay to Owner an amount equal to fifty percent (50 %) of the sales
tax paid by Tenant. If Owner does not submit a revised report within sixty (60) days of
notification, or if City is unable to verify the accuracy of the revised report, City shall make
no payment to Owner for that Reporting Year until the matter is resolved to the satisfaction
of the City.
3,4 Should Owner fail to timely submit to City the information as required in Section 2.6 of this
Agreement, City shall be under no obligation to make any payment to Owner for that year.
3,5 In no event shall City make any payment to Owner for any year in which the total sales tax
paid by Tenant is less than one hundred thousand dollars ($100,000).
3.6 At no time shall the cumulative amount of City's payments be more than the Eligible
Compensation Amount then in effect.
3.7 If Owner does not elect to construct the Improvements in phases pursuant to Section 2.5,
in no event shall City be obligated to pay Owner based on sales tax generated more than
five (5) years after the first quarter covered by the report of sales tax submitted to City
pursuant to Section 2.6 of this Agreement.
In the event that Owner has elected to construct the Improvements in phases pursuant to
Section 2.5 of this Agreement, in no event shall City be obligated to pay Owner for any
individual phase based on sales tax generated more than five (5) years after the first
quarter covered by the report of sales tax for that same phase submitted to City pursuant
to Section 2.6 of this Agreement.
3.8 In the event that the actual cost of the Improvements, or any phase thereof, is less than
the estimates approved by City pursuant to Section 3.1 of this Agreement, City shall be
responsible only for cumulative payments equal to the actual amount of the Improvements.
3.9 In the event that Tenant terminates its lease agreement or otherwise vacates the Property
before submitting five (5) annual reports of sales tax payments, City's obligation to pay
Owner shall be based only on the amount of sales tax generated by Tenant while
occupying the Property.
3.10 In the event that City learns that Tenant's sales tax payments were incorrectly calculated
or allocated to the City, and if the result of the incorrect calculation or allocation is that City
paid Owner more or less than it would have been required to pay pursuant to Section 33
of this Agreement, City shall determine the amount of overpayment or underpayment.
If the City is obligated to make any subsequent annual payment to Owner pursuant to this
Agreement, City shall adjust the subsequent payment to reflect any overpayment or
underpayment it may have made for the period in question.
If City determines that it underpaid Owner, but is not obligated to make any additional
payments to Owner pursuant to this Agreement, City shall pay owner the amount it
underpaid, provided that the total payments to Owner do not then exceed the Maximum
Compensation Amount. This payment shall be made within thirty (30) of City's discovery of
the amount of the underpayment.
If City determines that it overpaid Owner, but is either not obligated to make any additional
payments to Owner pursuant to this Agreement, or the amount of any additional payments
is insufficient to compensate City for its prior overpayment, Owner shall pay City the
amount City overpaid in compliance with Section 2.13 of this Agreement.
4. Indemnification
Owner shall defend City, its officers, employees and officials, against any claims or actions
(including declaratory or injunctive relief) concerning Owners construction of the Improvements,
including the Right -of -Way Improvements, and shall indemnify and hold City harmless from any
damages, charges, fees or penalties that may be awarded or imposed against City and/or Owner in
connection with, or on account of, Owner's construction of the Improvements, including the Right-
of-Way Improvements, and /or City's failure to enforce or comply with any applicable laws.
Amendments to Agreement
No part of this Agreement shall be altered or amended without written agreement of the signatory
Parties. Any amendment to the Maximum Reimbursement Amount shall require prior approval by
the City Council of the City of Dublin.
6. Assignment
The rights and obligations of the Parties under this agreement are not assignable and shall not be
delegated without the prior written approval of the other Party.
7. Exhibits.
The following Exhibit is attached hereto and incorporated as if fully set forth herein:
E ice; Description of Improvements.
mwm- Description of Tenant Improvements
IN WITNESS WHEREOF, the parties execute this agreement hereto on the day and the year first written
above.
APPROVED AS TO FORM AND CONTENT:
By:
John D. Bakker, City Attorney, City of Dublin
ADOPTED BY:
CITY OF DUBLIN, a Muniolpal Corporation
Date:
BICENTENNIAL SQUARE PARTNERS
By:
Joni Pattilio, City Manager
Date. By.
Kevin Ring, i!s Authorize Partner
2074567.1
Exhibit A
MAXIMUM COMPENSATION AMOUNT:
$997,500
Tenant Improvements: $300,000
o Tenant Improvement Allowance for work conducted by Graybar (see Exhibit B for description)
Interior and Exterior Improvements: $150,475
• Remodel 1st floor (Graybar's) restrooms. Includes new counter tops, sinks, faucets, low flow
toilets, partitions, tile, and paint
• Paint on north and east sides (visible from Dublin Blvd)
• Accessibility upgrades required for conformance to California Title 24 and Federal Americans with
Disability Act
Site and Right -of -Way Improvements: $547,025
o Improvements as necessary to connect the existing parking area to the new access that will be
constructed off Dublin Blvd.
o Construct additional parking for Graybar on the excess right -of -way area.
o Improvements will include grading, paving (new and repair), concrete curbing and stairs and/or
sidewalks, parking lot sealing and striping, signage numbering, and landscaping.
o Costs will include fees for civil engineers, a landscape architect, city plan check and permits, and
as well as factoring in labor costs under prevailing wage for the right -of -way improvements.
Exhibit B
TENANT IMPROVEMENTS — GRAYBAR ELECTRIC, INC.
DESCRIPTION
Tenant Improvement Summary
o Demolition of existing executive suite space
o Installation of new carpets
o Upgrades to disability access
o Addition of a conference room
o Remodel of remaining offices
o New lighting /rewiring of electrical system
o New mechanical duct work
o New heat pumps
o Painting of walls
Tenant Improvement Allowance for work conducted by Graybar - Cost: $300,000 (valuation of the
improvements — approx. $700,000)
RESOLUTION NO. -13
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING A PARKING LAND LEASE AGREEMENT WITH BICENTENNIAL SQUARE
PARTNERS
WHEREAS, in January 2009, the City entered into a Sales Tax Reimbursement
Agreement with the Ring Family Revocable Trust doing business as Ring Properties relating to
tenant and site improvements at 11501 Dublin Blvd., commonly known as 580 Executive
Center; and
WHEREAS, the second phase of the Agreement included site and right -of -way work
associated with the development of additional parking to accommodate future needs and growth
of Graybar; and
WHEREAS, since the adoption of the Agreement, Staff has been working with
Bicentennial Square Partners (also doing business as Ring Properties) on tenant, building, site
and right -of -way improvements (including Site Development Review); and
WHEREAS, under the proposed Parking Lease, Bicentennial Square Partners would
utilize 17,132 square feet of public right -of -way for purposes of assembling an undeveloped
area on the west side of the property; and
WHEREAS, Bicentennial Square Partners would improve the public right -of -way and be
subject to annual lease payments with a not to exceed 2.5% annual Consumer Price Index
adjustments; and
WHEREAS, this rate would be waived in any given year where the cumulative taxable
sales attributable to the 11501 Dublin Blvd. business address is $40 million or more; and
WHEREAS, the term of the lease period is 50 years with the ability to extend upon
mutual agreement; and
WHEREAS, a clause has been added to the Lease that if Bicentennial Square Partners
constructs any new building on its property, the property owner would need to acquire in fee title
the right -of -way lands from the City at the current fair market value; and
WHEREAS, the proposed Lease will result in a greater public benefit to the City than
what was originally anticipated for the following reasons:
1. The project will create a more aesthetically pleasing portion of the Dublin
Blvd. corridor;
2. The project will provide the 580 Executive Center with the ability to house
more small businesses and employees, both at Graybar and for other
tenants at 580 Executive Center;
3. The project's proposed new upper terrace parking alternative will provide
five times the parking at twice the cost; and
Page 1 of 2 ITEM NO.
4. More business and employees result in more spending locally.
NOW, THEREFORE BE IT RESOLVED that the City Council approves the Parking Land
Lease Agreement with Bicentennial Square Partners attached hereto as Exhibit A.
BE IT FURTHER RESOLVED that the City Manager is authorized to execute the Parking
Land Lease Agreement substantially in the form attached hereto.
PASSED, APPROVED AND ADOPTED this 7th day of May, 2013, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
City Clerk
Page 2 of 2
Mayor
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
CITY OF DUBLIN PARKING LAND LEASE
THIS LEASE is made and entered into as of the day of May, 2013, by and between the City
of Dublin ( "City'), a municipal corporation of the State of California, and Bicentennial Square Partners
( "Lessee "), a California general partnership.
RECITALS
City owns all that certain real property located adjacent to APN 941 - 1570 - 004 -03 to the south
with a street address of 11501 Dublin Boulevard.
City and Lessee desire to enter into a lease relating to the occupancy of certain premises (the
"Premises ") adjacent to APN 941 - 1570 - 004 -03 to the south with a street address of 11501
Dublin Boulevard ( "Lessee's Business Center ") for the purpose of constructing and operating an
overflow vehicle parking lot in support of Lessee's Business Center (the "Project ").
The Premises are more particularly identified and described in Exhibits A and B and identified as
a Parcel of Land adjacent to Parcel A as said Parcel is shown on Parcel Map 5179, Book 170 of
Parcel Maps, page 19, encompassing 17,132 square feet, or 0.393297 acres, which are
incorporated herein by this reference.
Lessee's right under this Lease are strictly limited to the defined premises
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
TERM
City leases to Lessee the Premises for a term of fifty (50) years commencing on the date written
above, and ending on the fiftieth (50th) anniversary thereof. The term of the Lease may thereafter be
extended for an additional period of time by mutual written agreement of the Parties.
RFnITAI RATF
Lessee shall pay to City a rental in accordance with the following provisions:
1
a. The initial rental rate for the Premises shall be $0.1751109 per square foot per year. The
Premises contain 17,132 square feet (see Exhibit A). Hence, the base rental rate for the Premises
shall be $3,000 per year.
b. The Rental Payment shall be waived for any calendar year in which the businesses occupying
Lessee's Business Center generate at least Forty Million dollars ($40,000,000.00) in taxable sales
within the City of Dublin. No later than April 30 of each year during the term of the Lease, and no
later than April 30 of the succeeding year after the term of the Lease, City shall inform Lessee
whether a lease payment shall be required for the previous calendar year and the amount of the
lease payment required to be made. Lessee shall pay said lease payment no later than the following
June 30. The amount of the final payment made pursuant to this Agreement shall be pro -rated to
reflect the actual duration of the lease in that final calendar year.
c. Whether or not a lease payment is required pursuant to Section 2.b of this Agreement, the base
lease amount shall be adjusted annually to reflect the change in the San Francisco - Oakland
Metropolitan Area Consumer Price Index ( "CPI ") over the previous year, All Urban Consumers (ref
1982 =100), ( "CPI adjustment ") between the index most recently published prior to March 30 of each
year, and the corresponding index published twelve months earlier. In no event shall the rent be
less than the immediately preceding base annual rental. The annual CPI rent adjustment for any
year shall not exceed two and a half percent (2.5%).
LATE CHARGES
If any installment of rent due from Lessee is not timely received by City, Lessee shall pay to City an
additional sum of five (5) percent of the overdue rent as a late charge.
Furthermore, any amount outstanding after 30 days or more shall bear interest from the due date
to the date of payment at a rate of one -half percent (0 .5 %) per month.
Acceptance of any late charge shall not constitute a waiver of Lessee's default with respect to the
overdue amount, nor prevent City from exercising any of the other rights and remedies available to City.
If Lessee fails to pay its rent for more than three (3) months after it is due, Lessee shall be in default of
this Lease.
USE OF PREMISES
The Premises shall only be used for vehicular access and parking including related access ways, drive
aisles, medians, islands, curbs and landscaping. Lessee shall not use or allow the use of the Premises for
any unlawful purpose. Lessee shall not, without the City's prior written consent, make any alterations,
improvements, or additions to the Premises or any portion thereof except for those set forth in the
approved plans and specifications for the Project.
TITLE TO IMPROVEMENTS
Lessee agrees that all improvements made upon the Premises by either party shall upon the
expiration or termination of this Lease be and become the City's property, and shall remain upon and be
surrendered with the Premises as part thereof upon termination of this Lease. Any changes or
improvements made to the Premises by Lessee without prior written approval from City if such approval
is required hereunder shall be restored to their original condition prior to surrendering the premises.
N
UTILITIES, TRASH AND REFUSE
Lessee shall pay or cause to be paid, and hold City free and harmless from all charges for all utilities,
including but not limited to electricity, required to utilize the Premises for the purposes described in
Section 4 of this Agreement, as well as for sweeping, landscaping and the removal of any trash and
refuse from the Premises until the expiration or termination of this Lease.
Lessee shall arrange for the quick and efficient collection and disposal of any trash and refuse from
the Premises at Lessee's expense in accordance with all applicable laws and ordinances. Lessee shall not
allow abandoned vehicles, equipment, scrap or other debris to collect in any way on or about the
Premises. Upon failure of Lessee to comply with the provisions of this section, the City may enter upon
the premises, and undertake any necessary cleanup and maintenance activities. If Lessee fails to pay
reasonable charges incurred in connection therewith, City may elect to declare the Lease in default.
RULES AND REGULATIONS
In its use and operation of the Premises, Lessee shall comply with all applicable statutes, ordinances,
or regulations now or hereafter adopted by any federal, state, or county governmental entity, and with
all ordinances, regulations, policies, and guidelines now or hereafter adopted by the City of Dublin, and
applicable to Lessee's use of the Premises.
If any license, permit, or other governmental authorization is required for the lawful use or
occupancy of the Premises or any portion of the Premises, Lessee shall procure and maintain such
license, permit, or other authorization throughout the term of this Lease.
MAINTENANCE AND REPAIRS
Lessee shall, at its sole cost and expense, keep and maintain the Premises in good and sanitary
order, condition and repair, hereby waiving all rights to make repairs at the expense of City as provided
in Civil Code section 1942 and all rights provided for by Civil Code section 1941. Any failure to maintain
or make said repairs upon being notified by City's agent shall constitute a default by Lessee as outlined
under the default section of this Lease.
ALTERATIONS AND ADDITIONS
Lessee shall not make any alterations to or erect any structures or improvements on the Premises
that would not comply with the provisions of this Lease without City's prior written consent. Any
alterations or additions approved by City shall be constructed at the sole expense of Lessee and shall
include the required City Building Permit(s) and related inspection fees.
Applicant shall require any contractors performing any alteration or construction on the Premises to
pay prevailing wages pursuant to the requirements of the California Labor Code, Section 1771, et seq.
For the purpose of this Agreement, prevailing wages are the general prevailing rate of per diem wages
and the general prevailing rate for holiday and overtime work in this locality for each craft, classification,
or type of worker needed to execute this Agreement as ascertained by the Director of the Department
of Industrial Relations of the State of California. The holidays upon which such rates shall be paid shall
be all holidays recognized in the collective bargaining agreement applicable to the particular craft,
classification, or type of worker employed on the project.
3
The Contractors and each subcontractor shall keep an accurate payroll record showing the name,
address, social security number, work classification, straight time and overtime hours worked each day
and week and the actual per diem wages paid to each journeyman, apprentice, worker or other
employee employed by the Contractors or subcontractors in connection with the Work. The payroll
records shall be kept in accordance with the provisions of Section 1776 of the California Labor Code, and
Contractor and each subcontractor shall otherwise comply with requirements of such Section 1776.
INSPECTION AND NOTICE
City shall upon twenty -four (24) hours' notice to Lessee, have the right to go upon and inspect the
Premises and any and every structure or improvement erected or constructed, or in the course of being
erected or constructed, repaired, added to, rebuilt, or restored thereon, and also to serve or to post and
to keep posted thereon, or in any part thereof, any notices required by law.
INSURANCE
Lessee shall procure and maintain for the duration of the Lease insurance against claims for injuries
to persons or damage to property which may arise from, or in connection with Lessee's operation and
use of the Premises, which shall be acceptable to the City's Risk Manager. The cost of such insurance
shall be borne by the Lessee.
a. Minimum Scope of Insurance
Coverage shall be at least as broad as:
Insurance Services Office Commercial General Liability coverage ( "occurrence" form
CG0001).
b. Minimum Limits of Insurance
Lessee shall maintain limits no less than:
(1) General Liability: $2,000,000 per occurrence /$4,000,000 aggregate for bodily injury,
personal injury and property damage. The general aggregate limit shall apply
separately to this project /location. Coverage shall include but not be limited to:
blanket contractual; products /operations completed, and broad form property
damage. Coverage shall pay on behalf of the insured and provide defense in
addition to limits.
c. Deductibles and Self- Insured Retentions
Any deductibles or self- insured retentions must be declared to the City of Dublin if
greater than its current deductible or self- insured retention of $25,000.
d. Other Insurance Provisions
The general liability policy is to contain, or be endorsed to contain, the following provisions:
(1) The City of Dublin, its officers, officials, employees and designated volunteers are to
be covered as additional insureds as respects: liability arising out of premises
4
owned, occupied, under the care, custody and control of or used by the Lessee. The
coverage shall contain no special limitations on the scope of protection afforded to
the City of Dublin, its officers, officials, employees or designated volunteers.
(2) The Lessee's insurance coverage shall be primary insurance as respects the City of
Dublin, its officers, officials, employees, agents and designated volunteers. Any
insurance or self- insurance maintained by the City of Dublin, its officers, officials,
employees or designated volunteers shall be excess of the Lessee's insurance and
shall not contribute with it.
(3) Any failure to comply with reporting or other provisions of any policy including
breaches of warranties shall not affect coverage or protection provided to the City
of Dublin, its officers, officials, employees, agents or designated volunteers.
(4) Coverage shall state that the Lessee's insurance shall apply separately to each
insured against whom claim is made or suit is brought, except with respect to the
limits of the insurer's liability. Defense shall be provided in addition to the required
limits for all policies required by this agreement.
(5) Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, canceled by either party, reduced in
coverage or in limits except after ten (10) days' prior written notice by United States
mail has been given to the City of Dublin.
e. Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII,
who are licensed to do business in California. If the insurer is not licensed to do business in the
state of California, the A.M. Best rating is to be no less than A +:X.
f. Verification of Coverage
Lessee shall furnish a copy of these requirements to Lessee's insurance agent. The agent
shall furnish the City of Dublin with certificate(s) of insurance and endorsements evidencing
coverage required by this clause. By sending the requisite documents, the agent is certifying the
Lessee maintains the appropriate coverage. The documents are to be signed by a person
authorized by that insurer to bind coverage and endorse policies on its behalf. All documents
are to be received and approved by the City of Dublin before Lessee takes possession of the
Premises. The City of Dublin may for any reason require the Lessee to provide complete,
certified copies of all required insurance policies affecting the coverage required by these
specifications. Throughout the term of this Lease, Lessee, or its insurance agent, shall furnish
City with evidence of insurance or a binder 30 days prior to expiration of the current
certificate(s).
HOLD HARMLESS
To the fullest extent permitted by law, Lessee agrees to, at Lessee's sole expense, defend, indemnify
and hold the City, its officials, directors, employees, designated volunteers, and agents harmless from
and against any or all loss, liability, expense, claim, cost, suits, assessments, fines, penalties and
damages of every kind, nature and description, including reasonable consultant, expert and attorney's
fees, and court costs for or on account of damage to property or injury to persons arising from anything
done or performed, or omitted to be done or performed, on the Premises by Lessee, employee of
Lessee, any subtenant, invitee, guest, contractor or licensee of Lessee, or any activity carried on by
Lessee, employee of Lessee, any subtenant, invitee, guest, contractor or licensee of Lessee in connection
with the Premises. Approval of the insurance requirements of this Lease does not relieve the Lessee
from liability under this hold harmless clause.
TAXES
Lessee is advised that under Revenue and Taxation Code Section 107.6, a possessory interest subject
to property taxation may be created by this Agreement. During the term of this Lease, Lessee shall pay
or cause to be paid, prior to delinquency, any and all taxes, including possessory interest taxes and any
assessments, licenses, and fees levied or assessed on the Premises, on all possessory interests
hereunder or in the Premises, and on any improvements, fixtures, and equipment now or hereafter
existing on the Premises and on any personal property situated on or about the Premises.
It is understood, however, that Lessee may pay any such taxes and assessments under protest
without liability, cost, or expense to City, and in good faith contest the validity or amount thereof.
ASSIGNMENT OR SUBLETTING
Lessee shall not assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part
of Lessee's interest in this Agreement or in the Premises without the prior written consent of the City.
If Lessee is adjudicated as bankrupt or becomes insolvent, or if possession of any interest in the
Premises is taken by virtue of any attachment, execution, or receivership, City may, at its election,
unless such bankruptcy proceedings be terminated in favor of Lessee and such insolvency be cured or
such possession regained within ninety (90) days thereafter, terminate this Lease by service of notice to
such effect upon any person found in the possession of the Premises.
SURRENDER OF POSSESSION
At the expiration of the leasehold term, Lessee agrees to yield and deliver to City the possession of
the Premises and physical improvements either existing or erected by Lessee pursuant to the terms
hereof in good condition, normal wear and tear excepted.
DEFAULT
Upon Lessee's default of any of the terms and conditions of this Lease, the City may terminate the
Lease if not cured within 30 -days after written notice to Lessee sent in accordance with Paragraph 27;
provided that if such default is not reasonably susceptible of cure within such 30 day period and Lessee
is acting with diligence in attempting to cure such default, such 30 day period shall be extended to such
time as is reasonable under the circumstances.
UTILITY EASEMENTS
City reserves the right to grant nonexclusive easements to others under, through, across or on the
Premises in locations that will not unreasonably interfere with Lessee's use of the Premises. If the
t�
installation or maintenance of utility lines, cables, pipes or other equipment ( "facilities ") in such
easements causes any damage to facilities upon the Premises, including but not limited to pavement,
curbs and sidewalks, the facilities will be repaired by City at its expense if not so repaired by the party
installing or maintaining the facilities. Lessee acknowledges that the Premises is subject to existing
utility facilities easements. Lessee agrees to conform with the requirements of the existing utility
easements. Further, Lessee and City acknowledge that Lessee intends to use a portion of the Premises
to build and maintain a storm water treatment pond for the purposes of drainage and treatment of
storm water originating from the Premises.
OPTION TO PURCHASE
At any time during the term of this Lease, Lessee shall have the option to purchase the Premises for
its fair market value as reasonably determined by an appraisal done by an MAI appraiser acceptable to
both parties at the time the option is exercised and subject to negotiation of a purchase and sale
agreement acceptable to the parties.
OBLIGATION TO PURCHASE
In the event that Lessee exercises its right to construct a pad building adjacent to the parking field,
the City shall have the option to require the Lessee to purchase the Premises for its fair market value as
reasonably determined by an appraisal done by an MAI appraiser acceptable to both parties at the time.
TERMINATION
By City: If, at any time after the date of execution of this Lease, City determines in good faith
that it requires the Premises or any portion thereof for uses including, but not limited to public safety
purposes or widening of Dublin Boulevard, City shall give one hundred and eighty (180) days' written
notice to Lessee, thereby terminating this Lease as to the portion of the Premises so required and only
for such period of time as the City uses such portion for such purposes.
By Lessee: If, at any time after the date of execution of this Lease, Lessee desires to vacate the
Premises, Lessee shall give one hundred and eighty (180) days' written notice to City, thereby
terminating this Lease and relinquishing full title, control, and possession of the Premises and
improvements to City.
In the event of termination by Lessee, Lessee shall surrender any and all improvements made to the
Premises and shall not be entitled for reimbursement by City for such improvements
INVALID PROVISIONS, SEVERABILITY
If any term of this Lease is held invalid by a court of competent jurisdiction, the invalidity of such
term shall not invalidate any other term of this Lease; provided, however, that the invalidity of any such
term does not materially prejudice either City or Lessee in their respective rights and obligations
contained in the valid terms of this Lease.
ATTORNEY'S FEES
7
If any Iegal action is con-u-nenced to �rrterpret or 'to erifurce the tei-uis of Ihis I-ease or to cohect
cbamaEges as a I asUlt 01' any breach of this Lease, tl')en ti'm Imrty prevailing in any such actior) shall be
entitled to recover al,l reasonable attorneys' fees and costs incurred.
LEASE IN MULTIPLE COPIES
"This Lease is exeUlted in niultiple copies, arid each eneult(ld copy sh@11 be deerned an oriiginal.
MODIFICATIONS
Lessee agrees that the terrns of this Lease constituto the entire- Lease bc,,Aween Lessee arid CiLy
regarding the Premises, However, this Lease riiay be ii,iodified by written Agreement of the parties,
BINDING ON SUCCESSORS
f e terms in this Lease shall, subject to the provisions as, to asMgnment, apply to and bind
0 ie heirs, successors, executors, adrnirflstrators, and assigns; of the Parties,
GOVERN
J Vi is I eFtSEr, and all i-natters relating to this L oase,, shill overned 1)y the laws of the StMe of
California, or ather api"Acable and st-iperseding feder'al kw in for-ce, at the time any need fol
interpretation of this Lease or any decisfian or Wding concen"ong
this I-easo arire.,s,
Nol'ice shafl be effec;tjve firory,11 the, date of i rWlirq Any and all riotices to be given under this Lease,
Of' OtherWiW, S[WaH IM! Sent Via certified rnad with postage pri-apaid to:
Lessor
City of Dublin
Attru City Manafgrer
1,00 ckk Plaga
MA'An, CA 94568
Lessee
bicente,nriial Square Partrr ers
15671 Stanton Road
Grass Valley, CA 95949
Attri-, Kevin Ring
IN WHAESS W1 IEREOF, the parties to Lease have. U)Iusecl it tc� be exec rAtecli by their officers
fl"weirmto duly authorized so to do this day of April, 2011
SIGNATURES MUST BE NOTAKIZED FOR RECORDING
BICEN-TENNIAL SQUARE PARTNERS,
as California generid partnership,
°r t 7
Date� L / /� I .... . .... ..
?Z . . . .. . .... . . ......... . . ...... . — By: ...........................
...... ............................
Kevin Ring, Autkwrize(i Pariner
Date:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
Attachments
Exhibit A— Legal Description of Lease Premises
Exhibit B — Diagram /Plat Map of Lease Premises
1957770.4
CITY OF DUBLIN,
a municipal corporation of the State of California,
By:
Joni Pattillo, City Manager
CALIFORNIA Al dL-.PL,'!'RP0S.E
C'ERTIFICATE OFACKNOWLEDGIVIENT
Some of 1, AUN10"t
C U Un q 0 f 1155. L
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EXH[B[I"A'
(`E(--;AL DESCRIPTION)
THAT CERTAIN REAL PROPERTY S7TUA I ED IN THE CITY OF DUBLIN ANI) IN
THE COUNTY 01T ALAMEDA, STATE, OFCALIFORNIA, DESCRIBEDASFOLLOIK ;
BEING A PARCEL OF LAND ADJACENT TO THE MOST WESTERLY LINE OF
PARCEL 'A'AS S411) PARCEL IS SHOWN ON PARCEL A,111P 5179, BOOK 170 OF
PARCEL 11APS', PAGE 19, MORE PAR TICULARLYDESCRIBED AS FOLLOWS;
BEGINNING AT THE NORMEAST CORNER OF SAID PARCEL 'A' AND
PROCEEDING SOU71MIESTERL)" ALONG 777E NORTHERLY PROPERTYLINE OF
SAID PARCEL THE FOLLOWING COURSES; SOUTH 790 10' 041, ;'B'ES'T 23&93
FE,E,T,,iVORTH2,5028'48"I,VE,S'7',29.49FLET,°SOUTH64031'12"l�f,'E�57'141.96F,EET
TO THE TRUE POINT OF BEGINNING OF THIS PARCEL.- THENCE CONTINUING
ALONG THE NORTHERLY LINE OF SAID PARCEL 'A' SOUTH 64 031'12 " WEST.
243.73' THENCE SOUTHIVl.-,,STEI?L)" ALONG THE ARC OF A CURTIE,
CONCA TIE, SOUTHTVESTE, RL)", HAVING A RADIUS OF 25.00 FEET, THROUGH A
CENTRAL ANGLE OF 9'1 036'54 ", AN ARC DISTANCE OF 39.97 FEET TO 711E
NORTHERLY LINE OF THE ST4TE OF CALIFORNIA RIGHT OF WAY AS SAID
RIGH7'OFJ,TIA)"15SI101,f'jV]IVPiII15179,° THENCE PROCEEDING SO UTHIVESTERLY
ALONG SAID RIGHT OF 117AY LINE, SOUTH 830,15'00" KIEST, 118.95 FEET;
THENCE LEAVING SAID RIGHT OF T11A)" LINE AND PROCEEDING 77JENCE,
NORTH 22-49'33" ffEST, 35.15 FEET; THENCE NORTH 67"70'27" EAST 72.43
FEET.- THENCE NORTH 64029'38" EAST, 138,92 FEET,, THEN(,,E NORTH 67-10'27"
EAST, 44,85 FEET,, THENCE NORTH 68052'35" EAST, 52,75 FEET; THENCE
NORTH 72020'17" EAST, 71.40 FEET; THENCE SOU'al 25-28'48" EAST, 29"19
FEET TO SAID POINT OF BEGINNING.
CONTAINS 17,132 SQUARE FEET, MORE OR LESS'
BEARINGS AND DISTANCES ARE BASED ON THE CALIFORNIA COORDINAYE,
SESTEAll, JVAD 27, ZONE, 3. AJULTIPLY ABOVE DISTANCES' BY 1.0000973 To
OBTAIN GROUND LEVEL DISTANCES.
I OF2
ATTACHED HERETO IS A PLAT ENTITLED EXHIBITVAND BY THISREFERENCE,
IS jl/l/l DE A PA R THE I? E OF
ff(,",E, 29851 EXP. 03131113
2 OF
N67010'27"E
44.85'
N67010'27"E
72,43'
N�6A Q
N68 °52'35 "E
52,75' 0
N72"20'17"E-
71,4 0'
IV25 '284 8 " W
29A 9'x.- -
Pullv / ut- T Y -
0, 0 4
BEGINNING N7 --- 11E
2303'
riymlwzmllld��
PA RC EL A
P=2500' PM 5179
D � 91 °3 6'54 1170 PM 19
r L::39,97'
rj-LJ-LJ-LLJ-U-LL 'I. LLLLL",
L EA SE PA R'CEL
11=11 = 17,132± cc STA TE OF CALIFORNIA
N83045'00"E, 118.95'
N22"49'33"W, 35.15'
......... . .
I
P:\Drawir)gs\08017-20 11501 Dublin Blvftegal\LEASE PLAT.dwg, 1/24/2013 1:17:04 PM, Station M, 1:1, P/A Design Resources, Inc,