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HomeMy WebLinkAbout8.7 - 1788 Lease and Option to Purchase Dublin Crossin Page 1 of 3 STAFF REPORT CITY COUNCIL DATE: January 9, 2018 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: Lease and Option to Purchase 12-Acre Site in Dublin Crossing Development for a School and Park Site Prepared by: Christopher L. Foss, City Manager EXECUTIVE SUMMARY: The City Council will consider an agreement with the Dublin Unified School District (DUSD) that would give the District the right to purchase a City-owned, 12-acre site within the Dublin Crossing project for $1.00 for use as a school/park. STAFF RECOMMENDATION: Adopt the Resolution Approving the Agreement for Lease and Property Option Between the City of Dublin and the Dublin Unified School District for the Dublin Crossing School/Park Site. FINANCIAL IMPACT: The proposed agreement specifies that the District will pay the City $100 for the option to purchase the property. During the option period, the City will receive an annual lease payment of $1.00 per year for the lease term (up to five years). If the District opts to purchase the site, the purchase price will be $1.00. DESCRIPTION: The City and Dublin Unified School District (District) have been working together since 2015 to deliver a 12-acre site within the Dublin Crossing project to the District for a future joint use school/park site. On February 7, 2017, the City Council received an informational report on the history of the Dublin Crossing School Site (Attachment 1). At that meeting, the City Council appointed Vice Mayor Biddle and Councilmember Gupta to serve as the City’s Negotiating Committee to work with the District on a potential agreement. Over the last several months, the City’s Negotiating Committee met several times with the District Committee (Trustees Cunningham and Giannini) to discuss the parameters of an agreement. The efforts of the City’s Negotiating Committee and the District Committee have led to this item. Page 2 of 3 The following summary of key terms is not inclusive of every term in the proposed Agreement for Ground Lease and Property Option - Dublin Crossing, but represents the major terms of the Agreement: 1. City will lease the twelve-acre site in Dublin Crossing to the District for $1.00 per year for a five-year period, commencing when City obtains title to the site (anticipated to occur in approximately Spring of 2018). 2. District will pay the City $100 for an option to purchase the Property, which may be exercised any time during the five -year lease term, upon the following conditions: i) District awards a construction contract for a K-8 school on the Property as reflected in DSA-approved plans, which plans include a gymnasium. ii) District provides confirmation of the sources and availability of adequate financing and an estimated schedule for completion of construction. 3. If District exercises the option, the purchase price is $1.00. 4. The District will use the Property solely for planning, constructing, and operating K-8 school facilities inclusive of a gymnasium. 5. The District will use best efforts to seek state funding for acquisition of the Property, and the City will cooperate with such efforts. 6. Upon their completion, the gymnasium and park and playground facilities will be available for use by the public under the terms of a joint use agreement to be negotiated by the City and the District. The proposed Resolution, with the agreement attached as Exhibit A, have been included as Attachments 2 and 3, respectively. NOTICING REQUIREMENTS/PUBLIC OUTREACH: A copy of the staff report has been made available to the Dublin Unified School District Superintendent. ATTACHMENTS: 1. February 7, 2017 City Council Staff Report - Overview of Dublin Crossing School Site 2. Resolution Approving the Agreement for Lease and Property O ption Between the City of Dublin and the Dublin Unified School District for the Dublin Crossing School-Park Site 3. Exhibit A to the Resolution - Dublin Crossing Ground Lease and Option to Purchase Agreement Page 3 of 3 Page 1 of 5 STAFF REPORT CITY COUNCIL DATE: February 7, 2017 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: Overview of Dublin Crossing School Site and Related Negotiations with Dublin Unified School District Prepared by: Linda Smith, Assistant City Manager EXECUTIVE SUMMARY: The City Council will receive an informational report on the history of the Dublin Crossing school site, including the ongoing discussions with Dublin Unified School District and provide direction to City Staff. STAFF RECOMMENDATION: Receive the report and provide direction to Staff. FINANCIAL IMPACT: None. DESCRIPTION: On November 5, 2013, the City Council approved the Dublin Crossing Specific Plan DCSP) and related entitlements. The DCSP included the construction of up to 1,995 single- and multi-family residential units, up to 200,000 square feet of retail, office, and/or commercial uses, a 30-acre Community Park, a 5-acre Neighborhood Park, and a 12-acre elementary school site. The Dublin Crossing project’s 12-acre school site was intended for use by Dublin Unified School District for a future school site to accommodate up to 900 students. After the project’s approval, it became apparent that the District, due to the un availability of state bond funds and the state’s failure to authorize Level III fees, lacked the ability to fund school sites to serve new development. It was also uncertain whether a new local bond would pass, and no other solutions had been proposed by Governor Brown to bridge the construction funding gap between the resources local school districts have to build new facilities to serve growth and the actual costs to build new school facilities. Page 2 of 5 In late 2014, City Staff, in an effort to assist the Dis trict, approached SunCal to discuss options for the City to obtain the school site free of charge. At that time, the Superintendent informed City Staff that both the Jordan Ranch School Site and the Dublin Crossing School Site needed to be open to serve students by 2018-19 and 2019- 20 respectively. After much discussion and negotiation, SunCal and the City reached an agreement that would allow the dedication of the future school site to the City at no cost in exchange for modifications to project entitlements and monetary concessions. The modifications required amendments to the General Plan, the Dublin Crossing Specific Plan and the Development Agreement (but they did not increase the current maximum number of housing units allowed in the Project). In exchange for the dedication of the school site to the City, the City conceded the following to the Dublin Crossing developer: Concession What it Means Approximate Value Inclusion of Chabot Creek in Community Park Net loss of 1.5 acres of Community Park 3.6 million Elimination of mandatory commercial square footage at Arnold Rd. and Dublin Blvd. Loss of 75,000 square feet and related taxable revenue producing lands 2 million (over a 10- year period, minimum) Removed dedication and improvement funding requirement for 5-acre neighborhood park Loss of 1 acre neighborhood park to community 4.5 million Reduced Community Benefit Payment Lost revenue to General Fund 1.2 million Total $10.3 million MOU Negotiation and Extension Immediately following the City Council’s approval of amendments to the General Plan, Dublin Crossing Specific Plan, and Development Agreement, the City Council, on May 19, 2015, reviewed and approved a Memorandum of Understanding between the City and District which set out the general terms under which the City and District would negotiate a ground lease on the 12 -acre school site. The MOU was set to expire 360 days after execution. The deal terms presented by Staff were as follows: A long-term, as-is, ground lease whereby the District will lease the school site from the City for a nominal sum to allow for construction of a school and joint use facilities. District construction of a school and joint use facilities on the leased land by District. District option to purchase the site from the City at fair market value. Page 3 of 5 District maintenance of park site area suitable for use as a park and for recreational programs and services. In approving the MOU, the City Council also directed Staff to negotiate a “purchase requirement” as a part of the lease. The video excerpt of that meeting is attached to this Staff Report. City Council members expressed the view that the District should purchase the site if state funds ever became available to do so. Subsequent to that meeting, the City Manager immediately discussed the purchase requirement with the Superintendent to ensure it was well understood what the City Council expected. However, because the City and District were currently negotiating the Jordan Ranch terms and preparing t hat item for the City Council and Board of Trustee action in late 2015, the discussion of the Dublin Crossing School site was deferred. On March 29, 2016, the City and the District held a Liaison Meeting – which is comprised of two City Council members and two District Trustees – to discuss a number of items, including an update on the MOU for Dublin Crossing. It was at this meeting that the Superintendent broached the idea of a 10 -year option to lease for the site and that a request would be coming to the City shortly. Following the meeting, the City Manager spoke with the Superintendent to voice concerns that the City Council may not be interested in a long and protracted, 10 -year period of time that creates uncertainty about the school use of the site. On April 20, 2016, the City and the District held another Liaison Meeting and the subject of the MOU was on that agenda. City staff provided the Liaison Committee with an update on the City’s position regarding the Ground Lease and specifically re garding the requirement that the District eventually purchase the site. City staff indicated that the City Council would be acting on the extension to the MOU at the May 3, 2016 meeting prior to its expiration. On May 3, 2016, the City Council extended the MOU term to September 30, 2016 and included the ability for the City Manager and Superintendent to extend for an additional 90 days (which was subsequently exercised). The staff report had recommended that the MOU be extended by 18 months, and the Dist rict requested a shorter period in order to encourage the parties to reach agreement quickly. On Monday, August 29, 2016, the City Manager and Assistant City Manager met with Superintendent Boozer and Kim McNeely, Executive Director of Facilities, to discuss the history of this MOU and review the general parameters regarding the lease terms that the City would be seeking, including a requirement to purchase. Most importantly, Staff wanted to provide the new Superintendent a fuller account of why the City offered the site, what concessions the City had to make to obtain the site, what discussions transpired over the previous year, and highlighting those items that are important to the City in the lease agreement. Prior to the September 30, 2016 termination of the MOU, the Superintendent and the City Manager extended the term to December 30, 2016. Page 4 of 5 In October 2016, the City Attorney, acting as the City’s designated negotiator, formally submitted the City’s response to the District’s proposed option to lea se and lease agreement. The response proposed a two -year option to lease the site (versus the 10 years proposed by the District), a lease term of 55 years, six acres of joint use facilities at the school site for park/recreation uses outside of school ho urs, and a requirement that the District purchase the site within five years of operation. To date, the City has received no response from the District. On November 21, 2016, the City and the District held another Liaison Meeting where the subject of the Dublin Crossing School Site was on the agenda. The respective representatives discussed the City’s purchase requirement request from the City in the context of the District applying for State funds to acquire lands and to provide any monies given by the State to the City as compensation for the land. The District position was that this request for compensation was not discussed or included in the MOU. City representatives advised them that this has been a transparent request for more than a year when the City Council took action on the original MOU and that the City would be open to different ways of achieving the City’s objectives from the purchase requirement. In December 2016, the City and the District agreed to extend the MOU term to June 2018. Analysis and Options to Proceed As noted above, the City and District have held numerous discussions related to the MOU, much of the time without consensus as to the terms and conditions of a future agreement. The City is still awaiting a formal response to the submittal to the District in October 2016. City Staff believes that the purchase requirement term is major sticking point between the District and the City. The current position of the City Council is if the District is able to obtain funds from the State for the acquisition of that land, the City should be compensated for the monetary and land use concessions it had to make in order to deliver the school site for District use. Recent statements by Trustees made at District Board meetings and recently at a City Council meeting suggest that the District is not interested in compensating the City for the land. Thus, the negotiations appear to be at an impasse. Staff believes there are two options that the City Council can consider at this time, other than awaiting the District’s formal response: 1. Defer any discussion or negotiation until the District has concluded its decision on the future high school site. The high school decision, whether comprehensive or satellite, and its location and form , will help to clarify funding available through the local bond, available of State bond dollars, or through the collection of the Level III fee available. This would inform the City Council if the District has the financial bandwidth to compensate the City for the value lost. Page 5 of 5 2. Establish a Negotiating Committee of the City Council. Appoint two members to serve as a Negotiating Committee and to work with Staff and the District on terms and conditions that would be recommended to the City Council. Should the City Council consider this direction, the City Council would request that the Board of Trustees appoint two of its members as a Negotiating Committee. NOTICING REQUIREMENTS/PUBLIC OUTREACH: A copy of this Staff Report has been provided to Superintendent Boozer. ATTACHMENTS: 1. March 17, 2015 - City Council Staff Report re: Dublin Crossing Amendments 2. Video Clip of May 19, 2017 CC Meeting, Item 8.3 Memorandum of Understanding between the City and the Dublin Unified School District for the Dublin Crossing Project School Site Of D, i9f CITYCLERKf882STAFFREPORT CITY COUNCIL File #420-30 DATE: March 17, 2015 TO:Honorable Mayor and City Councilmembers FROM Christopher L. Foss, City Manager ir SUBJECT: General Plan and Dublin Crossing Specific Plan Amendment Study Initiation Request Prepared by Linda Smith, Assistant City Manager and Kristi Bascom, Principal Planner EXECUTIVE SUMMARY: The City Council will consider directing staff to proceed with a proposed transaction withSunCalthatwouldresultinthedeliveryofa12-acre site to the City free of charge in exchange for certain land use changes. The City would be able to use the site to assist Dublin Unified School District in the acquisition and development of a school site within the Dublin Crossings Project. If the City Council directs Staff to proceed with the transaction, Staff would commence a General Plan and Dublin Crossing Specific Plan Amendment Study to: 1) Incorporate the 1.5 acre Chabot Creek into the Community Park and increase the acreage devoted to Medium Density Residential by 1.5 acres; 2) Re-designate the 13 acre "Mixed Use" site to "General Commercial/DC Medium-High Density Residential"; and 3) Allow use of the site designated School" for both school and park purposes. The proposal would not increase the total number of residential units in the Dublin Crossings project area. The project will also involve modifications to the Dublin Crossing Development Agreement and a minor technical amendment to the Eastern Dublin Specific Plan boundary to be consistent with the Dublin Crossing Specific Plan boundary. FINANCIAL IMPACT: All costs associated with preparing the General Plan and Specific Plan Amendment Study, if authorized by the City Council, would be borne by the Applicant. If the proposal moves forward and the Development Agreement Amendments are approved, the City will forego $1.2 million in Community Benefit Payments and $2.1 million in park construction funding. RECOMMENDATION: Staff recommends that the City Council provide its feedback on the negotiated terms with SunCal and adopt the Resolution Approving the Initiation of a General Plan and Dublin Crossing Specific Plan Amendment Study to: 1) Incorporate the 1.5 acre Chabot Creek into the Community Park and increase the acreage devoted to Medium Density Residential by 1.5 acres; 2) Re-designate the 13 acre "Mixed Use" site to "General Commercial/DC Medium-High Density Residential"; and 3) Allow use of the site designated "School" for both school and park purposes. Page 1 of 4 ITEM NO. 8.1 Submitted By eviewed By Community Development Director Assistant City Manager DESCRIPTION: Background Staffs from the City of Dublin and the Dublin Unified School District (DUSD) maintain an ongoing dialogue regarding population growth, particularly in the Eastern Dublin, where DUSD has future school sites identified to accommodate its growing student population. In fall 2015, DUSD will open Amador Elementary School in the Positano neighborhood. The City's General Plan identifies, and DUSD is planning to utilize, two future schools sites: one located in the Jordan Ranch subdivision and one located in the future Dublin Crossing project. Despite the best efforts of former State Assemblywoman Joan Buchanan last year, a state ballot measure for school construction was not placed on the November 2014 ballot, and no solutions have been proposed by Governor Brown to bridge the construction funding gap that exists between the resources local districts have to build new facilities and the actual costs to build new schools. The lack of funding support from the State means that local school districts, like DUSD, need to find alternative solutions to the now-broken State model that has funded school construction over the years. Realizing the predicament faced by DUSD, City staff has been working closely with the DUSD staff on potential options and ways for the City to assist in bridging the gap between land acquisition costs, the current development impact fee structure set by the State, and the need to provide adequate facilities for existing students and to accommodate future student populations. In addition to this proposal which will be outlined below, Staff has also proposed a framework for the City to provide DUSD a site within the Jordan Ranch subdivision, which will be considered on tonight's agenda. This proposal would likely save DUSD approximately $33 million in land acquisition costs, which is the current land value for the Existing School Site called E-5; and would free up both current and future development impact fee revenue that could then be used towards the construction of a new school at this location. In addition, Staff has also been working on a proposal for the other remaining school site at Dublin Crossing. City Staff's Dublin Crossing Proposal The Dublin Crossing project was approved in November 2013. The project allows for the construction of up to 1,995 single- and multi-family residential units; up to 200,000 square feet of retail, office and/or commercial uses; a 30 acre Community Park; a 5-acre Neighborhood Park, and a 12 acre elementary school site to serve approximately 900 students. Due to the nature of the land exchange agreement between the developer, Dublin Crossing Venture LLC (SunCal), and the Department of the Army, it is anticipated that the multi-phased project will take 8-12 years to construct. According to the project Phasing Plan and as identified by SunCal, the 12 acre school site is in Phase 3 of the project and should become available in 2017. Unfortunately, based on the Governor's stated position that school construction bond funding will not be authorized by the State, it is unlikely that DUSD will have the ability to acquire the Page 2 of 4 WINIONMOI Dublin Crossing school site in the near term, with a current land value of approximately $36 million. City staff approached SunCal to discuss options for the City to obtain the 12-acre school site in an effort to assist DUSD. It should be noted that SunCal did not initiate these discussions, and SunCal has indicated that they are satisfied with their existing entitlements as approved. After discussion and negotiation, SunCal and City Staff have reached agreement on tentative deal terms that would allow the transfer of the future school site to the City at no cost in exchange for modifications to the entitlements for the Dublin Crossing project. To summarize, the negotiated terms require amendments to the Dublin Crossing Specific Plan and the Dublin Crossing Project Development Agreement in the following areas: Under the proposal agreed to by City Staff and SunCal, the Specific Plan would be amended to: Incorporate the 1.5 acre Chabot Creek into the Community Park and increase the acreage devoted to Medium Density Residential by 1.5 acres Re-designate the 13 acre "Mixed Use" site on the corner of Arnold and Dublin Boulevard to "General Commercial/DC Medium-High Density Residential", thereby removing the requirement for both the 5-acre Neighborhood Park site and a minimum of 75,000 square feet of commercial development on the site; and Modify the designation of the 12-acre school site to allow both school and park uses. Attachment 1 illustrates the affected parcels in the Specific Plan area. Under the proposal agreed to by City Staff and SunCal, the Development Agreement would be amended to: Remove the requirement to provide construction funding for a 5-acre Neighborhood Park 2.143 million); Remove requirement for the final Community Benefit Payment ($1.2 million); and Include language related to the no-cost transfer of the school site. Details of the transfer will be further described in the amendments to the Development Agreement. Minor amendments to General Plan Section 2.5 (Dublin Crossing Planning Area) would also be needed to ensure consistency with the amended Dublin Crossing Specific Plan. Lastly, a cleanup item to the Eastern Dublin Specific Plan will update figures to reflect the adopted Dublin Crossing Specific Plan boundary. The proposed changes to the Dublin Crossing Specific Plan and Development Agreement will result in the delivery of the 12-acre school site to the City without increasing the current maximum number of housing units (1,995) allowed in the project. Staff would propose, if the City Council concurs, to ground lease the property to the School District at a price to be negotiated; and similar to the Jordan Ranch project, operate the facility as a joint School/Park site. The agreement terms between the City and DUSD remain to be negotiated and would be presented for City Council consideration at a future date. The City staff proposals, including the Jordan Ranch proposal and acquisition of the Dublin Crossing site, have a value to the community of nearly $70 million. The City and DUSD have had a long standing partnership over the years, however this is the first time that the City Council has been asked to consider land use and financial term changes to assist DUSD through this unprecedented time. Page 3 of 4 Staff recommends that the City Council provide feedback on the negotiated deal terms with SunCal and initiate a General Plan and Dublin Crossing Specific Plan Amendment Study. A draft Resolution approving the initiation of the study is included as Attachment 2 to this Staff Report. If the City Council opts to initiate the General Plan and Dublin Crossing Specific Plan Amendment Study, Staff will: 1. Prepare amendments to the General Plan, Dublin Crossing Specific Plan, Dublin Crossing Project Development Agreement, Eastern Dublin Specific Plan, and will complete the appropriate level of environmental review. 2. Begin negotiations with DUSD regarding the joint use of the Dublin Crossings school site and draft a Memorandum of Understanding (MOU) between the City of Dublin and DUSD to help DUSD obtain the rights to a site to build a school, at minimal cost, while maintaining the ability of the public to use the site for parks and recreation programs. The MOU will detail the agreement terms for the City Council and the School Board's consideration at a future date. 3. Prepare Staff Reports detailing the.necessary approvals for a recommendation by the Planning Commission and consideration by the City Council. NOTICING REQUIREMENTS/PUBLIC OUTREACH: Public noticing is not required to review a request to initiate a General Plan Amendment Study. Although not required, the City mailed notices to all property owners and tenants within 300 feet of the subject property. A notice was also published in the Valley Times and posted in the designated posting places. A copy of this Staff Report was distributed to the Applicant and Property Owner. ENVIRONMENTAL REVIEW: Staff recommends that the project be found exempt from the California Environmental Quality Act (CEQA) under Section 15306, Class 6 of the State CEQA Guidelines because initiation of a General Plan Amendment study, in and of itself, will not result in disturbance to an environmental resource. ATTACHMENTS: 1. Depiction of Proposed Changes to Dublin Crossing Specific Plan Land Use Map 2. Resolution Approving the Initiation of a General Plan and Dublin Crossing Specific Plan Amendment Study to: 1) Incorporate the 1.5 acre Chabot Creek into the Community Park and increase the acreage devoted to Medium Density Residential by 1.5 acres; 2) Re- designate the 13 acre "Mixed Use" site to "General Commercial/DC Medium-High Density Residential"; and 3) Allow use of the site designated "School" for both school and park purposes Page 4 of 4 Legend Mixed Use M DC Medium Density Residential School M DC Medium-High Residential Park General Commercial/DC Medium-High Density Residential M Open Space General Commercial/DC High Density Residential Project Area Boundary Allow use of t e site d es) nakke '” cho 1", 0.r,bath c tnerl ar ar[t purees , G st h 1.S acre CHaka t OPre k dintioifrorri Dpenpe" and redceorrrrirrrty T rC nu to e o a Gem""11 N n N Increase"acFrSage ftir" Medium-Density„ , Residential by 13 acresi. Dublin stud. Change"Mixed Use" parcel to"General Commercial/ CIO Medium-High Density Residential" RESOLUTION NO. xx-15 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING THE INITIATION OF A GENERAL PLAN AND DUBLIN CROSSING SPECIFIC PLAN AMENDMENT STUDY TO: 1) INCORPORATE THE 1.5 ACRE CHABOT CREEK INTO THE COMMUNITY PARK AND INCREASE THE ACREAGE DEVOTED TO MEDIUM DENSITY RESIDENTIAL BY 1.5 ACRES; 2) RE-DESIGNATE THE 13 ACRE MIXED USE" SITE TO "GENERAL COMMERCIAL/DC MEDIUM-HIGH DENSITY RESIDENTIAL"; 3) ALLOW USE OF THE SITE DESIGNATED "SCHOOL" FOR BOTH SCHOOL AND PARK PURPOSES. APNS 986-0001-001-15 (PARTIAL), 986-0034-002-00, AND 986-0034-006-00.) WHEREAS, the City Council is considering initiating a General Plan and Dublin Crossing Specific Plan Amendment Study to: 1) Incorporate the 1.5 acre Chabot Creek into the Community Park and increase the acreage devoted to Medium Density Residential by 1.5 acres; 2) Re-designate the 13 acre "Mixed Use" site to "General Commercial/DC Medium- High Density Residential"; 3) Allow use of the site designated "School" for both school and park purposes; and WHEREAS, the General Plan and Dublin Crossing Specific Plan Amendment Study would also include amendments to the Dublin Crossing Project Development Agreement and minor amendments to the Eastern Dublin Specific Plan ensure that there is consistency on all figures between the boundaries of the Dublin Crossing Specific Plan area and the Eastern Dublin Specific Plan area; and WHEREAS, the initiation request has been reviewed in accordance with the provisions of the California Environmental Quality Act (CEQA) and was found to be Categorically Exempt under Section 15306, Class 6 of the State CEQA Guidelines; and WHEREAS, a Staff Report was submitted outlining the issues surrounding the request; and WHEREAS, the City Council did hear and consider all such reports, recommendations, and testimony hereinabove set forth, and supports the initiation of General Plan and Dublin Crossing Specific Plan Amendment Study; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve the initiation of a General Plan and Dublin Crossing Specific Plan Amendment Study to: 1) Incorporate the 1.5 acre Chabot Creek into the Community Park and increase the acreage devoted to Medium Density Residential by 1.5 acres; 2) Re- designate the 13 acre "Mixed Use" site to "General Commercial/DC Medium-High Density Residential"; 3) Allow use of the site designated "School" for both school and park purposes. PASSED, APPROVED AND ADOPTED by the City Council of the City of Dublin on this 17th day of March 2015 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk Attachment 2: Video Clip of May 19, 2015 City Council Meeting, Item 8.3 Memorandum of Understanding between the City and the Dublin Unified School District for the Dublin Crossing Project School Site RESOLUTION NO. XX — 18 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING THE AGREEMENT FOR LEASE AND PROPERTY OPTION BETWEEN THE CITY OF DUBLIN AND THE DUBLIN UNIFIED SCHOOL DISTRICT FOR THE DUBLIN CROSSING SCHOOL/PARK SITE WHEREAS, on May 19, 2015, the City Council unanimously approved a Memorandum of Understanding ( MOU) that outlined in general terms an agreement to be negotiated between the City and the Dublin Unified School District relating to the long term ground lease of a 12- acre school site on which the District will construct a K-8 school, including a gymnasium; and WHEREAS, since that time, the City and the District have been negotiating the terms of the agreement; and WHEREAS, the parties have reached an agreement whereby the City would grant the District an option to purchase, rather than lease, the site, which would facilitate the District’s ability to seek state funding for the acquisition of the site; and WHEREAS, under the terms of the agreement, the City will have the ability to use the Gymnasium and playground under a to -be-negotiated joint use agreement. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve the Agreement for Ground Lease and Property Option Between the City of Dublin and the Dublin Unified School District. BE IT FURTHER RESOLVED that the Mayor is authorized to execute the Agreement and the City Manager is authorized and directed to exe cute amendments and such other documents, and to take such other and further action, as necessary and appropriate to carry out the intent of this Resolution. PASSED, APPROVED AND ADOPTED this 9th day of January 2018, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ____________________ Mayor ATTEST: ____________________ City Clerk Agreement for Ground Lease and Property Option - Dublin Crossing This Agreement for Ground Lease and Property Option – Dublin Crossing (“Agreement”) is entered into this _____ day of ___________________, 2018 (“Effective Date”) between the City of Dublin, a municipal corporation (“City”), and Dublin Unified School District, a California public school district (“District”; collectively the City and the District are the “Parties”). RECITALS A. Pursuant to a Development Agreement by and between the City of Dublin and Dublin Crossing Venture LLC Relating to the Dublin Crossing Project effective November 19, 2013, as amended by Amendment No. 1, effective June 16, 2015, and as further amended by Amendment No. 2, effective February 9, 2016, Dublin Crossing Venture LLC (“Developer”) committed to dedicate a twelve (12) net acre school site to the City, and City holds contractual rights to said school site as a condition of Developer being permitted to move forward with construction of the Dublin Crossing development (“Dublin Crossing”). This twelve (12) net acre school site is designated Parcel 27 on Vesting Tentative Map 8150 and is bounded by D Street, G Street, F Street, and Central Parkway (the “Property”). The Property is further identified in Exhibit A hereto (“Property”), and a legal description of the Property is attached hereto as Exhibit B. The City is in the process of obtaining the dedication of the Property from Developer to the City. B. Pursuant to a Memorandum of Understanding between the City and the District, dated May 19, 2015, as amended by First Amendment to Memorandum of Understanding, dated May 3, 2016, and as further amended by Second Amendment to Memorandum of Understanding, dated December 20, 2016 (collectively, the “MOU”), and in recognition of the District’s lack of funds to purchase a 12-acre Kindergarten through 8th grade (“K-8”) school site valued at approximately Thirty Six Million Dollars ($36,000,000) to serve Dublin Crossing, the Parties agreed to make their best reasonable efforts to successfully negotiate an agreement or agreements that would result in the City’s lease of the Property to the District for the nominal sum of One Dollar ($1.00) per year. C. Pursuant to a Development Impact Mitigation Agreement effective April 28, 2015 (“Impact Mitigation Agreement”), Developer and District agreed that Developer would pay certain mitigation fees to District to support adequate school facilities to house students, including those from Dublin Crossing. The Developer’s obligations under the Impact Mitigation Agreement are expressly contingent on Developer’s dedication of a twelve (12) acre school site to the City for the purpose of the City’s leasing said school site to District. The value of the twelve (12) acre school site was included when Developer and District calculated the mitigation fees included in the Impact Mitigation Agreement, so that the total mitigation included both the fees and the value of the school site, with the site to be provided to the District in lieu of additional mitigation fees. 2 2920 D. In order to finance, construct and operate a school and joint use facilities, including a gymnasium and playground and park facilities, the District seeks to lease the Property. E. Upon the City’s obtaining fee title to the Property, the Parties desire promptly to proceed with the lease of the Property to the District. F. Upon the City’s obtaining fee title to the Property, the Parties further desire that the District have an option to obtain fee title to the Property (the “Option”), with such Option exercisable upon the District’s satisfaction of certain conditions as set forth herein. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1. Recitals. The foregoing recitals are hereby incorporated into this Agreement as though fully set forth herein. 2. Leased Premises. Effective upon City’s obtaining fee title to the Property, City leases to District and District leases from City the Property. 3. Term. The term of the lease under this Agreement shall be five (5) years, commencing on the date on which City obtains fee title to the Property (“Commencement Date”) and ending on the fifth (5th) anniversary of the Commencement Date (“Lease Term”). 3.1 Commencement Notice. City shall provide notice to District within five (5) days of the City obtaining fee title confirming that title has transferred to City (the “Commencement Notice”). The Commencement Notice, if mailed, shall be sent certified mail, postage pre-paid, to City at the address indicated below, and shall be deemed to have been delivered as set forth in Section 29 herein. 4. Rent. District shall pay City as rent for the Property the sum of One Dollar ($1.00) per year (“Rent”), payable in advance on an annual basis. District shall pay City the first year’s Rent within five (5) days of District’s receipt from City of the Commencement Notice. District shall thereafter pay City Rent annually in advance on or before each anniversary of the Commencement Date. District may prepay to City up to five (5) years of annual rent payments. 5. Taxes. District recognizes and understands that the lease contained in this Agreement may create a possessory interest subject to property taxation, and that District may be subject to the payment of property taxes levied on such interest. District further agrees to pay any and all property taxes, if any, assessed during the Term of this Agreement pursuant to Sections 107 and 107.1 of the Revenue and Taxation Code against District’s possessory interest in the Property. 6. Use of Leased Premises. District may use the Property solely for the purposes of planning, constructing and operating school facilities and a related joint use gymnasium, which gymnasium shall be suitable for use by students through and including eight grade, as well as 3 2920 park and playground facilities also available for joint use (collectively the “School Facilities”). The School Facilities shall be designed to serve K-8. The School Facilities may be used for other purposes for which a public school site may be used pursuant to applicable State and Federal law, including but not limited to afterschool childcare and other purposes pursuant to the Civic Center Act, Education Code sections 38130, et seq., and parking related to all such uses. 7. Construction Standards. All improvements on the Property undertaken by District or District’s agents shall be constructed or installed on the Property in a good and workmanlike manner without the attachment of any construction, mechanics, or other liens, and District shall hold City free and harmless from any liability arising from such liens. 8. Permits. District shall comply with all applicable laws related to the construction of the School Facilities. District shall ensure that the School Facilities and related improvements are consistent with any and all federal, state and local requirements applicable to such improvements. District shall make best efforts to obtain all necessary state approvals for use of the Property for the School Facilities. In the event that District is unable to obtain such approvals despite its best efforts due to the condition of the Property, the Parties shall meet and confer regarding means to achieve such approvals. 9. Maintenance and Operation. 9.1 District shall, at its own expense, maintain the Property during the Lease Term, including the School Facilities and any related improvements, in a safe condition and in good repair. 9.2 District shall have the sole responsibility for the maintenance, repair, and security of the School Facilities and any related improvements and personal property on the Property, and shall keep the same in good repair and condition during the Lease Term. 9.3 District shall keep the Property free of graffiti, debris, and anything of a dangerous, noxious, or offensive nature, or which creates a hazard or undue vibration, heat, noise, or interference. 10. Utilities. District shall pay or cause to be paid, and shall hold City and the Property free and harmless from, all charges for the furnishing of gas, water, electricity, and telephone service, and other public utilities to the Property, and for removal of garbage and rubbish from the Property during the Lease Term. 11. Default by District and City’s Remedies. 11.1 If District is in default, City shall provide District written notice of the default. Within thirty (30) days after such written notice, the Parties shall informally discuss the manner in which to remedy the matter efficiently. If District has failed to cure such default within thirty (30) days after the Parties informally meet and confer, City may, at its option, perform such duty or obligation giving rise to the default on behalf of District, including, but not limited to, the obtaining of required insurance policies or government licenses, permits, or 4 2920 approvals. The costs and expenses of any such performance by City shall be due and payable by District within ten (10) business days of receipt of invoice therefor inclusive of sufficient backup documentation. In the event of a default which District has failed to cure within the applicable grace period, City may, after further notice or demand, and without limiting City in the exercise of any right or remedy which City may have by reason of such default, pursue any remedy now or hereafter available under the laws of the State of California. Notwithstanding the foregoing, given that the Property will be operated as a public school, City’s remedies in the event of a default shall not include the right to terminate the Agreement, so long as the Property is actually being used in accordance with Section 6 herein at the time of the alleged default. 11.2 If suit shall be brought by City because of the breach of any condition or covenant of this Agreement, District shall pay to City all expenses reasonably incurred therefor, including reasonable attorney’s fees. 12. Default by City and District’s Remedies. 12.1 If City is in default, District shall provide City written notice of the default. Within thirty (30) days after such written notice, the Parties shall informally discuss the manner in which to remedy the matter efficiently. If City has failed to cure such default within thirty (30) days after the Parties informally meet and confer, District may, at its option, perform such duty or obligation giving rise to the default on behalf of District, including, but not limited to, the obtaining of required insurance policies or government licenses, permits, or approvals. The costs and expenses of any such performance by District shall be due and payable by City within ten (10) business days of receipt of invoice therefor inclusive of sufficient backup documentation. In the event of a default which City has failed to cure within the applicable grace period, District may, after further notice or demand, and without limiting District in the exercise of any right or remedy which District may have by reason of such default, pursue and remedy now or hereafter available under the laws of the State of California. 12.2 If suit shall be brought by District because of the breach of any condition or covenant of this Agreement, City shall pay to District all expenses reasonably incurred therefore, including reasonable attorney’s fees. 13. Early Termination. 13.1 During the Lease Term, District may terminate this Agreement upon written notice to City, if District determines that it will no longer be practical to use the Property for public school purposes. 13.2 If, during the Lease Term, District shall exercise the Option as set forth in Section 21 herein, the Lease Term and the terms of this Agreement shall terminate upon District’s obtaining fee title to the Property from the City. 13.3 In the event of termination prior to the end of the Lease Term pursuant to this Section 13 and its subparts, the indemnification provisions of Section 16 shall survive the 5 2920 termination of the Agreement in relation to acts or omissions committed by District during the Lease Term. 14. Cooperation of the Parties. The Parties shall cooperate in District’s efforts to secure any and all funding approvals from state agencies for development of the Property as anticipated in this Agreement. 15. Condemnation. In the event that, during the Lease Term, all or part of the Property or any interest of District in the Property is taken by eminent domain by an government agency, quasi-governmental agency, or other public body other than by the City, thereby making it physically or financially unfeasible, as determined by District in its sole discretion, for the Property to be used in the manner it was intended to be used by District under this Agreement, District shall have the right to terminate this Agreement effective as of the date the condemning agency takes possession of the Property. District shall be entitled to the portion of the award paid attributable to 1) the diminution in value of its leasehold interest, 2) the value of any improvements made by District on the Property and personal property on the Property, and City shall receive the remainder of such award, and 3) the lost value to District of the Option. 16. Indemnity. 16.1 Indemnity by District. District shall, at its sole cost and expense, defend, indemnify, and hold harmless City, and its officials, boards, commissions, personnel, employees, agents, attorneys, and representatives (hereinafter referred to as City’s Indemnitees”), from and against any and all liability, obligation, damages, penalties, claims, liens, costs, charges, losses, and expenses (including, without limitation, reasonable fees and expenses of attorneys, expert witnesses, and consultants), which may be imposed upon, incurred by, or asserted against City or City’s Indemnitees by reason of any act or omission of District, its personnel employees, agents, or representatives, resulting in personal injury, bodily injury, sickness, disease, or death to any person, or damage to, loss of, or destruction of tangible or intangible property, which may arise out of or be in any way connected with the construction, installation, operation, maintenance, use, or condition of the Property or District’s failure to comply with any federal, state, or local statute, ordinance, or regulation in relation to the Property, or with District’s failure to comply with the terms of this Agreement. 16.1.1 District’s obligations to indemnify City or City’s Indemnitees under this Agreement shall not extend to claims, losses, and other matters covered hereunder to the extent such claims arise out of the negligence or willful misconduct of City or one or more of City’s Indemnitees. 16.2 Indemnification by City. City shall, at its sole cost and expense, defend, indemnify, and hold harmless District, and its officials, boards, commissions, personnel, employees, agents, attorneys and representatives (hereinafter referred to as “District’s Indemnitees”) from and against any and all liability, obligations, damages, penalties, claims, liens, costs, charges, losses, and expenses (including, without limitation, reasonable fees and expenses of attorneys, expert witnesses, and consultants), which may be imposed upon, incurred by, or asserted against District or District’s Indemnitees by reason of any act or omission of City, 6 2920 its officials, boards, commissions, personnel, employees, agents, attorneys or representatives, resulting in personal injury, bodily injury, sickness, disease, or death to any person, or damage to, loss of, or destruction of, tangible or intangible property, which may arise out of or be in any way connected with City’s ownership or use of the Property or City’s failure to comply with any federal, state, or local statute, ordinance or regulation, or with City’s failure to comply with the terms of this Agreement. 16.2.1 City’s obligations to indemnify District or District’s Indemnitees under this Agreement shall not extend to claims, losses, and other matters covered hereunder to the extent that such claims arise out of the negligence or willful misconduct of District or one or more of District’s Indemnitees. 17. Insurance. The Parties shall cause to be maintained, in full force and effect and at their sole cost and expense during the Lease Term, the following types and limits of insurance: 17.1 District. Throughout the Lease Term, District shall maintain, in full force and effect, either (a) comprehensive general liability insurance in commercially reasonable amounts, but in no event in an amount less than $5,000,000 per occurrence, protecting and insuring against claims for bodily injury, death, property damage, and personal injury occurring within or resulting from its operations, including its use of the Property, or (b) a general self- insurance program covering bodily injury, death, property damage, and personal injury occurring within or resulting from its operations, including its use of the Property. Any policy of insurance obtained by District must name the City, its officers, agents, and employees as additional insureds thereunder, be endorsed to provide that the insurance is primary to and non-contributory to insurance carried by the City with respect to liability imposed on District under this Agreement, and contain a severability of interest clause. 17.2 City. Throughout the Lease Term, City shall maintain, in full force and effect, either (a) comprehensive general liability insurance in commercially reasonable amounts, but in no event in an amount less than $5,000,000 per occurrence, protecting and insuring against claims for bodily injury, death, property damage, and personal injury occurring within or resulting from its operations, including its use of any portion of the Property, or (b) a general self-insurance program covering bodily injury, death, property damage, and personal injury occurring within or resulting from its operations, including its use of any portion of the Property. Any policy of insurance obtained by City must name the District, its officers, agents, and employees as additional insureds thereunder, be endorsed to provide that the insurance is primary to and non-contributory to insurance carried by the District with respect to liability imposed on City under this Agreement, and contain a severability of interest clause. 17.3 Property Insurance. Throughout the Lease Term, District shall maintain, in full force and effect, fire insurance and a standard “all risk” policy covering all structures and improvements at the Property and any personal property owned by District located at the Property. This coverage must (a) contain a waiver of subrogation endorsement in favor of City, (ii) cover loss or damage to the Property and any District-owned personal property thereon in an amount of the full replacement value, and (c) include a deductible no greater than $5,000. Covered perils are to include fire, all risk, vandalism, malicious mischief, and sprinkler leakage. 7 2920 Throughout the Lease Term, City shall maintain its own property insurance covering any personal property owned by City on the Property. 17.4 Workers’ Compensation and Employers Liability. Both Parties shall maintain, in full force and effect, Workers’ Compensation Insurance or self-insurance, and Employers’ Liability Insurance or self-insurance with limits that conform to legal requirements. 18. Hazardous Substance Information. 18.1 District represents and warrants that its use of the Property will not generate any hazardous substance, and it will not store or dispose on the Property, nor transport to or over the Property any hazardous substance except for reasonable amounts of cleaning, office, educational, and landscape substances ordinarily used on school sites. District further agrees to defend, indemnify, and hold harmless City and its officials, boards, commissions, employees, agents, and representatives from, and remediate the Property from, any release of any such hazardous substance and any damage, loss, expense, or liability resulting from such release, including all attorneys’ fees, costs, and penalties incurred as a result thereof, except any release caused by the negligence or intentional act or omission of City and its employees or agents. 18.2 City represents and warrants that its use of the Property herein will not generate any hazardous substance, and it will not store or dispose on the Property, nor transport to or over the Property any hazardous substance. City further agrees to defend, indemnify, and hold harmless District and its officials, boards, commissions, employees, agents, and representatives from, and remediate the Property from, any release of any such hazardous substance and any damage, loss, expense, or liability resulting from such release, including all attorneys’ fees, costs, and penalties incurred as a result thereof, except any release caused by the negligence or intentional act or omission of District and its employees or agents. 18.3 “Hazardous substance” for purposes of this Agreement shall be interpreted broadly to mean any substance or material defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous, toxic, or radioactive substance, or other similar term by any federal, state, or local environmental law, regulation, or rule presently in effect or promulgated in the future, as such laws, regulations, or rules may be amended from time to time; and it shall be interpreted to include, but not be limited to, any substance which after release into the environment will or may reasonably be anticipated to cause sickness, death, or disease. 19. Holding Over. Any holding over after the expiration of the Lease Term shall be construed to be a tenancy from month to month and shall otherwise be for the terms and on the conditions herein specified, as far as applicable, except that if the holding over is without the prior consent of the City, the Rent shall be increased prospectively as of the expiration of the Lease Term to the fair market value of the leasehold interest. 20. Acceptance of Premises. By taking possession of the Property, District accepts the Property in the condition existing as of the Commencement Date. City makes no representation or warranty as to the condition of the Property, and City shall not be liable for any latent or patent defect in the Property, except as otherwise stated herein. 8 2920 21. Option to Purchase. In addition to all other rights that District has under the Agreement, City grants District an Option to purchase the Property on the following terms and conditions: 21.1 Option Consideration. In consideration of granting the Option to District, District shall pay directly to City One Hundred Dollars ($100) at the same time that District makes its first Rent payment to City. 21.2 Purchase Price. The purchase price to be paid by District (“Purchase Price”) for the Property upon exercise of the Option shall be One Dollar ($1.00), which shall be paid directly by District to City. 21.3 Term of Option. Subject to the contingencies set forth herein, District shall have the right to exercise the Option at any time during the Lease Term. Upon termination of the Lease Term, if District has not exercised the Option, City shall be released from all obligations under the Option. 21.4 Exercise of Option. The Option shall be exercised by District by mailing or delivering a written notice of intent (“Exercise Notice”) to City prior to the end of the Lease Term in compliance with Section 29 herein. It is a condition to the effectiveness of the exercise of Option that District not then be in default under this Agreement. If District is in default under this Agreement at the time District gives the Exercise Notice, the Notice shall be void. It is acknowledged and agreed that simultaneously with delivering the Exercise Notice, District shall execute a purchase and sale agreement with City (“Purchase and Sale Agreement”), in a form mutually acceptable to City and District, under which District shall purchase the Property. The Purchase and Sale Agreement shall not be effective for any purpose unless District timely and effectively delivers the Exercise Notice. City shall execute the Purchase and Sale Agreement and deliver the executed Purchase and Sale Agreement to the Escrow Agent, as defined below, within thirty (30) days of receipt of the Exercise Notice and the Purchase and Sale Agreement from District. To the extent of any inconsistencies between the Purchase and Sale Agreement and the Option, the Option shall prevail. 21.5 Escrow. Promptly after District’s delivery of the Exercise Notice, and in no event later than seven (7) days after such delivery, the Parties shall open an escrow account with a mutually agreeable escrow agent (“Escrow Agent”) in order to consummate the Option and the purchase of the Property by District. 21.6 Exercise Notice. The Exercise Notice, if mailed, shall be sent certified mail, postage pre-paid, to City at the address indicated below, and shall be deemed to have been delivered as set forth in Section 29 herein. 21.7 Conveyance by City. If the Option is exercised, City shall convey title to the Property by grant deed. 9 2920 21.8 State Funding. In the event the District exercises the Option, the District shall promptly seek state funding for acquisition of the Property, to the extent legally allowed. If the District determines that it is not legally allowed to obtain state funding for the acquisition of the Property, its legal counsel shall provide the City with a detailed explanation of the basis for its determination to the City Attorney. Any such state funding shall be paid to City promptly following District’s receipt of said funding. The Parties acknowledge that the use of state funding in connection with the acquisition of the Property may give rise to an audit by the Office of Public School Construction, State Allocation Board or other state agency (any and all such entities constitute the “Auditing Agency”) pursuant to Title 2, Section 1859.106 of the California Code of Regulations or other applicable law (the “Audit”). The Parties shall cooperate in responding to any such Audit. In the event that the Audit results in District being required to surrender or reimburse to the state all or any portion of the state funding actually received for acquisition of the Property, City shall promptly reimburse District for the amount District is required to surrender or reimburse to the state. 21.9 Conditions Precedent to District’s Exercise of Option. Prior to exercise of the Option, the District shall provide evidence to the City Manager that indicates District has satisfied the following requirements: 21.9.1 Award of a contract for commencement of construction of a K-8 school on the Property as reflected in DSA-approved construction plans, with such plans inclusive of a gymnasium appropriate for use by students through and including 8th grade (“Gymnasium”). The K-8 school may be constructed in phases; the contract required for exercise of the Option must include at least the first phase of such construction, inclusive of classroom space. The Gymnasium and park and playground facilities, following District’s completion of construction, shall be subject to the Parties’ joint use. The Parties shall negotiate in good faith an agreement on the terms of such joint use. 21.9.2 Written confirmation, approved by the District Board of Trustees, of the sources and availability of adequate financing to construct the first phase of the K-8 school along with the estimated schedule for completion of the work. 21.9.3 In the event the conditions precedent to the exercise of the Option set forth in this Agreement or any other term of this Agreement would result in the inability to apply for or obtain state funding for either or both site acquisition and/or construction under then applicable state law or regulations, the Parties shall meet and confer and shall negotiate any amendment to this Agreement as necessary to adjust the conditions precedent or other terms of the Agreement so as to allow for the potential receipt of state funding. 21.10 Disposition of Leased Premises. During the Lease Term, City shall not dispose of the Property through sale or by any other means to any party other than District. 22. Non-Waiver. No waiver of any default under this Agreement shall constitute or operate as a waiver of any subsequent default hereunder, and no delay, failure, or omission in exercising or enforcing any right, privilege, or option under this Agreement shall constitute a waiver, abandonment, or relinquishment thereof, or prohibit or prevent any election under or 10 2920 enforcement or exercise of any right, privilege, or option hereunder. No waiver of any provision hereof by City or District shall be deemed to have been made unless and until such waiver shall have been reduced to writing and signed by City or District, as applicable. The receipt by City of Rent with knowledge of any default under this Agreement shall not constitute or operate as a waiver of such default. 23. Covenants Run with Land. Upon City’s obtaining fee title to the Property, the agreements, covenants, and conditions in this Agreement shall be deemed to be covenants running with the land, and shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. 24. Construction. This Agreement shall not be construed as if it had been prepared by one of the Parties, but rather as if both Parties had prepared it. 25. Further Assurances. Whenever requested to do so by the other party, each party shall execute, acknowledge, and deliver any further conveyances, agreements, confirmations, satisfaction, releases, powers of attorney, instruments of further assurance, approvals, consents, and any further instruments and documents as may be necessary or property to complete any conveyances, transfers, sales, or agreements contemplated by this Agreement. Each party also agrees to do any other acts to execute, acknowledge, and deliver any documents requested to carry out the intent and purpose of this Agreement. 26. Third-Party Rights. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties and their respective successors and assigns, any rights or remedies under or by reason of this Agreement. 27. Integration. This Agreement and the attached exhibits contain the entire agreement between the parties regarding the subject matter of the Property, and this Agreement expressly supersedes all previous or contemporaneous agreements, understandings, representations, or statements between the Parties regarding those matters, including but not limited to the MOU. 28. Amendment. This Agreement may only be amended or altered, by an instrument in writing executed by City and District. 28.1 Non-Material Amendments. Any amendments to this Agreement which do not related to (a) the Lease Term; (b) changes in the permitted uses of the Property as provided in Section 6 that would materially alter the impacts that the use of the Property have on the community; (c) changes that would cause either party to incur material increases in costs; (d) material changes in the insurance and indemnity provisions as provided in Sections 16, 17 and 18; or (e) material changes to the Option and related conditions set forth in Section 21 and its subparts, may be approved by the District’s Superintendent and by the City’s City Manager and shall not, except to the extent otherwise required by law, approval by City Council or by the District Board of Education before the parties may execute an amendment hereto. The City Manager shall determine whether an item is “material” for the City, and the Superintendent shall determine whether an item is “material” for the District. 11 2920 29. Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed give if personally delivered, delivered by overnight delivery service or mailed, via certified mail, return receipt requested, to the following addresses: If to City, to: City Manager City of Dublin 100 Civic Plaza Dublin, CA 94568 With a copy to: John Bakker, Esq. City Attorney Meyers, Nave, Riback, Silver & Wilson 555 12th Street, Suite 1500 Oakland, CA 94607 If to District, to: Superintendent Dublin Unified School District 7471 Larkdale Avenue Dublin, CA 94568 With a copy to: Harold M. Freiman, Esq. Lozano Smith 2001 N. Main Street, Suite 500 Walnut Creek, CA 94111 Any notice given by personal delivery shall be effective upon receipt. Any notice given by overnight delivery shall be effective the day after delivery to the overnight delivery service carrier. Any notice given by mail shall be effective five (5) days after deposit with the U.S. Postal Service. 30. Relationship to other Development. In addition to serving students generated by Dublin Crossing, the school to be located on the Property will assist with generating District- wide capacity for the District to serve K-8 students generated by a 499 unit multifamily housing development currently proposed by The Morley Bros./Bayview Development Group on an 8.53 acre property at 6700 Golden Gate Drive between St. Patrick Way and I-580 in Dublin. 31. Negotiations with Developers. The District will make its best efforts to negotiate an agreement as soon as reasonably practicable with the developers of a mixed-use development project known as “At Dublin,” proposed for 76.1 acres, on the property located at Tassajara Road between Gleason Drive and I-580 in Dublin, whereby said developers will contribute to the planning and construction of future school facilities, including but not limited to the School Facilities on the Property. 12 2920 32. Assignment. Neither party may assign or transfer their rights under this Agreement without the prior written consent of the other party; however, each party may allow use by others of the portions of the Property over which it has control during the times it has control of portions of the Property. 33. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties, their respective successors, personal representatives, and assigns. 34. Authority. The Parties represent that each, respectively, has the full right, power, and authority to execute this Agreement, and that the individual signatories below are authorized to execute this Agreement. 35. Governing Law. This Agreement shall be construed in accordance with the laws of the State of California. 36. Partial Invalidity. If any term of this Agreement is found to be void or invalid, such invalidity shall not affect the remaining terms of this Agreement, which shall continue in full force and effect. 37. Quiet Possession. City hereby warrants and represents that it is aware of no liens, encumbrances, or exceptions to property title as of the date of this Agreement that would interfere with District’s rights hereunder once City has obtained fee title to the Property, and that City has the legal right to enter into this Agreement. 38. Memorandum of Lease and Property Option. Following (a) the execution of this Agreement and (b) the City’s obtaining fee title to the Property, either party, at its sole expense, shall be entitled to second a “short form” Memorandum of Agreement in the form attached hereto as Exhibit C. 39. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. A copy, including electronic copy, facsimile, or an original, with all signatures appended together, shall be deemed a fully executed agreement. IN WITNESS WHEREOF, this Agreement was executed by the parties as of the dates set forth below. CITY OF DUBLIN DUBLIN UNIFIED SCHOOL DISTRICT By: __________________________________ By: ________________________________ Name: David Haubert Name: Amy Miller Mayor President Date: ________________________________ Date: ______________________________ 13 2920 14 2920 EXHIBIT A Property Description/Map 15 2920 EXHIBIT B Legal Description of the Leased Premises 16 2920 EXHIBIT C Form of Memorandum of Lease 17 2920 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 MEMORANDUM OF AGREEMENT FOR GROUND LEASE AND PROPERTY OPTION – DUBLIN CROSSING BETWEEN THE CITY OF DUBLIN AND THE DUBLIN UNIFIED SCHOOL DISTRICT This Agreement for Ground Lease And Property Option – Dublin Crossing between the City of Dublin, a municipal corporation (“City”) and the Dublin Unified School District, a California public school district (the “District”) for the school site in Dublin Crossing (this “Memorandum”) is entered into this ___ day of ___, 20__, by and between the City and District. City and District are, from time to time, individually referred to in this Memorandum as a “Party,” and are collectively referred to as “Parties.” 1. Pursuant to the Agreement for Ground Lease and Property Option in Dublin Crossing as of ______________________, 20__, by and between City and District (the “Ground Lease and Property Option”), the Parties have set forth their respective obligations with respect to District’s lease of certain land from the City for the construction and operation of a school and joint use park and playground facilities and gymnasium, and further, with respect to District’s option to acquire fee simple title to said land. 2. The option set forth in the Ground Lease and Property Option must be exercised by District no later than ____________________, 20__, subject to and conditional upon conditions set forth in the General Lease and Property Option. 3. City and District have executed and recorded this instrument to give notice of the Ground Lease and Property Option, and the respective rights and obligations of City and District thereunder. The Ground Lease and Property Option - Dublin Crossing is incorporated by reference in its entirety in this Memorandum. 18 2920 4. This Memorandum shall bind and inure to the benefit of the Parties and their respective heirs, successors and assigns, subject however to restrictions set forth in the Agreement regarding assignment. IN WITNESS WHEREOF, the Parties have executed this Memorandum as of the date first set forth above. CITY OF DUBLIN DUBLIN UNIFIED SCHOOL DISTRICT By: __________________________________ By: ________________________________ Name: _______________________________ Name: _____________________________ City Manager Superintendent Date: ________________________________ Date: ______________________________ 2889681.8