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HomeMy WebLinkAboutItem 7.3 Sales Tax Reimb Amendor 19 82 /ii � 111 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 �1 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: aw—fi 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. hTed:7:1 :1d,1:1►ki 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 (0� 14 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 �?Db 1 q 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) txH�1�BIT/�- C D jq-% I � 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) n L1�R'�l�l I New Project �V,s'` �. 4 Site w � . Interstate E SC - - _ . i 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. 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ADDIT10NAL 017101NAL INR)104ATION DES('],t111`FR)'�,q 017 THE ArTACHE[) D0C1jvjj,'�4'r k,l. , AS; Y CAR ok cw0n A ,rt a , CfWr ca dcwrMnon ONIOuched docwn,�;na co­,Ttarltw,;,.CI kAddmir,mal mkrrmndcmt CAPAUX BY ITIE' SIGNr i'zw at IndbWal vc commme DMOVr . .. ....... Awnvej-h-Fact 11 (whet, .. . ........ . . ... . ......... . ... --J V F10, TToo,"k kNSTF,AJC'-FN-)1,,JS J tDp, C()MpLI, ,�, G , I 1,q (i , 1, 1 I J" C) R Ivi PLUX. Cofll,WM Vurbw,w.v eujolv „.r. C aaW 11 r u vap jrma , u'A o o I 1� iev-1�4 n7 0 r V ta)y 'In A I &, awcho"t r n mom jr.g'-Ungew Tbe unh, bv re"A4vej owsmy qcvQ&n,,, M nwh PI mmwes eqr as mq�� be as reqwre ihe arnan to 4cr vwwthmp lhof 1 dhpwl6,w q n010, PT dar vpne�) Pjeayr check lb" prWOJJCa 69kn wl wfvrhyl,rs "Ma C700ch filru� iotln 0 re" paged "my "W"n MM A W SUN MW AmM."WM he &Wmant pprscw jkv dpptevv� hcdtwry kpir 1016t)' pMkk t0l a,'M(M MUM he 1hg aam thm A ppmw 1)v 30nv, d= 1he ukhawl"Ipmew Is': The way pubhc mot Immi lus a, hN 0,, QUMITMII'Sion fifflowed 0', uj :,omm", wl�d then vow wkp mwary pilblio flie, lnilrttiv, f,)Jl ld""JticM M],NW mhc) perwiiAt w,,ippear ;ai 1lje 11a1a;° 0, Indica[v dic cm,rvtj pland k1jr1l" by iur,115 fvc 44500WAsMw i crnAvq%cwmo wnm F",, , ,,n mforinatiolz rm', it to rcpcclkm, 0 dt,�Cumcrl rccorjm; 1111�" Mfl HTAPw Wpu mw,� b,c uk-"w, and impmunn mwv um warAny W [m• H swp,rrypmnkn vndpk sufiwlcrll Arm perri'du &(H-lt aEkll(lwlcdomww symne 4 Mr MoT PAW mu m mroch thc signzlwl�'. on fke xvltlh Ow officu ul ush, 001 Juwaired bw coWd help 0,m mmed W MUM W a dimmm Qwmua� MOM WK wal rw Cr n"My dww"M MMAM oQqn WW rlrrwaaw dw "MM KIM by At sqner, IF dw ulmnad camwKy i; Cl,"O Guar 'mau,w) rhis cociumew Go Ni ujnjjcd 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,