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HomeMy WebLinkAbout2014-11-17 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL November 17, 2014 Special Meeting Council Chambers 5:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 November 17, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Study Session 5:00-6:00 PM 1. Update on Santa Clara County Valley Transportation Authority (VTA) El Camino Real Bus Rapid Transit Project Agenda Changes, Additions and Deletions City Manager Comments 6:00-6:10 PM Oral Communications 6:10-6:25 PM Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Minutes Approval 6:25-6:30 PM September 8, 2014 2 November 17, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Consent Calendar 6:30-6:35 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 2. Adoption of a Resolution Approving and Authorizing the Execution of the State of California Department of Community Services and Development October 2014 - April 2017 Direct Payment Program Agreement No. 14Y-1419 Governing the City of Palo Alto Utilities Department's Administration of Home Energy Assistance Program Funds 3. Approval of a Construction Contract with G. Bortolotto & Co. Inc., Contractors in the Amount of $333,824, for the Mitchell Park Parking Lot Project (CIP PE-09003) 4. Approval of a Contract with Trafficware in the Amount of $2,139,005 for the Palo Alto Traffic Signal Upgrade Project and Approval of Budget Amendment Ordinance in the Amount of $915,603 to Transfer Funds from the Citywide Traffic Impact Fee Program to the CIP Program for the Project 5. Council Appointed Officers Committee Recommendation to Select Recruiting Firm for City Clerk Recruitment 6. Approval of a Utilities Enterprise Fund Contract with Jana Corporation In the Amount of $107,768 for a Risk Assessment Study of Piping Material in the City's Natural Gas Distribution System, Capital Improvement Program GS-11002, Gas System Improvement 7. Approval of Institute of Museum and Library Services Grant of $88,010 to Palo Alto Art Center for a Collaborative Project Between the Palo Alto Art Center and the Junior Museum and Zoo 8. Adoption of a Resolution Authorizing the City Manager to Sign a Memorandum of Understanding on Behalf of the City of Palo Alto, for a Grant of Funds for the State Homeland Security Grant Program State Homeland Security Grant for FY 2013 9. Comprehensive Plan Update: Discussion of the Scope and Schedule of the Planning Process, Including Concurrent Zoning Changes (An initial discussion on this item took place on November 3, 2014 and was expected to continue on November 17, 2014. Staff requests that the item be continued to December 15, 2014.) 3 November 17, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 6:35-7:05 PM 10. Approval of Third Amendment to the Lease Between the Palo Alto Unified School District and the City of Palo Alto at the Cubberley Community Center 7:05-7:50 PM 11. Adoption of an Ordinance Repealing the Prohibition on Human Habitation of Vehicles (Ordinance No. 5206, Codified as Palo Alto Municipal Code Section 9.06.010) 7:50-9:20 PM 12. Approval of the Proposed Grocery Store Tenant (College Terrace Market) Within PC 5069 (College Terrace Centre) Based on the Finding that the Proposed Grocery Tenant Would Likely be Comparable in Quality of Products and Services as JJ&F as it Existed and Operated on December 7, 2009 at 2180 El Camino Real 9:20-9:50 PM 13. Review of City Hall Remodel Project (Continued From November 10, 2014) 9:50-10:20 PM 14. Policy Discussion on Whether to Conduct a Closed Session Prior to an Open Session to Discuss the 2014-2015 Management & Professional Compensation Plan; Possible Referral to Policy & Services Regarding Closed/Open Session Practice for Compensation Matters Inter-Governmental Legislative Affairs Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. 4 November 17, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Supplemental Information Standing Committee Agendas Finance Committee Cancellation City/School Committee Meeting November 20, 2014 Schedule of Meetings Schedule of Meeting Tentative Agenda Tentative Agenda Public Letters to Council SET 1 City of Palo Alto (ID # 5265) City Council Staff Report Report Type: Study Session Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: Update on VTA's BRT Project Title: Update on Santa Clara County Valley Transportation Authority (VTA) El Camino Real Bus Rapid Transit Project From: City Manager Lead Department: Planning and Community Environment Recommended Motion This is a study session to provide an opportunity for a presentation on the El Camino Real Bus Rapid Transit (BRT) Project by staff of the Valley Transportation Authority (VTA) and no Council action is requested. City staff will prepare a letter commenting on the VTA’s Draft Environmental Impact Report (EIR) for Council review on a subsequent agenda. Executive Summary The El Camino Real BRT project is supported by the VTA’s Measure A Transit Sales Tax program along with federal and state sources. The goal of the project is to improve transit operations and increase ridership along the El Camino Real Corridor by providing faster service with target stops and more reliable service with specialized transit vehicles and facilities. The El Camino Real BRT Corridor extends from Downtown San Jose (Arena Station) to Downtown Palo Alto (Palo Alto Transit Center) passing through the cities of Santa Clara, Sunnyvale, Mountain View and Los Altos. Design alternatives being studied for Palo Alto include BRT operations in either dedicated bus lanes down the center of the street or mixed-flow, curb lane operations. VTA in partnership with the Federal Transit Administration (FTA) has prepared a Draft Environmental Impact Report/Envirionmental Assessment (Draft EIR) for the project in compliance with the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA). The Document was released on October 29, 2014 and public hearings have been scheduled for public comments. Notices have been sent out to ¼ mile radius along the corridor, in addition to project stakeholders and board members. The VTA has requested public and agency comments by December 15, 2015. City staff will prepare a letter commenting on the Draft EIR for City Council consideration on a future agenda. Tonight’s study session is to receive a presentation from VTA staff and allow for City of Palo Alto Page 2 City Council questions regarding design alterntives being considered, conclusions of the Draft EIR, and available mitigation for any impacts identified. Background The El Camino Real BRT Corridor extends from Downtown San Jose (San Jose Arena Station) to downtown Palo Alto via The Alameda to El Camino Real in San Jose and continues along El Camino Real through the cities of, Santa Clara, Sunnyvale, Los Altos, Mountain View to its terminus in Palo Alto at the University Transit Station. The El Camino Real Corridor is currently served by the Local 22 bus and the Rapid 522. The BRT project will replace and upgrade the Rapid 522 service by installing enhanced stations, branded vehicles with more comfortable executive-style seating, and more frequent reliable service. On May 14, 2012, the City Council held a study session on the BRT project and on March 6, 2013, the City submitted comments on the EIR scoping report for the El Camino BRT Project (See Attachement A) supporting the proposed Mixed Flow lanes option in the City of Palo Alto. Additional comments on the project elements were also requested to be addressed in the current Draft EIR for the project. Staff has not yet reviewed the Draft EIR to determine how the City’s scoping comments have been addressed. Discussion The VTA’s Draft EIR evaluates seven alternatives, including station options and options that vary the extent of dedicated lanes for providing BRT along El Camino Real. These alternatives explore two types of street cross-sections for BRT operations along the El Camino Real corridor: 1) Dedicated Bus Lanes in the Center of the Street, or 2) Mixed-Flow Curb Lanes. The Dedicated Bus Lanes in the Center of the Street option reconfigures El Camino Real to provide two dedicated bus-only lanes within the center of El Camino Real. Passenger platforms for boarding and de-boarding of the buses would occur at center-street platforms in this alternative and new ticket stations to expedite boarding would be provided on the platforms similar to Light Rail Transit stations within the County also operated by the VTA. The Dedicated Bus Lane alternative in general provides better travel time operations for transit by removing the buses from congested travel lanes similar to how High Occupancy Vehicle (HOV) lanes reduce travel times for carpoolers on freeways. The number of automobile travel lanes on El Camino under this alternative would be reduced to 2 lanes in each direction in order to accommodate the center dedicated bus lanes. This alternative would also allow for either on-street parking or bike lanes placed along the dedicated lanes segment on El Camino Real, but providing both would not be feasible due to right-of-way constraints. City of Palo Alto Page 3 Dedicated Bus Lane on El Camino Real with Bike Lanes Concept Rendering Source: VTA, March 2013 The Mixed-Flow Curb Lanes option would maintain bus operations similar to those that currently occur along El Camino Real through Palo Alto today with buses operating within the curb lanes of the street. The BRT platforms would include ticketing, shelter, and streetscape elements, and they would be built at “bulb-outs” allowing the bus to stop within the lane of traffic rather than pulling out of a lane of traffic into a parking aisle. The number of automobile travel lanes under this alternative would remain the same, with three lanes in each direction, and some on-street parking may be affected, but only near the bulb-out stations. Mixed-Flow Curb Lane BRT Operations on El Camino Real with Bike Lanes or Parking Concept Rendering Source: VTA, March 2013 Preliminary review of VTA’s environmental studies show that intersection Level of Service (LOS) operations would be more impacted in Palo Alto than in other cities with the Dedicated Bus Lanes option because LOS estimates for future traffic without BRT operation changes show Palo Alto intersections operating at an acceptable LOS, but if significant BRT configurations are made, LOS would deteriorate both along El Camino Real and on parallel routes such as Alma City of Palo Alto Page 4 Street. These potential impacts and the lower cost, support identification of the Mixed-Flow Curb Lanes as preferred within the City of Palo Alto. Bus Rapid Transit Stations VTA is proposing two new BRT Stations in Palo Alto at the following intersections:  El Camino Real & Arastradero Road-Charleston Road  El Camino Real & California Avenue  Optional Station at Churchill Avenue or Embarcadero Road (The University Avenue Transit Station would serve as the third station in Palo Alto as well as the terminus of the BRT Program within Santa Clara County but no upgrades at the station are proposed as part of the project.) BRT Stations would be placed within Caltrans’ El Camino Real Right of Way, and thus City permits would not be required, however the City can provide input on the proposed station locations and design to the VTA, to Caltrans, and to the federal funding agency as part of the City’s comments on the Draft EIR. Each of the two proposed station designs would include an off-board fare collection system where passengers would buy tickets so they could board the bus through the front and rear doors without needing to show proof of payment. This would allow faster boarding and would mean that transit officers would be onboard checking passengers for tickets, like they do on VTA’s light rail. The enhanced stations would be more substantial than regular bus stations by providing shelters for weather protection, more seating and better lighting for safety. Public Hearings/Meetings for DEIR VTA will hold four public hearings/meetings to share the results of the Draft EIR and listen to comments and concerns from the community. VTA will use the Draft EIR and comments received to select a locally preferred alternative. The same format and content will be offered at each meeting: Thursday, November 20, 2014, Mountain View City Council Chambers 500 Castro Street, 2nd Floor, Mountain View, CA 8:30 a.m.-10:30 a.m. (Presentation begins at 8:45 a.m.) 5:30 p.m.-7:30 p.m. (Presentation begins at 5:45 p.m.) Wednesday, December 3, 2014, Santa Clara City Council Chambers 1500 Warburton Avenue, Santa Clara, CA 8:30 a.m.-10:30 a.m. (Presentation begins at 8:45 a.m.) 5:30 p.m.-7:30 p.m. (Presentation begins at 5:45 p.m.) Project information and presentations can also be found online at http://www.vta.org/el- camino-brt . Comments on the Draft EIR must be received no later than 5:00 p.m. on Monday, December 15, 2014. Comments can be emailed at: ecrbrt@vta.org or by mail to: City of Palo Alto Page 5 VTA Environmental Planning Department, Attn: Christina Jaworski 3331 N. First Street, Building B-2 San Jose, CA 95134 Staff will be preparing a comment letter to submit to VTA after this study session and a thorough review of the Draft EIR. Timeline After the Draft EIR review period is completed, VTA's Board of Directors will select a Locally Preferred Alternative. While this will be a VTA decision, it will be influenced by the cities along the corridor and Caltrans. Caltrans must approve any changes to the El Camino corridor that are made by the BRT Project. Project Schedule: Final Design December 2014 - September 2016 Construction March 2017 - August 2018 First Day of Service September 2018 Resource Impact Staff has been participating in monthly Project Development Team meetings. Upon project implementation, the corridor will be operated and maintained by VTA so there are no on-going resource impacts to the City of Palo Alto. Policy Implications The proposed BRT project is generally consistent with the Comprehensive Plan, which contains the following policies:  Policy T-1: Make land use decisions that encourage walking, bicycling and public transit use;  Policy T-4: Provide local transit in Palo Alto.  Policy T-6: Improve public transit access to regional destinations, including those within Palo Alto.  Policy T-7: Support plans for a quiet, fast rail system that encircles the Bay, and for intra-county and transbay transit systems that link Palo Alto to the rest of Santa Clara County and adjoining counties.  Policy T-10: Encourage amenities such as seating, lighting, and signage at bus stops to increase rider comfort and safety. City of Palo Alto Page 6 The Draft EIR provides an opportunity to evaluate impacts of the proposed project to deterimine if there would be conflicts with Comprehensive Plan policies regarding the City’s quality of life or the character of the affected corridors. Environmental Review VTA in partnership with the Federal Transit Administration (FTA) has prepared a Draft Environmental Impact Report/Envirionmental Assessment (Draft EIR) for the project in compliance with the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA). VTA is the lead agency for CEQA and NEPA. The City of Palo Alto will be considered a “responsible agency” under CEQA if the VTA is required to secure City permits or approvals for any aspect of the project, including required mitigation at intersections/roadway facilities within the City’s jurisdiction. Attachments:  Attachment A: BRT Scoping Letter. 2013 (PDF)  Attachment B: Public Correspondence (PDF) Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors ! -f· .. : ... ·~ ~.: ~ :-. -. .. ·>. - t1UY Of PALO ALTID. CA GJTX Fl fRK'$ mifi!Cf Colin Heyne <colinheyne@gmail.com> 14 NOV 12 AM a: 82 Tuesday, November 11, 2014 11:52 AM Council, City Comments to the VT A on the El Camino Real BRT DEIR/EA As a frequent bus rider and erstwhile bike commuter, I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are ~ufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Colin Heyne 134 Monte Verano Court San Jose, CA 95116 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors QIJY fJF PALO ALTO. GA llNTY CLERK'S OFfi§E Cassie Blume <cassieblume@hotmail.com> f4 NOV 12 AH 8: 92 Tuesday, November 11, 2014 12:39 PM Council, City Comments to the VT A on the El Camino Real BRT DEIR/EA l urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. l support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT ori El Camino Real will also promote a safe and inviting space for people who walk, bikei ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more, vibrant place for us all to get around. Sincerely, Cassie Blume 349 Raymond Ave San Jose, CA 95128 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors . · .. . ·~····. . CIT X ~F PALO A!,.Tfl, CA @H Y CLERK'S OPF'I~E Kaitlin Walker <kaitlinw123@fastmail.fm> 14 NOV 12 AH a: 9 i Tuesday, November 11, 2014 7:31 PM Council, City Comments to the VT A on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation; or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Kaitlin Walker 1125 Manchester Drive Apt 1 Santa Clara, CA 95050 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors OilY OF PALO At.,TQ. Cl' f!:IX AI iil('i i~Fiie Chris Hlavka <chris_hlavka@yahoo.com> I~ NOV 12 AM a: (iJ I Tuesday, November 11, 2014 8:45 PM Council, City Comments to the VTA on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus RapidTransit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). . -and work to ensure that the bus is as fast or faster than cars (Don't compromise away this capability) If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Chris Hlavka 1686 Oak Avenue Los Altos, CA 94024 Carnahan, David From: carla Arango <carla.arango1@gmail.com> f ~NOV f 0 PH 5: Z3 Sent: Monday, November 10, 2014 5:06 PM To: Council, City Subject: Comments to the VTA on the El Camino Real BRT DEIR/EA Palo Alto City Councilors I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. 1 support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. . Thank you for your work to. make our region a safer, better; more vibrant place for us all to get around. Sincerely, carla Arango 731 N 12th St San Jose, CA 95112 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors Kerry Kravitz <kkravitz@pacbell.net> Monday, November 10, 2014 5:08 PM Council, City ~IY tiF PALO ALT,Q,CM CITY etERK'S fJFFHJE r 4 NOV r 0 PM S: 23 Comments to the VT A on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Kerry Kravitz 905 Continental Drive Menlo Park, CA 94025 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors 01J} OF PAlO ALTO, CA en Y CLERK'S ffPP'JCE. Yolanda Reynolds <yolandar@att.net> I~ NOV 12 AM S: 03 Monday, November 10, 2014 10:39 PM Council, City Comments to the VTA on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Yolanda Reynolds 1650 Shasta Ave. San Jose, CA 95128 Carnahan, David 'From: Sent: To: Subject: Palo Alto City Councilors / :---.. ·· _.;._:.: ---~-- C:IJY t'lf .PALO ALTO. OA €HY CLERK'S Of.lf'iCE Lenard Lesser <Lenny3200@gmail.com> 1'4 NOV 12 AM S: 03 Tuesday, November 11, 2014 8:42 AM Council, City Comments to the VT A on the El Camino Real BRT DEIR/EA 1 urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibra!lt environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. l strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). Jf we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Lenard Lesser PAMFRI 795 El Camino Real, Ames Palo Alto, CA 94301 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors Daniel Howard <dannyman@toldme.com> Tuesday, No>Jember 11, 2014 10:15 AM Council, City If+ NOV I 2 AH S: 0 3 Comments to the VT A on the El Camino Real BRT DEIR/EA I used to commute along El Camino from Mountain View to Palo Alto. I switched to the bus out of environmental concerns. El Camino has the best transit service in the county but it still took 2-3 times longer to take the bus than it would have taken to drive. Now it sounds like you could get BRT running on El Camino FASTER than cars? YES! J If the cars get slowed a bit that's not such a big deal, especially since any driver going any distance knows that Central Expressway I Alma is a much nicer car trip. Even though I now live 1.5 miles off of El Camino in Sunnyvale, if there were excellent transit services I would be tempted to hop on the 55, walk, or bike to enjoy the transit corridor, especially for trips up to Mountain View or Palo Alto or Stanford Shopping Center. What a pleasure it would be to not have to hassle with parking, traffic, or the Caltrain schedule. If it were sufficiently fast, I would totally use that as a commute option up to Menlo Park. Also, I'd probably be more inclined to visit Santa Clara. ,Thanks, -danny Daniel Howard 240 Hazelton Sunnyvale, CA 94085 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors --.·; ~:. : .. ,::.-~';- Ed Maurer <edmhydro@yahoo.com> Tuesday, November 11, 2014 10:17 AM Council, City etr:r. oF PALo A~ro. (M Gil Y CLERK'S OfFICE 14 NOV 12 AM 8: fl2 Comments to the VT A on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transporta.tion, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Ed Maurer 718 Los Olivos Dr. Santa Clara, CA 95050 . -· ,•. ·.-.. · ·: ~'-.. ,;,-;.· ' ·. ~~ ' . CITY oF PALO ALTO. GA Carnahan, David CITY CLERK'S Cfr:FICE From: Sent: To: Subject: Palo Alto City Councilors Alan brake <francesca.alan@gmail.com> Tuesday, November 11, 2014 11:04 AM Council, City 14NOV 12 AH 8:02 Comments to the VTA on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I commute by bicycle most days; El Camino Real is my most direct route but I have to go miles out of my way to stay clear of it. Too many vehicles, too much smog, too much stress .. The wider Bay Area is supposed to be the center of the tech universe and any number of Asian & European cities put it to shame. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Alan brake 1134 Werth Avenue Menlo Park, CA 94025 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors ' ~. . . . .. . . Priya G <pria007@gmail.com> Monday, November 10, 2014 5:27 PM Council, City ~' . ·~· . . . . lHJY @f PALO ALT@. CA CITY CLERK'S BFFlCE 14 NOV 12 AM 8: 05 Comments to the VTA on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT} project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs}. If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunityto bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Priya G Shadow Run Dr San Jose, CA 95110 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors CITY tiF PALO ALTO. CA BTTY CLERK'S OrFl6E Janani Dhinakaran <janinthesky@gmail.com> 14 NOV 12 AH 8l 04 Monday, November 10, 2014 5:45 PM Council, City Comments to the VTA on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit {BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions {bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Janani Dhinakaran Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors ···-.. _· .·. GUY OF i;;ALO ALTO. CA GfTY CL~RK'S OFFICE Anjali Mehta <Anjalin.mehta@gmail.com> 14 NOV 12 AH 8: 03 Monday., November 10, 2014 7:25 PM Council, City Comments to the VT A on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who wa!k, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Anjali Mehta 72 pare place drive Milpitas, CA 95035 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors 01TY OF PALO AI..TQ. CA C::l'fY CLERK'S OFFlGE Krista! Caidoy <kcaidoy@live.com> J4 NOV 12 AH 8: 03 Monday, November 10, 2014 8:25 PM Council, City Comments to the VTA on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Krista! Caidoy 7 Homme Way Milpitas, CA 95035 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors --•:;·'· ' .. GIJY OF PALO ALTO. OA €trY OLERK'S GlFf.':!Ct Charles Wilson <moogleborg@gmail.com> 14 NOV r 2 AH St 03 Monday, November 10, 2014 8:40 PM Council, City Comments to the VT A on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. l strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, Charles Wilson 650 Genine Dr San Jose, CA 95127 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors . . . . ~ ;:-~· .-.... C:ljY ~F r-ALO ALTO. GA trTY CLERK'S Of:FIGE Debbie Mytels <earthdeb3@yahoo.com> r ~NOV r 2 AM 8; 03 Monday, November 10, 2014 8:49 PM Council, City Comments to the VT A on the El Camino Real BRT DEIR/EA 1 urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thahk you for your work to make our region a safer, better, more vibrant place for us all to get around .. . Sincerely, Debbie Mytels 2824 Louis Road Palo Alto, CA 94303 Carnahan, David From: Sent: To: Subject: Palo Alto City Councilors _-.. -. ~ .·-.. QIJY OF PALO AlJO. CA eHY CLERK'S fJf:FIGt paul engstrom <paulmaryengstrom@gmail.coml4 NOV 12 AM S: Q3 Monday, November 10, 2014 9:44 PM Council, City Comments to the VT A on the El Camino Real BRT DEIR/EA I urge you and the Valley Transportation Authority to bring excellent public transportation to Silicon Valley with the El Camino Real Bus Rapid Transit Project. I support a safe and vibrant environment along El Camino Real with fast, frequent, reliable, and convenient public transportation. A robust El Camino Bus Rapid Transit (BRT) project will transform this important commercial and residential corridor into a more balanced street with drastically improved bus service. BRT on El Camino Real will also promote a safe and inviting space for people who walk, bike, ride public transportation, or drive. I strongly urge VTA to: Incorporate bus-only lanes in the El Camino Real plan, Invest in buffered bike lanes and greater bike carrying capacity on transit vehicles, and Ensure that there are sufficient left turns, more crosswalks, upgraded pedestrian refuges, and sidewalk extensions (bulb- outs). If we don't bring these critical aspects of BRT to El Camino Real, we are missing a huge opportunity to bring an innovative and important change to this increasingly congested and dangerous corridor. Thank you for your work to make our region a safer, better, more vibrant place for us all to get around. Sincerely, paul engstrom 655 Washington St los Altos, CA 94022 Carnahan, David From: Sent: To: ··---··. ~-.'. '. Clerk, City Wednesday, November 12, 2014 7:39AM Council, City C!'I!.Y OF PALO ALT6, CA en Y CLERK'S OFFICE 14 NOV I 2 AH 8: 00 Subject: Attachments: FW: SamT.rans Bus Rapid Transit Phasing Study Executive Summary SamTrans BRT Study Executive Summary.pdf David Carnahan, Deputy City Clerk, MPA 250 Hamilton Avenue I Palo Alto, CA 94301 From: Bhatnagar, Shweta [mailto:Bhatnagars@samtrans.com] Sent: Tuesday, November 11, 2014 5:39PM To: Keene, James; Clerk, City Subject: SamTrans Bus Rapid Transit Phasing Study Executive Summary For about a year, the San Mateo County Transit District (SamTrans) has been conducting a feasibility study potential bus rapid transit (BRT) service on El Camino Real . The study determined that a potential BRT service on El Camino could attract significant ridership growth, but that implementation would require significant resources. We also are well aware of the controversy that would ensue with a full BRT program that would consider bus-only dedicated lanes on El Camino. Based on findings of the study, SamTrans has decided not to implement BRT service in the near-term. The study did identify viable next-step service improvements on El Camino that have the potential to increase ridership and that could be pursued over the next two to five years. We will conduct public workshops to discuss the study and possible service improvements. We also are available to present information on the study to your city council. We also would ask that you provide this information to your council and let them know we are available to meet with them collectively or individually to discuss the study. Attached is an Executive Summary of the preliminary draft findings of the study. Additional information regarding the study can be found on our website at www.samtrans.com/brt. The geographic area included in the study was El Camino Real from Daly City to Palo Alto. With increasing densities and planned development along ECR, Sam Trans studied the potential of implementing BRT service to better prepare for future transit demands, as well as realize the vision of the Grand Boulevard Initiative and other regional planning initiatives. The goal of this study is to develop a phasing plan for enhancing bus operations on El Camino Real with BRT-type enhancements. The workshops are scheduled as follows: Thursday, November 13, 6 p.m. South San Francisco City Council 33 Arroyo Drive, South San Francisco Tuesday, November 18, 6 p.m. SamTrans Headquarters Second Floor Auditorium 1250 San Carlos Avenue, San Carlos Please let me know if you would like to schedule a presentation or if you require any additional information. With regards, Shweta Shweta Bhatnagar, Government Affairs Officer Sam Trans I Caltrain I T A Office of Public Affairs 1250 San Carlos Ave. San Carlos, CA 94070-1306 650-508-6385 www.smctd.com @SamTrans News @Caltrain News Facebook: Caltrain -Sam Trans Sam Trans -El Camino Corridor Bus Rapid Transit Phasing Plan Study Executive Summary Last year, the San Mateo County Transit District (SamTrans) was awarded a grant by the California Department of Transportation to conduct a feasibility study of the potential for bus rapid transit (BRT) service along the El Camino Real (ECR) corridor. The geographic area included in the study is the historic El Camino Real, from Daly City to Palo Alto. The 26-mile corridor carries the highest ridership in the Sam Trans bus system. The main bus route serving this corridor is Route ECR with over 13,000 daily weekday hoardings, which account for one- third of the system-wide hoardings. Bus Rapid Transit (BRT) is a type of bus service and accompanying facilities that attempts to provide a "rail-like" product in terms of speed, vehicle type, and station amenities. Sam Trans has prepared the El Camino Real BRT Phasing Plan Study to examine four issues: 1. The potential for BRT to provide a better service for existing customers. 2. The potential for BRT to increase transit ridership by attracting new customers. 3. The potential to increase options for Caltrain riders. 4. The potential for BRT to support planned regional development programs such as the Grand Boulevard Initiative. · Over the last year, Sam Trans has developed BRT service concepts, analyzed operating and capital costs and ridership potential, and identified opportunities to implement transit priority features along the corridor. · The goal of the study is to develop a plan for phased introduction ofBRT in the El Camino Real corridor over an extended time period: The initial focus is on the introduction of rapid service, a . faster service with limited capital expense on transit priority, station and vehicle amenities. The longer-term focus is on the possible introduction of full BRT, including the significant features mentioned above. To do so SamTrans needed to understand: • Essential system components • Impacts to customers • Ridership forecasts • Capital and operating costs • Funding strategy Service Concepts Our research, consistent with research conducted industry-wide, shows that the transit service features most desired by patrons are frequency and speed. Currently, RouteECR provides local service with 102-104 stops in each direction with an end- to-end trip taking more than two hours. 1 The BR T Study has identified a number of service concepts that have potential in the El Camino Real corridor to reduce travel time (shown in Table #1 ). Table #1 Service Concepts Option 1: Rapid / ECR OJ!tion 2: Truncated Rapid {58-RC) Option 3: Truncated Rapid (DC·RC) Option 4: Pure Hybrid Option 5: Peak Rapid {Rapid/ECR) 1. · Service Options 1, 2, 3, and 5 are all "Overlay" services that would operate along the same .·route, in addition to the existing local Route ECR. These service concepts would be limited stop service, reducing the 1 00-plus stops to 23 to 37 stops in each direction, and would provide faster service between prime locations along the corridor. Service Options 2 and 3 would serVe only a portion of the corridor between Daly City and Palo Alto based on heaviest demand, and Service Option 5 would operate over the entire corridor, but only in the two morning and evening peak commute periods. 2. Service Option 4 would modify the existing local service to a route that made fewer stops and would have a faster end-to-end travel time. This service concept, referred to as a "hybrid," assumes reducing the number ofRoute ECR stops from over 100 to somewhere between 50 to76 stops. Ridership Forecast The Bay Area maintains a regional travel forecast to the year 2040 using population, employment, transportation network development, and traffic pattern and congestion data. This information was used to forecast potential ridership for these service concepts in the near-(2020) and long-term (2040). The existing local Route ECR, which operates every 15 minutes, currently has over 13,000 daily weekday hoardings and has a net operating cost of nearly $14.5 million annually. The current Route ECR ridership is forecasted to increase to 16,600, or 25 percent, by the year 2020, and 26,600, or over 100 percent, by the year 2040. Overlay Rapid Service Findings Depending on the overlay rapid service option, ridership forecasts suggest that the combination ofthe local Route ECR and an Overlay Rapid service could increase ridership to19,700-22,200 daily weekday hoardings by the year 2020, an increase of 19 to 34 percent. Increases in net operating costs for this service ranges from $5.7 million to $10.3 million annually, an increase of 34 to 59 percent. 2 .. . . . . . . ... ~ -~----.:.. -.. . ····· _,. . Hybrid Service Findings Depending on the "hybrid'~ Route ECR service option, ridership could increase by 17,700 to 22,500 daily hoardings, a 6 to 25 percent increase over the projected Route ECR hoardings for the year 2020. Net operating costs for this type of service would increase between $1.3 million - $8.4 million annually, an increase of 8 to 51 percent. Long Term (Year 2040) Full BR T The Full BRT service (with capital intensive transit priority) would only have 37 stops and would still maintain 15-minute headways and would continue providing local ECR service. In this option, average weekday hoardings would be 33,800, an increase of27 percent over the ECR local service year 2040 daily hoardings of26,700. Net operating costs would increase by $6.9 million annually, an increase of 67 percent. Capital Costs for Optional Features Buses and traffic signals can be equipped to provide buses with early and/or extended green light time on signals along El Camino Real to reduce the amount of time buses spend at red lights. The modification of approximately 120 signals along the corridor and 20 buses would cost approximately $2.4 million. Field testing has shown the installation of this equipment would reduce end-to-end travel time by 15 minutes or more. Additionally, enhanced features such as bus stop canopies, benches, windscreens, lighting, signage and real-time information could be added to each bus stop. These features could cost approximately $150,000 per stop. The Full BRT option could include approximately 10 miles of exclusive bus lanes in each direction, queue jumps, and transit signal priority. Capital costs could include $100 million for bus lanes and $47 million for 74 enhanced stops. Implementing this service would have a significant amount of engineering and political challenges. Conclusion The analysis has shown that a Rapid and/or BRT service to could attract substantial ridership growth on the El Camino Real corridor. Each service would require significant operating and capital expenditures. As the current Route ECR is performing well with steady ridership growth, and Sam Trans' financial capacity currently is limited, there is no immediate urgency to undertake the Full BRT service, and no such service is planned for the near term. Pending availability of operating funds, the lead time to introduce a Rapid service could be approximately two years, driven by detailed service planning and vehicle and bus operator requirements. Sam Trans will continue to refine BRT planning and monitor Route ECR ridership patterns. 3 Carnahan, David From: Sent: To: Cc: .subject: Honorable City Council Members, fHTY Bf PALO ALTO, GA Cl1'Y €LERK'S OfcFIDE Penny Elison <pellson@pacbell.net> 14 NOV 12 AH B: 02 Tuesday, November 11, 2014 11:06 AM Council, City Planning Commission; 'board' FW: Transit-friendly election results; Buses as fast as cars? VTA slows BART Phase 2, and more As Council considers general plan changes in Menlo Park and East Palo Alto, it is also important to give similar consideration to Mountain View's planning processes. I suggest giving special attention to the San Antonio Change Areas that immediately abut and are impacting Palo Alto streets and are slated to undergo several more phases of very high density growth in the near term. Here are just two items currently scheduled for review in Mountain View: • TheEl Camino Real Precise Plan will be reviewed on Thursday, November 13, 7 PM by the Mountain View Environmental Planning Commission. MV City Council will review for approval on Monday, November 17, 5 PM. • The San Antonio Precise Plan will be reviewed on Monday, November 17, 7 PM by the Environmental Planning Commission with final Council hearing scheduled for December 2. Both of these major planning projects will have enormous implications for Palo Alto. It seems to me that Mountain View General Plans and change areas are due the same consideration as Menlo Park and East Palo Alto general plans. It might also be useful to get some information.about housing growth in Los Altos Hills which would impact on PAUSD schools. Anecdotally, it seems as though we are seeing new single family home construction up there. How does PAUSD track new housing plans/approvals in their attendance areas beyond Palo Alto city limits? Suburban sprawl = increased auto traffic and school impacts. Thank you for giving my comments your usual thoughtful consideration. Penny Elison City of Palo Alto (ID # 5166) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: Low Income Home Energy Assistance Program Title: Adoption of a Resolution Approving and Authorizing the Execution of the State of California Department of Community Services and Development October 2014 - April 2017 Direct Payment Program Agreement No. 14Y-1419 Governing the City of Palo Alto Utilities Department's Administration of Home Energy Assistance Program Funds From: City Manager Lead Department: Utilities Recommendation Staff recommends that the City Council adopt the attached resolution authorizing the City Manager or his designee to execute Direct Payment Agreement No. 14Y-1419 between the California Department of Community Service and Development (State CSD) and the City of Palo Alto for the purpose of making direct payment from State CSD to the utilities accounts of qualifying low-income residents. Executive Summary The United States Department of Health and Human Services annually distributes authorized funds under the Low-Income Home Energy Assistance Program (LIHEAP) to states to assist eligible low-income households with payments for heating and/or cooling energy expenses. The State CSD then distributes these funds, under its Home Energy Assistance Program, to energy providers under the LIHEAP terms and conditions. LIHEAP eligibility is based on the combined household income of the residence and provides financial assistance of up to $290 annually per qualifying utilities account. Background LIHEAP financial assistance is based upon the poverty guidelines used by the United States Department of Housing and Urban Development and other federal and state agencies. These guidelines are published annually in the Federal Register by the United States Department of Health and Human Services under the authority of Title 24, United States Code, 9902(2). The current LIHEAP administrator for Santa Clara County is Sacred Heart Community Service, headquartered in San Jose. The county’s LIHEAP allocation, in combination with a small-scale utility payment assistance program offered by the Society of Saint Vincent de Paul, the City of Palo Alto Page 2 ratepayer-supported City of Palo Alto Utilities (CPAU) Rate Assistance Program, and the utility customer-supported voluntary contribution PROJECT PLEDGE program, are the currently available sources of financial assistance for Palo Alto residents with qualifying accounts. Since October 2003, State CSD has required that the City of Palo Alto’s executed LIHEAP Agreement be accompanied by a resolution or ordinance authorizing CPAU participation and execution of the provisions of the Agreement. Discussion LIHEAP payments are restricted to the electric and/or natural gas portion of the CPAU customer bill, and the Agreement with State CSD provides for one energy payment per funding year to qualifying low-income families. State CSD, through its county administrator, provides the applying utility customer with program intake services, including verification of eligibility and determination of allowable LIHEAP payment. CPAU is provided with the names of applicants determined to be eligible for LIHEAP assistance, and maximum payment to be applied to the Utilities account. The elapsed time from CPAU customer initial LIHEAP application to Sacred Heart Community Service, verification of program eligibility, determination of funding amount, and direct payment by State CSD to CPAU, averages eight weeks. In Fiscal Year 2013-2014, there were 104 Palo Alto Utility residential accounts receiving $25,898 in LIHEAP direct payments (averaging $249.02 per customer). The Direct Payment Agreement is a no-cost contract, but participation by the City in LIHEAP results in a minor workload impact for CPAU Customer Service and Credit and Collection staffs for local program administration (including coordination with other local financial assistance programs), customer contact and referral, and Utilities payment tracking, investigation and reconciliation. Resource Impact The estimated impact of LIHEAP administration on the Utilities Department staff is less than 50 hours per fiscal year. Policy Implications The recommendation is consistent with the Council approved Utilities Strategic Plan Strategic Plan Strategy BP6. “Offer programs to meet the needs of customers and the community.” Environmental Review The adoption of this resolution does not meet the definition a project under Public Resources Code Section 21080 or Section 15378 of the CEQA Guidelines, and therefore no California Environmental Quality Act assessment is required. Attachments:  Attachment A: Resolution State Contract Direct Pmt Prog 2014-2017 (PDF)  Attachment B: City of Palo Alto Direct Payment Agreement No.14Y-1419 (PDF) *NOT YET APPROVED* 1 141028 jrm 0180075 Resolution No. _____ Resolution of the Council of the City of Palo Alto Approving and Authorizing the Execution of the State of California Department of Community Services and Development 2014-2017 Direct Payment Program Agreement No. 14Y-1419 Governing the City of Palo Alto Utilities Department's Administration of Home Energy Assistance Program Funds R E C I T A L S A. The City of Palo Alto (“City”), a California charter city, has offered energy assistance to families of low-income since 1981 as a part of the City’s Low Income Home Energy Assistance Program. B. The United States Department of Health and Human Services annually distributes authorized funds under the Low-Income Home Energy Assistance Program (“LIHEAP”) to states to assist eligible low-income households with payments for heating and/or cooling energy expenses. The State of California Department of Community Services and Development (“State CSD”) then distributes these funds, under its Home Energy Assistance Program, to energy providers under the LIHEAP terms and conditions. C. The City has a contract (the "Direct Payment Program Agreement") with the State of California to provide direct credit to the accounts of Palo Alto residents who have been identified by the State CSD as recipients of payments to be made under and in accordance with LIHEAP, which includes the Home Energy Assistance Program. D. The Direct Payment Agreement No. 14Y-1419 is for the term October 1, 2014 through April 30, 2017. The Council of the City of Palo Alto RESOLVES, as follows: SECTION 1. The Council hereby authorizes the City of Palo Alto to enter into and execute with the State of California Department of Community Services and Development the 2014-2017 Direct Payment Program Agreement. // // ATTACHMENT A *NOT YET APPROVED* 2 141028 jrm 0180075 SECTION 2. The Council finds that the adoption of this resolution does not meet the definition of a project under Public Resources Code Section 21080 or Section 15378 of the CEQA Guidelines and, therefore, no California Environmental Quality Act environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: ______________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: ______________________________ City Manager ______________________________ Sr. Deputy City Attorney ______________________________ Director of Utilities ______________________________ Director of Administrative Services STATE OF CALIFORNIA AGREEMENT City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 This Agreement consists of this signature page, Parts I and II, and Attachments 1 and 2, which are attached hereto and incorporated herein by this reference. It is entered into between the State of California, Department of Community Services and Development (CSD), and the Utility Company, City of Palo Alto Utilities( Contractor): Utility Company: The term of this Agreement is: The maximum amount of this Agreement is: Agreed to and approved: CONTRACTOR By: Authorized Signature Printed Name and Title of Person Signing Address: Telephone: Email: STATE OF CALIFORNIA City of Palo Alto Utilities October 1, 2014 through April 30, 2017 $-0- City of Palo Alto Utilities Date Signed Department of Community Services and Development By: Authorized Signature Date Signed Cindy Halverstadt, Deputy Director of Administrative Services Printed Name and Title of Person Signing Address: 2389 Gateway Oaks Drive, Suite 100 Sacramento, California 95833 Telephone: (916) 576-7109 Email: Cindy .Hal verstadt@csd.ca. gov ATTACHMENT B TABLE OF CONTENTS City of Palo Alto Utilities Direct Payment Agreement Agreement No.14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II PART I ........................................................................................................................................ 3 ARTICLE 1 --SCOPE OF WORK ......................................................................... 3 1.1 Purpose ................................................................................................................................ 3 1.3 Contract Amount ........................................................................ '. ........................................ 3 1.4 Term .. · ......................... .-........................................................................................................ 3 1.5 Applicable Laws and Requirements ................................................................................... 3 1.6 Notices and Project Coordinators ....................................................................................... 3 ARTICLE 2 --CONTRACT CONSTRUCTION, ADMINISTRATION AND PROCEDURE ... 5 2.1 Base Contract and Whole Agreement.. ............................................................................... 5 2.2 Budget Contingency Clause ................................................................................................ 5 2.3 Provisions for Federally Funded Contracts ......................................................................... 6 2.4 General Terms and Conditions-"GTC 610" ..................................................................... 7 2.5 Additional Provisions .......................................................................................................... 7 PART II. .................................................................................................................................... 10 SUBPART A-ADMINISTRATIVE REQUIREMENTS ................................................... 10 ARTICLE 3 -ADMINISTRATIVE POLICIES, TERMS AND CONDITIONS ....................... 10 3 .1 Confidentiality .................................................................................................................. 10 3.2 Compliance with Laws and Tax Wit4holding .................................................................. 19 3 .3 Conflict of Interest ......................................................................... : .................................. 11 3.4 Contractor's Use of CSD's Property ................................................................................. 11 3 .5 Independent Contractor ..................................................................................................... 11 3.6 Insurance ............................................................................................................................ 11 3. 7 Labor Code/Workers Compensation ................................................................................. 11 SUBPART B-PROGRAMMATIC AND REPORTING REQUIREMENTS.; ............... 13 ARTICLE 4-PROGRAMMATIC PROVISIONS ..................................................................... 13 4.1 Applicant Eligibility .......................................................................................................... 13 4.2 Payment Issuance and Processing ..................................................................................... 13 4.3 Payment Verification ......................................................................................................... 14 4.4 Telephone Pledges Under Energy Crisis Intervention Program/Fast Track ..................... 14 4.5 Assurances ........................................................................................................................ 15 1 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II ARTICLE 5-REPORTING AND RECONCILIATION REQUIREMENTS ............................ 16 5.1 Quarterly Pledge Reports .... '. ............................................................................................. 16 5 .2 Specific Requests for Additional Pledge Information ...................................................... 16 5.3 Account Reconciliation ...................................................................................................... 16 5 .4 Additional Reporting Requirements ............... .' ................................................................. 16 SUBPART C-GENERAL TERMS & CONDITIONS ....................................................... 17 ARTICLE 6 --GENERAL TERMS AND CONDITIONS-GTC 610 .................................. : .... 17 1. APPROVAL ............................................................................................................................. 17 2. AMENDMENT ......................................................................................................................... 17 3. ASSIGNMENT ......................................................................................................................... 17 4. AUDIT ...................................................................................................................................... 17 5. INDEMNIFICATION ............................................................................................................... 17 6. DISPUTES ............................................................... ; ................................................................ 17 7. TERMINATION FOR CAUSE ................................................................................................ 17 8. INDEPENDENT CONTRACTOR ........................................................................................... 18 9. RECYCLING CERTIFICATION ............................................................................................ 18 10. NON-DISCRIMINATION CLAUSE ..................................................................................... 18 11. CERTIFICATION CLAUSES ............................................ : ................................................... 18 12. TIMELINESS ......................................................................................................................... 18 13. COMPENSATION ................................................................................................................. 19 14. GOVERNING LAW ......... · ........................................................................................... : .......... 19 15. ANTITRUST CLAIMS .......................................................................................................... 19 16. CHILD SUPPORT COMPLIANCE ACT .............................................................................. 20 17. UNENFORCEABLE PROVISION ........................................................................................ 20 18. PRIORITY HIRING CONSIDERATIONS ........................................................................... 20 19. SMALL BUSINESS PARTICIPATION AND DVBE PARTICIPATION REPORTING REQUIREMENTS ........................................................................................................................ 20 20. LOSS LEADER ..................................................................................................................... 21 SUBPART D-FORMS AND ATTACHMENTS .............................................................. 22 2 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II PART I ARTICLE 1 -SCOPE OF WORK 1.1 Purpose The purpose of this Agreement between the Department of Community Services and Development, hereinafter referred to as CSD or the Department, and the City of Palo Alto Utilities, hereinafter referred to as Contractor, is for the purpose of making direct credit to the accounts of low-income energy customers of the Contractor that are identified by CSD as payment recipients under CSD's Low-Income Home En,ergy Assistance Program (LIHEAP), which includes the Home Energy Assistance Program (HEAP) and Energy Crisis Intervention Program-Fast Track (ECIP-FT). 1.2 Location of Services -Unless otherwise specified by advanced written notice to Contractor, all services performed by CSD under this Agreement shall be located at: Department of Community Services and Development Energy and Environmental Services Division -Consumer Provider Assistance Unit 2389 Gateway Oaks Way, Suite 100 · Sacramento, California 95833 1.3 Contract Amount Contractor will not receive any direct financial consideration under this Agreement. 1.4 Term The term of this Agreement shall be October 1, 2014 through April 30, 2017. 1.5 Applicable Laws and Requirements All services and activities unde1iaken by the parties in connection with this Agreement shall be performed in accordance with all applicable federal, state, and local laws and regulations, as may be amended from time to time, including any relevant memoranda of understanding and/or other cooperative agreements established between CSD, utility providers, and/or the Public Utilities Commission. 1.6 Notices and Project Coordinators 3 City of Palo Alto Utilities Direct Payment Agreement Agreement No.14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II ARTICLE 2 --CONTRACT CONSTRUCTION, ADMINISTRATION AND PROCEDURE 2.1 Base Contract and Whole Agreement A. This Agreement consists of two parts, which together constitute the whole agreement between CSD and Contractor. B. Part I is the "Base Contract" which consists of the following: 1. The face sheet which specifies: 1. the parties to the Agreement; ii. the term of the Agreement; 111. the maximum dollar amount of the Agreement; and 1v. the authorized signatures and dates of execution. 2. Article 1, Scope of Work, and Article 2, Contract Construction and Procedure. C. Part II consists of the "Administrative and Programmatic Provisions" which are comprised of Subparts A through D, including specified requirements, obligations, provisions,.procedures, guidance, forms, and technical materials necessary for program implementation. 2.2 Budget Contingency'Clause A. It is mutually agreed that if the Budget Act of the current year and/or any subsequent years covered under this Agreement does not appropriate sufficient funds for the program, this Agreement shall be of no further force and effect. In this event, CSD shall have no liability to pay any funds whatsqever to Contractor or to furnish any other considerations under this Agreement and Contractor shall not be obligated to perform any provisions of this Agreement. B. If funding for any fiscal year is reduced or deleted by the State of California Budget Act for purposes of this program, CSD shall have the option to either cancel this Agreement with no liability occmTing to CSD, or offer an agreement amendment to Contractor to reflect the reduced amount. C. Notwithstanding the language in Sections 2.2 A. or B. above, if CSD believes that funds will be insufficient to allow the State to make LIHEAP payments to Contractor i.e., for the reasons described in Section A. or B. above, then CSD 5 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II shall promptly notify Contractor's Project Coordinator. CSD and the Contractor's Project Coordinator shall attempt to amend this Agreement so the LIHEAP payments can continue to the extent possible given the nature of the shortage or unavailability of funding for LIHEAP. The parties agree that it is undesirable to terminate this Agreement for any short-term unavailability of LIHEAP funds and that it would be preferable, if Federal funds are not available for LIHEAP, to suspend LIHEAP until CSD is able to obtain sufficient funding to resume credits to qualified low-income energy customers, as provided for, under LIHEAP. 2.3 Provisions for Federally Funded Contracts A. It is mutually understood between the parties that this Agreement may have been written for the mutual benefit of both parties before ascertaining the availability of congressional appropriation of funds, to avoid program and fiscal delays that would · occur if the Agreement were executed after that determination was made. B. This contract is valid and enforceable only if sufficient funds are made available to CSD by the United States Government for the purpose of this program. In addition, this Agreement is subject to any additional restrictions, limitations, or conditions enacted by Congress or to any statute enacted by Congress that may affect the provisions, terms, or funding of this Agreement in any manner. · C. The parties mutually agree that if Congress does not appropriate sufficient funds for LIHEAP, this Agreement shall be amended to reflect any reduction in funds. D. CSD has the option to void the Agreement under the 30-day cancellation clause or to amend the Agreement to reflect any reduction for funds. E. CSD will notify Contractor's Project Coordinator if federal funds are insufficient for LIHEAP to continue as expected during the next fiscal year or if restrictions, limitations or conditions have been imposed by Congress on the LIHEAP or funding for it as soon as the Federal grant award letter has been issued with some constraint. CSD further agrees that Contractor's willingness to suspend the LIHEAP, as described herein and in Section 5.C. above, does not constitute an agreement by Contractor that: (i) funding for LIHEAP is unimportant or (ii) a delay in crediting a customer with LIHEAP funds is acceptable, to either Contractor or its customers. F. Federal Equal Opportunity Laws During the performance of this Agreement, and to the extent they may be applicable to this Agreement, Contractor agrees to comply with the following: 6 City of Palo Alto Utilities Direct Payment Agreement Agreement No.14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II 1. Federal Executive Order 11246, as amended by Executive Order 11375 relating to equal employment opportunity; 2, Title VI and Title VII of the Civil Rights Act of 1964; as amended; 3. Rehabilitation Act of 1973, as amended; 4. Vietnam Era Veterans Readjustment Assistance Act of 1972, as amended; 5. Title 41, Code of Federal Regulations (CFR), Chapter 60, Office of Federal Contract Compliance Program, Equal Employment Opportunity, Department of Labor, as amended; and 6. Public Law 101-336, Americans with Disability Act of 1990, as amended. 2.4 General Terms and Conditions -"GTC 610" In accordance with State contracting requirements, specified contracting terms and conditions are made a part of this agreement. The provisions in their entirety, previously located in Exhibit C of the Standard LIHEAP contract, are now found in Part II, Subpart C of this Agreement and are fully binding on the parties in accordance with state law. 2.5 Additional Provisions A. Amendment. Changes to this Agreement shall be made by formal amendment with exceptions specified in Section H, below. B. Assignment. Neither this Agreement nor any of the rights, interests, or obligations under this Agreement shall be assigned by any party without the prior written consent of the other paiiies, except in the case where responsibility for program implementation and oversight may be transfeITed by the State to another State agency. In the event of such transfer, this Agreement is binding on the agency to which the program is assigned. C. Cancellation/Te1mination. Either party may terminate this Agreement by giving thirty (30) days' prior written notice to the other party. D. Captions. The captions of the various sections, paragraphs, and subparagraphs are for convenience only and shall not be considered or referred to in resolving questions of interpretations .. E. Dispute Resolution. Unless otherwise mutually agreed to, any disputes between CSD and Contractor regarding the construction or application of this Agreement and claims arising out of this Agreement or its breach shall be submitted to mediation within thirty (30) calendar days of the written request of one party after 7 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II the service of that request on the other party, in accordance with the following procedures: 1. The parties shall make best efforts to settle all disputes arising under this Agreement as a matter of normal business and without recourse to either mediation or litigation. If the parties are unable to resolve a dispute with respect to this Agreement, either party may send a notice to the other requesting a meeting at which senior officers or officials of the parties will attempt to resolve the dispute. If the parties are unable to resolve the dispute within ten (10) days after the meeting notice is received by the party to whom it is directed, or such longer period as the parties may agree, then either party may initiate mediation as set forth herein. 2. Mediation under this section is a condition precedent to filing an action in any court. In the event of litigation that arises out of any dispute related to this Agreement, the parties shall each pay their respective attorney's fees, expert witness costs, and cost of suit, regardless of the outcome the litigation. F. Incidental and Consequential Damages. CSD shall not be liable for incidental or consequential damages including, but not limited to, loss of profits, commitments to subcontractors, rental or lease agreement(s), and personal services contracts, unless expressly authorized in writing by CSD. G. Merger/Entire Agreement. This Agreement (including the attachments, documents and instruments referred to in this Agreement) constitutes the entire agreement and understanding of the parties with respect to the subject matter of this Agreement and supersedes all prior understandings and agreements, whether written or oral, among the parties with respect to such subject matter. H. Minor Modifications. Contractor and/or CSD may request modifications to make minor adjustments during the contract term to implement process improvements and program efficiencies as appropriate. I. Nonwaiver. The waiver by either party of any breach of any term, covenant, or condition contained in this Agreement, or any default in the performance of any obligations under this Agreement, shall not be deemed to be a waiver of any other breach or default of the same or any other term, covenant, condition, or obligation; nor shall any waiver of any incident of breach or default constitute a continuing waiver of the same. All waivers shall be in writing. 8 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II J. Other Agreements. This Agreement shall not prevent either party from entering into similar agreements with others. K. Severability. If any provision of this Agreement be invalid or unenforceable in any respect for any reason, the validity and enforceability of any such provision in any other respect and of the remaining provisions ofthis Agreement will not be in any way impaired and shall remain in full force and effect. L. Subcontracts. No subcontracts shall be permitted under this Agreement; therefore, references to subcontractors or subcontracts as part of standard provisions that have been included herein shall have no applicability. M. Venue. In the event that suit shall be brought by either party to this Agreement, the parties agree that venue shall be exclusive vested in the State Courts of the County of Sacramento, or where otherwise appropriate, exclusively in the United States District Court for the Eastern District of California in Sacramento, California. 9 PART II City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II SUBPART A -ADMINISTRATIVE REQUIREMENTS ARTICLE 3 -ADMINISTRATIVE POLICIES, TERMS AND CONDITIONS 3.1 Confidentiality A. In the course of performing the services under this Agreement, CSD may have access to confidential, commercial, or personal information concerning, but not limited to, technology, rate making, legislative, and personnel matters and practices of the Contractor, its subsidiaries, affiliates, or members of the public. CSD agrees not to disclose any such information without the prior written approval of Contractor. B. Contractor hereby agrees to provide required security to insure the confidential, physical security and safekeeping of all data, information, files, and documents while in its possession. Through the observance of the same or more effective procedural requirements as used by CSD, Contractor will protect from unauthorized use and disclosure all sensitive data, documentation, or other information that are designated confidential by CSD and made available to Contractor in order to carry out this Agreement. CSD shall provide to Contractor, in writing, the identification of all such confidential data and information, as well as CSD procedural requirements for protection of such data and information from unauthorized use and disclosure. C. Any representation herein made by CSD relating to confidentiality or the operations, limitations, and requirements for the furnishing of personnel records, as set forth below in Section 3.4, CSD's Use of Contractor's Property, shall be subject to the Information Practices Act of 1977, Section 1798 et seq. of the California Civil Code, and the California Public Records Act, Section 6250 et seq. of the California Government Code. 3.2 Compliance with Laws and Tax Withholding A. Contractor shall comply with all applicable Federal, State, and local.laws, rules, and regulations and shall obtain all permits required to conduct its business and perform the work called for in this Agreement, if applicable. B. Contractor represents and warrants that it will withhold all taxes, if any, which are required to be withheld under applicable laws with respect to Contractor's 10 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II personnel who perform services for the Contractor. Contractor shall indemnify and hold CSD harmless, on an after-tax basis, for any liability incurred as a result of Contractor's failure to institute any such required withholding. 3.3 Conflict of Interest Contractor shall exercise reasonable care and diligence to prevent any actions or conditions that could result in a conflict with CSD's interest. During the term of this Agreement, Contractor shall not accept any employment or engage in any consulting work that creates a conflict of interest with CSD or in any way compromises the services to be performed under this Agreement. All financial statements, reports, billings, and other documents rendered shall properly reflect the facts about all activities and transactions handled for the account of CSD. 3.4 Contractor's Use of CSD's Property All records, reports, computer programs, written procedures, and similar materials, documents, or data, in whatever form provided by CSD for Contractor's use in performance of services under this Agreement shall remain the confidential property of CSD and shall be returned immediately upon completion of Contractor's use or upon written request of CSD. 3.5 Independent Contractor Contractor, and the agents and employees of Contractor, in the performance of this Agreement, shall act in an independent capacity and not as officers or employees or agents of CSD. 3.6 Insurance Contractor is a self-insured entity. If said coverage no longer prevails, Contractor will notify CSD within thirty (30) days of said coverage expiration. 3. 7 Labor Code/Workers Compensation Both parties affirm that they are aware of the provisions requiring every employer to be insured against liability for Workers' Compensation or to unde1iake self-insurance in accordance with the provisions, and Contractor affirms that it is or shall be in compliance with such provisions before commencing the performance of the work of this Agreement (Labor Code Section 3 700). 11 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II 3.8 Resolution of Governing Entity (Public Utilities) If Contractor is municipal entity or otherwise established by a county, city, district, or other local public body, it must provide a copy of a resolution, order, motion, or ordinance of the public entity authorizing execution of this Agreement. 3.9 Warranty Contractor warrants to CSD that the work under this Agreement shall be performed with the degree of skill and care that is required by current, good, and sound professional procedures and practices and in conformance with generally accepted professional standards prevailing at the time the work is performed, so as to ensure that the services performed are correct and appropriate for the purposes contemplated in this Agreement and related specifications. ( 12 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II SUBPART B-PROGRAMMATIC AND REPORTING REQUIREMENTS ARTICLE 4-PROGRAMMATIC PROVISIONS 4.1 Applicant Eligibility CSD's LIHEAP service provider agencies, and/or CSD personnel in some instances, will process applications and make a determination of applicant's eligibility for utility assistance based upon pre-established criteria in accordance with federal and state LIHEAP requirements. 4.2 Payment Issuance and Processing A. Utility Direct Pay Web Service. CSD will host a Utility Direct Pay Web Service (Web Service). Contractor will use the Web Service in order to receive Direct Pay data records from CSD, and to transmit status and "return credit" results back_ to CSD. The Web Service will replace all current modes of data communication of direct pay data between CSD and Contractor: 1. Contractor must use Web Service operations to retrieve their Direct Pay records and to post resulting statuses for all Direct Pay records received from CSD, (full payments, full credit returns, partial credit returns, and any other pertinent statuses). 2. CSD will no longer accept return statuses via fax, email, or paper transmissions. 3. CSD will provide Contractor with specifications, documentation, sample code, and test client software, as necessary, to enable Contractor's use of the Web Service. B. Funds provided under this Agreement shall be disbursed and applicant accounts credited in accordance with the provisions of the LIHEAP Direct Payment Instructions (Attachment 1 ). Payments shall issue in the form of a State of California warrant, along with a Direct Payment Summaiy (See Subpart D, Attachment 2) via Web Service/FTP transmission. The warrant shall represent the sum total of payments identified in the Direct Payment Summary transmission. C. Upon receipt of the warrant, Contractor shall review the associated FTP transmission "batch run" to identify the customers' accounts to be credited. 13 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II D. Timeliness and Customer Notification of Credit. Contractor shall attempt to credit the accounts of qualified low-income customers by the subsequent billing cycle following the receipt of the transmittal and State of California warrant. Contractor will provide notification of LIHEAP payment to each customer for whom a credit is made. The wording of said notification must contain the words "LIHEAP credit." 4.3 Payment Verification A. Completion of Direct Payment Summary. Within ten (10) working days of processing a batch run of LIHEAP customer credits, Contractor is responsible for completing and returning the Direct Payment Summary to CSD. The Direct Payment Summary must include the following information: 1. Total number of customer accounts where the Contractor was successful in crediting full amount of eligible LIHEAP benefit; 2. Customer accounts where the Contractor was only able to credit a partial amount of the eligible LIHEAP benefit, also referred to as Partial Payment Return; and 3. Customer accounts where the Contractor was unable to credit any of the eligible LIHEAP assistance amount, also referred to as Full Payment Return. B. Undeliverable Benefits. In the event that a credit cannot be posted to a customer's account, Contractor shall make reasonable attempts to identify the account and complete delivery. Contractor shall return any undeliverable LIHEAP benefits to CSD within 60 days of receipt of the warrant. 4.4 Telephone Pledges Under Energy Crisis Intervention Program/Fast Track Customers applying for LIHEAP assistance who have received a shutoff or disconnection notice may qualify for the Energy Crisis Intervention Program or Fast Track (ECIP/Fast Track) as determined by the agency or CSD staff processing the application. In order to carry out the purposes of the program and prevent interruption or loss of energy services, an expedited telephone pledge process may be utilized. A. Only authorized agency or CSD staff may make pledges on behalf of customers determined eligible for ECIP/Fast Track. 14 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSl&II B. Fraud Prevention If Contractor's personnel responsible for receiving pledges have any concerns or questions about the legitimacy of a pledge, or the caller's authority to make pledges, Contractor should notify the agency's contact person or CSD's Project Coordinator (identified in Article 1.4 of this Agreement) immediately to verify the pledge. C. Contractor shall post the pledge amount as a credit pending on the customer's account and shall ensure that any scheduled disconnection or termination process is canceled. D. The agency is responsible for prompt submittal of pledge data to CSD to ensure that Contractor receives the·payment as quickly as possible. To ensure prompt payment on pledges, Contractor shall run a quarterly pledge report as provided below in Article 5.1. 4.5 Assurances A. Contractor shall charge the eligible household, in the normal billing process, the difference between the actual cost of the home energy and the payment amount made by the Department. The actual costs of the home energy shall be consistent with appropriate utility company tariffs as approved by the CPUC, if applicable. B. No customer receiving LIHEAP assistance pursuant to this Agreement will be subjected to disparate or adverse treatment by Contractor due to receipt of such assistance, in accordance with applicable state laws. 15 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II ARTICLE 5 -REPORTING AND RECONCILIATION REQUIREMENTS 5.1 Quarterly Pledge Reports On at least a quarterly basis, Contractor shall provide CSD with a summary pledge report including the following information: A. Number of pledges received during the quarter; B. Average value of pledges; C. Number of pledges during the quarter that expired before receipt of payment; and D. Average number of days between initial receipt of pledges and delivery of benefit to customers' accounts. 5.2 Specific Requests for Additional Pledge Information To allow CSD to investigate and rectify instances of delayed benefit issuance and/or incidents of potential fraud or abuse in the pledge process, Contractor shall, on an as- requested basis, provide CSD with specific information on expired P.ledges, including (but not limited to) name of agency/agency representative making the pledge, name and address of customer, and frequency of pledges. 5.3 Account Reconciliation On no less than an annual basis, Contractor shall review and reconcile Direct Payment Summaries as necessary to ensure that any/all undeliverable LIHEAP benefits have been returned to CSD in accordance with Article 4.3 of this Agreement. 5.4 Additional Reporting Requirements Any further reports necessary to carry out the purposes of this Agreement are detailed in the LIHEAP Direct Payment Instructions and the attachments thereto in Subpart D. 16 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II SUBPART C -GENERAL TERMS & CONDITIONS ARTICLE 6 --GENERAL TERMS AND CONDITIONS -GTC 610 1. APPROVAL: This Agreement is of no force or effect until signed by both parties and approved by the Department of General Services, if required. Contractor may not commence performance until such approval has been obtained. 2. AMENDMENT: No amendment or variation of the terms of this Agreement shall be valid unless made in writing, signed by the parties and approved as required. No oral . understanding or Agreement not incorporated in the Agreement is binding on any of the parties. · 3. ASSIGNMENT: This Agreement is not assignable by the Contractor, either in whole or in part, without the consent of the State in the form of a formal written amendment. 4. AUDIT: Contractor agrees that the awarding department, the Department of General Services, the Bureau of State Audits, or their designated representative shall have the right to review and to copy any records and supporting documentation pertaining to the performance of this Agreement. Contractor agrees to maintain such records for possible audit for a minimum of three (3) years after final payment, unless a longer period of records retention is stipulated. Contractor agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records. Further, Contractor agrees to include a similar right of the State to audit records and interview staff in any subcontract related to performance of this Agreement. (Gov. Code §8546.7,.Pub. Contract Code § 10115 et seq., CCR Title 2, Section 1896). 5. INDEMNIFICATION: Contractor agrees to indemnify, defend and save haimless the State, its officers, agents and employees from any and all claims and. losses accruing or resulting to any and all contractors, subcontractors, suppliers, laborers, and' any other person, firm or corporation furnishing or supplying work services, materials, or supplies in connection with the performance of this Agreement, and from any and all claims and losses accruing or resulting to any person, firm or corporation who may be injured or damaged by Contractor in the perf01mance of this Agreement. 6. DISPUTES: Contractor shall continue with the responsibilities under this Agreement during any dispute. 7. TERMINATION FOR CAUSE: The State may te1minate this Agreement and be relieved of any payments should the Contractor fail to perform the requirements of this Agreement at the time and in the manner herein provided. In the event of such 17 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSl&II termination the State may proceed with the work in any manner deemed proper by the State. All costs to the State shall be deducted from any sum due the Contractor under this Agreement and the balance, if any, shall be paid to the Contractor upon demand. 8. INDEPENDENT CONTRACTOR: Contractor, and the agents and employees of · Contractor, in the performance of this Agreement, shall act in an independent capacity and not as officers or employees or agents of the State. 9. ·RECYCLING CERTIFICATION: Contractor shall certify in writing under penalty of perjury, the minimum, if not exact, percentage of post-consumer material as defined in the Public Contract Code Section 12200, in products, materials, goods, or supplies offered or sold to the State regardless of whether the product meets the requirements of Public Contract Code Section 12209. With respect to printer or duplication cartridges that comply with the requirements of Section 12156(e), the certification required by this subdivision shall specify that the cartridges so comply (Pub. Contract Code § 12205). 10. NON-DISCRIMINATION CLAUSE: During the performance of this Agreement, Contractor and its subcontractors shall not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex, race, color, ancestry, religious creed, national origin, physical disability (including HIV and AIDS), mental disability, medical condition (e.g., cancer), age (over 40), marital status, and denial of family care leave. Contractor and subcontractors shall insure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. Contractor and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code §12990 (a-f) et seq.) and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code Section 12990 (a-f), set foiih in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations, are incorporated into this Agreement by reference and made a paii hereof as if set foiih in full. Contractor and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other Agreement. Contractor shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perfo1m work under the Agreement. 11. CERTIFICATION CLAUSES: The CONTRACTOR CERTIFICATION CLAUSES contained in the document CCC 307 are hereby incorporated by reference and made a part of this Agreement by this reference as if attached hereto. 12. TIMELINESS: Time is of the essence in this Agreement. 18 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II 13. COMPENSATION: The consideration to be paid Contractor, as provided herein, shall be in compensation for all of Contractor's expenses incurred in the performance hereof, including travel, per diem, and t~xes, unless otherwise expressly so provided. 14. GOVERNING LAW: This contract is governed by and shall be interpreted in accordance with the laws of the State of California. 15. ANTITRUST CLAIMS: The Contractor by signing this agreement hereby certifies that if these services or goods a:t;e obtained by means of a competitive bid, the Contractor shall comply with the requirements of the Government Codes Sections set out below: a. The Government Code Chapter on Antitrust claims contains the following definitions: 1) "Public purchase" means a purchase by means of competitive bids of goods, services, or materials by the State or any of its political subdivisions or public agencies on whose behalf the Attorney General may bring an action pursuant to subdivision (c) of Section 16750 of the Business and Professions Code. 2) "Public purchasing body" means the State or the subdivision or agency making a public purchase. Government Code Section 4550. b. In submitting a bid to a public purchasing body, the bidder offers and agrees that if the bid is accepted, it will assign to the purchasing body all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Caiiwright Act (Chapter 2 (commencing. with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, materials, or services by the bidder for sale to the purchasing body pursuant to the bid. Such assignment shall be made and become effective at the time the purchasing body tenders final payment to the bidder. Government Code Section 4552. c. If an awarding body or public purchasing body receives, either through judgment or settlement, a monetary recovery for a cause of action assigned under this chapter, the assignor shall be entitled to receive reimbursement for actual legal costs incuned and may, upon demand, recover from the public body any portion of the recovery, including treble damages, attributable to overcharges that were paid by the assignor but were not paid by the public body as part of the bid price, less the expenses incurred in obtaining that pmiion of the recovery. Government Code Section 4553. 19 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II d. Upon demand in writing by the assignor, the assignee shall, within one year from such demand, reassign the cause of action assigned under this part if the assignor has been or may have been injured by the violation of law for which the cause of action arose and (a) the assignee has not been injured thereby, or (b) the assignee declines to file a court action for the cause of action. See Government Code Section 4554. 16. CHILD SUPPORT COMPLIANCE ACT: For any Agreement in excess of $100,000, the contractor acknowledges in accordance with Public Contract Code 7110, that: a. The Contractor recognizes the importance of child and family support obligations and shall fully comply with all applicable state and federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with section 5200) of Part 5 of Division 9 of the Family Code; and b. The contractor, to the best of its knowledge is fully complying with the earnings assignment orders of all employees and is providing the names of all new employees to the New Hire Registry maintained by the California Employment Development Department. 17. UNENFORCEABLE PROVISION: In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. 18. PRIORITY HIRING CONSIDERATIONS: If this Contract includes services in excess of $200,000, the Contractor shall giv~ priority consideration in filling vacancies in positions funded by the Contract to qualified recipients of aid under Welfare and Institutions Code Section 11200 in accordance with Pub. Contract Code§ 10353. 19. SMALL BUSINESS PARTICIPATION AND DVBE PARTICIPATION REPORTING REQUIREMENTS: a. If for this Contract Contractor made a commitment to achieve small business participation, then Contractor must within 60 days of receiving final payment under this Contract (or within such other time period as may be specified elsewhere in this Contract) report to the awarding department the actual percentage of small business participation that was achieved. (Govt. Code § 14841.) 20 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II b. If for this Contract Contractor made a commitment to achieve disabled veteran business enterprise (DVBE) participation, then Contractor must within 60 days of receiving final payment under this Contract (or within such other time period as may be specified elsewhere in this Contract) certify in a report to the awarding department: (1) the total amount the prime Contractor received under the Contract; (2) the name and address of the DVBE(s) that participated in the performance of the Contract; (3) the amount each DVBE received from the prime Contractor; ( 4) that all payments under the Contract have been made to the DVBE; and (5) the actual percentage ofDVBE participation that was achieved. A person or entity that knowingly provides false information shall be subject to a civil penalty for each violation. (Mil. & Vets. Code§ 999.S(d); Govt. Code§ 14841.) 20. LOSS LEADER: If this Contract involves the furnishing of equipment, materials, or supplies then the following statement is incorporated: It is unlawful for any person engaged in business within this state to sell or use any article or product as a "loss leader" as defined in Section 17030 of the Business and Professions Code. (PCC 10344(e).) 21 City of Palo Alto Utilities Direct Payment Agreement Agreement No. 14Y-1419 DIRECT PAYMENT AGREEMENT PARTSI&II SUBPART D -FORMS AND ATTACHMENTS T:\Direct Payment\2014 Direct Payment\Contracts\14Y-1419.Docx 22 (October 1, 2014 -April 30, 2017 Direct Pay Agreement) Direct Payment LIHEAP Direct Payment Instructions and Samples • Attachment 1 -Direct Payment Instructions • Attachment 2 -HEAP Direct Payment Summary (October 1, 2014 -April 30, 2017 Direct Pay Agreement) ATTACHMENT 1 LIHEAP DIRECT PAYMENT INSTRUCTIONS HOW TO MAKE A MATCH OPEN ACCOUNTS: If an applicant's utility account is open at the time a LIHEAP payment is received, the full amount of the payment can be applied even if it creates a credit to the account. It is incumbent upon your company to match payments to the correct account and customer of record to which the LIHEAP applicant has directed the benefit. For this purpose, both the "Customer of Record" and last name of the LIHEAP applicant, "Applicant Last Name" has been provided, as well as an account number and service address. CLOSED ACCOUNTS: If, at the time the LIHEAP benefit is to be applied, and the applicant's reported utility account is closed, you must select and complete one of the three options below: 1.) A match can be made with an applicant's new account within the same utility company. 2.) If the account is CLOSED with an outstanding balance owed, a partial payment can be made and the difference refunded to CSD with a notation on your printout. 3.) If the account is CLOSED with no outstanding balance, the total amount of LIHEAP benefit should be returned to CSD with a notation on your printout. HOW TO NOTIFY CSD OF PARTIALS AND/OR NON-MATCHES 1.) PRINTOUTS: • Provide the name of the customer of record to whose account the partial payment was applied. • Note beside the LIHEAP payment the amount that is being returned to CSD (the difference between the CSD payment and the returned amount is the amount which was credited to the customer of record). If there is a 100% refund to CSD, note the total LIHEAP payment amount. • Return the LIHEAP DIRECT PAYMENT SUMMARY SHEET, which accompanies each run of selected payment records, with the number of partials and/or non-matches (See Attachment 2). 1 (October 1, 2014 -April 30, 2017 Direct Pay Agreement) • Attach a check made payable to CSD and return your printout/customer information (with partials/non-matches information) and summary page to: The Department of Community Services and Development Energy and Environmental Services 2389 Gateway Oaks Drive, Suite 100 Sacramento, CA 95833 WHAT IF ALL RECORDS ARE MATCHES If you find that all records on a specific run are matches to your client database, you need to notify CSD on the LIHEAP Direct Payment Summary. In the case of a 100% match, the figure in the "Run$ Total" column would be the same amount as the amount in the "Total $ Match" column (Attachment 2). 2 City of Palo Alto (ID # 5211) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: Mitchell Park Parking Lot Resurfacing Title: Approval of a Construction Contract with G. Bortolotto & Co. Inc., Contractors in the Amount of $333,824, for the Mitchell Park Parking Lot Project (CIP PE-09003) From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1. Approve, and authorize the City Manager or his designee to execute, the attached contract with G. Bortolotto & Co., Inc. (Attachment A) in an amount not to exceed $333,824 for the Mitchell Park Parking Lot Project, Capital Improvement Program Project PE-09003; and 2. Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with G. Bortolotto & Co., Inc. for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $33,382. Background The Public Works Engineering Services Division is managing the construction contracts for the City Facility Parking Lot Maintenance Capital Improvement Program project (CIP) PE-09003. This project provides for the repair, resurfacing, or reconstruction of parking lots and walkways at various City facilities, including restriping and signage. All City parking lots were inspected by engineering staff and rated similar to a city street. These ratings were used to help prioritize the list of City parking lots which need to be repaved. City of Palo Alto Page 2 Discussion Project Description This contract will repave the existing Mitchell Park Parking Lot in order to better serve the park and the new library and community center. Paving work will occur in the existing park parking lot and will not affect the newly constructed parking lot at the adjacent Mitchell Park Library and Community Center. See Attachment B for project map. Staff is recommending approval of this contract for Fiscal Year 2015 as part of an enhanced program to improve the condition of Palo Alto’s facility parking lots. The work included in this project provides 1,500 tons of asphalt overlay, 450 linear feet of curb and gutter replacement, the installation of three new curb ramps and the retrofitting of four existing ramps with the installation of truncated dome detectable warning tiles. All work will be performed within the Mitchell Park Parking Lot. This contract also includes thermoplastic striping work to replace the existing striping. Additional signage and striping will be included in order to ensure drivers use the traffic circle in the middle of the parking lot appropriately. Extensive public outreach will be conducted before and during construction phase to inform the community throughout the repaving process. This outreach will include flyers sent to adjacent residences and businesses; notices posted on Nextdoor and the City’s website; and signs posted throughout the parking lot itself. In addition, staff will interface with neighborhood associations, and other organizations and businesses as appropriate. The paving work is scheduled to take place during the holiday break to minimize disruption for children who use the parking lot to access nearby schools. Bid Process On October 7, 2014, a notice inviting formal bids (IFB) for the Mitchell Park Parking Lot Project was posted at City Hall, and was sent to 12 builder’s exchanges and 20 contractors. The bidding period was 21 calendar days. Bids were received from 11 qualified contractors on October 28, 2014 as listed on the attached Bid Summary (Attachment C). Summary of Bid Process Bid Name/Number Mitchell Park Parking Lot IFB #156608 City of Palo Alto Page 3 Proposed Length of Project 40 calendar days Number of Bid Packages emailed to Contractors 20 Number of Bid Packages emailed to Builder’s Exchanges 12 Total Days to Respond to Bid 21 Pre-Bid Meeting? No Number of Bids Received: 11 Base Bid Price Range From a low of $333,824 to a high of $427,860 Base bids ranged from a high of $427,860 to a low bid of $333,824 and ranged from 8.7% below to 17% above the engineer’s estimate. Staff has reviewed all bids submitted and recommends that the base bid totaling $333,821 submitted by G. Bortolotto & Co., Inc. be accepted and that G. Bortolotto & Co., Inc. be declared the lowest responsible bidder. The change order amount of $33,382, which equals 10 percent of the total contract, is requested for related, additional, but unforeseen work which may develop during the project. The lowest responsible bidder, G. Bortolotto & Co., Inc. has not worked with the City on previous resurfacing projects. Staff investigated the references and found no significant complaints. Staff also checked with the Contractor's State License Board and found that the contractor has an active license on file. Resource Impact Funding for this project is available in CIP Project PE-09003 City Facility Parking Lot Maintenance. Policy Implications This project is in conformance with City of Palo Alto’s Comprehensive Plan and does not represent any changes to existing City policies. Environmental Review This proposed parking lot resurfacing project is a minor alteration and repair to existing facilities and is categorically exempt from the California Environmental Quality Act (CEQA) section 15301c guidelines. Attachments: City of Palo Alto Page 4  A: Contract (PDF)  B: Project Map (PDF)  B: Bid Summary (PDF)  C: Bid Summary (PDF) ATTACHMENT A                    CONSTRUCTION CONTRACT    Contract No. C15156608      City of Palo Alto    and    G. Bortolotto & Co., Inc.    PROJECT:    Mitchell Park Parking Lot Project       Invitation for Bid (IFB) Package  2 Rev. January 2014  CONSTRUCTION CONTRACT    CONSTRUCTION CONTRACT  TABLE OF CONTENTS    SECTION 1  INCORPORATION OF RECITALS AND DEFINITIONS. ......................................................... 5  1.1 Recitals. ................................................................................................................................................... 5  1.2 Definitions. ............................................................................................................................................ 5  SECTION 2  THE PROJECT. .................................................................................................................... 5  SECTION 3  THE CONTRACT DOCUMENTS. ......................................................................................... 5  SECTION 4  CONTRACTOR’S DUTY. ...................................................................................................... 6  SECTION 5  PROJECT TEAM. ................................................................................................................. 7  6.1 Time Is of Essence. .............................................................................................................................. 7  6.2 Commencement of Work. ................................................................................................................ 7  6.3 Contract Time. ...................................................................................................................................... 7  6.4 Liquidated Damages. .......................................................................................................................... 7  6.4.1       Other Remedies. ....................................................................................................... 7    6.5 Adjustments to Contract Time. ....................................................................................................... 8  SECTION 7  COMPENSATION TO CONTRACTOR. ................................................................................ 8  7.1 Contract Sum. ....................................................................................................................................... 8  7.2 Full Compensation. ............................................................................................................................. 8  SECTION 8  STANDARD OF CARE. ........................................................................................................ 8  SECTION 9  INDEMNIFICATION. ........................................................................................................... 8  9.1 Hold Harmless. ..................................................................................................................................... 8  9.2 Survival. .................................................................................................................................................. 9  SECTION 10  NONDISCRIMINATION. ................................................................................................... 9  SECTION 11  INSURANCE AND BONDS. ............................................................................................... 9  SECTION 12  PROHIBITION AGAINST TRANSFERS............................................................................... 9  SECTION 13 NOTICES ……………………………………………………………………………………………………………………. 10  13.1 Method of Notice ………………………………………………………………………………………………………………10  13.2 Notice Recipents ……………………………………………………………………………………………………………….10  13.3 Change of Address. ........................................................................................................................... 10  SECTION 14  DEFAULT. ......................................................................................................................... 11    Invitation for Bid (IFB) Package  3 Rev. January 2014  CONSTRUCTION CONTRACT    14.1 Notice of Default. .............................................................................................................................. 11  14.2 Opportunity to Cure Default. ........................................................................................................ 11  SECTION 15  CITY'S RIGHTS AND REMEDIES. ...................................................................................... 11  15.1 Remedies Upon Default. ................................................................................................................. 11  15.1.1   Delete Certain Services. .......................................................................................... 11  15.1.2   Perform and Withhold. ........................................................................................... 11  15.1.3   Suspend The Construction Contract. .................................................................... 11  15.1.5   Invoke the Performance Bond. .............................................................................. 12  15.1.6   Additional Provisions. ............................................................................................. 12    15.2 Delays by Sureties. ............................................................................................................................ 12  15.3 Damages to City. ................................................................................................................................ 12  15.3.1   For Contractor's Default. ........................................................................................ 12  15.3.2   Compensation for Losses. ...................................................................................... 12    15.4 Suspension by City ............................................................................................................................ 13   15.4.1  Suspension for Convenience. .......................................................................................... 13  15.5 Termination Without Cause. ......................................................................................................... 13  15.5.1   Compensation. ......................................................................................................... 13  15.5.2   Subcontractors. ........................................................................................................ 14  15.6 Contractor’s Duties Upon Termination. ..................................................................................... 14  SECTION 16  CONTRACTOR'S RIGHTS AND REMEDIES. ...................................................................... 14  16.1 Contractor’s Remedies. ................................................................................................................... 14  16.1.1   For Work Stoppage. ................................................................................................. 15  16.1.2   For City's Non‐Payment. ......................................................................................... 15    16.2 Damages to Contractor. .................................................................................................................. 15  SECTION 17  ACCOUNTING RECORDS. ................................................................................................ 15  17.1 Financial Management and City Access. ................................................................................... 15  17.2 Compliance with City Requests. ................................................................................................... 15  SECTION 18  INDEPENDENT PARTIES. ................................................................................................. 15  SECTION 19  NUISANCE. ...................................................................................................................... 16  SECTION 20  PERMITS AND LICENSES. ................................................................................................ 16  SECTION 21  WAIVER. .......................................................................................................................... 16  SECTION 22  GOVERNING LAW AND VENUE. ...................................................................................... 16    Invitation for Bid (IFB) Package  4 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 23  COMPLETE AGREEMENT. ................................................................................................ 16  SECTION 24  SURVIVAL OF CONTRACT. ............................................................................................... 16  SECTION 25  PREVAILING WAGES. ...................................................................................................... 16  SECTION 26  NON APPROPRIATION. ................................................................................................... 17  SECTION 27  AUTHORITY. .................................................................................................................... 17  SECTION 28  COUNTERPARTS .............................................................................................................. 17  SECTION 29  SEVERABILITY. ................................................................................................................. 17  SECTION 30  STATUTORY AND REGULATORY REFERENCES . ............................................................. 17  SECTION 31 WORKERS’ COMPENSATION CERTIFICATION. ................................................................ 17                   Invitation for Bid (IFB) Package  5 Rev. January 2014  CONSTRUCTION CONTRACT    CONSTRUCTION CONTRACT    THIS CONSTRUCTION CONTRACT entered into on November 17, 2014 (“Execution Date”) by and between  the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and G. Bortolotto & Co., Inc.  ("Contractor"), is made with reference to the following:    R E C I T A L S:    A. City is a municipal corporation duly organized and validly existing under the laws of the State of  California with the power to carry on its business as it is now being conducted under the statutes of the  State of California and the Charter of City.    B. Contractor is a California corporation duly organized and in good standing in the State of  California, Contractor’s License Number 397341. Contractor represents that it is duly licensed by the State  of California and has the background, knowledge, experience and expertise to perform the obligations set  forth in this Construction Contract.    C. On October 7, 2014, City issued an Invitation for Bids (IFB) to contractors for the Mitchell Park  Parking Lot Project (“Project”).  In response to the IFB, Contractor submitted a Bid.    D. City and Contractor desire to enter into this Construction Contract for the Project, and other  services as identified in the Contract Documents for the Project upon the following terms and conditions.    NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth  and for other good and valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, it is mutually agreed by and between the undersigned parties as follows:    SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS.    1.1 Recitals.    All of the recitals are incorporated herein by reference.    1.2 Definitions.    Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the  General Conditions.  If there is a conflict between the definitions in this Construction Contract and  in the General Conditions, the definitions in this Construction Contract shall prevail.  SECTION 2 THE PROJECT.    The Project is the Mitchell Park Parking Lot, located at 600 E. Meadow Drive, Palo Alto, CA. ("Project").    SECTION 3 THE CONTRACT DOCUMENTS.    3.1  List of Documents.  The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist  of the following documents which are on file with the Purchasing Division and are hereby incorporated by  reference.       1) Change Orders    Invitation for Bid (IFB) Package  6 Rev. January 2014  CONSTRUCTION CONTRACT      2) Field Orders    3) Contract    4) Bidding Addenda    5) Special Provisions    6) General Conditions    7)    Project Plans and Drawings    8)    Technical Specifications    9) Instructions to Bidders    10) Invitation for Bids    11) Contractor's Bid/Non‐Collusion Affidavit    12)   Reports listed in the Contract Documents    13)   Public Works Department’s Standard Drawings and Specifications (most current version at  time of Bid)    14) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current  version at time of Bid)    15)  City of Palo Alto Traffic Control Requirements    16)  City of Palo Alto Truck Route Map and Regulations    17) Notice Inviting Pre‐Qualification Statements, Pre‐Qualification Statement, and Pre‐ Qualification Checklist (if applicable)    18) Performance and Payment Bonds    3.2  Order of Precedence.    For the purposes of construing, interpreting and resolving inconsistencies between and among the  provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the  preceding section.  If a claimed inconsistency cannot be resolved through the order of precedence, the City  shall have the sole power to decide which document or provision shall govern as may be in the best  interests of the City.  SECTION 4 CONTRACTOR’S DUTY.    Contractor agrees to perform all of the Work required for the Project, as specified in the Contract  Documents, all of which are fully incorporated herein.  Contractor shall provide, furnish, and supply all  things necessary and incidental  for the timely performance and completion of the Work, including, but not  limited to, provision of all necessary labor, materials, equipment, transportation, and utilities, unless    Invitation for Bid (IFB) Package  7 Rev. January 2014  CONSTRUCTION CONTRACT    otherwise specified in the Contract Documents.  Contractor also agrees to use its best efforts to complete  the Work in a professional and expeditious manner and to meet or exceed the performance standards  required by the Contract Documents.  SECTION 5 PROJECT TEAM.    In addition to Contractor, City has retained, or may retain, consultants and contractors to provide  professional and technical consultation for the design and construction of the Project.  The Contract  requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other  members of the Project Team and other contractors retained by City to construct other portions of the  Project.    SECTION 6 TIME OF COMPLETION.    6.1 Time Is of Essence.    Time is of the essence with respect to all time limits set forth in the Contract Documents.    6.2 Commencement of Work.    Contractor shall commence the Work on the date specified in City’s Notice to Proceed.       6.3 Contract Time.    Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be  completed    not later than January 16, 2015.   within xx calendar days (xx) after the commencement date specified in City’s Notice to  Proceed.    By executing this Construction Contract, Contractor expressly waives any claim for delayed early  completion.  6.4 Liquidated Damages.  Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial  Completion of the entire Work within the Contract Time, including any approved extensions  thereto, City may assess liquidated damages on a daily basis for each day of Unexcused Delay in  achieving Substantial Completion, based on the amount of Five Hundred dollars ($500.00) per  day, or as otherwise specified in the Special Provisions. Liquidated damages may also be  separately assessed for failure to meet milestones specified elsewhere in the Contract  Documents, regardless of impact on the time for achieving Substantial Completion.  The  assessment of liquidated damages is not a penalty but considered to be a reasonable estimate of  the amount of damages City will suffer by delay in completion of the Work.  The City is entitled to  setoff the amount of liquidated damages assessed against any payments otherwise due to  Contractor, including, but not limited to, setoff against release of retention.  If the total amount of  liquidated damages assessed exceeds the amount of unreleased retention, City is entitled to  recover the balance from Contractor or its sureties.  Occupancy or use of the Project in whole or in  part prior to Substantial Completion, shall not operate as a waiver of City’s right to assess  liquidated damages.    6.4.1 Other Remedies.    City is entitled to any and all available legal and equitable remedies City may have where City’s  Losses are caused by any reason other than Contractor’s failure to achieve Substantial Completion  of the entire Work within the Contract Time.      Invitation for Bid (IFB) Package  8 Rev. January 2014  CONSTRUCTION CONTRACT    6.5 Adjustments to Contract Time.    The Contract Time may only be adjusted for time extensions approved by City and memorialized  in a Change Order approved in accordance with the requirements of the Contract Documents.  SECTION 7 COMPENSATION TO CONTRACTOR.     7.1 Contract Sum.    Contractor shall be compensated for satisfactory completion of the Work in compliance with the  Contract Documents the Contract Sum of three hundred thirty three thousand, eight hundred and  twenty four dollars ($333,824).       [This amount includes the Base Bid.]    7.2 Full Compensation.    The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor  and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all  Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties  or obstructions which may arise or be encountered in performance of the Work until its Acceptance by  City, all risks connected with the Work, and any and all expenses incurred due to suspension or  discontinuance of the Work, except as expressly provided herein.  The Contract Sum may only be adjusted  for Change Orders approved in accordance with the requirements of the Contract Documents.         SECTION 8 STANDARD OF CARE.    Contractor agrees that the Work shall be performed by qualified, experienced and well‐supervised  personnel.  All services performed in connection with this Construction Contract shall be performed in a  manner consistent with the standard of care under California law applicable to those who specialize in  providing such services for projects of the type, scope and complexity of the Project.     SECTION 9 INDEMNIFICATION.    9.1 Hold Harmless.    To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its  City Council, boards and commissions, officers, agents, employees, representatives and volunteers  (hereinafter individually referred to as an “Indemnitee” and collectively referred to as  "Indemnitees"), through legal counsel acceptable to City, from and against any and liability, loss,  damage, claims, expenses (including, without limitation, attorney fees, expert witness fees,  paralegal fees, and fees and costs of litigation or arbitration) (collectively, “Liability”) of every  nature arising out of or in connection with the acts or omissions of Contractor, its employees,  Subcontractors, representatives, or agents, in performing the Work or its failure to comply with  any of its obligations under the Contract, except such Liability caused by the active negligence,  sole negligence, or willful misconduct of an Indemnitee.  Contractor shall pay City for any costs  City incurs to enforce this provision.  Except as provided in Section 9.2 below, nothing in the  Contract Documents shall be construed to give rise to any implied right of indemnity in favor of  Contractor against City or any other Indemnitee.      Invitation for Bid (IFB) Package  9 Rev. January 2014  CONSTRUCTION CONTRACT    Pursuant to Public Contract Code Section 9201, City shall timely notify Contractor upon receipt of  any third‐party claim relating to the Contract.    9.2 Survival.    The provisions of Section 9 shall survive the termination of this Construction Contract.    SECTION 10 NONDISCRIMINATION.    As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of  this Agreement, it shall not discriminate in the employment of any person because of the race, skin color,  gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,  familial status, weight or height of such person. Contractor acknowledges that it has read and understands  the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination  Requirements and the penalties for violation thereof, and will comply with all requirements of Section  2.30.510 pertaining to nondiscrimination in employment.    SECTION 11 INSURANCE AND BONDS.    Within ten (10) business days following issuance of the Notice of Award, Contractor shall provide City with  evidence that it has obtained insurance and shall submit Performance and Payment Bonds satisfying all  requirements in Article 11 of the General Conditions.      SECTION 12 PROHIBITION AGAINST TRANSFERS.    City is entering into this Construction Contract in reliance upon the stated experience and qualifications of  the Contractor and its Subcontractors set forth in Contractor’s Bid.  Accordingly, Contractor shall not  assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by  operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or  transfer without said consent shall be null and void, and shall be deemed a substantial breach of contract  and grounds for default in addition to any other legal or equitable remedy available to the City.    The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of  Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor  is a partnership or joint venture or syndicate or co‐tenancy shall result in changing the control of  Contractor, shall be construed as an assignment of this Construction Contract. Control means more than  fifty percent (50%) of the voting power of the corporation or other entity.     SECTION 13 NOTICES.    13.1 Method of Notice.    All notices, demands, requests or approvals to be given under this Construction Contract shall be given in  writing and shall be deemed served on the earlier of the following:  (i) On the date delivered if delivered personally;  (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and   addressed as hereinafter provided;   (iii) On the date sent if sent by facsimile transmission;   (iv) On the date sent if delivered by electronic mail; or   (v) On the date it is accepted or rejected if sent by certified mail.     Invitation for Bid (IFB) Package  10 Rev. January 2014  CONSTRUCTION CONTRACT      13.2 Notice Recipients.     All notices, demands or requests (including, without limitation, Change Order Requests and  Claims) from Contractor to City shall include the Project name and the number of this  Construction Contract and shall be addressed to City at:      To City:  City of Palo Alto     City Clerk     250 Hamilton Avenue     P.O. Box 10250     Palo Alto, CA 94303     Copy to:   City of Palo Alto     Public Works Engineering     250 Hamilton Avenue     Palo Alto, CA 94301     Attn: Holly Boyd        AND       City of Palo Alto     Utilities Engineering     250 Hamilton Avenue     Palo Alto, CA 94301     Attn:             In addition, copies of all Claims by Contractor under this Construction Contract shall be provided  to the following:    Palo Alto City Attorney’s Office  250 Hamilton Avenue  P.O. Box 10250  Palo Alto, California 94303       All Claims shall be delivered personally or sent by certified mail.    All notices, demands, requests or approvals from City to Contractor shall be addressed to:    City of Palo Alto     Public Works Engineering     250 Hamilton Avenue     Palo Alto, CA 94301     Attn: Holly Boyd      13.3 Change of Address.    In advance of any change of address, Contractor shall notify City of the change of address in  writing.  Each party may, by written notice only, add, delete or replace any individuals to whom  and addresses to which notice shall be provided.      Invitation for Bid (IFB) Package  11 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 14 DEFAULT.    14.1 Notice of Default.    In the event that City determines, in its sole discretion, that Contractor has failed or refused to  perform any of the obligations set forth in the Contract Documents, or is in breach of any  provision of the Contract Documents, City may give written notice of default to Contractor in the  manner specified for the giving of notices in the Construction Contract, with a copy to  Contractor’s performance bond surety.    14.2 Opportunity to Cure Default.  Except for emergencies, Contractor shall cure any default in performance of its obligations under  the Contract Documents within two (2) Days (or such shorter time as City may reasonably require)  after receipt of written notice. However, if the breach cannot be reasonably cured within such  time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as  City may reasonably require) and will diligently and continuously prosecute such cure to  completion within a reasonable time, which shall in no event be later than ten (10) Days after  receipt of such written notice.    SECTION 15 CITY'S RIGHTS AND REMEDIES.    15.1 Remedies Upon Default.    If Contractor fails to cure any default of this Construction Contract within the time period set forth  above in Section 14, then City may pursue any remedies available under law or equity, including,  without limitation, the following:    15.1.1 Delete Certain Services.    City may, without terminating the Construction Contract, delete certain portions of the Work,  reserving to itself all rights to Losses related thereto.    15.1.2 Perform and Withhold.    City may, without terminating the Construction Contract, engage others to perform the Work or  portion of the Work that has not been adequately performed by Contractor and withhold the cost  thereof to City from future payments to Contractor, reserving to itself all rights to Losses related  thereto.    15.1.3 Suspend The Construction Contract.    City may, without terminating the Construction Contract and reserving to itself all rights to Losses  related thereto, suspend all or any portion of this Construction Contract for as long a period of  time as City determines, in its sole discretion, appropriate, in which event City shall have no  obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor  for damages if City directs Contractor to resume Work.    15.1.4 Terminate the Construction Contract for Default.    City shall have the right to terminate this Construction Contract, in whole or in part, upon the  failure of Contractor to promptly cure any default as required by Section 14.  City’s election to  terminate the Construction Contract for default shall be communicated by giving Contractor a  written notice of termination in the manner specified for the giving of notices in the Construction  Contract.  Any notice of termination given to Contractor by City shall be effective immediately,  unless otherwise provided therein.      Invitation for Bid (IFB) Package  12 Rev. January 2014  CONSTRUCTION CONTRACT    15.1.5 Invoke the Performance Bond.    City may, with or without terminating the Construction Contract and reserving to itself all rights to  Losses related thereto, exercise its rights under the Performance Bond.    15.1.6 Additional Provisions.    All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in  addition to those rights and remedies available in law or in equity.  Designation in the Contract  Documents of certain breaches as material shall not waive the City’s authority to designate other  breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the  City from terminating the Agreement for breaches that are not material.  City’s determination of  whether there has been noncompliance with the Construction Contract so as to warrant exercise  by City of its rights and remedies for default under the Construction Contract, shall be binding on  all parties.  No termination or action taken by City after such termination shall prejudice any other  rights or remedies of City provided by law or equity or by the Contract Documents upon such  termination; and City may proceed against Contractor to recover all liquidated damages and  Losses suffered by City.    15.2 Delays by Sureties.      Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange  for completion of the Work in accordance with the Performance Bond, within seven (7) calendar  days from the date of the notice of termination, Contractor’s surety shall be deemed to have  waived its right to complete the Work under the Contract, and City may immediately make  arrangements for the completion of the Work through use of its own forces, by hiring a  replacement contractor, or by any other means that City determines advisable under the  circumstances.  Contractor and its surety shall be jointly and severally liable for any additional cost  incurred by City to complete the Work following termination.  In addition, City shall have the right  to use any materials, supplies, and equipment belonging to Contractor and located at the  Worksite for the purposes of completing the remaining Work.    15.3 Damages to City.    15.3.1 For Contractor's Default.    City will be entitled to recovery of all Losses under law or equity in the event of Contractor’s  default under the Contract Documents.     15.3.2 Compensation for Losses.   In the event that City's Losses arise from Contractor’s default under the Contract Documents, City  shall be entitled to deduct the cost of such Losses from monies otherwise payable to Contractor.   If the Losses incurred by City exceed the amount payable, Contractor shall be liable to City for the  difference and shall promptly remit same to City.      Invitation for Bid (IFB) Package  13 Rev. January 2014  CONSTRUCTION CONTRACT    15.4 Suspension by City      15.4.1 Suspension for Convenience.    City may, at any time and from time to time, without cause, order Contractor, in writing, to  suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an  aggregate of fifty percent (50%) of the Contract Time.  The order shall be specifically identified as  a Suspension Order by City.  Upon receipt of a Suspension Order, Contractor shall, at City’s  expense, comply with the order and take all reasonable steps to minimize costs allocable to the  Work covered by the Suspension Order.  During the Suspension or extension of the Suspension, if  any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered  by the Suspension Order.  If a Suspension Order is canceled or expires, Contractor shall resume  and continue with the Work.  A Change Order will be issued to cover any adjustments of the  Contract Sum or the Contract Time necessarily caused by such suspension.    A Suspension Order  shall not be the exclusive method for City to stop the Work.    15.4.2 Suspension for Cause.  In addition to all other remedies available to City, if Contractor fails to perform or correct work in  accordance with the Contract Documents, City may immediately order the Work, or any portion  thereof, suspended until the cause for the suspension has been eliminated to City’s satisfaction.   Contractor shall not be entitled to an increase in Contract Time or Contract Price for a suspension  occasioned by Contractor’s failure to comply with the Contract Documents.  City’s right to  suspend the Work shall not give rise to a duty to suspend the Work, and City’s failure to suspend  the Work shall not constitute a defense to Contractor’s failure to comply with the requirements of  the Contract Documents.  15.5 Termination Without Cause.    City may, at its sole discretion and without cause, terminate this Construction Contract in part or  in whole upon written notice to Contractor. Upon receipt of such notice, Contractor shall, at City’s  expense, comply with the notice and take all reasonable steps to minimize costs to close out and  demobilize.  The compensation allowed under this Paragraph 15.5 shall be the Contractor’s sole  and exclusive compensation for such termination and Contractor waives any claim for other  compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue,  lost opportunity, or other consequential, direct, indirect or incidental damages of any kind  resulting from termination without cause.  Termination pursuant to this provision does not relieve  Contractor or its sureties from any of their obligations for Losses arising from or related to the  Work performed by Contractor.     15.5.1 Compensation.    Following such termination and within forty‐five (45) Days after receipt of a billing from  Contractor seeking payment of sums authorized by this Paragraph 15.5.1, City shall pay the  following to Contractor as Contractor’s sole compensation for performance of the Work :    .1 For Work Performed.  The amount of the Contract Sum allocable to the portion of the  Work properly performed by Contractor as of the date of termination, less sums previously paid to  Contractor.    .2 For Close‐out Costs.  Reasonable costs of Contractor and its Subcontractors:  (i) Demobilizing and  (ii) Administering the close‐out of its participation in the Project (including, without  limitation, all billing and accounting functions, not including attorney or expert fees) for a  period of no longer than thirty (30) Days after receipt of the notice of termination.      Invitation for Bid (IFB) Package  14 Rev. January 2014  CONSTRUCTION CONTRACT    .3 For Fabricated Items.  Previously unpaid cost of any items delivered to the Project Site  which were fabricated for subsequent incorporation in the Work.    .4 Profit Allowance.    An allowance for profit calculated as four percent (4%) of the sum of  the above items, provided Contractor can prove a likelihood that it would have made a profit if  the Construction Contract had not been terminated.    15.5.2 Subcontractors.      Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts  permitting termination for convenience by Contractor on terms that are consistent with this  Construction Contract and that afford no greater rights of recovery against Contractor than are  afforded to Contractor against City under this Section.    15.6 Contractor’s Duties Upon Termination.    Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the  notice directs otherwise, do the following:  (i) Immediately discontinue the Work to the extent specified in the notice;  (ii) Place no further orders or subcontracts for materials, equipment, services or facilities,  except as may be necessary for completion of such portion of the Work that is not  discontinued;  (iii) Provide to City a description in writing, no later than fifteen (15) days after receipt of the  notice of termination, of all subcontracts, purchase orders and contracts that are  outstanding, including, without limitation, the terms of the original price, any changes,  payments, balance owing, the status of the portion of the Work covered and a copy of  the subcontract, purchase order or contract and any written changes, amendments or  modifications thereto, together with such other information as City may determine  necessary in order to decide whether to accept assignment of or request Contractor to  terminate the subcontract, purchase order or contract;  (iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions  thereof, that City elects to accept by assignment and cancel, on the most favorable terms  reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof,  that City does not elect to accept by assignment; and  (v) Thereafter do only such Work as may be necessary to preserve and protect Work already  in progress and to protect materials, plants, and equipment on the Project Site or in  transit thereto.  Upon termination, whether for cause or for convenience, the provisions of the Contract  Documents remain in effect as to any Claim, indemnity obligation, warranties, guarantees,  submittals of as‐built drawings, instructions, or manuals, or other such rights and obligations  arising prior to the termination date.    SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES.    16.1 Contractor’s Remedies.    Contractor may terminate this Construction Contract only upon the occurrence of one of the  following:      Invitation for Bid (IFB) Package  15 Rev. January 2014  CONSTRUCTION CONTRACT    16.1.1 For Work Stoppage.     The Work is stopped for sixty (60) consecutive Days, through no act or fault of  Contractor, any  Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of  an order of a court or other public authority other than City having jurisdiction or due to an act of  government, such as a declaration of a national emergency making material unavailable.  This  provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension  notice issued either for cause or for convenience.    16.1.2 For City's Non‐Payment.     If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of  notice from Contractor, Contractor may terminate the Construction Contract (30) days following a  second notice to City of Contractor’s intention to terminate the Construction Contract.    16.2 Damages to Contractor.   In the event of termination for cause by Contractor, City shall pay Contractor the sums provided  for in Paragraph 15.5.1 above.  Contractor agrees to accept such sums as its sole and exclusive  compensation and agrees to waive any claim for other compensation or Losses, including, but not  limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential,  direct, indirect and incidental damages, of any kind.  SECTION 17 ACCOUNTING RECORDS.    17.1 Financial Management and City Access.    Contractor shall keep full and detailed accounts and exercise such controls as may be necessary  for proper financial management under this Construction Contract in accordance with generally  accepted accounting principles and practices. City and City's accountants  during normal business  hours, may  inspect, audit and copy Contractor's records, books, estimates, take‐offs, cost reports,  ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase  orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these  documents for a period of three (3) years after the later of (i) Final Payment or (ii) final resolution  of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by  law.    17.2 Compliance with City Requests.    Contractor's compliance with any request by City pursuant to this Section 17 shall be a condition  precedent to filing or maintenance of any legal action or proceeding by Contractor against City  and to Contractor's right to receive further payments under the Contract Documents.  City many  enforce Contractor’s obligation to provide access to City of its business and other records referred  to in Section 17.1 for inspection or copying by  issuance of a writ or a provisional or permanent  mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such  court, without the necessity of oral testimony.    SECTION 18 INDEPENDENT PARTIES.    Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’  of the other party.  City, its officers or employees shall have no control over the conduct of Contractor or  its respective agents, employees, subconsultants, or subcontractors, except as herein set forth.      Invitation for Bid (IFB) Package  16 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 19 NUISANCE.    Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in  connection in the performance of services under this Construction Contract.    SECTION 20 PERMITS AND LICENSES.    Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall  provide, procure and pay for all licenses, permits, and fees, required by the City or other government  jurisdictions or agencies necessary to carry out and complete the Work.  Payment of all costs and expenses  for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation  shall be paid to the Contractor for these items or for delays caused by non‐City inspectors or conditions set  forth in the licenses or permits issued by other agencies.    SECTION 21 WAIVER.    A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be  deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition  contained herein, whether of the same or a different character.    SECTION 22 GOVERNING LAW AND VENUE.    This Construction Contract shall be construed in accordance with and governed by the laws of the State of  California, and venue shall be in a court of competent jurisdiction in the County of Santa Clara, and no  other place.    SECTION 23 COMPLETE AGREEMENT.    This Agreement represents the entire and integrated agreement between the parties and supersedes all  prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended  only by a written instrument, which is signed by the parties.  SECTION 24 SURVIVAL OF CONTRACT.    The provisions of the Construction Contract which by their nature survive termination of the Construction  Contract or Final Completion, including, without limitation, all warranties, indemnities, payment  obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect  after Final Completion or any termination of the Construction Contract.  SECTION 25 PREVAILING WAGES.          This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in  the performance and implementation of the Project, because the City, pursuant to its authority as a  chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages.  The City  invokes the exemption from the state prevailing wage requirement for this Project and declares that the    Invitation for Bid (IFB) Package  17 Rev. January 2014  CONSTRUCTION CONTRACT    Project is funded one hundred percent (100%) by the City of Palo Alto.  This Project remains subject to all  other applicable provisions of the California Labor Code and regulations promulgated thereunder.    Or     The Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the  California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code.   Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has  obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work  in this locality for each craft, classification, or type of worker needed to execute the contract for this  Project from the Director of the Department of Industrial Relations.  Copies of these rates may be obtained  at the Purchasing Office of the City of Palo Alto.  Contractor shall provide a copy of prevailing wage rates to  any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a  minimum.  Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, 1810, and 1813 of  the Labor Code.  SECTION 26 NON APPROPRIATION.    This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto  Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the  event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time  within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds  for this Construction Contract are no longer available.  This section shall take precedence in the event of a  conflict with any other covenant, term, condition, or provision of this Agreement.   SECTION 27 AUTHORITY.    The individuals executing this Agreement represent and warrant that they have the legal capacity and  authority to do so on behalf of their respective legal entities.    SECTION 28 COUNTERPARTS    This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties,  constitute a single binding agreement.  SECTION 29 SEVERABILITY.    In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity,  legality and enforceability of the remaining provisions shall not be affected.    SECTION 30 STATUTORY AND REGULATORY REFERENCES.      With respect to any amendments to any statutes or regulations referenced in these Contract Documents,  the reference is deemed to be the version in effect on the date that the Contract was awarded by City,  unless otherwise required by law.    SECTION 31 WORKERS’ COMPENSATION CERTIFICATION.      Pursuant to Labor Code Section 1861, by signing this Contract, Contractor certifies as follows: “I am aware  of the provisions of Section 3700 of the Labor Code which require every employer to be insured against    Invitation for Bid (IFB) Package  18 Rev. January 2014  CONSTRUCTION CONTRACT    liability for workers’ compensation or to undertake self‐insurance in accordance with the provisions of that  code, and I will comply with such provisions before commencing the performance of the Work on this  Contract.”    IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the   date and year first above written.         CITY OF PALO ALTO    ____________________________   Purchasing Manager   City Manager      APPROVED AS TO FORM:    ____________________________  Senior Asst. City Attorney    APPROVED:    ____________________________  Public Works Director      CONTRACTOR      By:___________________________    Name:________________________    Title:__________________________    Date: _________________________        PROJECT LIMITS PUBLIC WORKS ENGINEERING HOLLY BOYD EXP. OF ATTACHMENT B MITCHELL PARK PARKING LOT ‐ BID SUMMARY # BID ITEM QTY UNIT 1 ASPHALT OVERLAY 1,500 TON 120.00$           180,000.00$         103.00$              154,500.00$               115.00$           172,500.00$                2AC BASE REPAIR 200 TON 175.00$           35,000.00$           163.00$              32,600.00$                 58.00$             11,600.00$                  3 MILLING 3" DEPTH 78,000 SF 0.44$                34,320.00$           0.51$                  39,780.00$                 0.54$                42,120.00$                  4 POTHOLE 8 EA 150.00$           1,200.00$             500.00$              4,000.00$                    250.00$           2,000.00$                     5 INERT SOLIDS RECYCLING 2,100 TON 5.00$                10,500.00$           2.27$                  4,767.00$                    11.00$             23,100.00$                  6 REMOVE AND REPLACE CURB AND GUTTER 450 LF 60.00$             27,000.00$           57.00$               25,650.00$                 42.00$             18,900.00$                  7 REMOVE AND REPLACE DRIVEWAY 800 SF 13.00$             10,400.00$           12.00$               9,600.00$                    12.00$             9,600.00$                     8 REMOVE AND REPLACE CONCRETE SIDEWALK 1,000 SF 12.00$             12,000.00$           11.00$               11,000.00$                 12.00$             12,000.00$                  9 CURB RAMP 3 EA 2,500.00$        7,500.00$             2,500.00$           7,500.00$                    3,000.00$        9,000.00$                     10 ADA DOME UPGRADE 4 EA 500.00$           2,000.00$             700.00$              2,800.00$                    1,500.00$        6,000.00$                     11 RESET CATCH BASIN 4 EA 1,750.00$        7,000.00$             1,100.00$           4,400.00$                    400.00$           1,600.00$                     12 4" WHITE THERMO 3,100 LF 2.00$                6,200.00$             1.50$                  4,650.00$                    1.80$                5,580.00$                     13 CURB PAINT, VARIOUS COLORS 1,000 LF 4.00$                4,000.00$             2.00$                  2,000.00$                    1.20$                1,200.00$                     14 12" WHITE THERMO 300 LF 4.00$                1,200.00$             5.00$                  1,500.00$                    5.30$                1,590.00$                     15 THERMO LEGENDS 32 EA 50.00$             1,600.00$             70.00$               2,240.00$                    2.70$                86.40$                          16 TRAFFIC CONTROL 1 LS 10,000.00$     10,000.00$           14,225.28$         14,225.28$                 4,000.00$        4,000.00$                     17 TREE TRIMMING 1 LS 5,000.00$        5,000.00$             1,500.00$           1,500.00$                    3,000.00$        3,000.00$                     18 NOTICES 1 LS 500.00$           500.00$                 1,111.11$           1,111.11$                    2,000.00$        2,000.00$                     19 TRANS IMPOVEMENTS 1 LS 10,000.00$     10,000.00$           10,000.00$         10,000.00$                 10,000.00$     10,000.00$                  BASE BID TOTAL:365,420.00$         333,823.39$               335,876.40$                # BID ITEM QTY UNIT 1 ASPHALT OVERLAY 1,500 TON 110.00$           165,000.00$         101.00$              151,500.00$               130.00$           195,000.00$                2AC BASE REPAIR 200 TON 110.00$           22,000.00$           115.00$              23,000.00$                 175.00$           35,000.00$                  3 MILLING 3" DEPTH 78,000 SF 0.60$                46,800.00$           0.36$                  28,080.00$                 0.20$                15,600.00$                  4 POTHOLE 8 EA 100.00$           800.00$                 645.00$              5,160.00$                    575.00$           4,600.00$                     5 INERT SOLIDS RECYCLING 2,100 TON 2.00$                4,200.00$             12.50$               26,250.00$                 18.00$             37,800.00$                  6 REMOVE AND REPLACE CURB AND GUTTER 450 LF 70.00$             31,500.00$           97.50$               43,875.00$                 40.00$             18,000.00$                  7 REMOVE AND REPLACE DRIVEWAY 800 SF 13.00$             10,400.00$           23.00$               18,400.00$                 15.00$             12,000.00$                  8 REMOVE AND REPLACE CONCRETE SIDEWALK 1,000 SF 10.00$             10,000.00$           19.00$               19,000.00$                 13.00$             13,000.00$                  9 CURB RAMP 3 EA 3,200.00$        9,600.00$             4,450.00$           13,350.00$                 2,500.00$        7,500.00$                     10 ADA DOME UPGRADE 4 EA 450.00$           1,800.00$             845.00$              3,380.00$                    900.00$           3,600.00$                     11 RESET CATCH BASIN 4 EA 750.00$           3,000.00$             1,892.00$           7,568.00$                    550.00$           2,200.00$                     12 4" WHITE THERMO 3,100 LF 1.60$                4,960.00$             1.60$                  4,960.00$                    1.85$                5,735.00$                     13 CURB PAINT, VARIOUS COLORS 1,000 LF 1.60$                1,600.00$             2.00$                  2,000.00$                    2.35$                2,350.00$                     14 12" WHITE THERMO 300 LF 5.00$                1,500.00$             4.95$                  1,485.00$                    5.06$                1,518.00$                     15 THERMO LEGENDS 32 EA 55.00$             1,760.00$             145.00$              4,640.00$                    116.22$           3,719.04$                     16 TRAFFIC CONTROL 1 LS 25,000.00$     25,000.00$           975.00$              975.00$                       2,500.00$        2,500.00$                     17 TREE TRIMMING 1 LS 5,000.00$        5,000.00$             4,500.00$           4,500.00$                    4,800.00$        4,800.00$                     18 NOTICES 1 LS 500.00$           500.00$                 4,450.00$           4,450.00$                    2,400.00$        2,400.00$                     19 TRANS IMPOVEMENTS 1 LS 10,000.00$     10,000.00$           10,000.00$         10,000.00$                 10,000.00$     10,000.00$                  BASE BID TOTAL:355,420.00$         372,573.00$               377,322.04$                O'GRADY PAVING GRANITE ROCK GUERRA CONST GROUP ENGINEER'S ESTIMATE G. BORTOLLOTO & CO. SILICON VALLEY PAVING Page 1 ATTACHMENT B MITCHELL PARK PARKING LOT ‐ BID SUMMARY # BID ITEM QTY UNIT 1 ASPHALT OVERLAY 1,500 TON 114.00$           171,000.00$         132.60$              198,900.00$               107.85$           161,775.00$                2AC BASE REPAIR 200 TON 180.00$           36,000.00$           184.00$              36,800.00$                 134.65$           26,930.00$                  3 MILLING 3" DEPTH 78,000 SF 0.48$                37,440.00$           0.65$                  50,700.00$                 0.60$                46,800.00$                  4 POTHOLE 8 EA 650.00$           5,200.00$             175.00$              1,400.00$                    450.00$           3,600.00$                     5 INERT SOLIDS RECYCLING 2,100 TON 5.00$                10,500.00$           8.40$                  17,640.00$                 3.00$                6,300.00$                     6 REMOVE AND REPLACE CURB AND GUTTER 450 LF 70.00$             31,500.00$           41.00$               18,450.00$                 60.00$             27,000.00$                  7 REMOVE AND REPLACE DRIVEWAY 800 SF 13.00$             10,400.00$           7.50$                  6,000.00$                    18.00$             14,400.00$                  8 REMOVE AND REPLACE CONCRETE SIDEWALK 1,000 SF 11.00$             11,000.00$           16.00$               16,000.00$                 15.00$             15,000.00$                  9 CURB RAMP 3 EA 3,300.00$        9,900.00$             3,500.00$           10,500.00$                 5,000.00$        15,000.00$                  10 ADA DOME UPGRADE 4 EA 600.00$           2,400.00$             550.00$              2,200.00$                    1,000.00$        4,000.00$                     11 RESET CATCH BASIN 4 EA 1,500.00$        6,000.00$             550.00$              2,200.00$                    3,000.00$        12,000.00$                  12 4" WHITE THERMO 3,100 LF 1.60$                4,960.00$             1.94$                  6,014.00$                    1.50$                4,650.00$                     13 CURB PAINT, VARIOUS COLORS 1,000 LF 2.00$                2,000.00$             1.35$                  1,350.00$                    1.50$                1,500.00$                     14 12" WHITE THERMO 300 LF 4.35$                1,305.00$             6.00$                  1,800.00$                    5.00$                1,500.00$                     15 THERMO LEGENDS 32 EA 100.00$           3,200.00$             281.25$              9,000.00$                    50.00$             1,600.00$                     16 TRAFFIC CONTROL 1 LS 26,000.00$     26,000.00$           2,500.00$           2,500.00$                    37,950.00$     37,950.00$                  17 TREE TRIMMING 1 LS 3,500.00$        3,500.00$             2,000.00$           2,000.00$                    5,000.00$        5,000.00$                     18 NOTICES 1 LS 3,500.00$        3,500.00$             2,000.00$           2,000.00$                    1,000.00$        1,000.00$                     19 TRANS IMPOVEMENTS 1 LS 10,000.00$     10,000.00$           10,000.00$         10,000.00$                 10,000.00$     10,000.00$                  BASE BID TOTAL:385,805.00$         395,454.00$               396,005.00$                # BID ITEM QTY UNIT 1 ASPHALT OVERLAY 1,500 TON 105.00$           157,500.00$         120.00$              180,000.00$               150.00$           225,000.00$                2AC BASE REPAIR 200 TON 300.00$           60,000.00$           292.00$              58,400.00$                 150.00$           30,000.00$                  3 MILLING 3" DEPTH 78,000 SF 0.90$                70,200.00$           0.65$                  50,700.00$                 0.75$                58,500.00$                  4 POTHOLE 8 EA 350.00$           2,800.00$             300.00$              2,400.00$                    250.00$           2,000.00$                     5 INERT SOLIDS RECYCLING 2,100 TON 2.00$                4,200.00$             7.20$                  15,120.00$                 0.01$                21.00$                          6 REMOVE AND REPLACE CURB AND GUTTER 450 LF 60.00$             27,000.00$           82.00$               36,900.00$                 67.00$             30,150.00$                  7 REMOVE AND REPLACE DRIVEWAY 800 SF 13.00$             10,400.00$           16.00$               12,800.00$                 12.00$             9,600.00$                     8 REMOVE AND REPLACE CONCRETE SIDEWALK 1,000 SF 12.00$             12,000.00$           13.00$               13,000.00$                 9.00$                9,000.00$                     9 CURB RAMP 3 EA 3,100.00$        9,300.00$             3,600.00$           10,800.00$                 3,056.00$        9,168.00$                     10 ADA DOME UPGRADE 4 EA 600.00$           2,400.00$             1,000.00$           4,000.00$                    415.00$           1,660.00$                     11 RESET CATCH BASIN 4 EA 1,200.00$        4,800.00$             1,000.00$           4,000.00$                    734.00$           2,936.00$                     12 4" WHITE THERMO 3,100 LF 1.70$                5,270.00$             1.70$                  5,270.00$                    1.70$                5,270.00$                     13 CURB PAINT, VARIOUS COLORS 1,000 LF 1.70$                1,700.00$             2.00$                  2,000.00$                    1.70$                1,700.00$                     14 12" WHITE THERMO 300 LF 5.50$                1,650.00$             5.00$                  1,500.00$                    5.75$                1,725.00$                     15 THERMO LEGENDS 32 EA 55.00$             1,760.00$             105.00$              3,360.00$                    57.50$             1,840.00$                     16 TRAFFIC CONTROL 1 LS 28,200.00$     28,200.00$           10,600.00$         10,600.00$                 25,915.00$     25,915.00$                  17 TREE TRIMMING 1 LS 3,200.00$        3,200.00$             2,500.00$           2,500.00$                    2,875.00$        2,875.00$                     18 NOTICES 1 LS 1,600.00$        1,600.00$             3,000.00$           3,000.00$                    500.00$           500.00$                        19 TRANS IMPOVEMENTS 1 LS 10,000.00$     10,000.00$           10,000.00$         10,000.00$                 10,000.00$     10,000.00$                  BASE BID TOTAL:413,980.00$         426,350.00$               427,860.00$                INTERSTATE  ARCHIBALD PAVING ALANIZ CONST MCK SERVICES INC GOLDEN BAY CONSTAMERICAN ASPHALT Page 2 ATTACHMENT C MITCHELL PARK PARKING LOT ‐ BID SUMMARY # BID ITEM QTY UNIT 1 ASPHALT OVERLAY 1,500 TON 120.00$           180,000.00$         103.00$              154,500.00$               115.00$           172,500.00$                2AC BASE REPAIR 200 TON 175.00$           35,000.00$           163.00$              32,600.00$                 58.00$             11,600.00$                  3 MILLING 3" DEPTH 78,000 SF 0.44$                34,320.00$           0.51$                  39,780.00$                 0.54$                42,120.00$                  4 POTHOLE 8 EA 150.00$           1,200.00$             500.00$              4,000.00$                    250.00$           2,000.00$                     5 INERT SOLIDS RECYCLING 2,100 TON 5.00$                10,500.00$           2.27$                  4,767.00$                    11.00$             23,100.00$                  6 REMOVE AND REPLACE CURB AND GUTTER 450 LF 60.00$             27,000.00$           57.00$               25,650.00$                 42.00$             18,900.00$                  7 REMOVE AND REPLACE DRIVEWAY 800 SF 13.00$             10,400.00$           12.00$               9,600.00$                    12.00$             9,600.00$                     8 REMOVE AND REPLACE CONCRETE SIDEWALK 1,000 SF 12.00$             12,000.00$           11.00$               11,000.00$                 12.00$             12,000.00$                  9 CURB RAMP 3 EA 2,500.00$        7,500.00$             2,500.00$           7,500.00$                    3,000.00$        9,000.00$                     10 ADA DOME UPGRADE 4 EA 500.00$           2,000.00$             700.00$              2,800.00$                    1,500.00$        6,000.00$                     11 RESET CATCH BASIN 4 EA 1,750.00$        7,000.00$             1,100.00$           4,400.00$                    400.00$           1,600.00$                     12 4" WHITE THERMO 3,100 LF 2.00$                6,200.00$             1.50$                  4,650.00$                    1.80$                5,580.00$                     13 CURB PAINT, VARIOUS COLORS 1,000 LF 4.00$                4,000.00$             2.00$                  2,000.00$                    1.20$                1,200.00$                     14 12" WHITE THERMO 300 LF 4.00$                1,200.00$             5.00$                  1,500.00$                    5.30$                1,590.00$                     15 THERMO LEGENDS 32 EA 50.00$             1,600.00$             70.00$               2,240.00$                    2.70$                86.40$                          16 TRAFFIC CONTROL 1 LS 10,000.00$     10,000.00$           14,225.28$         14,225.28$                 4,000.00$        4,000.00$                     17 TREE TRIMMING 1 LS 5,000.00$        5,000.00$             1,500.00$           1,500.00$                    3,000.00$        3,000.00$                     18 NOTICES 1 LS 500.00$           500.00$                 1,111.11$           1,111.11$                    2,000.00$        2,000.00$                     19 TRANS IMPOVEMENTS 1 LS 10,000.00$     10,000.00$           10,000.00$         10,000.00$                 10,000.00$     10,000.00$                  BASE BID TOTAL:365,420.00$         333,823.39$               335,876.40$                # BID ITEM QTY UNIT 1 ASPHALT OVERLAY 1,500 TON 110.00$           165,000.00$         101.00$              151,500.00$               130.00$           195,000.00$                2AC BASE REPAIR 200 TON 110.00$           22,000.00$           115.00$              23,000.00$                 175.00$           35,000.00$                  3 MILLING 3" DEPTH 78,000 SF 0.60$                46,800.00$           0.36$                  28,080.00$                 0.20$                15,600.00$                  4 POTHOLE 8 EA 100.00$           800.00$                 645.00$              5,160.00$                    575.00$           4,600.00$                     5 INERT SOLIDS RECYCLING 2,100 TON 2.00$                4,200.00$             12.50$               26,250.00$                 18.00$             37,800.00$                  6 REMOVE AND REPLACE CURB AND GUTTER 450 LF 70.00$             31,500.00$           97.50$               43,875.00$                 40.00$             18,000.00$                  7 REMOVE AND REPLACE DRIVEWAY 800 SF 13.00$             10,400.00$           23.00$               18,400.00$                 15.00$             12,000.00$                  8 REMOVE AND REPLACE CONCRETE SIDEWALK 1,000 SF 10.00$             10,000.00$           19.00$               19,000.00$                 13.00$             13,000.00$                  9 CURB RAMP 3 EA 3,200.00$        9,600.00$             4,450.00$           13,350.00$                 2,500.00$        7,500.00$                     10 ADA DOME UPGRADE 4 EA 450.00$           1,800.00$             845.00$              3,380.00$                    900.00$           3,600.00$                     11 RESET CATCH BASIN 4 EA 750.00$           3,000.00$             1,892.00$           7,568.00$                    550.00$           2,200.00$                     12 4" WHITE THERMO 3,100 LF 1.60$                4,960.00$             1.60$                  4,960.00$                    1.85$                5,735.00$                     13 CURB PAINT, VARIOUS COLORS 1,000 LF 1.60$                1,600.00$             2.00$                  2,000.00$                    2.35$                2,350.00$                     14 12" WHITE THERMO 300 LF 5.00$                1,500.00$             4.95$                  1,485.00$                    5.06$                1,518.00$                     15 THERMO LEGENDS 32 EA 55.00$             1,760.00$             145.00$              4,640.00$                    116.22$           3,719.04$                     16 TRAFFIC CONTROL 1 LS 25,000.00$     25,000.00$           975.00$              975.00$                       2,500.00$        2,500.00$                     17 TREE TRIMMING 1 LS 5,000.00$        5,000.00$             4,500.00$           4,500.00$                    4,800.00$        4,800.00$                     18 NOTICES 1 LS 500.00$           500.00$                 4,450.00$           4,450.00$                    2,400.00$        2,400.00$                     19 TRANS IMPOVEMENTS 1 LS 10,000.00$     10,000.00$           10,000.00$         10,000.00$                 10,000.00$     10,000.00$                  BASE BID TOTAL:355,420.00$         372,573.00$               377,322.04$                G. BORTOLLOTO & CO. SILICON VALLEY PAVING O'GRADY PAVING GRANITE ROCK GUERRA CONST GROUP ENGINEER'S ESTIMATE Page 1 ATTACHMENT C MITCHELL PARK PARKING LOT ‐ BID SUMMARY # BID ITEM QTY UNIT 1 ASPHALT OVERLAY 1,500 TON 114.00$           171,000.00$         132.60$              198,900.00$               107.85$           161,775.00$                2AC BASE REPAIR 200 TON 180.00$           36,000.00$           184.00$              36,800.00$                 134.65$           26,930.00$                  3 MILLING 3" DEPTH 78,000 SF 0.48$                37,440.00$           0.65$                  50,700.00$                 0.60$                46,800.00$                  4 POTHOLE 8 EA 650.00$           5,200.00$             175.00$              1,400.00$                    450.00$           3,600.00$                     5 INERT SOLIDS RECYCLING 2,100 TON 5.00$                10,500.00$           8.40$                  17,640.00$                 3.00$                6,300.00$                     6 REMOVE AND REPLACE CURB AND GUTTER 450 LF 70.00$             31,500.00$           41.00$               18,450.00$                 60.00$             27,000.00$                  7 REMOVE AND REPLACE DRIVEWAY 800 SF 13.00$             10,400.00$           7.50$                  6,000.00$                    18.00$             14,400.00$                  8 REMOVE AND REPLACE CONCRETE SIDEWALK 1,000 SF 11.00$             11,000.00$           16.00$               16,000.00$                 15.00$             15,000.00$                  9 CURB RAMP 3 EA 3,300.00$        9,900.00$             3,500.00$           10,500.00$                 5,000.00$        15,000.00$                  10 ADA DOME UPGRADE 4 EA 600.00$           2,400.00$             550.00$              2,200.00$                    1,000.00$        4,000.00$                     11 RESET CATCH BASIN 4 EA 1,500.00$        6,000.00$             550.00$              2,200.00$                    3,000.00$        12,000.00$                  12 4" WHITE THERMO 3,100 LF 1.60$                4,960.00$             1.94$                  6,014.00$                    1.50$                4,650.00$                     13 CURB PAINT, VARIOUS COLORS 1,000 LF 2.00$                2,000.00$             1.35$                  1,350.00$                    1.50$                1,500.00$                     14 12" WHITE THERMO 300 LF 4.35$                1,305.00$             6.00$                  1,800.00$                    5.00$                1,500.00$                     15 THERMO LEGENDS 32 EA 100.00$           3,200.00$             281.25$              9,000.00$                    50.00$             1,600.00$                     16 TRAFFIC CONTROL 1 LS 26,000.00$     26,000.00$           2,500.00$           2,500.00$                    37,950.00$     37,950.00$                  17 TREE TRIMMING 1 LS 3,500.00$        3,500.00$             2,000.00$           2,000.00$                    5,000.00$        5,000.00$                     18 NOTICES 1 LS 3,500.00$        3,500.00$             2,000.00$           2,000.00$                    1,000.00$        1,000.00$                     19 TRANS IMPOVEMENTS 1 LS 10,000.00$     10,000.00$           10,000.00$         10,000.00$                 10,000.00$     10,000.00$                  BASE BID TOTAL:385,805.00$         395,454.00$               396,005.00$                # BID ITEM QTY UNIT 1 ASPHALT OVERLAY 1,500 TON 105.00$           157,500.00$         120.00$              180,000.00$               150.00$           225,000.00$                2AC BASE REPAIR 200 TON 300.00$           60,000.00$           292.00$              58,400.00$                 150.00$           30,000.00$                  3 MILLING 3" DEPTH 78,000 SF 0.90$                70,200.00$           0.65$                  50,700.00$                 0.75$                58,500.00$                  4 POTHOLE 8 EA 350.00$           2,800.00$             300.00$              2,400.00$                    250.00$           2,000.00$                     5 INERT SOLIDS RECYCLING 2,100 TON 2.00$                4,200.00$             7.20$                  15,120.00$                 0.01$                21.00$                          6 REMOVE AND REPLACE CURB AND GUTTER 450 LF 60.00$             27,000.00$           82.00$               36,900.00$                 67.00$             30,150.00$                  7 REMOVE AND REPLACE DRIVEWAY 800 SF 13.00$             10,400.00$           16.00$               12,800.00$                 12.00$             9,600.00$                     8 REMOVE AND REPLACE CONCRETE SIDEWALK 1,000 SF 12.00$             12,000.00$           13.00$               13,000.00$                 9.00$                9,000.00$                     9 CURB RAMP 3 EA 3,100.00$        9,300.00$             3,600.00$           10,800.00$                 3,056.00$        9,168.00$                     10 ADA DOME UPGRADE 4 EA 600.00$           2,400.00$             1,000.00$           4,000.00$                    415.00$           1,660.00$                     11 RESET CATCH BASIN 4 EA 1,200.00$        4,800.00$             1,000.00$           4,000.00$                    734.00$           2,936.00$                     12 4" WHITE THERMO 3,100 LF 1.70$                5,270.00$             1.70$                  5,270.00$                    1.70$                5,270.00$                     13 CURB PAINT, VARIOUS COLORS 1,000 LF 1.70$                1,700.00$             2.00$                  2,000.00$                    1.70$                1,700.00$                     14 12" WHITE THERMO 300 LF 5.50$                1,650.00$             5.00$                  1,500.00$                    5.75$                1,725.00$                     15 THERMO LEGENDS 32 EA 55.00$             1,760.00$             105.00$              3,360.00$                    57.50$             1,840.00$                     16 TRAFFIC CONTROL 1 LS 28,200.00$     28,200.00$           10,600.00$         10,600.00$                 25,915.00$     25,915.00$                  17 TREE TRIMMING 1 LS 3,200.00$        3,200.00$             2,500.00$           2,500.00$                    2,875.00$        2,875.00$                     18 NOTICES 1 LS 1,600.00$        1,600.00$             3,000.00$           3,000.00$                    500.00$           500.00$                        19 TRANS IMPOVEMENTS 1 LS 10,000.00$     10,000.00$           10,000.00$         10,000.00$                 10,000.00$     10,000.00$                  BASE BID TOTAL:413,980.00$         426,350.00$               427,860.00$                INTERSTATE  ARCHIBALD PAVING ALANIZ CONST MCK SERVICES INC GOLDEN BAY CONSTAMERICAN ASPHALT Page 2 City of Palo Alto (ID # 5099) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: Palo Alto Traffic Signal System Upgrade Title: Approval of a Contract with Trafficware in the Amount of $2,139,005 for the Palo Alto Traffic Signal Upgrade Project and Approval of Budget Amendment Ordinance in the Amount of $915,603 to Transfer Funds from the Citywide Traffic Impact Fee Program to the CIP Program for the Project From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council: 1. Approve and authorize the City Manager or designee to execute a contract with Trafficware Group, Inc. for the implementation of the Palo Alto Traffic Signal System Upgrade project, for a not to exceed amount of $2,139,005. 2. Approve the attached Budget Amendment Ordinance (BAO) to increase funding in the Capital Improvement Fund in the amount of $915,603 for the Traffic Signal and ITS Upgrades project, offset by a transfer from the Citywide Traffic Impact Fee Fund. Executive Summary The Palo Alto Traffic Signal System Upgrade project will replace traffic signal controller hardware at each of the City’s 100 signalized intersections. The new traffic signal controllers will enable additional traffic signal timing strategies and help to improve the efficiency of Palo Alto streets. Traffic signals were identified by the Infrastructure Task Force as a critical city facility requiring modernization and the signal upgrade project would complement other transportation-focused programs undertaken at the City Council’s direction. Newer traffic signal controllers would allow for improved traffic operations. The project also replaces auxiliary equipment at each intersection including fiber optic transceivers used to network the traffic signals with the Traffic Operations Center located at the Municipal Service Center and fail-safe equipment that is used to monitor conflicting signal indications for safety. Innovations within the Palo Alto Traffic Signal System Upgrade project include a new traffic City of Palo Alto Page 2 adaptive control system along Sand Hill Road to help support activities at the Stanford University Medical Center (SUMC) area called Synchrogreen. The deployment of traffic adaptive controls along Sand Hill Road is a condition of the SUMC Expansion Program and is being funded by previously collected Traffic Impact Fees. The project includes additional innovations that will offer the City improved traffic monitoring capabilities and are discussed further within this report. Background The City’s existing traffic signal management system includes two independent systems, each consisting of traffic signal controllers at signalized intersections and a central management system located at the Traffic Operations Center located at the Municipal Service Center on E. Bayshore Road. A legacy system installed in 2002 by McCain Inc. operates a majority of the City’s existing traffic signals but field communications to the McCain central management system have failed over time, resulting in the loss of data recording capabilities. In 2010 the City installed traffic signal controllers by Trafficware along Alma Street at each of the three signalized Caltrain crossings along with a new central management system to capture and record real-time traffic signal data at each intersection in the event of Caltrain incidents. Since 2010 the City has required the use of Trafficware traffic signal controllers at each new traffic signal project or deployed them proactively at existing intersections to help improve traffic signal operations for commute or school activities, as well as to help expand and modernize the city’s traffic signal infrastructure. Of the city’s 100 signalized intersections, 17 currently operate with Trafficware equipment. Bid Process The City released a Request for Quotations (RFQ) for the Palo Alto Traffic Signal Management System on May 14, 2014. The City received two proposals in response from the RFQ and reviewed the bids over the summer using a proposal review team comprised of city staff from Transportation and Utilities, and staff from the County of Santa Clara – Roads & Airports Department. Trafficware was selected as the lowest responsible bidder for the project unanimously by the proposal review committee. The bid results are provided below for the base project work. No. Vendor Base Bid Add Alternate Items Total+Tax 1 Trafficware $1,263,950 $223,000 $1,486,950 2 Western Pacific Signal $1,385,005 $276,600 $1,771,523 The City negotiated with Trafficware to include additional project elements required to help complete the build-out of the signal system, including furnishing new traffic signal cabinets for downtown intersections, expanded video detection equipment for support traffic adaptive operations along Sand Hill Road as part of the Stanford University Medical Center (SUMC) traffic mitigation program, and additional security measures to support web-based distribution of traffic information for the public. City of Palo Alto Page 3 Traffic Signal Reliability and Integration This project replaces the remaining traffic signal controller inventory in the field with new Trafficware controllers and expands the current central management system known as ATMS.now (Advanced Traffic Management System) to allow for communications to all signalized intersections. The new controllers will enable additional traffic signal timing strategies and improve reliability of the City’s traffic signals. In addition, the connection between the ATMS.now central management system and traffic signal controllers in the field will allow for real-time monitoring by staff and the collection of traffic signal control data to support future traffic signal retiming projects. Historical traffic data can also be useful in accident reconstruction where a determination of liability is being pursued. The project proposes an expansion of traffic monitoring equipment in the city to support active traffic management, incident response, and emergency operations center activities. Traffic Signal System Innovations In addition to addressing basic functionality (system reliability and integration), the Palo Alto Traffic Signal System Upgrade project includes innovations that will allow the Transportation Division and Utilities Departments to better monitor and respond to traffic signal problems in the City. Currently, when customer service requests are received, staff must schedule and travel to the field to investigate and respond to concerns or events that will likely have passed by the time investigations take place. The new system will allow for immediate monitoring and response. The following additional innovations are included either directly or indirectly as part of the project.  Downtown Fiber Optic Upgrades A majority of the City’s traffic signals currently communicate over fiber optic cables taking advantage of the city’s fiber optic network. The 27 Downtown Core traffic signals along Lytton Avenue, University Avenue, and Hamilton Avenue lost communications over five years ago, limiting the ability of those signalized intersections to synchronize due to damaged twisted copper pair cables used for communications in this area. The Transportation Division and Utilities Department began replacement of the damaged twisted copper pair cables over the Spring/Summer and replaced them with new fiber optic cables. As new traffic signal controllers are installed in the field, City crews will bring traffic signal communications online as part of the deployment of the new system.  Downtown Traffic Signal Cabinet Upgrades 9 of the Downtown Core traffic signals utilize smaller traffic signal cabinets that cannot support the larger Trafficware traffic signal controllers being deployed as part this project. The smaller traffic signal cabinets are over 30 years old and have started to fail due to age, requiring emergency replacement. As failures have occurred staff has started replacing the smaller cabinets with larger cabinets in anticipation of this project. City of Palo Alto Page 4 5 cabinets in the Downtown were replaced in the last twelve months alone. Trafficware will be furnishing nine (9) new traffic signal cabinets that will be used at various locations in the Downtown. The cabinets will be installed by the City’s existing on-call traffic signal & street lighting contractor.  Fiber Optic Transceivers Each of the city’s 100 signalized intersections will receive new fiber optic transceivers that include network switching capabilities. The new fiber optic transceivers, by Hirschmann, will be consistent with equipment already utilized by the Utilities Department for communications to SCADA managed facilities ensuring easier maintenance capabilities for city crews. The new Trafficware traffic signal controllers come with Ethernet based communications equipment allowing for “click and play” connections.  Sand Hill Road Adaptive Traffic Signal System – Synchrogreen Trafficware will deploy a new traffic adaptive signal system at nine intersections on and along Sand Hill Road to help facilitate commute and incident traffic generated by the Stanford University Medical Center project. This portion of the project is being funded by previously paid traffic impact fees. The scope includes new traffic signal controllers with adaptive traffic signal timing algorithms, upgrades to video detection equipment used to determine vehicle presence at the intersections, and adaptive signal timing modules for the ATMS.now central management system. Under their contract, Trafficware will also train staff from the Transportation Division and Utilities Department on the use of the adaptive traffic signal system.  Traffic Monitoring Equipment Trafficware will furnish 25 new traffic monitoring cameras that will be deployed by city crews around the City. These cameras include pan/tilt/zoom operations that will allow the City to proactively monitor and respond to traffic incidents. Trafficware will be responsible for integrating the cameras into the ATMS.now central management system for viewing and for providing network equipment to store the video for future use in incident reconstruction. In addition to the new pan/tilt/zoom cameras, Trafficware will also integrate all existing video detection cameras currently in use into the ATMS.now central management system for viewing as supplemental stationary view cameras. The traffic monitoring cameras will support emergency operations center activities allowing for the remote viewing of natural disasters and incidents improving the efficiency of city resources during those events. Initial traffic monitoring cameras will be deployed along entry/exit points to the city, crossing residential arterial streets, and adjacent to public schools.  ATMS.now Central System – WEB.now over Google Maps Module The upgrade of the ATMS.now central management system will include the deployment of a new WEB.now module that will allow the City to push and motorists to view real- City of Palo Alto Page 5 time traffic information online over Google maps. Google maps will also be the interface in which staff will view real-time traffic data from the ATMS.now central management system. Providing real-time data will allow travelers to better plan their trips, and staff will be able to post temporary construction information online to help motorists plan and travel around work zones. The ATMS.now system can also be used to track any parking occupancy data that is collected in the field (for example, through the current pilot project with VIMOC Technologies downtown), and to export real-time data in a raw format that can be used by automobile manufacturers or data system integrators for integration with connected vehicles. The data will be exported onto a new server that will be housed at the Traffic Operations Center and available on a subscription basis. Staff anticipates meetings with Google, Tesla, and other connected vehicle manufactures for the development of standards for the export of the data. Palo Alto will be a leader in the deployment of traffic signal data through the development of this module. Server Upgrades & Security The project also includes additional server upgrades and computer upgrades at the Traffic Operations along with computers for Transportation and the Emergency Operations Center. The existing traffic signal network is independent of the City’s IT infrastructure and is managed by the Utilities Department as a critical piece of the SCADA maintenance program. The new servers will allow for the proposed traffic monitoring expansion elements of the project and allow the deployment of real-time traffic data without jeopardizing the core traffic network. Individual servers will be used to operate core functions of the system, separate servers for traffic communications, web-based data for the public, connected vehicles operations, and traffic monitoring. Currently only two separate servers do all these tasks but with citywide expansion, additional processing capacity will be required to ensure reliability of the system. To help support City maintenance of the new system field laptops and tables will also be provided that will allow staff to access the private traffic signal network securely. New fiber optic transceivers will also introduce redundancy into the system that does not exist today. In addition, the existing fiber optic transceivers are no longer manufactured so as maintenance failures occur, the existing network will begin to deteriorate without replacement. Sufficient spare equipment for traffic signal controllers and fiber optic transceivers will be provided. Policy Implications The Palo Alto Traffic Signal System Upgrade project is consistent with the following goals of the Comprehensive Plan: Program T-38 Implement computerized traffic management systems to improve traffic flow when feasible. City of Palo Alto Page 6 Policy T-49 Lead and paritcipate in initiatives to manage regional traffic Resource Impact The Palo Alto Traffic Signal Upgrade project will cost $1,944,550 plus a 10% contingency budget of $194,455 for incidental project modifications resulting in a recommended contract award of $2,139,005. This project will be funded through two existing Capital Improvement Program (CIP) project and Citywide Transportation Impact Fee funds. A combination of CIP and previously paid traffic impact fees is recommended that will require the adoption of a Budget Amendment Ordinance as follows: No. CIP Project CIP Budget Transfer from Citywide Traffic Impact Fee fund Transfer from Citywide Traffic Impact Fee Fund (fees paid by Stanford University) Recommended Funding Amount 1 PL-11003 Palo Alto Signal Central System $364,472 $364,472 2 PL-05030 Traffic Signal and ITS Upgrades $858,930 * $538,878 $376,725 $1,774,533 Project Budget: $2,139,005 *$50,000 will remain in the project for potentail traffic signal needs for the remainder of the Fiscal Year. The $376,725 transfer of the amount paid by Stanford University Medical Center (SUMC) to the Traffic Impact Fee Fund covers all costs associated to the deployment of the SynchroGreen Traffic Adaptive System on and along Sand Hill Road including: SUMC Traffic Impact Fee BAO Transfer Breakdown No. Cost Detail Cost 1 SynchroGreen Deployment  Central System Module/Configuration  Signal Timing Development $171,000 City of Palo Alto Page 7 2 SynchroGreen Detection  Video Detection Upgrades for adaptive technology  City will cover the cost of field installation  $169,550 3 Traffic Signal Controllers  Sand Hill Rd & Oak Creek  Sand Hill Rd & Stockfarm  Sand Hill Rd & Pasteur/Clark  Sand Hill Rd & Durand  Sand Hill Rd & Vineyard-Clark  Sand Hill Rd & Arboretum  Sand Hill Road & Ronald McDonald-Plum  Sand Hill Rd & London Plan  Welch Road & Pasteur  $3,100 per traffic signal controller $27,900 4 Traffic Signal Controller Auxiliary Equipment  Malfunction Monitoring Equipment $8,275 Total Cost of Synchrogreen Traffic Adaptive Module: $376,725 Following implementation of the new system, staff will review potential staffing needs to take full advantage of the features offered by the new system. A new Traffic Signal Coordinator could monitor commute and traffic incidents from a central location, post and manage notices regarding construction staging activities in the city, and develop/implement traffic signal timing strategies to help ensure efficient roadway operations. Timeline Staff anticipates the project taking approximately 8 months to complete, beginning in October 2014 and being complete by June 2015. Attachments:  Attachment A: Contract with Trafficware Group Inc (PDF)  Attachment B: BAO XXXX - Revised Traffic Signals (DOC) Professional Services Rev. Feb. 2014 1 CITY OF PALO ALTO CONTRACT NO. C15154106 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND TRAFFICWARE GROUP, INC. FOR THE PROCUREMENT, DEPLOYMENT AND INTEGRATION SUPPORT SERVICES OF TRAFFIC MANAGEMENT SYSTEM This Agreement is entered into on this 21st day of October, 2014, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and TRAFFICWARE GROUP, INC., a Texas corporation, authorized to do business in California, located at 522 Gillingham, Sugar Land, Texas, 77478, Telephone (281) 240-7233 ("INTEGRATOR"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to upgrade the traffic signal management system (“Project”) and desires to engage a contractor to procure, deploy and support the upgrade of City’s traffic signal management system in connection with the Project (“Services”). B. INTEGRATOR has represented that it has the necessary professional expertise, qualifications, capability, and certifications to provide the Services. C. CITY in reliance on these representations desires to engage INTEGRATOR to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. INTEGRATOR shall perform the Services described in Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through October 20, 2015 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. INTEGRATOR shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by INTEGRATOR in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the INTEGRATOR. CITY’s agreement to extend the term or the schedule for performance shall not DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 2 preclude recovery of damages for delay if the extension is required due to the fault of INTEGRATOR. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to INTEGRATOR for performance of the Services described in Exhibit “A”, including both payment for services and reimbursable expenses, shall not exceed One Million, Nine Hundred Forty Eight Thousand Three Hundred Eight Dollars ($1,948,308.00). In the event additional Services are authorized, the total compensation for Services, additional Services and reimbursable expenses shall not exceed Two Million One Hundred Thirty Nine Thousand Five Dollars ($2,139,005.00). The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “RATE SCHEDULE,” which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. INTEGRATOR shall not receive any compensation for additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit “A”. SECTION 5. INVOICES. INTEGRATOR shall submit invoices upon receipt of delivery of each item set forth in Exhibit “C-1”. INTEGRATOR shall send all invoices to the City’s project manager at the address specified in Section 13 below. CITY will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by INTEGRATOR or under INTEGRATOR’s supervision. INTEGRATOR represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. INTEGRATOR represents that it, its employees and sub-INTEGRATORs, if permitted, have and shall maintain during the term of this Agreement all qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by INTEGRATOR under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. INTEGRATOR shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. INTEGRATOR shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. DEFECTS. INTEGRATOR shall correct, at no cost to CITY, any and all defects in the work and products submitted to CITY, provided CITY gives notice to INTEGRATOR. If INTEGRATOR has prepared plans and specifications or other design documents to construct the Project, INTEGRATOR shall be obligated to correct any and all defects discovered prior to and DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 3 during the course of construction of the Project. This obligation shall extend through the warranty period of the products. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, INTEGRATOR shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY’s stated construction budget, INTEGRATOR shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY-approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement INTEGRATOR, and any person employed by or contracted with INTEGRATOR to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of INTEGRATOR are material considerations for this Agreement. INTEGRATOR shall not assign or transfer any interest in this Agreement nor the performance of any of INTEGRATOR’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Notwithstanding Section 11 above, CITY agrees that subcontractors may be used to complete the Services. The subcontractor authorized by CITY to perform work on this Project is: Western Pacific Signal, LLC 15890 Foothill Blvd. San Leandro, CA 94578 Hoffman, Weisman, and Associates 11225 Randolph Siding Rd Jupiter, FL 33478 INTEGRATOR shall be responsible for directing the work of any subcontractor and for any compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning compensation. INTEGRATOR shall be fully responsible to CITY for all acts and omissions of a subcontractors. INTEGRATOR shall change or add subcontractors only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. INTEGRATOR will assign Dustin Hinds as the Contract Manager to have supervisory responsibility for the performance, progress, and execution of the Services and Theresa Rohlfs as the Project Manager to represent INTEGRATOR during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 4 replacement personnel will be subject to the prior written approval of the CITY’s project manager. INTEGRATOR, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City’s project manager is Jaime Rodriguez, Planning & Community Environment Department, Transportation Division, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650) 329-2136. CITY’s project manager will be INTEGRATOR’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. . All copyrights and intellectual property which arise from the creation of work pursuant to this Agreement are exclusive property of INTEGRATOR, and CITY waives and relinquishes all claims to copyright or other intellectual property rights. INTEGRATOR agrees to license all intellectual property pursuant to this Agreement INTEGRATOR to CITY. SECTION 15. AUDITS. INTEGRATOR will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, INTEGRATOR’s records pertaining to matters covered by this Agreement. INTEGRATOR further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, INTEGRATOR shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature, including attorneys’ fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by INTEGRATOR, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require INTEGRATOR to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of INTEGRATOR’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall extend through the warranty period of the products.. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 5 covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. INTEGRATOR, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". INTEGRATOR and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of INTEGRATOR retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to INTEGRATOR, INTEGRATOR shall provide CITY’s Purchasing Division manager with written notice of the cancellation or modification within two (2) business days of INTEGRATOR’s receipt of such notice. INTEGRATOR shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Purchasing Division manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not limit INTEGRATOR's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, INTEGRATOR will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to INTEGRATOR. Upon receipt of such notice, INTEGRATOR will immediately discontinue its performance of the Services. 19.2. INTEGRATOR may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 6 19.3. Upon such suspension or termination, INTEGRATOR shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by INTEGRATOR or its contractors, if any, or given to INTEGRATOR or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, INTEGRATOR will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by INTEGRATOR, CITY will be obligated to compensate INTEGRATOR only for that portion of INTEGRATOR’s services which are of direct and immediate benefit to CITY as such determination may be mutually made by the INTEGRATOR and the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To INTEGRATOR: Attention of the project director at the address of INTEGRATOR recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, INTEGRATOR covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. INTEGRATOR further covenants that, in the performance of this Agreement, it will not employ subcontractors, contractors or persons having such an interest. INTEGRATOR certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 7 SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, INTEGRATOR certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. INTEGRATOR acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. INTEGRATOR shall comply with CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. INTEGRATOR shall comply with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, INTEGRATOR shall comply with the following zero waste requirements:  All printed materials provided by INTEGRATOR to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s project manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks.  Goods purchased by INTEGRATOR on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office.  Reusable/returnable pallets shall be taken back by the INTEGRATOR, at no additional cost to the City, for reuse or recycling. INTEGRATOR shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 8 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested in the state courts of the originator of the action. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and INTEGRATORs of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with INTEGRATOR, CITY shares with INTEGRATOR personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), INTEGRATOR shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. INTEGRATOR shall not use Personal Information for direct marketing purposes without CITY’s express written consent. 25.9 All unchecked boxes do not apply to this agreement. 25.10 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 25.11 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement // DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 9 // IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: TRAFFICWARE GROUP, INC. Attachments: EXHIBIT “A”: SCOPE OF WORK EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Chief Financial Officer Professional Services Rev. Feb. 2014 10 EXHIBIT “A” SCOPE OF SERVICES GENERAL INTEGRATOR shall procure, deploy and support the upgrade of CITY’s traffic signal management system. This Project involves the procurement of signal controllers, traffic signal central management system (expansion), CCTV cameras, fiber optic field switches, and several software modules that integrate ITS devices and disseminate traffic operational data. SCOPE OF WORK 1.0 Traffic Signal Controllers Traffic signal controllers provided as part of the Project shall be one of the following models: 1) Intersection Naztec 980 ATC-Type 2 (ATC) – 44 Total 2) Intersection Naztec 2070L (2070) (Modules: 1B, 2A, 3B, 4A, 7A, 7B) – 38 Total 3) Spare Naztec 980 ATC-Type 2 (ATC) – 7 Total 4) Spare Naztec 2070L (2070) (Modules: 1B, 2A, 3B, 4A, 7A, 7B) – 7 Total Intersections listed in Table 1 shall be included in the Project. New traffic controllers are to be installed at these locations as identified in the “Preferred Controller Type to be Installed,” column. All new traffic controllers shall be accompanied by new malfunction monitoring units (MMUs) as well as new fiber optic switches. Table 1 - Intersection Locations No. Intersection Existing Controller/Cabinet Preferred Controller Type 1 Sand Hills Road & Oak Creek Apts 2070 336 2070 - SynchroGreen 2 Sand Hill Road & Stockfarm 2070 336 2070 – SynchroGreen 3 Sand Hill Road & Pasteur/Clark 2070 336 2070 – SynchroGreen 4 Sand Hill Road & Durand 2070 332 2070 – SynchroGreen 5 Sand Hill Road & Vineyard Clark 2070 336 2070 – SynchroGreen 6 Sand Hill Road & Arboretum 2070 336 2070 – SynchroGreen 7 Sand Hill Road & Ronald McDonald-Plum 2070 336 2070 – SynchroGreen 8 Sand Hill Road & London Plane 2070 336 2070 – SynchroGreen 9 Welch Road & Pasteur 980-Naztec NEMA-P 2070 – SynchroGreen 10 Welch Road & AMD 980-Naztec NEMA-P N/A 11 Welch Road & The Farm 980-Naztec NEMA-P N/A 12 Quarry & Palo Pear 2070 336 2070 13 Quarry & Sweet Olive 2070 336 2070 14 Quarry & Arboretum 2070 336 2070 15 Quarry & Vineyard Lane 2070 336 2070 DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 11 Table 1 - Intersection Locations No. Intersection Existing Controller/Cabinet Preferred Controller Type 16 Quarry & Welch 2070-Naztec NEMA-P N/A 17 Arboretum & Orchard 2070 NEMA-P ATC 18 Arboretum & Palm 2070 NEMA-P ATC 19 Middlefield & Lytton 2070 NEMA-M ATC 20 Middlefield & University 2070 NEMA-M ATC 21 Middlefield & Hamilton 2070 NEMA-M ATC 22 Middlefield & Homer 2070 336 2070 23 Middlefield & Channing 2070 336 2070 24 Middlefield & Addison 2070 336 2070 25 Middlefield & Melville 2070 336 2070 26 Alma & Lytton 980-Naztec NEMA-P N/A 27 Lytton & High Vector NEMA-F ATC 28 Lytton & Emerson Vector NEMA-F ATC 29 Lytton & Ramona Vector NEMA-F ATC 30 Lytton & Bryant Vector NEMA-SM ATC 31 Lytton & Florence Vector NEMA-SM ATC 32 Lytton & Waverly Vector NEMA- SM ATC 33 Lytton & Cowper Vector NEMA- SM ATC 34 Lytton & Webster Vector NEMA- SM ATC 35 University & El Camino Real 2070 NEMA-P ATC 36 University & High Vector NEMA-F ATC 37 University & Emerson Vector NEMA-F ATC 38 University & Ramona Vector NEMA-F ATC 39 University & Bryant Vector NEMA-F ATC 40 University & Florence Vector NEMA-F ATC 41 University & Waverly Vector NEMA-F ATC 42 University & Kipling Vector NEMA-F ATC 43 University & Cowper Vector NEMA-F ATC 44 University & Webster Vector NEMA-F ATC 45 University & Guinda 2070 336 2070 46 University & Chaucer 2070 336 2070 47 University & Lincoln 2070 336 2070 48 Hamilton & High Vector NEMA-M ATC 49 Hamilton & Emerson Vector NEMA-F ATC 50 Hamilton & Ramona Vector NEMA-F ATC 51 Hamilton & Bryant Vector NEMA-F ATC 52 Hamilton & Gilman 980-Naztec NEMA- SM N/A DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 12 Table 1 - Intersection Locations No. Intersection Existing Controller/Cabinet Preferred Controller Type 53 Hamilton & Waverly Vector NEMA-SM ATC 54 Hamilton & Cowper Vector NEMA-SM ATC 55 Hamilton & Webster Vector NEMA- SM ATC 56 Channing & Waverly Vector 336 2070 57 Embarcadero & Geng Vector NEMA-M ATC 58 Embarcadero & E Bayshore 2070 NEMA-P ATC 59 Embarcadero & St Francis 2070 336 2070 60 Embarcadero & Greer 2070 336 N/A 61 Embarcadero & Louis 2070 336 N/A 62 Embarcadero & Newell 980-Naztec NEMA-P N/A 63 Embarcadero & Middlefield 980-Naztec NEMA-P N/A 64 Embarcadero & Waverly 2070 336 2070 65 Embarcadero & Bryant 2070 NEMA-SM ATC 66 Embarcadero & PALY Ped Xing 2070 332 2070 67 Embarcadero & Town Country- PALY 2070- Naztec 332 N/A 68 Newell & Channing 2070 336 2070 69 E Bayshore & Laura 2070 336 2070 70 Middlefield & N California 2070 336 2070 71 Middlefield & Coop Ped Xing 2070 NEMA-M ATC 72 Middlefield & Bryson 2070 336 2070 73 Middlefield & Colorado 2070 NEMA-SM ATC 74 Middlefield & Loma Verde 2070 336 2070 75 Middlefield & E Meadow 2070 336 2070 76 Middlefield & Mayview 980-Naztec NEMA-P N/A 77 Middlefield & E Charleston 2070 NEMA-SM ATC 78 Middlefield & Montrose 2070 336 2070 79 Stanford & Hanover-Escondido 2070 NEMA-M ATC 80 Porter & Hanover-Hillview 2070 NEMA-M ATC 81 E Meadow & Cowper 2070 336 2070 82 E Meadow & Waverly 2070 336 2070 83 San Antonio & E Bayshore 2070 NEMA-P ATC 84 San Antonio & Nita 2070 NEMA-SM ATC 85 San Antonio & Middlefield 980-Naztec NEMA-P N/A 86 San Antonio & Leghorn 2070 NEMA-P ATC 87 San Antonio & Charleston 2070 336 2070 88 Alma & Homer 2070 336 2070 DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 13 Table 1 - Intersection Locations No. Intersection Existing Controller/Cabinet Preferred Controller Type 89 Alma & Churchill 2070-Naztec NEMA-P N/A 90 Alma & Alma Commons 2070-Naztec NEMA-P N/A 91 Alma & E Meadow 2070- Naztec NEMA-P N/A 92 Alma & E Charleston 2070- Naztec NEMA-P N/A 93 Alma & San Antonio 2070 NEMA-M ATC 94 Charleston & Fabian 2070 336 2070 95 Charleston & Carlson 2070 NEMA-P ATC 96 Charleston & Nelson 2070 NEMA-M ATC 97 Charleston & Wilkie 2070 336 2070 98 Arastradero & Coulomb 2070-Naztec NEMA-M N/A 99 Arastradero & Donald-Terman 2070-Naztec 336 N/A 100 Arastradero & Gunn High 2070 336 2070 Specification: Traffic signal controllers provided as a part of this Project shall be compatible with CITY’s current ATMS.now central system software. Traffic signal controllers shall use a Flash File System to store data and to allow for faster communications with the ATMS.now central system. Traffic signal controllers utilizing older EPROM technology shall not be considered acceptable. Each traffic signal controller shall include a backlist data screen with an 8-line minimum by 40-character LCD display. Traffic signal controllers shall include highly accurate real-time clocks within a 0.005% accuracy of time established through the ATMS.now central system. Traffic signal controllers shall allow flexibility for programming of ring structures by the user including four (4) separate barriers allowing programming for applications from one (1) to eight (8) phase in each barrier. Traffic signal controllers shall include a keyboard for programming of the traffic signal controllers including LCD control adjustment keys. Traffic signal controllers must include a 10/100-Base Ethernet port. Controllers operating in NEMA traffic signal cabinet environments shall include a USB port, and programmable EIA-232 ports including PC/Print, System Up/Down, SDLC and DB-9 ports. Controllers operating in a Caltrans traffic signal cabinet environment shall include a Programmable Auxiliary On/Off Switch and Active display. The USB port shall allow the operator to store database records for the traffic signal controller as well as configure a new traffic signal controller directly from the Flash drive. Traffic signal controllers shall be capable of operating in either Caltrans or NEMA TS2 Type 1 or Type 2 cabinet environments. 1.1 Database Conversion INTEGRATOR shall inventory and convert all existing signal timing plans/databases from CITYs traffic signal controllers to INTEGRATOR (Naztec) v76 databases. CITY will provide INTEGRATOR copies of existing hardcopy timing records. INTEGRATOR shall input database settings and submit new v76 timing sheets in .PDF format to CITY for review and approval. INTEGRATOR shall receive any comments within five (5) business-days of submittal. Before DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 14 deploying new databases and controllers, INTEGRATOR shall review existing field operations against the submitted v76 timing sheets. In the event that actual existing traffic signal controller timings differ from the v76 timings sheets, INTEGRATOR shall use the actual traffic signal controller timing parameters as the baseline traffic signal timing. INTEGRATOR shall notify CITY immediately in writing if any discrepancies exist and highlight the discrepancies. CITY and INTEGRATOR shall identify a base coordination timing plan configuration to be included as part of all traffic signal timing conversions. Intersections that currently include time- of-day “All Pedestrian” signal intervals for school crossing shall include new year-round calendars programmed by INTEGRATOR; CITY shall make available the current year school schedule to INTEGRATOR. 1.2 Controller Software INTEGRATOR shall install the latest version of v76 Patriot Local Intersection Software on all traffic signal controllers. Existing 2070-Naztec or 980 traffic signal controllers already installed in the field shall also be updated by INTEGRATOR. Intersection where SynchroGreen is to be installed shall have the SynchroGreen module activated within the Local Intersection Software. All traffic signal controllers delivered to CITY shall have v76 Patriot Local Intersection Software pre-installed along with the approved traffic signal timings from Task 1.1. 1.3 Controller Burn-In INTEGRATOR shall complete traffic signal controller programming for each controller at their manufacturing center and shall conduct a seven (7)-day “burn-in” test for signal timing plans/databases using the actual traffic signal controllers to be installed in the field. All burn-in tests shall be completed before controller shipment. INTEGRATOR shall provide confirmation that successful burn-in testing has been completed for each traffic signal controller. 1.4 Traffic Signal Controller Shipment INTEGRATOR shall ship all traffic signal controllers to CITY– Municipal Service Center – 3201 E Bayshore Road – Palo Alto, CA 94303. Shipping terms shall FOB Destination and custody of traffic signal controllers shall transfer upon delivery to the Palo Alto Municipal Service Center facility. Traffic signal controllers shipped by INTEGRATOR will also include the correct database and controller software. INTEGRATOR shall provide traffic signal controller operations manuals in PDF format to CITY, along with 20 hard copies. 1.5 MMU Configuration INTEGRATOR shall provide a new malfunction monitoring unit (MMU) for each new traffic signal controller installed. Traffic signal controllers in a Caltrans standard cabinet shall be accompanied by a new EDI 2010 ECL IP malfunction monitoring unit with additional hardware to monitor pedestrian indications. Controllers in a NEMA cabinet shall be accompanied by a new EDI MMU 16LE IP Smart Monitor. INTEGRATOR shall supply, program and test all MMUs. 1.6 Traffic Signal Controller/MMU Removal INTEGRATOR shall remove legacy traffic signal controllers and MMUs located in traffic signal cabinets. INTEGRATOR shall immediately replace these units with new traffic signal DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 15 controllers and MMUs. Equipment removed from traffic signal controllers shall be returned to CITY. CITY shall provide any necessary traffic control during Traffic Signal Controller/MMU removal or installation. 1.7 Traffic Signal Controller/MMU Installation INTEGRATOR shall install new traffic signal controllers where indicated in Table 1. Traffic signal controllers shall be new, with no visual defects, and be programmed by INTEGRATOR with CITY-approved traffic signal timing conversion sheets. INTEGRATOR shall install any auxiliary equipment to support new traffic signal controllers in the cabinets, including D- connector plugs. Traffic signal controllers installed in cabinets shall have the correct Local Intersection Software (v76 Patriot Local Intersection Control Firmware) and timing database pre-installed. The traffic signal controller shall also have all network settings pre-configured. INTEGRATOR shall install new MMUs for each new traffic signal controller installed. MMUs shall be programmed, tested and installed with correct settings and pre-configured for “plug and play” operation with the corresponding traffic signal controller. INTEGRATOR shall coordinate all traffic signal controller/MMU installations with CITY, as these installations will require periods where traffic signals will be deactivated; weekend or evening conversions will be required on the San Antonio Road and Embarcadero Road corridors. CITY shall provide any necessary traffic control during Traffic Signal Controller/MMU removal or installation. 1.8 Traffic Signal Controller Training INTEGRATOR shall provide a two (2) day training course pertaining to traffic signal controller operations, programming, installation and maintenance. INTEGRATOR shall provide hardcopies of all training material. 2.0 Network Configuration/Network Hardware Installation Network configuration will consist of the development of a network IP scheme to support CITY’s traffic signal infrastructure. Additionally, this task involves the removal of legacy fiber optic switches and the supply, configuration and deployment of new Hirschmann fiber optic switches – 100 for intersection installation and 10 for spares, 110 total. Specification: Managed fiber optic switches that can support at least eight (8) separate Ethernet- based field elements without the use of additional switching gear. Power supplies and fiber optic switches must be one integrated unit. Separate power supplies will not be accepted to help manage space requirements within traffic signal controller environments. Switches shall have Ethernet/Fast Ethernet (10/100-FX) communications over Single Mode (SM) fiber optic cables using SC connector types. Switches shall be compact with integrated power supplies and allow for either shelf mounting or DIN rail mounting. Switches should include a fan-less design and be capable of installation with NEMA-rated enclosures. Each fiber optic switch database must be accessible both on-site and remotely using IP-based communications. 2.1 Network Hardware Shipment All network hardware shall be ordered by INTEGRATOR and drop-shipped from the hardware vendor. Shipping terms shall be FOB Destination and custody of network hardware shall transfer upon delivery to the Palo Alto Municipal Service Center facility. 2.2 Network Configuration DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 16 INTEGRATOR shall develop a network IP-scheme to support the traffic signal controllers and coincide with all existing traffic signal auxiliary equipment, including conflict monitors/MMUs, battery backup systems and, and video surveillance equipment. INTEGRATOR shall develop the network IP scheme and submit a document (Network Configuration Report) to CITY outlining proposed IP addresses for traffic signal controllers. INTEGRATOR shall receive any comments within five (5) business-days of submittal. 2.3 Program New Fiber Optic Switches INTEGRATOR shall program the new Hirschmann fiber optic switches. INTEGRATOR shall identify fiber optic routes to support traffic management on the network and redundancy. INTEGRATOR will not be responsible for fiber optic termination work, however, INTEGRATOR shall provide a memorandum recommending fiber optic terminations (Fiber Optic Termination Memorandum). INTEGRATOR shall configure fiber optic switches to coincide with the network IP-scheme and settings prescribed in the Network Configuration Report. INTEGRATOR shall submit a memorandum to CITY, acknowledging the completion of this task. 2.4 Remove Existing Fiber Optic Switches INTEGRATOR shall remove legacy network switches from traffic signal cabinets. INTEGRATOR shall remove fiber optic switches at the same time as the removal of the traffic signal controller and MMU. Equipment removed from traffic signal controllers shall be returned to CITY. 2.5 Install New Fiber Optic Switches INTEGRATOR shall install configured Hirschmann fiber optic switches. Installation of fiber optic switches shall be performed at the same time as the installation of the traffic signal controller and MMU. 2.6 Network Switch Training INTEGRATOR shall provide fiber optic switch training direct from Hirschmann. Fiber optic switch training shall be a one-day training session. 3.0 Camera Integration INTEGRATOR shall supply 25 new IP-based (Pan-Tilt-Zoom) PTZ cameras as part of this project. The preliminary locations where cameras are to be installed are provided in Table 2 below. The installation of cables and conductors and mounting of cameras shall be provided by CITY. IP schemes for new PTZ cameras shall be programmed by INTEGRATOR prior to installation by CITY. Table 2 – New Pan/Tilt/Zoom Camera Locations 1. University @ Middlefield 2. Middlefield @ Meadow 3. Embarcadero @ St. Francis 4. Middlefield @ Mayview- Library 5. Embarcadero @ Middlefield 6. Middlefield @ Montrose- Cubberly 7. San Antonio @ Charleston 8. Charleston @ Wilkie 9. San Antonio @ Middlefield 10. Arastradero @ Dolod-Terman 11. Charleston @ Middlefield 12. Palm @ Arboretum DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 17 13. Sand Hill @ Arboretum 14. University @ High 15. Sand Hill @ Pasteur 16. University @ Bryant 17. Arastradero @ Gunn High School 18. University @ Waverly 19. University @ Lincoln 20. Alma @ Lytton 21. Middlefield @ Lytton 22. Alma @ Hamilton 23. Middlefield @ Addison 24. Quarry @ Arboretum 25. Middlefield @ Colorado Specification: PTZ Cameras should include all outdoor enclosures and mounting hardware for installation on a Caltrans standard traffic signal pole. Cameras must support 1080p HD video with 18X optical zoom, H.264 MJPEG multi-streaming, Day/Night switching and be manufactured to support installation in harsh weather environments. INTEGRATOR shall also integrate video detection camera feeds into the system according to Task 3.3. Only video detection cameras utilizing coaxial video connections shall be integrated. INTEGRATOR shall integrate video detection cameras at the locations indicated in Table 3. Table 3 Video Detection Integration Locations Location Make Sandhill @ Oak Creek Apts. Proposed Iteris Sandhill @ Pasteur Proposed Iteris Sandhill @ Clark/Vineyard Proposed Iteris Sandhill @ Arboretum Proposed Iteris Sandhill @ Plum Proposed Iteris Sandhill @ London Plane Proposed Iteris Sandhill @ Durand Proposed Iteris Sandhill @ Stock Farm Proposed Iteris Welch @ LPH Iteris Welch @ Blake Wilbur Iteris Welch @ Pasteur Proposed Iteris San Antonio @ Charleson Iteris San Antonio @ Leghorn Iteris San Antonio @ Middlefield Iteris Alma @ E. Meadow Iteris Alma @ Alma Plaza Iteris Alma @ Charleston Iteris Quarry @ Vineyard Iteris Arastradero @ Coulombe Iteris Charleston @ Wilke Iteris Middlefield @ Mayview Iteris DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 18 3.1 PTZ Camera Shipment All PTZ cameras shall be ordered by INTEGRATOR and drop-shipped from the hardware vendor. Shipping terms shall be FOB Destination and custody of PTZ cameras shall transfer upon delivery to the Palo Alto Municipal Service Center facility. Physical PTZ camera installation shall be performed by CITY or others. 3.2 PTZ Camera Configuration INTEGRATOR shall perform initial PTZ camera configuration and determine initial device settings including programming of IP-schemes. INTEGRATOR shall ensure camera functionality and configure view presets. View presets shall include at least one preset view for each intersection approach. INTEGRATOR shall configure all video feeds and upgrade CITY’s current IVC software license to support all PTZ cameras. 3.3 Video Detection Configuration INTEGRATOR shall install new video encoders to digitize coaxial video detection cameras feeds. INTEGRATOR shall split coaxial video detection feeds and provide one feed to the video detection hardware rack, and the other feed to a digital video encoder. Digital video encoders shall have Ethernet connections and shall be IP addressable. INTEGRATOR shall provide necessary licenses and integrate video detection cameras into IVC software. 3.4 IVC License Upgrade INTEGRATOR shall upgrade CITY’s current IVC server software license to support up to 104 cameras (Includes: Existing PTZ cameras, New PTZ cameras, Iteris cameras). INTEGRATOR shall also supply workstations (rack-mount or desktop) in order to support the IVC server software. INTEGRATOR shall work with CITY IT staff in order to properly configure the server and ensure PTZ camera functionality with the IVC server software. This task will be completed upon agency acknowledgement of installation of the software. 3.5 IVC Servers INTEGRATOR shall provide servers or workstations capable of hosting CITY’s expanded IVC Server software license. INTEGRATOR shall submit specification cut sheets to CITY and receive product approval before ordering the servers. 4.0 Computer Hardware INTEGRATOR shall supply, workstations (PCs), Laptops and/or Tablet PCs are part of this project. INTEGRATOR shall supply six (6) workstations. INTEGRATOR shall also provide four (4) laptops or tablet PCs. All computer hardware shall be ordered by INTEGRATOR and drop-shipped from the hardware vendor. Shipping terms shall be FOB Destination and custody of computer hardware shall transfer upon delivery to the Palo Alto Municipal Service Center facility. 4.1 PC Hardware INTEGRATOR shall supply five (5) standard workstations and one (1) premium workstation as part of this project, including two PCs in the current traffic signal management center, one PC in the signal shop, one PC in the Municipal Service Center utility control center, one PC in CITY emergency management system in the police department at City hall, and one PC in the traffic engineering division. INTEGRATOR shall submit specification cut sheets to CITY and receive product approval before ordering project workstations. DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 19 4.2 Laptop Hardware INTEGRATOR shall provide two (2) laptops as part of this project. INTEGRATOR shall submit specification cut sheets to CITY and receive product approval before ordering project laptops. 4.3 Tablet PC Hardware INTEGRATOR shall provide two (2) Tablet PCs as part of this project. Tablet PCs shall be Windows Surface Pro 3 tablets (or newer model). Tablet PCs shall have built-in 4G wireless capabilities. INTEGRATOR shall submit specification cut sheets to CITY and receive product approval before ordering project tablets. 5.0 Central Management System Expansion 5.1 ATMS.now Installation INTEGRATOR shall upgrade CITY’s current ATMS.now license and shall install ATMS.now Enterprise Edition. This version of ATMS.now is capable of supporting all INTEGRATOR modules and all of CITY’s traffic signals. INTEGRATOR shall coordinate the installation of ATMS.now with CITY, and arrange for the date/time of the installation. The ATMS.now upgrade shall be installed remotely by INTEGRATOR Systems Engineers. CITY will initially receive off-the-shelf ATMS.now 2.0; modules will be added to the software as the project progresses and as custom modules are developed. 5.2 ATMS.now Database Integrity INTEGRATOR shall maintain CITY’s ATMS.now database integrity and ensure that historical data from CITY’s current ATMS.now system remains intact. 5.3 ATMS.now Client Application Installation INTEGRATOR shall install ATMS.now Client Applications on all new CITY workstations, laptops and tablets, as well as any existing workstations or laptops. INTEGRATOR shall ensure that the Client Application is capable of accessing the ATMS.now server via the CITY’s LAN. 5.4 ATMS.now Training INTEGRATOR shall provide two (2) days of ATMS.now training. INTEGRATOR shall provide hardcopies of all training material. 5.5 ATMS.now Configuration/Settings INTEGRATOR shall ensure that any existing traffic controllers and related settings defined in CITY’s current ATMS.now system are successfully migrated to the upgraded system. INTEGRATOR shall also configure the following settings within ATMS.now for all existing traffic controllers (intersections), as well as any intersections added to the ATMS.now system as part of this project:  Flex Groups  Time-space diagrams  Map objects using the Scan Builder  Turn/Phase/Directions  Link speeds DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 20  Congestion Maps (if adequate detection exists)  Master schedules  Triggers ATMS.now configuration shall be completed and invoiced incrementally. 5.6 PTZ Camera Integration INTEGRATOR shall integrate all IVC PTZ cameras, and create corresponding map objects within ATMS.now. Map objects will allow the ATMS.now operator to click on the map object and view the video feed through a built-in ATMS.now web browser. 5.7 Other Camera Integration INTEGRATOR shall integrate all video detection cameras into ATMS.now and create corresponding map objects within ATMS.now. Map objects will allow the operator to click on the map object and view the video feed through a built-in ATMS.now web browser. 6.0 Off-The-Shelf Module Deployment 6.1 SynchroGreen This section outlines tasks necessary for the installation of SynchroGreen Real-Time Adaptive Traffic Control System at nine (9) locations along Sand Hill Road. Proposed adaptive intersections are listed in Table 2. Table 2 - SynchroGreen Intersections No. SynchroGreen Intersection 1 Sand Hills Road @ Oak Creek Apts 2 Sand Hill Road @ Stockfarm 3 Sand Hill Road @ Pasteur/Clark 4 Sand Hill Road @ Durand 5 Sand Hill Road @ Vineyard Clark 6 Sand Hill Road @ Arboretum 7 Sand Hill Road @ Ronald McDonald-Plum 8 Sand Hill Road @ London Plane 9 Welch Road @ Pasteur 6.1.1 Detection Inventory INTEGRATOR has performed a field inventory for all nine (9) proposed SynchroGreen intersections on Sand Hill Road. All video detection for the nine (9) intersections shall be replaced with new video detection capable of connecting to 2070 traffic controllers via SDLC and provide 64-channel detection. INTEGRATOR shall provide all processors necessary to provide 4-channel (4 approach) video detection and remote surveillance capabilities at each DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 21 intersection. All video feeds at SynchroGreen intersections shall be integrated into the IVC system, as well as ATMS.now. Additionally, INTEGRATOR shall provide new video detection cameras; one (1) per approach. INTEGRATOR shall also provide all accessories and hardware necessary to install and operate video detection systems. CITY shall be responsible for the installation of any video detection equipment on signal mast arms/poles or installation of any device above, below or within the roadway right-of-way, as well as the installation of any cables outside the traffic signal cabinet. INTEGRATOR shall provide installation and configuration of all video detection equipment within the traffic signal cabinet. 6.1.2 SynchroGreen Database Configuration A INTEGRATOR Traffic Engineer shall simulate and program all SynchroGreen Central Server and Intersection databases (settings) before the actual system deployment. INTEGRATOR shall present recommended settings to CITY prior to deployment and allow them to comment on adaptive signal settings. 6.1.3 SynchroGreen Installation After all system hardware has been installed, INTEGRATOR shall install SynchroGreen software. INTEGRATOR shall install all necessary software on the ATMS.now server, and verify that Local Intersection software has SynchroGreen modules activated. INTEGRATOR shall install SynchroGreen using SynchroGreen adaptive settings and databases approved by CITY. 6.1.4 SynchroGreen Activation INTEGRATOR shall activate SynchroGreen after permission has been granted by CITY. A INTEGRATOR Traffic Engineer shall be onsite during system activation. INTEGRATOR shall verify detector functionality after system activation and review intermediate SynchroGreen calculations and final output. 6.1.5 SynchroGreen System Adjustments Once SynchroGreen has been successfully activated, INTEGRATOR staff shall begin fine- tuning SynchroGreen settings based on observations and measurements from system detection. The adjustment period may last 3-4 days, depending on the size and complexity of the system. INTEGRATOR may remotely monitor the Sand Hill Road SynchroGreen corridor for up to three (3) weeks after initial SynchroGreen activation. 6.1.6 SynchroGreen Training INTEGRATOR shall provide two (2) days of SynchroGreen training. INTEGRATOR shall provide hardcopies of all training material. 6.2 Web.now INTEGRATOR’s Web.now application shall be installed as a part of this project. The module must allow for the export of real-time congestion and surveillance video data to customers online in both traditional web page and smart phone/tablet formats. INTEGRATOR shall configure Web.now web pages, customizing items such as colors and logos and will ensure that generated web pages display properly on all major web browsers. The version of Web.now delivered to CITY shall utilize Google Maps. INTEGRATOR shall integrate the following elements: DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 22  Google Maps  Congestion Data  Camera Video (IVC Cameras & IP-based Video Detection Cameras)  Incidents  Parking Data (see Task7.3). Once Web.now is deployed, INTEGRATOR shall verify that congestion data is correct and also that camera icons, labels and images disseminated by Web.now display correctly and video image refresh rates are acceptable. INTEGRATOR shall also verify that Web.now data and web pages are functional with mobile devices from Apple and Android, as well as on Windows Surface Pro tablet devices. INTEGRATOR shall install Web.now (traditional and mobile web pages) and shall allow CITY to review and comment. INTEGRATOR shall receive any comments within five (5) business- days of submittal. INTEGRATOR shall review comments and provide a response (acknowledged, cannot provide this feature, or requires additional development). INTEGRATOR will than perform any agreed-upon changes to Web.now. CITY shall provide a final review of Web.now and acknowledge acceptance. INTEGRATOR will provide a server to host the Web.now web pages. This server will be used for both Web.now, as well as the Smart Vehicle Data Export (see Task 7.2). 6.3 StreetSync INTEGRATOR shall provide four (4) licenses of StreetSync software and install the StreetSync module for ATMS.now. INTEGRATOR shall install StreetSync software on laptops and tablet devices as directed by CITY. INTEGRATOR shall configure all initial StreetSync settings and perform the initial synchronization between StreetSync and ATMS.now and ensure all databases are synchronized correctly. 7.0 Custom Module Development/Deployment 7.1 Google Maps INTEGRATOR shall update CITY’s ATMS.now server and incorporate Google Maps into the ATMS.now Map View. INTEGRATOR shall verify that Google Maps functions properly and that images/aerials refresh as the users zoom, pan and manipulate the Map View. Additionally, INTEGRATOR shall verify that Scan Builders and Map Scan Screens function with Google Maps and that IVC PTZ cameras, video detection cameras and other devices appear correctly. INTEGRATOR will update all CITY ATMS.now Client Applications and ensure that Google Maps functionality is optimized. 7.2 Smart Vehicle Data Export INTEGRATOR shall create a data export system intended to be used by Smart Vehicle manufacturers. The minimum data parameters that shall be included in the Smart Vehicle Data Export module include: Active Phase/Direction, Active Timer, Active Controller Time, Phase Next, Max Green Timer, Yellow, Red Clearance, Gap, Preempts (Rail, EV, Transit), Walk, Don’t Walk, Coordination On/Off, and Coordination Hold. Additional parameters that must be supported through the real-time data sharing include: Pedestrian Call by Phase/approach, Bicycle DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 23 Calls by Approach, Active Vehicle Calls, and Occupancy/Volume data. Bicycle calls by approach will be provided through the use of MSSEDCO microwave or video detection equipment into predefined detection channels of traffic signal controllers. INTEGRATOR shall create a non-proprietary data format (protocol) for disseminating the specified data; this data format will be determined by INTEGRATOR and CITY after project kick-off and after any meetings with auto manufacturer stakeholders. INTEGRATOR shall submit a memorandum documenting the Smart Vehicle Data protocol to CITY. This protocol shall include a “broadcast” system that allows CITY to enter recipient IP addresses/port numbers (and other relevant network settings) to broadcast the Smart Vehicle Data to authorized parties. CITY’s Smart Vehicle Data Export system shall be designed such that ATMS.now data will be exported to an external gateway (open data server), located outside CITY’s firewall. 7.3 ATMS.now/Web.now Parking Data INTEGRATOR shall integrate CITY’s real time parking data system into CITY’s ATMS.now and Web.now system. INTEGRATOR will coordinate with companies already partnering with CITY to provide parking occupancy data to obtain the relevant real time parking data for inclusion. The Parking Data will be aggregated and displayed as a symbol on the ATMS.now/Web.now map interfaces. When a user clicks on the symbol, a popup will illustrate the number of available parking spaces (e.g., 3 of 6 available) at the location where parking data is available. Parking data shall be displayed in real time, without the user having to refresh the browser/interface. 8.0 Project Management 8.1 General Project Management This task relates to general project management and oversight of the installation of various components of this project over the six (6) months from the commencement of the project. Project management items shall include the creation and submission of requested documents (reports, memorandums, etc.), meeting attendance, onsite management, general project correspondence and coordination, as well as project scheduling and controls. 8.2 Auto Manufacturer/Third-Party Coordination INTEGRATOR shall obtain the network information from Auto Manufacturers and other parties’ listening servers as directed by CITY. INTEGRATOR shall enter this network information into the developed Smart Vehicle Data Export system and broadcast the requested data. 9.0 Traffic Signal Cabinets 9.1 Traffic Signal Cabinets This Project includes the purchase of traffic signal cabinets (M Cabinet and G Cabinet) for installation by CITY along Downtown intersections to replace aged traffic signal cabinets that are not large enough to support the new traffic signal controllers being provided as part of this project. INTEGRATOR shall procure traffic signal cabinets as purchased and directed by CITY. INTEGRATOR may assist CITY to specify and “kit” each traffic signal cabinet purchased as DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 24 part of this contract. Shipping terms shall be FOB Destination and custody of traffic signal cabinets shall transfer upon delivery to the Palo Alto Municipal Service Center facility. CITY shall be responsible for the installation of traffic signal cabinets. 10.0 System Access and Support 10.1 System Access During Project Deployment INTEGRATOR shall be granted remote access to CITY’s traffic signal network during the entirety of this project. Remote access shall be provided to all central management servers, video servers and traffic databases. Remote Access may be provided via Windows VPN/Remote Desktop, Internet-based remote desktop applications or other secure VPN portal. INTEGRATOR shall formally submit a list of individuals to CITY that require access to the system during project deployment. 10.2 System Access Post-Deployment and during Warranty Period INTEGRATOR shall be granted remote access to CITY’s traffic signal network during the system warranty period, as well as during any extended warranty/maintenance period. Remote Access may be provided via Windows VPN/Remote Desktop, Internet-based remote desktop applications or other secure VPN portal. INTEGRATOR shall submit a list of individuals to CITY that require access to the system during the warranty/maintenance period. 11.0 Wireless Communications – Embarcadero Road 11.1 Wireless Communications INTEGRATOR shall install new wireless communications systems at the following intersections along Embarcadero Road to provide communications between traffic signal controllers and the ATMS.now central system where fiber optic communications do not currently exist:  Embarcadero @ Town & Country  Embarcadero @ Bryant  Embarcadero @ Waverly  Embarcadero @ Middlefield INTEGRATOR shall create a point-to-point wireless network terminating at the Embarcadero @ Town & Country intersection. The point-to-point wireless network shall connect to CITY’s existing fiber optic network at the Embarcadero @ Middlefield intersection. INTEGRATOR assumes one (1) wireless communication system per intersection. If more repeaters are required, due to wireless signal degradation or line-of-sight issues, INTEGRATOR shall present additional quantities to CITY as part of a separate proposal. CITY shall be responsible for the installation of wireless devices on signal mast arms/poles or installation of any device above, below or within the roadway right-of-way, as well as the installation of any cables outside the traffic signal cabinet. INTEGRATOR shall configure and install any equipment within the traffic signal cabinets. 12.0 Traffic Operations Center Server Rack DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 25 12.1 Server Rack INTEGRATOR shall provide a new server rack as part of this project to house new servers for Web.now, Smart Vehicle Data Exporter, as well as IVC software. INTEGRATOR shall submit specification cut sheets to CITY and receive product approval before ordering the server rack. Installation of all existing and new server and communications equipment into the server rack shall be performed by INTEGRATOR. WARRANTY INTEGRATOR shall provide a three (3) year warranty on all INTEGRATOR hardware and software as part of this project. This warranty is provided as part of the INTEGRATOR Product Maintenance Program and includes the repair or replacement of items that are deemed defective in material workmanship. Technical Support shall also be included as part of the INTEGRATOR Maintenance Program. Requests for Technical Support will be addressed by telephone or remote internet connection within 24 hours of the receipt of the request. Any support requests requiring onsite assistance will be addressed within three (3) business days of the receipt of the request. On site assistance may be performed by INTEGRATOR or Western Pacific Signal (WPS). In cases where software defects are discovered during the warranty period, INTEGRATOR will provide a software update that addresses the issue. Hardware items will first be addressed remotely and then on-site. Defective hardware items are eligible for repair or replacement under this warranty. ALL FREIGHT SHALL BE SHIPPED FOB DESTINATION DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 26 EXHIBIT “B” SCHEDULE OF PERFORMANCE INTEGRATOR shall perform the Services so as to complete each Task within the number of days/weeks specified on the following timeline. The time to complete each Task may be increased or decreased by mutual written agreement of the project managers for INTEGRATOR and CITY so long as all work is completed within the term of the Agreement. DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Task Name 0. Meetings  0.1 Project Kickoff Meeting  0.2 Recurring Project Meeting  0.3 Project Closeout Meeting 1. Traffic Signal Controllers 1.x Manufacture Traffic Controllers 1.1 Database Conversion 1.3 Controller Burn‐in 1.3 Controller Burn‐in 1 1.3 Controller Burn‐in 2 1.3 Controller Burn‐in 3 1.4 Traffic Signal Controller Shipment 1.4 Traffic Signal Controller Shipment 1 1.4 Traffic Signal Controller Shipment 2 1.4 Traffic Signal Controller Shipment 3  1.5 MMU Configuration  1.6‐1.7 Traffic Signal Controller/MMU Removal/Installation  1.8 Traffic Signal Controller Training 2. Network Configuration/Network Hardware Installation 2.1 Network Hardware Shipment 2.1 Network Hardware Shipment 1 2.1 Network Hardware Shipment 2  2.2 Network Configuration  2.3 Program New Fiber Optic Switches  2.4‐2.5 Remove/Install Fiber Optic Switches  2.6 Network Switch Training 3. Camera Integration  3.1 PTZ Camera Shipment  3.2 PTZ Camera Configuration  3.3 Video Detection Configuration  3.4 IVC License Upgrade  3.5 IVC Servers 4. Computer Hardware  4.1 PC Hardware Delivery  4.2 Laptop Harware Delivery  4.3 Tablet PC Hardware Delivery 5. Central Management Expansion  5.1 ATMS.now Installation  5.2 ATMS.now Database Integration  5.3 ATMS.now Client Application Installation  5.4 ATMS.now Training  5.5 ATMS.now Configuration/Settings  5.6 PTZ Camera Integration  5.7 Other Camera Integration 6. Off‐the‐Shelf Module Deployment 6.1 SynchroGreen 6.1.1 Detection Inventory/Installation 6.1.2 SynchroGreen Database Configuration 6.1.3 SynchroGreen Installation 6.1.4 SynchroGreen Activation 6.1.5 SynchroGreen System Adjustments 6.1.6 SynchroGreen Training 6.2 Web.now 6.3 Street Sync 7. Custom Module Development/Deployment 7.1 Google Maps 7.2 Smart Vehicle Data Export 7.3 ATMS.now/Web.now Parking Data 9. Traffic Signal Cabinets 9.1 Traffic Signal Cabinets 11 Wireless Communications ‐ Embarcadero Road 11.1 Wireless Communications 12. Traffic Operations Center Server Rack 12.1 Server Rack 19 26 2 9 16 23 30 7 14 21 28 4 11 18 25 1 8 15 22 1 8 15 22 29 5 12 19 26 3 10 17 24 31 7 14 21 28 Nov '14 Dec '14 Jan '15 Feb '15 Mar '15 Apr '15 May '15 Jun '15 Task Milestone Summary Deadline Progress Page 1 Palo Alto TImeline Date: 9/30/14 EXHIBIT "B" SCHEDULE OF PERFORMANCEDocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 28 EXHIBIT “C” COMPENSATION CITY agrees to compensate the INTEGRATOR for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. The compensation to be paid to INTEGRATOR under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $1,948,308.00. INTEGRATOR agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $2,139,005.00. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to CITY. INTEGRATOR shall perform the tasks and categories of work as outlined and budgeted below. CITY’s project manager may approve, in writing, the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $1,948,308.00 and the total compensation for Additional Services does not exceed $2,139,005.00. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $475,250.00 (Traffic Signal Controllers) Task 2 $447,500.00 (Network Switches) Task 3 $197,125.00 (PTZ Integration) Task 4 $28,325.00 (Computer Hardware) Task 5 $105,800.00 (Central Management System Expansion) Task 6 $370,550.00 (Off the Shelf Module Deployment) Task 7 $170,500.00 (Custom Module Development/Deployment) Task 8 $39,000.00 DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 29 (Project Management) Task 9 $73,500.00 (Traffic Signal Cabinets) Task 10 Included (No Charge) (System Access & Support) Task 11 $28,000.00 (Wireless Communication – Embarcadero Road) Task 12 $9,000.00 (Traffic Operations Center Server Rack) FREIGHT (FOB DESTINATION) $3,758.00 Sub-total Basic Services $1,948,308.00 Reimbursable Expenses None Total Basic Services and Reimbursable expenses $1,948,308.00 Additional Services (Not to Exceed) $190,697.00 Maximum Total Compensation $2,139,005.00 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse INTEGRATOR for the following reimbursable expenses at cost. Expenses for which INTEGRATOR shall be reimbursed are: None All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $0.00 shall be approved in advance by CITY’s project manager. ADDITIONAL SERVICES INTEGRATOR shall provide additional services only by advanced, written authorization from CITY. INTEGRATOR, at CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and INTEGRATOR’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev. Feb. 2014 30 agreed to, in writing, by CITY’s project manager and INTEGRATOR prior to commencement of the Services. Payment for Additional Services is subject to all requirements and restrictions in this Agreement DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev Feb. 2014 31 EXHIBIT “C-1” RATE SCHEDULE Scope of Work Section Sub Tasks Scope Mapping Cost Mapping Extension 1.0 - Traffic Signal Controllers (2070 & 980 ATC) Traffic Controller Hardware 1.1, 1.2, 1.3, 1.4 Base Bid: 1 - 4, 16 340,750$ MMU Hardware 1.5 Base Bid: 5 - 8 104,400$ Traffic Controller Installation 1.6, 1.7 Base Bid: 17 30,100$ Traffic Controller Training 1.8 Base Bid: 17 -$ Section 1 - Total 475,250$ 2.0 - Network Switches Network Switch Hardware 2.1 Base Bid: 12 - 15 358,000$ Network Switch/ Network Configuration 2.2, 2.3 Base Bid: 12 - 15 44,750$ Network Switch Installation 2.4, 2.5 Base Bid: 12 - 15 22,375$ Network Switch Training 2.6 Base Bid: 12 - 15 22,375$ Section 2 - Total 447,500$ 3.0 - PTZ Integration IVC Cameras (25 - PTZ 3330 - 14) 3.1 Add Alt: 23, Increased scope 90,000$ IVC Camera Configuration 3.2, 3.3 Add Alt: 23 10,000$ Additional IVC Licenses (88)3.4 Increased scope 45,700$ Additional IVC Servers (4)3.5 Increased scope 51,425$ Section 3 - Total 197,125$ 4.0 - Computer Hardware Standard PC Hardware (5)4.1 Included in cost sheet notation 10,725$ Premium PC Hardware (1)4.1 Included in cost sheet notation 6,725$ Laptop Hardware (2)4.2 Included in cost sheet notation 5,725$ Tablet Hardware (2)4.3 Included in cost sheet notation 5,150$ Section 4 - Total 28,325$ 5.0 - Central Management System Expansion ATMS Central System Software 5.1, 5.2 Base Bid: 9 75,000$ ATMS Central System Configuration 5.3, 5.5 Base Bid: 9 10,000$ ATMS Central System Training 5.4 Base Bid: 9 10,000$ PTZ Camera Integration 5.6, 5.7 Base Bid: 9 10,800$ Section 5 - Total 105,800$ 6.0 - Off The Shelf Module Deployment SynchroGreen Deployment 6.1 (all except 6.1.1) Add Alt: 18 - 20 171,000$ SynchroGreen Detection 6.1.1 Add Alt: 18 - 20 169,550$ Web.now Deployment 6.2 Base Bid: 10 30,000$ StreetSync Deployment 6.3 Added Feature at no charge -$ Section 6 - Total 370,550$ 7.0 - Custom Module Development/Deployment Google Maps Development 7.1 Base Bid: 10 35,000$ Smart Vehicle Data Export Development/Deployment 7.2 Base Bid: 11 98,500$ Smart Vehicle Data Server 7.2 Add Alt: 21 12,000$ Parking Data Integration 7.3 Increased Scope 25,000$ Section 7 - Total 170,500$ 8.0 - Project Management General Project Management - ATMS 8.1 Base Bid: 9, 10, 11 34,000$ Auto Manufacturer - Third Party Coordination 8.2 Increased Scope 5,000$ Section 8 - Sub Total 39,000$ 9.0 - Traffic Signal Cabinets Traffic Signal Cabinets - G Cabinets (6)9.1 Increased Scope 40,200$ Traffic Signal Cabinets - M Cabinets (3)9.1 Increased Scope 33,300$ Section 9 - Total 73,500$ 10.0 - System Access and Support Section 10 - Total 10.1, 10.2 No charge -$ 11.0 - Wireless Communications - Embarcadero Road 11.1 Increased Scope 28,000$ 12.0 - Traffic Operations Center Server Rack 12.1 Increased Scope 9,000$ Freight 3,758$ Sub Total (Sections 1 - 10)1,948,308$ Additional Service 190,697$ Grand Total 2,139,005$ DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev Feb. 2014 32 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRE D TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBINTEGRATORS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $25,000 REQUIRE CITY’S PRIOR APPROVAL. II. INTEGRATOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Professional Services Rev Feb. 2014 33 THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE INTEGRATOR SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE INTEGRATOR SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 DocuSign Envelope ID: 86D9019E-E548-4967-880E-786696EF4767 Attachment B ORDINANCE NO. XXXX ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR FISCAL YEAR 2015 IN THE CAPITAL IMPROVEMENT FUND FOR THE TRAFFIC SIGNAL AND ITS UPGRADE PROJECT IN THE AMOUNT OF $915,603, OFFSET BY A TRANSFER FROM THE CITYWIDE TRAFFIC IMPACT FEE FUND, IN ORDER TO ALLOW FOR THE REPLACEMENT OF THE REMAINING TRAFFIC SIGNAL CONTROLLER INVENTORY WITH NEW CONTROLLERS, VARIOUS TRAFFIC SINGAL SYSTEM INNOVATIONS, AND SERVER UPGRADES AND SECURITY IMPROVEMENTS. The Council of the City of Palo Alto does ordain as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 16, 2014 did adopt a budget for Fiscal Year 2015; and B. The Palo Alto Traffic Signal System Upgrade project will replace traffic signal controller hardware at each of the city’s 100 signalized intersections; and C. The new traffic controllers will enable additional traffic signal timing strategies and help to improve the efficiency of Palo Alto streets; and D. The project replaces the remaining traffic signal controller inventory in the field with new Trafficware controllers and expands the current central management system to allow for communications to all signalized intersections. The new controllers will enable additional traffic signal timing strategies and improve the reliability of the City’s traffic signals; and E. The project also includes innovations that will allow the city to better monitor and respond to traffic signal problems in the City. Included in the project are upgrades to the Downtown Fiber Optic Network, Traffic Signal cabinet upgrades, traffic monitoring equipment, and additional server and computer upgrades for Traffic Operations and the Emergency Operations Center. SECTION 2. In the Capital Improvement Fund, the Traffic Signal and ITS Upgrades project is hereby increased by Nine Hundred and Fifteen Thousand, Six Hundred and Three Dollars, offset by a corresponding transfer from the Citywide Traffic Impact Fee Fund. SECTION 3. In the Citywide Traffic Impact Fee Fund, the transfer to the Capital Improvement Fund is hereby increased by Nine Hundred and Fifteen Thousand, Six Hundred and Three Dollars, offset by a decrease to the fund balance. Of the increased transfer, Three Hundred Seventy Six Thousand, Seven Hundred Twenty Five Dollars represents fees paid in association with the Stanford University Medical Center project, and will support the cost of a new traffic adaptive signal system at nine intersections on and along Sand Hill Road to help facilitate commute and incident traffic generated by the project. SECTION 4. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 5. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Manager City Attorney Director of Public Works Director of Administrative Services City of Palo Alto (ID # 5298) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: CAO Committee Recommendation to Select Recruiting Firm Title: Council Appointed Officers Committee Recommendation to Select Recruiting Firm for City Clerk Recruitment From: City Manager Lead Department: Human Resources Recommended Motion The CAO Committee recommends that Council select the recruiting firm of Peckham and McKenney for the City Clerk recruitment. Executive Summary On Nov. 14, 2014, the CAO Committee met to interview recruiters for the City Clerk recruitment, and recommends to Council to select the recruiting firm Peckham and McKenney. Background On Nov. 14, 2014, the CAO Committee interviewed three recruiting firms who responded to a Request for Proposals. The three firms who responded were Bob Murray & Associates, Bobby Peckham (Peckham and McKenney) and Heather Renschler (Ralph Anderson & Associates). Discussion Chairman Greg Scharff and Committee Members Nancy Shepherd and Larry Klein attended the November 14, 2014 CAO Committee meeting. Upon interviewing Bob Murray of Bob Murray & Associates, Bobby Peckham of Peckham and McKenney, and Heather Renschler of Ralph Anderson & Associates, the CAO Committee discussed the relative merits of the various proposals, considering overall cost, availability of the primary recruiter, experience and likelihood of success. After discussion, the CAO Committee voted three in favor to recommend City of Palo Alto Page 2 Peckham and McKenney, with Liz Kniss not in attendance. Resource Impact It is anticipated that there is sufficient funds in the City Clerk’s Fiscal Year 2015 budget to absorb the cost of the recruiting effort. Environmental Review Selection of a recruiting firm is not a project subject to environmental review. Attachments:  Attachment A: 11-14-14 CAO ACTION MINUTES (DOC) Council Appointed Officers Committee DRAFT Action Page 1 of 1 Friday, November 14, 2014 Special Meeting Council Member Klein called the meeting to order at 5:04 P.M. in the Council Conference Room, 250 Hamilton Avenue, Palo Alto, California. Present: Klein, Scharff arrived at 5:04 P.M., Shepherd Absent: Kniss Agenda Items 1. Interview of Recruitment Firms (City Clerk) and Recommendation to City Council. MOTION: Council Member Klein moved, seconded by Council Member Scharff to recommend the City Council approve the selection of Bobbi Peckham of Peckham and McKenney, Inc. to conduct the recruitment for the City Clerk. MOTION PASSED: 3-0 Kniss absent ADJOURNMENT: Meeting adjourned at 6:07 P.M. City of Palo Alto (ID # 5067) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: Risk Assessment Study PVC/PE Materials in the City of Palo Alto Natural Gas Distribution System Title: Approval of a Utilities Enterprise Fund Contract with Jana Corporation In the Amount of $107,768 for a Risk Assessment Study of Piping Material in the City's Natural Gas Distribution System, Capital Improvement Program GS- 11002, Gas System Improvement From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to execute the attached contract with Jana Corporation (Attachment A) in a not to exceed amount of $107,768 for the Capital Improvement Program (CIP) GS-11002, Gas System Improvement (Risk Assessment Study of PVC and PE Gas Piping Material in the City of Palo Alto’s natural gas distribution system). Staff also recommends that Council approve and authorize the City Manager or his designee to negotiate and execute changes to the contract with Jana Corporation for related additional but unforeseen work (additional services), which may develop during the project, the total value of which shall not exceed $10,777, or 10% of the proposal cost (RFP #152453). Background In the early 1990s, Palo Alto performed an assessment of the age and condition of the materials in the natural gas distribution system. Based on this assessment, in 1991, City Council approved an accelerated Capital Improvement Program (CIP) to replace the City’s aging utility infrastructure. The CIP natural gas distribution system program targeted replacement of acrylonitrile butadiene styrene (ABS) mains and services as the highest priority. Over the past 20 years the City concentrated on replacing ABS mains and services, and expects that all known ABS material, including ABS services connected to mains with materials other than ABS, will be replaced with polyethylene (PE) by March 2015. The City of Palo Alto has implemented a Distribution Integrity Management Plan (DIMP) for its gas distribution system, in compliance with Federal gas pipeline safety regulations, to ensure City of Palo Alto Page 2 that the gas distribution system is managed safely. One of the functions of the DIMP is to establish relative risk of various pipe materials in the system. As a result, the City has identified polyvinyl chloride (PVC), located in business districts, as a material in need of replacement. The City’s remaining ABS piping, also flagged in the DIMP as a higher risk material, is currently being replaced on Gas Main Replacement (GMR) Project 19A, 20 and 21. The City’s natural gas distribution system currently has approximately 37.0 miles of PVC piping comprised of 2” through 6” diameter mains installed mostly in early to late ‘70s. Staff also wants to evaluate the distribution system’s polyethylene (PE) materials to determine its life expectancy. The City’s analysis considers that older PE materials could eventually pose a failure risk. One of the early PE piping types prone to failure was Aldyl A. All known sections of Aldyl A piping in the City’s distribution system are being replaced on the current GMR Project. There are approximately 99.5 miles of PE piping comprising of 2” through 8” diameter mains installed since the mid-70s in the City, with the majority of PE piping installed since mid-90s. Discussion The scope of this contract includes a comprehensive assessment of the condition of the PVC and PE materials in the City’s natural gas distribution system, evaluation of risks associated with the materials, and determination of PVC annual infrastructure replacement rate. The work to be performed under the contract includes the following:  Comprehensive assessment study of the condition of PVC and PE material in the City’s natural gas distribution system including: o evaluation of risks associated with the material leak rate for the next 5 years, o evaluation of performance during an earthquake and other disruptive operating conditions, o life expectancy analysis, and o guidelines for development of a replacement program that prioritizes the replacements and recommends an annual replacement rate (PVC). The term of this Agreement shall be from the date of its full execution through December 31, 2015. Selection Process Requests for Proposals for this project were sent out to four consultants on May 19, 2014. The proposal period was 16 calendar days. One consultant, Jana Corporation, submitted a proposal of $107,768. A staff committee reviewed the proposal and determined that Jana Corporation has the ability to provide the services needed under this contract. Staff is recommending that this contract be City of Palo Alto Page 3 awarded to Jana Corporation because they have the required expertise in plastics analysis and utility experience to perform the work specified and because Jana Corporation is the lowest responsible, responsive bidder (and the only bidder). Resource Impact Funds for this capital project are available in the Gas System Improvement project (GS-11002). Policy Implications The approval of this contract is consistent with existing City policies including the Council approved Utilities Strategic Plan-Strategic Objectives: BP1. Ensure a reliable supply of utility resources, BP2. Operate the utility systems safely, BP3. Replace infrastructure before the end of its useful life, and PT4. Investigate and adopt innovative technologies. Environmental Review Approval of the contract with Jana Corporation does not meet the California Environmental Quality Act’s (CEQA) definnition of “project” under California Public Resources Code Section 21065, thus no environmental review is necessary. Attachments:  Attachment A: Jana Agreement (PDF) CITY OF PALO ALTO CONTRACT NO. C15152453 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JANA CORPORATION FOR PROFESSIONAL SERVICES This Agreement is entered into on this 17th day of November, 2014, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and JANA CORPORATION, a corporation in the Canadian province of Ontario, located at 280B Industrial Parkway S, Aurora, ON L4G 3T9 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to conduct a Risk Assessment Study of PVC/PE materials in CAP Natural Gas Distribution System (“Project”) and desires to engage a consultant to provide professional services in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through December 31, 2015 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed one hundred seven thousand, seven hundred sixty-eight dollars ($107,768.00). In the event Additional Services are authorized, the total compensation for Basic Services, Additional Services and reimbursable expenses shall not exceed one hundred eighteen thousand five hundred forty-five dollars ($118,545.00). The applicable rates and schedule of payment are set out in Exhibit “C- 1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY’s stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: NSF Janalab 280B Industrial Pkwy. S., Aurora, ON L4G3T9 CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Sarah Chung, as the Project Supervisor to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City’s project manager is Aleksandr Pishchik, Utilities Department, Engineering Division, Telephone: (650) 566-4521. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project supervisor at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the City’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 25.9 All unchecked boxes do not apply to this agreement. 25.10 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 25.11 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO City Manager APPROVED AS TO FORM: Senior Asst. City Attorney JANA CORPORATION Attachments: EXHIBIT “A”: SCOPE OF WORK EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 President & CEO Wayne Bryce EXHIBIT “A” SCOPE OF SERVICES City of Palo Alto Natural Gas Distribution System and Capital Improvement Program The City of Palo Alto natural gas distribution system is comprised of 2” through 12” diameter mains of various materials including acrylonitrile butadiene styrene (ABS), polyethylene of medium density (PE), polyvinyl chloride (PVC), and Schedule 40 Grade B Steel (coated, wrapped and cathodically protected) totaling 209.5 miles. The distribution system’s Maximum Allowable Operating Pressure is 25 PSIG; however, Palo Alto has approximately 2200 ft. of 6” PVC and 2500 ft of 6” PE mains, dedicated to a single customer, and run at MAOP of 40 PSIG. In the early 1990’s, Palo Alto performed an assessment of the age and condition of the materials in the natural gas distribution system. Based on this assessment, in 1991 City Council approved an accelerated Capital Improvement Program (CIP) to replace the City aging utility infrastructure. The CIP program targeted replacement of ABS mains and services as the highest priority. Over 20 years the City concentrated on replacing ABS mains and services and expects that all known ABS material including individually located services will be replaced with PE by 2015. The City of Palo Alto natural gas Distribution System Integrity Management Plan identified PVC, located in business districts, as a threat with the second highest probability score only exceeded by remaining ABS material. Following completion of the current gas main replacement project by 2015, PVC will become material with the highest probability score. The City’s natural gas distribution system currently has approximately 37.0 miles of PVC piping comprised of 2” through 6” diameter mains installed mostly in early to late-70s making this portion of the system approximately 40 years old. According to the Distribution Integrity Management Plan, the City of Palo Alto plans to develop accelerated Capital Improvement Program to replace the existing PVC infrastructure with Polyethylene (PE) material. The City’s natural gas distribution system also contains approximately 99.5 miles of medium density polyethylene (PE) piping comprised of 2” through 8” diameter mains installed since mid-70s with majority of piping installed since mid-90s, making bulk of the PE system approximately 25 year old or younger. The pipes are joined by butt and electro fusion; the services are connected to the mains with electro fused tapping tees. The polyethylene system also contains approximately 3,000 feet of Aldyl A installed in early 70th , but this portion of the system is a part of a different project and will be replaced with PE by 2015. . Minimum Requirements for Risk Assessment Study: a.) PVC Piping: Perform a comprehensive assessment study of condition of the PVC material in the City’s natural gas distribution system to evaluate risks associated with the material and determine the appropriate annual Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 replacement rate. The risk assessment shall include the following Work: 1. Analysis of available leak data associated with a PVC portion of the City’s gas distribution system 2. Review of GIS data including: o Natural gas distribution system map o PVC material locations and associated installation time map o Business Districts locations map 3. Suggestion of locations within the PVC portion of the distribution system where actual sample shall be obtained. 4. Performance of physical property testing on the obtained samples min. including: o Density o Specific Heat Capacity o Glass Transition Temperature o Weight Average Molecular Mass o Impact Testing o Flattening Testing o Tensile Strength Testing o Elasticity Testing o Burst Pressure Testing o Suggesting MAOP pressure for piping based on test o Other tests that may be necessary in the opinion of the Consultant 5. Performance of failure modes analysis considering material and operating conditions: o Brittle failure o Joint failure o Rapid crack propagation o Earthquake resistance o Third party damage 6. Generation of a written report containing at a minimum: o Analysis of historical PVC material performance in the natural gas distribution industry in general based on summarizing publically available data o Specific analysis of PVC material performance in the City of Palo Alto natural gas distribution system reflecting at minimum above stated requirements in items 1 through 5 o Comparison of performance PVC material versus ABS and PE in the City’s distribution system o Leakage rate forecast of PVC piping for the next 5 years o Expected performance of PVC portion of distribution system during earthquake o Guidelines for development of an accelerated replacement program including location prioritizing and suggesting annual replacement rate. b.) PE Piping: Perform a relative risk assessment of the polyethylene material in the City’s natural gas distribution system. The risk assessment shall include the following Work: 1. Review of provided information on PE resins and pipe material installed 2. Analysis of available leak data associated with a PE portion of the City’s gas distribution system 3. Review of GIS data including: o Natural gas distribution system map o PE material locations and associated installation time map o Business Districts locations map Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 4. Performance of physical property testing on the submitted samples. The City of Palo Alto will not extract PE samples from the active distribution piping network. The City will provide samples available as a result of third party damage or extracted during tie-ins. The test shall include: o Density o Tensile Strength Testing o Elasticity Testing o Burst Pressure Testing o Suggesting MAOP pressure for piping based on test o Other tests that may be necessary in the opinion of the Consultant 5. Performance of failure modes analysis considering material and operating conditions: o Brittle failure o Joint failure o Rapid crack propagation o Earthquake resistance o Third party damage 6. Generation of a written report containing at a minimum: o Analysis of historical PE material performance in the natural gas distribution industry in general based on summarizing publically available data o Specific analysis of PE material performance in the City of Palo Alto natural gas distribution system reflecting at minimum above stated requirements in items 1 through 5 o Comparison of performance PE material versus ABS and PVC in the City’s distribution system o Leakage rate forecast for PE piping for the next 5 years o Expected performance of PE portion of distribution system during earthquake The City will provide: 1. A project contact person 2. Natural gas distribution map in PDF format 3. PVC material locations and associated installation time map in PDF format 4. PE material locations and associated installation time map in PDF format 5. Business districts locations map in PDF format 6. Leak data 2005 through 2013 in PDF or Excel format 7. Available or excavated PVC samples for testing 8. Available PE samples 9. Summary PE resin and pipe installed and associated footage 10. Other information that may be necessary for completion of the study Project Duration The final report is expected to be submitted within Six (6) months from Consultant receiving all required data including samples for analysis. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 Work Plan Proposed by Consultant Overview As part of their overall asset management program, the City of Palo Alto is proactively assessing the risk associated with an identified aging asset group – PVC and PE piping. Jana's overall Project Management approach, along with the scope of work as detailed in the Items below, will enable a clear, data-supported characterization of the piping asset situation that will prove acceptable to the City of Palo Alto. The work plan items described below in Item A (PVC Piping Assessment) and Item B (PE Piping Assessment) provide a more detailed discussion of the Consultant’s responsibilities under this Agreement. Item A: PVC Piping Assessment The purpose of Item A is to provide a risk assessment of the PVC piping in the City of Palo Alto's gas distribution system in comparison to ABS and PE piping to facilitate the determination of an appropriate replacement rate. The intent of this assessment is: (1) a leak rate projection and (2) a comparative assessment to provide a basis for a recommended replacement rate and (3) to enable efficient and effective direction of resources in prioritizing replacement decisions to minimize overall pipeline risk. Jana's assessment will encompass the following steps: 1. Literature Review The general performance of PVC piping in gas distribution piping will be summarized based on a comprehensive literature review, publically reported failure incidents and publically available data/information of other gas utilities' replacement programs. 2. Failure Modes Analysis A failure modes analysis will be conducted to identify and characterize the potential PVC piping failure modes and their associated consequences. This analysis will include the review of reported incidents from PHMSA, City of Palo Alto, etc. Failure modes that will be considered include leakage, rupture, third party damage, repair, Rapid Crack Propagation (RCP), etc. 3. Leak Rate Projections The performance history of PVC piping in the City’s system will be analyzed and leak rate projections through the next five (5) years will be developed, as possible, based on the available data and installation records. The City of Palo Alto will provide all available GIS data including the natural gas distribution system map, PVC piping samples, and associated installation time map and Business Districts’ location map. 4. Physical Property Testing Samples of PVC piping from the City’s distribution network will be identified for collection/exhumation and tested to assess the general performance properties of the piping. Physical Property testing will be conducted on two (2) PVC pipe samples and may include: - Visual Assessment - Density - Specific Heat Capacity - Glass Transition Temperature - Weight Average Molecular Mass - Impact Testing by Falling Tup - Flattening Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 - Tensile Strength and Modulus of Elasticity - Burst Pressure Testing The following physical property testing will also be conducted on up to five (5) additional PVC samples and may include: - Visual Assessment - Flattening - Burst Pressure Testing An assessment of the MAOP for the piping based on testing will be conducted. 5. Engineering Assessment A relative risk assessment of the PVC piping in the City of Palo Alto's gas distribution system compared to ABS and PE piping will be conducted based on the data and information collected during Steps 1 to 4. The assessment will be structured to facilitate the City’s development of a replacement program. The assessment will consider, as a minimum, the potential for brittle failure, joint failure, third party damage, earthquake resistance and rapid crack propagation as a function of pipe installation and operating conditions. 6. Final Report The report will include, but is not limited to, the following: - Analysis of historical PVC material performance in the natural gas distribution industry in general based on summarizing publically available data - Specific analysis of PVC material performance in the City of Palo Alto's natural gas distribution system as outlined in Steps 1-5 above - Comparison of performance of PVC material versus ABS and PE in the City's distribution system - Leakage rate forecast of PVC piping for the next 5 years - Expected performance of PVC portion of distribution system during earthquake - Guidelines for development of an accelerated replacement program, including suggested annual replacement rate Item B: PE Piping Assessment The purpose of Item B is to provide a relative risk assessment of the City of Palo Alto’s gas distribution system MDPE piping compared to PVC, ABS and other installed PE piping materials. The resulting risk ranking will provide the City with a technical basis to manage the replacement of the MDPE piping in its system. Jana's assessment will encompass the following steps: 1. Preliminary Investigation A preliminary investigation will be conducted to ensure that all relevant information will be brought to bear on the finalization of the Assessment for the City of Palo Alto. The investigation will start with identification of the specific MDPE piping asset and associated joining methods, fittings, etc. The Jana Pipe Performance Database (a historical log of PE pipe performance compiled over the last Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 decade) and a combination of external sources, conference proceedings and interviews with industry personnel, will be used to identify all available performance information regarding these materials. 2. Knowledge Consolidation Existing data on MDPE pipe will be gathered from the City of Palo Alto. The City will provide information on the PE resins and pipe material used in their gas distribution system, available leak data and GIS data (including the natural gas distribution system map, PE material locations and associated installation time map and Business District locations map). Jana will review all provided information. Any gaps in data will be identified. In addition, Jana Proprietary Data will be reviewed for relevance and appropriately incorporated in the MDPE Assessment. This data will be combined with Jana’s Proprietary Modeling Methodology to develop an assessment of the MDPE in the City of Palo Alto gas network. 3. Material Performance Data Collection Leak survey data and other performance information will be employed in the overall assessment. Ultimately, a projection of near term performance will be developed in support of a preliminary risk assessment. 4. Physical Property Testing Samples of PE piping from the Palo Alto distribution network may be identified for collection and tested to assess the general performance properties of the piping. The City has noted that only samples available as a result of third party damage or extracted during tie-ins will be provided. Testing of up to five (5) MDPE pipe samples will be performed, as available. Physical Property testing, as deemed appropriate, may include: - Density - Tensile Strength and Modulus of Elasticity - Burst Pressure Testing - Elevated temperature sustained pressure testing to assess Slow Crack Growth (SCG) resistance An assessment of the MAOP for the piping based on testing will be conducted. 5. Engineering Assessment A relative risk assessment of the City of Palo Alto’s MDPE gas pipe compared to PVC, ABS and other installed PE piping materials will be conducted based on the data and information from Steps 1 to 4. The assessment will be structured to facilitate the City’s development of a replacement program. The assessment will consider, as a minimum, the potential for brittle failure, joint failure, third party damage, earthquake resistance and rapid crack propagation as a function of pipe installation and operating conditions. 6. Final Report The report will include, but is not limited to, the following: - Analysis of historical PE material performance in the natural gas distribution industry in general based on summarizing publically available data - Specific analysis of PE material performance in the City of Palo Alto's natural gas distribution system as outlined in Steps 1-5 above - Comparison of performance of PE material versus PVC and ABS in the City's distribution system - Leakage rate forecast of PE piping for the next 5 years - Expected performance of PE portion of distribution system during earthquake Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 Proposed Innovations The technology underlying the proposed assessment is based on proprietary pipeline performance forecasting methodologies developed and validated by Jana for risk assessment of gas distribution pipelines. The approach is based on state-of-the-art reliability engineering techniques using Weibull Proportional Hazards modeling of historical leak data combined with a detailed understanding of the physical mechanisms of failure. This approach has been successfully applied to performance forecasting and risk assessments for a broad range of gas distribution system components including plastic pipe, fittings, joints and components, steel piping systems and specific system components. Coupled with this technology is Jana’s database of plastic gas distribution piping performance data and Jana’s specific expertise in performance validation of PVC and PE piping systems. Jana has been conducting Root Cause Analysis, performance validation assessments and risk assessments of plastic pipelines for over 15 years. A knowledge database of fault tress leading to plastic pipe failure has been developed and will be applied to the assessment of the PVC and PE piping in the City of Palo Alto’s system. Jana has also developed a database of material performance for PVC and PE piping materials which will be coupled with the pipe testing outlined in this proposal and used to develop the overall risk assessment. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone/task within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Project Schedule Jana projects kick-off with a teleconference meeting to clarify the overall project objectives and timeline and to establish the Project Team. The Project Team will confirm the resources available and characterize the data availability, data format for the piping asset and sample availability. As applicable a general data request, to be detailed and finalized on project initiation, will be issued. Timeline, Meetings & Reports - Timeline o Detailed project timeline to be developed and confirmed with the City of Palo Alto upon project initiation o Estimated project timeline is 6 months from receipt of all required information & samples o Jana will notify the City that the required samples or information is received in writing - Meetings o Initial project kick-off meeting via teleconference to introduce all personnel, identify roles and clarify objectives o Monthly teleconference meeting to review project activities/tasks - Reports o Draft Final Report, for review and comment by the City of Palo Alto o Final Report Notes - Final project timeline is dependent upon timely delivery of all requested information and samples. - The City of Palo Alto will provide a key point person to support this project (Project Liaison) and be the main point of contact for Jana - Additionally, engineering and operational resources required to facilitate the generation of the necessary information will be made available to Jana - The final report will be provided in .pdf format. All background data and detail will be provided in the Appendices. - This proposal provides for the issuance of one (1) Draft report and one (1) Final report and additional revisions are outside the scope of this proposal. Timeline and Cost Breakdown (PVC) Item# Scope Timeline Cost 1 Literature Review Two weeks $1,681 2 Failure Modes Analysis Three weeks $3,894 3 Leak Rate Projections Twelve weeks $22,465 4 Physical Property Testing Eight weeks $15,861 Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 5 Engineering Assessment Three weeks $8,763 6 Final Report Four weeks $2,400 Total Project* Six months $55,064 *Some Project steps will be run concurrently Timeline and Cost Breakdown (PE) Item# Scope Timeline Cost 1 Preliminary Investigation Three weeks $2,240 2 Knowledge Consolidation Three weeks $4,562 3 Material Performance Data Collection Six weeks $9,446 4 Physical Property Testing Twelve weeks $11,600 5 Engineering Assessment Twelve weeks $22,456 6 Final Report Four weeks $2,400 Total Project* Six months $52,704 *Some Project steps will be run concurrently The project progress payments are based on the following milestones/deliverables: a. Project Initiation and Project Management: - Deliverables: o Clarification of Objectives and establishment of Project Team o Characterization of data availability and data format o On-going Project Management to ensure delivery of project objectives in committed timeline b. Data Characterization: - Deliverables: o Establishment of data needs o Collection of existing data o Analysis of existing data c. Model Development - Deliverables: o Characterization of leak mechanism and key variables o Correlation of key variables with field performance o Development of Leakage Rate Model(s) o Identification of Samples/Location for Field Sampling d. Field Sampling and Analysis - Deliverables: o Testing of samples o Analysis of sample data o Characterize asset condition e. Recommendations for Asset Replacement Program and Reporting - Deliverables: o Forecast of leak rates, using Leakage Rate Model(s) o Risk Ranking of asset, per forecasted leak rates o Characterize relative risk o Develop recommendations for annual replacement program o Issuance of Draft Report for review by City o Final Report Release Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as Exhibit C-1 up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $107,768.00. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation for Basic Services, reimbursable expenses, and Additional Services shall not exceed $118,545.00. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $107,768.00. ADDITIONAL SERVICES NOT DESCRIBED ABOVE: The CONSULTANT shall provide additional services above and beyond the services described above, only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 EXHIBIT C-1 HOURLY RATE SCHEDULE Cost Breakdown Item#A Scope Cost 1 Literature Review $1,681 2 Failure Modes Analysis $3,894 3 Leak Rate Projections $22,465 4 Physical Property Testing $15,861 5 Engineering Assessment $8,763 6 Final Report $2,400 Total Project* $55,064 Item#B Scope Cost 1 Preliminary Investigation $2,240 2 Knowledge Consolidation $4,562 3 Material Performance Data Collection $9,446 4 Physical Property Testing $11,600 5 Engineering Assessment $22,456 6 Final Report $2,400 Total Project* $52,704 *Some Project steps will be run concurrently Project Financials Task Scope Fee A Perform a comprehensive risk assessment study of PVC material in the City’s natural gas distribution system and submit a report as described in the Scope of Work $ 55,064 B Perform a relative risk assessment of the polyethylene material in the City’s natural gas distribution system and submit a report as described in the Scope of Work $ 52,704 Grand Total Not to Exceed: $107,768 Hourly Service Rates - Project Manager: $180/hour - Project Technical Lead/Executive Support: $400/hour - Principal Consultant: $300/hour - Technical Lead: $200/hour - Operations Director: $300/hour - Administrative Services: $100/hour Fees and rates are in US dollars. The noted rates span across all tasks in the project to deliver the final product. Request for additional services beyond the scope of work detailed in Items A and B will be quoted based on these rates. Project Progress Payments 30% Upon completion of review & characterization of data for the PVC and PE material assessments 30% Upon completion of Leak rate model development and identification of required samples 20% Upon completion of the field sampling and analysis 10% Upon issuance of Draft report 10% Upon issuance of Final report Professional Services Rev Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER Professional Services Rev Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 Professional Services Rev Feb. 2014 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 DocuSign Envelope ID: 23EB4364-53E0-4695-A2A9-04386E410450 City of Palo Alto (ID # 5257) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: Approval of Institute of Museum and Library Services Grant of $88,010 to Palo Alto Art Center Title: Approval of Institute of Museum and Library Services Grant of $88,010 to Palo Alto Art Center for a Collaborative Project Between the Palo Alto Art Center and the Junior Museum and Zoo From: City Manager Lead Department: Community Services Recommendation Staff recommends that Council authorize: 1. Approval of an $88,010 grant from the Institute of Museum and Library Services to the Palo Alto Art Center for the project Creative Ecology: Exploring our Environment with Art, Science, and the Community, a collaborative STEAM education project between the Palo Alto Art Center and Junior Museum and Zoo; and 2. The City Manager or his designee from the Community Services Department to manage the grant, including submission of the grant, reports, and requests for reimbursement. Executive Summary Creative Ecology is an innovative art and science residency program that promotes learning about and appreciation of the natural world through the creative process, engaging artists, art and science educators, and the larger community. This unique STEAM education and exhibition opportunity is intended to provide a model for the museum field. Receipt of grant funds and expenditures will commence in Fiscal Year 2016. Background The Institute of Museum and Library Services (IMLS) is the primary source of federal support for the nation’s 123,000 libraries and 35,000 museums. Their mission is to inspire libraries and museums to advance innovation, lifelong learning, and cultural and civic engagement. Their grant making, policy development, and research to help libraries and museums deliver valuable services that make it possible for communities City of Palo Alto Page 2 and individuals to thrive. This grant program is highly competitive. “The Institute of Museum and Library Services enlists hundreds of library and museum professionals throughout the United States to review grant applications and make recommendations on projects most worthy of funding,” says IMLS Director Susan H. Hildreth. “Receiving a grant from IMLS is significant achievement and we congratulate the Palo Alto Art Center for being among the 2014 IMLS museum grantees.” Discussion This IMLS grant will be used to support the Creative Ecology: Exploring Our Environment with Art, Science, and the Community project—a collaboration between the Palo Alto Art Center and the Junior Museum and Zoo. This 18-month project, commencing in July 2015, will comprise a series of four artist residencies, each with an artist who explores the natural world in his or her artwork. Each artist, with a group of community participants, will explore the natural open spaces around Palo Alto, then create a culminating artwork in the Palo Alto Art Center’s Glass Gallery. An art educator from the Palo Alto Art Center and a science educator from the Junior Museum and Zoo will work together to create opportunities for learning and engagement in the residency and with associated programing around the culminating exhibition Project intended results are as follows:  Adults and children will discover connections between art and science, and in the exhibited artwork, see how they can be successfully employed together  Children will be able to adopt 21st-century skills through STEAM-based learning projects  Children and adults will gain a greater appreciation of their local open-space environments and develop a personal connection to the environment, which in turn encourages community-based stewardship  Children will learn scientific and artistic literacy skills an develop ways of thinking that they can use in their continued education  Adults will gain exposure to working artists’ perspective, materials, and processes  Art and science museums elsewhere will learn about, and possibly employ, a model for interdisciplinary education that incorporates art and science The IMLS grant will fund the honoraria for participating artists and the fees associated for the art and science educators, along with materials. Per the Official Award Notification, (Attachment A) the City is required to provide $90,627 in cost sharing and staff is proposing an in-kind match of regular and temporary salaries to satisfy this requirement. Timeline The Creative Ecology project will commence in July 2015 with the first residency project. Prior to that, Palo Alto Art Center and Junior Museum staff will select City of Palo Alto Page 3 particpating artists (April 2015) and coordinate contracting for art and science educators (June 2015). Resource Impact The City’s grant award for is $88,010 and the City’s grant match is $90,627. Staff plans to accept the award early in Fiscal Year 2016. To fullfill the matching requirements, staff is recommending an in-kind match of requrlar and temporary salaries from the department’s Fiscal Year 2016 budget, subject to City Council approval. Attachments:  Attachment A: MA-10-14-0431-14 Award Notification (7) (PDF) Official Award Notification for Grants and Cooperative Agreements Date of Award August 12, 2014 From Total Award Amount To Award Period Award Number Awardee Name and Address Project Director 1305 Middlefield Road Palo Alto, CA 94301-3349 October 01, 2014 March 31, 2016 MA-10-14-0431-14 $ 88,010.00 08/12/2014 $88,010.00 Original Award Authorizing Official Rebecca Barbee 1313 Newell Road Palo Alto, CA 94303 1313 Newell Road Palo Alto, CA 94303 City of Palo Alto Org. Unit: Palo Alto Art Center Foundation, Inc MFA-Learning Experiences Museums for America Lisa Ellsworth CFDA Number: 45.301 Basic Award Information IMLS Authorizing Official Signature Name and Title Christopher J. Reich Senior Advisor, Office of Museums 59140301P0.2014.MP140.65010.41 Accounting Code: 59140301P0.2014.MP140.65010.41 1. The Institute of Museum and Library Services (IMLS) provides this grant support pursuant to 20 USC § 9101 et seq. 2. The award is made in support of the purposes set forth in the original application or, if noted in the special terms and conditions of the award, in a revised plan of work that has been approved by IMLS program staff. 3. The administration of this grant and the expenditure of grant funds are subject to the special terms and conditions of this award, which appear on the second page of the award notification, and the General Terms and Conditions for IMLS Discretionary Awards. The latter document incorporates by reference the audit requirements of OMB Circular A-133 and the applicable uniform administrative requirements and cost principles promulgated by the Office of Management and Budget. 4. The first request for payment will indicate the grantee’s acceptance of the award. 5. The schedule of due dates for financial and performance reports is attached as the final page of the award notification. TIN No. - 946000389 DUNS No. - 050520782 Official Award Notification, page 2 City of Palo Alto MA-10-14-0431-14 IMLS CONTACTS Questions related to changes in project activities, personnel, and budgets or the extension of the grant period should be addressed to Helen Wechsler at (202)653-4779 or hwechsler@imls.gov . Questions related to the processing of payments, financial reports, notices of overdue reports, interest earned on grant funds, or audit requirements should be sent via e-mail to the financial specialist for your award, whose name and contact information may be found at http://www.imls.gov/recipients/administration.aspx. Alternatively, you may e-mail grantsadmin@imls.gov. Please include your log number, MA-10-14-0431-14, in the subject line of your message. SPECIAL TERMS AND CONDITIONS OF THE AWARD The budget submitted on July 3, 2014 is approved. Changes in this budget will be subject to the limitations set forth in the General Terms and Conditions for IMLS Discretionary Awards. The grantee is required to cost share project expenses at no less than the level indicated in the approved budget. The approved budget includes a cost share of $90,627. The grantee is required to secure prior written approval from IMLS to replace or to substantially reduce the level of effort of the Project Director or the Authorizing Official identified on page 1 of this grant award notification, and/or of any personnel named in the List of Key Project Staff and Consultants submitted with the application. All requests for approval of such changes must be submitted as set forth in the General Terms and Conditions for IMLS Discretionary Awards. City of Palo Alto (ID # 5294) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: State Homeland Security Grant for FY 2013 Title: Adoption of a Resolution Authorizing the City Manager to Sign a Memorandum of Understanding on Behalf of the City of Palo Alto, for a Grant of Funds for the State Homeland Security Grant Program State Homeland Security Grant for FY 2013 From: City Manager Lead Department: Office of Emergency Services Recommended Motion Staff recommends that Council adopt the attached resolution authorizing the City Manager to sign a Memorandum of Understanding on behalf of the City of Palo Alto, a grant of funds made by the County of Santa Clara for the State Homeland Security Grant Program (SHSGP) for Fiscal Year 2013. Discussion The Federal Department of Homeland Security (DHS), through the State Homeland Security Grant Program (SHSGP), has awarded Fiscal Year 2013 grant funding to the State of California for a number of grant programs, including EMPG and SHSGP. The State, a grantee, has awarded funding to designated Operational Areas within the State for expenditure of these grant programs, including Santa Clara County. The County of Santa Clara Office of Emergency Services requests that each Jurisdiction in the Operational Area sign a Memorandum of Understanding in order to receive reimbursement for any training, exercises or projects utilized under the State Homeland Security grant program. In FY 2013, SHSGP projects are regional in nature meaning that the City of Palo Alto will not receive pre-allocated direct funding but will benefit from the acquisition of products and services in support of the Operational Area. The performance period for this grant is from 09-01-2013 through 05-31-2015. Resource Impact The Fire Department applied for and received $16,940 in SHSGP funding for their personnel to conduct online training via the ‘Blue Card’ system. The Blue Card Command online training allows students taking the course to practice standarized risk assessments and make operational decisions to be used on events involving terrorism and catastrophic circumstances. The concepts learned durign the Blue Card Command training will be shared at the Region’s Command Traning Centers during practical simulations involving multi-disciplenary/multi-agency training programs. No overtime costs are being requested City of Palo Alto Page 2 with this funding. Policy Implications The recommendations in this report do not represent a change in City policies. Environmental Review The recommendation in this report does not constitute a project requiring review under the California Environmental Quality Act (CEQA). Attachments:  Attachment: ATTACHMENT A: City of Palo Alto FY13 HSGP MOU (PDF)  Attachment: Exhibit A - SHSGP FY13 Funded Projects (PDF)  Attachment: Exhibit B - FY13 HSGP Assurances (PDF) AGREEMENT BETWEEN THE COUNTY OF SANTA CLARA AND THE CITY OF PALO ALTO GRANTING PROGRAM FUNDS FOR THE DISTRIBUTION OF 2013 HOMELAND SECURITY GRANT PROGRAM FUNDS This agreement is made November 15, 2013 by and between the County of Santa Clara (County) and the City of Palo Alto (City) for the distribution of 2013 Homeland Security Grant Program Funds. RECITALS WHEREAS, the 2013 Homeland Security Grant Program is made up; the State Homeland Security Program (SHSGP, CFDA #97.067); and WHEREAS, the SHSGP Program supports the implementation of State Homeland Security Strategies to address the identified planning, organization, equipment, training, and exercise needs for acts of terrorism and other catastrophic events. In addition, SHSGP supports the implementation of the National Preparedness Guidelines, the National Incident Management System (NIMS), and the National Response Framework (NRF); WHEREAS, the State has designated the County of Santa Clara as the Operational Area for purposes of distributing SHSGP funds to the cities, special districts and other entities within the County. An Anti-Terrorism Approval Body (County Approval Authority) has been appointed for the purpose of approving the distribution of SHSGP funds at the Operational Area level; WHEREAS, on October 25, 2013 the California Emergency Management Agency awarded the County a 2013 Homeland Security Grant of $1,760,533. The allocation of the SHSGP funds $1,760,533, will be determined by the County Approval Authority in accordance with the grant guidelines; and NOW THEREFORE, the parties agree as follows: THE AGREEMENT Article I. Payment 1. Payment Eligibility Unless otherwise approved in advance by the Santa Clara County OES Grants Administrator (hereinafter “grants administrator”), only an actual cash disbursement by the City for a claimed expense is eligible for reimbursement by the County as approved and specified in Exhibit A, SHSGP Project Funding, which is attached and hereby incorporated into this Agreement. 2. Amount of Payment The County will provide the City, unless otherwise specified, with the equipment, supplies and/or other resources as set forth in Exhibit A, SHSGP Project Funding. Specifications for Page 1 of 9 Agreement between the County of Santa Clara and the City of Palo Alto Granting Funds for 2013 Homeland Security Grant Programs such equipment shall be provided by the City’s requesting agency to the County for the appropriate procurement process. City’s requesting agency will be notified when the procurement process is complete for final approval of equipment prior to the order being placed. If, through previous agreement with the County, the City is to procure its own equipment, performance milestone dates will apply (refer to Article II, Section 3(a)). The County may reallocate SHSGP funds as specified in Article 1, section 3 of this Agreement. County does not guarantee a minimum payment to the City. Funds in the amount of $100,000 have been set aside for the training program from the total Homeland Security grant to be allocated during the term of this Agreement. The Office of Emergency Services will allocate training funds to agencies as determined by the Training/Exercise Advisory Group. Authorized personnel budgets are allowable within the Sheriff’s Office, County Office of Emergency Services, Central Fire, and Public Health Emergency Medical Services. The personnel budget for these departments will reflect the expenditure authority. Reimbursement for actual cash disbursements will be requested through the County Office of Emergency Services. Based on the preference of the Department/Agency, reimbursement requests may be requested on a monthly or quarterly basis. For County Departments, reimbursement will be made via inter-county transfer. For all others, a county warrant will be issued. 3. Maximum Amount Payable Subject to the availability of funds and the priorities established by the Approval Authority, the maximum amount of SHSGP funds payable by the County to the City under this Agreement must not exceed the total amount of the 2013 Homeland Security Grant as allocated by the County Approval Authority. 4. Reallocation of SHSGP Grant Funds For the purpose of maximizing the resources available for disaster preparedness within the Operational Area, the City agrees that the County Approval Authority may reallocate funds under this agreement to the City or to another applicant if County determines that a City is unable to utilize the amount allocated under this Agreement. County may base its determination on factors that include, but are not limited to the following: delivery timelines, fund expenditure capabilities, and timeliness of expenditure. County will notify the City in writing of any determination to reallocate funds, by issuing a “Notice of Reallocation.” SHSGP funds will be put forth to the County Approval Authority for reallocation. The City agrees that the County has the authority to increase or decrease the maximum amount payable under this Agreement as specified in the Notice of Reallocation document without liability and County has the authority to amend Exhibit A, “SHSGP Project Funding,” accordingly. Upon issuance, the Notice of Reallocation will automatically become part of this Agreement. Article II. Use of Funds. Page 2 of 9 Agreement between the County of Santa Clara and the City of Palo Alto Granting Funds for 2013 Homeland Security Grant Programs 1. Scope of Services (a) If the City has been allocated funding for a project, Exhibit A, “SHSGP Project Funding,” will serve as the basis for the project. A further detailed description may be necessary and will be requested by the County if needed to be incorporated by reference herein. If future funding is allocated, the City will provide a detailed description of the approved project to be attached hereto and incorporated by reference herein. (b) The City will use the funds granted under this Agreement only for the purpose of obtaining equipment, training and exercise and implementing applicable programs authorized under the 2013 Homeland Security Grant Program. (c) The City will use funds and equipment granted under this Agreement in a manner consistent with: 1. the applications submitted by the County to the State for the grant under this Agreement; 2. the grant guidance issued by the State for the grant under this Agreement; and 3. the notifications issued by the State of the approval of the grant under this Agreement. (d) The documents described in Article II 1(c) (1)-(3) of this Agreement (collectively the “State Grant Requirements”) are on file with the County and the granting agencies of the State, and are hereby incorporated into this Agreement. The City hereby acknowledges that it has received a copy of the State Grant Requirements. 2. Master Grant Obligations (a) The City agrees to comply with all applicable requirements and assurances contained in the State Grant Requirements and attached as Exhibit B, “Grant Assurances”. The City may designate vendors or sub-recipients to fulfill these obligations, including all State Grant Requirements and Grant Assurances. (b) If any provisions of this Agreement conflict with the State Grant Requirements, the provisions of the State Grant Requirements will control. (c) The City shall establish and maintain administrative, programmatic and fiscal management records in accordance with federal and state requirements, and: 1. Maintain financial management systems that support grant activities in accordance with federal and state requirements, including but not limited to requirements in 44 Code of Federal Regulations (“C.F.R.”) Part 13.20, and the Office of Justice Programs Financial and Administrative Guide for Grants, Part II, Chapter 3. 2. The County of Santa Clara will provide and affix equipment tracking numbers for all Page 3 of 9 Agreement between the County of Santa Clara and the City of Palo Alto Granting Funds for 2013 Homeland Security Grant Programs equipment purchased through our procurement process. Using the County issued tracking number, the City/Town will maintain an equipment tracking ledger that tracks the equipment within their City/Town and complies with federal and state requirements, including but not limited to requirements in 44 C.F.R. Parts 13.32 and 13.33, and the Office of Justice Programs Financial and Administrative Guide for Grants, Part III, Chapter 6. (d) The City will ensure that any sub-recipients or contractors with which the City enters any agreement comply with the certification requirements under 44 C.F.R. Part 13.35, “Sub-Awards to Debarred and Suspended Parties.” 3. Performance and Reporting Requirements (a) If previously approved by the County and the City is conducting the purchasing process, the City will comply with the performance milestone dates as indicated on Exhibit A, “SHSGP Project Funding.” (b) Performance reports, indicating the status of outstanding projects are due to the County Grants Administrator identified in Article V, Section 1 as follows: (c) The following dates represent the Grant Performance Period for the SHSGP Program; • Performance Period 1 (October 25, 2013 – December 31, 2013) – due by January 15, 2014 • Performance Period 2 (January 1, 2014 – March 31, 2014) – due May 31, 2015 (d) The County will provide the City with a report template (Exhibit C, “Performance Report”), and the City will utilize the template to complete the performance submittal to the County. (e) Payments made by County to the City are conditioned upon the timely receipt of applicable, accurate and complete reports, including supporting documents, to be submitted by the City. (f) The City will notify the County representative identified in Article V, Section 1, within 15 days, when the City has completed all performance obligations for these grants. (g) City will provide single audit reports to County by July 31st of every fiscal year. 4. Disallowances (a) Unless otherwise approved in advance by Grants Administrator, the County will not process any claims for reimbursement submitted by City without proof of actual cash disbursement by City for expenses claimed. (b) During the term of this Agreement, County is not obligated to honor any claim for Page 4 of 9 Agreement between the County of Santa Clara and the City of Palo Alto Granting Funds for 2013 Homeland Security Grant Programs payment that is submitted more than three months following the date of the service for which payment is requested. (c) All requests for reimbursement must be submitted by April 15, 2015. County will not process any claims submitted after this date. Article III. Term and Termination. 1. Term of Agreement This Agreement is effective from October 25, 2013 to March 31, 2015. 2. Termination (a) Either party may terminate this Agreement for cause upon written notice to the other. Cause includes, but is not limited to a material breach of this Agreement, or a violation of any applicable laws. (b) Opportunity to cure. The non-breaching party will give written notice of the breach to the breaching party, specifying the breach. The breaching party will not be deemed in default hereunder and the non-breaching party will not institute proceedings or exercise any remedies against the breaching party unless the breach has not been cured, corrected or remedied within thirty (30) days after the giving of such notice of breach or within such longer period as may be reasonably required to cure, correct or remedy the breach, provided the breaching party has commenced such cure, correction or remedy within such thirty (30) day period and diligently and continuously pursues such cure, correction or remedy. (c) If this Agreement is terminated, the City will return funding in accordance with grant guidelines. (d) Budget Contingency This Agreement is contingent upon the appropriation of sufficient funding by the state and County for the services covered by this Agreement. If funding is reduced or deleted for the services covered by this Agreement, the County has the option to either terminate this Agreement with no liability occurring to the County or to offer an amendment to this Agreement indicating the reduced amount. Article IV. Liabilities. 1. Mutual Indemnification In lieu of and notwithstanding the pro rata risk allocation which might otherwise be imposed between the parties pursuant to Government Code Section 895.6, the parties agree that all losses or liabilities incurred by a party shall not be shared pro rata but instead the Page 5 of 9 Agreement between the County of Santa Clara and the City of Palo Alto Granting Funds for 2013 Homeland Security Grant Programs County and the City agree that pursuant to Government Code Section 895.4, each of the parties hereto shall fully indemnify and hold each of the other parties, their officers, board members, employees and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined by Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, board members, employees or agents, under or in connection with or arising out of any work, authority or jurisdiction delegated to such party under this Agreement. No party, nor any officer, board member, employee or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of other parties hereto, their officers, board members, employees or agents, under or in connection with or arising out of any work, authority or jurisdiction delegated to such other parties under this Agreement. Article V. Miscellaneous. 1. Notice All notices required by this Agreement will be deemed given when in writing and delivered personally or deposited in the United States mail, postage prepaid, addressed to the other party at the address set forth below or at such other address as the party may designate in writing: To the City: Director of Emergency Services City of Palo Alto, Office of Emergency Services 275 Forest Avenue Palo Alto, CA 94301 To the County: Michelle Sandoval, Grants Administrator County of Santa Clara, Office of Emergency Services 55 W. Younger Ave., Suite 450 San Jose, CA 95110 2. Compliance and Nondiscrimination The parties will comply with all applicable Federal, State, and local laws and regulations. Such laws include but are not limited to the following: Title VII of the Civil Rights Act of 1964 as amended, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973 (Sections 503 and 504), the California Fair Employment and Housing Act (Government Code sections 12900 et seq.), and California Labor Code sections 1101 and 1102. The parties will not discriminate against any subcontractor, employee, or applicant for employment because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status in the recruitment, selection for training including apprenticeship, hiring, employment, utilization, promotion, layoff, rates Page 6 of 9 Agreement between the County of Santa Clara and the City of Palo Alto Granting Funds for 2013 Homeland Security Grant Programs of pay or other forms of compensation. Nor will the parties discriminate in the provision of services provided under this Agreement because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status. 3. County No-Smoking Policy Contractor and its employees, agents and subcontractors, shall comply with the County's No Smoking Policy, as set forth in the Board of Supervisors Policy Manual section 3.47 (as amended from time to time), which prohibits smoking: (1) at the Santa Clara Valley Medical Center Campus and all County-owned and operated health facilities, (2) within 30 feet surrounding County-owned buildings and leased buildings where the County is the sole occupant, and (3) in all County vehicles. 4. Food and Beverage Standards Except in the event of an emergency or medical necessity, the following nutritional standards shall apply to any foods and/or beverages purchased by Contractor with County funds for County-sponsored meetings or events. If food is to be provided, healthier food options shall be offered. “Healthier food options” include (1) fruits, vegetables, whole grains, and low fat and low calorie foods; (2) minimally processed foods without added sugar and with low sodium; (3) foods prepared using healthy cooking techniques; and (4) foods with less than 0.5 grams of trans fat per serving. Whenever possible, Contractor shall (1) offer seasonal and local produce; (2) serve fruit instead of sugary, high calorie desserts; (3) attempt to accommodate special, dietary and cultural needs; and (4) post nutritional information and/or a list of ingredients for items served. If meals are to be provided, a vegetarian option shall be provided, and the Contractor should consider providing a vegan option. If pre-packaged snack foods are provided, the items shall contain: (1) no more than 35% of calories from fat, unless the snack food items consist solely of nuts or seeds; (2) no more than 10% of calories from saturated fat; (3) zero trans fat; (4) no more than 35% of total weight from sugar and caloric sweeteners, except for fruits and vegetables with no added sweeteners or fats; and (5) no more than 360 mg of sodium per serving. If beverages are to be provided, beverages that meet the County’s nutritional criteria are (1) water with no caloric sweeteners; (2) unsweetened coffee or tea, provided that sugar and sugar substitutes may be provided as condiments; (3) unsweetened, unflavored, reduced fat (either nonfat or 1% low fat) dairy milk; (4) plant-derived milk (e.g., soy milk, rice milk, and almond milk) with no more than 130 calories per 8 ounce serving; (5) 100% fruit or vegetable juice (limited to a maximum of 8 ounces per container); and (6) other low-calorie beverages (including tea and/or diet soda) that do not exceed 40 calories per 8 ounce serving. Sugar- sweetened beverages shall not be provided. 5. Governing Law This Agreement has been executed and delivered in, and will be construed and enforced in accordance with, the laws of the State of California. 6. Assignment Page 7 of 9 Agreement between the County of Santa Clara and the City of Palo Alto Granting Funds for 2013 Homeland Security Grant Programs The parties may not assign this Agreement or the rights and obligations hereunder without the specific written consent of the other. 7. Entire Agreement This document represents the entire Agreement between the parties with respect to the subject matter hereof. All prior negotiations and written and/or oral agreements between the parties with respect to the subject matter of this Agreement are merged into this Agreement. 8. Amendments This Agreement may only be amended by an instrument signed by the parties. 9. Counterparts This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which together shall constitute one and the same instrument. 10. Severability If any provision of this Agreement is found by a court of competent jurisdiction to be void, invalid or unenforceable, the same will either be reformed to comply with applicable law or stricken if not so conformable, so as not to affect the validity or enforceability of this Agreement. 11. Waiver No delay or failure to require performance of any provision of this Agreement will constitute a waiver of that provision as to that or any other instance. Any waiver granted by a party must be in writing, and will apply solely to the specific instance expressly stated. 12. Conflict of Interest In accepting this Agreement, City covenants that it presently has no interest and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of services under this Agreement. City is responsible for assuring compliance of its subcontractors, if any, with the requirements of this provision. 13. Certified Resolution of Signature Authority Page 8 of 9 Agreement between the County of Santa Clara and the City of Palo Alto Granting Funds for 2013 Homeland Security Grant Programs Upon request of Santa Clara County, City will deliver to Santa Clara County a copy of the resolution(s) authorizing the execution, delivery and performance of this Agreement, certified as true, accurate and complete by the appropriate authorized representative of City. Signed: COUNTY OF SANTA CLARA CITY OF PALO ALTO By__________________________ ________ By_____________________ ______ James Williams Date James Keene Date Deputy County Executive City Manager Approved as to Form and Legality: Approved as to Form: ___________________________________ _______________________________ Greta Hansen Deputy County Counsel City Attorney Exhibit A 2013 SHSGP Project Funding Exhibit B Grant Assurances Exhibit C Performance Report Template Page 9 of 9 Agreement between the County of Santa Clara and City of Palo Alto Granting Funds for 2013 Homeland Security Grant Programs FY13 Homeland Security Grant Program Funded Projects 11/14/2013 Li n e I t e m # Di s c i p l i n e Agency/Contact Info Funding Category Project Description Requested Amount Priority Allocated Amount Staffing / Contractor Office of Emergency Services Melissa Erickson (408) 808-7811 Training/ Exercise/ Planning Contractor to facilitate the Training/Exercise Program 45,000.00$ 45,000.00$ Staffing/ M&A Office of Emergency Services Melissa Erickson (408) 808-7811 M/A/ Planning 1/2 time salary cost for Management & Administration of Homeland Security Grant Program 75,000.00$ 75,000.00$ Staffing/ EMS EMS John Montes (408) 885-4250 Planning Countywide Multi-Hazard Task Force Position for EMS 160,000.00$ 94,000.00$ Staffing/ Fire Santa Clara Co. Fire Chief Ken Kehmna (408) 341-4440 Planning Countywide Multi-Hazard Task Force Position for Fire 187,000.00$ 90,000.00$ Staffing/ Law Sheriff's Office Sgt. Jeff McCoy (408) 808-7813 Planning Countywide Multi-Hazard Task Force Position for Law Enforcement 185,000.00$ 107,920.00$ All Staff Training Training Program 250,000.00$ 250,000.00$ All Staff Exercise Exercise Program -$ EMS EMS John Montes (408) 885-4250 Planning Homeland Security Personnel for EMS - Extra Help 75,000.00$ 75,000.00$ EMG SCCo Communications Bert Hildebrand (408) 977-3205 Equipment SVRIA - Inter Op Comm/Design 312,000.00$ 1 312,000.00$ Sheriff's Office Juan Gallardo (408) 808-4650 Equipment COPLINK 188,000.00$ 188,000.00$ EMG Lt. Vinicia Mata SCC Emergency Mgrs Assoc. (408) 730-7198 Planning Emergency Volunteer Center (EVC)63,500.00$ 63,500.00$ FY13 Homeland Security Grant Program Funded Projects 11/14/2013 EMG Tom Busk SCCEMA/CADRE Subcommittee (408) 577-2010 Planning Collaborative Agencies Disaster Relief Effort (CADRE)140,000.00$ 140,000.00$ Law Sheriff's Office Sgt. Jeff McCoy (408) 808-7813 Equipment Mobile Cellular Triangulation/Tracking System 544,000.00$ 320,113.00$ 28 30 31 2,224,500.00$ 1,760,533.00$ 32 33 34 35 -$ 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 Page 1 Initials ___ California Governor’s Office of Emergency Services FY 2013 Grant Assurances (All HSGP Applicants) Name of Applicant: ________ ___________________________________________________________________ Address: ____________________________________________________________________________________ City: _____________________________________ State: _______________ Zip Code: _______________ Telephone Number: ____________________________________ Fax Number: _________________________ E-Mail Address: _____________________________________________________________________________ As the duly authorized representative of the Applicant, I certify that the Applicant named above: 1. Will assure that all allocations and use of funds under this grant will be in accordance with the Fiscal Year 2013 HSGP Funding Opportunity Announcement. 2. Will assure that grant funds will support efforts related to providing an integrated mechanism to enhance the coordination of national priority efforts to prepare for, prevent, respond to, and recover from terrorist attacks, major disasters and other emergencies. 3. Has the legal authority to apply for federal assistance and has the institutional, managerial and financial capability to ensure proper planning, management and completion of the grant provided by the U.S. Department of Homeland Security (DHS)/Federal Emergency Management Agency (FEMA) and sub- granted through the State of California, California Governor’s Office of Emergency Services (Cal OES). 4. Will assure that grant funds are used for allowable, fair, and reasonable costs only and will not be transferred between grant programs (for example: State Homeland Security Program and Urban Area Security Initiative) or fiscal years. 5. Will comply with any cost sharing commitments included in the FY2013 Investment Justifications submitted to DHS/FEMA/Cal OES, where applicable. 6. Will establish a proper accounting system in accordance with generally accepted accounting standards and awarding agency directives. 7. Will give the DHS/FEMA, the General Accounting Office, the Comptroller General of the United States, the Cal OES, the Office of Inspector General, through any authorized representatives, access to, and the right to examine, all paper or electronic records, books, and documents related to the award, and will permit access to its facilities, personnel and other individuals and information as may be necessary, as required by DHS/FEMA or Cal OES, through any authorized representative, with regard to examination of grant related records, accounts, documents, information and staff. 8. Will require any subrecipients, contractors, successors, transferees, and assignees to acknowledge and agree to comply with applicable provisions governing DHS/FEMA access to records, accounts, documents, information, facilities, and staff. a. Recipients must cooperate with any compliance review or complaint investigation conducted by DHS/FEMA or Cal OES. b. Recipients must give DHS/FEMA and Cal OES access to and the right to examine and copy records, accounts, and other documents and sources of information related to the grant and permit access to Page 2 Initials ___ facilities, personnel, and other individuals and information as may be necessary, as required by DHS/FEMA and Cal OES program guidance, requirements, and applicable laws. c. Recipients must submit timely, complete, and accurate reports to the appropriate DHS/FEMA and Cal OES officials and maintain appropriate documentation to support these reports. d. Recipients must comply with all other special reporting, data collection, and evaluation requirements, as prescribed by law or detailed in program guidance. e. If, during the past three years, the Recipient has been accused of discrimination on the grounds of race, color, national origin (including limited English proficiency), sex, age, disability, religion, or familial status, the Recipient must provide a list of all such proceedings, pending or completed, including outcome and copies of settlement agreements to the DHS/FEMA/Cal OES awarding office and the DHS Office of Civil Rights and Civil Liberties. f. In the event any court or administrative agency makes a finding of discrimination on grounds of race, color, national origin (including limited English proficiency), sex, age, disability, religion, or familial status against the Recipient, or the Recipient settles a case or matter alleging such discrimination, Recipients must forward a copy of the complaint and findings to the DHS/FEMA Component and/or awarding office. The United States has the right to seek judicial enforcement of these obligations. 9. Will comply with any other special reporting, assessments, national evaluation efforts, or information or data collection requests, including, but not limited to, the provision of any information required for the assessment or evaluation of any activities within this agreement, or detailed in the program guidance. 10. Agrees that funds utilized to establish or enhance state and local fusion centers must support the development of a statewide fusion process that corresponds with the Global Justice/Homeland Security Advisory Council (HSAC) Fusion Center Guidelines, follow the federal and state approved privacy policies, and achieve (at a minimum) the baseline level of capability as defined by the Fusion Capability Planning Tool. 11. Will initiate and complete the work within the applicable timeframe, in accordance with grant award terms and requirements, after receipt of approval from Cal OES, and will maintain procedures to minimize the amount of time elapsing between the award of funds and the disbursement of funds. 12. Will provide timely, complete and accurate progress reports, and maintain appropriate documentation to support the reports, and other such information as may be required by the awarding agency, including the Initial Strategy Implementation Plan (ISIP), within 45 (forty-five) days of the award, and update these reports and related documentation via the Grant Reporting Tool (GRT) twice each year. 13. Will provide timely notifications to Cal OES of any developments that have a significant impact on award- supported activities, including changes to key program staff. 14. Agrees to be non-delinquent in the repayment of any federal debt. Examples of relevant debt may be found in OMB Circular A-129, form SF-424, item #17, and include delinquent payroll and other taxes, audit disallowances, and benefit overpayments. 15. Will comply with the requirement of 31 U.S.C. Section 3729, which sets forth that no subgrantee, Recipient or subrecipient of federal payments shall submit a false claim for payment, reimbursement or advance. Administrative remedies may be found in 38 U.S.C. Section 3801-3812, addressing false claims and statements made. 16. Will comply with all federal and state laws, executive orders, regulations, program and administrative requirements, cost principles, audit requirements, policies and any other terms and conditions applicable to this award. 17. Will comply with all applicable provisions of DHS/FEMA's regulations, including Title 44 of the Code of Federal Regulations, Part 13, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, including the payment of interest earned on advances. Page 3 Initials ___ 18. Will comply with Office of Management and Budget (OMB) Circular A-102, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (also known as the "A-102 Common Rule"), found under FEMA regulations at Title 44, Code of Federal Regulations (CFR) Part 13, "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments”; OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, relocated to 2 CFR Part 215; requirements for allowable costs/cost principles in the A-102 Common Rule, OMB Circular A- 110 (2 CFR § 215.27); OMB Circular A-21, Cost Principles for Educational Institutions, relocated to 2 CFR Part 220; OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, relocated to 2 CFR Part 225; OMB Circular A-122, Cost Principles for Non-Profit Organizations, relocated to 2 CFR Part 230; and OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, as applicable. 19. Will comply with all provisions of the Federal Acquisition Regulations including, but not limited to, Title 48 CFR Part 31.2, Part 31.2 Contract Cost Principles and Procedures, Contracts with Commercial Organizations. 20. Will comply with provisions of the Hatch Act (5 U.S.C. §§ 1501-1508 and 7324-7328), which limits the political activities of employees whose principal employment activities are funded in whole or in part with federal funds. 21. Will establish safeguards to prohibit employees from using their positions for a purpose that constitutes, or presents the appearance of, personal or organizational conflict of interest, or personal gain for themselves or others, particularly those with whom they have family, business, or other connections. 22. Understands and agrees that federal funds will not be used, directly or indirectly, to support the enactment, repeal, modification or adoption of any law, regulation, or policy, at any level of government, without the express prior written approval from DHS/FEMA and Cal OES. 23. Will comply with all applicable lobbying prohibitions and laws, including those found in United States Code Title 31, § 1352, et seq., and agrees that none of the funds provided under this award may be expended by the Recipient to pay any person to influence, or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any federal action concerning the award or renewal of any federal contract, grant, loan, or cooperative agreement. 24. Agrees that, to the extent contractors or subcontractors are utilized, will use small, minority-owned, women-owned, or disadvantaged businesses, to the extent practicable. 25. Will comply with Title 2 of the Code of Federal Regulations regarding duplication of benefits, whereby any cost allocable to a particular federal award or cost objective under the principles provided for in this agreement may not be charged to other federal awards to overcome fund deficiencies. 26. Will ensure that federal funds do not replace (supplant) funds that have been budgeted for the same purpose through non-federal sources. Subgrantees and subrecipients may be required to demonstrate and document that a reduction in non-federal resources occurred for reasons other than the receipt or expected receipt of federal funds. 27. Will comply, if applicable, with the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. §§ 4801 et seq.), which prohibits the use of lead based paint in construction or rehabilitation of structures. 28. Will comply with all federal and state laws and regulations relating to civil rights protections and nondiscrimination. These include, but are not limited to: Page 4 Initials ___ a. Title VI of the Civil Rights Act of 1964, Public Law 88-352,(42 U.S.C. § 2000d et seq.), , as amended, which prohibits discrimination on the basis of race, color and national origin. b. Title IX of the Education Amendments of 1972, as amended (20 U.S.C. § 1681 et seq.), which prohibits discrimination on the basis of gender. c. The Americans with Disabilities Act, as amended, which prohibits Recipients from discriminating on the basis of disability (42 U.S.C. § 12101 et seq.). d. Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794), which prohibits discrimination on the basis of disability in any program receiving federal financial assistance. e. The Age Discrimination Act of 1975, as amended (42 U.S.C. § 6101 et seq.), which prohibits discrimination on the basis of age. f. The Drug Abuse Office and Treatment Act of 1972 (P.L. 92-255), as amended, relating to nondiscrimination on the basis of drug abuse. g. The Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (P.L. 91-616), as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism. h. Sections 523 and 527 of the Public Health Service Act of 1912 (42 U.S.C. 290 dd-3 and 290 ee-3), as amended, relating to confidentiality of alcohol and drug abuse patient records. i. Title VIII of the Civil Rights Act of 1968 (42 U.S.C. § 3601 et seq., as implemented by 24 CFR Part 100), as amended, relating to nondiscrimination in the sale, rental and financing of housing. j. Title 44 of the Code of Federal Regulations (CFR) Parts 7, 16, and 19 relating to nondiscrimination. k. The requirements of any other nondiscrimination provisions in the specific statute(s) under which the application for federal assistance is being made and any other applicable statutes. l. Will, in the event that a federal or state court or federal or state administrative agency makes a finding of discrimination after a due process hearing on the grounds or race, color, religion, national origin, gender, or disability against a Recipient of funds, the Recipient will forward a copy of the finding to the Office of Civil Rights, Office of Justice Programs. m. Will provide an Equal Employment Opportunity Plan, if applicable, to the Department of Justice Office of Civil Rights within 60 days of grant award. n. Will comply, and assure the compliance of all its subgrantees and contractors, with the nondiscrimination requirements and all other provisions of the current edition of the Office of Justice Programs Financial and Administrative Guide for Grants, M7100.1. 29. Will comply with the requirements of Titles II and III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. § 4601 et seq. [P.L. 91-646]), which provides for fair and equitable treatment of persons displaced or whose property is acquired as a result of federal or federally-assisted programs. These requirements apply to all interested in real property acquired for project purposes regardless of federal participation in purchases. Will also comply with Title 44 CFR, Part 25, Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally Assisted Programs. 30. Will comply with all provisions of DHS/FEMA's regulation 44 CFR Part 10, Environmental Considerations. 31. Will comply with all applicable federal, state, and local environmental and historical preservation (EHP) requirements. Failure to meet federal, state, and local EHP requirements and obtain applicable permits may jeopardize federal funding. Agrees not to undertake any project having the potential to impact EHP resources without the prior written approval of DHS/FEMA and Cal OES, including, but not limited to, ground disturbance, construction, modification to any structure, physical security enhancements, communications towers, any structure over 50 years old, and purchase and/or use of any sonar equipment. The subgrantee must comply with all conditions and restrictions placed on the project as a result of the EHP review. Any construction-related activities initiated without the necessary EHP review and approval will result in a noncompliance finding, and may not be eligible for reimbursement with DHS/FEMA and Page 5 Initials ___ Cal OES funding. Any change to the scope of work will require re-evaluation of compliance with the EHP. If ground-disturbing activities occur during the project implementation, the subgrantee must ensure monitoring of the disturbance. If any potential archeological resources are discovered, the subgrantee will immediately cease activity in that area and notify DHS/FEMA and Cal OES and the appropriate State Historic Preservation Office. 32. Any construction activities that have been initiated prior to the full environmental and historic preservation review could result in a non-compliance finding. Subgrantees must complete the DHS/FEMA EHP Screening Form (OMB Number 1660-0115/FEMA Form 024-0-01) and submit it, with all supporting documentation, to their Cal OES program representative, for processing by the DHS/FEMA Grants Program Directorate EHP. 33. Grantees should submit the FEMA EHP Screening Form for each project as soon as possible upon receiving their grant award. The Screening Form for these types of projects is available at: www.fema.gov/doc/government/grant/bulletins/info329_final_screening_memo.doc 34. Will ensure that the facilities under its ownership, lease or supervision, which shall be utilized in the accomplishment of this project, are not on the Environmental Protection Agency’s (EPAs) List of Violating Facilities, and will notify Cal OES and the DHS/FEMA of the receipt of any communication from the Director of the EPA Office of Federal Activities indicating if a facility to be used in the project is under consideration for listing by the EPA. 35. Will provide any information requested by DHS/FEMA and Cal OES to ensure compliance with applicable laws including, but not limited to, the following: a. Institution of environmental quality control measures under the Archaeological and Historic Preservation Act, Endangered Species Act, and Executive Orders on Floodplains (11988), and Environmental Justice (EO12898) and Environmental Quality (EO11514). b. Notification of violating facilities pursuant to EO 11738. c. Assurance of project consistency with the approved state management program developed under the Coastal Zone Management Act of 1972 (16 U.S.C. § 1451 et seq.). d. Conformity of federal actions to State (Clean Air) Implementation Plans under Section 176(c) of the Clean Air Act of 1955, as amended (42 U.S.C. § 7401 et seq.). e. Protection of underground sources of drinking water under the Safe Drinking Water Act of 1974, as amended, (P.L. 93-523). f. California Environmental Quality Act (CEQA), California Public Resources Code Sections 21080- 21098, and California Code of Regulations, Title 14, Chapter 3 Sections 15000-15007. g. Wild and Scenic Rivers Act of 1968 (16 U.S.C. § 1271 et.seq.) related to protecting components or potential components of the national wild and scenic rivers system. h. Applicable provisions of the Coastal Barrier Resources Act (P.L. 97-348) dated October 19, 1982 (16 USC 3501 et seq.), which prohibits the expenditure of most new federal funds within the units of the Coastal Barrier Resources System. 36. Will comply with Standardized Emergency Management System (SEMS) requirements as stated in the California Emergency Services Act, Government Code, Chapter 7 of Division 1 of Title 2, § 8607.1(e) and CCR Title 19, §§ 2445, 2446, 2447, and 2448. 37. Agrees that subgrantees and subrecipients collecting Personally Identifiable Information (PII) must have a publically-available privacy policy that describes what PII they collect, how they plan to use the PII, whether they share PII with third parties, and how individuals may have their PII corrected where appropriate. Subgrantees and subrecipients may also find DHS Privacy Impact Assessments, guidance and templates online at http://www.dhs.gov/xlibrary/assets/privacy/privacy_pia_fuidance_june2010.pdf and at http://www.dhs.gov/xlibrary/assets/privacy/privacy_pia_template.pdf, respectively. Page 6 Initials ___ 38. Agrees that all DHS/FEMA-funded project activities carried on outside the United States are coordinated as necessary with appropriate government authorities and that appropriate licenses, permits, and approvals are obtained. 39. Will comply with Section 6 of the Hotel and Motel Fire Safety Act of 1990, 15 U.S.C. § 2225(a), whereby all subgrantees, recipients, and subrecipients must ensure that all conference, meeting, convention, or training space, funded in whole or in part with federal funds, complies with the fire prevention and control guidelines of the Federal Fire Prevention and Control Act of 1974, 15 U.S.C. § 2225. 40. Agrees that all publications created or published with funding under this grant shall prominently contain the following statement: “This document was prepared under a grant from FEMA's Grant Programs Directorate, U.S. Department of Homeland Security. Points of view or opinions expressed in this document are those of the authors and do not necessarily represent the official position or policies of FEMA's Grant Programs Directorate or the U.S. Department of Homeland Security.” The Recipient also agrees that, when practicable, any equipment purchased with grant funding shall be prominently marked as follows: “Purchased with funds provided by the U.S. Department of Homeland Security.” 41. Acknowledges that DHS/FEMA reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use, and authorize others to use, for federal government purposes: a) the copyright in any work developed under an award or sub-award; and b) any rights of copyright to which a Recipient or sub-recipient purchases ownership with federal support. The Recipient agrees to consult with DHS/FEMA and Cal OES regarding the allocation of any patent rights that arise from, or are purchased with, this funding and has requested through the State of California, federal financial assistance to be used to perform eligible work approved in the submitted application for federal assistance and after the receipt of federal financial assistance, through the State of California, agrees to the following: a. Promptly return to the State of California all funds received which exceed the approved, actual expenditures as determined by the federal or state government. b. In the event the approved amount of the grant is reduced, the reimbursement applicable to the amount of the reduction will be promptly refunded to the State of California. c. Property and equipment purchased under the HSGP reverts to Cal OES if the grant funds are deobligated or disallowed and not promptly repaid. d. HSGP funds used for the improvement of real property must be promptly repaid following deobligation or disallowment of costs, and Cal OES reserves the right to place a lien on the property for the amount owed. e. Separately account for interest earned on grant funds, and will return all interest earned, in excess of $100 per federal fiscal year. 42. Will comply with the Intergovernmental Personnel Act of 1970 (42 U.S C. §§ 4728-4763) relating to prescribed standards for merit systems for programs funded under one of the nineteen statutes or regulations specified in Appendix A of OPM’s Standards for a Merit System of Personnel Administration (5 C.F.R. 900, Subpart F). 43. Will comply, if applicable, with the Laboratory Animal Welfare Act of 1966 (P. L. 89-544, as amended, 7 U.S.C. 2131 et seq.) pertaining to the care, handling, and treatment of warm blooded animals held for research, teaching, or other activities supported by this award of assistance. 44. Will comply with the minimum wage and maximum hour provisions of the Federal Fair Labor Standards Act (29 U.S.C. 201), as they apply to employees of institutions of higher education, hospitals, and other non-profit organizations. 45. Agrees that "Classified national security information," as defined in Executive Order (EO) 12958, as amended or updated via later executive order(s) , means information that has been determined pursuant to EO 12958 to require protection against unauthorized disclosure and is marked to indicate its classified status when in documentary form. No funding under this award shall be used to support a contract, Page 7 Initials ___ subaward, or other agreement for goods or services that will include access to classified national security information if the Award Recipient has not been approved for and granted access to such information by appropriate authorities. 46. Agrees that where an Award Recipient has been approved for and has access to classified national security information, no funding under this award shall be used to support a contract, subaward, or other agreement for goods or services that will include access to classified national security information by the contractor, subrecipient, or other entity without prior written approval from the DHS Office of Security, Industrial Security Program Branch (ISPB), or, an appropriate official within the federal department or agency with whom the classified effort will be performed. Such contracts, subawards, or other agreements shall be processed and administered in accordance with the DHS "Standard Operating Procedures, Classified Contracting by States and Local Entities," dated July 7, 2008; EOs 12829, 12958, 12968, and other applicable executive orders; the National Industrial Security Program Operating Manual (NISPOM); and other applicable implementing directives or instructions. Security requirement documents may be located at: http://www.dhs.gov/xopnbiz/grants/index.shtm 47. Immediately upon determination by the Award Recipient that funding under this award may be used to support a contract, subaward, or other agreement involving access to classified national security information pursuant to paragraph 47, and prior to execution of any actions to facilitate the acquisition of such a contract, subaward, or other agreement, the Award Recipient shall contact ISPB, and the applicable federal department or agency, for approval and processing instructions. DHS Office of Security ISPB contact information: Telephone: 202-447-5346 Email: DD254AdministrativeSecurity@dhs.gov Mail: Department of Homeland Security Office of the Chief Security Officer ATTN: ASD/Industrial Security Program Branch Washington, D.C. 20528 48. Will comply with the requirements regarding Data Universal Numbering System (DUNS) numbers. If recipients are authorized to make subawards under this award, they must first notify potential subrecipients that no entity may receive or make a subaward to any entity unless the entity has provided a DUNS number. 49. For purposes of this award term, the following definitions will apply: a. “Data Universal Numbering System (DUNS)” number means the nine digit number established and assigned by Dun and Bradstreet, Inc. (D&B) to uniquely identify business entities. A DUNS number may be obtained from D&B by telephone (currently 866-705-5711) or the Internet, currently at http://fedgov.dnb.com/webform. b. “Entity”, as it is used in this award term, means all of the following, as defined at 2 CFR Part 25, Subpart C, as a governmental organization, which is a state, local government, or Indian Tribe; or a foreign public entity; or a domestic or foreign nonprofit organization; or a domestic or foreign for- profit organization; or a federal agency, but only as a subrecipient under an award or subaward to a non-federal entity. c. “Subaward” means a legal instrument to provide support for the performance of any portion of the substantive project or program for which you received this award and that you as the Recipient award to an eligible subrecipient. It does not include your procurement of property and services needed to carry out the project or program (for further explanation, see § 210 of the attachment to OMB Circular A-133, ''Audits of States, Local Governments, and Non-Profit Organizations'') and may be provided through any legal agreement, including an agreement that you consider a contract. d. “Subrecipient” means an entity that receives a subaward from you under this award, and is accountable to you for the use of the federal funds provided by the subaward. Page 8 Initials ___ 50. Will comply, as applicable, with the provisions of the Davis-Bacon Act (40 U.S.C. Section 276a to 276a-7), the Copeland Act (40 U.S.C. § 276c and 18 U.S.C. § 874), and the Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 327-333), regarding labor standards for federally-assisted construction sub- agreements. 51. Agrees that equipment acquired or obtained with grant funds: a. Will be made available pursuant to applicable terms of the California Disaster and Civil Defense Master Mutual Aid Agreement, in consultation with representatives of the various fire, emergency medical, hazardous materials response services, and law enforcement agencies within the jurisdiction of the Applicant, and deployed with personnel trained in the use of such equipment in a manner consistent with the California Law Enforcement Mutual Aid Plan or the California Fire Services and Rescue Mutual Aid Plan. b. Is consistent with needs as identified in the State Homeland Security Strategy and will be deployed in conformance with that Strategy. 52. Will comply with the financial and administrative requirements set forth in the current edition of the DHS Financial Management Guide. 53. Agrees that all allocations and use of funds under this grant will be in accordance with the FY 2013 Homeland Security Grant Program Funding Opportunity Announcement, and the California Supplement to the FY 2013 Homeland Security Grant Program Funding Opportunity Announcement. All allocations and use of funds under this grant will be in accordance with the Allocations, and use of grant funding must support the goals and objectives included in the State and/or Urban Area Homeland Security Strategies as well as the investments identified in the Investment Justifications which were submitted as part of the California FY2013 Homeland Security Grant Program application. Further, use of FY13 funds is limited to those investments included in the California FY13 Investment Justifications submitted to DHS/FEMA and Cal OES and evaluated through the peer review process. 54. Will comply with Homeland Security Presidential Directive (HSPD)-5, Management of Domestic Incidents. The adoption of the National Incident Management System (NIMS) is a requirement to receive federal preparedness assistance, through grants, contracts, and other activities. The NIMS provides a consistent nationwide template to enable all levels of government, tribal nations, nongovernmental organizations, and private sector partners to work together to prevent, protect against, respond to, recover from, and mitigate the effects of incidents, regardless of cause, size, location, or complexity. 55. Will comply with OMB Standard Form 424B Assurances – Non-construction Programs, whereby the awarding agency may require subgrantees and subrecipients to certify to additional assurances. 56. Will not make any award or permit any award (subgrant or contract) to any party which is debarred or suspended or is otherwise excluded from or ineligible for participation in federal assistance programs under Executive Order 12549 and 12689, “Debarment and Suspension”. As required by Executive Order 12549, Debarment and Suspension, and implemented at 44 CFR Part 17, for prospective participants in primary covered transactions, the Applicant will provide protection against waste, fraud and abuse, by debarring or suspending those persons deemed irresponsible in their dealings with the federal government. Applicant certifies that it and its principals: a. Are not presently debarred, suspended, proposed for debarment, declared ineligible, sentenced to a denial of federal benefits by a state or federal court, or voluntarily excluded from covered transactions by any federal department or agency. b. Have not within a three-year period preceding this application been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (federal, state, or local) transaction or contract under a public transaction, violation of federal or state antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property. Page 9 Initials ___ c. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (federal, state, or local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and have not within a three-year period preceding this application had one or more public transactions (federal, state, or local) terminated for cause or default; and d. Where the Applicant is unable to certify to any of the statements in this certification, he or she shall attach an explanation to this application. 57. Will comply with requirements to acknowledge federal funding when issuing statements, press releases, requests for proposals, bid invitations, and other documents describing projects or programs funded in whole or in part with federal funds. 58. Will comply with requirements that publications or other exercise of copyright for any work first produced under federal financial assistance awards hereto related unless the work includes any information that is otherwise controlled by the government (e.g., classified information or other information subject to national security or export control laws or regulations). For any scientific, technical, or other copyright work based on or containing data first produced under this award, including those works published in academic, technical or professional journals, symposia proceedings, or similar works, the recipient grants the government a royalty-free, nonexclusive and irrevocable license to reproduce, display, distribute copies, perform, disseminate, or prepare derivative works, and to authorize others to do so, for government purposes in all such copyrighted works. The Recipient shall affix the applicable copyright notices of 17 U.S.C. § 401 or 402 and an acknowledgement of government sponsorship (including award number) to any work first produced under an award. 59. Will obtain, via Cal OES, the prior approval from DHS on any use of the DHS seal(s), logos, crests or reproductions of flags or likenesses of DHS agency officials, including use of the United States Coast Guard seal, logo, crests or reproductions of flags or likenesses of Coast Guard officials. 60. Will comply with the requirements of the Preference for U.S. Flag Air Carriers: Travel supported by U.S. Government funds requirement, which states preference for the use of U.S. flag air carriers (air carriers holding certificates under 49 U.S.C. § 41102) for international air transportation of people and property to the extent that such service is available, in accordance with the International Air Transportation Fair Competitive Practices Act of 1974 (49 U.S.C. § 40118) and the interpretative guidelines issued by the Comptroller General of the United States in the March 31, 1981, amendment to Comptroller General Decision B138942. 61. Will comply with the requirements of the Drug-Free Workplace Act of 1988 (41 U.S.C. § 701 et seq.), which requires that all organizations receiving grants from any federal agency agree to maintain a drug-free workplace. The Recipient must notify the awarding office if an employee of the recipient is convicted of violating a criminal drug statute. Failure to comply with these requirements may be cause for debarment. These regulations are codified at 2 CFR 3001. 62. Will comply with the requirements of the government-wide award term which implements § 106(g) of the Trafficking Victims Protection Act (TVPA) of 2000, as amended (22 U.S.C. § 7104), located at 2 CFR Part 175. This is implemented in accordance with OMB Interim Final Guidance, Federal Register, Volume 72, No. 218, November 13, 2007. In accordance with Section 106(g) of the TVPA, as amended, requires the agency to include a condition that authorizes the agency to terminate the award, without penalty, if the Recipient or a subrecipient engages in severe forms of trafficking in persons during the period of time that the award is in effect, procures a commercial sex act during the period of time that the award is in effect; or uses forced labor in the performance of the award or subawards under the award. Full text of the award term is provided at 2 CFR § 175.15. 63. Will comply with the requirements of Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance; national origin discrimination includes discrimination on the basis of limited English proficiency (LEP). To ensure compliance with Title VI, Page 10 Initials ___ Recipients must take reasonable steps to ensure that LEP persons have meaningful access to your programs. Meaningful access may entail providing language assistance services, including oral and written translation, where necessary. Recipients are encouraged to consider the need for language services for LEP persons served or encountered both in developing budgets and in conducting programs and activities. For assistance and information regarding LEP obligations, go to http://www.lep.gov. 64. Will comply with the requirements of 42 U.S.C. § 7401 et seq. and Executive Order 11738, which provides for the protection and enhancement of the quality of the nation's air resources to promote public health and welfare and for restoring and maintaining the chemical, physical, and biological integrity of the nation's waters is considered research for other purposes. 65. Will comply with the requirements of the federal regulations at 45 CFR Part 46 and the requirements in DHS Management Directive 026-04, Protection of Human Subjects, prior to implementing any work with human subjects. The regulations specify additional protections for research involving human fetuses, pregnant women, and neonates (Subpart B); prisoners (Subpart C); and children (Subpart D). The use of autopsy materials is governed by applicable state and local law and is not directly regulated by 45 CFR Part 46. 66. Will comply with the requirements of the National Environmental Policy Act (NEPA), as amended, 42 U.S.C. § 4331 et seq., which establishes national policy goals and procedures to protect and enhance the environment, including protection against natural disasters. To comply with NEPA for its grant-supported activities, DHS requires the environmental aspects of construction grants (and certain non-construction projects as specified by the Component and awarding office) to be reviewed and evaluated before final action on the application. 67. Will comply with the requirements of § 1306(c) of the National Flood Insurance Act, as amended, which provides for benefit payments under the Standard Flood Insurance Policy for demolition or relocation of a structure insured under the Act that is located along the shore of a lake or other body of water and that is certified by an appropriate state or local land use authority to be subject to imminent collapse or subsidence as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels. These regulations are codified at 44 CFR Part 63. 68. Will comply with the requirements of the Flood Disaster Protection Act of 1973, as amended (42 U.S.C. § 4001 et seq.), which provides that no federal financial assistance to acquire, modernize, or construct property may be provided in identified flood-prone communities in the United States, unless the community participates in the National Flood Insurance Program and flood insurance is purchased within one year of the identification. The flood insurance purchase requirement applies to both public and private applicants for DHS support. Lists of flood-prone areas that are eligible for flood insurance are published in the Federal Register by FEMA. 69. Will comply with the requirements of Executive Order 11990, which provides that federally funded construction and improvements minimize the destruction, loss, or degradation of wetlands. The Executive Order provides that, in furtherance of § 101(b)(3) of NEPA (42 U.S.C. § 4331(b)(3)), federal agencies, to the extent permitted by law, must avoid undertaking or assisting with new construction located in wetlands unless the head of the agency finds that there is no practicable alternative to such construction, and that the proposed action includes all practicable measures to minimize harm to wetlands that may result from such use. In making this finding, the head of the agency may take into account economic, environmental, and other pertinent factors. The public disclosure requirement described above also pertains to early public review of any plans or proposals for new construction in wetlands. This is codified at 44 CFR Part 9. 70. Will comply with the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act), which amends 18 U.S.C. §§ 175-175c. Among other things, it prescribes criminal penalties for possession of any biological agent, toxin, or delivery system of a type or in a quantity that is not reasonably justified by a prophylactic, protective, Page 11 Initials ___ bona fide research, or other peaceful purpose. The act also establishes restrictions on access to specified materials. "Restricted persons," as defined by the act, may not possess, ship, transport, or receive any biological agent or toxin that is listed as a select agent. 71. Understands the reporting of subawards and executive compensation rules, including first tier subawards to Cal OES. a. Applicability. Unless you are exempt as provided in paragraph d. of this award term, you must report each action that obligates $25,000 or more in federal funds that does not include Recovery funds (as defined in § 1512(a)(2) of the American Recovery and Reinvestment Act of 2009, b. Where and when to report: you must report on each obligating action described in the following paragraphs to Cal OES. For subaward information, report no later than the end of the month following the month in which the obligation was made. (For example, if the obligation was made on November 7, 2011, the obligation must be reported by no later than December 31, 2011.) c. What to report: You must report the information about each obligating action that the submission instructions posted in Information Bulletin 350, to Cal OES. To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm. Subgrantees must report subrecipient executive total compensation to Cal OES by the end of the month following the month during which you make the subaward. Exemptions include: If, in the previous tax year, you had gross income, from all sources, under $300,000, you are exempt from the requirements to report on subawards, and the total compensation of the five most highly compensated executives of any subrecipient. d. Reporting Total Compensation of Recipient Executives: You must report total compensation for each of your five most highly compensated executives for the preceding completed fiscal year, if i. the total federal funding authorized to date under this award is $25,000 or more; ii. in the preceding fiscal year, you received 80 percent or more of your annual gross revenues from federal procurement contracts (and subcontracts) and federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and $25,000,000 or more in annual gross revenues from federal procurement contracts (and subcontracts) and federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and iii. The public does not have access to information about the compensation of the executives through periodic reports filed under § 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or § 6104 of the Internal Revenue Code of 1986. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm.) iv. Subrecipient Executives. Unless you are exempt as provided above, for each first-tier subrecipient under this award, you shall report the names and total compensation of each of the subrecipient's five most highly compensated executives for the subrecipient's preceding completed fiscal year, if in the subrecipient's preceding fiscal year, the subrecipient received 80 percent or more of its annual gross revenues from federal procurement contracts (and subcontracts) and federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and $25,000,000 or more in annual gross revenues from federal procurement contracts (and subcontracts), and federal financial assistance subject to the Transparency Act (and subawards); and the public does not have access to information about the compensation of the executives through periodic reports filed under § 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or § 6104 of the Internal Revenue Code of 1986. 72. Understands that failure to comply with any of the above assurances may result in suspension, termination, or reduction of grant funds. Page 12 The undersigned represents that he/she is authorized by the above named Applicant to enter into this agreement for and on behalf of the said Applicant. Signature of Authorized Agent:______________________________________________ Printed Name of Authorized Agent:___________________________________________ Title:____________________________________ Date:__________________________ City of Palo Alto (ID # 5299) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: Comp. Plan Continuation Date Change Title: Comprehensive Plan Update: Discussion of the Scope and Schedule of the Planning Process, Including Concurrent Zoning Changes (An initial discussion on this item took place on November 3, 2014 and was expected to continue on November 17, 2014. Staff requests that the item be continued to December 15, 2014.) From: City Manager Lead Department: Planning and Community Environment Recommended Motion Staff recommends that Council continue this item to the December 15th public hearing date. Recommendation At the November 3rd City Council hearing, when the Comprehensive Plan Update item was discussed, it was recommended that the second discussion and final action be continued to the November 17, 2014 date. Due to not being able to attend the November 17 meeting, a Council Member asked for consideration to have this item rescheduled to another meeting. Given the upcoming meetings schedule, staff is requesting a continuation date of December 15, 2014 when the full Council will be present. City of Palo Alto (ID # 5297) City Council Staff Report Report Type: Action Items Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: Third Amendment to the Lease of the Cubberley Community Center Title: Approval of Third Amendment to the Lease Between the Palo Alto Unified School District and the City of Palo Alto at the Cubberley Community Center From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff recommends that Council authorize the Mayor to sign the Third Amendment to the Lease between the City of Palo Alto and Palo Alto Unified School District (PAUSD)/ (District) in substantially the form as contained in Attachment A, extending the Cubberley Community Center (CCC) lease for an additional five years and updating the financial terms to permit additional City investment in the aging infrastructure of the Cubberley Community Center (CCC). EXECUTIVE SUMMARY On February 24, 2014, the Council approved a series of recommendations (Attachment B, CMR: 4506) regarding the renewal of the Cubberley Community Center Lease and authorized the City Manager to negotiate with PAUSD to execute a new agreement based on the Council’s guidelines. While there were initial negotiations between the City and School District following the Council direction, over the past few months, the City Manager and the School Superintendent had fruitful meetings regarding terms and conditions for the renewal of the Cubberley Lease and have reached a tentative agreement to move forward with a new five (5) year extension of the Lease Agreement. As part of the new five (5) year term agreement the City and PAUSD have agreed to eliminate the Covenant Not to Develop clause from the Lease, with that funding ($1.86 million annually) now going into a Property Infrastructure Fund to be used for repairing, renovating, and/or improving the infrastructure at the Cubberley Community Center site. City of Palo Alto Page 2 The new adjusted Cubberley lease payment (less the payment for the Covenant Not to Develop Sites) in the amount $5.45 million from the City to PAUSD will include two components from the original lease: the base payment for the leased site and the payment for extended day care spaces at a variety of elementary school sites. The Lease also provides a mechanism for a joint planning process between the City and PAUSD to develop a long term master plan for the Cubberley site. BACKGROUND History The background information on the Cubberley Community Center since the City’s initial involvement at the Center in 1989 as well as interaction with the PAUSD is extensive (note links to additional reports in Attachment B). Originally opened as a high school in the 1950s, Cubberley was closed due to decreasing enrollment in 1979. At that time, PAUSD was experiencing substantial budget pressures due to a variety of circumstances starting in the late 1970s and early 80s, including Passage of Proposition 13 in 1978 and declining PAUSD enrollment and revenue during the post–Baby Boom era. In response to that stressed financial situation, the PAUSD closed several schools and sold some existing school sites in order to help sustain its educational programs at the level the community expected. This included the closure of Cubberley in 1979 and the City’s acquisition of Terman in 1981, as well as the District’s sale and/or closure of other school sites. On September 1, 1989, the City and the PAUSD entered into a lease agreement. Under the lease agreement, the City provided PAUSD with annual revenue in exchange for the City receiving: 1) a lease on the former 35-acre Cubberley High School site, including 180,000 square feet in improvements to be used for community theater, sport and art groups; 2) a Covenant Not to Develop five neighborhood elementary school sites (Jordan, Jane Lathrop Stanford, Ohlone, Garland and Greendell); and 3) an agreement that PAUSD provide space for extended day care at each of eleven remaining elementary school sites. On December 10, 2001, City and PAUSD entered into a property exchange agreement whereby City conveyed to the district the Terman site and in exchange received 7.97 acres of the Cubberley site. The original lease Agreement was for 15 years, beginning January 1, 1990 and ending on December 31, 2004. The option to extend the lease for an additional ten years was exercised by the City and the current term of the lease will expire on December 31, 2014. Since 1989 City staff and PAUSD have entered into several lease amendments and other agreements regarding the site needs. Cubberley Property and Lease The Cubberley Community Center currently occupies the entire 35-acre site: the City owns 8 acres in the northeast corner of the site; the remaining 27 acres are owned by PAUSD and leased to the City. Together, this 35-acre site is the last major plot of publicly owned land in the City proper, and its long term future use is critical to both community services and education. City of Palo Alto Page 3 The city’s acreage contains campus classroom space, art and dance studios, some parking, a portable building used by Friends of the Palo Alto Library (FOPAL), and the tennis courts. The 27-acre area contains the playing fields, a dance studio, weight room, gymnasiums and pavilion, multi-purpose auditorium and theater with music rooms, three wings of classrooms, a portable building used by Friends of Palo Alto Library (FOPAL), and most of the parking areas. Facility According to Cubberley Community Advisory Committee report (CCAC Report, Attachment B), most of the buildings and other facilities at the Cubberley site were completed by 1955. Some additional buildings (Pavilion, Theater, and others) were added in the early 1960’s along with a new artificial turf field in 2009. The site was built to then-existing school standards. While the structures have stood up well given their age, they have become increasingly run-down and expensive to maintain and were not designed to support current and future needs. The Cubberley site is inefficiently used by modern standards. Existing buildings are single story, per the 1950s model of Palo Alto school architecture. Single pane windows, poor insulation and louvers contribute to high energy costs. Air conditioning is not provided throughout most of the site, heating is ineffective and aged wiring does not adequately support today’s technological needs. The small, largely uniform, individual classroom design also limits the types of groups and activities that can be accommodated and fails to provide appropriate gathering spaces for modern school or community use. DISCUSSION The following items described below represent the list of key points that City Council recommended to be pursued in negotiations for new terms and conditions, and those in particular that have been agreed on by the City and the District in this Lease Amendment as the result of the lease negotiation. Lease Term The term of the current lease will expire on December 31, 2014. According to section 6.1.3 of the lease, the City and PAUSD can extend the lease for two (2) additional five (5) year periods. The parties have decided to extend the lease for another five (5) years. The new term (five years) is scheduled to commence on January 1, 2015, thru December 31, 2019. (The Council had recommended a longer term lease. The School District was not prepared to enter into a longer term lease at this time. It is hoped that the Master Plan for the site that will be developed in the next five years will better inform the needs and schedule for changes on the site, in advance of the next lease renewal discussion. Lease Payment City of Palo Alto Page 4 According to the new term of the new Lease Amendment, the Lease is renamed as the “Lease and Child Care Agreement between the City of Palo Alto and the Palo Alto Unified School District” and the new payment from the City to the District will consist of the Base Payment for the Leased Site and the payment for the Extended Day Care Spaces excluding the payment for Covenanted Sites that City has been paying since 1989. The new payment to the district will be paid monthly and it is projected to start on January 1, 2015 in the amount of $454,423. This amount would translate into an annual total payment of $5,453,076 in 2015. Covenant Not to Develop & Cubberley Property Infrastructure Fund The parties have agreed to the elimination of the Covenant Not To Develop. The $1.86 million former annual covenant payment (from the City to the PAUSD) will be transferred to a Cubberley Infrastructure Fund to be used by the City for reasonable and acceptable expenses for repairing, renovating, and/or improving the property infrastructure for the CCC site, (for more information regarding the infrastructure needs of CCC, please refer to Infrastructure Blue Ribbon Commission (IBRC) report link in attachment B). The Lease Amendment requires the City to notify the District of planned projects and following consultation with the District and consideration of District input, the City will make final determination as to the expenditures. The City annually will provide the District with an annual report as to how the funds were spent in the previous year. (These conditions align with the Council’s recommendations) (CPI) Annual Adjustments: The District and City have agreed to adjust the Lease payment by a 3% annual increase on the anniversary of the Third Lease Amendment date. (The Council directions had included elimination of the CPI). Future plan for the use of the 8-Acre Site The District and the City have agreed to commit to jointly develop a master plan for the entire site in the next five years. The scope of the plan and its funding source will be determined by future mutual agreement. (The Cubberley Community Advisory Committee recommended that the City and the District work jointly to develop shared community/school use plan for the site) Reconfiguration of the City owned eight (8) acres The Third Amendment provides a mechanism for allowing, by mutual consent, the parties to change the footprint of the 8 acre City owned site. This allows for the possibility of a new configuration for the site, if both parties agree, as a result of planning for the site for the long term. City of Palo Alto Page 5 (Consistent with the recommendation of the City Council). Loss of Anchor Tenant Foothill College represents a significant portion of the current tenant lease income and serves as the anchor tenant at Cubberley paying more than a million dollars to City for rent of its space. Foothill College is planning to move to a new Sunnyvale campus located at the Onizuka Air Force Base in the next three years. The District and The City have agreed that when Foothill College moves their entire operation or a significant part of it out of Cubberley, the District and City agree to split either the lost revenue or the gain in revenue on a 50/50 basis by either decreasing or increasing the City’s lease payments. Alternatively, should the City choose to use some or all of the space for its own purposes, such as the temporary relocation of the Junior Museum, it would pay the appropriate rent to the District. (This condition aligns with the Council’s earlier recommendation). Child Care Cubberley is home to several centers providing both childcare and early education, supporting both the children and their parents. Palo Alto has recognized this since the 1970s with innovative support for such programs. The Lease amendment allows for the continuation of this collaborative support of child care by the City and the District. (Aligns with Council recommendation). Playing Fields The demand for fields is growing faster than the population, yet there are few locations for additional fields in Palo Alto. This agreement includes no new language relating to playing fields. Related to the Council direction to pursue access to fields at Cubberley for the longest possible period, that objective is limited to the new five year term in the lease. The City and the District anticipate working together to develop a long term use plan which can help inform playing fields needs and access at Cubberley. Access to other fields and sites that the School District has would be a relevant corollary to those discussions. (Partially meets Council’s earlier recommendation). Eliminate PAUSD right to cancel the lease to open a compact high school City of Palo Alto Page 6 Section 10 of the Second Amendment of the Cubberley lease grants the PAUSD the right to terminate the lease by exercising a twenty-four (24) months written notice with respect to all or a portion of Leased Site so it may operate a compact high school at Cubberley. The new lease remains unchanged from the former lease language. (Council had recommended elimination). Ventura The City and School District have a separate agreement related to the Ventura School site. Section “H” of the Purchase Agreement that was executed on October 30, 1980 between the City and PAUSD granted a repurchase right to PAUSD to buy back the Ventura School site from the City with a one-year prior notice. The School District did not want to eliminate this language at this time. (Council had recommended elimination) Eliminate PAUSD’s right to acquire City’s Interest at Cubberley Section “3” of the Lease Amendment and Land Exchange between City of Palo Alto and PAUSD executed on August 13, 2002 provides the school district with the right-of-first-refusal on the sale, if City offers to sell its 8 acres to another party. There is no new language in in the Lease Amendment regarding this Section. (While Council had recommended looking at this change, the City’s interest in this is protected, as this condition would only be triggered by the City’s decision to sell its 8 acres.) RESOURCE IMPACT The City had budgeted approximately $1 million in reserve in the FY 2015 Budget, planning for a half-year savings in the Covenant Not To Develop Funds with a successful negotiation on a new lease. With the terms of the lease amendment as proposed that is before Council, once enacted, staff will return at Mid-Year Budget Review to establish the Cubberley Property Infrastructure Fund as required in the Lease Amendment, and “transfer” and adjust this reserve budget item into the new fund. POLICY IMPLICATIONS City of Palo Alto Page 7 Amending the Lease Agreement at Cubberley Community Center is consistent with policies and programs in the Comprehensive Plan promoting City-PAUSD collaboration and the effective provision of community services. ENVIRONMENTAL REVIEW Extension or re-negotiation of an existing lease and agreement does not constitute a project for purposes of the California Environmental Quality Act (CEQA). Attachments:  Attachment A: Amendment 3 to Lease Between City of Palo Alto and the PAUSD re Cubberley Community Center (PDF)  Attachment B - CMR 4506 Cubberley (PDF) AMENDMENT NO. 3 TO LEASE BETWEEN THE CITY OF PALO ALTO AND THE PALO ALTO UNIFIED SCHOOL DISTRICT This Amendment No. 3 to Lease and Covenant Not to Develop (“Third Amendment”) is entered into this January 1, 2015 (“Effective Date”), by and between the Palo Alto Unified School District (“District”), and the City of Palo Alto (“City”). The District and the City are sometimes hereinafter referred to collectively as the “Parties,” or each individually as a “Party.” RECITALS A. The Cubberley Community Center Site (“Cubberley Site”) is a 35-acre site, where the City currently owns 8 acres in the northeast corner of the site (referred to in the operative agreements and herein as the “Cubberley Conveyance Property”) and the School District owns and leases to the City the remaining 27 acres (referred to in the operative agreements and herein as the “Leased Site”) pursuant to a Lease and Covenant Not to Develop dated September 1, 1989 (“Lease”). B. The original term of the Lease was for fifteen (15) years, from January 1, 1990, through December 31, 2004. Per the Lease, the City timely provided notice extending the term for an additional ten (10) years, to December 31, 2014. The Lease further states that the term may be extended further by mutual agreement of the Parties for up to two (2) additional periods of five (5) years each. C. The Lease includes a covenant by the District not to subdivide, sell, or develop with additional square footage for non-District programs, the Covenanted Sites (as that term is defined in the Lease). In exchange for this covenant not to develop, the City has, under the terms of the Lease, made annual payments to the District that have been subject to annual inflationary adjustments (the “Covenant Payments”). The most recent yearly Covenant Payment paid to the District by the City was in the amount of One Million Eight Hundred Sixty Four Thousand Two Hundred and Forty Eight Dollars ($1,864,248). The origin of these annual payments is related to declining enrollment in the District as of the date of the Lease. In order to offset resulting budget impacts at that time, the District had begun to close and dispose of underpopulated school sites. The Covenant Payments offset certain of these budget impacts, in exchange for which the District agreed not to dispose of the school sites identified in the Lease. D. In 1998, the Parties entered into the Amendment No. 1 to Lease and Covenant Not to Develop (“First Amendment”) to replace the District’s Ohlone site as one of the Covenanted Sites with the Walter Hays site and the Juana Briones site. E. In 2001, The Parties entered into a Lease Amendment and Land Exchange Agreement (“Exchange Agreement”), pursuant to which the District agreed to convey to the City fee title to a portion of the Leased Site, defined in the Exchange Agreement as the “Cubberley Conveyance Property.” In exchange, the City relinquished its right to 141112 jb 0131263B 1 acquire the New Terman School Site and reserved the option to acquire such property if the District wished to sell it prior to September 1, 2022 (as defined in the Exchange Agreement). The Exchange Agreement further provides that if the City wishes to sell the Cubberley Conveyance Property at any time prior to September 1, 2022, the City must give notice to the District, and the District has the option to purchase the Cubberley Conveyance Property for fair market value. F. In 2002, the Parties entered into the Amendment No. 2 to Lease and Covenant Not to Develop (“Second Amendment”) to replace the Garland site as one of the Covenanted Sites with the Addison and El Carmelo sites. G. As of the Effective Date of this Third Amendment, the District is experiencing rising enrollment, thus reducing the possibility of school closures and disposal of District property for the foreseeable future. As a result, the covenant not to develop has significantly diminished relevance under the current circumstances. H. The City currently subleases a portion of the Leased Site (the “Subleased Premises”) to Foothill College (“Foothill”). The Parties anticipate that Foothill may relocate from the Subleased Premises, which will result in a loss of revenue to the City. I. The Parties acknowledge the benefits to the Parties’ mutual constituents of the City’s use of facilities at the Cubberley Site, and desire to provide for such continued use. J. The Parties also acknowledge the need to keep the facilities being used on the Cubberley Site well maintained and in good repair, with the District and the City further benefiting from such ongoing maintenance and repair of their properties. K. For these reasons, the Parties now desire to encourage and facilitate the use of City funds to improve, maintain and repair the Leased Site and the Cubberley Conveyance Property with City funds that had previously been appropriated for the Covenant Not to Develop. L. The Parties therefore desire to extend the term of the Lease for five (5) years; to amend the Lease to remove the District’s covenant not to develop; to ensure that funding is available so that the Leased Site and improvements located thereon and Cubberley Conveyance Property and improvements located thereon are adequately maintained; and to distribute between the City and the District certain gains or losses of revenue that will result in the event of Foothill’s relocation from the Subleased Premises. Now therefore, for consideration, receipt of which is acknowledged, the Parties agree as follows: 141112 jb 0131263B 2 AGREEMENT 1. Extension of Lease Term. The term of the Lease is hereby extended to and including December 31, 2019. 2. Elimination of Covenant Not to Develop. Section 4.0 of the Lease is hereby deleted in its entirety. Throughout the remainder of the term, the Lease shall not contain any restrictions on the District’s ability to subdivide, sell, or develop the Covenanted Sites. The Lease is hereby renamed as the “Lease and Child Care Agreement between the City of Palo Alto and the Palo Alto Unified School District.” 3. Property Infrastructure Fund. The City shall create a restricted Property Infrastructure Fund (“Fund”) for the benefit of the Cubberley Site. On an annual basis, the City shall deposit One Million Eight Hundred Sixty Four Thousand Two Hundred and Forty Eight Dollars ($1,864,248) into the Fund. This annual Property Infrastructure Fund payment shall not be subject to inflationary adjustments. The Fund shall only be used for expenditures that are directly related to repairing, renovating, and/or improving the Leased Site and improvements located thereon and/or improving the Cubberley Conveyance Property and improvements located thereon. Prior to making any expenditure from the Fund, the City shall notify the District of the intended expenditures in writing, and shall meet and confer with the District regarding such expenditures. After considering the District’s input in good faith, the City shall be responsible for making a final determination regarding the intended expenditures. On or before December 31 of each year of the Lease term, the City shall provide the District with a detailed, written report summarizing all expenditures from the Fund, including the amount and purpose of each such expenditure. If the City and the District choose not to extend this Lease after December 31, 2019, and if the entire Fund has not been expended by that date, then prior to that date, the City shall demonstrate to the District how the Fund has been formally committed to expenditures that are consistent with the purposes set forth in this paragraph. City shall continue to provide the District with the report described herein by each December 31 until such time as the Fund is fully expended, at which time City shall provide the District with a final reporting. This section 3 shall survive the earlier termination of the Lease. 4. Master Plan for Leased Site. The Parties shall jointly develop a master plan for the Leased Site and Cubberley Conveyance Property, which shall be completed within five (5) years of the Effective Date of this Third Amendment. The Parties shall meet and confer to determine the scope of the master plan and appropriate funding for the preparation of the plan. 5. Cubberley Conveyance Property. The City and the District may agree by mutual consent to reconfigure or relocate the Cubberley Conveyance Property within the Leased Site to accommodate the construction or relocation of improvements on the Leased Site by the City. If agreed by the Parties in writing, such reconfiguration may include exchange of the City’s ownership interest in all or a portion of the Cubberley Conveyance 141112 jb 0131263B 3 Property with a portion of the remainder of the Leased Site, and/or adjustment of the boundaries of the Cubberley Conveyance Property. 6. Payment Adjustment. A. Annual Increases. Section 2.7, consisting of sections 2.7, 2.7.1, 2.7.2, 2.7.3, 2.7.4, and 2.7.5, of the Lease is hereby deleted in its entirety, and replaced with the following: 2.7.1 “Payment” means all payments due from City to District pursuant to this Lease. 2.7.2 The Payment shall be increased by three percent (3%) annually on the anniversary of the commencement date of the Third Amendment to the Lease. B. Adjustments Related to Foothill College Sublease. If Foothill vacates the Subleased Premises, the City may elect to use the entirety of the Subleased Premises for its own purposes, in which case there shall be no adjustment in the base payment owing by the City under the Lease. (For purposes of this Third Amendment, “elect” shall mean any decision made by the City to use the Subleased Premises, whether at that time or in the future.) If the City does not elect to use the entirety of the Subleased Premises for its own purposes, the City shall take all action reasonably necessary to secure a new sublessee (“Sublessee”) for the Subleased Premises, or that portion of the Subleased Premises that the City does not elect to use. Within 30 days of Foothill’s vacating the Subleased Premises, the City shall provide the District with verifiable documentation of (1) the annual rent paid by Foothill as of the date of termination of the tenancy by Foothill (“Foothill Sublease Amount”), (2) the total square footage of the Subleased Premises, (3) if Foothill vacates only a portion of the Subleased Premises, the square footage that Foothill continues to occupy, and (4) the total square footage of the Subleased Premises that the City elects to use for its own purposes, if any. (In the event the Foothill rent amount at date of termination is different than three months before termination, the parties shall meet and confer to determine the appropriate rent amount to be used for this Third Amendment.) i. Base Payment While Subleased Premises Are Vacant. If the City does not elect to use any of the Subleased Premises, then unless and until the City secures a Sublessee for the Subleased Premises, the City’s annual base payment shall be reduced by fifty percent (50%) of the Foothill Sublease Amount during the time that the Subleased Premises remain vacant. If the City elects to use only a portion of the Subleased Premises, then the annual payment reduction shall be proportional to the amount of square footage that the City chooses not to use. For illustration purposes only, if the Subleased Premises are 100,000 square feet, and the City elects to use only 40,000 square feet, then the annual base payment shall be reduced by thirty percent (30%) of the Foothill Sublease Amount (100,000 square feet – 40,000 square feet = 60,000; 60,000 divided by 100,000 = 60%; 50% reduction = 30%). 141112 jb 0131263B 4 ii. Base Payment If Sublessee Is Secured for Entire Subleased Premises. In the event that the City elects not to use any of the Subleased Premises for its own purposes and is successful in securing a Sublessee for the entirety of the Subleased Premises, the City’s base payment shall be adjusted as follows: a. If the Sublessee’s annual rent (“Modified Sublease Amount”) is an amount one hundred thousand dollars ($100,000) or more greater than the Foothill Sublease Amount, then the City’s annual base payment shall be increased by fifty percent (50%) of the difference between the Foothill Sublease Amount and the Modified Sublease Amount. For illustration purposes only, if the Foothill Sublease Amount is $1,037,000, Foothill vacates the Subleased Premises, and the City secures a Sublessee who will pay a Modified Sublease Amount of $1,237,000, then the City’s annual base payment shall be increased by $100,000 ($1,237,000 - $1,037,000 = $200,000; 50% of $200,000 = $100,000). b. If the Modified Sublease Amount is an amount at least one hundred thousand dollars ($100,000) less than the Foothill Sublease Amount, the City’s annual base payment shall be decreased by fifty percent (50%) of the difference between the Foothill Sublease Amount and the Modified Sublease Amount. For illustration purposes only, if the Foothill Sublease Amount is $1,037,000, Foothill vacates the Subleased Premises, and the City secures a Sublessee who will pay a Modified Sublease Amount of $837,000, then the City’s annual base payment shall be decreased by $100,000 ($837,000 - $1,037,000 = (- $200,000); 50% of - $200.000 = (- $100,000)). c. If the Modified Sublease Amount is within one hundred thousand dollars ($100,000) of the Foothill Sublease Amount, the City’s annual base payment shall remain as set forth in the Lease, with no adjustment. For illustration purposes only, if the Foothill Sublease Amount is $1,037,000, Foothill vacates the Subleased Premises, and the City secures a Sublessee who will pay a Modified Sublease Amount of $1,100,000, the City’s annual base payment amount will remain as provided for in the Lease, without change ($1,100,000 - 1,037,000 = $63,000; $63,000 < $100,000). iii. Base Payment If City Uses Part of Subleased Premises and Subleases the Remainder of the Subleased Premises. In the event that the City elects to use only part of the Subleased Premises, and is successful in securing a Sublessee for the entire remainder of the Subleased Premises, the City’s base payment shall be adjusted consistent with section 6(B)(ii), above, except that any resulting reduction in the City’s annual base 141112 jb 0131263B 5 payment shall be further reduced in proportion to the amount of square footage of the Subleased Premises not being used by the City. For illustration purposes only, if the City uses 40% of the Subleased Premises and subleases the remaining 60% to a Sublessee, and if the City’s annual base payment would otherwise be reduced by $100,000 pursuant to section 6(B)(ii), above, that amount would be multiplied by 60%, so that the resulting reduction in the City’s annual base payment would be $60,000. iv. Base Payment If Sublessee Is Secured for Only A Portion of the Subleased Premises. In the event that the City elects not to use any of the Subleased Premises for its own purposes, or elects to use only part of the Subleased Premises, and is successful in securing a Sublessee for only a portion of the remaining Subleased Premises, the City’s base payment shall be adjusted as follows. If the Sublessee (or Sublessees) sublets only a portion of the Subleased Premises, then the base payment reduction to which the City is entitled pursuant to section 6(B)(i), above, shall be proportional to the amount of square footage sublet as compared to the total square footage of the entire Subleased Premises (“Sublessee Proportional Square Footage”). For illustration purposes only, if the total square footage identified by City pursuant to section 6(B), above, were 50,000 square feet, and a Sublessee sublets 25,000 square feet, the Sublessee Proportional Square Footage would be equal to 50%. If the City’s annual base payment would otherwise be reduced by $150,000 pursuant to section 6(B)(i), above, that amount would be multiplied by 50%, so that the resulting reduction in the City’s annual base payment would be $75,000. v. Base Payment If Foothill Vacates Only A Portion of the Subleased Premises. In the event that Foothill vacates only a portion of the Subleased Premises, the base payment shall be adjusted proportionally to the amount of square footage that Foothill vacates. For illustration purposes only, if Foothill vacates only 50% of the total square footage it currently subleases, any adjustment to the base payment set forth above shall be reduced by 50%. vi. Other Scenarios. In the event that a scenario occurs relative to Foothill’s vacating of the Subleased Premises that is not addressed in sections 6(B)(i), (ii), (iii), (iv) and (v), above, the Parties shall meet and confer to carry out their mutual intent to achieve a result generally consistent with sections 6(B)(i), (ii), (iii), (iv) and (v), above. C. Pro Rata Application of Base Payment Reductions. All reductions of the base payment pursuant to section 6(B)(i), (ii), (iii), (iv), (v), or (vi), above, shall be applied monthly on a pro rata basis so that the payment reflects only the months remaining in the calendar year in which the reduction takes effect. Thereafter, the reduction will continue to apply on a monthly basis based on a one-twelfth (1/12th) portion of the annual base payment. Any reduction in base payment shall commence the month immediately following the calendar month in which Foothill vacates the Subleased Premises. For illustration purposes only, if Foothill vacates the Subleased Premises on June 15 of a calendar year, the reductions set forth above, if applicable, shall commence as of the payment for the immediately following July in that same calendar year. 141112 jb 0131263B 6 D. Re-adjustment of Base Payment Reductions. Any reduction of the base payment pursuant to section 6(B)(i), (ii), (iii), or (iv) above, shall be adjusted annually pursuant to section 2.7.2 of the Lease, as amended herein. Additionally, the reduction may be eliminated, reduced further or diminished to reflect additional City use, a new Sublessee, or a change in the square footage being subleased. Any such adjustment shall become effective in the calendar month immediately following the month in which the event or circumstances occur giving rise to the adjustment. 7. Conflicting Terms. All other terms and conditions contained in the Lease, the First Amendment, and the Second Amendment shall remain in full force and effect and this Third Amendment shall not affect any provisions of the Lease, the First Amendment, or the Second Amendment, except as otherwise set forth herein. In the event there is conflicting language between the Lease, the First Amendment, or the Second Amendment, on the one hand, and this Third Amendment, on the other hand, this Third Amendment shall prevail. 8. Counterparts. This Third Amendment may be executed in counterparts and a facsimile signature shall be sufficient to bind each Party, subject to the terms set forth herein. 9. Definitions. All terms not otherwise defined herein shall have the meaning ascribed to them in the Lease, First Amendment, or the Second Amendment, as applicable. 10. Further Documents and Actions. Each of the Parties agrees to execute such further documents and take such further actions as may be reasonably necessary or appropriate to effectuate the terms of the Third Amendment. 11. Warranty of Authority. Each of the persons signing this Third Amendment represents and warrants that such person has been duly authorized to sign this Third Amendment on behalf of the Party indicated, and each of the Parties by signing this Third Amendment warrants and represents that such Party is legally authorized and entitled to enter into this Third Amendment. IN WITNESS WHEREOF, District and City have executed this Third Amendment, through their respective officers or representatives duly authorized, as of the Effective Date. ATTEST: CITY OF PALO ALTO ______________________________ ____________________________ City Clerk Mayor 141112 jb 0131263B 7 APPROVED AS TO FORM: PALO ALTO UNIFIED SCHOOL DISTRICT, Lessor ___________________________ _____________________________ Senior Asst. City Attorney President, Board of Education APPROVED: APPROVED: ______________________________ ____________________________ City Manager Superintendent of Schools 141112 jb 0131263B 8 City of Palo Alto (ID # 4506) City Council Staff Report Report Type: Action Items Meeting Date: 2/24/2014 City of Palo Alto Page 1 Summary Title: Cubberley Lease Between City of Palo Alto and Palo Alto Unified School District Title: Direction to Staff on Lease Terms for the Renewal of the Cubberley Lease Between City of Palo Alto and Palo Alto Unified School District From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff recommends that Council authorize the City Manager to negotiate with the Palo Alto Unified School District (PAUSD) Superintendent to execute a new lease agreement based on the following potential terms and conditions, offered for Council consideration. These terms are intended to provide a balance of flexibility and certainty to both City and PAUSD for the Cubberley site, in the near term and the long term, while enabling most effective investment of public funds. Suggested terms for consideration: 1. Eliminate the Covenant not to Develop from the lease. Reallocate that funding towards investment in the Cubberley facilities for long neglected and ongoing maintenance. Consider inclusion of Ventura Community Center site for reinvestment dollars. 2. Eliminate the Consumer Price Index (CPI) annual increases. 3. Create a longer term lease (20 year) with PAUSD to allow creation of a long-term plan for the City owned 8-acre site, investment in facility improvements and public access to playing fields. 4. Explore new terms with PAUSD to allow potential reconfiguration of City 8 acres within the Cubberley site. 5. Eliminate the language allowing PAUSD to purchase the City’s 8 acres. 6. Eliminate the buy-back /repurchase option clause that allows PAUSD to repurchase Ventura. 7. Continue Child Care program per terms and condition of the existing lease. 8. Allow for use of the playing fields at Cubberley for maximum time period possible. Attachment B City of Palo Alto Page 2 Other issues to consider:  Process for adjustment of rent paid by City to PAUSD, if City loses anchor tenants such as Foothill College?  24 month notice clause in the existing lease which gives the PAUSD the right to cancel the lease if PAUSD plans to open a compact high school?  Discussion of better access to other school site field and facility use? EXECUTIVE SUMMARY Over the past few months, the City Manager and School Superintendent have had exploratory negotiation meetings regarding terms for any potential renewal of the Cubberley Lease and Covenant Not to Develop, which expires at the end of this year. Both parties see great value in developing a new lease and an agreement seems within reach on a number of terms. We have not been able to reach tentative agreement yet at staff level regarding the Covenant Not to Develop. The District does not want to lose the money provided through the Covenant terms (approximately $1.8 million out of the $7.16 million the City will pay in 2014). After this year, the City sees no rationale for continuing to pay for a purpose no longer necessary (preserving school sites from sale) and greater needs that lack funding. Notably, this includes needed maintenance and investment in the Cubberley facilities themselves and planning and funding towards potential redevelopment of the facilities on the City’s 8 acres at Cubberley into a true community serving center. A recommendation to reinvest covenant funds into Cubberley, negates any need from the School District towards shared maintenance costs. BACKGROUND Originally opened as a high school in the 1950’s, Cubberley was closed due to decreasing Enrollment in 1979. At that time, substantial budget pressures were being experienced by the PAUSD due to a variety of circumstances starting in the late 1970s and early 80s, including Passage of Proposition 13 in 1978 and declining PAUSD enrollment and revenue during the post–Baby Boom era. In response to that stressed financial situation, the PAUSD closed several schools and sold some existing school sites in order to help sustain its educational programs at the level the community expected. This included the closure of Cubberley in 1979 and the City’s acquisition of Terman in 1981, among the sale and/or closure of other sites. Attachment B City of Palo Alto Page 3 The City realized that the PAUSD is one of the City’s defining assets and its decline would have severely negative impacts on the City as a whole. The City and the PAUSD also recognized that sites once sold would never again be available for school use should the trends reverse in the future. In 1987, the City put Measure B on the ballot with the intent to create a 5 percent utility users tax (UUT). (Infrastructure Blue Ribbon Commission (IBRC) Final Report) On September 1, 1989, the City and the PAUSD entered into a lease agreement (Lease). Under the lease agreement, the City provided PAUSD with annual revenue in exchange for the City receiving: 1) a lease on the former 35-acre Cubberley High School site, including 180,000 square feet in improvements to be used for community theater, sport and art groups; 2) a Covenant Not to Develop five neighborhood elementary school sites (Jordan, Jane Lathrop Stanford, Ohlone, Garland and Greendell); and 3) an agreement that PAUSD provide space for extended day care at each of eleven remaining elementary school sites. In July 1998, the Agreement was amended (Amendment #1) to provide for the reopening of one of the covenanted sites (the “old” Ohlone site, now renamed Hoover School) and the substitution of two operating sites, Walter Hays and Juana Briones, for the covenanted site to be reopened. The amendment also provided for the addition of a twelfth extended day care site to be opened at the Hoover School. On December 10, 2001, City and PAUSD entered into a property exchange agreement whereby City conveyed to the district the Terman site and in exchange received 7.97 acres of the Cubberley site. The original lease Agreement was for 15 years, beginning January 1, 1990 and ending on December 31, 2004. The option to extend the lease for an additional ten years was exercised by the City and the current term of the lease will expire on December 31, 2014. Background information on the Cubberley Lease agreement with the City as well as Communication with the PAUSD is extensive. Specifically, since 1989 City staff and PAUSD have entered into several lease amendments and other agreement regarding the site needs. DISCUSSION Much has been studied and written about Cubberley over the past decade. Some facts and excerpts from earlier reports and other discussion factors have been included (below). Additional background information can be found in the attachments and reports Attachment B City of Palo Alto Page 4 Cubberley Property: The Cubberley Community Center currently occupies the entire 35-acre site, the City owns 8 acres in the northeast corner of the site; the remaining 27 acres are owned by PAUSD and leased to the City. Together, this 35-acre site is the last major plot of publicly owned land in the City proper, and its long term future use is critical to both community services and education. (Note attachment A). The city’s acreage contains campus classroom space, art and dance studios, some parking, a portable building used by Friends of the Palo Alto Library (FOPAL), and the tennis courts. The 27-acre area contains the playing fields, a dance studio, weight room, gymnasiums and pavilion, multi-purpose auditorium and theater with music rooms, three wings of classrooms, a portable building used by Friends of Palo Alto Library(FOPAL), and most of the parking areas. Facility: According to Cubberley Community Advisory Committee report (CCAC Report), most of the buildings and other facilities at the Cubberley site were completed by 1955. Some additional buildings (Pavilion, Theater, and others) were added in the early 1960’s along with a new artificial turf field in 2009. The site was built to then-existing school standards. While the structures have stood up well given their age, they have become increasingly run-down and expensive to maintain and were not designed to support current and future needs. The Cubberley site is inefficiently used by modern standards. Existing buildings are single story, per the 1950’s model of Palo Alto school architecture. The building layout results in long distances between buildings through low, covered walkways that give a foreboding tunnel effect block natural light and require costly repair and replacement. Single pane windows, poor insulation and louvers contribute to high energy costs. Air conditioning is not provided throughout most of the site, heating is ineffective and aged wiring does not adequately support today’s technological needs. The small, largely uniform, individual classroom design also limits the types of groups and activities that can be accommodated and fails to provide appropriate gathering spaces for modern school or community use. In addition to being inefficiently designed and poorly suited to the structural needs of modern school and community programming, the aged site is costly to maintain. Covenant Not to Develop Section 4.1 of the Lease indicates that the purpose of the covenant is “to prevent further burden on the City’s infrastructure and in order to preserve a substantial amount of the City’s remaining open space.” The Lease includes a "Covenant Not To Develop" payment that was intended to safeguard District owned properties from being sold. It is the City's agreement to pay the District in return for the District not selling its land. This is no longer an immediate issue as the school sites identified in the Covenant are now all in use. (Source CCAC Report) Attachment B City of Palo Alto Page 5 This clause now appears to be obsolete given the district’s recently expressed intent to reopen existing sites. Further, there is no current plan for any sites to be sold for development, and the district has just recently purchased additional property at 525 San Antonio Road. Ironically, the $1.78 million annual covenant payment (from the City to the PAUSD) directly or indirectly puts a burden on the City’s infrastructure budgeting because these funds are not available to support infrastructure needs including Cubberley maintenance. (Note IBRC Final Report) The Cubberley Community Advisory Committee (CCAC) Report recommends the removal of the “Covenant not to Develop” from the Lease; however the reports states the recommendation should not be understood to imply deleting the dollars associated from the covenant. Lease Term: The term of the current lease will expire on December 31, 2014. According to section 6.1.3 of the lease, City and PAUSD can extend the lease for two (2) additional Five (5) year periods. The parties can also extend the lease term base on mutual agreement by a longer term period. The lease provides a hold-over clause that allows the continuation of the tenancy after the expiration date. The City and School District have discussed a new lease. Future plan for the use of the 8- Acre Site: If City develops a specific plan for the City owned 8 acre site, the City may need to have the flexibility of being able to change the footprint of the 8 acre site with the cooperation of PAUSD to create a new configuration to maximize its potential to support the City plan and vision. Requires agreement from PAUSD. Child Care: Cubberley is home to several high quality centers providing both childcare and early education, supporting both the children and their parents. Good early care and education are part of the infrastructure of any vibrant city and are especially valued in our city. Palo Alto has recognized this since the 1970s with innovative support for such programs. City needs to continue this support as the city grows and develops. (CPI) Annual Adjustments: The Cubberley Lease calculates annual lease payment adjustments using the Consumer Price Index which has been steadily increasing over time. This is an inconsistent correlation of income and expense for the City. Recommend elimination. Attachment B City of Palo Alto Page 6 Playing Fields: The demand for fields is growing faster than the population, yet there are few locations for additional fields in Palo Alto. The proposed new fields near the golf course will help a bit, but these fields are not funded, are likely to be windy and will not be easily accessible. If a full high school reopens on this site, it will not be possible to continue the same recreation programs unless additional fields become available somewhere else. The City needs the fields for as long as possible at Cubberley in order to develop a long term use plan and be able to meet the future demands for playing field by the users. Loss of Anchor Tenant: Foothill College represents a significant portion of the current tenant lease income and serves as the anchor tenant at Cubberley paying approximately a million dollars to City for rent of its space. Foothill College is planning to move to a new Sunnyvale campus located at the Onizuka Air Force Base in the next three years. The new lease agreement with PAUSD should allow reduction in rent payment from the City to the District in the event of loss of a major tenant. Capital Improvement & Maintenance: According to the recent Infrastructure Blue Ribbon Commission (IBRC) report, current, ongoing maintenance requires a minimum annual expenditure of $330,000 (optimal maintenance should be closer to $800,000 per year). On top of that, the IBRC concluded that an additional $10.2 million in major deferred maintenance would be required between now and 2016, followed by $4.9 million before 2026 and another $3.7 million by 2036. CCAC recommended for the School District to pay for its share of the projected capital improvements, and for City to negotiate regarding contribution toward ongoing maintenance and repairs beyond routine maintenance. As discovered through our Commission’s infrastructure investigations, this maintenance liability – not included in the above figures – cumulatively totals about $18.8 million through 2036, with $10.2 million scheduled between now and 2016. Public works indicates that optimal maintenance expenditures should be about $800,000 versus the $330,000 currently expended. This projected aggregate maintenance liability has several implications. Long term, the City has identified $18.8 million in infrastructure improvements that must be made at Cubberley. Of those, $8.4 million is on City Buildings and $10.4 is on School District Buildings. This would cover infrastructure improvements which would extend the life of the buildings for 25 years but most would need to be accomplished within 10 years. These improvements have not yet been funded. The nature of both agencies’ budgets requires that capital investment in the Cubberley site be well-planned, deliberate and suited to a long term vision for the site. Presently the City is responsible for all Attachment B City of Palo Alto Page 7 maintenance expenses for the site but does not have adequate funding. The cost of maintenance for the site rises as the buildings age and continue to deteriorate. Eliminate PAUSD right to cancel the lease to open a compact high school: Section 10 of the Second Amendment of the Cunbberley lease grants the PAUSD the right to terminate the lease by exercising a twenty-four (24) months written notice with respect to all or a portion of Leased Site so it may operate a compact high school at Cubberley. Recommend elimination. Eliminate the buy-back / repurchase option clause that allows PAUSD to repurchase Ventura: Section “H” of the Purchase Agreement that was executed on October 30, 1980 between City of Palo Alto and PAUSD grant a repurchase right to PAUSD to buy back the Ventura School site from the City by exercising a one-year prior notice. Staff recommends the elimination of this clause in conjunction with development and negotiation of the new Cubberley lease agreement. Eliminate the PAUSD’s right to acquire City’s Interest at Cubberley: Section “3” of the Lease Amendment and Land Exchange between City of Palo Alto and PAUSD executed on August 13, 2002 provides the school district with the right-of-first-refusal on the sale until September 1, 2022, if City offers to sell its 8 acres to another party. (This is dependent on renewal of lease on existing terms). After that time the City has an unencumbered right to sell the 8 acres, if it decides to do so. Of course, the City and the district can negotiate a sale to the district at any time. The clause restricts the City’s ability to make much needed infrastructure improvements. TIMELINE Does Council want to establish a negotiation completion deadline? RESOURCE IMPACT The District has developed a dependency on the lease payment funds, comprising now approximately 4.4% of the District's annual budget as revenue. These funds also constitute approximately 4.6% of the City's annual budget as an expense (CCAC Report). PAUSD’s 27 acres is currently leased to the City for approximately $7.16 million per year including Covenant Not to Develop plus all maintenance costs, expenses which are supported by the City’s General Fund. Attachment B City of Palo Alto Page 8 Cubberley Finances There are three components to the Lease and Covenant Not to Develop, (Office of Management & Budget) that will total to the amount of $7,159,827 for the Calendar year 2014: 1. The lease of the Cubberley Facility – cost in calendar Year 2014 = $4.7 million 2. The Covenant Not to Develop – cost in calendar year 2014 = $1.8 million 3. Payment for provision of space at each elementary school for child care – current cost in calendar year 2014 = $ 615 thousand; According to CCAC Finance Committee Report, there is an annual CPI adjustment built into the document so that each component increases each year. Aside from the lease payments, Cubberley has expenses for: General operating maintenance: $430,000 Operations expense (CSD): $1,325,000 In 2013, Cubberley generated revenues of, (Office of Management & Budget): Tenant leases (Foothill-DeAnza, artists, nonprofits, etc.) $1,602,143 Hourly rentals (events, use of theater, etc.) $907,098 Office space rental by City $73,000 Total: $2,582,241 History of Payments City to PAUSD Between 1989 to 2013 City has paid approximately a total of $136 million (maintenance cost and operating expenses are not included) to PAUSD for lease of the Cubberley site, Covenant not to Develop and child care program. Projected Future Payment to PAUSD Extending the Lease Agreement without the “Covenant not to Develop” and the “CPI” increases, for 20 years (2014 -2034), will result in projected cost of $106,714,200 to City’s General Fund for payments to PAUSD, plus additional costs for maintenance and operating expenses. Attachment B City of Palo Alto Page 9 POLICY IMPLICATIONS Exercising the option to extend or entering into a new Lease Agreement is consistent with policies and programs in the Comprehensive Plan promoting City-PAUSD collaboration and the effective provision of community services. ENVIRONMENTAL REVIEW Extension or re-negotiation of an existing lease and agreement does not constitute a project for purposes of the California Environmental Quality Act (CEQA). Links to additional reports: G– CMR 2861- 5/14/2012 Cubberley Guiding principles Link http://tinyurl.com/mhkq49a H– CMR 3824 – 5/13/2013 Discussion of Cubberley Report & Lease Link http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=34285 I– CMR 4476 2/18/2014 Artists Studio Program Hyper Link http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=39050 Below are four links to the four volumes of the CCAC final report: Volume 1 http://www.cityofpaloalto.org/civicax/filebank/documents/33438 Volume 2 http://www.cityofpaloalto.org/civicax/filebank/documents/33439 Volume 3 http://www.cityofpaloalto.org/civicax/filebank/documents/33440 Volume 4 http://www.cityofpaloalto.org/civicax/filebank/documents/33441 Attachment B City of Palo Alto Page 10 Infrastructure Blue Ribbon Commission (IBRC) Final Report http://www.cityofpaloalto.org/civicax/filebank/documents/29729 Cubberley Master Plan http://www.city.palo-alto.ca.us/civicax/filebank/documents/30937 Attachments:  Attachment: A. Cubberley CC - Map (PDF)  Attachment: B Exh 1. Amendment 1 to CCC Lease (PDF)  Attachment: B Exh 2. Amendment 2 to CCC Lease (PDF)  Attachment: B Exh 3. CCC Lease Amendment and Land Exchange (PDF)  Attachment: B. CCCLease and Covenant Not To Develop (PDF)  Attachment: C.CMR Staff Report 535-9 (PDF)  Attachment: D.CMR Staff Report 448-01 (PDF)  Attachment: E. CMR Staff Report 498-03 (PDF)  Attachment: F. CMR Staff Report 556-03 (PDF) Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B Attachment B C) ) ) ',. 1 LEASE AMENDMENT AND LAND EXCHANGE AGREEMENT This Lease Amendment. and Land Exchange Agreement is entered into this 1~.1h day of ii()l.W{,r~~, 2001,. by and between the Palo Alto Unified School District ("District") and the City of Palo Alto, a municipal corporation ("City"). RECITALS A. The District is the owner of the certain property as described and shown in Exhibit A attached hereto and commonly referred to as the Cubberley Site. Lease whereby B. The District and the City have entered into a and Covenant Not to Develop dated September 1, 1989 the District leased to the City the Cubberley Site. C. The District is property as shown in Exhibit B referred to as the Terman Site. the legal owner of attached hereto and certain commonly D. In 1981, the District entered into a Lease to Purchase Agreement (the "Terman Lease Purchase Agreement") with the City whereby the City leased the Terman Site, including both the New Terman School Site and the adjacent Terman Park, from the District for 20 years with the right to acquire the Terman Site on November 1, 2000. The City exercised its option under the lease in a timely fashion, but with the consent of City, the District has not yet delivered title to the Terman Site to the City, and the" City has remained in possession of the Terman Site. E. The District has determined that in order to provide a quality education experience the desired range of school size for middle schools is 600 to 900 students. The District currently operates two middle SChools, one of which has an enrollment of 1,076 students and the other of which has an enrollment of 1, 179 students. In order to ensure that middle school students in the District receive the best education possible, the District has determined that it is necessary to open a third middle school in order to reduce the enrollments at the middle schools to the range of 600 to 900 students. F. The District has conducted an extensive search for a site of the new middle school. Based on the residences of 1 011205 ')'II 0090986 Attachment B () ) ) the current middle school population, the District determined that a portion of the Terman Site, as shown Exhibit C attached hereto and incorporated herein ("the Terman School Site") is the most appropriate location for middle school. has in New the G. In order to permit the District to reopen a middle school at the New Terman School Site the City has agreed to exchange its right to acquire the New Terman School Site for a fee interest in a portion of the Cubl;lerley School Site which portion is of equal size to the New Terman School Site. H. The City, with the consent of the District, and the Albert L. Schultz. Jewish Community Center ("the JCC") entered into a sublease for a portion of the New Terman School Site ("the JCC Sublease") in 1982. The JCC Sublease has not expired. Onder the terms of a Lease Termination and Mutual Release Agreement approved by the City Council on September 10, 2001 between the City and the JCC and a separate Settlement and Relocation Agreement between the District and the JCC, the sublease between the City and the JCC will continue in effect after transfer of title to the New Terman School Site. I. The City and the District recognize and acknowledge that if the parties did not enter into this Agreement, and the parties and the JCC had not entered into the Lease Termination and Mutual Release Agreement and the Settlement and Relocation Agreement, the District would consider instituting eminent domain action to acquire the New Terman School Site and there would likely be opposition to such eminent domain action. NOW, THEREFORE, for good and valuable consideration, the City and the District agree as follow: 1. Terman Site The Terman Lease currently provides that upon expiration of the Lease Term, which expiration occurred on November 9, 2000, the District was to have conveyed to the City fee title to the "Terman Site". Due to the District I s determination that a portion of the Terman Site, namely the New Terman School Site, is the most appropriate place to open a middle school that is needed to serve the community, the City and the District hereby agree to amend the Terman Lease as follows: 2 011205 'yn 0090986 Attachment B () i) ) (a) The Term of the Terman Lease is hereby extended to September I, 2002. (b) The City shall make 'no further rental payments. (c) Notwithstanding anything to the contrary in the Terman Lease, the District agrees that on or before September 1, 2002, the District shall convey to the City by grant deed fe. title to that portion of the Terman Site identified in Exhibit D attached hereto and incorporated herein as Terman Park, subject to those exceptions shown on the Preliminary Report attached hereto as Exhibit E. The City shall chose the escrow company and title company to be used and shall pay all costs of escrow and title insurance; the District shall sign and deliver a grant deed and such other documents as are reasonably required to close escrow within thirty days after they are presented to District for signature. (d) Notwithstanding anything to the contrary in the Terman Lease, the City agrees that on or before September 1, 2002, the City shall execute a quitclaim deed or such other document as the District may request relinquishing any leasehold rights or rights of ownerShip the City has to the New Terman School Site, as shown in Exhibit C. (e) The City and the District agree to execute and record in the Official Records of the County of Santa Clara a termination of lease terminating the Terman Lease effective as of September 1, 2002. (f) The City shall convey its interest in the New Terman School Site subject to the sublease to the JCC. (g) The City and the District shall enter into a joint use agreement, regarding Terman Site in substantially the form attached hereto as Exhibit F. 2. Cubberley Property (a) The District in consideration for the City relinquishing control of the New Terman School Site hereby agrees to convey fee title by way of a grant deed a portion of the Cubberley Site ("Cubberley Conveyance Property") as set forth in Exhibit G attached hereto and incorporated herein 3 011205 ')'ll 0090986 Attachment B () ) simultaneously with City's relinquishments of its rights to the New Terman School Site subject to those exceptions shown on the Preliminary Report attached hereto as Exhibit H. The City shall chose the escrow company· and title company to be used and shall pay all costs of escrow and title insurance; the District shall sign and deliver a grant deed and such other documents as are reasonably required to close escrow within thirty days after they are presented to District for signature. (b) Prior to the conveyance of the Cubberley Conveyance Property, the City and the District will agree on the legal description and surveyor's map describing the Cubberley Conveyance Property, which legal description and map shall generally conform to the property lines set forth in Exhibit G. At the time the Cubberley Conveyance Property is conveyed to the City, the City and the District shall execute the Amendment No. 2 to Lease and Covenant Not to Develop attached hereto and incorporated herein as Exhibit I. 3. pistrict Right to Acquire If the City wishes to sell its fee interest in the Cubberley Conveyance Property any time prior to September 1, 2022, the City shall give written notice of such intention to the District. The District shall have the option to acquire the Cubberley Conveyance Property for fair market value. If the City and the District are unable to agree on fair market value, the purchase price for the Cubberley Conveyance Property shall be determined as follows: The fair market value of the property shall be determined bya state-certified appraiser acceptable to City and District with the cost of the appraisal to be shared by City and District equally. Should City and PAUSD not agree upon a State certified designated appraiser, one shall be appointed by the presiding judge of the Superior Court of Santa Clara County. The district must provide the City with written notice of its intent to acquire the Cubberley Conveyance Property within ninety (90) days of receiving notice from the City of its intent to sell the Cubberley Conveyance Property. 4. City Right to Acquire If the District wishes to sell its fee interest in the New Terman School Site any time prior to September I, 2022, the District shall give written notice of such intention to the City. The City shall have the option to acquire the New Terman School Site for fair market value. If the District and the City are unable to agree on fair market value, the purchase 4 011205 syn 009{)986 Attachment B C) ( ) ) price for the District Portion of the Terman Site shall be determined as follows: The fair market .value of the property shall be determined by a state-certified appraiser acceptable to City and District with the cost of the appraisal to be shared by City and District equally. Should City ,and PAUSD not agree upon a State certified appraiser, one shall be appointed by 'the presiding judge of the Superior Court of Santa Clara County. The City must provide the District with written notice of its intent to acquire the New Terman School Site vlithin ninety (90) days of receiving notice from the District City of its intent to' sell the new Terman School Site. 5. Settlement of Potential~~~i.tigatio!J: The City and the District acknowledge that this Agreement is being entered into. in order to settle potential litigation regarding the possession of the New Terman School Site. The Parties agree that no part of this Agreement will be admissible as evidence in a court of law in the event the District institutes eminent domain actions to acquire possession of the New Terman School Site and that this Settlement Agreement shall be subject to the applicable California Evidence Code Section related to the inadmissibility of settlement discussions. 6. Mutual Release Upon performance of the parties' obligations under this Agreement, and in consideration for the conveyance of the Cubberley Conveyance Property, and other consideration set forth herein, the City hereby releases and forever discharges, on behalf of the City, and its successors, assigns, ·heirs, executors and administrators, the District and its board members, officers, directors, employees, agents, contractors and affiliates from any and all demands, claims or causes of action against the District, including without limitatiqn all claims, demands or causes of action arising out of or pertaining to any occurrence, event, circumstances or matter of any kind or nature arising out of, directly or indirectly, the acquisition of the New Terman School Site by the District, including, but not limi ted, to any claims for compensation for leasehold value, fixtures and equipment, loss of business goodwill, severance damages, interest, litigation expenses, attorneys' fees and costs (including, but not limited to, costs incurred to negotiate this Agreement) , loss or damages for inverse condemnation, unreasonable precondemnation delay, unreasonable precondemnation activities and statutory relocation benefits. 5 011205 syn 0090986 Attachment B () ) Upon performance of the parties' obligations under this Agreement, and in consideration for the City relinquishing its rights to the New Terman School Site and other consideration herein set forth, the District hereby releases and forever discharges, on behalf of the District, its successors, assigns, heirs, executors and administrators, the City and its council members, officers, directors, employees, agents, contractors and affiliates from any and all demands, claims or causes of action against the City relating to the' City's occupancy of the New Terman School Si te including attorneys' fees and costs (including costs to negotiate this Agreement). In giving this release, the City and the District expressly waive the protection of civil Code Section 1542, which statute provides as follows: "A general re~ease does not extend to c~aims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have' materially ~l~d his setUement with debtor." District ~i~ . City 7 0 7. Headings The title and headings of the various Section of this Agreement are intended for means of reference and are not intended to place any construction on the provisions of this Agreement. 8. Invalidity If any provisions of this Agreement shall be invalid or unenforceable, the remaining provisions shall not be affected thereby, and every provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 9. Entire Agreement The terms of this Agreement are intended by the Parties as a final expression of their agreement and may not be contradicted by evidence of any prior or contemporaneous agreement. No provision of this Agreement may be amended except 6 O1l205 ,yn 0090986 Attachment B () by an agreement in writing signed by the Parties hereto or their respective successors in interest. The Parties were represented by attorneys with regard to the drafting of this Agreement, and neither party shall be deemed to be the drafter of this Agreement. 10. Successors This Agreement shall be binding upon and inure to the benefit of. the· heirs, executors, administrators, successors and assigns of the Parties hereto. 11. Governing Law This Agreement shall be governed by the laws of the State of California. 12. Execution· This Agreement may be executed in multiple counterpart originals. 13. Attorneys' Fees ) In the event of a breach of this Agreement, the ) non-breaching party shall recovery all attorneys' fees and litigation expenses incurred as a result of such breach andlor to enforce this Agreement, including without limitation costs of appeal. II II II II II II II II II II 7 011205 ,yn 0090986 Attachment B () ) IN WITNESS WHEREOF, the Parties have executed this Agreement on or as of the date first above written. CITY OF PALO ALTO, Lessee APPROVED AS TO FORM; ~~./ S~Asst. City Attorney APPROVED; c~ EXHIBITS; Exhibit A; Exhibit B; Exhibit C; Exhibit D; Exhibit E; Exhibit F; Exhibit G; Exhibit H; Exhibit I: 011205 syn 0090986 Legal Description Cubberley Site and Map of entire Map of the Terman Site 1 (including both New Terman School Site and Terman Park, both of which are identified on Exhibit B.) Map of New Terman School Site, (which City will quitclaim to District.) Map of Terman Park Preliminary Report on Terman Park Joint Use Agreement for Terman Site Map of Cubberley Conveyance Property Preliminary Report on Cubberley Conveyance Property Amendment No. 2 to Lease and Covenant Not to Develop 8 Attachment B · CUCBEHLEY SITE .' I:.t$9al Oeser 1ption EXHIBIT A () i'bRCEL 1 (continued) seqinning at a point en the Southwesterly line of Middlefield Road at the :Illost Northerly corner of that oertain parcel of land conveyed by Ralph Gre.bmeier, at uX', to Rolf Grebrneier I a married lIIan, by Deed dated August 14 I :1954 and recorded october 15, 1954 in Book 2983 of Official Records, Page 211 i . thence leavin9 said line of M~ddlefield Road and running along the Northwesterly line of said Clrebllleie:r paroel, South 57' 42' 46 11 West :a:n.S3 ,:feet; thence leaving said Northwesterly line of said Grebmeier paroel and running North :)2' 04' 46" El!l.Iit 200.00 he,t t~ a pOint on the Southwesterly loins of Middlefield Road, thence along s/ud ll.ne of Mido.l~field Road, South 57' 55 I 14" East 9.6.97 feat to the point of beqinning ano. being a portion of the Rancho Rinoon de San Francisquito. pARCEL 2 ~eqinning at the most Southerly corner of Lot 11 in Blook 1, as Shown on the Nap of Traot 1310, Greenmeadow I whioh Map was filed for reoord in the off ice of the ReOOl:'der of the County of santa Clara, state of California on July 7; 2$54 in Book SO of Maps, Pages 50 and 51; thence along southwesterly iine ot saio Lot 11, North 33' 33' 18" West 40.00 feElt;thenoe along a Southeasterly line of Lots 11 and 12, b10cX 1, as shown on the loIap ,hClreinal:iove referred to, south 56' 26' 42" Weat50,OO feet: thence along a Northeasterly lineo! said Lotl2, south 33'.33 ' 18" East 40.00 feet! thence alon~ the Northeasterly p:Nlonqation of thEa ,most Southerly line of said Lot 12, North 56' 26 ' 4 ~i':' ) . East 50.00 feet to the point of beginning I and being a portion Qf the Sant!~: Ri:1:I Rancho. . ) PARCEL 3 tleqinninq at $. point on the Northwesterly liM of that oertain parcel of land conveyed by ~alph Grebmeier, at UX, to Rolf Grebmsiel:',& married man by Oeed dated. Auqust 14, 19.154 and recorded october 15, 15154 in Book 2983 of Off'ioiU Records, Page2ll, distant thereon, south 51' 42' 46" Wsst 221.83 feet from the point of intersE\ctionof said Northwelilter1y-line with the Southwesterly line of Middlefield Road; thence along the Northwesterly lin~ of· said Grebmlllier parcel, south 57' 42' 46" West 221. 83 feet to the IIIOlllt Westerly corner thereof! thence along the Southwesterly line of said Grabmeier parcel anCi parallel with said line of MiC!d1efieldRoad, South 51' 55' 14 II East 95. )).7 teet~ thence leavinq the Southwesterly lirlC~ of said Clrab:me1er. par.cel lind runnin/l North 32" 04' 46" East 200.00 feet, to tM point of l:leginning and baing a portion of the Rancho Rincon de San Francisquito, . EXCEPTION Excepting therefrom a portion of Parcel 1 and Par,cel 3 described as follo\,ls: Seginnin9 at the most Southerly corner of thlll above described Parcel 3 I th6lll'loe North 57' S5' 14" west !15.97 feet! thlllnoe South 57' 42' 46" West l' .41 flleti thence North 32' 04 '46" East !S3.19 feet: thence South 57' 55' l4" Ea~+- 103. so feet; thfinoe South 32' 04' ij 6 11 west 37.50 feet· to the po int i'.: l:leqinning. 2 Attachment B Exhibit A ).,. ~Z~ .. ,),.,., '.' ) 3 Attachment B ---, DRA\.IlNG -/ t!i96' ! calc-' ('251 ret:ord 2: / I I I '-' / ./ f .I , 1?-8.,/ , ""I I , ~ -' ;' ..,.~""'--_-__ 1:1:"" ___ -___ -___ -""', -~""-""-'-~---;{-_-_--_-_~ -___ --_"'1'''' , , e #'- t ~. ~ ",", ~f ,Ii' ~ ~ If " AJl'.l\ro. m __ !I\Ilm,JlI!~ IPAllClElL "lB" .$ PM :Ii-'i,t 4-M-49 &:5 ;, r'ARCEL 2 -----'li ~ ----" ' '07' ~'. SIlo ~ ------",-oS' -"" -.. ,,:.~" ,,!.~--., .' CITY AND COUNTY OF SAN FRANCISCO TERMAN SITE S 46" 22" J6w \{ 24.15' "-7--s: l~ eZ' le;.' \I 2.31' ~ $I t ~ ~ ~ " r---------~r---------_,----------_, K I i I 200 0 200 400 ,c,LALE, 1 u '" 200' REVISION· (4)12/03/2001 REviSION< (3) !l/2l1Ol REVISION. (2) Cl12/2001 REVISION. (J) 11/09/2000 t'l :><: ::tl '"' OJ '"' I-;l OJ Attachment B --------~~ / f ~-------------------------.;---~----;---~----- .I 2;4:~' .I U.l'!4lI._ ~ ~ mm.~ palC1l!'JL"'IIB" ~ / I / ! , / ! i.?>", I / 9 C'i! ..;{?;/ I , 1 ! 0 I I' / 1>8,,1 / ..,;;,.- / /' 30 / / I /' ~~ .. i I . . I 1iI.1 I 6;. 28 / () .. ~ : <G,..,., 27 ~<?..:.:§ .>f' .". ~-1[(£-'l~:::-:::-:::-_ 'M<:M:."::'41£.&f.W.-M " 'E-L-_1..--_-_--,~ , ... v_ N ,,. ,.' 44' \I 5 •.• 5' I' & ~~ III 20'" «" 57~ \I 7UD' , ~a 6 ~ ff'" ·N ,,,. 56' "" \I "a7S' A;;~ /;;I ~ ~ ~ ~l e ~l1(!! : ,,#,i'~ I o s: 46-22" 16" '-' t4.7S' S 19" 1;'1' 19~ '\I 19E1.67+ it ttl c ~ ~ ~. SIS· 22' 16'" V 2.31' " ~. t ~ :t ~ " pI{" EX. """'" " 514-M-49&::5 '" »lImJCl.I"IJUr1~»Itl PARCEL 2 ro i:l:il-~!;i"""'" II -,,-'" s ' ' '\I ' S B3' '" •• ' \I ""SA.' ,.,'A5" CITY AND COUNTY OF SAN FRANCISCO I F ~==~===~F=== 200 ~ I 1 200 4 j 00 NEW TERMAN SCHOOL ST'T'd;,CALE: l' = 200' REVISION, (4) 12/03/2001 REVISION: (3) lI/21/0l REVISION' (c) 2/12/2001 REVISION, (J) 11/0912000 f t<I X ::t: H to H I-:l n Attachment B AJP.I'IIJI.U01'- <';' FIMlm.lI&_ ,/"" _t .. 'I2S"'\ l"el!o:rd. :z 1S7.6~ AJI".N@. ]Jii1~~ 514"":'M-49&50 PARCEL 1 19" 13' 16" t; ti c i;' <I' ~ 211~ 5E" 16"' Y 83.16' V 2.31' !; C ~ ~ :j~ ,...l I'dtCElL 1IIir . ,'" PM 5 ,~'''' " ./4-M-49&5 "',,' ~""'"'' , p~m' ''','''''''',''''''-,.-""" """,,"""" ,~," $ roo 7' '" 50' " " , " .. ~ "'" ' :M';.""'''''''''''' " " CITY AND COUNTY OF SAN FRANCISCO FI ~===f====F==== 200 ~ I =1 200 400 CITY ROADWAY OF AND PALO ALTO TERMAN PARK l' 200' REVISIIJN, (4) 12103/200) REVlSlON, (3) lllZVOl REVJSlD~ (2) iU1e/COO') REVrSlON, (l) 11/0910000 t'I :><: iIi H U;1 H 1-3 I:l Attachment B () ) ) rilIINoRTH _AMERICAN .TITLE 1111 COM PANY February 8, 2000 CITY OF PALO ALTO 250 HAMILTON AVENUE PALO ALTO, CALIFORNIA 94301 ATTN: ELAINA CHAN PROPERTY ADDRESS NO SITUS GIVEN ExhibitE Preliminary Report DIRECT ALL INQUIRES TO: Escrow Officer: DEBORAH MINARIK Telephone No. 650·917-5699 . Our No.: 50370029 IN RESPONSE TO THE A80VE REFERENCED APPLICATION FOR A POLICY OF TITLE INSURANCE, .North American Title Company, Inc. HEREBY REPORTS THAT IT IS PREPARED TO ISSUE, OR CAUSE TO BE ISSUED, AS OF THE DATE HEREOF, A POLICY OR POLICIES OF TITLE iNSURANCE, DESCRIBINGTHE LAND AND THE ESTATE OR INTEREST HEREINAFT·ER SET FORTH, INSURING AGAINST LOSS WHICH MAY BE SUSTAINED SYREASON OF ANY . DEFECT, LIEN, OR ENCUMBRANCE NOT SHOWN OR REFERRED TO AS AN EXCEPTION BELOW OR NOT EXCLUDED FROM COVERAGE PURSUANT TO THE PRINTED SCHEDULES, CONDITIONS AND STIPULATIONS OF SAID POLICY FORMS. THE PRINTED EXCEPTIONS AND EXCLUSION FROM THE COVERAGE OF SAID POLICY OR POLICIES ARE SET FORTH ON THE ATTACHED COVER, COPIES OF THE POLICY FORMS SHOULD BE READ, THEY ARE AVAILABLE FROM THE OFFICE WHICH ISSUED THIS REPORT. PLEASE READ THE EXCEPTIONS SHOWN OR REFERRED TO BELOW AND THE EXCEPTIONS AND EXCLUSIONS SET. FORTH IN EXHIBIT A OF THIS REPORT CAREFULLY. THE EXCEPTIONS AND EXCLUSIONS ARE MEANT TO PROVIDE YOU WITH NOTICE OF MATTERS WHICH ARE NOT COVERED UNDER THE TERMS OF THE TITLE INSURANCE POLICY AND SHOULD BE CAREFULLY CONSIDERED. IT IS IMPORTANT TO NOTE THAT THIS PRELIMINARY REPORT IS NOT A WRITTEN REPRESENTATION AS TO THE CONDITION OF TITLE AND. MAY NOT UST ALL LIENS, ·DEFECTS, AND ENCUMBRANCES AFFECTING TITLE TO THE LAND. THIS REPORT lAND ANY SUPPLEMENTS OR AMENDMENTS THERETOI IS ISSUED SOLELY FOR THE PURPOSE OF FACILITATING THE ISSUANCE OF A POLICY OF TITLE INSURANCE AND NO LIABILITY IS ASSUMED HEREBY. IF IT IS DESIRED TI-lAT LIABILITY BE ASSUMED PRIOR TO THE ISSUANCE OF POLICY TITLE INSURANCE, A BINDER OR COMMITMENT SHOULD BE REQUESTED. . Dated as of JANUARY 28, 2000 at 7:30 A.M. DONNA HARNDEN Till. Officer 419 S. SAN ANTONIO ROAD #106, LOS ALTOS, CA 94022·1650j917-5699FAX 1650)917-8607 Attachment B , () :) ) The form of policy of title insurance contemplated by this report is: ALTA Loan Policy -Form 1 (10-17-92) and/or CLTA Standard Coverage Policy -1990 The estate or interest in the land hereinafter described or referred to covered by this report is: A FEE Title to said estate or interest at the date hereof is vested in: PALO ALTO UNIFIED SCHOOL DISTRICT Page 2 of 8 Order No. 5037002 Attachment B L C) () ) Description: The land referred to herein is situated in the State of California, County ot SANTA CLARA, CITY OF PALO ALTO, and is described as follows: PARCELS A AND C AS SHOWN ON PARCEL MAP FILED 12/5/83 IN BOOK 521 OF MAPS AT PAGES 52 AND 53; AND PARCEL 1 AS SHOWN ON PARCEL MAP FILED 7/13/83 IN BOOK 514 OF MAPS AT PAGES 49 AND 50. ASSESSOR'S PARCEL NO.: 167-05-003,028,030,031 Page 3 of 8 Order No. 50370029 i I ,I I Attachment B ~ LANDS Cft PAUl ALiO ~ N o CHR1$TlAN REf'CRiiiE: D CHURCH " c, .,' ·l.. .... v~I'i,,;: ~O;l4~~1W D rIC MlL '5£1" '''-'", • tIlle SO' l!lIL9f"_*~ ll1f WM«l Ul(~Oo" .. Of" 1lI( ~£.uTUIU PA~CEl MAP 0G) \ !.lit 011 tan 1 .... U S!!O\II'I( OR 1'»£ I4Al" 0IT11U:1l ""flt1.Cr Ik.t4'ot.lW:OI "tI\#.I:T" IIItr.CMI!')tI) Off;lV;!' Ill."" N 11001( ~" QIf IUI'j; .L'I' I'IC£ l4 IN YIt1: ~ eu.u eI.lIJIlft ~. CAUJ'OIIHU,. ~ 'I'Al(o. M me ~'tw IEJI.JlIJII45 ''Of! T~}tAP. .- •• , ~ ~ ~ ,. PORTION OF RANCHO 'RINCON DE SAN FRANCISaUITO RECORDED IN BOOK "A" MiSe, PAGE 66-RECORDS OF SAIITA CLARA COUNTY -CALIFORNIA CITY OF PALO ALTO 'SCAt.E:! .-.. iIIto'-d" F"E:$~ m!I3 'fA fl£ARING • • N.2S"32'4 <. ""'" ;W ... 27.0 'lEnS' 5.Gl'·'z7"I:I" E. "m 44"'1l>~ "'. :!.\4.00' ""m-30.0 ...... . '>.:c~ , '" "'" if' SHeFr 'l! Of' 'l! SHE'E'I'$ Ft~ it' 77f.t.';}?S";:') iI'I' ~..l S1'r p. ,0 , " ~ ~,:-.~" "'~,,-.-, .. ~ _ ,~' .• '.l'.'" ",'" "THE . INfORMATION ON i:firs. PLAT IS PRoviDEo' FOfl YOUR CONVENIENCE AS A GUIDE TO THE GENERAL LOCATION OF THE SUBJECT PROPERTY. THE ACCURACY OF THIS PLAT IS NOT GUAIWffEl'D. NOR IS IT A PART Of ANY POLICY. REPOFIT OR GUARANltt TO WHICH IT MAY BE ATTACHED" -','., 61f t so Attachment B () ) ) EXHIBIT F AGREEMEN'l' FOR JOIN'l' USE OF TERMAN SITE This AGREEMENT FOR JOINT USE OF TERMAN SITE, entered into this day of , 2001, by and between City of .Palo Alto and Palo Alto Unified School District, hereinafter referred to as "City" and "School District". RECITALS 1. The City and School District have entered into a property exchange agreement in which the City obtains fee title to approximately eight (8) acres of land at the Cubberley Community Center and the School District obtains fee title to an equivalent area at the Terman Site. At the Terman Site, the City will own a dedicated public park, Terman Park, which includes playing fields and tennis courts. The School District will own the Terman Middle School, developed with school buildings, including a gymnasium, a parking lot, and a swimming pool. A map showing the Terman Si te, Terman Park, and the Terman Middle School is attached as E:x:hib~t A. As part of the land exchange' agreement, the City and the School District have agreed to enter into this joint use agreement for the Terman Site. The purpose of the agreement is to cooperatively use the Terman Site so that both educational and community services can be provided to those living in the City and the School Distri<;::t. 2. The City and the School District also have power to assist each other under Education Code Sections 17051(a) and 35275 and Government Code section 6500 et seq. of the State of California, which authorize and empower public school districts and municipalities to cooperate with each other and to that end enter into agreements with each other for the purpose of organizing, promoting and conducting such programs of community recreation and education for children and adults of the state. 3. The School District has need of the Terman Park playing fields for its middle schOOl, and the City has need of a portion of the Terman Middle School buildings for its library and related activities. Both City and School District wish to have the City provide recreational programs for middle school children and others that will make use of both the Park and the Middle School. Terman Park is a dedicated park and use of the Park by the School District must be consistent with that des,ignation; Terman Middle School will be a public school 1 011206 syn 00909 IO Attachment B \) ) ) facility, and its use as a middle school will have priority over all other uses. NOW, THEREFORE, the City and School District mutually covenant and agree with each other as follows: A. Principles 1. The City and School District shall cooperate in the use of the Terman Site. 2. The City shall control use of the Terman Park and the School District shall control use of the Terman Middle School, in a manner that is consistent with this Joint Use Agreement. B. Joint Use of the Terman Site. 1. The School District shall make Terman Middle School facilities and equipment available to the City as described-in Attachment 1. The School District-shall also make such facilities and equipment available upon application of the City provided that their use for City purposes does not interfere with the School District's use of such facilities and equipment for Terman Middle School or constitute a violation of provisions of the California Education or Government Codes. No charges shall .be made for such use other than those specifically described in this Agreement. 2, The City shall make Terman . Park facilities available to the School District as described in Attachment 2. The City shall also make such facilities and equipment available upon application of the School District, provided that their use for School District purposes does not interfere with the use of the facilities or equipment by the City in connection with its stated purposes or with City Charter provisions and ordinances regulating the use of dedicated park land. No charges shall be made for such use other than those specifically described in this Agreement. 3, The City Manager and the Superintendent of Schools do hereby delegate the responsibility for establishing schedules for facilities and equipment use to the City Director of Community Services and the School District Business Manager. 4. Each party using facilities or equipment owned by the other pursuant to this agreement shall furnish qualified personnel for the proper conduct and supervision of the use, 2 011206 ,yo 009091Q Attachment B ) ) 5. The party using facilities or equipment of the other under this agreement shall repair, or cause to be repaired, or will reimburse the owner for the actual cost of repairing damage done to the facilities or equipment during the period of such use, excluding damage attributed to ordinary wear and tear. C. Scheduling and Supervision 1. Subject to the limitations in Section A above and to the specific commitments set forth in Attachment 1, in scheduling the use of Terman Middle School, Terman Middle School events and programs' shall have first priori ty and Ci ty recreation programs, and City co-sponsored programs shall have second priori ty. In cases of emergencies or errors in scheduling, the Terman Middle Schocilevents and 'programs shall have first priority for use. Every reasonable attempt will be made to avoid such conflict. City activities shall, not be scheduled on Terman Middle School facilities between the hours of seven thirty a.m. and three-thirty p.m, on days when school is in session without the permission of the school principal. 2. Subject to the limitations in Section A above and to the specific commitments set forth in Attachment 2 below, in scheduling the use of Terman Park, City recreation programs and Ci ty co-sponsored programs shall have first priority. Terman Middle School events and programs shall have second priority. In cases of emergencies or errors in scheduling, the City programs and events shall have first priority for use. Every reasonable attempt will be made to avoid such conflict. School activities shall not be scheduled before seven thirty a.m. or after three-thirty p.m. 3. The City will have a responsible adult representative, present at all times at any City event held on the Terman Middle School. That representative may be a volunteer or a paid City employee responsible to see that School District rules and regulations are observed and complied with and that the facilities and grounds are returned to existing condition upon completion of the activity. The City will have a City employee on call at all times that a City~sponsored or' scheduled activity is occurring in the Terman Middle School in order to respond and investigate any questions or improper action at such activities and events. 4. The School District will have a responsible adult representative present at all times at a School District 3 Oil 206 'YO 0090910 Attachment B / ') activity or event is held in Terman Park. That representative \, may be a volunteer' or a paid School District employee responsible to see that City rules and regulations are observed and complied with and that the facilities and grounds are returned to existing condition upon completion of the activity. The School District will have a School District employee on Call at all times that a School District-sponsored or scheduled activity is occurring in Terman Park in order to respond and investigate any questions or improper action at such activities and events. ) ) 5. The other written use schedul ing shall following schedule: City and School District shall submit requests in advance. Requests for be submitted annually according July 1st for the School Year February 1st for the summer months to each advance to the The Terman Site Joint Use Committee shall approve a master calendar for each of these periods within thirty (30) days of the submi ttal of the requests for advanc',e scheduling. Each schedule will be arranged so as to avoid any conflict between the School District's and City's uses of the facilities and equipment. The City, or the School District shall not schedule other uses until first and second priorities are set as prescribed herein. D. Maintenance of Terman Site Facilities. 1.' Basic Standard. Facilities jointly used shall be adequately' maintained to insure appropriate and safe use, appearance and longevity. 2. Basi<::..l'esponsibility. Except as may otherwise be specified herein, the responsibility for maintenance, repair and ,renovation of facilities shall be the responsibility of the owner of the real property on ''''hich the facility is situated, E. Maintenance of Athletic Fields. ---~-- 1. Turf Areas and Tennis Courts on Terman Site. a. The City will maintenance program for turf areas of areas are shown on Attachment 3. 4 011206 ,yn 0090910 continue its existing the Terman Site. These Pursuant to that Master Attachment B () ! ) Maintenance Agreement, the City will mow, trim, fertilize and irrigate and perform other maintenance work of a general nature at the fields at the frequencies and times in accordance with· the field maintenance standards adopted by the City. The School District will pay one half of the city's actual cost to maintain the fields. b. The City will also maintain the drainage and irrigation systems of the fields under the terms and conditions described in the Master Maintenance Agreement between the City and the District. If these systems need repair or replacement, the City will consult with the School District on the SCOPe of work and estimated cost to perform it, and the School District shall confirm its approval of the scope of· work. The School District shall pay one half of the City's actual costs for such approved repair or replacement work. c. The City will continue its . existing maintenance program for tennis courts in Terman Park. The City will wash and air blow the surfaces of the courts, repair and/or replace, as reasonably necessary, the tennis nets and screens, and perform other maintenance work of a general nature at the frequencies and times in accordance with the maintenance standards adopted by the City. The City will also resurface and restripe the courts ~ Such resurfacing and restriping will be scheduled to match the Ci ty' s existing tennis court resurfacing program at an approximate five year interval for such work. The School District shall pay one half of the City'S actual cost of maintaining and resurfacing the courts. d. Money owed by the School District to the City under this Agreement will first be credited against any monthly lease payments due and payable by the City under its lease agreement with the District entitled "Lease and COvenant Not to Develop," as amended from time to time. If the sums owed under this agreement exceed those payments, the City shall bill the School District and the School District shall pay the City within forty-five days after receipt of its invoice. 2. Custodial Services. The School District shall provide all custodial services for the Terman Middle School. If the Terman Middle School is used by the City at a time when custodial staff is not regularly on duty, or when a custodian is required to open a facility, the City shall pay the cost of the custodial time to the School. Alternatively, the City may arrange with the School District to open and close a facility ) itself. 5 011206 ,yo 0il90910 Attachment B () F.Library Facilities. City vrill continue its existing library at the Terman Middle School until such time as the District gives it notice tha.t all or a portion of those facilities are needed for district purposes. Upon six months vrritten notice that all or a portion of the facilities are needed for district purposes, the City shall vacate the identified portions of the premises. G. Restroo~s at Terman Middle School. 1. The restroom facilities located at Terman Middle Scho'ol shall be available for public use while City programs are scheduled at either Terman' Middle Schocl or Terman Park,and while the Terman Library is open to the.public. They shall also. be available to library staff during their working hours. 2. The School District shall' perform custodial maintenance of the restrooms on a da'ily basis when its custodians are on duty. On days when its custodians are not on duty, the School district shall make arrangements in advance, as part of the scheduling agreements, to provide supplies to the City on site so that is may restock the restrooma. on those days. ) H. Establishment of City and School District Joint lise ) Committee. The Ci ty Manager designate two staff members which is hereby established. three times a year, but may necessary to administer this responsible for administering I. Term of Agreement. and the Superintendent shall each to the Terman Joint Use Commi ttee The Committee shall meet at least meet additional times each year as agreement. The Committee shall be this joint use agreement. This agreement shall commence upon the date first entered above and shall end upon termination of the Cubberley Lease between the City and the School District unless otherwise terminated by consent of the parties. J. Indemnification. The ci ty shall investigate, defend and indemnify the School District from any and all claims, demands, actions or damages arising out of the City's use of School District Facili ties to which the School District may be subj ected as a direct consequence of this agreement except for those claims, 6 0l120G syu. 009091 0 Attachment B () ) demands, actions or damages resulting solely from the negligence of the School District, its officers, agents and employees. The School District shall investigate, defend and indemnify the City from any and all claims, demands, actions or damages arising out of the School District's use of City Facilities to which the City may be subjected as a direct consequence of this agreement except for those claims, demands, actions or damages resulting solely from the negligence of the City, its officers, agents and employees. K. Complete Understanding and Amendments. This agreement and the attached exhibits set forth the complete agreement and understanding of the parties; any modification must be in writing executed by both parties. L. . Notices. If at any time after the execution of this agreement, it shall become necessary or convenient for one of the parties hereto to serve any notice, demand or communication· upon the other party, such notice, demand or communication shall be in writing and shall be served personally or by depositing the same in the United States mail, return receipt requested, first class postage prepaid and (1) if intended for City shall be addressed to: with a copy to: City Clerk City of Palo Alto P.O. Box 10250 Palo Alto, CA 94301 Director of Community Services Department P.O. Box 10250 Palo Alto, CA 94301 and (2) if intended for PALO ALTO UNIFIED SCHOOL SCHOOL DISTRICT shall be addressed to: 011206 S)'ll 0090910 Palo Alto Unified School District 25 Churchill Avenue Palo Alto, CA 94306 7 Attachment B C) ( ) ) or to such other address as either party may have furnished to the other in writing as a place for the service of notice. Any notice so mailed shall be deemed to have been given as of the time the same is deposited in the United States mail. IN WITNESS WHEREOF, the parties have executed this agreement on the date and year first above written. CITY OF PALO ALTO A municipal corporation Frank Benest City Manager ATTEST: City Clerk APPROVED AS TO FORM: Ariel Pierre Calonne, City Attorney By __________________ __ APPROVED AS TO CONTENT: PALO ALTO UNIFIED SCHOOL DISTRICT Robert Golton Acting Superintendent Paul Thiltgen, Parks and Recreation Director By __________________ __ 8 Otl206 'YO 0090910 Attachment B <:m.lv'(2S') .....,.,.,....a 2 .-AJI'.l'ID. . _.~ __ _ . ,lI;r~~3 _ _ _ -:;:...~".'M~'~~: -::::::;~'NCISCO PM PARCEL 2 ~ N F.lV'> . . SA CITY AND COUNTY OF TERMAN SITE 1 I I I ---, 200 0 200 400 REVISION, (4) IE/03/EOOI REVISION, (3) 11/21101 REVISIIJN, (2) 2/12/2001 REVJSl\:J~ m 11/09/200\) ~ ~ >-l » Attachment B () A'l"l'ACHMEN'I' 1 CI'I'Y USE OF 'I'ERMAN MIDDLE SCHOOL A'I''I'ACHMEN'I' 1 The JCCsha11 have priority over the City for use of the pool and the gymnasium for its programs year round until it relocates to its permanent facilities or until August 31, 2009, whichever is earlier. All exceptions to this can be found in Attachment lAo The City'S use of the Terman site following August 2003 will include: 1. Swimming Pool a. School year-After school, evening and weekends for instructional programs .and lap. swimming .. b. Summer-Seven-day and night uses for instructional programs, recreational swimming and lap swimming. i ) 2. Gymnasium ) a. School Year-After school for middle school athletics, youth and teen programs evenings; Weeknights for youth and adult programs; Weekend and night use for youth, teen and adult programs. b. Summer-Seven-day and night uses for youth, teen and adult programming. 3. Library Wing OIlW6,yu009091O Use of that wing as a neighborhood library subject to section F of this agreement. This use may be converted to City/School joint library services at some time in the future. 9 Attachment B ) ) , - 1)1\~'~V\\\ • ...... I 1\ 1\1' k ~~~lli!\'" J!III1IAlq,'IY!\'J\ . l.11/1111rlll~ , 1'111 ~.iI't!"!I .. .14\\\ "'~~'~\' f)1'1~1 ,Iji{!\'l! I, 'i1'1.;I('~ , . ~j.~Y¢.f~9_AJt9 D~p«I'l!Jte/l1 n!('.D/tHlI~!liIJl Smlle"s O\lO\lm1)(lf 5, ZOO J . MI', ~lli!)' I.3ll'lvad , AlbC1i Scl\lIl1r. Jew/An Comm4nity Ci;;n!~r ~>5 Ai<l~lI'jI(!ero Ito~ 1\~10 Ah(), CA 94)OC , mur~nndr: TI,I/> 11I1<mHI1Il 9f thi~ dtlOUlw>nl I.; In ""',Ie IIw \>I~)' j.o !ln~ !hll Jowhlh (,;Olllt'l)\lI'llty Cenl~' illtljrlm 1.l~(l 9r c.xYl'!' A it th~ (1IlbMrley CQI1IIJ1\!lill,Y ~1l11l(l''. In thi8 r~,!W'd1 tbe JCC will h~v(,l cx\>h.!slv{l \IJI) <lI'Qym A. ut ihil ("\,\'Illlirl~ C\Jmmillllty Ctlnter\ tl'lroU!hOlil Ib,. yw, with the t'lCOlllpl\OIl ill' , MdBYS, (\:30 p.li!, tQ !O;)() p.m •• lln~ SiitlAfdayS, *:~O a,lll, To flOOIl, $1l1llln,s A\lI!u&~ 1, 2(JO~. 'U\ ol'dotl0 rl!Kla~d i§l.!oh lJJIill Qf'tlym A to lhe n:c lIlI of 1 lie ,i':OfQatkmi£! tlrQmtm. tbM prc$tntiy ,e!t'\S! ill Gylll A 111\1$t'hflnln~i"iPrf~ tli 'Ih~ ·1\li'.m~n;3rm. SllOllhllho City eb~nge; 1\, Ptog,a.riimingIlllIMtlll~ 11ll11li,'l\ ilr!Ufll, thfl JCC wl:llI!,d him I'Il'st rialit (If use of dl1ll Ti;l'l'l'iall ()yll\, . Atlditlolllllly, thl1 Cib Will hi; tlelilble In illll pn~WillllMilli m Ihe 'i'lI'rl1!llil OYIli, lind, wllellovllI' pO$s!bll'!, Ill)lIa~\)li4l!l with Ihe JCC tlil j:lfb~.ims, 'I~I~ wl,ditiQII; I)r.lbi~ dQtlI41!~l.rll' ~Ibj(lc\ \0 Iill! .!I\.\ItOOS~fllllljlj!rovl!I! of'1I B\,bl~~e ~tWW!l \hQ rIC() (llid the (:n~ Qf Jl!'I;lg A!~~ tor trw Interim \.ISO \)f' tJw CI.lbl,.\ll'lll1 CC>lF'\I'lIlt~ C0l\\~r .1~Cr Il.ti,d CIII\"O~ 11\1' r",lll!~ Ihp .... n 'Ill! ~~,~ tMfa j'll\l'ty (iill1l!ldlft/ll th1s PAUSD) unlll such iljlpmval.' 7'his fcttl.lf WIU b<*lMHI'I llddou4Um to> th'l City I'IrPllIo Al\\If1'illo Alt9 Ui~tI~ Sdl~IJl ,IJill!ri\i1 ~1'=4l1!11'1!lt liil Jllln( lJij~(~inbtll'u!llmll $lw; , . '. . C()!1~i110h~ ii, 'r.1l1'JM1I Middltl Sehtlcl *Ylnlll.';luBI: , B. 'I.'hl). uw (lr ~w 'rorilliil~ B)'II!\. tw.t9ldf-of'l» AlJSI) mse, ~Ii ~ $(liI~dl!lt:d i1fS\ by tho YCc, 'rhe CILy 01111 $Oil(Jdllle lin (I1l!$( times trot U!lOO by Ih0 JC!e ~fld J'AU$U, I:!ltelipliOIlUo 1hi~ poUo)' $1~ fiB follawll: .. \I Ueeigll'll~ In SepUrnber :too3, Ihe Pl.I\o AHt) RI:lllI'lllilioll DM~ll'ln wi!! hl\V¢ 1l4i:1 $tnll,l 'A'1."I)llSII Gym MOlld~y Uirol.lmn .'I'I.y, Sllptll!'lber tlu\1lif,\h 1unC! rrom'3:J.O, p.m. to' I O:3() p,I~. ~fr.i' Silturd&y .d SllIi1!IlI)1i>, lII;~O 3,\1'1: thVQ.1i!!b IO:~1) ~.ID, , . . . L,,<lf.III!\'I'I\ C>'I>lIL'l' 1,lOll Mf<IIIMI"'~ II~Ml ,I'»l!)oo\1I1), tA ~~~nl , Attachment B () i) ) '.1 "' •• -_. '. . . , \ JiVlli\l\lK .. .0 n I , If Ail, ll' ';I1II\l\~ . t 1\U,lu'l !l\'1 VI(I'~ I l\,i"III,'fi .' /\1, ~j Ii \1,~11 11'1'~j"1!i~n, tll~ll\ ~'I'~n: '8J.l\~1QnM.'v . ATTACHMENT1A ~#y'Qt Pm9 f,\J~Q D~fll/rll/l,t'Ill ¢f C91111111111I1!18t'rvi"'~ • r}~glrinlng in ZOO;!, YMOA Hn~ke!bIlU Will u..e tile Tcrlll~n GYlll J<lI111nIY t!Il'l.'luSh M'~l'ch Ilf\l~{:h Y~llf, lJ.:J.(J.I!.Iii, thro\l~[\ 6:00 P f!'I, ttn ,~!,lh1'l'day~ •. ~fl:llQ ICO Jlilll inrQr!ll.~ ~\\e City or iUI il'llqnijrm to ooniin.uespo!\9<lrohip . or $\Wlt'\<:!~ ¢.iIjnjls. ill thl'! '1'Ilrmq,n Gym, 11$ !~ ~all f(lt Ihlb laal :l,Q yeil.!'i. If fho Jt:() dllQ1110\ sponSl)r lIYUlmott."lIII)) ~\lIMlIe~ 1l\'I"*' TermAn sym, tho el~y of' ~~1!) :Alto rcq\\osls the ~Plli;l(l (0 Jiroaram CAIl'lPS rrom 111.111\: tblXllluh J\,1\~.\f. 1J~8inll!.rw II'! 2(,lO~ fr(,ltll 8:110 ,,",11'1,' ~lu))ugh 3:00 p,m.; Mimduy Ihl'I.l\I!:\h Frld~YI. . '. . .' . . , Attachment B C) ) ) AT'l'ACHMENT 2 SCHOOL DISTRICT USE OF TEru\'IA1:i! PA:RK School District shall be entitled to the issuance of a City pe,rmit under Chapter 22 of the Palo Alto Municipal Code for use of portions of Terman Park during certain, hours. School District shall not be required to pay for such permit, and in any case where there is a contradiction between the terms of the permit and the terms of this Agreement, this Agreement shall govern. 1. Terman Tennis Courts a. Terman Middle School shall have first calIon the tennis courts between the hours of 7:30 a.m. and 3:30 p.m. on days when Terman Middle School is in regular session. b. School District shall pick up all litter and leave courts in good condition at end of every day of use. 2. Terman Playfields. a. Terman Middle School shall have first call on the playing fields between the hours of 7 :30 a.m. and 3 :30 p.m. on days when Terman Mid¢lle School is in regular session. School District will not have the right to routinely exclude members of the public from any dedicated playing field or parkland. School District will have the right to take reasonable actions to prote'ct both its first call on the playing fields and the safety of the students. No permanent fence or other barriers to public access will be constructed. b. School District shall pick up all litter and leave fields in good condition at end of every day of use. The public will have unrestricted access to those portions of Terman Park not being used by the Terman Middle School. 10 011206 'yn 0090910 Attachment B EXHIBITG 1ft, ~1.fII(j)fNI \lJJ1F' uJ !Jl'Ift,IRlICIeL m«ll N51'30'OQ"W ''D.\ ~OOItt ~~@® 19.80' :t [illIft,G~ ~~~ U.~$ $~~r~ ICL~~~ 1C\lJJ~~V '0 '" IMiJO[l)'i'«llWINI ~1E1i' ~OIL r" !P' ~lil'f(lNIrelRl$ ib!Jl' to ~ , lMIDl$ (\))IF' Ii!:: 1i'~<e;'ii' INJ@. ~~~@ 8-lIl'~ib«ll ~1L'ii'«ll 18 ~te~f.!iIIE~OOW If! SCl'llOOIL IiJIO$'ii'IRlIIC'ii' '0 oo©[t{ 00 \lJJ1F' <v. 34l5,322. 00, 1F'il', !'> to IMIAfF' /J;. 'ii' [ill A@IE ,l,J' 1,00 AICIRl~ !2 00 1§1 ;;II /!l '" 10 !£ 0 ~ N Ii!:: Ig 10' PG&E GAS 'b N43'26' 42"E MAIN EASEMENT &; S51'30'OO"E i:l 71.1.3' 170.00' I BK, 748 PG, 487 l-t---=---=-4-------- - - - - ----------------------- til N56'26'42"E J.--{l2.20' ""+0--P.D.S N51'.30'Oor.W-·548.44' tEs LEA &. SUNG ENGINEERING, INC. ONiL ENGINEERS • LAND SURVEYORS 2495 I~DUS1RIAL PARKWAY 'M':ST HA \'WARD, CAUFORNIA 94545 (510) 887-4086 FA)( (510) 887-3019 , JOB NO, 2010248 200 J SCALE. 1"· 100' EXHIBIT "G" PROPOSED LOT-LINE ADJUSTMENT PALO ALTO UNIFIED SCHOOL DISTRICT CUBBERLEY SCHOOL 4000 MIDDLEFIELD ROAD PALO ALTO, CALIFORNIA SANTA CLARA COUNTY APN: 147-08-003 JUNE 14, 2002 Attachment B () ) IIINORTH _AMERICAN • TITLE Iii COMPANY City of Palo Alto Attn: Janet Freeland 250 Hamilton Avenue Pale Alto CA 94303 Property Address: 4000 Middlefield Road Palo Alto, California Our No.: Customer No.: Exhibit H Preliminary Report 56901-51990229-PRT 4000 Middlefield Road IN RESPONSE TO THE ABOVE REFEI>ENCED APPLICATION FOR A POLICY OF TITLE INSURANCE, North American Title Company, Inc. HEREBY REPORTS THAT IS PREPARED TO ISSUE, OR CAUSE TO BE ISSUED, AS Of THE DATE HEREOF,A POLICY OR POLICIES OF TITLE INSURANCE, DESCRIBING. THE LAND AND THE ESTATE OR INTEREST HEREINAFTER SET FORTH, INSURING AGAINST LOSS WHICH MAY BE SUSTAINED BY REASON OF ANY DEFECT, LIEN, OR ENCUMBRANCE NOT SHOWN OR REFERRED TO AS AN EXCEPTION BELOW OR NOT EXCLUDED FROM COVERAGE PURSUANT TO THE PRINTED SCHEDULES, CONDITIONS AND STIPULATIONS OF SAID POLICY FORMS. THE PRINTED EXCEPTIONS AND EXCLUSION FROM THE COVERAGE OF SAID POLICY OR POLICIES ARE SET FORTH ON THE ATTACHED COVER, COPIES OF THE POLICY FORMS SHOULD BE READ, THEY ARE AVAILABLE FROM THE OFFICE WHICHlpSUED THIS REPORT. PLEASE READ THE EXCEPTIONS SHOWN OR REFERRED TO BELOW AND THE EXCEPTIONS AND EXCLUSIONS SET FORTH IN EXHIBIT A OF THIS REPORT CAREFULLY. THE EXCEPTIONS ARE MEANT TO PROVIDE YOU WITH NOTICE OF MATTERS WHICH ARE NOT COVERED UNDER· THE TERMS OF THE TITLE INSURANCE POLICY AND SHOULD BE CAREFULLY CONSIDERED. IT IS IMPORTANT TO NOTE THAT THIS PRELIMINARY REPORT IS NOT A WRITTEN REPRESENTATION As TO THE CONDITION OF TITLE AND MAY NOT LIST ALL LIENS, DEFECTS, AND ENCUMBRANCES AFFECTING TITLE TO THE LAND. THIS REPORT (AND ANY SUPPLEMENTS OR AMENDMENTS THERETO) IS ISSUED SOLELY FOR THE PURPOSE OF FACILITATING THE ISSUANCE OF A POLICY OF TITLE INSURANCE AND NO LIABILITY IS ASSUMED HEREBY. IF IT IS DESIRED THAT LIABILITY BE ASSUMED PRIOR TO THE ISSUANCE OF A POLICY OF TITLE INSURANCE, A BINDER OR COMMITMENT SHOULD BE REQUESTED. . Dated as of October 15, 2001 at 07:30 am Pam Thompsonlpu Title Officer/Examiner 4255 Hopyard Road, Suite 1, Pleasanton, CA 94588 Phone No.: (925) 399·3000 Fax No.: (925) 399-3028 Attachment B The form of policy oftltle Insurance contemplated by this report is: () Preliminary Report Only The estate or interest In the land hereinafter described or referred to covered by this report is: A fee Title to said estate or Interest at the date hereof is vested In: Palo Alto Unified School District aka Palo Alto Unified School Dlstric! of Santa Clara County ) Page 2 Order No.: 56901·51990229·PRT Attachment B () { ) Description: The land referred to herein is situated in the Slate of California, County of Santa Clara, Cily of Palo Alto, and Is described as follows: BEGINNING AT THE MOST WESTERLY CORNER OF THE PARCEL OF LAND CONTAINING 42.27 ACRES DESCRIBED IN THE DECREE OF DISTRIBUTION MADE IN THE ESTATE OF JOHN MILLER RECORDED OCTOBER 7, 1937 IN BOOK 849 OF OFFICIAL RECORDS. AT PAGE 61, RECORDS OF SANTA CLARA COUNTY, CALIFORNIA; THENCE FROM SAID POINT OF BEGINNING NORTH 57° 42' 46" EAST ALONG THE NORTHWESTERLY LINE OF SAID 42.27 ACRE PARCEL 327.41 FEET TO THE POINT OF INTERSECTION THEREOF WITH A LINE DRAWN PARALLEL WITH AND DISTANT 400 FEET, SOUTHWESTERLY AT A RIGHT ANGLE, FROM THE SOUTHWESTERLY LINE OF MIDDLEFIELD ROAD 60 FEET IN WIDTH; THENCIO SOUTH 57° 55' 14" EAST PARALLEL WITH AND DISTANT 400 FEET SOUTHWESTERLY AT A RIGHT ANGLE FROM SAID SOUTHWESTERLY LINE OF MIDDLEFIELD ROAD 572.04 FEET; THENCE AT RIGHT ANGLES TO THE LAST COURSE SOUTH 32° 04' 46" WEST 373.77 FEET TO THE SOUTHWESTERLY LINE OF THE 42.27 ACRE PARCEL; THENCE NORTH 51° 38' 17" WEST 717.99 FEET ALONG SAID LINE TO THE POINT OF BEGINNING. PARCEL TWO: BEGINNING AT A POINT ON THE CENTERLINE OF MIDDLEFIELD ROAD ATTHE MOST SOUTHERLY CORNER OF TRACT 870 CHARLESTON GARDENS UNIT NO.1 AS SHOWN ON A MAP THEREOF WHICH WAS FILED IN BOOK 33 OF MAPS AT PAGES 26 AND 27 IN THE OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SANTA CLARA; THENCE FROM .SAID POINT OF BEGINNING SOUTH 57° 42' 46" WEST 804.35 FEET TO AN IRON PIPE ON THE NORTHEASTERLY LINE OF LAND FORMERLY OF D.L. SLOAN; THENCE SOUTH 51 0 37' 17" EAST 224.14 FEET TO A POSTMARKED P.S. 7 ATTHE MOST NORTHERLY CORNER OF LOT 11 OF THE J. J. MORRIS REAL ESTATE CO'S SUBDIVISION OF THE LOUOKS TRACT, A MAP OF WHICH IS OF RECORD IN THE OFFICE OF THE COUNTY RECORDER OF THE SANTA CLARA, STATE OF CALIFORNIA, IN BOOK "l" OF MAPS, PAGE 35 RECORDS OF SANTA CLARA; THENCE ALONG THE NORTHERLY LINE OF LOTS 10 AND 11 OF SAID SUBDIVISION SOUTH 38° 23' 31" WEST 657.32 FEET TO A POINT WHICH IS DISTANT ALONG THE NORTHERLY LINE OF LOTS 9 AND 10 OF SAID SUBDIVISION NORTH 38° 23' 31" EAST 520.00 FEET FROM THE MOST EASTERLY CORNER OF LOT 6 OF SAID SUBDIVISION; THENCE PARALLEL WITH AND DISTANT NORTHEASTERLY 520 FEET FROM THE NORTHEASTERLY LIEN OF LOTS 4, 5 AND 6 NORTH 51° 36' 25" WEST 941.59 FEET TO A POINT WHICH IS DISTANT NORTHEASTERLY, MEASURED AT RIGHT ANGLES, 260 FEET FROM THE NORTHEASTERLY, BANK OF ADOBE CREEK; THENCE PARALLEL WITH AND DISTANT NORTH EASTERLY 260 FEET FROM SAID CREEK NORTH 14° 12' WEST 501.67 FEETTO A POINT WHICH IS DISTANT 657 FEET SOUTHEASTERLY MEASURED AT RIGHT ANGLES FROM THE CENTERLINE OF CHARLESTON ROAD; THENCE PARALLEL WITH AND DISTANT 657 FEET SOUTHEASTERLY FROM THE CENTER LlNEOF CHARLESTON ROAD NORTH 56° 26' 42" EAST 340.00 FEET TO A POINT ON THE CENTERLINE OF A 10 FOOT EASEMENT GRANTED TO THE PACIFIC GAS & ELECTRIC COMPANY BY DEED DATED NOVEMBER 21, 1935 AND RECORDED DECEMBER 11, 1935 IN BOOK 748 OF OFFICIAL RECORDS, PAGE 487; THENCE NORTH 43° 26' 42" EAST 170.00 FEET TO A POINT WHICH BEARS. SOUTH 57° 55' 14" EAST 70.00 FEET; SOUTH32' 04' 46" WEST 235.00 FEET AND SOUTH 56° 26' 42" WEST 265.00 FEET FROM A POINT ON THE CENTERLINE OF MIDDLEFIELD ROAD AT THE MOST WESTERLY CORNER OF THE ABOVE MENTIONED CHARLESTON GARDENS UNIT NO.1; THENCE NORTH 56° 26' 42" EAST 265.00 FEET; THENCE NORTH 32° 04' 46" EAST 235.00 FEET TO THE CENTERLINE OF MIDDLEFIELD ROAD; THENCE ALONG THE CENTERLINE OF MIDDLEFIELD ROAD SOUTH 52° 55' 14" EAST 1212.79 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM, THAT PORTION CONVEYED TO ROLF GRABMEIER BY DEED RECORDED APRIL 8, 1955,3138·82 ) PARCEL THREE: Page3 Order No.: 56901·51990229·PRT Attachment B C) . ) BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF THAT CERTAIN PARCEL OF LAND CONVEYED BY RALPH GROBMEIER: ET UX, TO ROLF GROBMEIER, A MARRIED MAN BY DEED DATED AUGUST 14,1954 AND RECORDED OCTOBER 15, 1954 IN BOOK 2983 OF OFFICIAL RECORDS, PAGE 211, DISTANT THEREON, S. 57 DEG. 42' 46" W. 221.83 FEET, FROM THE POINT OF INTERSECTION OF SAID NORTHWESTERLY LINE WITH THE SOUTHWESTERLY LINE OF MIDDLEFIELD ROAD; THENCE ALONG THE NORTHWESTERI-Y LINE OF SAID GROBMEIER PARCEL,S. 57 DEG.42' 46" W. 221.83 FEET TO THE MOST WESTERLY CORNER THEREOF; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID GROBMEIER PARCEL AND PARALLEL WITH SAID LINE OF MIDDLEFIELD ROAD, S. 57 DEG. 55' 14" E. 95.97 FEET; THENCE LEAVING THE SOUTHWESTERLY LINE OF SAID GROBMEIER PARCEL AND RUNNING, N. 32 DEG. 04' 46" E. 200.00 FEET TO THE POINT OF BEGINNING AND BEING A PORTION OF THE RANCHO RINCONDE SAN FRANCISQUITO. PARCEL FOUR: BEGINNING AT THE MOST SOUTHERLY CORNER OF LOT11IN BLOCK 1, AS SHOWN ON THE MAP OF TRACT 1310, GREENMEADOW, WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON JULY 7, 1954, IN BOOK 50 OF MAPS, PAGES 50 AND 51; THENCE ALONG A SOUTHWESTERLY LINE OF SAID LOT 11, N. 33· 33' 18" W., 40.00 FEET; THENCE ALONG A SOUTHEASTERLY LINE OF LOTS 11 AND LOT 12, iN BLOCK 1, AS SHOWN ON THE MAP HEREINABOVE REFERRED TO, S. 56° 26' 42" W., 50.00 FEET; THENCE ALONG A NORTHEASTERLY LINE OF SAID LOT 12, S. 33· 33' 18" E., 40.00 FEET; THENCE ALONG THE NORTHEASTERLY PROLONGATION OF THE MOST SOUTHERLY LINE OF SAID LOT 12, N. 56· 26' 42" E., 50.00 FEET TO THE POINT OF BEGINNING, AND BEING A PORTION OF THE SANTA RITA RANCHO. ASSESSOR'S PARCEL NUMBER: 147-08-003 Page 4 Order No.: 56901-51990229-PRT Attachment B At the date hereof exceptions to coverage In addition to the printed exceptions and exclusions contained In said policy form would be as follows: 1, The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions of Chapter 3,5 (commencing with Section 75) of the Revenue and Taxation Code of the State of California, 2, Rights of the public, county and/or city in that portion lying within the street as it now exists: Middlefield Road: 3, An easement affecting the portion of said tand and for the purpose stated herein, and incidental purposes, In Favor of: Pacific Gas and -Electric Company, a California corporation No representation is made as to the present ownership of said easement. Purpose: Recorded: BooK: Page: - Affects: Gas pipeline December 11, 1935 748 487 As therein described 4, An easement affecting the portion of said land and for the purpose slaled herein, and incidenlal purposes, In Favor of: City of Palo Allo No representation is made as to the present ownership of said easemen!. Purpose: Recorded: Book: Page: Affects: Public street July 22, 1954 2920 557 The Southwestarly boundary of Parcel Two, as therein described 6, Any rights of parties in possession of said land, based on any unrecorded lease or leases, as disclOSed by an Inspection of said land aMlor inquiry. Note: Please submit copies of leases for review, 6. Matters which may be disclosed by an inspection or survey of said land or by inquiry of the parties In possession thereof. Note: An inspection of said land should be ordered prior 10 close of escrow and upon its completion, we will advise you of our findings, . Page5. Order No,: 56901-51990229-PRT Attachment B '--' ~/I / .,'" "'< .... (')"" e ,'"....--"", . ................ ~ ..... \._.,(:r:.o.. ... -~Ijo.. Q.I\ltI". ~MTl~t.AU~r.. " ~~: 2l '''i'' ilil cfIoIll'!lilltDfII~urru:1:S::.'nl ' f1F 'f)!;E Ii!EWt:lN£ iDo ~.ewe El'F'P.'CT!t£ ~'t£~.!!" ~ ~_§._~-~OR ~ ~ -------,-_ MIDDLEFIELD --, "---~~ 111 --J j/ ,4 t AA.\o ALTO lINU'lED 5C1n)t DistRiCT . I , I-' <> '" ';( w '" ~~.t£UMg :! y,,= \\ " x- \ ~ . R!lS.l.SO-M-\7 -~' ~o; II '"'" 1\ II ~1'H 8 ! CD @ \ 0 :z. I?: 47 ""1\ CD ~ on ~ ,-' -( ,-,0 r j_ L. -----r--="'''''----------.Jf, t_ »'\f!1 . @ "lllE 1NfORMI\l1011 ON nns PIJ!J III PRO\IIDBJ fOR 'VOUR CONVENll:SNGE AS A SUlDe TO 'THE. GENERAL UlCATlON OFlHE SIJl!JECT PROPERTY.1HE ACCURACY ,llFllllSPlATlSNOTSUARAI/TE8J,NQR IS ITA PIlRT OF I\lf( POlICY REPORT DR GI.JJ\IlAI'ffi: 10 WI1IGII IT W\Y BE JI1ll\C!!BJ.' @ '\~~/ .~) .pi /~~ , Attachment B () ! ) ) EXHIBIT I AMENDMENT NO. 2 TO LEASE AND COVENANT NOT TO DEVELOP BETWEEN THE CITY OF PALO ALTO AND THE PALO ALTO UNIFIED SCHOOL DISTRICT 'This Affiendment No. 2 to Lease and Covenant Not Develop is entered into this day of _-:-__ "'_-' 200_ by between the Palo Alto Unified School District (UDistrict U) the City of Palo Alto, a municipal Corporation (UCityU). to and and RECITALS A. The City and the District entered into that certain Le,ase and Covenant Not to Develop on September 1, 1989 ("Lease") which provides in part that the City leases from the District certain property cormnonly referred to as the Cubberley Site. The parties entered into the Amendment No. 1 to Lease and Covenant Not to Develop on July 20, 1998. B. The City and the District have now entered into a property exchange agreement whereby the City will convey to the District a portion of a site known as the Terman site in exchange for the District conveying fee title to the City of 7.97 acres of the Cubberley Site. The City will continue to lease from the District the remaining portion of the Cubberley Site. C. Pursuant to Section 4.1 of the Lease, District covenants with City and City covenants with District that, in order to prevent further burden on City's infrastructure and preserve a substantial amount of City's remaining open space, certain school sites shall not be subdivided, sold or developed with additional square footage to be used for non-school district purposes. D. Section 6.5.2(b) of the Lease provides that in the event District wishes to reopen, as an operating school, any of the Covenanted Sites described in Exhibits D, E, and F, it may do so upon written notice to City, provided that in such event, City and District shall amend the Lease to include within the Covenant Not to Develop two operating elementary school sites of District within the city limits of the City of Palo Alto. Amendment No. 1 to the Lease and Covenant Not to Develop 1 011206 syn 0090980 Attachment B () ) substituted the Walter Hays Site and replacements for the "old" Ohlone site "Hoover School." Juana Briones Site as which has been renamed E. The District has now re-opened the Garland Site and wishes to designate Addison and El Carmelo as the two operating school sites to be substituted for the Garland Site. F. Section 4.1 of the Lease limits additional development on any Covenanted Site for non-school district purposes to 2,000 square feet. As part of the re-opening of the Terman Middle School, the District will grant a' license to use the Greendell Site to the AlbertL. Schultz Jewish Community Center (" JCC") for interim childhood development programs. The JCC wishes to use nine (9) portable classrooms and one portable bathroom, each with an area of approximately 960 square feet, on the Greendell Site. City is willing to amend the Lease to permit the installation and use of these portable facilities by the JCC wi thout addi tional consideration;: however, the installation and use of such portable facilities requires a conditional use permit from the City. G. Ci ty and District wish to amend the Lease and· Covenant Not to Develop to provide for the reduction in area of the Cubberley Site and reduction in rent; the reopening of the Garland Site and the substitution of the Addison 'site and the El Carmelo site within the Covenant Not to Develop; to permit the interim use of portable buildings at the Greendell Site; and to grant to District the right to open a compact high school at Cubberley after the JCC has ceased relocated its operations from' CUbberley. NOW, THEREFORE, for consideration, receipt of which is acknowledged, the parties agree as follows: 1. Site Description. Section 1.1.5 of the Lease is hereby amended in its entirety to read as follows: "1.1.5 ,Leased Site-Cubberley Site. Effective September 1, 2002; the term 'Leased Site' means all of that certain real property situated in the City described in Exhibit A attached hereto and made a part hereof, and all improvements thereon as of September 1, 2002." 2 011206 syn 0090980 Attachment B C) ) ) 2. Covenanted Sites. --..... hereby Paragraph 1.1. 8 is amended to read as follows: \\ 1. 1. 8 Covenanted Sites. The term 'Covenanted Sites' means all that certain property situated in the City described in Exhibits B, C, D-l, D-2, E-l, E-2, F, and G attached hereto and made a part hereof." 3. Reo12ening of Garland Site. hereby deleted. Paragraph 1.1.10 is 4. Substitution of Paragraphs 1.1.10.1 and 1.1.10.2 added to read as follows: Addison and El are, respectively, Carmelo. are hereby "1.1.10.1 Addison Site. The term 'Addison Site' means all that certain real property situated in the City described in Exhibit E-l attached hereto and made a part hereof. 1.1.10.2 El Carmelo Site. The term 'El Carmelo Site' means all that certain real property situated in the City described in Exhibit E-2 hereto and made a part hereof." 5. Covenant Payments. Section 2.2 is hereby amended to read as follows: Walter Hayes/Juana Briones Addison/El Carmela Greendell Jane Lathrop Stanford Jordan $204,742 $182,804 $182,804 $236,000 $164,000 6. Lease Payments. Section 2.8 is added to the Lease and Covenant Not to Develop to read as follows: "2.8 Reduction in Rent. City obligation to pay rent to the District for the Cubberley Site shall be reduced, commencing September 1, 2002, by an amount equal to $23,490 per month, ('the Offset Amount.') Whenever the Payment is adjusted pursuant to Section 2.7, the Offset Amount shall be adjusted by the same method." 3 011206 ')'11 OO9IJ9S0 Attachment B l () ) 7. Cubber~eyLease. Section 3.0 of the Lease is hereby amended in its entirety to read as follows: "3:0 Cubberley Lease. District hereby leases to City and City hereby leases from District for the term, at the rental, and upon all of the conditions set forth herein, the Leased Site commonly known as 'Cubberley School' situated in the City of Palo Alto described in Exhibit A attached hereto and made a part hereof, and all improvements thereon. ' As of September 1, 2002, the total acreage of the Leased Site is approximately 27.48 acres of which 15.94 acres is outdoor recreation area; the remaining 11.54 acres is comprised of parking lot area, walkways, and approximately 80,150 square feet of buildings; however I it is understood that such acreage and square footage figures are only approximate and have not been precisely detemined. 8. Covenant Not to Develop. Section 4.1 of the Lease is hereby amended in its entirety to read as follows: "4.1 D:j.stricthereby covenants with City and City hereby covenants with District that, in order to prevent a further burden on the City's infrastructure and in order to preserve a substantial amount of the City's remaining open space, which contributes to the welfare of the City's residents, the Covenanted Sites situated in the City of Palo Alto and described in Exhibits B, C, D-1, D-2, E-1, E-2, F and G attached hereto and made a part hereof, shall not be (1) subdivided, (2) sold or (3) developed with additional square footage to be used for non-school district purposes for the term of this Lease, for the consideration and upon all the conditions set forth herein, provided that the district may add portable non-permanent structures totaling no more than 2,000 square feet per Covenanted Site. If the District adds such square footage on any Covenanted Site, it shall give written notice to the City within 30 days of such addition. Provided, City hereby agrees tha't placement of up to nine portable class rooms and one portable bathroom, each consisting of approximately 960 square feet, on the Greendell Site, to be used by the JCC as 4 011206 .yn 0090980 Attachment B () ) ) an interim relocation site for childhood development programs for not more than eight years, shall not be a . violation of this Covenant. City acknowledges that location and use of such facilities by District itself for school-district purposes is not a violation of the Covenant and does not require City consent. JCC may not place or use portable facilities on the Greendell Site prior to obtaining a conditional use permit from City. Upon the expiration or earlier termination of this Lease, except as provided. in Section 4.2, the City shall execute and deliver to District a quitclaim deed for the Covenanted Sites, unless otherwise agreed to by the parties." 9. Exhibit E to the Lease is deleted and replaced ~Iith Exhibits E-1 and Exhibits E.-2, respectively; and the Summary of Exhibits is amended accordingly. 10. District Option to Open ·Compact HighSchool. Not withstanding any other provision of the Lease, after the JCC ·has removed its programs from the City-owned property at the former Cubberley School and from the Leased . Site, District may terminate the Lease with respect to all or a portion of the. Leas.ed Site so that it may operate a compact high school at Cubberley. District must provide twenty-four (24) months .wri tten notice to City of such termination or partial termination. If the District elects a partial termination, the notice shall include a map and legal description specifying the·> new Leased Site, and the City's payment for the Leased Site, shall be reduced in proportion to the reduction in the land area of the Leased Site. Further, if the District elects a complete or partial termination of the Lease under this Section 10, the District and City shall enter into a joint use agreement regarding the gym, ·cafeteria, theatre and fields. The COvenant Not to Develop shall remain in effect. 11. Effect of Amendment No.2 . . (a) As amended herein, the Lease dated September 1, 1989 and Amendment No. 1 remain in full force and effect. In case of any conflict bet'tJeen any of the amendments made in thi~ Amendment No. 2 and the remaining provisions of the Lease as entered into September 1, 1989 and Amendment No.1, the 5 011205 'yn 0090980 Attachment B ) ) Lease and Amendment No. 1 shall be interpreted so as to give effect to the provisions of this Amendment No.2. (b) This Amendment No. 2 shall be effective upon the date first written above. By separate agreement, parties have agreed that prior to September 1, 2002! District shall transfer to City fee title to that portion of the Cubberley Site removed from the leasehold by Section 7 of this Amendment No.2. If, pursuant to that agreement, the transfer of Cubberley property to City and the release of City's interest in the reduction in City rent will be accelerated to coordinate with that .closing, and the transfer to the District of the City! s right to receive rental income for the Terman Site from the JCC. IN WITNESS WHEREOF, the District and ,the City have caused this Amendment No. 2 to be executed by their respective officers as of the day and year first· above written. ATTEST: CITY OF PALO ALTO City Clerk Mayor APPROVED AS TO FORM: PALO ALTO UNIFIED SCHOOL DISTRICT! Lessor Sen Asst. City Attorney President, Board of Education .4 APPROVED: Manager Exhibit E-l Exhibit E-2 01!206 syn 0090980 APPROVED: Superintendent of Schools Addison Site (Legal Description and Map) El Carmela Site (Legal Description and Map) 6 Attachment B () ) A,P,NO, .120-006-010 650 ADDISON AVENUE EXHlBITEl ADDISON SITE PROPERTY DESCRIPTION April 24, 2002 A portion of,real property situated in the City of Palo Alto, County of Santa Clara, State of California more particularly described as follows; ALL of Lots 1,2,3 and 4 of Block 81 as shown on the map titled "OlUGINAL MAP SHOWING SUBDIVISION OF UNIVESITY PARK, SANTA CLARA CO, CALIFORNIA" and recorded in the office of the County Recorder of said Santa CI!\Tll County on February 27, 1889 hi Book uD" of maps, at page 69 Parcel contains 200,000 square feet or 4.5913 acres more or less, Parcel is shown on attached map J:XHIBIT E-! and made a part hereof BND OF DESClUPTION _____ --c-=_expires 6-30-03 lAMES DAVIDK1E;BL P.L,S.7152 PP.BPAREDBY I APPROVED LBGAL: .l20061O.Word REVISION (1) 34-24-2002 PLAT: 1200610.DWG REFERENCE: TITLE REPORT: #56901·52990147·PRT Dated March 28,2002. This d~cription are b!lsed upon information from record data and said title Report '. Attachment B C) EXH IBIT ,""E~1~-;r-l -"DRAWN BY: JAM . KIEH PALO ALTO HIGH SCHOOL DISTRICT OF, SANTA CLARA COUNTY ) -:AL FILENAME: 12000510.WORD !-__ 6...;..5_0~A_D_D_I_S_O_N~A_V_E_N_U_E_-.I DRAWING FIlENAME: 12000610.DWG CITY OF PALO ALTO. CALIFORNIA REVISION'. (1) 04/24/2002 Attachment B ". " (' .) \ ) ) AP.NO. 132-048-034 EXHIBITE2· EL CARMELO SITE PROPERTY DESCRIPTION April 30, 2002 A portion of real property' situated in the City of Palo Alto, County of Santa Clara, State ofCaJifornia more particularly described as follows; (Grant Deed Book 2116 page 52'S, dated July 2,1951) . ALL of Block 20 as laid down designated and delineated upon that certain map entitle, "Map No. 1 Map of Stanford City, Santa Clara County, California "recorded May 3, 1910 in the office of the Recorder of the County of Santa Clara, State of California, in Vol. HM" Of Maps, page 97 records of said County and (Resolution and "Order proclaiming the Abandonl1ient of a County Road Book 2140 page 146, dated January 22,2951) El Capitan Road from its intersection with Ramona Street to its intersection with Bryant Stree~ as the same is delineated and designated upon that certain Map entitled ''Map No. 1 Map of Stanford City, Santa Clara County, California " recorded May 3, 1910 in the office of the Recorder of the· County of Santa Clara, State of Californi!l., in Vol. "11" of Maps, page 97 records of said County al)d (Corporation Grant Deed Book 2143 page 235, dated JanU£lry 30, 1951) Lots 1 to 18 inclusive in Block ,;n as laid down, designated and delineated upon that certain Map entitled, "Map No, 1 Map of Stanford City, Santa Clara County, C:ilifornia " recorded May 3, 1910 in the office of the Recorder oftbe County of Santa Clara, State of California, in VoL "hi" of Maps, page 97 records of said County and excepting therefrom: . (Grant Deed Book 2455 page.5~4, dated February 13,1952) Beginning at a point on the northwesterly line of Loma Verda Avenue, formerly called· College Avenue, distant northeasterly upon said line 10.78 feet from the most southerly· corner of Lot 14, Block 21 Map No, 1 Map of Stanford City, Santa Clara County, California" recorded May 3, 1910 in the office of the Recorder of the County of Santa Clara, state of Califomia, in VoL "M" of Maps, page 97, records of Santa. Clara County, California: . thence southwesterly along a curve to the right, having a radius of 37b feet and a central angle ofl8°12', an arc distance of 117.53 feet; thence South 56° 42' West 4.8:2 feet; thence southwesterly along a curve to the right, having a radius of 20.00 feet and a central angle of 36° 48' 34", an arc distance of 12.84 feet to a point on the southwesterly line of Lot 18 of said Block; thence South 510 30' East 27.56 feet to the most southerly comer of said. Lot 18, Attachment B () ) ) A.P.NO. 132-048-034 April 29 , 2002 thence North 38° 30' East along said Iilie of Loma Verda Avenue 130.28 feet to the point of beginning, being a part of Lots 14, 15, 16,17 and 18 of said Block 21 and . contain 0.025 acres, more or less. . Parcel contains 189,963 square feet or 4.3609.acres more or less. Parcel is shown on attached map Exhibit "El" and made a part hereof END OF DESCRIPTION Requested by: Bill Fellman _~_ Check by: Jay Remley f)-t Check by: James B9urquin-,-__ ::-:-::-=~.,.,-,:::::::--===-=E\,piies 6-30-03 JAMESIiA VID KIEELP.L.S. 7152 PREPARED BY / APPROVED' LEGAL: 13204834.word REVISION (1) 4-29-2002 PLAT: 13204834:DWG TITIE REPORT: #56901-52990146-PRT dated March 28,2002. This description is based upon information from record data and said title report. . 20F2 •• Attachment B ( / , f\1 -'" U1 U1 PALO :ALTO SCHOOL DISTRICT OF, SANTA CLARA COUNTY I--t---~-----~-- A.P.NO. 132-048-034 REVISlDN, (1)04/29/2000 , DRAWING FILENAME, 13204834.DIJG t-----;:'~:;;:-;:~;;;-.;;-;:-;:~~------.I Attachment B () ( ) ) AP.NO . .120-006-010 650 ADDISON AVENUE EXHIBITEI ADDISON SITE PROPERTY DESCRJPTION April 24, 2002 A portion ofrea1 property situated in the City of Palo Alto, County of Santa Clara, State of California more particularly described as foHows; ALL of Lots 1,2,3 and 4 of Block 81 as shown on the map titled "ORIGINAL MAP SHOWING SUBDIVISION OF UNIVESITY PARK, SANTA CLARA CO CALIFORNIA" and recorded in the office of the County Recorder of said Santa Clar~ County on February 27, 1889 in Book "D" of maps, at page 69 Parcel contains 200,000 square feet or 4.5913 acres more or less. Parcel is shown on attached map J>XHIBIT E-! and made a part hereof. END OF DESCRIPTION ... , expires 6-30-03 J~AMEC=-=::CS::-:D='A""VID=-:KIE=' ::::;m..=--P.L. S. 7152 PREPARED BY I APPROVED LEGAL: J200610,Word REVISION (1) 34-24-2002 PLAT: 120061O,DWG 'REFERENCE: TInE REPORT: #56901-52990147 -PRT Dated March 28, 2002, This d~cription are b~sed upon information from record data and said title Report , . Attachment B EXHIBIT E1 ---C>RAWN BY, JAMES D. KiEHl---... - PALO ALTO HIGH SCHOOL DISTRICT OF, SANTA. CLARA COUNTY )-------1 LEGAL fiLENAME: 1200061O,WORO 1--__ 6_5_0_A_D_D_I_S_O_N_A_V_E_N_U_E_---I DRA'MNG FILENAME: 1200061O,QWG . CITY OF PALO ALTO, CALIFORNIA SCALE: 1" = 100' RE\QSION: (1) 04/24/2002 Attachment B () ) ) AP.NO. 132-048-034 EXHIBITE2 EL CARMELO SITE PROPERTY DESCRIPTION April 30, 2002 A portion of real property' situated in the City of Palo Alto, County of Santa Clara, State of California more particularly described as follows; (Grant Deed Book 2126 page 525, dated July 2,1951) . ALL of Block 20 as laid d.own designated and delineated upon that certain map entitle, "Map No.1 Map of Stanford City, Santa Clara County, California" recorded May 3, 1910 in the office of the Recorder of the County of Santa Clara, State of California, in VoL "M" dfMaps, page 97 records of said County and (Resolutwn and order proclaiming the Abandonment of a County Road Book 2140 page 146, dated January 22,2951) El Capitan Road from its intersection with Ramona Street to its intersection with Bryant Street, as the same is delineated and designated upon that certain Map entitled "Map No. 1 Map of Stanford City, Santa Clara County, California" recorded May 3, 1910 in the office ·of the Recorde'r of the· County of Santa Clara, State of California, in VoL "M" of Maps, page 97 records of said County and . (Corporation Grant Deed Book 2143 page 135, dated January 30,1951) Lots 1 to 18 inclusive in Blpck .21 as laid down, designated and delineated upon that certain Map entitled, "Map No. 1 Map of Stanford City, Santa Clara County, California" recorded May 3, 1910 in the office of the Recorder of the County of Santa Clara, State of California, in Vol. "M" of Maps, page 97 records of said County and excepting therefrom: . . (Grant Deed Book 2455 page5~4,dated February 13, 1952) Beginning at Ii point on the northwesterly line of LomaYerda Avenue, formerly called College Avenue, distant northeasterly upon said line 10.78 feet from the most southerly· corner of Lot 14, Block 21 Map No. 1 Map of Stanford City, Santa Clara County, California" recorded May 3, 1910 in the office of the Recorder of the County of Santa Clara, Sfate of California, in Vol. "M" of Maps, page 97, records of Santa. Clara County, California: . thence southwesterly along a curve to the right, having a radius of 370 feet and a central angle of 18 0 12', an arc distance of 117. 53 feet; thence South 56° 42' West 4.82 feet; thence southwesterly along a curve to the right, having a radius of 20.00 feet and a central angle of 36° 48' 34", an arc distance of 12.84 feet to a point on the southwesterly line of Lot 18 of said Block; thence South 51 0 30' East 27.56 feet to the most southerly corner of said Lot 18, Attachment B · " () !) ) AP,NO.132·048·034 April 29, 2002 thence North 38° 30' East along said line ofLoma Verda Avenue 130.28 feet to the point of beginning, being a part of Lots 14, 15,16, 17 and 18 of said Block 21 and contain 0.025 acres, more or less, Parcel contains 189,963 square feet or 4,3609 acres more or less, Parcel is shown on attached map Exhibit "E2" and made a part hereof END OF DESCRIPTION Requested by: Bill Fellman __ _ Check by: Jay Remley % Check by: James Bourquin -,-__ ~-=-:-:::~=-===::-c:'Expiies '6·30·03 JAMES,DA VID KIEHLP.L.S, 7152 PREPARED BY I APPROVED LEGAL: 13204834,Word REVISION (1) 4-29-2002 PLAT: '. 13404834,DWG TITLE REPORT: #56901-52990146·PRT . dated March 28 2002. , . This descriptionis based upon information from record data and said title report, 2·0n Attachment B OJ '" U1 U1 LEGALF'ii:ENAM£, 13~04834,DOC DRAliflNG rJLENAM[, 13204834,D"'G PALO ALTO 'ffIGH SCHOOL DISTRICT OF, SANTA CLARA COUNTY A.P.NO. 132-048-034 CITY OF PALO ALTO, CALlFORNIA SCALE: I'" 100' REV1SlON, (1)04/2912002 Attachment B ') \ ( ) ) ! J. ' ~ : ," !)I\\)~~)\\ • •••• j 1\ 1\)' /K '~'Ilil\fl\ JlUHIMI ~"Mq,it. . ',11i1llrrll1fi . "nl"" tJlIlI .. J~l" 1·\'Ali'~I. I JPl'Il .Ij'<ll" Ir ~1'1'?1(1i;I ;, ~.:, , ','" \ ",~, A'l"L'Ac.: 1:iM.l!a~ '1'· .LA Mr, SUndy Blond , Alb\l1i Schlllt;; 1ewlsh Comrn4nity COllier 6)J M.il'adero !lo~ llalo A!\Q, CA 943Q(i , IMr Sundy: ~i.~y9t.f.?J9./~~t9 D~PflNtJraIl! nl('.l1/rJIIl~71itJl S<1t!I{c,.~ TI,/j> 11I1~I'l!i9!l 9f til!; d;;Qj.!men\ 1$ 10 p6\ve (lw Y/~)' \.a 411dW u,IIJaw!;1h Commlll'lity Cel'ltl'll' intllrlm. 'Il~(t 9~ QYlil A $t thl,l ('.ub'tl4rley CQIlI!T'\1I)ily C;!QlltQI'. In tlli~ r~,!I.lU'd, the 1CC mil hr.vtl Q:\Qh.!1I1vr; urI' ol'qym A II! tho Cll\'!\lllrl .... y Ci:lmrnUl\ltyOe!ltet; t!1\'Q\I,I\1iOi\\ 1M y.-r, 'Wltll 'die exOtlJP'\Oll of , '~\(ldaysl 1$:30 p.lil. to 10:)0 p,m" !lll~ S(ltl1rdays, 11;30 #,111, to /lOOIlt slll'llng , AWAil&l i, 200'~., 'In ardono I/lXlflll~ 1>\1ab IIIlt ot(l~m A i(} Jhe J(:C Ill! I.ltlli() · !'\llllillillQnll.l prl,\8r~lI'\i thli.t I1r~ei1tly ,exist ill CYI11 'A Il1\.1sl b~ 'tnmst'\llr~ l() Ih~ 'J'~i'man;g>,l'!1, S\lQull) tho City changlll!4 PtO$r~liimi~ I!ellylHei il'i til(>. . . fu!u~l'l. tllll .ICC \IiI;lllbi have ill's!. "1I1It (If' U~\i of ftl~ Terman Clylll, · fi,ddltll:ll1,1l11,y. tb~ Oily Wll/ hiI tle~Jllle III !l9 p!'l~l\t'a:ali'l'dI1B m IIw Termflll 0YIll. and. Wbi!iil()VllI' po~lbIilj ot)Ua~gr'.41! with the JCC on ~iI'iims. 'I~lti OOI\ditIQq~ r,tf thl~ ~Q':'jll~t 'lifO $\,bjC\,.'i, to ,~\! QU~5~M IIpprovl'lli 01' a silbloo.se bIltWWi'llbo JC() I,IIId the Oitl of hlQ Al~& fOf the In!erim \l1I\l r)£ tllQ Cq'b\;I"I'I~y ComtnlJl1!W CM\\ot ul~Or Mil. CMI)O~ Ulf ,,,110. IAP")1 1\)1 ~((y tilled pII!'1y (!i1\)llIditl~ t~ PAUSD) unlll suol1 III)Pro'llai, . 1'his toit(jr illl1l li*I)1(), foli IIddon4umto the) Clly ofJ'ftl¢ Altull'al(J Alto Ulll~«l Sdl~..,l .l)j~!rivl ~tClt\elll nIt Jlllnt lJlIId \lnlAill'\!!£I.IJ alw; . . '. . , ' Ci'l~~lUOlI~ it. 'r~l'Il\(\n Middlil Sl)bQo1 ~YlliM.'l!um! · • 'I.'Il\), U~Q q( ~'C '~'Ill.\il\ 11:)"I~ (JJ.\t~I~~ efl> AUSI) ~a. 'Will bo &\lbedul~ Oni by tnb rcc. 'rh~ OILy !lcn tlllhodlllG ~t (Ilb$r limes hot usoo by Ih0 J(:C Md J'I AUSU. 1!lIeilflllons Itl1h1S poUey eli/; illS follow('!: .' a Ijeeltllllrlll Itl S~mber 1003, Ij).f; hlo Ai'tL) JI.~lillltlil~ Dlvish'l!\ will 11l1'l0 \i$1;t Qfllll) l\"OlIlln Gym MI)!ld~)' IhrouBli I<'riday, S.il1lIhl:r tliroij~h. luf\/.li rroRt ·3:)0, p.m. to' lO:~G I~.m. ~oo' SflMda~ I\nd SlllIdar&, 11:30 a,lit t!ll'(Ilitlh UI:~O p.m. ... . Attachment B () : ) ) '. !)IVllIi\IIlH .... f II , II I\!I~ 1\.«\111\11'\1 ' IMI hili $\'1 VWI'\ 1111,,1110.'11 :' 1',Il~Y t. <I,ll! )1\'~I\;Hi\m, I, 'I\!l\ ~ltml'l} 'h~1qIMV , ATTACHMENT lA ~~~Qt P.?M9 AJ~Q DrpifY/t11f111 pI C9111/l1lililty ill'n>lc,'~ ; fJt£lril1lll€i In ZOO), YMCA !1~~kClbi1U wlil U5e tb\!: TeTman Oy In JanIJijljl i\\J'uugb M~!'ch '()!:~~h year, IJ.:JO a.liI, thro\l~h 6:00 II m. on ~$hrl'(:Ia)'~, ' • ,'fbI( JOe JIM iflforln!;d ~\\e CIty or ils il'ltqniiQfi, 10 tolll!i\U0 9pon~on;hip 'of !)\U\\h\Qt tiI/njl., at the 'li:\rm~1\ Gyln, a~ Is ~:II~ fQt lh01~1!t ~Q ylMl!'i. If fhQ Jt:O dr;!Ci JlOI SPOrlSlJf SUll'lmlltl'l1llltp .ClIYme~ hnb0 TermAn !tim, lhe my Qf 111110 :Alto tIlqw.lats (he ~pace to pr"Jifam OI!Ill'IPS frQm 11l1!1,l throu\jh .l\.l\bl~!, bilLllnl1ln£) in 2QO!l fl'9m 8:00 M'fI,' ~l\!\'l'gh 3:00 p,Iil,~ Mimd,lY 1l\('()llgil. IIridny, ' " ' , . ' , Attachment B () ) ATTACHMENT 2 SCHOOL DISTRICT USE OF TERMAN PARK School District shall be entitled to the issuance of a'City permit under Chapter 22 of the Palo Alto Municipal Code for use of portions of Terman Park during certain hours. School District shall not be required to pay for such permit, and in any case where there is a contradiction between the terms of the permit and the terms of this Agreement, this Agreement shall govern. 1. Terman Tennis Courts a. Terman Middle School shall have first calIon the tennis courts between the hours of 7:30 a.m. and 3:30 p.m. on days when Terman Middle School is in regular session. b. School District shall pick up all litter and leave courts in good condition at end of every day of use. 2. Terman Playfields. a. Terman Middle School shall have first calIon the playing fields between, the hours of 7:30 a.m. and 3:30 p.m. on days when Terman Middle School is in regular session. School District will not have the right to routinely exclude members of the public from any dedicated playing field or parkland. School District will have the right to take reasonable actions to protect both its first calIon the playing fields and the safety of the students. No permanent fence or other barriers to public access will be constructed. b. School District shall pick up all litter and leave fields in good condition at end of every day of use. portions SchooL 011206 'yn 0090910 The public will have unrestricted access to those of Terman Park not being used by the Terman Middle 10 Attachment B ( EXHIBITG Ul:.'f ~Ul:.@~ 2(5 " ~ (86')--- _ MIDDLEFIELD ROA~ __ ---S57'56'07"E 44Q,.o§.----. l------:r- /Iii. ~~irOOWl @IF ll'f!;,.rFil~1L NO N51'3Q'OO"W U~$ iMllIlQJ'fOWiNJ rFil~ Ul:.ilL Ill' Ul:.1Pl'irWl~IF!$ ILIP 'f~Ul:.<C'f WlO. il3il@ '8 @~lElNlfi\All.Eb\OOW if! IlllOOI){ 00 OIF cy. 1i\fj]b\1P Ul:.ir ~Ul:.@1E ,,,,, 00 "511 ~I k ,Jy ~ ID)00iJ{ 2500 19.60' ~/Iii.~ il2~ $/lii.lNJirA <CILA~Ul:. <C~iNJTY lLUl:.iNJlriJ$ OIF ~Ul:.W Ul:.1L ro $CIHlOOC IriJlI$mo<Cir :M5,3:!:! 00, IFf. '1.!in Ul:.<C~ii:$ I~ I~ ~ S51"30'00"E 10' PG&E GAS N43'26'42"E MAIN EASEMENT &l 71.13' -170.00' j BK. 748 PG. 467 ,-+---=---=+ --- --- - - - - - - ---, ----------------- N5B'26'42"E 1--9:2.20' ---t--P.O.B N17'54'07"E 37.65' N51'30'OIt'W·546.44' \~ /, . '~LEA &. SUNG ENGINEERING. INC. . ) -OIVlL ENGINEERS • LANO SUFWEYORS 2495 INDUSTRIAL PARKWAY WEST HAYWARD. CAUfORNIA 94545 (510) 887-4086 fAX (510) 867-3019 JOB NO. 201 0248 zoo ~ SCALE. 1" .. 100' EXHIBIT "G" PROPOSED LOT-LINE ADJUSTMENT PALO ALTO UNIFIED SCHOOL DISTRICT CUBBERLEY SCHOOL 4000 MIDDLEFIELD ROAD PALO ALTO, CALIFORNIA SANTA CLA A COUNTY APN: 147~08-003 JUNE 14, 2002 Attachment B () ) ) I"NORTH .AMERICAN .TITLE IIiCOMPANY City of Palo Alto Attn: Janet Freeland 250 Hamilton Avenue Palo Alto CA 94303 Properly Address: 4000 Middlefield Road Palo Alto, California Our No.: 56901-51990229-PRT Customer No.: AOOO Middlefield Road ExhibitH Preliminary Report IN RESPONSE TO THE ABOVE REFERENCED APPLICATION FOR A POLICY OF TITLE INSURANCE, North American Tille Company, Inc. HEREBY REPORTS THAT IS PREPARED TO ISSUE, OR CAUSE TO BE ISSUED, AS OFTHE DATE HEREOF, A . POLICY OR POLICIES OF TITLE INSURANCE, DESCRIBING. THE LAND.AND THE ESTATE OR INTEREST HEREINAFTER SET FORTH, INSURING AGAINST LOSS WHICH MAY BE SUSTAINED BY REASON OF ANY DEFECT, LIEN, OR ENCUMBRANCE NOT SHOWN OR REFERRED TO AS AN EXCEPTION BELOW OR NOT EXCLUDED FROM COVERAGE PURSUANT TO THE PRINTED SCHEDULES, CONDITIONS AND STIPULATIONS OF SAID POLICY FORMS. THE PRINTED EXCEPTIONS AND EXCLUSION FROM THE COVERAGE OF SAID POLICY OR POLICIES ARE SET FORTH ON THE ATTACHED COVER, COPIES OF THE POLICY FORMS SHOULD BE READ, THEY ARE AVAILABLE FROM THE OFFICE WHICH ISSUED THIS REPORT. PLEASE READ THE EXCEPTIONS SHOWN OR REFERRED TO BELOW AND THE EXCEPTIONS AND EXCLUSIONS SET FORTH IN EXHIBIT A OF THIS REPORT CAREFULLY. THE EXCEPTIONS ARE MEANT TO PROVIDE YOU WITH NOTICE OF MATTERS WHICH ARE NOT COVERED UNDER· THE TERMS OF THE TITLE INSURANCE POLICY AND SHOULD BE CAREFULLY CONSIDERED. IT IS IMPORTANT TO NOTE THAT THIS PRELIMINARY REPORT IS NOT A WRITTEN REPRESENTATION AS TO THE CONDITION OF TITLE AND MAY NOT LIST ALL LIENS, DEFECTS, AND ENCUMBRANCES AFFECTING TITLE TO THE LAND. THIS REPORT (AND ANY SUPPLEMENTS OR AMENDMENTS THERETO) IS ISSUED SOLELY FOR THE PURPOSE OF FACILITATING THE ISSUANCE OF A POLICY OF TITLE INSURANCE AND NO LIABILITY IS ASSUMED HEREBY. IF IT IS DESIRED THAT LIABILITY BE ASSUMED PRIOR TO THE ISSUANCE OF A POLICY OF TITLE INSURANCE, A BINDER OR COMMITMENT SHOULD BE REQUESTED. . Dated as of October 15, 2001 at 07:30 am Pam Thompson/pu Title Officer/Examiner 4255 Hopyard Road, Suite 1, Pleasanton, CA 94588 Phone No.: (925) 399-3000 Fax No.: (925) 399-3028 Attachment B The form of policy of title Insurance contemplated by this report Is: () Preliminary Report Only The estate or Interest In the land hereinafter described or referred to covered by this report Is: A fee Title to said estate or interest at the date hereof is vested in: Palo Alto Unified School District aka Palo Alto Unified School District of Santa Clara County ) ) Page 2 Order No.: 56901-51990229-PRT Attachment B () ; ) Description: The land referred to herein is situated in the State of California, County of Santa Clara, City of Palo Alto, and is described as follows: BEGINNING AT THE MOST WESTERLY CORNER OF THE PARCEL OF LAND CONTAINING 42.27 ACRES DESCRIBED IN THE DECREE OF DISTRIBUTION MADE IN THE ESTATE OF JOHN MILLER, RECORDED OCTOBER 7,1937 IN BOOK 849 OF OFFICIAL RECORDS. AT PAGE 61, RECORDS OF SANTA CLARA COUNTY, CALIFORNIA; THENCE FROM SAID POINT OF BEGINNING NORTH 57° 42' 46" EAST ALONG THE NORTHWESTERL Y LINE OF SAID 42.27 ACRE PARCEL 327.41 FEET TO THE POINT OF INTERSECTION THEREOF WITH A LINE DRAWN PARALLEL WITH AND DISTANT 400 FEET, SOUTHWESTERLY AT A RIGHT ANGLE, FROM THE SOUTHWESTERLY LINE OF MIDDLEFIELD ROAD 60 FEET IN WIDTH; THENC~ SOUTH 57° 55' 14" EAST PARALLEL WITH AND DISTANT 400 FEET SOUTHWESTERLY AT A RIGHT ANGLE FROM SAID SOUTHWESTERLY LINE OF MIDDLEFIELD ROAD 572.04 FEET; THENCE AT RIGHT ANGLES TO THE LAST COURSE SOUTH 32° 04' 46" WEST 373.77 FEET TO THE SOUTHWESTERLY LINE OF THE 42.27 ACRE PARCEL; THENCE NORTH 51° 38' 17" WEST 717.99 FEET ALONG SAID LINE TO THE POINT OF BEGINNING. PARCEL TWO: BEGINNING AT A POINT ON THE CENTERLINE OF MIDDLEFIELD ROAD AT THE MOST SOUTHERLY CORNER OF TRACT 870 CHARLESTON GARDENS UNIT NO.1 AS SHOWN ON A MAP THEREOF WHICH WAS FILED IN BOOK 33 OF MAPS AT PAGES 26 AND 27 IN THE OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SANTA CLARA; THENCE FROM SAID POINT OF BEGINNING SOUTH 57° 42' 46" WEST 804.35 FEET TO AN IRON PIPE ON THE NORTHEASTERLY LINE OF LAND FORMERLY OF D.L. SLOAN; THENCE SOUTH 51° 37' 17" EAST 224.14 FEET TO A POST MARKED P.S. 7 AT THE MOST NORTHERLY CORNER OF LOT 11 OF THE J. J. MORRIS REAL ESTATE CO'S SUBDIVISION OF THE LOUOKS TRACT, A MAP OF WHICH IS OF RECORD IN THE OFFICE OF THE COUNTY RECORDER OF THE SANTA CLARA, STATE OF CALIFORNIA, IN BOOK "L" OF MAPS, PAGE 35 RECORDS OF SANTA CLARA; THENCE ALONG THE NORTHERLY LINE OF LOTS 10 AND 11 OF SAID SUBDIVISION SOUTH 38° 23' 31" WEST 657.32 FEET TO A POINT WHICH IS DISTANT ALONG THE NORTHERLY LINE OF LOTS 9 AND 10 OF SAID SUBDIVISION NORTH 3B" 23' 31" EAST 520.00 FEET FROM THE MOST EASTERLY CORNER OF LOT 6 OF SAID SUBDIVISION; THENCE PARALLEL WITH AND DISTANT NORTHEASTERLY 520 FEET FROM THE NORTHEASTERLY LIEN OF LOTS 4, 5 AND 6 NORTH 51" 36' 25" WEST 941 ,59 FEET TO A POINT WHICH IS DISTANT NORTHEASTERLY, MEASURED AT RIGHT ANGLES, 260 FEET FROM THE NORTHEASTERLY, BANK OF ADOBE CREEK; THENCE PARALLEL WITH AND DISTANT NORTH EASTERLY 260 FEET FROM SAID CREEK NORTH 14° 12' WEST 501.67 FEET TO A POINT WHICH IS DISTANT 657 FEET SOUTHEASTERLY MEASURED AT RIGHT ANGLES FROM THE CENTERLINE OF CHARLESTON ROAD; THENCE PARALLEL WITH AND DISTANT 657 FEET SOUTHEASTERLY FROM THE CENTER L1NEOF CHARLESTON ROAD NORTH 56° 26' 42" EAST 340.00 FEET TO A POINT ON THE CENTERLINE OF A 10 FOOT EASEMENT GRANTED TO THE PACIFIC GAS & ELECTRIC COMPANY BY DEED DATED NOVEMBER 21,1935 AND RECORDED DECEMBER 11, 1935 IN BOOK 748 OF OFFICIAL RECORDS, PAGE 487; THENCE NORTH 43° 26' 42" EAST 170.00 FEET TO A POINT WHICH BEARS SOUTH 57° 55' 14" EAST 70.00 FEET; SOUTH32" 04' 46" WEST 235.00 FEET AND SOUTH 56° 26' 42" WEST 265.00 FEET FROM A POINT ON THE CENTERLINE OF MIDDLEFIELD ROAD AT THE MOST WESTERLY CORNER OF THE ABOVE MENTIONED CHARLESTON GARDENS UNIT NO.1; THENCE NORTH 56° 26' 42" EAST 265.00 FEET; THENCE NORTH 32° 04' 46" EAST 235.00 FEET TO THE CENTERLINE OF MIDDLEFIELD ROAD; THENCE ALONG THE CENTERLINE OF MIDDLEFIELD ROAD SOUTH 52° 55'14" EAST 1212.79 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM, THAT PORTION CONVEYED TO ROLF GRABMEIER BY DEED RECORDED APRIL 8,1955,3138·82 PARCEL THREE: Page 3 Order No.: 56901·51990229-PRT Attachment B ! ) BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF THAT CERTAIN PARCEL OF LAND CONVEYED BY RALPH GROBMEIER, ET UX, TO ROLF GROBMEIER, A MARRIED MAN BY DEED DATED AUGUST 14, 1954 AND RECORDED OCTOBER 15, 1954 IN BOOK 2983 OF OFFICIAL RECORDS, PAGE 211, DISTANT THEREON, S, 57 DEG, 42' 46" W, 221,83 FEET, FROM THE POINT OF INTERSECTION OF SAID NORTHWESTERLY LINE WITH THE SOUTHWESTERLY LIN E OF MIDDLEFIELD ROAD; THENCE ALONG THE NORTHWESTERLY LINE OF SAID GROBMEIER PARCEL, S, 57 DEG, 42' 46" W, 221.83 FEET TO THE MOST WESTERLY CORNER THEREOF; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID GROBMEIER PARCEL AND PARALLEL WITH SAlD LINE OF MIDDLEFIELD ROAD, S, 57 DEG. 55' 14" E, 95,97 FEET; THENCE LEAVING THE SOUTHWESTERLY LINE OF SAID GROBMEIER PARCEL AND RUNNING, N, 32 DEG, 04' 46" E, 200,00 FEET TO THE POINT OF BEGINNING AND BEING A PORTION OF THE RANCHO RINCONDE SAN FRANCISQUITO, PARCEL FOUR: BEGINNING ATTHE MOST SOUTHERLY CORNER OF LOT 11 IN BLOCK 1, AS SHOWN ON THE MAP OF TRACT 1310, GREENMEADOW, WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON JULY 7, 1954, IN BOOK 50 OF MAPS, PAGES 50 AND 51; THENCE ALONG A SOUTHWESTERLY LINE OF SAID LOT 11, N. 33" 33' 18" W., 40,00 FEET; THENCE ALONG A SOUTHEASTERLY LINE OF LOTS 11 AND LOT 12, IN BLOCK 1, AS SHOWN ON THE MAP HEREINABOVE REFERRED TO, S. 56° 26' 42" W., 50.00 FEEt; THENCE ALONG A NORTHEASTERLY LINE OF SAID LOT 12, S. 33° 33' 18" E" 40.00 FEET; THENCE ALONG THE NORTHEASTERLY PROLONGATION OF THE MOST SOUTHERLY LINE OF SAID LOT 12, N, 56" 26' 42" E., 50,00 FEET TO THE POINT OF BEGINNING, AND BEING A PORTION OF THE SANTA RITA RANCHO. ASSESSOR'S PARCEL NUMBER: 147-08-003 Page 4 Order No,: 56901-51990229-PRT Attachment B () ) At the date hereof exceptions to coverage In addition to the printed exceptions and exclusions contained in said policy form would be as follows: 1. The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation Code of the State of California. 2. Rights of the public, county and/or city in that portion iying within the street as it now exists: Middlefield Road. 3. An easement affecting the portion of said land and for the purpose stated herein, and incidental purposes. 4. In Favor of: Pacific Gas and Electric Company, a California corporation No representation is made as 10 the present ownership of said easement. Purpose: Reccrded: Book: Page: Affects: Gas pipeline December 11, 1935 748 487 . As therein described An easement affecting the portion of said land and for the purpose stated herein, and Incidental purposes. In Favor of: City of Palo Alto No representation is made as to the present ownership of said easement. Purpose: Recorded: Book: Page: Affects: Public street July 22, 1954 2920 557 The Southwesterly boundary of Parcel Two, as therein described 5. Any rights of parties in possession ofsaJd land, based on any unrecorded lease or leases, as disclosed by an inspection of said land aha/or Inquiry. Note: Please submit copies of leases for review. 6. Mailers which may be disclosed by an inspection or survey of said land or by inquiry of the parties In possession thereof. Note: An Inspection of said land should be ordered prior to close of escrow and upon lis compietion, we will advise you of our findings .. Page 5· Order No.: 56901-519902Z9-PRT Attachment B !l,~~_ '"---' ",-/1/ I / I "1.'<"0 -"Ic: .... .f"l' G ~""!'o ..... _ ...................... . 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"' ......... _ .... _"' ..... _., TO: HONORABLE CITY COUNCIL CITY MANAGER DATE: DECEMBER 10,2001 DEPARTMENT: CITY MANAGER'S OFFICE CMR:448:01 S'IJBJECT: TERMAN-CUBBERLEY PROPERTY EXCHANGE AGREEMENT WITH PALO ALTO IJNIFIED SCHOOL DISTRICT (LEASE AMENDMENT AND LAND EXCHANGE AGREEMENT, INCLUDING JOINT USE OF TERMAN SITE) RECOMMENDATION Staff recommends that the City Council approves the attached property exchange agreement between the City of Palo Alto and the Palo Alto Unified ,School District (PAUSD). The property exchange agreement allows the City to swap 8 acres of City- owned property at Tennan Community Center to PAUSD for 8 acres of District-owned property at the Cubberley Community Center. BACKGROIJND To accommodate PAUSD'splam to establish the third middle school at Terman, the City Council and the Board of Education jointly approved on January 29, 2001, a conceptual agreement to exchange 8 acres at Terman for 8 acres at Cubberley, (See Attachment A- for conceptual agreement.) The property exchange was also a central element in the 4- Party Memorandum of Understanding (MOU) to address the Middle School Challenge, involving the 'City, PAUSD, Jewish Commwlity Center (lCC), and Stanford University. The 4-Party MOD was approved by the City Council on September 10,2001. Under the provisions ofthe property exchange agreement, PAUSD receives ownership of 7.97 acres of buildings and parking lots at Tennan. In exchange, the City receives 7.97 acres of buildings and parking lots at Cubberley. (See AttachmentB for maps,) Other major provisions include the following: CMR448:01 Page 1 on 6 Attachment B PAUSD will be the primary user of City-owned playgrounds at Terman during school hours. The parkland will be open for corrununity use and programming after school and on weekends and holidays. Terman Middle School facilities (e.g.) gym, pool, auditorium) will be availabie for joint use under terins of a City-PAUSD joint use agreement which is attached to the Lease Amendment and Land Exchimge Agreement., , » Should the District need to reclaim part of the Cubberley Community Center' for a compact high school prior' to the expiration of the City) s lease for Cubberley) the District, only needs to provide notice to the City and replace lost revenue to the City. ' POLICY IMPLICATIONS The property exchange agreement is consistent with the many policies and programs in ' the Comprehensive Plan promoting City-pistrict collaboration and the effective provision of community services, RESOURCE IMPACT , No monies are paid by the City or the District pursuant to the property exchange agreement. ' In 'terms of the City',s continuing l~ase of the remaining 27 'acres at Cubberley, the City's lease payments to the District are reduced by the amount equivalent --- to the City)s lost revenues from the ICC ($276,810 in 2001). j/1-. ,r<='( d L fl.-f.!) , {,'1/ -~>JJC-'_ /;?J' ( j $' ;2. 7 Ct7/ £l/)~,~\ PREP ARED BY: !r, ;')t$(9. ( enest City Manager CITY MANAGER APPROVAL: ~ " Frarik Benest City Manager Attachments: Attachment A -Conceptual Agreement Attachment B -Maps Lease Amendment and Land Exchange Agreement CMR:448:01 Page 2 of2 ' Attachment B City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL ATTENTION: FINANCE COMMITTEE FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE SERVICES DATE: SUBJECT: NOVEMBER 18, 2003 CMR: 498:03 OPTION TO EXTEND THE LEASE AND COVENANT NOT TO DEVELOP AGREEMENT WITH THE PALO ALTO SCHOOL DISTRICT REPORT IN BRIEF Staff requests that the Finance Committee recommend to Council that the City exercise its option for a 10-year extension on the Lease and Covenant Not to Develop (Agreement) with the Palo Alto Unified School District (PAUSD), which will expire December 31, 2004. Under the Agreement as amended, the City provides PAUSD with annual revenue in exchange for 1) the City’s lease for the former Cubberley High School site; 2) a Covenant Not to Develop seven elementary school sites; and 3) an agreement that PAUSD provide space for extended day care at 12 elementary school sites. The terms of the Agreement have resulted in significant benefit for the community since its inception in 1991. The Cubberley Community Center has become a major hub of community participation with more the 900,000 people and 66 organizations using the Cubberley facilities on an annual basis. The Covenant Not to Develop has prevented the PAUSD from selling or developing sites for non School District purposes and has preserved a substantial amount of the City’s remaining open space. The seven covenanted sites provide athletic fields supporting a variety of sporting events for all ages. The Extended Day Childcare program provides space at 12 elementary school sites for City-operated extended day childcare services. Currently, 897 children are accommodated at these sites, which are running near capacity. The Agreement since 1990 has provided the PAUSD with over sixty million dollars, Revenue from the Agreement is now almost equal to 4% of the PAUSD annual budget. CMR:498:03 Page 1 of 6 Attachment B Extending the Agreement for 10 years will result in cost to the General Fund projected to total $69,077,000 for payments to PAUSD, plus an additional estimated $1,800,000 for maintenance and repairs. Exercising the option to extend the Agreement is consistent with policies and programs in the Comprehensive Plan promoting City-PAUSD collaboration and the effective provision of community services. CMR:498:03 Page 2 of 6 Attachment B RECOMMENDATION Staff requests that the Finance Committee recommend to Council that the City exercise its option to the 10-year extension on the Lease and Covenant Not to Develop (Agreement) with the Palo Alto Unified School District (PAUSD), which will expire December 31, 2004. BACKGROUND On September 1, 1989, the City and the PAUSD entered into the Agreement. Under the Agreement, the City provided PAUSD with annual revenue in exchange for the City receiving: 1) a lease on the former 35-acre Cubberley High School site, including 180,000 square feet in improvements to be used for community theater, sport and art groups; 2) a Covenant Not to Develop five neighborhood elementary school sites (Jordan, Jane Lathrop Stanford, Ohlone, Garland and Greendell); and 3) an agreement that PAUSD provide space for extended day care at each of eleven remaining elementary school sites. The Agreement was for 15 years, beginning January 1, 1990 and ending on December 31, 2004. There are three options to extend the lease. In the first option, the City has the sole option to extend the Agreement for an additional 10 years. This first option is the focus of this CMR. The second and third options are for two additional five-year terms and require the mutual agreement of both the City and PAUSD. Each year, the payment for the entire agreement is increased by an amount equal to the increase in the consumer price index (CPI). In July 1998, the Agreement was amended (Amendment # 1) to provide for the reopening of one of the covenanted sites (the "old" Ohlone site, now renamed Hoover School) and the substitution of two operating sites, Walter Hays and Juana Briones, for the covenanted site to be reopened. The amendment also provided for the addition of a twelfth extended day care site to be opened at the Hoover School. On January 29, 2001, to accommodate PAUSD’s plans to establish a third middle school at the City-owned former Terman School site, the City and PAUSD jointly approved a conceptual agreement to exchange 7.97 acres at Terman for 7.97 acres at the PAUSD- owned Cubberley site. The property exchange was also a central element in the Four- Party Memorandum of Understanding (MOU) to Address the Middle School Challenge, involving the City, the PAUSD, Jewish Community Center and Stanford University. The Four-Party MOU was approved by the City Council on September 10, 2001. On December 10, 2001, the City Council approved the Terman-Cubberley Property Exchange Agreement with the PAUSD (Lease Amendment #2 and Land Exchange Agreement). The property exchange agreement provided for the City to swap 7.97 acres of City-owned property at Terman to the PAUSD for 7.97 acres of PAUSD-owned property at Cubberley. Its provisions also included the following: 1) a reduction of the City’s lease payments to the PAUSD by an amount equivalent to the City’s lost revenues CMR:498:03 Page 3 of 6 Attachment B from its lease of the Terman site to the Jewish Community Center ($23,490 per month); 2) joint use of the Terman site fields and special facilities; and 3) reopening of the covenanted Garland School site and the substitution of the Addison and E1 Carmelo school sites within the Covenant Not to Develop. DISCUSSION In the late 80’s, when the Agreement was negotiated, declining enrollment and post- Proposition 13 revenue reductions had placed the PAUSD in financial trouble. School enrollment was down, and the PAUSD was consolidating schools and selling surplus school sites to developers for housing (Attachment A). This produced the necessary funds for the PAUSD, but the City and community became concerned with the increased housing density and the loss of open space and recreational opportunities formerly provided by the neighborhood school sites. The City and PAUSD negotiated the Agreement for the purpose of providing revenue to help assure the continued existence of the City’s excellent school system, while still retaining the open space and recreational facilities for the community. The Agreement currently provides the following community benefits: 1) the Cubberley Community Center with its many and varied community programs; 2) space for extended day care at 12 elementary school sites; 3) the Covenant Not to Develop 7 school sites and 4) continued income for the PAUSD. Cubberley Community Center Since its inception in 1991, the Cubberley Community Center has steadily become a major hub for community participation. In total, more than 900,000 people and 66 organizations use Cubberley facilities on an annual basis - more than all of Palo Alto’s community facilities combined. (See Attachment B for full listing of program providers.) The Cubberley lease program offers affordable rates that attract and keep valuable community assets such as Foothill College, the Jewish Community Center, Palo Alto Adult School, the Cardiac Care program, Friends of the Palo Alto Library, and a variety of day care providers, schools and churches - just to name a few. The room rental program is just as valuable with more than 600 individual rentals a year, including weddings, receptions, parties, church affairs, public meetings, seminars and workshops. Cubberley has also become a focal point for all art disciplines. Groups who rehearse and perform at Cubberley include the E1 Camino Youth Symphony, Palo Alto Chamber Orchestra, Palo Alto Philharmonic, Zohar School of Dance, Dance Visions, and many more. There is also a visual artist colony providing professional artists low cost studios to create their work, while being able to afford to do so in Palo Alto. The Cubberley theatre also provides a rental space for myriad theatre groups who do not have a home stage of their own. CMR:498:03 Page 4 of 6 Attachment B Sports also take center stage at Cubberley where organized groups and individuals throughout the year play organized soccer, softball, karate, football, table tennis, tennis, Lacrosse, and basketball. Covenant Not to Develop School Sites The Covenant Not to Develop portion of the Agreement was created to "prevent a further burden on the City’s infrastructure and in order to preserve a substantial amount of the City’s remaining open space." The Covenant prevents the District from: 1) subdividing, 2) selling, or 3) developing sites for non-School District purposes for the term of the Agreement. The covenanted sites now include 7 sites (Jordan, Jane Lathrop Stanford, Walter Hayes, Juana Briones, Addison, E1 Carmelo and Greendell). The Greendell site is currently the only covenanted site that is not being used as a school. Through the Covenant, vacant school sites were retained and residents have been greatly served through the continued availability and use of PAUSD-owned athletic fields, supporting a variety of sporting events for all ages. School fields, in addition to programs that are scheduled by PAUSD, are used most frequently by American Youth Soccer Organization (AYSO), California Youth Soccer Association (CYSA), Palo Alto Babe Ruth, Pop Warner, SVSA (adult soccer league), PAASL (adult soccer league), BAWSL (adult soccer league), Little League, girls’ softball, American Legion and the Palo Alto Tomahawks Lacrosse teams. PAUSD athletic fields are used most heavily between the after school hours of 3:30 p.m. and 7 p.m., Monday through Friday. These athletic fields are used by the same organizations on weekends from early morning to dusk. Adults play primarily on Sundays while youth organizations play on both days. The months when the heaviest use occurs are September through November and March through June. AYSO, which has approximately 2,500 participants in the fall, will have thousands of hours of use on elementary and middle school fields. Most recently, the Palo Alto Committee on Athletic Fields has pointed out that Palo Alto does not have adequate athletic fields to meet the identified need. Without the Covenant, this issue would be greatly exacerbated and many of the community teams would be without places to play. Extended Day Childcare Proaram The Agreement as amended provides space at 12 elementary school sites for the purpose of providing City-operated extended day child care services. The City pays PAUSD rent for the sites and in turn subleases them out to day care providers. Ten sites are subleased to Palo Alto Community ChildCare and two others are subleased to two private providers. Over the years, this program has seen steady, continued growth. Eleven of the sites have expanded from one classroom to two, and the one site that has not expanded, CMR:498:03 Page 5 of 6 Attachment B due to lack of available land, has a waiting list. In total, 897 children can be accommodated at these sites, which are currently running near capacity. Revenue to PAUSD The Agreement provides for significant annual revenue to the PAUSD. Since the lease began in January of 1990, the City has paid PAUSD over sixty million dollars. Revenue from this agreement is now almost equal to 4% of the PAUSD annual budget. RESOURCE IMPACT Extending the Agreement for 10 years will result in costs to the general fund projected to total $.69,077,000 for payments to PAUSD, plus an additional estimated $1,800,000 for maintenance and repairs (See Attachment C). POLICY IMPLICATIONS Exercising the option to extend the Agreement is consistent with policies and programs in the Coanprehensive Plan promoting City-PAUSD collaboration and the effective provision of community services. ENVIRONMENTAL REVIEW Extension or re-negotiation of an existing lease and agreement does not constitute a project for purposes of the California Environmental Quality Act (CEQA). ATTACHMENTS Attachment A: Disposition Status of Surplus School Sites as of January 15, 1987 Attachment B: Cubberley Center Program Providers 2003-04 Attachment C: Lease and Covenant Not To Develop Revenue and Expenses 2003-2013 PREPARED BY: DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL WILLIAM W. FELLMAN Manager, Real Property CARL Services cc:PAUSD Assistant City Manager CMR:498:03 Page 6 of 6 Attachment B ATTACHMENT A DISPOSTI.OI~ STATUS OF SURPLUS SCHOOL SITES AS OF JANUARY 15, 1987 C l.osHre Oa ~e B i re. Ross Road Fremont Hill s ~6178 Ventura .6¢7~ ?~bberl ey Crescent Park ~oovmr Status Sold FY 84-85 (retail) Sold FY 85-8~ (retail) Leased until 9188 with (3) 5Lyear .op~iomS.t~’r.e~ew-;.iment adjusted at: end. a{ each 5~.Y:e~r period to pre- ~ai?limg-:r.mte:i~or-.similar-properties~ ~P~S~:x~s~mi~ht-:t~ terminate with 1 y~.-_~ri.~.Odzi=m.in-ev,ent site .must be sold.; Les~s~t,:~as.bpti_~u~ purchase; lessee .Reopened to house PAUSD Adult ~ "~ ....PTA wardrobeiSpecial .Ed ~su.ppo t s~arr, Sold~FY 80~81 ~o-Oity of P.A. de~e~ined,@ .r.~apt~re of.-investme~t " v.alue or-.75.~---o~-fair m~rke~ value. ith .Cit-y:;o~ :P ~.A.. effective :Nov. 1981 (20- yea.us) ;;B~se,ire~,~. of ~475,000 pl us Leased .until: 3~me-:~ i;~91 w/opt ions $=4:~-00~0 .(.N) ~!44.~000: ~Y B6187 . $1.M-"F]’. -86 ~87 S236,:,0"~0 F’Y .86187 88187 $4M Attachment B &181 Ohl.one U~im. PM/A~aszra Lmased until 618,/; 8 lessees; w~ll -:be-.rebid limB7 for ’5 yr term vacant; some:hourly use Of gym + MP; turf and pool le’ased to Ci:ty Sold FY 92-83 (whol esale) to Town o_~ Los A~ltos Hills -sold FY 85-86 (retail) 86/87 S2...~ N = Naylor purchase Revi.sed: II!5187 Attachment B ATTACHIvIENTB ITenanCs Adolescent Counseling Services FH Artists Studios (2I)E,F,U California Law Revision D2 Children’s International School L1 Children’s Pre-School Center T1 Dance Connection L5 Dance Visions L3 Foothill College Administration I Friends of the PA Library Port Neighbor Montessori -K3 Hua Kuang Chinese Reading Rm H4 Jewish Community Center Port Office of Emergency Services D4 Palo Alto Preparatory School H2 Wildlife Rescue V Youth Community Service D3 Zohar School of Dance L4 Academy of Dance Libre DS African Dance with Wilfred Mark DS Congolese Dance with Regine DS Friday Night Ballroom Dancers Pav L’ecole de Danse DS Mayfield Morris & Sword DS Mystic Sun Mid-Eastern Dance DS Racies de Mexico L6 Red Thistle Dancers DS Rosen Method Movement DS Saturday Night Ballroom Dancers Pav Music El Camino Youth Symphony M4 Music for Children M3 Palo Alto Chamber Orchestra M1 Palo Alto Philharmonic H! Peninsula Barbershop Chorus M2 Peninsula Women’s Chorus M2 Peninsula Piano School M1 I Exerci.~e/Sports AYSO Soccer Field Basketball/Volleyball Camps Gyms California Karate Academy GAR Jazzercise Pav/Gym Keys School Gym Palo Alto Adult Soccer Field Palo Alto Girls Softball Field PACYSA Field Palo Alto Table Tennis Club Gym Palo Alto Tennis Club Courts Palo Alto Tomahawks Lacrosse Field Silicon Valley Soccer League Field Taijiquan Tutelage M4 Traditional Wushu Assocation M4 YMCA Basketball League Gyms IIOther l Acme Education Center A2,3,6,7 BA Amphibian/Reptile Society H1 Chinese Com. Cntr Lunch Prg Kitchen Christ Temple Church Pay First Fijian Assembly of God Pay Grossman Academy A2,3,6,7 Image Film Group H1 Innovative Education Center A2 Kumon Math and Reading A7 Mt. Calvary Baptist Church HI National Traffic Safety InsituteB4 PA Adult School - ESL Testing A3 Senior Friendship Day Aud Software Development Forum H-1 Theater du Coin M2 Vineyard ChristenFellowship Aud Attachment B Attachment B City of Palo Alto City Manager's Report TO: TRANSMITTAL OF FINANCE COMMITTEE RECOMMENDATION TO COUNCIL HONORABLE CITY COUNCIL 10 FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: DECEMBER 15, 2003 CMR: 556:03 SUBJECT: OPTION TO EXTEND THE LEASE AND COVENANT NOT TO DEVELOP AGREEMENT WITH THE PALO ALTO SCHOOL DISTRICT RECOMMENDATION: Staff requests that the Finance Committee recommend to Council that the City exercise its option to the lO-year extension on the Lease and Covenant Not to Develop (Agreement) with the Palo Alto Unified School District (PAUSD), which will expire December 31, 2004. COMMITTEE REVIEW AND RECOMMENDATIONS: The Committee voted unanimously to accept staffs recommendation. In addition, the Committee requested that Council direct staff to work with the Cubberley Standing Committee and other shareholders to begin development of a new IO-year Lease and Covenant Not to Develop Plan. ATTACHMENTS Attachment 1: CMR: 498:03 Attachment 2: Revised Attachment C to CMR 498:03 CMR:556:03 Page I of2 Attachment B PREPARED BY: _---!:::t/...:.::;! V:......G.~::::...!;:;.//~..I.<::Ju.~'AX41:::::..t:..L.-L-JrJ~, ;jL-.:~:""='-":""VUJ---~ __ WILLIAM W. FELLMAN Manager, Real Property DEPARTMENTAPPROVAL:~~~~==~~~====~ __ CITY MANAGER APPROVAL: ~.~ E YHARRISON Assistant City Manager CMR:556:03 Page 2 of2 Attachment B TO: ATTENTION: FROM: DATE: SUBJECT: HONORABLE CITY COUNCIL FINANCE COMMITTEE CITY MANAGER DEP ARTMENT:ADMINISTRA TIVE SERVICES NOVEMBER 18,2003 CMR: 498:03 OPTION TO EXTEND THE LEASE AND COVENANT NOT TO DEVELOP AGREEMENT WITH THE PALO ALTO SCHOOL DISTRICT REPORT IN BRIEF Staff requests that the Finance Committee recommend to Council that the City exercise its option for a lO-year extension on the Lease and Covenant Not to Develop (Agreement) with the Palo Alto Unified School District (P AUSD), which will expire December 31,2004. Under the Agreement as amended, the City provides PAUSD with annual revenue in exchange for 1) the City'S lease for the former Cubberley High School site; 2) a Covenant Not to Develop seven elementary school sites; and 3) an agreement that P AUSD provide space for extended day care at 12 elementary school sites. The terms of the Agreement have resulted in significant benefit for the community since its inception in 1991. The Cubberley Community Center has become a major hub of community participation with more the 900,000 people and 66 organizations using the Cubberley facilities on an annual basis. The Covenant Not to Develop has prevented the PAUSD from selling or developing sites for non School District purposes and has preserved a substantial amount of the City'S remaining open space. The seven covenanted sites provide athletic fields supporting a variety of sporting events for all ages. The Extended Day Childcare program provides space at 12 elementary school sites for City-operated extended day childcare services. Currently, 897 children are accommodated at these sites, which are running near capacity. The Agreement since 1990 has provided the PAUSD "vith over si:x.1y million dollars. Revenue from the Agreement is now almost equal to 4% of the PAUSD annual budget. CMR:498:03 Page 1 of6 Attachment B E:x.iending the Agreement for 10 years will result in cost to the General Fund projected to total $69,077,000 for payments to PAUSD, plus an additional estimated $1,800,000 for maintenance and repairs. Exercising the option to extend the Agreement is consistent with policies and programs in the Comprehensive Plan promoting City-P AUSD collaboration and the effective provision of community services. CMR:498:03 Page 2 of6 Attachment B RECOMMENDATION Staff requests that the Finance Committee recommend to Council that the City exercise its option to the 10-year extension on the Lease and Covenant Not to Develop (Agreement) with the Palo Alto Unified School District (PAUSD), which will expire December 31,2004. BACKGROUND On September 1, 1989, the City and the PAUSD entered into the Agreement. Under the Agreement, the City provided P A USD with annual revenue in exchange for the City receiving: 1) a lease on the former 35-acre Cubberley High School site, including 180,000 square feet in improvements to be used for community theater, sport and art groups; 2) a Covenant Not to Develop five neighborhood elementary school sites (Jordan, Jane Lathrop Stanford, Ohlone, Garland and Greendell); and 3) an agreement that P AUSD provide space for extended day care at each of eleven remaining elementary school sites. The Agreement was for 15 years, beginning January 1, 1990 and ending on December 31, 2004. There are three options to extend the lease. In the first option, the City has the sole option to ex-tend the Agreement for an additional 10 years. This flIst option is the focus of this CMR. The second and third options are for two additional five-year terms and require the mutual agreement of both the City and PAUSD. Each year, the payment for the entire agreement is increased by an amount equal to the increase in the consumer price index (CPI). In July 1998, the Agreement was amended (Amendment #1) to provide for the reopening of one of the covenanted sites (the "old" Ohlone site, now renamed Hoover School) and the substitution of two operating sites, Walter Hays and Juana Briones, for the covenanted site to be reopened. The amendment also provided for the addition of a twelfth ex-tended day care site to be opened at the Hoover School. On January 29, 2001, to accommodate PAUSD's plans to establish a third middle school at the City-ovmed former Terman School site, the City and PAUSD jointly approved a conceptual agreement to exchange 7.97 acres at Terman for 7.97 acres at the PAUSD- owned Cubberley site. The property exchange was also a central element in the Four- Party Memorandum of Understanding (MOU) to Address the Middle School Challenge, involving the City, the PAUSD, Jewish Community Center and Stanford University. The Four-Party MOU was approved by the City Council on September 10,2001. On December 10, 2001, the City Council approved the Terman-Cubberley Property Exchange Agreement with the P AUSD (Lease Amendment #2 and Land Exchange Agreement). The property exchange agreement provided for the City to swap 7.97 acres of City-mvned property at Terman to the PAUSD for 7.97 acres of PAUSD-owned property at Cubberley. Its provisions also included the following: 1) a reduction of the City's lease payments to the PAUSD by an amount equivalent to the City's lost revenues CMR:49S:03 30f6 Attachment B from its lease of the Tennan site to the Jewish Community Center ($23,490 per month); 2) joint use of the Tennan site fields and special facilities; and 3) reopening of the covenanted Garland School site and the substitution of the Addison and El Carmelo school sites within the Covenant Not to Develop. DISCUSSION In the late 80's, when the Agreement was negotiated, declining enrollment and post- Proposition 13 revenue reductions had placed the P AUSD in financial trouble. School emollment was down, and the P AUSD was consolidating schools and selling surplus school sites to developers for housing (Attachment A). This produced the necessary funds for the PAUSD, but the City and community became concerned with the increased housing density and the loss of open space and recreational opportunities formerly provided by the neighborhood school sites. The City and P AUSD negotiated the Agreement for the purpose of providing revenue to help assure the continued existence of the City's excellent school system, while still retaining the open space and recreational facilities for the community. The Agreement currently provides the following community benefits: 1) the Cubberley Community Center with its many and varied community programs; 2) space for extended day care at 12 elementary school sites; 3) the Covenant Not to Develop 7 school sites and 4) continued income for the PAUSD. Cubberlev Communitv Center Since its inception in 1991, the Cubberley Community Center has steadily become a major hub for community participation. In total, more than 900,000 people and 66 organizations use Cubberley facilities on an annual basis -more than all of Palo Alto's community facilities combined. (See Attachment B for full listing of program providers.) The Cubberley lease program offers affordable rates that attract and keep valuable community assets such as Foothill College, the Jewish Community Center, Palo Alto Adult School, the Cardiac Care program, Friends of the Palo Alto Library, and a variety of day care providers, schools and churches -just to name a few. The room rental program is just as valuable with more than 600 individual rentals a year, including weddings, receptions, parties, church affairs, public meetings, seminars and workshops. Cubberley has also become a focal point for all art disciplines. Groups who rehearse and perfonn at Cubberley include the EI Camino Youth Symphony, Palo Alto Chamber Orchestra, Palo Alto Philharmonic, Zohar School of Dance, Dance Visions, and many more. There is also a visual artist colony providing professional artists low cost studios to create their \vork, \vhile being able to afford to do so in Palo ,AJtO. The Cubberley theatre also provides a rental space for myriad theatre groups who do not have a home stage of their own. CMR:498:03 Page4of6 Attachment B Sports also take center stage at Cubberley where organized groups and individuals throughout the year play organized soccer, softball, karate, football, table tennis, tennis, Lacrosse, and basketball. Covenant Not to Develop School Sites The Covenant Not to Develop portion of the Agreement was created to "prevent a further burden on the City's infrastructure and in order to preserve a substantial amount of the City's remaining open space." The Covenant prevents the District from: 1) subdividing, 2) selling, or 3) developing sites for non-School District purposes for the term of the Agreement. The covenanted sites now include 7 sites (Jordan, Jane Lathrop Stanford, Walter Hayes, Juana Briones, Addison, EI Carmelo and Greendell). The Greendell site is currently the only covenanted site that is not being used as a school. Through the Covenant, vacant school sites were retained and residents have been greatly served through the continued availability and use of PAUSD-owned athletic fields, supporting a variety of sporting events for all ages. School fields, in addition to programs that are scheduled by PAUSD, are used most frequently by American Youth Soccer Organization (A YSO), California Youth Soccer Association (CYSA), Palo Alto Babe Ruth, Pop Warner, SVSA (adult soccer league), PAASL (adult soccer league), BAWSL (adult soccer league), Little League, girls' softball, American Legion and the Palo Alto Tomahawks Lacrosse teams. P A USD athletic fields are used most heavily between the after school hours of 3:30p.m. and 7 p.m., Monday through Friday. These athletic fields are used by the same organizations on weekends from early morning to dusk. Adults play primarily on Sundays while youth organizations play on both days. The months when the heaviest use occurs are September through November and March through June. AYSO, which has approximately 2,500 participants in the fall, will have thousands of hours of use on elementary and middle school fields. Most recently, the Palo Alto Committee on Athletic Fields has pointed out that Palo Alto does not have adequate athletic fields to meet the identified need. Without the Covenant, this issue would be greatly exacerbated and many of the community teams would be without places to play. EA'tended Dav Childcare ProQram The Agreement as amended provides space at 12 elementary school sites for the purpose of providing City-operated extended day child care services. The City pays PAUSD rent for the sites and in tum subleases them out to day care providers. Ten sites are subleased to Palo Alto COIn..'11unity ChildCare and nvo oth.ers are subleased to two private providers. Over the years, this program has seen steady, continued gro\\rth. Eleven of the sites have expanded from one classroom to two, and the one site that has not expanded, CMR:498:03 Page 5 of6 Attachment B due to lack of available land, has a waiting list. In total, 897 children can be accommodated at these sites, which are currently running near capacity. Revenue to PAUSD The Agreement provides for significant annual revenue to the PAUSD. Since the lease began in January of 1990, the City has paid PAUSD over sixiy million dollars. Revenue from this agreement is now almost equal to 4% of the PAUSD annual budget. RESOURCE IMPACT Extending the Agreement for 10 years will result in costs to the general fund projected to total $69,077,000 for payments to PAUSD, plus an additional estimated $1,800,000 for maintenance and repairs (See Attachment C). POLICY IMPLICATIONS Exercising the option to exiend the Agreement is consistent with policies and programs in the Comprehensive Plan promoting City-PAUSD collaboration and the effective provision of community services. ENVIRONMENTAL REVIEW Extension or re-negotiation of an existing lease and agreement does not constitute a project for purposes of the California Environmental Quality Act (CEQA). ATTACHMENTS Attachment A: Disposition Status of Surplus School Sites as of January 15, 1987 Attachment B: Cubberley Center Program Providers 2003-04 Attachment C: Lease and Covenant Not To Develop Revenue and Expenses 2003-2013 PREPARED BY: WILLIAM W. FELLMAN Manager, Real Property DEPARTMENT HEAD APPROVAL: ~~~~-'::~~::::::::iI~~""""""" .......... =- CITY MANAGER APPROVAL Assistant City Manager cc:PAUSD CMR:498:03 Page 6 of6 Attachment B ATTACHMENT A DISPOSTION STATUS OF SURPLUS SCHOOL SITES AS OF JANUARY 15, 1987 . .:itIIrtor,~.t.m.l.5 ';'. Closure .~ Site Stat.U:5 . ;'slyd1ni lnt9t""es·· .. · . . 6/1'6 Dr'te9= Sord FY84-85 (retail) one, Ross Road Sold FY 85-86 (retail) . . . . 6/1.6 Fremont Hills Leased until -li!!.96~1 th(3) 5~year Qf:lti:on$to r~;'rent adjusted at .end of "e,aI::ii S.ye#rperi ocitopre- !\ta§.'.~ci.m9 r,a.t~:f~·simi 1 ar ·properties-; ,f"At.(S!t,J'las;l"i9htto'terminate with 1 ¥E:aJ'" ,n;trt:il:ein.e-vent sitemL!st besoid; ~Le5:s.e€ha.:so!ftian to purchase; lessee pno¥~'.des ownS!!T'vlces bn66reendellR~opened tohoL!se PAUSn Adul t. Ed \ Special Ed.'sl..111Port. st.aff I F'TFt wardrobe :617£ VEntura. So~,d FY 80-81 to Ci ty of F'. A. 6/78 Terman -. 6179 ,sriand · (2.2A pre-Naylor creditl';:PurchaS'E price de-t:'ENnined ·@r-ec~?tl.!re of investment' . value or' 7S~o:f' f.air market valuE. · Lea-se-pur'cnase 'agre~me~twith .C.l ty ;of P .A. e.ffectiy,e ~Nov. 1981' . (20. ye~l"'s j ;;Basere~t .. of $475 IO(lO . P 1 u~ interest on-princip.aJ.; . ~ ,~ Leased until JlJ~el99J.· w/optionsto r.enew far 1"0' moP"e ~rs; · tur'f . Teased t-oCJty' . Sol dFr 85-8bkef:a.il> 6/79tubberley Le'ases to.be renegotiated to terminat.e b192; · 31I teased ;121 esse!!s 43% ,'tlour'fy-arokerage ZZ'~-'PAUSrf«c::upl-ed . :n ... vac:ant 1i.50f JuneJ996 11 .S ~·s lea'sed to CftylNayl:or · 1 05,~tO{jSFC1.assl"'Qom space 75iQ0'lo 'SF :Spec:i a~F a;'cil iot i es 6/91 .Crescent ParkSol.a. FY ·84--85 {retail ~ S2..SM ... ·$b4'IOQO(N) NlA $9M $11'\ F"Y 6q lE7 $2 .• 1I!l .$.EH. ,OOO{·m SSl,vikfOG FY 86/87 S2.B~ $305,.0'00 on Attachment B 6/81 Ohlone !!:lIas Jordan Unim • PMIA 1 e.x is UHim. P~IAra5t.ra ttl -=Naylor purchase Ls.as~d unt.i 1 6/87; 8 1 esSees i . wi llbe·l"'.eo'id 11'87 +01"'5 ¥I'" ter.m vac4nt; somehoul"'ly use of gym + HPj tUl"'f .nd pool le'a.sed to City sold F'Y82-S3(whol esal e) to Town of Los· Altos Hi' 1 5 $i70,.OOOfY B6/86 -'$5.0,000 .ae';i:H e6lS'?' $2.7:M $.9H Revised 1/15/87 f.'E Attachment B ATT ACHMEl\T}' B II II Exercise/Sports II II Tenants AYSO Soccer Field Adolescent Counseling Services FH BasketballIVolleyball Camps Gyms Artists Studios (21) Ef,U California Karate Academy GAR California Law Revision D2 Jazzercise Pav/Gym Children's International School L1 Keys School Gym Children's Pre-School Center T1 Palo Alto Adult Soccer Field Dance Connection L5 Palo Alto Girls Softball Field Dance Visions L3 PACYSA Field Foothill College Administration I Palo Alto Table Tennis Club Gym Friends of the PA Library Port Palo Alto Tennis Club Courts Neighbor Montessori K3 Palo Alto Tomahawks Lacrosse Field Hua Kuang Chinese Reading Rm H4 Silicon Valley Soccer League Field Jewish Community Center Port Taijiquan Tutelage M4 Office of Emergency Services D4 Traditional Wushu Assocation M4 Palo Alto Preparatory School H2 YMCA Basketball League Gyms Wildlife Rescue V Youth Community Service D3 II Other II Zohar School of Dance L4 Acme Education Center A2,3,6,7 II ~ SA Amphibian/.t<eptiJe Society HI Dance Chinese Com. Cntr Lunch Prg Kitchen Christ Temple Church Pav Academy of Dance Libre DS First Fijian Assembly of God Pav African Dance with Wilfred Mark DS Grossman Academy A2,3,6,7 Congolese Dance with Regine DS Image Film Group Hi Friday Night Ballroom Dancers Pav Innovative Education Center A2 L'ecole de Donse DS Kumon Math and Reading A7 Mayfield Morris & Sword DS Mt. Calvary Baptist Church Hi Mystic Sun Mid-Eastern Dance DS National Traffic Safety Insitute B4 Rocies de Mexico L6 PA Adult School -ESL Testing A3 Red Thistle Dancers DS Senior Friendship Day Aud Rosen Method Movement DS Software Development Forum H-l Saturday Night Ballroom Dancers Pav Theater du Coin M2 II Music II Vineyard Christen Fellowship Aud EI Camino Youth Symphony M4 Music for Children M3 Palo Alto Chamber Orchestra M1 Palo Alto Philharmonic Hi Peninsula Barbershop Chorus M2 Peninsula Women's Chorus M2 Peninsula Piano School MI Attachment B With Inflation ATTACHMENT C Lease & Covenant Revenues and Expenses 2003-2015 (Fiscal Year Basis) ACTUAL Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Revenues Property Rental (long term leases) 1,421,596 1,464,244 1,508,171 1,553,416 1,600,019 1,648,019 1,697,460 1,748,384 1,800,835 1,854,860 1,910,506 1,967,821 2,026,856 Facilities Rental (hourly rental) 793,354 833,022 874,673 918,406 964,327 1,012,543 1,063,170 1,116,329 1,172,145 1,230,752 1,292,290 1,356,905 1,424,750 Cubberley Rental (City office space) 73,000 73,000 73,000 73,000 73,000 73,000 73,000 73,000 73,000 73,000 73,000 73,000 73,000 ITotaf Revenue 2,287,950 2,370,266 2,455,844 2,544,823 2,637,346 2,733,562 2,833,630 2,937,713 3,045,980 3,158,613 3,275,796 3,397,726 3,524,6061 Expenses Payments to PAUSD Lease 3,353,693 3,637,453 3,914,202 4,012,250 4,132,618 4,256,596 4,384,294 4,515,823 4,651,298 4,790,837 4,934,562 5,082,599 5,235,077 Covenant Not To Develop 1,458,069 1,482,886 1,512,544 1,550,432 1,596,945 1,644,854 1,694,199 1,745,025 1,797,376 1,851,297 1,906,636 1,964,041 2,022,962 Child Care Sites 491,758 500,129 510,131 522,910 538,597 554,755 571,397 588,539 606,196 624,381 643,113 662,406 682,278 Utilities (child care sites) 25,927 30,175 29,156 30,778 30,778 31,702 30,315 31,224 31,224 32,161 32,161 33,126 33,126 Subtotal PAUSD 5,329,647 5,850,642 5,966,032 6,116,371 6,298,938 6,487,907 6,680,206 6,880,612 7,086,094 7,298,676 7,516,672 7,742,172 7,973,443 Departmental Expenditures lor Cubberley Lease Management and Maintenance (PWD and ASD) 501,403 526,473 552,797 580,437 609,458 639,931 671,928 705,524 740,801 777,641 816,733 857,569 900,448 Non-maintenance Operating Expense (CSD) 1,448,846 1,521,288 1,597,353 1,677,220 1,761,081 1,649,135 1,941,592 2,038,672 2,140,605 2,247,636 2,360,017 2,478,018 2,601,919 Subtotal Departmental Expenditures 1,950,249 2,047,761 2,150,150 2,257,657 2,370,540 2,489,067 2,613,520 2,744,196 2,881,406 3,025,476 3,176,750 3,335,588 3,502,367 [Total Expenses 7,279,896 7,898,403 8,116,182 8,374,028 8,669,478 8,976,973 9,293,726 9,624,808 9,967,500 10,324,153 10,693,422 11,077,760 11,475,8101 INet (4,991,946) (5,528,138) (5,660,338) (5,829,205) (6,032,133) (6,243,411) (6,460,096) (6,687,096) (6,921,519) (7,165,540) (7,417,626) (7,680,034) (7,951,205)1 Cubberley Opera lions Only Rev 2,287,950 2,370,266 2,455,844 2,544,823 2,637,346 2,733,562 2,833,630 2,937,713 3,045,980 3,158,813 3,275,798 3,397,726 3,524,606 Exp 1,950,249 2,047,761 2,150,150 2,257,657 2,370,540 2,489,067 2,613,520 2,744,196 2,881,406 3,025,478 3,178,750 3,335,588 3,502,367 Net 337,701 322,504 305,694 287,166 266,806 244,496 220,110 193,516 164,574 133,136 99,046 82,138 22,239 Factor 1.173 1.157 1.142 1.127 1.113 1.098 1.084 1.071 1.057 1.044 1.031 1.019 1.006 Cubberley Capital Projects Since 1995-96 Name Number Adopted Year Bud et Appropriated Cubberley Code Roof Repair 19018 647,000 95-96 Cubberley Athletic Field Irrigation Improvements 19905 30,000 98-99 Cubberley Theatre Improvements 19911 120,000 98-99 Cubberley and Children's Theatre Stage Floor Replacement AC04010 50,000 03-04 Cubberley Building I Air Conditioning Replacement PF04012 175,000 03-04 Cubberle Mechanlcel and Electrical U rades PF04010 425,000 03-04 Total 1.647.000 11/20/2003 Cubb Actuals 2003-2015.xI5 Attachment B CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY November 17, 2014 The Honorable City Council Palo Alto, California Adoption of an Ordinance Repealing the Prohibition on Human Habitation of Vehicles (Ordinance No. 5206, Codified as Palo Alto Municipal Code Section 9.06.010) Recommendation Staff recommends that the Council adopt an ordinance repealing the prohibition on Vehicle Habitation (Ordinance No. 5206, codified at Palo Alto Municipal Code Section 9.06.010), enforcement of which has been continuously stayed since its adoption in August 2013, while continuing to monitor conditions and impacts on residents. Executive Summary In the fall of 2013, the City Council responded to complaints from City residents and adopted an ordinance prohibiting people from living in vehicles. The City Council initially delayed enforcement of the ordinance for a six month period to allow for education and outreach, and subsequently delayed enforcement further due to ongoing litigation regarding an ordinance on the same topic in Los Angeles. In June 2014, the U.S. Court of Appeals for the Ninth Circuit determined that the Los Angeles ordinance was unconstitutional. City staff is recommending that the City Council repeal Palo Alto’s ordinance, which has never been enforced. Homelessness and attendant issues will continue to be the focus of the Palo Alto Human Services staff, working in conjunction with Santa Clara County and non- governmental organizations. Background Over the past few years, City Staff have received a number of complaints from residents about persons living in vehicles around town, especially in and near residential neighborhoods. Beginning in 2011, City staff participated in numerous community meetings with a variety of interested people regarding these challenging and complex issues. Meeting participants explored a number of ideas and models, though consensus on solutions proved elusive. In the fall of 2013, the Council took two actions: First, on August 5, 2013, the City Council passed on first reading an ordinance amending the Palo Alto Municipal Code, Chapter 9, to add Section 9.06.010, prohibiting the human habitation of vehicles. In conjunction with adopting the ordinance, the Council, by motion, directed City staff to stay enforcement of the ordinance for six months to allow for public education and outreach regarding the ordinance. The ordinance passed on second reading on August 19, Page 2 2013, and became effective September 19, 2013. At that time, City staff prepared for a period of education and outreach. Second, Council allocated $250,000 to enhance the efforts of Santa Clara County to address housing placement and social services for the unhoused. Desertrain Case In December 2013, Staff learned that a vehicle habitation ban in effect in Los Angeles was the subject of a legal challenge. The case of Cheyenne Desertrain, et al. v. City of Los Angeles, et al., 754 F.3d 1147 (9th Cir. 2014), had been briefed, argued and submitted to the U.S. Court of Appeals for the Ninth Circuit, and a decision was pending. In light of the pending litigation, on December 16, 2013, Council passed a resolution extending the stay of enforcement of the ordinance from February 10, 2014 to a date in the future (either the end of calendar year 2014 or the conclusion of the Desertrain litigation) to allow for additional outreach and further clarification regarding legal requirements governing ordinances prohibiting vehicle habitation. Further Developments Since the Vehicle Habitation Ordinance was first enacted, there have been two developments. First, the City has engaged in social services outreach using $250,000 appropriated by the City Council in the fall of 2013, together with funding provided by the County of Santa Clara for housing subsidies. In February 2014, the County went out to bid for intensive case management providers for projects based in South, Central and North County. The North County (Palo Alto) project received two proposals and in June of 2014 the contract was awarded to Peninsula Healthcare Connections (PHC), a Palo Alto-based non-profit. Existing PHC staff has started the initial work of outreach to homeless individuals identified by North County Alternative Services, a committee comprised of local service providers to the unhoused, the North County District Attorney, the North County Public Defender, the Probation Department, the Palo Alto Police Department and Palo Alto Human Services Staff, and approved for eligibility by the County. In August 2014, PHC hired an intensive case manager specifically for this project and he has continued outreaching to unhoused individuals in the community and working toward housing solutions. Second, the U.S. Court of Appeals for the Ninth Circuit held that the Los Angeles vehicle habitation ordinance was unconstitutionally vague in violation of the First and Fourteenth Amendments. Cheyenne Desertrain, et al. v. City of Los Angeles, et al., 754 F.3d 1147 (9th Cir. 2014). Plaintiffs who prevail in this type of litigation are authorized to seek reimbursement of their attorneys’ fees from defendants. The plaintiffs in the Desertrain litigation have sought $570,445 in attorney’s fees and costs from the City of Los Angeles in connection with their successful challenge to the LA ordinance. The parties are currently litigating the amount of the fee award. Discussion Staff recommends that Council adopt an ordinance (attached) repealing the Vehicle Habitation Ordinance, while continuing to monitor conditions and impacts to residents. The social services Page 3 outreach initiated by Council in August 2013 is underway at this time with the goal of enhancing services to the unhoused in Palo Alto. In addition, in light of the Ninth Circuit’s recent decision in the Desertrain case, many cities’ vehicle habitation ordinances are now subject to legal challenges on similar grounds to that of Los Angeles. While Palo Alto’s ordinance is different from the Los Angeles ordinance and is consistent, in our view, with constitutional requirements, a decision to retain and enforce the ordinance will likely result in litigation that will be both resource intensive and expensive. Accordingly, staff recommends that the City direct its resources towards proactive solutions such as social services and outreach rather than litigation costs. Resource Impact The repeal of an ordinance that has been continually stayed since adoption will incur no additional resource impacts. Environmental Review The proposed ordinance would repeal an ordinance that has never been implemented, and thus would not result in physical environmental impacts requiring analysis under the California Environmental Quality Act (CEQA). See CEQA Guidelines Section 150612(b)(3). ATTACHMENTS:  Attachment A: Ordinance Repealing the Prohibition on Human Habitation of Vehicles (Ordinance No. 5206, codified as Palo Alto Municipal Code Section 9.06.010) (PDF)  Emails From Public (PDF) Department Head: Molly Stump, City Attorney Page 4 NOT YET APPROVED Ordinance No. _______ Ordinance of the Council of the City of Palo Alto Repealing the Prohibition on Human Habitation of Vehicles (Ordinance No. 5206, codified as Palo Alto Municipal Code Section 9.06.010) The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: (a) On August 5, 2013, the City Council passed on first reading an ordinance amending the Palo Alto Municipal Code, Chapter 9, to add Section 9.06.010, prohibiting the human habitation of vehicles. (b) In conjunction with adopting the ordinance, the Council, by motion, directed City staff to stay enforcement of the ordinance for six months to allow for public education and outreach regarding the ordinance. The ordinance passed on second reading on August 19, 2013, and became effective September 19, 2013. At that time, City staff prepared for a period of education and outreach. Enforcement of the ordinance was stayed through February 10, 2014. (c) In June 2014, the U.S. Court of Appeals for the Ninth Circuit held that the Los Angeles vehicle habitation ordinance was unconstitutionally vague in violation of the First and Fourteenth Amendments. Cheyenne Desertrain, et al. v. City of Los Angeles, et al., Case No. 11- 56957 (9th Cir. June 19, 2014). (d) Since initial passage of the ordinance, the City has engaged in social services outreach using $250,000 appropriated by the City Council in the fall of 2013, together with funding provided by the County of Santa Clara for housing subsidies. SECTION 2. Section 9.06.010 of Chapter 9.06 of Title 9 (Public Peace, Morals, and Safety) of the Palo Alto Municipal code is hereby repealed in its entirety. // // // // // // 1 NOT YET APPROVED SECTION 3. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney City Manager ____________________________ Director of Administrative Services 2 Carnahan, David from: Sent: To: Subject: Hello Aram, et al, .. ,·~ . Bhushans@aol.com Tuesday, November 11, 2014 10:23 PM GlTX OF PALO All.·ll. CA Cl1 Y CLERK'S OFFIG:E ·1 ~ NOV I 2 AH 8: 0 I abjpd1@gmail.com; efilseth@gmail.com; VoteCoryWolbach@gmail.com; lydiakou@gmail.com; earwopa@yahoo.com; Kniss, Liz (internal); rnorse3@hotmail.com; dminkler@dminkler.com; jkfredrich@gmail.com; jrosen@da.sccgov.org; jay.boyarsky@da.sccgov.org; Stump, Molly; molly.o'neal@pdo.sccgov.org; J.J.Kapp@pdo.sccgov.org; stb_discussion@googlegroups.com; Council, City; kenneth.dauber@gmail.com; tom.dubois@gmail.com; timothygray@sbcglobal.net; t.ciampi@hotmail.com; paloaltolife@gmail.com; Keene, James; Klein, Larry; dryan@scscourt.org; ppennypacker@scscourt.org; rpichon@scscourt.org; mgreenwood@scscourt.org; smanley@scscourt.org; gsaldivar@scscourt.org; dprice@padailypost.com; bkenny5678 @gmail.com; bkerr@padailypost.com; aflint@scscourt.org; miguel.rodriguez@pdo.sccgov.org; jgreen@dailynewsgroup.com Re: Mayor defends stance on public homeless feeding Looks like serving pizza to the homeless is NOT ILLEGAL, mostly because the pizza parlor that supplied the pizza had to have a commercial food license anyway, in light of the food being prepared by a commercial establishment, any charges against those who are giving food to the homeless will be dropped. I think one could also hand out fresh fruit, like apples, bananas and oranges without the threat of arrest. On a more prosaic note, I have copied a Press Release about a local ACLU event where the featured speaker is journalist Chris Hedges. Hope you all will consider attending on Monday, Nov. 24, 2014 at 7 P.M. Topic is: the Loss of Constitutional Rights in America. See below: PRESS RELEASE FOR IMMEDIATE RELEASE FROM: ALICE SMITH-Mid-Peninsula Chapter C?f the ACLU INQUIRIES: 650-283-2822 JOURNALIST CHRIS HEDGES TO SPEAK IN PALO ALTO on LOSS OF CONSTITUTIONAL RIGHTS IN AMERICA The distinguished journalist, Chris Hedges, will speak on November 24, 2014 at 7:00 pm at the First United Methodist Church, 625 Hamilton Avenue, Palo Alto, on the National Defense Authorization Act which concerns the indefinite detention of Americans without charge or trial and the loss of constitutional rights over which Hedges, Norm Chomsky and six other plaintiffs sued the Obama Administration. Hedges' talk is hosted by the Mid-Peninsula Chapter of the ACLU of Northern California and co-sponsored by the Peninsula Peace and Justice Center and the California Chapter of the Council on American-Islamic Relations. The event is free and open to the public. Chris Hedges was awarded the Pulitzer Prize for Journalism in 2002, as a member of the team of journalists for their global terrorism coverage. Hedges also received the Amnesty International Global Award for Human Rights that same year. He has authored 12 books including: Death of the Liberal Class {2010); Days of Destruction, Days of Revolt" co-authored with cartoonist Joe Sacco (2012) ; I Don't Believe in Atheists (2008); American Fascists: The Christian Right and the War in America (2008). A collection of his Truthdig Columns, The World As It is: Dispatches on the Myth of Human Progress (2011) was published by Nation Books. Truthdig has provided the following biographical information: Hedges previously spent nearly two decades as a foreign correspondent in Central America, the Middle East, Africa and the Balkans. He has reported from more than 50 countries and has worked for The Christian Science Monitor, National Public Radio, The Dallas Morning News and The New York Times, for which he was a foreign correspondent for 15 years. Hedges was part of the team of reporters at The New York Times awarded a Pulitzer Prize in 2002 for the paper's coverage of _ global terrorism. He also received the Amnesty International Global Award for Human Rights Journalism in 2002. The Los Angeles Press Club honored Hedges' original columns in Truthdig by naming the author the Online Journalist of the Year in 2009 and again in 2011. The LAPC also granted him the Best Online Column award in 2010 for his Truthdig essay "One Day We'll All Be Terrorists". Hedges is a senior fellow at The Nation Institute in New York City. He has taught at Columbia University, New York University, Princeton University and The University of Toronto. He currently teaches prisoners at a maximum-security prison in New Jersey. Hedges began his career reporting on the Falkland War from Argentina for National Public Radio. He went on to cover the war in El Salvador and Nicaragua for five years, first for The Christian Science Monitor and National Public Radio and later The Dallas Morning News. Following six years in Latin America, he took time off to study Arabic and then went to Jerusalem and later Cairo. He spent seven years in the Middle East, most of them as the bureau chief there for The New York Times. He left the Middle East in 1995 for Sarajevo to cover the war in Bosnia and later reported the war in Kosovo. Afterward, he joined the Times' investigative team and was based in Paris to cover ai~Qaida. He left the Times after being issued a formal reprimand for denouncing the Bush administration's invasion of Iraq. Hedges holds a B.A. in English literature from Colgate University and a Master of Divinity degree from Harvard University. He was awarded an honorary doctorate from Starr King School for the Ministry in Berkeley, Calif. Hedges speaks Arabic, French and Spanish and studied classics, including ancient Greek and Latin, at Harvard. In addition to writing a weekly original column for Truthdig, he has written for Harper's Magazine, Le Monde, The New Statesman, The New York Review of Books, Ad busters, Granta, Foreign Affairs and other publications. He lives in Princeton, New Jersey In a message dated 11/11/2014 8:17:37 P.M. Pacific Standard Time, abjpd1@gmail.com writes: · - Hi Eric, I hope you are doing well. Now that you will be on our city council, starting in January 2015, and given your open support for Palo Alto's draconian, -and arguably unconstitutional vehicle habitation ordinance, I am curious what you think about the below article ( in today's Mercury News). Of course, it would be great if others jumped into this critical conversation as well. Will We continue to allow our politicians to demonize and marginalize the most vulnerable among us? All views welcome. Aram Follow the link below to view the article. sanjosemercurynews.ca.newsmemory.com/publink.php?shareid=075e40045 Sent from my iPhone You received this message because you are subscribed to the Google Groups "Stop the Ban Discussion" group. To unsubscribe from this group and stop receiving emails from it, send an email to STB Discussion+unsubscribe@googlegroups.com. For more options, visit https://groups.google.com/d/optout. Carnahan, David From: Sent: To: Subject: Hi Eric, I hope you are doing well. . ~ · .. : ~ (~lTY Of ~ALO AtJO, CA €tTY !tiLERK'S eTP:FieE Aram James <ahjpd1@gmail.com> I 4 NOV 12 AH S: 91 Tuesday, Nov_ember 11, 2014 8:18 PM efilseth@gmail.com; VoteCory Wolbach; lydiakou@gmail.com; mark weiss; Kniss, Liz (internal); Robert; Doug Minkler; John Fredrich; jrosen@da.sccgov.org; jay.boyarsky@da.sccgov.org; Stump, Molly; molly:o'neal@pdo.sccgov.org; J.J Kapp; Stop the Ban Google Discussion Group; Council, City; Ken Dauber; Tom DuBois; Timothy Gray; Tony Ciampi; paloaltolife; Keene, James; Klein, Larry; Deborah Ryan; ppennypacker@scscourt.org; rpichon@scscourt.org; mgreenwood@scscourt.org; smanley@scscourt.org; gsaldivar@scscourt.org; dprice@padailypost.com; Bruce. Kenyon; Breena Kerr; aflint@scscourt.org; miguel.rodriguez@pdo.sccgov.org; jgreen@dailynewsgroup.com Re Mayor defends stance on public homeless feeding Now that you will be on our city council, starting in January 2015, and given your open support for Palo Alto's draconian, and arguably unconstitutional vehicle habitation ordinance, I am curious what you think about the below article (in today's Mercury News). Of course, it would be great if others jumped into this critical conversation as well. Will we continue to allow our politicians to demonize and marginalize the most vulnerable among us? All views welcome. Aram Follow the link below to view the article. sanjosemercurvnews.ca.newsmemory.com/publink.php?shareid=075e40045 Sent from my iPhone Carnahan, David From: Sent: To: Cc: Subject: Norman Beamer <nhbeamer@yahoo.com> Monday, November 10, 2014 3:36 PM City Mgr; Council, City Sullivan, Jessica No Overnight Parking On University Avenue CITY @f PALO ALJQ, .CA QH'¥ tlsERifi ii*flil lit NOV I 0 PH 3: 52 I have received inquiries from residents along University Avenue about the No Overnight Parking program (NOP) on the segment of University between Lincoln and Crescent. On October 6, the City Council approved a resolution extending the program to that segment of University, assuming the petition process provided for in that resolution is followed. The City Manager's report supporting that resolution stated that "University Avenue in particular has experienced noticeable parking impacts in recent months" (p. 4). However, apparently city staff is only considering implementing NOP on the North Side of University. If the program is so limited, the overnight parking problem on University will be exacerbated. Please direct staff to implement the NOP in accord with the resolution, extending NOP to both sides of University Norman H. Beamer ·--· · .. ' .. ~ ... --·: Carnahan, David t;t:JY Of ~ALO ALTS· CA unY CLERK'S OFFICE From: Sent: To: Cc: Subject: Norm, Keene; James I~ NOV 12 AM 8: 03 Monday, November 10, 2014 6:55 PM Norman Beamer Council, City; Sullivan, Jessica; Svendsen, Janice; Gitelman, Hillary; Rodriguez, Jaime Re: No Overnight Parking On University Avenue Will look into this and loop back. Jim James Keene City Manager Palo Alto, California Sent from my iPhone On Nov 10, 2014, at 3:36 PM, Norman Beamer <nhbeamer@yahoo.com> wrote: I have received inquiries from residents along University Avenue about the No Overnight Parking program (NOP) on the segment of University between Lincoln and Crescent. On October 6, the City Council approved a resolution extending the program to that segment of University, assuming the petition process provided for in that resolution is followed. The City Manager's report supporting that resolution stated that "University Avenue in particular has experienced noticeable parking impacts in recent months" (p. 4). However, appa'rently city staff is only considering implementing NOP on the North Side of University. If the program is so limited, the overnight parking problem on University will be exacerbated. Please direct staffto implement the NOP in accord withthe resolution, extending NOP to both sides of University Norman H. Beamer City of Palo Alto (ID # 5296) City Council Staff Report Report Type: Action Items Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: College Terrace Market Title: Approval of the Proposed Grocery Store Tenant (College Terrace Market) Within PC 5069 (College Terrace Centre) Based on the Finding that the Proposed Grocery Tenant Would Likely be Comparable in Quality of Products and Services as JJ&F as it Existed and Operated on December 7, 2009 at 2180 El Camino Real From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council consider the attached information submitted regarding the proposed grocery store tenant for the development at 2180 El Camino Real and approve the tenant as likely to be comparable in quality of products and service to the former JJ&F market as it existed and operated on December 7, 2009. Executive Summary As a key element of the community benefit package for the Planned Community (PC) zoning ordinance approving a new mixed-use development at 2180 El Camino Real in early 2010, the City Council required that the project include a neighborhood serving grocery store. The ordinance made the grocery tenant subject to City approval, stating specifically: “The grocery tenant, if it is a party other than John Garcia (DBA JJ&F), shall be subject to the prior approval of the City of Palo Alto,” and further stating that the City’s approval: “shall not be withheld unless the City reasonably finds that such proposed grocery tenant is not likely to be comparable in qualify of products and service as JJ&F as it existed and operated on December 7, 2009.” (The PC zoning ordinance is provided as Attachment A.) City of Palo Alto Page 2 In August 2014, the project applicant proposed a grocery tenant, J&A Family Market, owned by James Smailey, a member of the development team. The City Council considered this tenant at a public meeting on August 11, 2014, and adopted a motion indicating that the applicant had not submitted sufficient information for the City to reasonably find that the proposed grocery tenant is likely to be comparable in quality of products and services as the former JJ&F Market as it existed and operated on December 7, 2009. In early November 2014, the development team submitted additional information, including an un- redacted lease between the property owner and J&A Family Market, a lease guarantee, and information about a newly proposed Grocery Operations Officer, Uriel Chavez, who would operate the market under the name College Terrace Market. (See Attachments B and C.) To supplement these materials, City staff requested further information regarding Mr. Chavez’s recent work experience, an agreement between Mr. Chavez and J&A Family Market, and some form of financial assurance that a grocery would remain in operation at the site even if the current proposed tenant were to be unsuccessful. Additional materials were provided immediately prior to publication of this staff report and are attached as Attachments D, E, F, and G. Background On January 11, 2010 the City Council approved PC Ordinance 5069 for a new mixed use development at 2180 El Camino Real. The approved Planned Community development consisted of 57,900 square feet of floor area to be developed within three new buildings over a two level below grade parking structure. The approval included 8,000 square feet for a grocery store, 5,580 square feet of other ground floor retail space, and 38,980 square feet of office space. Eight below-market-rate residential apartment units were also approved. The provision of a neighborhood grocery store on the property was one of the primary public benefits of the project. At the time of the original project approval, it was understood that the grocery store that operated on the property at that time, JJ&F, would continue its operation in the new project once it was built. While the developer requested JJ&F to return, John Garcia, the individual that represented JJ&F, has declined to return as the grocery operator at this site. This placed the applicant in the position to find an alternate grocery tenant that is comparable in quality of products and services as JJ&F as it existed and operated on December 7, 2009. The PC Ordinance contains a series of Council created safeguards to ensure that a viable grocery store is incorporated into the project and continues operating during the project’s useful life. Pursuant to item #3 of the Special Limitations on Land Uses from the PC ordinance, on January 2, 2014 the applicant provided staff with a lease agreement for a new grocery tenant. The City Attorney signed off on the form of the lease agreement, but staff requested more information on the grocery store tenant. The proposed tenant, J&A Family Market, is owned by James Smailey, a member of the project’s development team. (The tenant is now proposing to do business as College Terrace Market, and has an agreement with an experienced grocery operator.) City of Palo Alto Page 3 Mr. Smailey does not have prior experience running a grocery store, and when the City Council reviewed the materials submitted by J&A Family Market in August 2014, the Council found the information insufficient to make the required finding that the tenant would offer a comparable quality of products and service to JJ&F. The Council’s finding followed public comments and discussion about the tenant’s unwillingness to specify the names of personnel with grocery experience or terms of the tenant’s lease. City staff and members of the public also pointed out that Ordinance No. 5069 is silent about what would happen if the grocery store goes out of business or diminishes in quality sometime after the project is constructed. Such an unfortunate event would constitute a violation of the City’s PC ordinance, but the ordinance itself does not specify a particular remedy or fine. In this situation the City would have to fall back on the traditional code enforcement remedies (fines and administrative penalties). Discussion Based on the information submitted by the development team in August and November, staff believes the applicant is proposing a grocery store with products and service comparable to JJ&F, and that the only outstanding issue is whether the grocery will be a financial success and remain in operation, unlike other small grocery stores in the area that have failed. In August, this concern was accentuated by the proposed tenant’s unwillingness to share information about the personnel with grocery experience who would be engaged to help operate the business, and the tenant’s unwillingness to share the lease terms. The development team was also unwilling to provide any financial assurance that a grocery tenant would remain in operation even if Mr. Smailey were unsuccessful at launching or maintaining his business, indicating only that this would violate (undisclosed) terms of the project financing. With the new materials submitted in early November 2014, the development team is now proposing a Grocery Operations Officer from a family that has opened and developed small markets throughout Northern California. The proposed Grocery Operations Officer, Uriel Chavez, has direct experience in the grocery business, although he has not worked in the business since 2009 or 2010. The materials submitted in early November 2014 also include an un-redacted lease indicating that J&A Family Market will pay monthly rent of $22,500 after the first six months of free or reduced rent, as well as expenses. In addition, the landlord has guaranteed the grocery store rent to the real estate lender for the term of the lease, and has provided the City with a letter proposing a financial penalty of $11,250 per month if the grocery store goes out of business and is not replaced within six months.1 If the City Council approves the tenant, staff could 1 The City’s Municipal Code (Chapter 1.12 & 1.16) allows the City to establish a penalty schedule, which currently (effective May 12, 2014) specifies a $500 penalty for zoning violations. This has been interpreted as $500/day, an interpretation that can be made explicit via upcoming amendments to the PC ordinance. City of Palo Alto Page 4 execute an agreement implementing this additional condition-specific penalty as a further incentive to keep the grocery store in operation. The Council may also wish to request/impose regular reporting via this agreement. Timeline The project applicant has completed demolition and site preparation, and expects to pull a permit for excavation and grading the week of November 17, 2014. The applicant is seeking City approval of a building permit to commence construction and under the terms of the adopted PC ordinance and subsequent extensions, must commence construction by the end of December, 2014. The City’s approval of a grocery tenant is a prerequisite of building permit issuance. Policy Implications The College Terrace Center project was approved by PC Ordinance 5069 in January of 2010. Environmental Review The College Terrace Center project was reviewed pursuant to the California Environmental Quality Act (CEQA) prior to its approval. The current decision regarding a specific grocery tenant would not alter the project as originally approved or analyzed, and no further review is needed. Attachments:  Attachment A: PC Ordinance 5069 (PDF)  Attachment B: Applicant's Narrative, November 3, 2014 (PDF)  Attachment C: Applicant's College Terrace Market Exhibits (PDF)  Attachment D: Tenant Support Letter (PDF)  Attachment E: Uriel Chavez Operating Agreement, November 4, 2014 (PDF)  Attachment F: Uriel Chavez Resume (PDF)  Attachment G: Penalty Agreement (PDF) Attachment A (d) The ARB, after a duly noticed public hearing fo~ld. on November 5, 2009, reviewed the project design and recommended that the City Council approve the project with associated draft conditions of approval 'Exhibit B.' ( e) The PTC, after a duly noticed public hearing heid on December 2, 2009, confirmed their approval of the project and conditions of approval (Exhibit B). (f) The City Co:uncil, after a duly noticed public hearings held on December 7, 2009, and after due consideration of the proposed proje.ct, the Mitigated Negative · Declaration, the analysis of the project by City staff, and the modification of the proposed conditions recommended by the PTC and the ARB, finds that the proposed Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth. (g) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow for the Project; and (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section ( 4)( c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Comprehensive Plan (Goals, Policies and proposed designation of Mixed Use for the Subject Property) and are compatible with existing and potential uses on adjoining sites or withiri the general vicinity. SECTION 2. Section 18.08.040 of the Palo Alto Municipal Code, the "Zoning Map," is hereby amended by changing the zoning of Subject Property from "CN Neighborhood Commercial" to "PC Planned Community 5069." SECTION 3. The City Council hereby finds with respect to the Subject Property that the project (the "Project") as depicted on Development Plans. dated October 22, 2009, incorporated by reference, comprises a mixed-use development that includes the following components: - (a) The replacement of 18,028 square feet of existing commercial space with 57,900 square feet of new commercial and residential space. The conunercial space would include 8,000 square feet for a grocery store, 5,580 square feet of other ground floor retail space, and 38,980 square feet of office space; (b) Eight (8) residential below-market-rate (BMR) units, comprising 5,340 square feet; (c) Underground parking garage containing 216 parking spaces on two levels; (d) Surface parking lot accommodating 11 parking spaces; 2 100114 syn 8261209 ·, ( e) 24 on-street parking spaces around the site's perimeter; (f) A landscaped plaza at the comer of Staunton Court and Oxford Avenue; (g) Removal of street trees along Staunton Court, and Oxford and College Avenues. and planting of new street trees within the sidewalk area; (h) Removal and replacement of some or all street trees along El Camino Real in tree wells; (i) Automobile driveways on El Camino Real, Oxford Avenue and Staunton Court providing access to parking lots and an area for loading and deliveries. Access to the below grade parking would be provided from the El Camino Real driveway. SECTION 4. The Development Plan dated October-22, 2009, and any approved supplemental materials, for the Subject Property, as submitted by the applicant pursuant to Palo Alto Municipal Code Section (PAMC) 18.38.090, shall. be subject to the following pennitted and conditional land uses and special limitations on land uses, development standards, parking and loading requirements, modifications to .the development plans and provisions of public benefits outlined below, and conditions of project approval, attached and incorporated as "Exhibit B". (a) Pennitted and Conditionally Permitted land uses shall be allowed and limited as follows: 100114 syn 8261209 Pennitted Uses (subject to the limitations below under Section 4Cb): (1) Multifamily Residential (2) Professional and General Business Offices (excluding medical offices) (3) Retail Services (excluding liquor stores) (4) Eating and Drinking Services (excluding drive-in and Take-out services) (5) Personal Services Conditionally Pennitted Uses: (1) Farmers Markets (2) Businesses that operate or have associated activities at any time between the hours of 10:00 p.m. and 6:00 a.m. (such businesses shall be operated in a manner to protect residential properties from excessive noise, odors, lighting, or other nuisances from any source during those hours) The following conditionally pennitted uses are only pennitted within the areas designated as office ·space on the development plan: · (1) Banks and Financial Services (2) . Commercial recreation (3) Private clubs, Lodges, and Fraternal Organizations 3 (b) Special limitations on land uses include the following: (1) A grocery store, with an area of at least 8,000 square feet, shall exist . within the development for the useful life of the improvements; · (2) The grocery store shal_l be a neighborhood serving grocery store that provides all the typical grocery store products and services of a neighborhood serving store such that it shall not become a convenience mart facility; (3) A signed lease for the grocery store, enforceable against the tenant and approved by the City Attorney, shall be submitted prior to issuance of any building permits on the site. ( 4) The grocery tenant shall occupy and begin operations prior to any office tenant occupancy. · (5) The below-market rate housing shall be occupied not later than 120 days after the first occupancy of the office building. No more than 50% of the . office space shall be occupied prior to occupancy of the housing. (6) The grocery tenant, if it is a party other than John Garcia (DBA JJ&F), shall be subject to the prior approval of the City of Palo Alto and shall not be withheld unless the City reasonably finds that such proposed grocery tenant is not likely to be comparable in quality of products and service as J J &F as it existed and operated on December 7, 2009. (7) The grocery store space shall remain in continuous operation as a grocery store. "Continuous shall be defined to include brief closure for ordinary business purposes." (8) No medical office shall be permitted within the development; , (9) The office uses within the project shall not exceed 38,980 square feet; (10) The 5,580 square feet of area designated as "Other Retail" on the development plan shall not be converted to grqund floor office space; and (11) The "Other Retail" space may be occupied by retail uses, personal service use, or eating and drinking services only. (12) Use of the outdoor market area as shown on the project plans as being 2,447 square feet shall be limited to an open air market for grocery related uses only. (c) Development Standards: Development Standards for the site shall comply with the standards prescribed for the Planned Community (PC) zone district (Chapter 18.38), and as modified in Section 4(a) and (b) above. (d) Parking and Loading Requirements: 100114 syn 8261209 In addition to the parking and loading requirements specified in P AMC 18.52 and 18.54, a Transportation Demand Management (TDM) Program has been incorporated in the Development Plan to allow reductions in parking requirements. The TDM is shown in 'Exhibit C' and is attached to this document 4 (b) The design is compatible with the immediate environment of the site in that the proposed buildings are designed to meet the El Cam~no Real Design Guidelines and be sensitive to the lower scale residential neighborhood beyond; (c) The design is appropriate to the function of the project in that the project has been designed to be pedestrian friendly, provide additional bike and vehicular parking, attract people.to the project and provides unique amenity spaces; ( d) In areas considered by the board as having a unified design character or historical character, the design is compatible with such character. In this case, the building is not within an area of unified design character or historical character; (e) The design promotes hannonious transitions in scale and character in areas between different designated land uses in that the project includes the proposal to locat~ the two story residential component across from the existing residential uses on Staunton Court to create a transitional buffer between the existing residential uses and the proposed commercial buildings; (t) The design is compatible with approved improvements both on and off the site in that the proposed buildings and other project improvements would blend well with the existing off site improvements by proposing to break up the proposal in to multiple buildings with varying heights to control the mass and scale; (g) The planning and siting of the various functions and buildings on the site create an internal sense of order and provide a desirable environment for occupants, visitors and the general community in that the proposed design reduces neighborhood traffic by placing the garage entry on El Camino, improves the economic viability of the grocery market by placing it at the visible comer of El Camino, brings light into the below grade parking structure with a large open bamboo garden, locates the commercial buildings away from existing residential uses, and provides landscaped open spaces; (h) The amount and arrangement of open space are appropriate to the design and the function of the structures in that several open spaces are provided to accommodate the various uses that may occur at the site. These spaces include . the garden square at the comer of Staunton Court and Oxford A venue, the roof top gazebo at the vegetated green roof and the arcade and open area at the comer of Staunton Court and College Avenue; (i) SuffiCient ancillary functions are provided to support the main functions of the project in that the proposal includes a large trash storage area, ample areas for bike parking, and an underground vehicle parking ·area; G) Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles in that the driveway to the underground garage 6 100114 syn 8261209 and incorporated by reference. The final TDM plan shall provide for implementation and monitoring as provided in the conditions of approval. ( e) Modifications to the Development Plan and Site Development Regulations: Once the project has been constructed consistent with the approved Development Plan, any modifications to the exterior design of the Development Plan or any new construction not specifically pennitted by the Development Plan or the site development regulations contained in Section 4 (a) ~ ( c) above shall require an amendment to this Planned Community zone, unless the modification is a minor change as described in PAMC 18.76.050 (b) (3) (e), in which case the modification may be approved through the Minor Architectural Review process. Any use not specifically pennitted by this ordinance shall require an amendment to the PC ordinance, except that conversion of designated office space to retail use shall not reqµire amendment. (f) Public Benefits: Development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The Project includes the following public benefits that are inherent to the Project and in excess of those required by City zoning districts: (1) Provision of an 8,000 square foot neighborhood-serving grocery market. (2) 4 Below Market Rate housing units. (3) A contribution of $5,000 dollars for tree planting within the El Camino Real median. (g) · Development Schedule: The Project is required to include a Development Schedule pursuant to PAM C 18.38.100. The approved Development Schedule is set forth below: Construction of the Project shall commence on or before December 2012, unless extension(s) are granted. The total tinie for project construction and occupancy of spaces is three (3) years,. or by December 2015. SECTION 5. Council approves the Architectural Review·application, finding that: (a) The design .is consistent and compatible with applicable elements of the city's Comprehensive Plan as set forth in Resolution No. 9012, Adopting an Amendment to the Comprehensive Plan Land Use Map by Changing the Land Use Designation for 2180 El Camino Real From Neighborhood Commercial to Mixed Use. The proposed mixed use development containing office, residential, retail and commercial uses is consistent with the Mixed Use land use designation; · 5 J.00114 syn 8261209 has been designed such that vehicles existing the garage are level with the sidewalk such that the drivers view of pedestrians is not impeded, extra bike and vehicle parking spaces have been provided and there are pedestrian pathways provided to allow access through the project; (k) Natural features are appropriately preserved and integrated with the project. The site is already developed and contains some mature trees that would be removed to accommodate the proposed podium over the below grade parking. The trees to be removed will be replaced with new plantings including approximately 41 new street trees around the perimeter of the project, a bamboo garden that would grow up through the center of the parking structure, various potted plantings throughout . the project , and trees and plantings within the propo.sed garden square. (1) The materials, textures, colors and details of construction and plant material are appropriate expression to the design and function in that the proposal includes many detail elements to ensure the proposed architectural style is appropriately expressed; (m) The landscape design concept for the site, as shown by the relationship of plant masses, open space, scale, plant forms and foliage textures and colors create a desirable and functional environment in that landscape elements have been incorporated wherever they could over the concrete podium. There are planters at · entry locations and the fronts of the ·buildings~ there is a large bamboo garden growing up through the center of the project, a vegetated green roof over the grocery store, and a garden square; (n) Plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety which would tend to be drought- resistant and to reduce consumption of water in its installation and maintenance in that the proposal includes many plant species that perform well within this ·environment; ( o) The project exhibits green building and sustainable design that is energy efficient, water conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. The following considerations should be utilized in determining sustainable site and building design: (1) Optimize building orientation for heat gain, shading, daylighting, and natural ventilation; · (2) Design of landscaping to create comfortable micro-climates and reduce heat island effects; (3) Design for easy pedestrian, bicycle and transit access; ( 4) Maximize on site stormwater management through landscaping and permeable paving; · (5) Use sustainable building materials;_ 7 100114 syn 8261209 (6) Design lighting, plumbing and equipment for efficient energy and water use; (7) Create healthy indoor environments; and (8) Use creativity and innovationto build more sustainable environments. (p) The design incorporates many of the above mentioned green building measures including photovoltaic panels on the roof and a green roof. (see LEED and Build It Green checklists, Attaclnnent G) The design is consistent and compatible with the purpose of architectural review, to: (1) Promote orderly and harmonious development in the city; (2) Enhance the desirability of residence or investment in the city; (3) Encourage the attainment of the most desirable use of land and improvements; ( 4) Enhance the desirability of living conditions upon the immediate site or in adjacent areas; and (5) Promote visual environments which are of high aesthetic quality and variety and which, at the same time, are considerate of each other. SECTION 6. Design Enhancement Exceptions (DEEs) are approved as follows: (a) Height Exceptions for the proposed rooftop gazebo arid the architectural signage spire above the grocery store, which would exceed the 35 foot limit by five feet and ten feet, respectively, with an additional seven feet of height for the metal pole atop the spire, rising to 52 feet. (b) Setback Exception to allow portions of the building along Oxford Avenue to encroach into a ten foot setback; specifically, to allow a 7'9" encroaclnnent for the second floor of the grocery store building and parts of the first floor" and 3'6" encroachment for the recessed first floor areas as set forth in the project plans. -(c) DEE Findings: 100114 syn 8261209 ( 1) ·. Th~re are exceptional or extraordinary circumstances or conditions applicable to the property or site improvements involved that do not apply generally to property in the same zone district, in that, although the adjacent parcel on Oxford Avenue is not occupied by a residential use, its zoning is residential and forces the imposition of a more restrictive setback requirement upon a portion of the site. The intent of the more restrictive height and setback regulations is to ensure that the new commercial development is sensitive to the nearby residential uses. Being that the adjacent use is not residential the need for the sensitivity is diminished. · 8 . (2) The granting of these Exceptions will enhance the appearance of the site or structure, or improve the neighborhood character of the project and preserve an existing or proposed architectural style in a manner which would not otherwise be accomplished through strict application of the minimum requirements of Title 18 and the standards for review set forth in this Chapter, in that (a) the height exception for the gazebo would allow the construction of a shade structure that ~ould provide an amenity space on the roof top and this space would provide views over the vegetated roof and would serve to help increase awareness of green roofs; (b) the height exception for the signage spire allows for the provision of a stronger element for the grocery store building to give the building more dominance at the comer, improving the significance of the building in this location; and (c) the setback encroachment improves the design of the streetscape in this location since the project faces the El Camino Real commercial strip and employing a similar urban setback and sidewalk , along Oxford A venue preserves the continuity of the design, such that implementation of a ten foot setback and landscaped yard at this comer would appear odd in relationship to the use of a hotel across the street. (3) The Exception is related to a site improvement that will not be detrimental or injurious to property or improvement in the site vicinity, and will not be detrimental to the public health, safety, general welfare or convenience, in that (a) the height exceptions are for minor architectural elements that improve the architecture, do not contribute to the bulk and mass of the structure, and are not in close proximity to residential uses such that they would have a negative impact upon them; and (b) the setback encroachment occurs opposite a residential zone but no residences would be impacted by encroachment since a hotel is located opposite the grocery store building and the encroaching wall of the grocery ·store building would be across the street from the back side of the_ hotel and even with the encroachment, a generous 14' -5" wide sidewalk would be provided. · SECTION 7. Indemnification. To the extent pennitted by law, the Applicant shall indemnify and hold hannless the City, its City Council, its officers, employees and agents (the "indemnified parties") from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside, or void this ordinance or any pennit or approval authorized hereby for the project, including (without limitation) reimbursing the City its actual attorneys fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its choice. SECTION 8. Acceptance by the applicant. If the Applicant does not accept the Proposed ordinance in writing prior to second reading of the ordinance and within 30 days of the Council's adoption, the question of the appropriate zoning of the Subject Property shall be referred to the Planning and Transportation Commission for their consideration and recommendation, which may include the CN zone, the CN zone plus various overlays, a newly 10 100114 syn 8261209 cr~fted zone applicable to Neighborhood Centers or such other zone as the Commission deems appropriate. . ' SECTION.9. A mitigated negative declaration (MND) for this project was prepared in accordance with the California Environmental Quality Act and circulated for public review for a 30-day period beginning on October 9, 2009. The City Council approved the MND at its meeting of on December 7, 2009. SECTION 10. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: December 07, 2009 PASSED: January 11, 2010 AYES:. BURT, ESPINOSA, HOLMAN, KLEIN, PRICE, SCHARFF, SCHMID, SHEPHERD, YEH NOES: ABSTENTIONS: ABSENT: APPROVED AS TO FORM: (~rv (J.Otptt!N~ '~fp!.. d Director o anmng an Community Environment 100114 syn 8261209 11 :;;"rt::~ 2180 El Camino Real (Project Site) c::J Stanford Lands c:J Zone Districts abc Zone District labels The City oC Palo Alto 2180 El Camino Real Zoning Districts Area Map Exhibit A o-o,. This map la a product of the City of Palo Alto GIS --o· 261'1 Thllld0cl#n"11S.t~1'9p!-.. ll0114l'il'ofbe1tt\lslltl:lt-ct1. TheCKyotPaloNlo•&Wl'llt&no~larMyert0n101919Co:I008Cllrof PllOAllO Exhibit B 2180 El Camino Real Conditions of Project Approval Planning and Transportation Division Conditions 1. The project shall be constructed as depicted on plans dated October 22, 2009 and labeled as 'Approved Plans' and the project, including uses, shall be implemented in accordance with Section 4 of the PC Ordinance (PCS O 6 9), except as modified by these conditions of approval. .. 2. The applicant shall return to the Architectural Review on consent calendar to address the following: a) Provide clarified floor plans for the BMR units (with room names) b) Clarify the site circulation, making it more clear; c) Consider redesign of the exterior stair to the roof top garden, this shall include the elimination of the diagonal banding; d) Consider simplifying the pathway from the exterior stairs to the gazebo area on the roof; · e) Review the banding of the grocery store building, consider one color with the two different finishes; f) Provide details of the transformer fencing; g) Reconsider the tile roofs at the office towers; h) Consider some modification to the grocery walls facing Oxford A venue such as a mural, display windows etc.; i) Provide additional information about the private open spaces and the materiality of it; j) Provide additional infonnation about the bridge, materials, underside, etc.; k) Consider redesign of the striped tower; 1) Reconsider the selection of the Ash tree species; m) Provide additional information about the proposed bamboo (species and height) related to the canted wall;, n) Provide detail to show how the headlights going into the below grade parking will or will· not impact the BMR units; o) Consider redesign of the BMR units such that they are equally as striking as the other buildings in the project; p) Provide more information regarding the plant pallet and conceptual plan for the green roof; q) Provide more infonnation about all screening ~lements and locations; and r) Provide additional information about potted plant~' and the planting at the open area at the center of the project as well as the planting for the trellises located at ·the at-grade parking area. 3. The ARB shall address making the vegetated roof maximally observable t9 owners, occupants, tenants and visitors during normal business hours of the office Exhibit B to PC Ordinance for 2180 El Camino Real building, provided, however, that enjoyment of the vegetative roof shall not interfere with or derogate from the health of the growth thereon. 4. The owners/occupants of the BMR units shall have access to view and enjoy the ·vegetated roof from the gazebo during normal business hours of the office building. 5. The PC shall be inspected at least once every three years for compliance with the PC district regulations and the conditions of the ordinance under which the district was created. 6. The applicant shall comply with applicable provisions of Palo Alto's noise ordin8:flce, both during construction and following construction, for .the life of the project as per Chapter 9 .I 0 of the Palo Alto Municipal Code and pursuant to PAMC Section 18.23.060, requiring an acoustical analysis at the time of building permit issuance, and demonstration and certification that it complies with the Noise Ordinance prior to final inspection. Any new noise producing equipment shall be placed as far away as is feasible from any existing residential sites and as close to El Camino Real as is possible. · 7. The building permit for the building in which the grocery store is to be located shall be pulled concurrently with the building permit for the other non-residential building in the development. 8. The lease for the grocery store shall have, at minimtun, a 20 year initial term. 9. Development Impact fees, totaling approximately $393,684.70, shall be paid prior to issuance of building permits. 10. The applicant shall file and receive. approval of a Preliminary Parcel Map/Parcel Map to combine the four parcels into one. The Parcel Map shall be recorded with the County of Santa Clara prior to. issuance of a demolition permit or building permit. 11. The commercial portions of the project shall be required to attain LEED Silver level of certification through the USGBC. The residential portion of the project shall be required to meet the Build It Green multifamily green building requirements. 12. The following mitigation measures from the adopted Mitigated Negative Declaration are included below as project conditions: a. Mitigation Measure #1: The project shall include automatic night shades or other system such as motion sensors and timers for the office windows at the rear of the building. b. Mitigation Measure #2: Prior to any excavation the applicant shall prepare a site specific Health and Safety Plan that conforms to the requirements of Title 29 of the Code of Federal Regulations (VFR) Section 1910.120, the California General Exhibit B to PC Ordinance for 2180 El Camino Real 2 Industry Safety Order (GISO) and Title 8, California Code of Regulation (CCR) Section 5192. c. Mitigation Measure #3: All employees and subcontractors involved in excavation of potentially contaminated material shall be 40 hour Hazardous Waste Operations and Emergency Response (HAZWOPER) trained and certified. d. Mitigation Measure #4: Soils shall be field screened, tested, and properly profiled during redevelopment to determine appropriate reuse or off site disposal. e. Mitigation Measure #5: The proposed mechanical equipment shall be evaluated to ensure compliance with City of Palo Alto noise limit regulations. Measures such as-equipment selection, equipment placement (location), and or the addition of barriers or enclosures shall be employed to ensure that any new noise producing equipment is in compliance with the City's noise ordinance. f. Mitigation Measure # 6: Cal Trans must approve the proposed curb cut on the El Camino Real for the driveway to the underground parking garage . . g. Mitigation Measure #7: A Transportation Demand Management (TDM) program must be submitted by the applicant and approved by the Transportation Department prior to submittal of a building permit application. The TDM program shall outline parking and/or traffic demand measures to be implemented to reduce parking need and trip generation. Measures may include, but are not limited to: parking cash-out programs, provision of EcoPass (VT A) or Go Pass (Caltrain) for office tenants, shared parking, enhanced shuttle service, car sharing, providing priority parking spaces for car pools/vanpools or green vehicles, vehicle charging stations, additional bicycle parking faci.lities, or other measures to encourage transit use or to reduce parking needs. The program shall be proposed to the satisfaction of the Director, shall include proposed performance targets for parking and /or trip reductions, and indicate the basis for such estimates, and shall designate a single entity to implement the proposed measures. State of California Department of Transportation (Cal Trans) Conditions 13. The design standard of the driveway on El Camino Real (SR 82) must comply with the Highway Design Manual. 14. Work that encroaches onto the State right of way (ROW) requires an encroachment permit that is issued by the Cal Trans. To apply, a completed encroachment permit application, environmental documentation, and five (5) sets of plans clearly indicating State ROW must be submitted to the address below. Office of Permits California DOT, District 4 P .0. Box 23660 Oakland, CA 94623-0660 15. Traffic-related mitigation measures shall be incorporated into the construction plans during the encroachment permit process. Transportation Division Conditions Exhibit B to PC Ordinance for 2180 El Camino Real 3 16. Do not include or add any monument signs, furniture, or other sight obstructions (except trees) in the sight triangle on the northern frontage on El Camino Real. This condition does not prevent the use of produce or flower stalls, or tables and chairs for · grocery store patrons in the space designated as grocery store outdoor space, so long as the location of same is approved by the City's Transportation Department. 17. The TDM shall include at least two car share vehicles. The Final TDM plan monitoring and implementation shall be carried out in accordance with Palo Alto Municipal Code Section 18.52.050 (d) TDM requirements, items (3) and (4) with respect to monitoring, and item (2) with respect to implementation related to performance targets for parking and trip reduction, and single entity to implement the TDM measures. Vehicle Parking 18. ~ Spaces adjacent to walls required to be 9' wide (spaces adjacent to mechanical and utility rooms). Spaces adjacent to poles/columns would be required to be 9.0' wide based on the location of the columns right at the entry to the parking spaces. 19. Northern most HC spaces can also be labeled as "van accessible" if the combined opening is 26.0' (9' -8' "9'). 20. Include wheel stops where appropriate (all spaces that are at grade with pedestrian paths, lobbies, or bike locker areas) Bicycle Parking 21. Illustrate on plans the location of Long Term (lockers) and Short Term bike racks, including total count similar to vehicular parking. Adequate aisles between lockers and racks must be shown. 22. Include details of types of racks to be used (must be approved by City Staff). Plan appears to include inverted-U racks (approved type). 23. All short tenn bicycle parking (racks) need to be located on the street level and be located within 50 feet and distributed near each of the main entrances to the various buildings. (Office racks not in appropriate location) 24. Long term bike lockers are allowed in the garage, but need to be located near employee elevators/stairs (locations appears to be okay, but all lockers should be on the first level of garage). · Building Division Conditions 25. The plans submitted for the building permit shall include the full scope of the construction of the entire building, including all site development, utility installations, Exhibit B to PC Ordinance for 2180 El Camino Real 4 . architectural, structural, electrical, plumbing and mechanical work associated with the proposed project. 26. The applicant shall be required to schedule and attend a pre-application meeting with Building Division staff to review the permit application process and to verify that . the permit application will include all items required by these conditions. 27. Due to the scale of the overall project, the applicant shall be required to utilize a 3rd party plan check agency to conduct the building code plan review. A list of the agencies approved by the City of Palo Alto is available at the Development Center. The City Building plan check fees are reduced by 75% when a 3rd party plan check agency is utilized. 28. The plans submitted for the building permit shall include an allowable floor area cafoulation that relates the mixed occupancies and type· of construction. 29. The plans submitted with the permit application shall include the complete design for disabled access and exiting for the entire site.· Disable access features and exiting within the unimproved offices spaces may be deferred to future tenant improvement permits. 30. The design of building components that are not included in the plans submitted for building permit and are to be deferred shall be limited to as few items as possible. The list of deferred items shall be reviewed and approved prior to permit application. 31. The plans submitted with the building permit application for the shell building shall include the construction of stairs, exit enclosures and exit passageways extending to the exterior of the building. · 32. All entrances and vertical clearances within the parking structures shall have a minimum vertical of 8 feet 2 inches where required for access to the accessible parking spaces per CBC Section 1130B. 33. The location of the building electrical service shall _require prior approval by the Inspection Services Division and shall be located at an exterior location or in a room or enclosure accessible directly from the exterior. 34. · A separate building permit shall be required for the construction of each building. 35. Plans submitted for plan review shall clearly indicate the proposed occupancy group( s) and type of construction of the building. 36. Plans for the residential units submitted for plan review shall comply with the latest requirements from the State of Califomia [HCD 1 I AC] Chapter 11 B of the 2007 Edition of the CBC. Exhibit B to PC Ordinance for 2180 El Camino Real 5 37. Plans for the residential units shall include an acoustical analysis and the plans shall incorporate the report's recommendations needed to show the common walls and floor ceiling assemblies in compliance with the sound transmission control requirements in CBC Section 1207. 38. Normal and accessible parking stalls for the residential rental units must be separated from the stalls of the commercial building and their location must be identified on plans submitted for plan revfow. 39. Plans submi~ed for plan review shall indicate the required number of parking stalls for the residential units and commercial building. Plans shall also indicate number of accessible stalls is in compliance with HCD 1/ AC Chapter I IA for residential units . and with DSA/ AC Chapter 11 B for the commercial facilities. Parking stalls for each use shall be separated in accordance with recommendations of the Planning Division. Fire Dep·artment Conditions 40. The Fire Department requires that the developer have a contingency plan in place to handle any contamination or abandoned underground tanks discovered during excavation. 41. Emergency Contractor must have State HAZ license. 42. Fire Department shall be notified during nonnal business hours at the earliest opportunity in the event of such a discovery. 43. A permit from the Santa Clara County Department of Environmental Health is required for any underground tank removal. 44. 3 nearest Street Hydrants shall be upgraded to Clow Rich Model 76. 45. · Aerial Fire Apparatus access shall be provided for the entire El Camino building Frontage. No overhead cable will be allowed on this side of the building. 46. Site address to be prominently posted on the building. (2001CFC901) Maximum vehicle weight bearing capacity for the podium deck shall be posted. 47. Please contact the Palo Alto Fire Department Training Office at 650-321-5617 if it is at all feasible to allow the Fire Department to use the structures to be demolished for training purposes. 48. A fire sprinkler system shall be provided which meets the requirements of NFPA Standard No. 13, 2002 Edition. (PAMClS.04.160) Fire Spri~er system installations or modifications require separate submittal to the Fire Prevention Bureau. (PAMClS.04.083) Exhibit B to PC Ordinance for 2180 El Camino Real 6 49. An exterior bell shall be provided, and an approved audible sprinkler flow alarm to alert the occupant shall be provided in the· interior of the building in an approved location. (2001 CBC904.3 .2) Fire Alarm system installations or modifications require separate submittal to the Fire Prevention Bureau. (PAMC15.04.083) 50. Underground fire supply system installations or modifications require separate submittal to the Fire Prevention Bureau as well as the Public Works Department and the Water/Gas/Wastewater Section of the Utilities Department. (PAMClS.04.083) 51. All sprinkler drains, including those for floor control valves and inspectorl,s test valves, as well as the main drain; shall not discharge within the building. Water discharged from these points shall be directed to an approved landscape location or to the . sanitary sewer system. (99NFPAB, Sec. 5-14.2.4.3) NOTE: Please check with Roland Ekstrand in Utilities for maximum flow capacity of sanitary sewer in the area. Main Drain test discharge flow rate shall be impounded and attenuated to below sanitary sewer capacity before discharge. 52. Elevator car shall be sized for Fire Department gurney access requirements based on gurney dimensions of 24 in. x 84 in. plus a minimum of two emergency response personnel. (2007 Cal. Bldg. Code Sec. 3002.4a) 53. The maximum weight bearing capacity for the podium deck shall be posted. 54. A fire hydrant is required at the intersections of Oxford A ve./Staunton Ct. and College A ve./Staunton Ct. 55. Fire Department ground ladder access to the dwelling units bedroom egress windows shall be provided. 56. When the Main Electrical Shutoff is located in the interior of the building, an exterior shunt trip or other approved means of emergency shutoff shall be provided. Please contact the Building Div. for details. 57. An approved access walkway shall be provided to each bedroom egress/rescue window. 58. Provide Fire Department access across the roof of the 3 story building. 11. If the residential units have a different address than El Camino Real, provide a separate fi~e department connection at the housing building. Public Works Engineering 59. This project must meet the State Regional Water Quality Control Board's (SRWQCB) revised provision C.3. The applicant is required to satisfy all current stonn water discharge regulations and shall provide calculations and documents to verify compliance. The project must also enter into a maintenance agreement with the City to Exhibit B to PC Ordinance for 2180 El Camino Real 7 I IJ ~I 'U ijj I I ll I ~ j· I II ii 'I 11 lj 11 ! guarantee the ongoing maintenance of the permanent C.3 storm water discharge compliance measures. The maintenance agreement shall be executed prior to the first building occupancy sign-off. Offsite property or ROW cannot be used to satisfy the C.3 requirements. Every effort should be made to use natural (non-mechanical) methods of stormwater treatment. The applicant is required to meet with Public Works Engineering (PWE) prior to final ARB to discuss and review the C.3 stormwater treatment plan. 60. The applicant shall meet with PWE prior to final ARB to discuss the shoring system to be used in the construction of the project. Shoring systems must be on private property, out of the right-of-way (ROW) and the use of tie-back systems has specific requirements which will be discussed at the meeting. 61. The applicant shall, at minimum, submit an application for a minor subdivision with the Planning division prior to issuance of building permits. · 62. The street frontages of the development shall be resurfaced (grind and overlay, full width) and the curbs, gutters~ and sidewalks shall be removed and replaced. This work shall be detailed in the offsite improvement plans required for the final map process and it is highly. encouraged that the work takes place near the end of the construction process. 63. The applicant shall install LED streetlights along the frontages of the development. Type, style and location, etc. shall be determined at the time of offsite improvement construction and in coordination and consultation with Palo Alto Utilities Department. 64. Any special surface (i.e. sidewalk) treatments proposed within the ROW shall be reviewed by PWE. 65. The project must be constructed without the use of perimeter or subgrade drains outside the walls of the subgrade structure. In other words, the project shall be constructed "like a boat". 66. Provisions for a grease trap shall be made onsite. 67. The applicant is required to meet with Public Works Engineering (PWE) to verify the basic design parameters affecting grading, drainage and surface water infiltration. The applicant is required to submit a conceptual site grading and drainage plan that conveys site runoff to the nearest adequate municipal storm drainage system. In order to address potential storm, water quality impacts, the plan shall identify the Best . Management Practices (BMP's) to be incorporated into the Storm Water Pollution Prevention Plan (SWPPP) that will be required for the project. The SWPPP shall include permanent BMP's to be incorporated into the· project to protect storm water quality. (Resources and handouts are available from Public Works -Engineering. Specific reference is made to Palo Alto's companion document to "Start at the Source", entitled Exhibit B to PC Ordinance for 2180 El Camino Real 8 "Planning Your Land Development Project"). The elements of the PWE-approved conceptual grading and drainage plan shall be incorporated into the building permit plans. PRIOR TO SUBMITTAL FOR BUILDING PERMIT 68. The applicant shall submit a final grading and drainage plan to Public Works Engineering. This plan shtill show spot elevations or contours of the site and demonstrate the proper conveyance of storm water to the nearest adequate municipal ~torm drainage system. Existing drainage patterns, including accommodation of runoff from adjacent properties, shall be maintained. 69. The proposed development will result in a change in the impervious area of the property. The applicant shall provide calculations showing the adjusted impervious area with the building permit application. A Storm Drainage Fee adjustment on the applicant's monthly City utility bill will take place in the month following the final approval of the construction by the Building Inspection Division. The impervious area calculation sheets and instructions are available from Public Works Engineering. 70. A construction logistics plan shall be provided, addressing at minimum parking, · truck routes and staging, materials storage, and the provision of pedestrian and vehicular traffic adjacent to the construction site. All truck routes shall conform with the City of Palo Alto's Trucks and Truck Route Ordinance, Chapter 10.48, and the route map which outlines truck routes available throughout the City of Palo Alto. A handout describing these and other requirements for a construction logistics plan is available from Public Works Engineering. PRIOR TO ISSUANCE OF BUILDING PERMIT 71. Prior to building permit issuance, a digital copy of the parcel map or final map, in AutoCAD format, shall be submitted to Public Works Engineering and shall confonn to North American Datum 1983 State Plane Zone 3 for horizontal survey controls and NGVD 1929 for vertical survey controls. 72. A detailed site-specific soil report prepared by a licensed soils or gee-technical engineer must be submitted which includes information on water table and basement construction issues. Measures must be undertaken to render the basement waterproof and able to withstand all projected hydrostatic and soil pressures. No pumping of ground water is allowed. In general, Public Works Engineering recommends that structures be constructed in such a way that they do not penetrate existing or projected ground water levels. 73. The applicant is required to paint the "No Dumping/Flows.to Matadero Creek" logo in blue color on a white background, adjacent to all stonn drain inlets. Stencils of the logo are available from the Public Works Environmental Compliance Division, which may be contacted at ( 650) 329 ... 2598. A deposit may be required to secure the return of the stencil. Include the instruction to paint the logos on the construction grading and Exhibit B to PC Ordinance for 2180 El Camino Real 9 drainage plan. Include maintenance of these logos· in the Hazardous Materials Management Plan, if such a plan is part of this project. 74. The project includes the construction of dumpster and recycling areas as part of a food service facility. Regulations require that the dumpster/recycling area be adequately roofed or covered. 75. The project includes the construction of dumpster and recycling areas. City guidelines require that this area be covered. 76. The project includes a loading dock. Design of the loading area shall comply with the Palo Alto Municipal Code (PAMC) Sec. 16.09.032(2). DURING CONSTRUCTION 77. The contractor must contact the CPA Public Works Inspector at (650) 496-6929 prior to any work performed in the public right-of-way. 78. No storage of construction materials is permitted in the street or on the sidewalk without prior approval of Public Works Engineering. 79. The devel.oper shall require its contractor to incorporate best management practices (BMP's) for stormwater pollution prevention in all construction operations, in confonnance with the Storm Water Pollution Prevention Plan prepared for .the project. It is unlawful to discharge any construction debris (soil, asphalt, sawcut slurry, paint, chemicals, etc.) or other waste materials into gutters or stonn drains. (PAMC Chapter 16.09). 80. All construction within the City right-of-way, easements or other property under City jurisdiction shall conform to Standard Specifications of the Public Works and Utility Departments. PRIOR TO FINALIZATION 81. · All sidewalks and curb and gutters bordering the project shall be removed and replaced in compliance with Public Works approved standards. Sec. 12.08.010. 82. All unused driveways shall be removed and replaced with curb and gutter. Sec. 12.08.090. 83. All street surfaces along the frontages of the development shall be removed and replaced (grind and overlay, full-width). 84. The Public Works Inspector shall sign off the building permit prior to the finalization of this permit. All off-site improvements shall be finished prior to this sign- Exhibit B to PC Ordinance for 2180 El Camino Real 10 off. Similarly, all as-builts, on-site grading, drainage and post-developments BMP's shall be completed prior to sign-off. 85. A curb ramp for the disabled will be required at comers of the development. PRIOR TO SUBMITTAL OF PARCEL OR FINAL MAP 86. Subdivision Agreement is required to s~cure compliance with condition of approval and security of improvements onsite and offsite. No grading or building permits will be issued until Final or Parcel Map is recorded with County Recorder. 87. The applicant shall arrange a meeting with Public Works Engineering, Utilities Engineering, Planning, Fire, and Transportation Departments after approval of this map and prior to submitting the improvement plans. These improvement plans must be completed and approved by the City prior to submittal of a parcel or final map. 88. The project subdivision includes significant complexity involving, final map and coordination of infrastructure design and construction. Developer shall appoint a Project Manager to coordinate with City, Public Works and Utility, engineering staff. Public Works will conduct daily and longer tenn communicatiot). with appointed project manager in order to facilitate timely review and approval of design and construction matters. 89. All construction within the City right-of-way, easements or other property under City's jurisdiction shall conform to standard specifications of the Public Works and Utility Department. Sec. 12.08.060. PRIOR TO RECORDATION OF PARCEL/FINAL MAP 90. The subdivider shall post a bond prior to the recording of the final parcel or subdivision map to guarantee the completion of the "on" and "off' site condition(s) of approval. The amount of the bond shall be determined by the Planning, Utilities and Public Works Departments. Public Works Recycling 91. Recommend that enclosure doors open full width of enclosure, service aisle and curbs do not restrict access to enclosure. 92. Enclosure access must not conflict with loading dock. 93. PASCO services enclosure from street and distance from street to enclosures is beyond standard service. Additional charges apply for service beyond 25 feet from street. 94. PASCO will not drive into loading dock to provide service. 95. Tallow bins must be segregated from refuse/recycling area of enclosure to eliminate slip hazardous due to spills. Exhibit B to PC Ordinance for 2180 El Camino Real 11 Electric Utility Engineering Department Conditions 96. The applicant shall comply with all the Electric Utility Engineering Department service requirements noted during plan review. PRIOR TO ISSUANCE OF DEMOLITION PERMIT 97. The Permittee shall be responsible for identification and location of all utilities, both public and private, within the work area. Prior to any excavation work at the site, the Permittee shall contact Underground Service Alert (USA) at 1-800-227-2600, at least 48 hours prior to beginning work. 98. . The Applicant shall submit a request to disconnect all existing utility-services and/or meters including a signed affidavit of vacancy, on the form provided by the · Building Inspection Division. Utilities will be disconnected or removed within ·10 working days after receipt of request. The demolition permit will be issued after all utility services and/or meters have been disconnected and removed. THE FOLLOWING SHALL BE INCORPORATED IN SUBMITTALS FOR BUILDING PERMIT 99. A completed Electric Load Sheet and a full set of plans must be included with all building permit applications involving electrical work. The load sheet must be included with the preliminary submittal. 100. Industrial and large commercial customers must allow sufficient lead-time for Electric Utility Engineering and Operations (typically 8-12 weeks after advance engineering fees have been paid) to design and construct the electric service requested. 101. Only one electric service lateral is permitted per parcel. Utilities Rule & Regulation # 18. 102. This project requires a padmount transformer. The location of the transformer shall be shown on the site plan and approved by the Utilities Department and the Architectural Review Board.· Utilities Rule & Regulations #3 & #16. 103. The developer/owner shall provide space for installing padmount equipment (i.e. transformers, switches, and interrupters) and associated substructure as required by the City. In addition, the owner shall grant a Public Utilities Easement for facilities installed on private property as required by the City. Exhibit B to PC Ordinance for 2180 El CamiJ;lo Real 12 104. The customer shall install all electrical substructures (conduits, boxes and pads)· required from the service point to the customer's switchgear. The design and installation shall be according to the City standards and shown on plans. Utilities Rule & Regulations #16 & #18. 105. The customer shall maintain a minimum of six feet horizontal clearance between the neare~t conductor at rest and any part of the new development. The customer shall meet all California General Order No. 95 clearance requirements. 106. Location of the electric panel/switchboard shall be shown on the site plan and approved by the Architectural Review Board and Utilities Department! 107. All utility meters; lines, transformers, backflow preventers, and any other required equipment shall be shown on the landscape and irrigation plans and shall show that no conflict will occur between the utilities and landscape materials. In addition, all aboveground equipment shall be screened in a manner that is consistent with the building design and setback requirements. · 108. For services larger than 1600 amps, the customer will be required to provide a transition cabinet as the interconnection point between the utility's padmount transformer and the customer's main switchgear. The ~abinet design drawings must be submitted to the Electric Utility Engineering Department for review and approval. 109. The customer is responsible for sizing the service conductors and other required equipment according to the National Electric Code requirements and the City standards. Utilities Rule & Regulation #18. 110. If the customer's ~otal load exceeds 2500kVA, service shall be provided at the primary voltage of 12,470 volts and the customer shall provide the high voltage switchgear and transfonners. Utilities Rule & Regµlation #3. 111. Projects that require the extension of high voltage primary distribution lines or reinforcement of off site electric facilities will be at the customer's expense and must be coordinated with the Electric Utility .. 112. Any additional facilities and services requested by the Applicant that are beyond what the utility deems standard facilities will be subject to Special Facilities charges. The Special Facilities charges include the cost of installing the additional facilities as well as the cost of ownership. Utilities Rule & Regulation #20. COMMENTS ON SUBMITTALS 113. Drawing Al .1 -First Floor & Site Plan Exhibit B to PC Ordinance for 2180 El Camino Real 13 • Transformer Pad size (and working spaces), boxes, conduit size and quantity will be determined after Electric Load Sheets are submitted. A 3 'x5' primary box is required in front of each transformer pad. • Three feet clearance is required on each side of the transformer pad. There shall be eight feet of clearance in the front of the transformer. Transformer shall not be in an enclosed environment. 114. Drawing A2.2-Elevations • Elevation drawings shall show that the project meets California General Order No. 95 clearance requirements. Regional Water Quality Control Plant Conditions. 115. Drain plumbing for parking garage floor drains must be connected to an oil/water separator with a minimum capacity of 100 gallons, and to the sanitary sewer system (PAMC 16.09.032(B)(l 7). 116. Substances containing copper in excess of 2.0 mg/L, tributyl tin in excess of 0.1 mg/L, or chromium in excess of2.0 mg/L may not be added to cooling systems in Palo Alto. These concentrations apply to the substances prior to dilution with cooling system water. (Note: The City of Palo Alto Municipal Code has proposed additions to this requirement which include substances that may not be added to cooling towers containing Zinc in excess of2.0 mg/liter and Molybdenum in excess of2.0 mg/liter.) (PAMC 16.09.115) 117. A flow meter shall be installed to measure the volume of blowdown water from the new cooling tower. Cooling systems discharging greater than 2,000 gallons per day are required to meet a copper discharge limit of 0.25 milligrams per liter. 118. Prior to draining any existing closed loop chilled water, the water in each of the existing loops shaJl be tested for copper, lead, nickel, and zinc. Test results shall be submitted to the Regional Water Quality Control Plant. Treatment of the chilled loop water prior to draining may be required if the pollutant concentrations exceed discharge limitations contained in the P AMC. 119. If thermometers will be installed on the chilled water supply and return piping. Non-mercury thermometers should be used for this application.(This is a recommendation and not required). 120. If the project is located in an area of known groundwater contamination with Volatile Organic Compounds (VOCs) then the plans must include the following procedure for construction dewatering pursuant to (PAMC 16.09.117, 16.09.1 lO(h): 121. Prior to discharge of any water from construction dewatering, the water shall be tested for volatile organic compounds (VOCs) using EPA Method 6011602. The Exhibit B to PC Ordinance for 2180 El Camino Real 14 analytical results of the VOC testing shall be transmitted to the Regional Water Quality Control Plant (RWQCP). If the concentration of any VOC exceeds 5 ug/L (S ppb), the water may not be discharged to the storm drain system and an Exceptional Discharge Permit for discharge to the sanitary sewer must be obtained from the RWQCP prior to discharge. If the voe concentrations exceed the toxic organics discharge limits contained in the Palo Alto Municipal Code, a treatment system for removal of VOCs will also be required prior to discharge to the sanitary sewer. Additionally, any water discharged to the storm drain system must be free of sediment. 122. Connections to the storm drain shall not be permitted for loading docks where chemicals, hazardous materials, grease, oil, or waste products are handled (P AMC 16.09.032). 123. Loading dock drains may be connected to the sewer only if the area in which the drain is located is covered or protected from rainwater run-on by berms and/or grading, and appropriate wastewater treatment approved by the superintendent is provided. Any loading dock area with a sanitary sewer drain shall be equipped with a fail"safe valve, which shall be kept closed during periods of operation. 124. Condensate lines shall not be connected or allowed to drain to the storm drain system (PAMC 16.09.032(b)(8). 125. New dumpster areas shall be covered. The area shall be designed to prevent water run-on to the area and run-off from the area (P AMC 16.09 .106( e) Dumpsters for New and Remodeled Facilities). U ndesignated Retail Space 126. Newly constructed or improved buildings with all or a portion of the space with undesignated tenants or future use will need to meet all requirements that would have been applicable during design and construction. If such undesignated retail space becomes a food service facility the following requirements must be met pursuant to PAMC Section 16.09.103(a) Grease Control Devices for Food Service Facilities: • A grease control device (GCD) shall be installed with a minimum capacity of 750 gallons. The GCD must be sized in accordance with the 2007 California Plumbing Code. The sizing calculation must be submitted with the plans. All grease generating drainage fixtures shall be connected to the GCD. The connection of any dishwashers or pasta cookers to a GCD is prohibited. All large, in-ground interceptors shall have a minimum of three manholes to allow visibility of each inlet piping, baffle (divider) piping and outlet piping to ensure accessibility for inspection, cleaning and removal of all contents. The plans shall clearly indicate the number of manholes on the GCD and a list of all drainage fixtures connecting to the GCD. Two manholes may be allowed under certain conditions only granted by the Environmental Compliance Division of Public Works Department. Exhibit B to PC Ordinance for 2180 El Camino Real 15 • To ensure all food service establishment drainage fixtures are connected to the correct lines, each drainage fixture shall be clearly labeled on the plans. Also a list of all fixtures and their discharge connection, i.e. sanitary sewer or grease waste line, shall be included on the plans. • New buildings constructed to house food service facilities shall include a covered area for a dumpster. The area shall be designed to prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins (used oil containers) serving food service facilities are optional. Any such drain installed shall be connected to a GCD and the sanitary sewer. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area (PAMC 16.09.032b(l6) -'Covered Dumpsters for Food Service Facilities'). • ·The installation of a garbage grinder at any food service facility is prohibited after January l, 2003. The kitchen calU1ot utilize a garbage grinder for food wa~te disposal to the sanitary sewer (PAMC 16.09.103(e) Prohibition Against Garbage Disposals). • Food service facilities shall have a sink or other area for cleaning floor mats, containers, and equipment, which is connected to a grease interceptor and the sanitary sewer (PAMC 16.09.032b(l6) Large Item Cleaning Sink for Food Service Facilities.) \ Public Works Operations-Trees 127. Provide optimum public tree replacement for street trees. The plans shall show and provide a streetscape design with materials on the civil, landscape and irrigation drawings with the following information and·direction: • El Camino Real and Oxford A venue Frontage: Utilize city-approved Silva Cell soil · planter (approx. 30-inch depth) beneath the new sidewalk from comer to corner. Utilities shall be allowed to pass thru the planters. Provide automatic irrigation using a solar smart controller with two bubblers per tree. Utilize Public Works Planting Detail #604. Beneath each tree planting site, auger two 4-6" diameter drain holes 3ft deep below the bottom of the planter basin soil and backfill with medium sand (0.25 to· 0.5 mm) or fine gravel. For El Camino Real, utilize Platanus a. 'Columbia', Columbia Plane, #15 size, spaced 30-feet on center, a minimum of 15-feet from street lights and 10-feet from utilities and driveways. For Oxford A venue, utilize Fraxinus a. 'Autumn Purple', Autumn Purple Ash (or other species as may be agreed upon by the Directors of Planning and Community Environment and Public Works)) #15 (ball and burlap) B&B or 15 gallon minimum size, spaced 25-30 feet on center, a minimum of 15-feet from street lights and 10-feet from utilities and driveways. • Staunton Court and College A venue Frontage: Provide automatic irrigation using a solar smart controller with two bubblers per tree. Utilize Public Works Planting Detail #604. Beneath eachtree planting site, auger two 4-6" diameter drain holes 3ft deep below the bottom of the planter basin soil and backfill with medium sand (0.25 Exhibit B to PC Ordinance for 2180 El Camino Real 16 to 0.5 mm) or fine gravel. Automatic irrigation shall be provided to all street trees as required in landscape design conditions below. On College Avenue, utilize Fraxinus a. 'Autumn Purple', Autumn Purple Ash (or other species as may be approved by the Directors of Planning and Community Environment and Public Works), #15 B&B or 15 gallon minimum size, spaced 25-30 feet on center, a minimum of 15-feet from street lights and 10-feet from utilities and driveways. On Staunton Court frontage, utilize Fraxinus pennsylvanica 'Cimmzam', Red Ash (or other species as may be approved by the Directors of Planning and Community Environment and Public Works), #15 B&B or 15 gallon minimum size, spaced 25-30 feet on center, a minimum of 15-feet from street lights and 10-feet from utilities and driveways. Planning Department Arborist 128. LANDSCAPE PLANS. a. Provide a detailed landscape and irrigation plan encompassing on-and off- site plantable areas out to the curb shall be approved by the Architectural Review Board. A Landscape Water Use statement, water use calculations and a statement of design intent shall be submitted for the project. A licensed landscape architect and qualified irrigation consultant will prepare these plans, to include: i) All existing trees identified both to be retained and removed including street trees. ii) Complete plant list indicating tree and plant species, quantity, size, and locations. iii) Irrigation schedule and plan. iv) Fence locations. · v) Lighting plan with photometric data. vi) Trees to be retained shall be irrigated, aerated and maintained as necessary to ensure survival. vii) All new trees planted within the public right-ofwway shall be installed per Public Works (PW) Standard Planting Diagram #603 or 604 (include on plans), and shall have a tree pit dug at least twice the diameter of the root ball. viii) Landscape plan shall include planting preparation details for trees specifying digging the soil to at least 30-inches deep, backfilled with a quality topsoil and dressing with 2-inches of wood or bark mulch on top of the root ball keeping clear of the trunk by· 1-inch. ix) Automatic irrigation shall be provided to all trees. For trees, PW Detail #513 shall be included on the irrigation plans and show two bubbler heads m0tmted on flexible tubing placed at the edge of the root ball. Bubblers shall not be mounted inside an aeration tube. The tree irrigation system shall be connected to a separate valve from other shrubbery and ground cover, pursuant to the City's Landscape Water Efficiency Standards. Irrigation in the right-of-way requires a street work permit per CPA Public Works standards. x) Landscape Plan shall ensure the baekflow device is adequately obscured with the appropriate screening to minimize visibility (planted shrubbery is Exhibit B to PC Ordinance for 2180 El Camino Real 17 preferred, painted dark gr~en, decorative boulder covering ~cceptable; wire cages are discouraged). b) Mandatory Landscape Architect (LA) Inspection Verification to the City.· The LA of record shall verify the performance measurements are achieved with a separate letter of verification to City Planning staff, in addition to owner's representative for each of the following: i) Tree and Shrub Planting Specifications, including delivered stock, meets Standards in the CPA Tree Technical Manual, Section 3.30-3.50. Girdling roots and previously topped trees are subject to rejection. DURING CONSTRUCTION 129. TREE DAMAGE. Tree Damage, Injury Mitigation and Inspections apply to Contractor. Reporting, injury mitigation measures and arborist inspection schedule (1 .. 5) apply pursuant to TTM, Section 2.20-2.30. Contractor shall be responsible for the repair or replacement of any publicly owned or protected trees that are damaged.during the course of construction, pursuant to Title 8 of the Palo Alto Municipal Code, and city Tree Technical Manual, Section 2.25. 130. GENERAL. The following general tree preservation measures apply to all trees to be retained: No storage of material, topsoil, vehicles or equipment shall be permitted within the tree enclosure area. The ground under and around the tree canopy area shall not be altered. Trees to be retained shall be irrigated, aerated and maintained as necessary to ensure survival. PRIOR TO OCCUPANCY 131. LANDSCAPE INSPECTION. The Planning Department shall be in receipt of written verification that the Landscape Architect has inspected all trees, shrubs, planting and irrigation and that they are installed and functioning as specified in the approved plans. 132. PLANNING INSPECTION. Prior to final sign off, contractor or owner shall contact the city planner (650-329-2441) to inspect and verify Special Conditions relating to the conditions for structures, fixtures, colors and site plan accessories. POST CONSTRUCTION 133. MAINTENANCE. All landscape and trees shall be maintained, watered, fertilized, and pruned according to Best Management Practices-Pruning (ANSI A300w 2001 or current version). Any vegetation that dies shall be replaced or failed automatic irrigation repaired by the current property owner within 3 0 days of discovery. Exhibit B to PC Ordinance for 2180 El Camino Real 18 MONDAY, NOVEMBER 3, 2014 SUBMITTAL: ACTION REQUESTED: City Council Approval of College Terrace Market formerly J&A Family Market. We hereafter refer only to College Terrace Market. At the City Council hearing of August 11 2014, approval of J&A Family Market was deferred, notwithstanding recommended approval by Staff in its Staff Report and analysis. Deferral was based on Council’s request for both: (i) more complete and comprehensive documents including un-redacted copies of the grocery store lease and it’s guaranty; and (ii) demonstration of the quality and experience of the grocery store operator since James Smailey of College Terrace Market did not have extensive experience with the grocery business. We have provided as Exhibit 1 and Exhibit 2 to staff, and for the public record, un-redacted copies of the Grocery Lease and it’s Guaranty. Staff can report on their prior approval of these documents. Also, as requested by City Council, College Terrace Market has put in place the finest possible operating skills and experience for a neighborhood-serving community market by hiring Uriel Chavez to serve as Grocery Operations Officer. Much of this memo discusses the unparalleled accomplishments and experience of Uriel whose resume is attached as Exhibit3. College Terrace Market will also be very well capitalized to assure its long-term success as later discussed. Proposed Grocery Store: College Terrace Market Grocery Operations Officer: Uriel Chavez. Landlord: Chilcote Trust. Project Developer: Brian Spiers Development. Project Architect: Tony Carrasco, Carrasco Associates. Land Use Consultant: Jim Baer, Palo Alto Land Use Consulting. Attachment B I. PROPOSED OWNERSHIP AND OPERATIONS: CAREER DEPTH OF GROCERY SUCCESS AND FACILITIES MANAGEMENT. College Terrace Market will enter into a long term Operating Agreement for the 20-year length of the Grocery Store Lease term. Uriel will be responsible and have authority for managing all grocery operations such as vendor selection, purchasing, displaying, staffing, purchase and leasing of grocery equipment, including refrigeration, marketing, selling grocery inventories and developing recurring neighborhood and community programs for holidays and for periodic special events. Uriel, along with industry experts of his choosing, will be responsible for designing the Market, its refrigeration and display racks and other specialty features for the Market. Uriel will also manage the financial operations of the store, much as he did when Chief Financial Officer of the La Hacienda collection of family markets and his own La Hacienda Market that he owned and operated in Sacramento. These broad responsibilities have been among the skills of Uriel for over 25 years with his family’s markets including Chavez Family Markets, La Hacienda, Mi Ranchero, Arteagas and Mi Pueblo Markets. The extended Chavez Family Markets have included nearly 40 grocery stores with greatest gross annual revenues of over $200 Million. All of the Chavez markets have been in Northern California with most in the Peninsula. Uriel has developed three (3) successful stores from ground up in recent years as he will design and build for College Terrace Market. Additionally, Uriel has implemented POS and other key operational facets of grocery operations. Uriel has served in all positions with his family’s stores – purchasing, display, staffing, marketing, vendor selection and financial accounting. Under the College Terrace Market, Uriel Chavez will be given responsibility as Grocery Operations Officer to advise College Terrace Market about financial and grocery operations, and to staff the College Terrace Market store. Uriel has already identified and contacted many of the grocery managers and employees that will include approximately 20 over two shifts. College Terrace Market will benefit from the deep career of grocery successes under Uriel Chavez. A few of Uriel’s accomplishments and honors described in the following paragraph are more fully described in Uriels’ resume attached as Exhibit 3. Uriel’s experience is unparalleled with managing markets to fine successes that are best suited for their neighborhoods with fresh produce displayed such as at Segonias’, a deli superior to that of JJ&F and styled much like Robert’s variety of selection, an open air feel like Segonia’s, and with many aisle widths and quality product selection most comparable to a luxury store like Draeger’s. Uriel’s combined value oriented features with highest quality goods will be utilized to create an uncommon and appealing full service grocery market. City Consultant, Sutti Associates: After reviewing the information provided to the City’s Consultant it is the opinion of the Consultant “ that the proposed store layout, marketing, strategy, management team and advisors will create a store that will be a benefit to the community of Palo Alto” and “will be comparable, if not superior, in quality of products and services to JJ&F”. We provide as Exhibit 4 this letter from Sutti Associates. The management capabilities of College Terrace Market exceed those of JJ&F Market of any period of its operations. II FINANICIAL RESOURCES OF COLLEGE TERRACE MARKET WERE NEVER AVAILABLE TO JJ&F The Chilcote Trust, as Owner, provided initial guarantees for the $40,000,000 project lender as did James Smailey. James Smailey may also provide required guarantees from product or service providers for the College Terrace Market as well as for equipment leases for refrigeration equipment, cook lines, produce and cold cut display cases and other grocery store specialty equipment that is often leased long term to a credit worthy operator. With an existing project real estate loan from Canyon Funds of not less than ($40,000,000) Forty Million Dollars, the lender requires a personal guarantee for performance of obligations under the loan or loans. College Terrace Market is receiving these direct capital enhancements from the landlord: (a) 3 months free rent @$22,500 = $67,500 (b) 3 months @$11,250 = $33,750 (c) Landlord guarantees to the real estate lender of the entire grocery store rent for the Lease Term. This rent guaranty ensures that there will be no default by the grocery store with respect to any lender and timely delivery of rent when due. JJ&F could never have provided such a guaranty to support any landlord or lender. College Terrace Market is superior with respect to its financial condition for performing obligations under the operating experience of Uriel Chavez (ii) the facility physical store; (iii) with better financial and business plan strategies: and (iv) with capital and capital enhancements along with multiple personal guarantees that JJ&F was never able to provide. The standard of PC 5069 4(b)(6) that the replacement grocer must be comparable to that of John Garcia’s tired JJ&F Market in 2009 has been fully satisfied. JJ&F would have been unable to provide such financial enhancements for either a real estate lender or a major equipment lender or as a lessee. College Terrace Market will be capitalized separately from the real estate. We provide as Exhibit 5 a bank statement dated October 31, 2014 indicating the $700,000 cash equivalent deposit. Additionally, College Terrace Market will provide the lender a Security Deposit for the premises of $45,000 on or before November 13, 2014. James Smailey has the financial capacity to guarantee equipment leases and inventory purchases to ensure success of College Terrace Market. The financial condition of College Terrace Market is far superior with greater financial opportunities than were ever available for JJ&F Market. III. FAVORABLE COMPARISON OFTHE VASTLY SUPERIOR PHYSICAL COLLEGE TERRACE MARKET WITH 2009 JJ&F This portion of the memo focuses entirely on providing City Staff, City Council Members and neighbors compelling information that reasonably demonstrates that the proposed grocery operation to be known as College Terrace Market will meet and exceed the standards established by JJ&F as of December 7, 2009. We are confident that this memo and the actual operation of College Terrace Market will provide products and services that will substantially exceed those of JJ&F as of December 7, 2009 This portion of the memo compares the physical layout with respect to parking, site amenities, and interior floor display and marketing features for 2009 JJ&F and the proposed College Terrace Market. The College Terrace Market sales floor area at 8,000 square feet is substantially greater than that of JJ&F that was only 5,000 square feet. JJ&F had no outdoor market while College Terrace Market will provide 2,447 square feet of outdoor food sales and service. Both JJ&F and College Terrace Market have some areas dedicated to storage and food preparation. College Terrace Market will provide 40 dedicated parking spaces compared with fifteen shared spaces for JJ&F. There will be fifteen bicycle parking spaces on site for College Terrace Market, while JJ&F had no controlled bicycle parking. Interior and site plans and photographic displays are set forth in Exhibits 6, 7, 8 & 9 and provide photographs and floor plans showing the poorer quality of the JJ&F Market in 2009 as now compared with College Terrace Market as an entirely new grocery store. A major improvement for College Terrace Market over JJ&F as influenced by the ARB, College Terrace Market provides full El Camino frontage, with highly visible and attractive signage, whereas JJ&F was shut down to El Camino with a windowless wall that was uninviting. For College Terrace Market, there will be a dedicated elevator from the garage to the inside of the store, and there will be contemporary, highly functioning entry retail doors on the ground floor. These positive attributes were not provided by JJ&F. w i t h r e s p e c t t o JJ&F 2009 College Terrace Market Interior sales floor 5,000 sf 8,000 sf Outdoor sales area None 2,447 sf Dedicated parking none 40 dedicated spaces Full parking 15 shared spaces 40 dedicated and many more shared spaces Public amenities none Modern electronic doors, the park area, outdoor seating and garage access with elevator El Camino frontage none Not less than 100 linear feet College Terrace Market provides a superior physical condition with respect to size, sales floor area, updated displays, ADA access, garage access, parking, location, visibility and predominance along El Camino Real that JJ&F failed to provide or accomplish. College Terrace Market’s physical features are greatly superior to those of JJ&F. These features, alone, would allow the improved College Terrace Market to proceed by its having exceeded the conditions of JJ&F since it will have met and exceeded the 2009 standard of PC Zone 5069. The operations of JJ&F and the Garcia family in 2009 and 2010 were stressed with severe financial losses from operating JJ&F market. Exhibit 10 is a Statement of Operations for JJ&F for much of 2009 and through March 31, 2010. The Net income for the 6-month period ending March 31, 2010 reported a loss of ($44,734.64). This high level of loss was not sustainable by the Garcia Family. There were many competitive factors negatively impacting JJ&F as studied by the City in 2009 which grocery study by ADE is attached as Exhibit 11 in addition to multiple grocery and retail studies retained and assembled by the City in recent, earlier years as set forth in Exhibit 12. We provide as Exhibit 13, the College Terrace Market Business Plan that projects a conservative annual revenue in its first stabilized year of operations of $3,640,000 based on demographic analysis and economic analysis prepared by ADE in 2009 as the City’s consultant. Exhibit 14 and Exhibit 15 are the Vision and Values of College Terrace Market and it’s Business Overview. Recall that Uriel Chavez will operate the purchasing, distribution, display and promotion and sales of College Terrace Market. College Terrace Market will serve as a community center and will offer many special events for children and adults on each of the merchandised national holidays such as Halloween, Thanksgiving, Christmas, Easter, Valentines Day and 4th of July. Conclusion: College Terrace Market is superior with the operating experience of Uriel Chavez (ii) the facility physical store; (iii) with better financial and business plan strategies: and (iv) with capital and capital enhancements along with multiple personal guarantees that JJ&F was never able to provide. The standard of PC 5069 4(b)(6) that the replacement grocer must be comparable to that of John Garcia’s JJ&F Market in 2009 has been fully satisfied. There can be no reasonable basis for the City Council denying approval of the College Terrace Market to replace John Garcia’s tired JJ&F Market. It is, simply, now, time to approve the College Terrace Market. Attachment C I l .. l . I -! . J I : . l I ! , [ . , l I _ j - J I _ J Exhibit 1 ., I I I ·· 1 l I /: 1 I I .....J COMMERCIAL LEASE THIS COMMERCIAL L~ASE (this "Lease") is made as of Nov-t·~~r Z-~2013, by and between COLLEGE TERRACE CENTRE LLC, a California limited liability company (collectively, "Landlord"), and J & A FAMILY MARKETS, INC., a California corporation ("Tenant"). Landlord and Tenant are collectively referred to herein as the "Parties," and each individually a "Party." RECITALS WHEREAS, Landlord owns the city block on which the.Premises is to be located (the "City Block"); and WHEREAS, a portion of the City Block was previously leased and operated as a grocery store for more than sixty (60) years; and WHEREAS, Landlord has submitted an application to the City of Palo Alto for a PC Zone for the City Block for the purposes of redeveloping the entire City Block (the "Application"); and ·· WHEREAS, the Council of the City of Palo Alto granted the Application and on January 11, 2010 passed Ordinance No. 5069 creating the PC Zone for the City Block (the "Ordinance"); and · WHEREAS, the name of the new development of the City Block is College Terrace Centre (the "Project"); and WHEREAS, the Application and the Ordinance include a plan to locate a grocery store (the "Grocery Store") with eight thousand (8,000) square feet of floor space on the Northwest comer of 2180 El Camino Real, Palo Alto, CA, in a building (the "Building") located on a portion of the City Block, along with an outdoor market of approximately two thousand (2,000) square feet immediately adjacent thereto and approximately six hundred (600) square feet of dry storage in the basement garage (collectively, the "Premises"); and WHEREAS, Tenant desires to lease the Premises from Landlord for the purpose of operating the Grocery Store q.pon completion of construction of the portion of the Project in which the Premises will be located; and WHEREAS, on the terms and conditions set forth in this Lease, Tenant hereby leases the Premises from Landlord upon the terms and conditions stated herein. AGREEMENT f. AGREEMENT. Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, according to the terms of this Lease. 2. PREMISES. The Premises shall comprise eight thousand (8,000) square feet of interior space ("Interior Space"), approximately two thousand (2,000) square feet of outdoor 310492820.2 1 .-, I I • I ' . J r-, l I :-J :___, I I . J ! I 1~1 I . j . I 1 I I ' I - J space ("Outdoor Space") immediately adjacent thereto and approximately six hundred (600) square feet of dry storage ("Storage Space") in the basement garage. 3. TERM. (a) Term. The "Term" of this Lease shall be for a period of 20 years commencing on the first day of the month following issuance of a Certificate of Occupancy by the City of Palo Alto for the building in which the Premises are located (the "Commencement Date") and expiring on the date that is 20 years later (the "Expiration Date"). (b) Tenant shall have the right to extend the Term for 10 years by delivery of written notice ("Extension Notice") to Landlord no less than six (6) months and no more than twelve (12) months before the existing Expiration Date. If Tenant timely delivers the Extension Notice, and provided that no default exists, or shall occur with the giving of notice or the passage of time or both, the Expiration Date shall so be extended and the Expiration Date shall be the Expiration Date as extended by the Extension Notice. (c) Possession. If Landlord fails to deliver possession of the Premises by the Commencement Date, Landlord shall not be liable for any damages resulting from that failure, nor shall that failure cause a termination of this Lease or Tenant's obligations under this Lease or extend the Term of this Lease except as otherwi_se provided in this Lease or agreed to in writing between Landlord and Tenant. 4. RENT. (a) Base Monthly Rent. Commencing on the first day of the first full calendar month following the Commencement Date (or on the Commencement Date if it is the first day of a calendar month) and continuing throughout the Term on the first day of each succeeding calendar month, Tenant shall pay Landlord base monthly rent in the amount as set forth below in this Subparagraph (the "Base.Monthly Rent"). Base Monthly Rent shall be paid in advance in lawful money of the United States at the address specified for Landlord in Paragraph 27(f), below (or such other place as Landlord designates) without demand, abatement, counterclaim, deduction or offset. If the Commencement Date occurs on a day other than the first day of a calendar month, or if this Lease expires or sooner terminates on a day other than the last day of a calendar month, then the Base Monthly Rent for the fractional month shall be prorated on a daily basis. The Base Monthly Rent shall be increased during the Extension Term as set forth above. (i) The Base Monthly Rental shall be as set forth in Attachment A-2, attached hereto and incorporated herein by this reference. (ii) "Triple net" means that Tenant will be responsible for payment of property taxes, insurance and utilities with respect to the Premises. Utilities (with the possible exception of water, which Landlord may not be able to separately meter) will be separately metered. Tenant will maintain all of its equipment, including but not limited to the heating, ventilating, air conditioning ("HV AC") systems. (iii) Notwithstanding the provisions in Section (i), during the first, second and third months of the Term, Base Monthly Rent will be waived completely and, during 310492820.2 2 ~, I -, -II I I I I I I ' j J --1 J the fourth, fifth and sixth months of the Term, Base Monthly Rent will be !·educed by fifty percent (50%). (iv) During the Term, the Base Monthly for each respective element of the Premises (i.e., the Indoor Space, the Outdoor Space and the Storage Space) will increase, every five (5) years, by the amount of increase, if any, in the San Francisco-San Jose-Oakland CPI Index over the previous five (5)-year period. (b) Prepaid Rent. Tenant shall, upon execution of this Lease, pay to Landlord the first month's rent as prepayment of rent for credit against the first payment of Base Monthly Rent due hereunder. (c) Additional Rent. In addition to all Base Monthly Rent, Tenant agrees to pay all Additional Rent as and when provided in this Lease. "Additional Rent" shall mean any and all monetary obligations of Tenant under this Lease other than the obligation to pay Base Monthly Rent. As Additional Rent hereunder, Tenant shall pay to Landlord and/or those third parties designated in this Lease to receive Additional Rent from Tenant, all charges and other amounts due under this Lease including, without limitation, Tenant's obligation ·to pay (1) certain costs and expenses as provided in Paragraphs 6(b), 8(a) and 24(f), below; (2) the cost of all utilities and services as provided in Paragraph 7, below; (3) all late charges and interest due Landlord under this Lease; and (4) any and all other charges due Landlord under this Lease. (d) Late Charges. Tenant hereby acknowledges that late payment to Landlord of any installment of Base Monthly Rent or any item of Additional Rent shall cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult· to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Landlord by the terms of any ground lease, underlying lease, mortgage or trust deed affecting the premises. Accordingly, if during the Term hereof any installment of Base Monthly Rent or item of Additional Rent is not received by Landlord within three (3) days of its due date, Tenant shall pay Landlord a late charge equal to five percent (5%) of such overdue amount. The parties agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of a late payment by Tenant. Acceptance of such late charge by Landlord shall in no event constitute a waiver by Landlord of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of its rights or remedies granted under this Lease or otherwise available to Landlord. (e) Interest on Past-Due Obligations. Any monetary payment due Landlord hereunder, other than late charges, not received by Landlord within ten (10) days following the date when due, shall bear interest from the date due at the lesser of (i) the "prime rate" (also know as the "reference rate") being charged by Bank of America at that time plus four percent (4%) per annum or (ii) the maximum, non-usurious rate allowed by law. (f) Guaranty. The obligations of Tenant under this Lease shall be guaranteed by JAMES SMAILEY, an individual ("Guarantor"), pursuant to a Guaranty in the form of Exhibit C (the "Guaranty"). 310492820.2 3 I i l ; 'I J I ___:J 'I ,I . J ' l',1 ,' I J ' . J I l r1 I l J l I J J -I 5. ACCEPTANCE OF THE PREMISES. (a) Acceptance: "AS-IS"; Waivers. (i) Tenant acknowledges that it is familiar with the condition of the Premises and the Common Area and that it has had the opportunity to inspect the Premises and the Common Area to its complete satisfaction (including, but not limited to, the electrical systems, if any, security, applicable environmental conditions and requirements, applicable seismic and earthquake conditions and requirements, and compliance with applicable zoning and other Applicable Laws, defined below in Paragraph 10), and has either done so, or has voluntarily elected not to do so, thereby voluntarily and knowingly assuming the risk of adverse conditions or other defects in or about the Premises, the Common Area, and other portions of the Project. Subject to Landlord's obligations under Subparagraph (d) below, Tenant hereby accepts the Premises and Common Area in their "AS-IS" condition and "AS-IS" state of repair, inclusive of all faults and defects·, whether known or unknown, latent or patent, or foreseeable or unforeseeable. Tenant hereby fully and forever waives, and Landlord hereby fully and forever disclaims, all warranties of whatever type or kind with respect to the Premises and the Common Area, whether express, implied or otherwise including, without limitation, those of fitness for a particular purpose, tenantability, habitability or use. (ii) Tenant hereby waives, releases arid relinquishes any and all rights, claims and causes of action which Tenant may now have or may hereafter be entitled to assert against Landlord, whether known or unknown, (a) with respect to the environmental condition of the Premises and the soil, air and groundwater thereof, including, without limitation, any and all rights, claims and causes of action arising under or with respect to the California Health and Safety Code, Title 42 of the United State~ Code Section 9601 et, seq., the federal and state Occupational Health & .Safety Acts, and common law tort theories, and/or (b) arising out of the use, generation, handling, exposure of others to, disposal or release of Hazardous Materials by Tenant or any Tenant Party (defined below) on, in, or about the Premises. With respect to the foregoing releases and waivers, Tenant expressly waives the benefits of Civil Code Section 1542, which reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor" and any similar statute or common law that would render a waiver of unknown claims unenforceable. 6. PROPERTY TAXES. (a) Definitions. (1) As used herein, the term "Real Property Taxes" shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed upon the Project or any part thereof by any authority having the direct or indirect power to tax, including any city, state or foderal 310492820.2 4 l I I I I l I _I I _j j government, or any school, agricultural, sanitary, fire, street, drainage, or other improvement district thereof, levied against any legal or equitable interest of Landlord in the Project or any part thereof, Landlord's right to rent or other income therefrom, and/or Landlord's business of leasing the Premises. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring, or changes in Applicable Laws taking effect, during the Term of this Lease, including but not limited to a change in the ownership of the Project or any part thereof, the execution of this Lease, or any modification, amendment or transfer thereof, and whether or not contemplated by the parties. (b) Payment of Real Prope1ty Taxes. Tenant shall pay the Real Property Taxes applicable to the Project. Notwithstanding the foregoing, Tenant shall pay, within fifteen (15) days after demand from Landlord, any part of the Real Property Taxes assessed against the Project by reason of Alterations or Trade Fixtures placed in or on the Premises by Tenant or at Tenant's request. (c) Joint Assessment. If the Project is not separately assessed, Real Property Taxes allocated to the Project shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel(s) assessed, such proportion to be determined by Landlord from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available. Landlord's reasonable determination thereof, in good faith shall be conclusive. (d) Tenant's Property Taxes. Tenant shall pay prior to delinquency all taxes, charges and assessments assessed against or levied upon: all furniture and other personal property of Tenant within the Premises, all Alterations, and all Trade Fixtures. When possible, Tenant shall cause all such items to be assessed and billed separately from the real property of the Landlord. If any of such items shall be assessed with Landlord's real property, Tenant shall pay Landlord the taxes attributable to Tenant's prope1ty within ten (10) days after receipt of a written statement setting forth the taxes applicable to Tenant's property. 7. UTILITIES. Tenant shall pay, prior to delinquency, all charges for water, gas, electricity, light, heat, telephone, power, waste pickup, sewer services, and other utilities and communications services furnished to or otherwise used by Tenant on or about the Premises, whether or not the services are billed directly to Tenant, including, without limitation, any connection or hook-up fees and any penalties for discontinued or interrnpted service. Tenant shall also procure, or cause to be procured, without cost to Landlord, any and all necessary permits, licenses, or other authorizations required for the lawful and proper installation and maintenance upon the Premises of wires, pipes, conduits, tubes, and other equipment and appliances for use in supplying any utilities or communications services to and upon the Premises. Landlord, upon request of Tenant, and at the sole expense and liability of Tenant, shall join with Tenant in any application reasonably required for obtaining or continuing any of the services. 8. INSURANCE. (a) Payment of Premium Increases. As used herein, the term "Landlord's Insurance Cost" is defined as the actual cost of the insurance required to be carried by Landlord 310492820.2 5 .I I , I J : I, • ! I ~ , I l j J j pursuant to Subparagraphs (b) and (e), below, calculated on an annual basis. Tenant shall be responsible for all costs associated with such insurance obtained by Landlord hereunder; provided, however, in the event that Tenant's particular use of the Premises, or Alterations or Trade Fixtures causes such premiums to be increased, Tenant shall pay such increase of the premiums. (b) Property Insurance -Building. Landlord shall obtain and keep in force during the Term of this Lease a policy of policies in the name of Landlord, with loss payable to Landlord and to any Lender(s) (defined below) insuring against physical loss or damage to the Building. Such insurance shall be the amount required by any Lender(s); but in no event more than the commercially reasonable and available insurable value thereof if by reason of the unique nature or age of the Building such latter amount is less than full replacement cost. If the coverage is available and commercially appropriate, Landlord's policy or policies of casualty insurance shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake, unless required by Lender(s) or Landlord), including coverage for any additional costs resulting from debris removal and reasonable amounts of coverage for the enforcement of any ordinance or law regulating the reconstruction or replacement of any undamaged sections or the Building required to be demolished or removed by reason of the enforcement of any building zoning or safety or land use laws as the result of a covered loss, but not including plate glass insurance. Said policy or policies of casualty insurance shall also contain an agreed valuation provision in lieu of any co-insurance clause and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for all Urban Consumers for the city nearest to where the Premises are located. All of Tenant's furniture and other personal property, all Alterations, and all Trade Fixtures shall be insured by Tenant pursuant to Subparagraph (c), below. (c) Property Insurance -Tenant. Subject to the requirements of Subparagraph (f), below, Tenant at its sole cost shall either by separate policy or, at Landlord's option, by endorsement to a policy already carried, maintain insurance coverage on all of Tenant's furniture and other personal property, Trade Fixtures and Alterations in or on the Premises similar in coverage to that can-ied by Landlord as the insuring party under Subparagraph (b), above. Such insurance shall be full replacement cost coverage with a deductible not to exceed One Thousand Dollars ($1,000) per occurrence. The proceeds from any ·such insurance shall be used by Tenant solely for the replacement of furniture and other personal property located on the Premises and for the repair and restoration of Trade Fixtures and Alterations. Upon request from Landlord, Tenant shall provide Landlord with written evidence that such insurance is in full force and effect. (d) Liability Insurance -Tenant. Tenant shall obtain and keep in force during the Term of this Lease a commercial general liability policy of insurance protecting Tenant, Landlord and any Lender(s) whose names have been provided to Tenant in writing (as additional insureds) from claims or damages for bodily injury (including death), personal injury, and property damage based upon, involving or arising out of (a) any occurrence on the Premises, (b) any act or omission of Tenant, any subtenant of Tenant, or any of their respective invitees, agents, servants, contractors, or employees anywhere on the Premises, the Common Area, or Project, (c) the business operated by Tenant and by any subtenant of Tenant on the Premises, or 310492820.2 6 l 1 1 ) l l I ' j ~j j J (d) the contractual liability of Tenant to Landlord pursuant to the indemnification provisions of Paragraphs lO(d)(7) and 20(a), below (including deletion of the contractual liability exclusion for personal injury). Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than Three Million Dollars ($3,000,000) per occurrence with an "Additional Insured-Mangers or Landlords of Premises" endorsement and contain the "Amendment of the Pollution Exclusion" endorsement for damage caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Tenant's indemnity obligations under this Lease. The limits of said insurance required by this Leas<:: or as carried by Tenant shall not, however, limit the liability of Tenant nor relieve Tenant of any obligation under this Lease. All insurance to be carried by Tenant shall be primary to and not contributory with any similar insurance carried by Landlord, whose insurance shall be considered excess insurance only. The liability policy shall contain an endorsement (ISO Form 20-26) naming Landlord, its members, and shareholders (as applicable) and any Lender(s) as additional insureds, and shall provide that the insurance carrier shall have the duty to defend and/or settle any legal proceeding filed against Landlord seeking damages based upon personal injury, bodily injury or property damage liability even if any of the allegations of such legal proceedings are groundless, false or fraudulent. In addition, Tenant's liability insurance policies shall be endorsed as needed to provide cross liability coverage for Tenant, Landlord and any lender of Landlord and shall provide for severability of interest. (e) Liability Insurance -Landlord. Landlord shall also maintain liability insurance similar to the liability insurance described in Subparagraph (d), above, in addition to and not in lieu of, the insurance required to be maintained by Tenant. Tenant shall not be named as an additional insured therein. (f) Worker's Compensation -Tenant. Tenant shall carry and maintain during · the entire Term hereof, at Tenant's sole cost and expense, a policy or policies of worker's compensation insurance as required by Applicable Laws. Such policy or policies shall contain waivers of subrogation in favor of Landlord. (g) Business Income and Extra Expense Coverage. Tenant shall carry and maintain during the entire Term hereof, at Tenant's sole cost and expense, keep in full force and effect, a policy or policies of business income/business interruption insurance and extra expense coverage (collectively, "Business Income Insurance") with coverage that will reimburse Tenant for all direct and indirect loss of income and changes and costs incurred arising out of all named perils insured against by Tenant's policies of property insurance, including prevention of, or denial of use of or access to, all or part of the Premises or Building as a result of those named perils. The Business Income Insurance coverage must provide coverage for no less than twelve ( 12) months of the loss of income, charges and costs contemplated under this Lease. (h) Other Matters. All insurance required of Tenant under this Paragraph 8 and all renewals of it shall be issued by companies authorized to transact business in the State of California, and rated at least A, VIII, or such other rating as may be required by Lender(s), as set forth in the most current issue of Best's Insurance Guide. All insurance policies shall be subject 310492820.2 7 -) I rt I ' J I ~i I J to approval by Landlord and any Lender(s) as to form and substance; shall expressly provide that the policies will not be canceled or altered without thirty (30) days' prior written notice to Landlord and any Lender(s), in the case of "all-risk" coverage insurance, and to Landlord, in the case of general liability insurance; and shall, to the exterit obtainable, provide that no act or omission of Tenant which would otherwise result in forfeiture or reduction of the insurance will affect or limit the obligation of the insurance company to pay the amount of any loss sustained. (i) Additional Insureds. All policies of liability insurance that Tenant is obligated to maintain according to this Lease (other than any policy of workmen's compensation insurance) shall name Landlord and such other persons as Landlord specifies from time to time as additional insureds (including any Lender(s)). Original or copies of original policies (together with copies of the endorsements naming Landlord, and any others specified by Landlord, as additional insureds) and evidence of the payment of all premiums of such policies shall be delivered to Landlord prior to Tenant's occupancy of the Premises and from time to time at least thirty (30) days prior to the expiration of the term of each policy. All public liability, property damage liability, and casualty policies maintained by Tenant shall be written as primary policies, not contributing with and not in excess of coverage that Landlord may carry. No insurance required to be maintained by Tenant under this Paragraph 8 shaU be subject to any deductible without Landlord's prior written consent. G) Waiver of Subrogation. In addition to the waiver of subrogation contained in Paragraph 8(f), above, Tenant hereby waives its rights and the subrogation rights of its insurer against Landlord and any other tenants of the Project, as well as their respective members, officers, employees, agents, authorized representatives and invitees, with respect to any claims including, but not limited to, claims for injury to any persons, and/or damage to the Premises and/or any furniture, personal property, Trade Fixtures, and/or Alterations in or to the Premises, which are caused by or result from (a) risks or damages required to be insured against by Tenant under a policy of property insurance under this Lease, or (b) risks and damages which are in fact insured against by one or more property insurance policies maintained by Tenant from time to time. It is the intent of Landlord that with respect to any loss from a named peril required to be covered under a policy of property insurance, Tenant will look solely to its insurance companies for recovery. Tenant shall obtain for Landlord from Tenant's insurers under each policy required of Tenant under this Lease a waiver of all rights of subrogation which such insurers of Tenant might otherwise have against Landlord (and such waiver may be included in a certificate of insurance from the insurer). (k) Adequacy of Insurance. Landlord makes no representation or warranty to Tenant that the amount of insurance to be carried by Tenant under the terms of this Lease is adequate to fully protect Tenant's interests. Tenant acknowledges that Landlord shall not, by the fact of approving, disapproving, waiving, accepting, or obtaiiling any insurance, insure any liability for or with respect to the amount of insurance carried, the form or legal sufficiency of such insurance, the solvency of any insurance companies or the payment or defense of any lawsuit in connection with such insurance coverage, and Tenant hereby expressly assumes full responsibility therefor and all liability, if any, with respect thereto. 310492820.2 8 r' ' i I : I . I " --i ' i • J :i I c J J I ~ J .! 9. USE. (a) Permitted Use. The Premises shall be used for a full service grocery store, storage areas and office and administrative purposes and for no other use or purpose. (b) Restrictions on Use. Tenant shall not do or permit any act that could: (1) cause any structural damage to the Premises or any other part of the Project; (2) cause any other damage to any part of the Premises, except to the extent reasonably necessary for the installation of trade fixtures, equipment, machinery, or the construction of Alterations approved in writing in advance by Landlord, provided such damage is promptly repaired by Tenant; (3) materially damage the Premises or any other part of the Project; ( 4) impair the efficient operation of the Premises' or Building's heating, ventilation, or air conditioning systems, if any; (5) overload or otherwise place an undue strain on the Premises' or Building's electrical and mechanical systems; or (6) damage, overload, or corrode the Premises' or Building's sanitary sewer system. ( c) Further Restrictions. (1) Tenant shall not install or attach anything in the Premises in excess of the load limits established by Landlord for the Premises. Tenant shall contain and dispose of all dust, fumes, or waste products generated by Tenant's use of the Premises so as to avoid: (i) fire or health hazards, (ii) damage to the Project, or (iii) any violation of Applicable Laws. (2) Except as may be approved by Landlord in advance in writing, Tenant shall not change the exterior of the Building or install any equipment, machinery, or antennas on -or make any penetrations of, the exterior or roof of the Building. Tenant shall not commit, or suffer to be committed, any waste or nuisance in or about the Premises and shall keep the Premises or Common Area in a neat, clean, attractive and orderly condition, free of any waste or nuisances. Tenant shall not conduct on any part of the Premises or Project, any sale of any kind, including but not limited to any public or private auction, going out-of-business sale, distress sale, or other liquidation sale. 10. USE RESTRICTIONS; COMPLIANCE; ENVIRONMENTAL MATTERS. (a) Restrictions on Use. Tenant shall not use or occupy, or permit any part of the Premises to be used or occupied: (1) in violation of any federal, state or local law, ordinance, order, rule, regulation, permit, license, certificate of occupancy, or other governmental requirement now or hereafter in effect (collectively, "Applicable Laws") or any covenants, conditions, or restrictions affecting the Project or any part thereof (collectively, "CC&Rs"); (2) for any disreputable business or purpose; or (3) in any manner or for any business or purpose that creates risks of fire or other hazards, or that would in any way violate, suspend, void, or increase the rate of fire or liability or any other insurance of any kind at any time carried by Landlord upon all or any part of the Premises, the Building, or its contents. (b) Compliance. Tenant shall comply with all CC&Rs and all Applicable Laws relating to the use, condition, or occupancy of the Premises or the conduct of Tenant's business (including workplace safety and the employment of Tenant's employers), and all rules, 3 I 0492820.2 9 i I , I i l 1 ' l ]" I J J orders, regulations, and requirements of the board of fire underwriters or insurance service office, or any other similar body, having jurisdiction over the Project or any part thereof. (c) Legally Required Alterations. Tenant shall pay the entfre expense of any and all alterations as may be needed to conform the Premises to all Applicable Laws (including without limitation the Ameri<;:ans with Disabilities Act and Title 24 of the Code of California Regulations) governing the use or occupancy of the Premises including, without limitation, any and all alterations to the Premises that may be required under any Applicable Laws relating to accessibility or usability of, to, or within the Premises by disabled persons. ( d) Tenant's Obligations with Respect to Environmental Requirements. (1) Without limiting Tenant's obligations underSubpa.ragraphs (a) and (b), above, Tenant shall comply with and shall cause the Premises to comply with, all Applicable Laws relating to (i) human health or safety, (ii) workplace safety, (iii) industrial hygiene, or (iv) the use, generation, _handling, manufacture, installation, maintenance, disposal, transportation, storage, spill, or release of Hazardous Materials by Tenant or any Tenant Pa1iy, all as amended and modified from time to time (collectively, "Environmental Requirements"). The foregoing obligation shall not negate Landlord's obligation under Paragraph lO(e), below. Tenant shall cause all governmental permits and other approvals relating to the use or operation of the Premises by Tenant required by applicable Environmental Requirements or, any other Applicable Laws to at all times remain in effect, and Tenant shall at all times comply with such permits and other approvals. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the release, generation, possession, storage, handling, use, transportation, or disposal of any Hazardous Materials that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, or (iii) the presence in, on or about the Premises of any Hazardous Materials with respect to which any Environmental Requirements or other Applicable Laws require that a notice be given to persons entering or occupying the Premises, the Project, or neighboring properties. (2) Tenant shall not, nor allow any Tenant Party to, release, use, generate, manufacture, store, transport, or dispose of any Hazardous Materials on, under, or about the Premises. Notwithstanding the foregoing, Tenant may use on the Premises, without Landlord's prior consent, but only upon written notice to Landlord and in compliance with all Environmental Requirements and other Applicable Laws, any ordinary and customary materials reasonably required for use by Tenant in the normal course of the permitted use described in Paragraph 9(a), above, and further, only so long as such use is not a Reportable Use and does not expose the Premises or any other portion of the Project or neighboring properties to any meaningful risk of contamination or damage or expose Landlord to any liability therefor. In addition, Landlord may (but without any obligation to do so) condition its consent to any Reportable Use of any Hazardous Materials by Tenant upon Tenant's giving Landlord such additional assurances as Landlord deems necessary to protect itself, the public, the Premises, the Project, and the environment against damage, contamination or injury and/or liability therefor, including but not limited to the installation (and, at Landlord's option, removal on or before Lease expiration or earlier termination) of reasonably necessary protective modifications to the Premises (such as concrete encasement) and/or the deposit of an additional security deposit. 310492820.2 10 I I ' ) 1 'f. ', ) I l l I _j (3) If Tenant knows, or has reasonable cause to believe, that any Hazardous Materials have been introduced upon the Premises or any other portion of the Project b·y Tenant or a Tenant Party (other than as may have been previously consented to by Landlord), Tenant shall immediately give Landlord written notice thereof, together with a copy of any statement, report, notice, registration, application, pe1mit, business plan, license, claim, action, or proceeding, given to, or received from, any governmental authority or pdvate party concerning such Hazardous Materials including, but not limited to, all such documents as may be involved in any Reportable Use involving the Premises. Landlord's receipt of any notice, documents or other information from Tenant as provided above in this Subparagraph shall not create any obligation on the part of Landlord to respond in any way to such notice, documents or information or the conditions described therein. (4) Tenant shall immediately notify Landlord and provide copies upon receipt of all written complaints, claims, citations, demands, inquiries, reports, or notices relating to the condition of the Premises or compliance with Environmental Requirements (provided, however, that Landlord's receipt of any of the foregoing shall in no way create or impose any duty or obligation upon Landlord to respond thereto). Tenant shall promptly cure and have dismissed with prejudice any of those actions and proceedings to the satisfaction of Landlord. (5) Landlord, its agents, employees, contractors and designated representatives, and the holders of any mortgages, deeds of trust or ground leases on the Premises ("Leiider(s)") shall have the right, but not the obligation, to enter the Premises at any time in the case of an emergency, and otherwise at reasonable times, for the purpose of inspecting the condition of the Premises and for verifying compliance by Tenant with this Lease (including compliance with Environmental Requirements) and Landlord shall be entitled to employ expe1ts and/or consultants in connection therewith to advise Landlord with respect to Tenant's activities, including but not limited to Tenant's installation, operation, use, monitoring, maintenance, or removal of any Hazardous Materials on or from the Premises. The costs and expenses of any such inspections shall be paid by the party requesting same, unless a default or breach oftpis Lease by Tenant or a violation of Environmental Requirements or a contamination, caused or materially contributed to by Tenant or a Tenant Party, is found to exist or to be imminent, or unless the inspection is requested or ordered by a governmental authority as the result of any such existing or imminent violation or contamination, and in each such case, Tenant shall upon· demand reimburse Landlord, or Landlord's Lender(s), as the case may be, for the costs and expenses of such inspections. (6) If Tenant breaches any of its waiTanties, representations, and covenants under this Paragraph 10, Landlord may cause the removal from the Premises (or other cleanup acceptable to Landlord) of any Hazardous Materials which relate to or are the subject of such breach. The costs of Hazardous Materials removal, remediation, and other response (including, without limitation, transportation and storage costs) shall be deemed covered by the indemnity in Subparagraph ( d)(7), below, whether or not a court has ordered the cleanup, and those costs shall become due and payable on demand by Landlord. Tenant shall give Landlord, its agen~s. contractors, and employees access to the Premises to remove or otherwise clean up any Hazardous Materials. Landlord, however, has no obligation whatsoever 3 I 0492820.2 11 ,-, : l i ' I, ' 1 J l to remove, clean up, or otherwise respond to any Hazardous Materials, and this Lease shall not be construed as creating any such obligation. (7) Tenant agrees to indemnify, defend (with counsel reasonably acceptable to Landlord and at Tenant's sole cost), and hold Landlord and Landlord's members, affiliates, employees, agents, successors and assigns free and harmless from and against all losses, liabilities, obligations, penalties, claims, litigation, orders, demands, defenses, costs, judgments, suits, proceedings, damages (including consequential damages), disbursements, losses, or expenses of any kind (including attorneys' and experts' fees and expenses and fees and expenses incurred in investigating, defending, or prosecuting any litigation, claim, or proceeding) that may at any time be imposed upon, incurred by, or asserted or awarded against Landlord or any of them in connection with or arising from or out of: a. any Hazardous Materials (whether or not the use thereof has been consented to by Landlord) in, under, or affecting all or any part of the Premises or Project, the presence of which is attributable, in whole or in part, to any act or omission of Tenant or any of it.s officers, directors, members, employees, agents, contractors, visitors, customers, shippers, suppliers, invitees, licensees, subtenants, or other persons entering the Premises under the express or implied invitation of Tenant (collectively, "Tenant Parties"); b. any misrepresentation, inaccuracy, or breach of any warranty, covenant, or agreement contained or referred to in this Paragraph 10; c. any violation or claini of violation by Tenant or any Tenant Party of any Environmental Requirement; or d. the imposition of any lien for the recovery of any costs for environmental cleanup or other response costs relating to the release or threatened release of Hazardous Materials by Tenant or any Tenant Party. This indemnification is the personal obligation of Tenant and shall survive the expiration or sooner termination of this Lease. Tenant, its successors, and assigns waive, release, and agree not to make any claim or bring any cost recovery action against Landlord under the Comprehensive Environmental Response, Compensation and Liability Act, as amended and reauthorized to date (42 U.S.C. § 9601 et seq.), or any state equivalent or any similar law now existing or enacted after this date. To the extent that Landlord is strictly liable under any such law, regulation, ordinance, or requirement, Tenant's obligation to Landlord under this indemnity shall also be without regard to fault on the part of Tenant with respect to the violation or condition that results in liability to Landlord. (8) "Hazardous Materials" means any product, substance, chemical, material or waste whose presence, nature, quantity and/or intensity or existence, use, manufacture, disposal, transportation, spill, release, or effect, either by itself or in combination with other materials, is either (i) potentially injurious or harmful to the public health, safety or welfare, the Premises, any other portion of the Project, or the environment (including, without limitation, any soil, air, or groundwater on, in, under, above or about the Project); (ii) regulated or monitored by any governmental authority; or (iii) a basis for potential liability of Landlord to 310492820.2 12 ,---"• 1 ! :·---, i ~ J , 1 l '· J l I _J I ,! any governmental agency, private party, or other third party under any applicable statute, regulation, code, ordinance or common law theory. Without limiting the scope or generality of the· forgoing, Hazardous Materials shall include, but not be limited to, petroleum hydrocarbons, gasoline, crude oil or any products or by products thereof. 11. ASSIGNMENT AND SUBLETTING (a) Restrictions on Transfer. The terms and conditions in this Lease were offered solely to Tenant as an inducement to lease the Premises. Landlord would not necessarily lease the Premises to another Tenant on such favorable terms and conditions, it being understood that Landlord is specifically relying on the identity of Tenant in agreeing to the terms and conditions in this Lease. Tenant acknowledges that the lease terms and conditions are for Tenant's benefit only so long as Tenant operates the business allowed by this Lease, and that Tenant is not entering into this Lease for any other purpose, such as the recognition of a leasehold value that it could later sell. It is understood and agreed that any value, upon the early termination of Tenant's occupancy of the Premises, shall revert to Landlord, either by termination of this Lease or as a condition of assignment or subletting, as provided in this Paragraph 11. But for the previously stated reasons, Landlord would not enter into this Lease. Therefore, without the express prior written consent of Landlord, which may withheld for any reason whatsoever, Tenant shall not voluntarily, involuntarily, or by operation of law: (1) sublet all or any part of the Premises or allow it to be sublet, occupied, or used by any person or entity other than Tenant; (2) assign Tenant's interest in this Lease; (3) mortgage or encumber this Lease, or otherwise use this Lease as a security device in any manner; or ( 4) amend or modify an assignment, sublease, or other transfer that has not been previously approved by Landlord. Any action taken or proposed to be taken pursuant to clauses (1) through (4) in the preceding paragraph shall be collectively referred to herein as an "Assignment'', and any third party succeeding to all or a p011ion of Tenant's interest under this Lease or proposed to succeed to all or a portion of Tenant's interest under this Lease shall be referred to as an "assignee". If Tenant is a partnership, any withdrawal or substitution, whether voluntary, involuntary, or by operation of law, and whether occurring at one time or over a period of time, of any partner owning twenty-five percent (25%) or more, cumulatively, of any interest in the capital or profits of the partnership or the dissolution of the partnership, shall be deemed an assignment. If Tenant is a corporation, any dissolution, merger, consolidation, or other reorganization of Tenant, any sale or transfer or cumulative sales or transfers of the capital stock of Tenant in excess of twenty- five percent (25%) or any sale or cumulative sales of fifty-one percent (51 % ) or more of the value of Tenant's assets shall be deemed an assignment. However, the previous provisions shall not apply to corporations, the capital stock of which is publicly traded. (b) Payment of Landlord's Costs. Tenant shall pay to Landlord, as Additional Rent, all reasonable costs and attorney fees incurred by Landlord in connection with the evaluation, processing, or documentation of any requested assignment, whether or not Landlord's consent is granted. Landlord's reasonable costs shall include the cost of any review or investigation performed by Landlord or consultant acting on behaJf of Landlord of: (1) any Hazardous Materials used, stored, released, or disposed of by the proposed assignee, or (2) violations of any environmental law by Tenant or the proposed assignee. 3 J 0492820.2 13 i, . J .-... , i ! ·., j l : j i J (c) Effectiveness of Assignment. Any Assignment approved by Landlord shall not be effective until Tenant has delivered to Landlord an executed counterpart of the document evidencing the Assignment that: (1) is in form and substance reasonably satisfactory to Landlord, and (2) contains the same terms and conditions as stated in Tenant's notice given to Landlord pursuant to Subparagraph (e), below. (d) Assignment Voidable. Any attempted Assignment without Landlord's express prior written consent shall constitute an event of default hereunder and shall be voidable at Landlord's sole option. Landlord's consent to any one assignment shall not constitute a waiver of the provision of this Paragraph 11 as to any subsequent assignment or a consent to any subsequent assignment. No Assignment, even with the consent of Landlord, shall relieve Tenant of the obligatipn to pay the rent and to perform all of the other obligations to be performed by Tenant. The a,cceptance of rent by Landlord from any person shall not be deE:med to be a waiver by Landlord of any provision of this Lease, nor to be a consent to any Assignment. (e) Notice of Proposed Assignment. At least sixty (60) days before a proposed Assignment is to become effective, Tenant shall give Landlord written notice of the proposed terms of the Assignment and request Landlord's approval, which notice shall include the following: (1) the name and legal composition of the assignee; (2) a current financial statement of the assignee, financial statements of the assignee covering the preceding three (3) years, if they exist, and, if available, an audited financial statement of the assignee for a period ending not more than one (1) year prior to the proposed effective date of the assignment, all of which are to be prepared in accordance with generally accepted accounting principles; (3) the nature of the assignee's business to be carried on in the Premises;(4) a statement of all consideration to be given on account of the assignment; and (5) any other information that Landlord reasonably requests. (f) Withholding of Consent. Landlord's consent to any requeste~ Assignment may be withheld for any reason whatsoever. (g) Guarantor's Consent. If Tenant's obligations under this Lease have been guaranteed by third parties, any assignment of Tenant's interest under this Lease and Landlord's consent shall not be effective unless those guarantors give written consent to the assignment. (h) Order. If an event of default occurs and is continuing, Landlord may proceed directly against Tenant, any assignee, any guarantors, or any other party responsible for the performance of this Lease, without first exhausting Landlord's remedies against any other party responsiple to Landlord, or resorting to any security held by Landlord. (i) Attornment. If an event of default occurs and is continuing, Landlord may require any subtenant to attorn to Landlord, in which event Landlord shall undertake the obligations of Tenant under any sublease, provided, however, that Landlord shall not be liable for any amounts paid by the subtenant to Tenant or for any defaults by Tenant or prior obligations of Tenant under the sublease. U) Binding. Every provision of this Paragraph 11 shall be binding on any assignee as if that assignee were the Tenant under this Lease. 310492820 .2 14 l i I I I J (k) No Further Assignment or Subletting. No assignee shall further assign or sublet the Premises without Landlord's prior written consent. 12. SIGNS. Landlord reserves the exclusive right to control the architectural and aesthetic appearance of the exterior side-walls and roof of the Premises .and Building. Tenant will not place or permit to be placed in or upon the exterior side walls, windows or roof of the Building or within the Common Area any signs, advertisements or notices, or alter its architecture or appearance without first obtaining the express prior written consent of Landlord. Landlord shall have the right to post or place such signs, notices or displays as Landlord reasonably deems necessary or appropriate upon the roof, the exterior of the Building, and/or within the Corpmon Area. Landlord shall have the right to remove any of Tenant's signs, advertisements or notices to which Landlord objects, at Tenant's sole expense. Landlord shall be entitled to all revenues from such advertising signs. 13. REPAIRS AND MAINTENANCE. (a). By Tenant. Except as otherwise provided in Paragraphs 13(b), 16, 17 and 24(f) hereof, Tenant shall, at its sole expense, maintain the Premises and make repairs, restorations, and replacements to _the Premises, including, without limitation, the heating, ventilating, air conditioning, mechanical, electrical, sewage, and plumbing systems, interior walls, fl,oors, carpets, window coverings, ceilings, roof, windows, plate glass, and doors, and the fixtures and appmtenances to the Premises, as and when needed to preserve them in good · working order and condition and regardless of whether the repairs, restorations, and replacements <1.re stmctural or non-structural, ordinary or extraordinary, foreseeable or unforeseeable, capital or noncapital, or the fault or not the fault of Tenant or any Tenant Party. Without limitation of the scope or generality of the foregoing, at all times during the Term Tenant shall maintain a contract for the regular maintenance and servicing of the HV AC syestems serving the Premises, and such contract shall be with a duly licensed HVAC service and repair specialist acceptable to Landlord. All repairs, restorations, and replacements shall be in quality and class equal to the original work or installations. If Tenant fails to make repairs, restorations, or replacements within fifteen (15) days after written demand by Landlord, Landlord may make them at the expense of Tenant and the expense shall be collectible as Additional Rent to be paid by Tenant within fifteen (15) days after delivery of a statement for the expense. (b) By Landlord. Subject to the other provisions of this Lease, Landlord shall keep in good order and repair the exterior walls of the Building. Notwithstanding the foregoing, Landlord shall not be obligated to paint the exterior or interior surfaces of exterior walls or doors (including any roll up doors), nor shall Landlord be obligated to maintain, repair or replace any windows, doors (including any roll up doors), or plate glass of the Premises. Notwithstanding anything to the contrary herein, Landlord shall not be obligated to perform any maintenance, repairs or replacements in response to or arising out of damage caused by the act or omission of Tenant or any Tenant Party, which repairs or replacements shall be the sole obligation of Tenant. Tenant expressly waives the benefit of any statute now or hereafter in effect which would otherwise afford Tenant the right to make repairs at Landlord's failure to keep the Building, Common Area, or any other portion of the Project in good order, condition and repair. \ 310492820.2 15 ~1 ! 1 '-j I 1 I J 14. ALTERATIONS. (a) Alterations. Tenant shall not make, or suffer to be made, any alterations, additions, renqvations or improvements (collectively "Alterations") to the Premises without Landlord's prior written consent; however, Landlord's prior written consent shall not be necessary for CJ.DY Alteration which: (1) costs less than one thousand dollars ($1,000.00) including labor and materials; (2) does not change the general character of the Premises, or reduce the fair market value of the Premises below its fair market value prior to the alteration, addition, or improvement; (3) is made with due diligence, in a good and workmanlike manner, and in compliance with the laws, ordinances, orders, rules, regulations, certificates of occupancy, or other governmental requirements described in Paragraph 9, and above; (4) is promptly and _fully paid for by Tenant. (b) Architect's Supervision; Compliance with Laws; Ownership; Removal. All Alterations (other than those costing less than One Thousand Dollars ($1,000.00)) shall be made by Tenai:it under the supervision of an architect and/or engineer hired by Tenant and reasonably satisfactory to Landlord and in accordance with plans and specifications and cost estimates approved by Landlord. In addition, Landlord may designate a supervising architect and/or engineer to assure compliance with the provisions of this paragraph, and if it does, Tenant · shall pay as Additional Rent the supervising architect's and/or engineer's charges. All Alterations shall be performed solely at Tenant's expense, in compliance with all Applicable Laws, and shall be performed only by properly licensed ·contractors or workers. Subject to Tenant's rights under Paragraph 15, below, all Alterations and Trade Fixtures, whether temporary or permanent in character, made in or on the Premises by Tenant shall immediately become Landlord's property, and upon the expiration or sooner termination of this Lease shall remain on the Premises without compensation to Tenant; provided, however, that by written notice given ta Tenant at any time prior to the expiration or sooner termination of this Lease, Landlord may require that any Alterations and/or Trade Fixtures made in or on the Premises be removed by Tenant. In such event, 'Tenant shall remove the designated Alterations and/or Trade fixtures at Tenant's sole cost and shall restore the Premises to the condition in which it was in before the Alterations and Trade fixtures were installed, reasonable wear and tear excepted. (c) Mechanic's Liens. Tenant shall also pay and discharge any and all mechanics' liens placed against the Premises and/or the Project resulting from the actions of Tenant or any of Tenant's employees or agents (including, without limitation, any work performed at the request of Tenant or any of its employees or agents). If Tenant wishes in good faith to contest the validity of any mechanic's lien claim placed against the Premises and/or project for any reason whatsoever, Tenant shall forth-with either pay the disputed amount or shall, at Tenant's sole cost and expense and with the prior written consent of the Landlord, obtain a bond conforming with the requirements of California Civil Code Section 3143 so as to release the lien against the Premises and/or any other portion of the Project. 15. END OF TERM. Upon the expiration or sooner termination of this Lease, Tenant shall surrender the Premises clean and free of debris and in good operating order and condition, ordinary wear and tear excepted. If Tenant is not then in default, Tenant may remove from the Premises any trade fixtures, machinery and equipment owned by Tenant which can be removed without doing material damage to the Premises (herein collectively called "Trade Fixtures") 3104928202 16 I : I I I ,I J and any movable furniture owned by and placed in the Premises by Tenant, whether or not such Trade Fixtures are fastened to the Premises. Tenant shall not remove any Trade Fixtures without Landlord's prior written consent if the Trade Fixtures are used in the operation of the Premises or if the removal of the Trade Fixtures will impair the structure of the Premises. Whether or not Tenant is then in default, Tenant shall remove all Alterations, Trade Fixtures, and furniture that Landlord has requested be removed in accordance with Paragraph 14, above, and shall, under all circumstances, fully repair any damage occasioned by the removal of any Alterations, Trade Fixtures, or furniture. Any Alterations, Trade Fixtures, or furniture not so removed shall be conclusively deemed to have been abandoned by Tenant and may be appropriated, sold, stored, destroyed, or qtherwise disposed of by Landlord without notice to Tenant or any other person and without oqligation to account for them. Tenant shall pay Landlord all expenses incurred in connection with Landlord's disposition of such property, including without limitation the cost of repairing any damage to Premises caused by removal of such property. Tenant's obligation to observe and perform covenants set forth in this Paragraph 15 shall survive the expiration or sooner termination of this Lease. 16. DAMAGE AND DESTRUCTION. (a) Definitions. (1) "Premises Partial Damage" means damage or destruction to the Premises, other than any furniture, inventory, Alterations, Trade Fixtures or other items owned, installed, leased or paid for by Tenant (collectively, "Excluded Items"), the repair cost of which damage or destruction is less than fifty percent (50%) of the then Replacement Cost (as defined below) of the Premises, excluding all Excluded Items, immediately prior to such damage or destruction. (2) "Premises Total Destruction" means damage or destruction to the Premises, other than Excluded Items, the repair cost of which damage or destruction is fifty percent (50%) or more of the then Replacement Cost of the Premises (excluding any Excluded Items) immediately prior to such damage or destruction. In addition, damage or destruction to the Building, other than Excluded Items of any tenants of the Building, the cost of w~ch damage or destruction is fifty percent (50%) or more of the then Replacement Cost (excluding Excluded Items of any tenants of the Building) of the Building shall, at the option of Landlord, be deemed to be Premises Total Destruction. (3) "Insured Loss" shall mean damage or destruction to the Premises, other than Excluded Items, which was caused by an event required to be covered by the casualty insurance described in Paragraph 8(b), above, inespective of any deductible amounts or coverage limits involved. (4) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Landlord at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of applicable building codes, ordinances or laws, and without deduction for depreciation. 310492820.2 17 '.1 I j ,~l I ' ) J j (5) Premises Partial Damage -Insured Loss. If Premises Partial Damage that is an fusured Loss occurs, then Landlord shall, at Landlord's expense, repair such damage (but not Excluded Items) as soon as reasonably possible and this Lease shall continue in full force and effect. In the event, however, that there is a shortage of insurance proceeds and ~uch shortage is due to the fact that, by reason of the unique nature of the improvements in the Premises, full replacement cost insurance coverage was not commercially reasonable and available, Landlord shall have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Prerr.iises unless Tenant provides Landlord with the funds to cover same or adequate assurance thereof, within ten (10) days following receipt of written notke of such shortage and request therefor. If Landlord receives said funds or adequate assurance thereof within said ten (10) day period, Landlord shall complete them as soon as reasonably possible and this Lease shall remain in full force an effect. If Landlord does not receive such funds or assurance within said period, Landlord may nevertheless elect by written notice to Tenant within ten (10) days thereafter to make such restoration and repair as is commercially reasonable with Landlord paying any shortage in proceeds, in which case this Lease shall remain in full force and effect. If Landlord does not receive such funds or assurance within such ten (10) day period, and if Landlord does not so elect to restore and repair, then this Lease shall terminate sixty (60) days following the occurrence of the damage or destruction. Unless otherwise agreed, Tenant shall in no event have any right to reimbursement from Landlord for any funds contributed by Tenant to repair any such damage or destruction. Premises Partial Damage due to flood or eru.thquake shall be subject to Paragraph 16(c) rather than this Paragraph 16(b ), notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurru.1ce shall be made available for the repairs if made by either party. (b) Partial Damage -Uninsured Loss. If Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful act of Tenant (in which event Tenant shall make the repairs at Tenant's expense and this Lease shall continue in full force and effect), Landlord may at Landlord's option, either (i) repair such damage as soon as reasonably possible at Landlord's expense, in which event this Lease shaU continue in full force and effect, or (ii) give written notice to Tenant within thirty (30) days after receipt by Landlord of know ledge of the occurrence of such damage of Landlord's desire to terminate this Lease as of the date sixty (60) days following the date of such notice. In the event Landlord elects to give such notice of Landlord's intention to terminate this Lease, Tenant shall have the right within ten (10) days after receipt of such notice to give written notice to Landlord of Tenant's commitment to pay for the repair of such damage totally at Tenant's expense and without reimbursement from Landlord. Tenant shall provide Landlord with the required funds or satisfactory assurance thereof within thhty (30) days following such commitment from Tenant. In such event this Lease shall continue in full force and effect, and Landlord shall proceed to make such repair as soon. as reasonably possible after the required funds are available. If Tenant does not give such notice and provide the funds or assurance thereof within the time specified above, this Lease shall terminate as of the date specified in Landlord's notice of termination. (c) Total Destruction. Notwithstanding any other provision hereof, if Premises Total Destruction occurs (including any destruction required by any authorized pub]ic authority) this Lease shall terminate sixty (60) days following the date of such Premises Total Destruction, whether or not the damage or destruction is an Insured Loss or was caused by a 310492820 .2 18 ~l l ~1 ' l J negligent or willful act of Tenant. In the event, however, that the damage or destruction was caused by Tenant, Landlord shall have the right to recover all of Landlord's damages and losses from Tenant. (d) Damage Near End of Term. If at any time during the last six (6) months of the term of this Lease there is damage for which the cost to repair exceeds one month's Base Monthly Rent, whether or not an Insured Loss, Landlord may, at Landlord's option, terminate this Lease effective sixty (60) days following the date of occurrence of such damage by giving written notice to Tenant of Landlord's election to do so within thirty (30) days after the date of occurrence of such damage. (e) Abatement of Rent: Tenant's Remedies. (1) In the event of Premises Partial Damage for which Tenant is not legally responsible, the Base Monthly Rent and the Additional Rent payable by Tenant hereunder for the period during which such damage or condition, its repair, or restoration continues, shall be abated in proportion to the degree to which Tenant's use of the Premises is impaired, but not in excess of the amount of Base Monthly Rent for a 12-month period. Except for abatement of Base Monthly Rent and Additional Rent as aforesaid, all other obligations of Tenant hereunder shall be performed by Tenant, and Tenant shall have no claim against Landlord for any damage suffered by reason of any such damage, destruction, or repair. (2) If Landlord shall be obligated to repair or restore the Premises under this Paragraph 16 and shall not commence, in a substantial and meaningful way, the repair or restoration of the Premises within ninety (90) days after such obligation shall accrue, Tenant may, at any time prior to the commencement of such repair or restoration, give written notice to Landlord and to any Lender(s) of which Tenant has actual notice of Tenant's election to terminate this Lease on a date not less than sixty (60) days following the giving of such notice. If Tenant gives such notice to Landlord and such Lender(s) and such repair or restoration is not commenced within thirty (30) days after receipt of such notice, this Lease shall terminate as of the date specified in said notice. If Landlord or a Lender(s) commences the repair or restoration of the Premises within thirty (30) days after the receipt of such notice, this _ Lease shall continue in full force and effect. "Commence" as used in this paragraph shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of actual work on the Premises, whichever occurs first. (f) Waiver. Except as expressly provided in this Lease, damage to or destruction of the Premises shall not terminate this Lease or result in any abatement of Base Monthly Rent, Additional Rent or any other charge hereunder. Tenant waives any right of offset against Tenant's rental obligations that may be provided by any statute or rule of law in connection with Landlord's duties of repair and restoration under the provisions of this Lease. (g) Landlord Not Responsible. Landlord shall not be responsible for any loss, damage, or destruction to any Alterations, Trade Fixtures, or to other of Tenant's leasehold improvements or to any furniture, inventory, or other Tenant-owned improvements or prope1ty. 310492820.2 19 ] 9 . J J 17. CONDEMNATION. (a) Total Taking. If, by exercise of the right of eminent domain or by conveyance made in response to the threat of the exercise of such right (in either case a "Taking"), all of the Premises are Taken, or if so much of the Premises are Taken that the Premises (even if the restorations described in Subparagraph (b), below, were to be made) cannot be used by Tenant for the purposes for which they were used immediately before the Taking, this Lease shall end on the earlier of the vesting of title to the Premise.s in the condemning authority or the taking of possession of the Premises by the condemning authority (in either case the "Ending Date"). If this Lease ends according to this Subparagraph (a), prepaid rent shall be appropriately prorated to the Ending Date. The award in a taking subject to this Subparagraph (a) shall be allocated according to Subparagraph (d), below. (b) Partial Taking. If, after a Taking, in Landlord's reasonable discretion, so . I much of the Premises remains that the Premises can be used for substantially the same purposes for which they were used immediately before the taking: (1) this Lease shall end on the Ending Date as to the part of the Premises which is Taken; (2) prepaid rent shall be appropriately allocated to the part of the Premises which is Taken and prorated to the Ending Date; (3) beginning on the day after the Ending Date, rent for so much of the Premises as remains shall be reduced in the proportion of the floor area of the Premises remaining after the Taking to the floor area of the Premises before the Taking; ( 4) at its sole expense, Tenant shall restore so much of the Premises as remains to a sound architectural unit substantially suitable for the purposes for which it was used immediately before the Taking, using good workmanship and new first class materials, all according to Paragraph 14, above; (5) upon the completion of restoration according to Subparagraph (4), above, Landlord will pay Tenant the lesser of (A) the net award made to Landlord on account of the taking (after deducting from the total award attorneys', appraisers', and other costs incurred in connection with obtaining the award, and amounts paid to the holders of mortgages affecting the Premises), or (B) Tenant's actual out-of-pocket cost of restoring the Premises; and (6) . Landlord shall keep the balance of the net award. (c) Tenant's Award. In connection with any Taking subject to Subparagraph (b), above, Tenant may prosecute its own claim by separate proceedings against the condemning authority for damages legally due to it (such as the loss of fixtures which Tenant was entitled to remove and moving expenses) only so Jong as Tenant's award does not diminish or otherwise adversely affect Landlord's award in any manner. 310492820.2 20 r-1 I ' l ~I I I J (d) Allocation of an Award for a Total Taking. If this Lease ends according to Subparagraph (a), above, Landlord shall receive the entirety of any award that may be paid in connection with the Taking, including severance and consequential damages and any award for the value of this Lease, and Tenant shall have no claim or interest in any award, whether or not the award or any part of it is attributable to the value of the unexpired Term of this Lease. Tenant hereby irrevocably assigns and transfers to Landlord any right to compensation or damages to which Tenant may become entitled during the Tenn hereof by reason of any taking. (e) · Waiver. Each party hereby waives the provisions of California Code of Civil Procedure Section 1265.130 allowing either party to petition the Superior Comito terminate this Lease in the event of a partial Taking of the Premises. 18. SUBORDINATION. (a) General. This Lease and Tenant's rights under this Lease are subject and subordinate to any ground lease or underlying lease, first mortgage, first deed of trust, or other first lien encumbrance or indenture, together with any renewals, extensions, modifications, consolidations, and replacements of them, which now or at any subsequent time affect the Premises, any interest of Landlord in the Premises, or Landlord's interest in this Lease and the estate created by this Lease (except to the extent that any such instrument expressly provides that this Lease is superior to it). This provision shall be self-operative and no further instrument of subordination shall be required in order to effect it. Nevertheless, Tenant shall execute, acknowledge and deliver to Landlord, at any time and from time to time, upon demand by Landlord, any documents as may be requested by Landlord, any ground Landlord or underlying Landlord, or any mortgagee, or any holder of a deed of trust or other instrument described in this paragraph, to confirm or effect the subordination. If Tenant fails or refuses to execute, acknowledge, and deliver any such document within twenty (20) days after written demand, Landlord, its successors, and assigns shall be entitled to execute, acknowledge, and deUver the document on behalf of Tenant as Tenant's as attorney-in-fact. Tenant constitutes and iITevocably appoints Landlord, its successors, and assigns, as Tenant's attorney-in-fact to execute, acknowledge, and deliver on behalf of Tenant any documents described in this paragraph. (b) Attornment. If any holder of any mortgage, indenture, deed of trust, or other similar instrument described in Subparagraph (a), above, succeeds to Landlord's interest in the Premises, Tenant shall pay to it all rents subsequently payable under this Lease. Tenant shall, upon request of anyone so succeeding to the interest of Landlord, automatically become the tenant of, and attorn to, the successor in interest without change in this Lease. The successor in interest shall not be bound by (1) any payment of rent for more than one month in advance, (2) any amendment or modification of this Lease made without its written consent, (3) any claim against Landlord arising prior to the date on which the successor succeeded to Landlord's interest, or (4) any claim or offset of rent against the Landlord. Upon request by the successor in interest and without cost to Landlord or the successor in interest, Tenant shall execute, acknowledge, and deliver an instrument or instruments confirming the attornment. The instrument of attornment shall also provide that, so long as Tenant does not default under this Lease, the successor in interest shall not disturb Tenant in its use of the Premises in accordance with this Lease. If Tenant fails or refuses to execute, acknowledge, and deliver the instrument within twenty (20) days after written demand, the successor in interest shall be entitled to 310492820 .2 21 " I r-1 ' ' ----; ~j l I I J I I execute, acknowledge, and deliver the document on behalf of Tenant as Tenant's as attorney-in- fact. Tenant constitutes and irrevocably appoints the successor in interest as Tenant's attorney- in-fact to execute, acknowledge, and deliver on behalf of Tenant any document described in this paragraph. 19. LANDLORD'S ACCESS. Landlord, its agents, employees, and contractors may enter the Premises at any time in response to an emergency, and at all reasonable times to (1) inspect the Premises, (2) exhibit the Premises to prospective purchasers, lenders, or tenants, (3) determine whether Tenant is complying with its obligations under this Lease, (4) supply any service which this Lease may require Landlord to provide, (5) post notices of nonresponsibility or similar notices, 01; (6) make repairs or do any other act which this Lease or Applicable Laws may require or permit Landlord to make or do. Tenant waives any claim on account of any injury or inconvenience to Tenant's business, interference with Tenant's business, loss of occupancy or quiet enjoyment of the Premises, or any other loss occasioned by any entry of Landlord, its agents, employees, or contractors permitted hereunder. Landlord shall at all times have a key with which to unlock all of the doors in the Premises (excluding Tenant's vaults, safes, and similar areas designed in writing by Tenant in advance). No entry to the Premises by Landlord by any means will be a forcible or unlawful entry into the Premises or a detainer of the Premises or an eviction, actual or constructive, of Tenant from the Premises, or any part of the Premises, nor will any entry entitle Tenant to damages or an abatement of rent or other charges which this Lease requires Tenant to pay. Subject to the foregoing and to the other terms and conditions of this Lease, so long as Tenant pays the rent and fully performs all of its other obligations in this Lease, Tenant's possession of the Premises will not be disturbed by Landlord. 20. lNDEMNIFICATI.ON, W AIYER AND RELEASE. (a) Indemnification. Tenant shall indemnify Landlord, its members, agents, and employees (Landlord and all such other persons are collectively referred to herein as "Landlord Parties") against, and hold Landlord and all other Landlord Parties harmless from and against any and all demands, claims, causes of action, fines, penalties, damages (including consequential damages), losses, liabilities, judgments, costs, and expenses (including, without limitation, attorneys' fees and court costs) (collectively, "Claims") incurred in connection with or arising from: (1) the use or occupancy of the Premises by Tenant or any person claiming under or through Tenant; (2) any activity, work, or thing done by Tenant on or about the Premises, the Common Area, or any other part of the Project; (3) any acts, omissions, or negligence of Tenant, any person claiming under Tenant or any Tenant Party; ( 4) any breach, violation, or nonperformance by Tenant or any person claiming under Tenant of any term, covenant, or provision of this Lease or any Applicable Laws; or (5) except for loss of use of all or any portion of the Premises or Tenant's property located within the Premises that is proximately caused by or results proximately from the willful misconduct of Landlord or its agents or employees, any injury or damage to the person, property, or business of Tenant or any Tenant Party. If any action or proceeding is brought against Landlord, its employees, or agents by reason of any claim, Tenant, upon notice from Landlord, shall defend the claim at Tenant's sole expense with counsel reasonably satisfactory to Landlord. Landlord need not have first paid any claim or other item covered by the foregoing indemnity or by any other indemnity contained in 310492820.2 22 ~l I ' I ~) . I 1 \ . I I I __ J this Lease in order to be indemnified. The rights of Landlord and the obligations of Tenant under the foregoing indemnity are in addition to, and not in lieu of, the rights of Landlord and the obligations of Tenant under .the other indemnities made by Tenant in this Lease. (i) Waiver and Release. Tenant waives and releases all claims against Landlord, its employees, and agents with respect to all matters for which Landlord has disclaimed liability pursuant to the provisions of this Lease. In addition, Tenant agrees that Landlord, its members, agents, and employees shall not be liable for, and Tenant hereby waives and releases any claims, causes of action, or rights arising from or based on, any loss, injury, death, damage (including consequential damages) or other liability to persons, property, or Tenant's business occasioned by or arising from theft; fire; earthquake or other act of God; public enemy; injunction; riot; strike; insurrection; war; court order; requisition; order of governmental body or authority; fire; explosion; falling objects; steam, water, rain or snow; leak or flow of water (including water from the elevator system), rain or snow from the Premises or into the Premises or from the roof, street, subsurface, or from any other place, or by dampness, or from the breakage, leakage, obstruction, or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting fixtures of the Premises; or from construction, repair, or alteration of the Premises or from any acts or omissions of any visitor of the Premises; the acts or omissions of Landlord or its employees, agents, contractors or other persons acting for or on behalf of Landlord, regardless of whether such acts or omissions be negligent, grossly negligent or otherwise (but not including the willful misconduct of Landlord); or from any cause beyond Landlord's control. With respect to the foregoing releases and waivers, Tenant expressly waives the benefits of Civil Code Section 1542, which reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor" and any similar statute or common law that would render a waiver of unknown claims unenforceable. (b) Scope. Except as provided in the following sentence, the indemnities and waivers made or given by Tenant under this Lease will apply regardless of the active or passive negligence or sole, joint, concurrent, or comparative negligence of any Landlord Parties and regardless of whether liability without fault or strict liability is imposed or sought to be imposed on any of them. The indemnities and waivers made or given by Tenant under this Lease will not apply to the extent of the percentage of liability that a final judgment of a court of competent jurisdiction establishes under the comparative negligence principles of the State of California that a Claim against a Landlord Party was proximately caused by the willful misconduct or direct and active gross negligence of that Landlord Party; provided, however, that in such event the indemnity or waiver will remain valid for all other Landlord Parties. Tenant's duty to defend Landlord Parties is separate and independent of Tenant's duty to indemnify Landlord Parties, and applies regardless of whether issues of negligence, liability, fault, default or other obligation on the part of Tenant have been determined and whether or not Landlord Parties have paid any sums or incurred any detriment arising out of or relating, directly or indirectly, to any Claims. Tenant's compliance with the insurance requirements and other obligations under this Lease does not in any way restrict, limit or modify Tenant's indemnification obligations under this Lease. 310492820.2 23 , I I l ~J J J (c) Survival. The provisions of this Paragraph 20 shall survive the expiration or sooner termination of this Lease. 21. SECURITY DEPOSIT. Upon the execution of this Lease, Tenant shall deposit -----~Dollars($ ) with Landlord as security for Tenant's payment of rent and performance of its other obligations under this Lease. If Tenant defaults in its payment of rent or performance of its other obligations under this Lease, Landlord may use all or part of the security deposit for (a) the payment of rent or any other amount in default, (b) for the ·payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant's default, (c) for the payment to Landlord of any other loss or damage which Landlord may suffer by reason of Tenant's default or (d) to clean and restore or repair the Premises, the Building or the Common Area following their surrender by Tenant hereunder. If Landlord so uses any portion of the security deposit, Tenant shall restore the security deposit to its original amount within five (5) days after written demand from Landlord. Landlord shall not be required to keep the security deposit separate from its general funds, and Tenant shall not be entitled to interest on the security deposit. The security deposit shall not be a limitation on Landlord's damages or other rights under this Lease, or a payment of liquidated damages, or an advance payment of the rent. If Tenant pays the rent and performs all of its other obligations under this Lease, Landlord will return the unused p01tion of the security deposit to Tenant within sixty (60) days after the end of the Term; however, if Landlord has evidence that the security deposit has been assigned to an assignee of this Lease, Landlord will return the security deposit to the assignee. Landlord may deliver the security deposit to the purchaser of the Premises and be discharged from further liability with respect to it. 22. LIMITATION ON TENANT'S RECOURSE. Tenanes sole recourse against Landlord, and any successor to the interest of Landlord in the Premises, is to the interest of Landlord, and any successor, in the Premises. Tenant shall not have any right to satisfy any judgment which it may have against Landlord, or any successor, from any other assets of Landlord, or any successor. In this paragraph the terms "Landlord" and "successor" include the shareholders, venturers, and partners of Landlord and successor and the officers, directors, and employees of Landlord and successor. The provisions of this paragraph are not intended to limit Tenant's right to seek injunctive relief or specific performance, or Tenant's right to claim the proceeds of insurance (if any) specifically maintained by Landlord for Tenant's benefit. 23. DEFAULT. (a) Cure by Landlord. If Tenant fails to pay when due amounts payable under this Lease or to perform any of its other obligations under this Lease within the time permitted for its performance, then Landlord, after ten (10) days' written notice to Tenant (or, in case of any emergency, upon notice or without notice as may be reasonable under the circumstances) and without waiving any of its rights under this Lease, may (but shall not be required to) pay the amount or perform the obligation. All amounts so paid by Landlord and all costs and expenses incurred by Landlord in connection with the performance of any obligations (together with interest at the rate described in Paragraph 4(d), above, from the date of Landlord's payment of the amount or incurring of each cost or expense until the date of full repayment by Tenant) shall be payable by Tenant to Landlord on demand. In the proof of any damages that Landlord may . claim against Tenant arising out of Tenant's failure to maintain insurance, Landlord shall not be 310492820.2 24 ] ' l l . ; I J ~] r-l I I _J I j limited to the amount of the unpaid insurance premium but shall also be entitled to recover as damages for the breach the amount of any uninsured loss (to the extent of any deficiency in the insurance required by the provisions of this Lease), damages, costs and expenses of suit, including attorneys' fees, arising out of damage to, or destruction of, the Premises occurring during any period for which Tenant has failed to provide the insurance. (b) Events of Default. Any of the following events or conditions shall constitute an event of default hereunder without any notice or demand, except as otherwise expressly specified: (1) Tenant fails to make any payment of rent, whether an installment of Base Monthly Rent or an item of Additional Rent, as and when required under the terms of this Lease; (2) Tenant vacates or abandons the Premises; (3) This Lease or the Premises or any part of the Premises is taken upon execution or by other process of law directed against Tenant, or is taken upon or subjected to any attachments by any creditor of Tenant or claimant against Tenant, and the attachment is not discharged within fifteen (15) days after its levy; (4) Tenant files a petition in bankruptcy or insolvency or for reorganization or arrangement under the bankruptcy laws of the United States or under any insolvency act of any state, or is dissolved, br makes an assignment for the benefit of creditors; (5) Involuntary proceedings under any bankruptcy laws or insolvency act or for the dissolution of Tenant are instituted against Tenant, or a receiver or trustee is appointed for all or substantially all of Tenant's property, and the proceeding is not dismissed or the receivership or trusteeship is not vacated within sixty (60) days after institution or appointment; (6) Tenant's assignment in violation of Paragraph 11, above; (7) Tenant breaches any of the other agreements, terms, covenants, or conditions that this Lease requires Tenant to perform, fulfill, comply with or observe, and the breach continues for a period of ten ( 10) days after written notice by Landlord to Tenant; (8) Tenant fails to take possession of the Premises on the Commencement Date; or (9) Any default occurs under the Guaranty. Tenant agrees that each and every one of the foregoing events of default are a material part of this Lease, and that Landlord would not have entered into this Lease without each and every one of said events of defaults being a material part of this Lease. 310492820.2 25 _j I I , I ) ..... __ ) :1 l J J (c) Remedies. If any one or more events of default set fo1th in Subparagraph (b ), above, occurs, then Landlord may, at its sole election, exercise any one or more of the following remedies: (1) give Tenant written notice of its intention to terminate this Lease on the date of the notice or on any later date specified in the notice, and, on the date specified in the notice, Tenant's right to possession of the Premises shall cease and this Lease shall be terminated~ except as to Tenant's liability set forth in this Subparagraph (c)(l) and as to any obligations stated in this Lease to survive the termination of this Lease, as if the date fixed in the notice were the end of the Term of this Lease. If this Lease is terminated pursuant to the provisions of this Subparagraph (c)(l), Tenant shall remain liable to Landlord for damages in an amount equal to the rent and other sums that would have been owing by Tenant m;ider this Lease for the balance of the Term if this Lease had not been terminated, less the net proceeds, if any, of any reletting of the Premises by Landlord subsequent to the termination, after deducting all Landlord's expenses in connection with reletting, including without limitation the expenses set forth in Subpatagraph (c)(2), below. Landlord shall be entitled to collect damages from Tenant monthly on the days on which the rent and other amounts would have been payable under this Lease if this Lease had not been terminated, and Landlord shall be entitled to receive damages from Tenant on each day. Alternatively, at the option of Landlord, if this Lease is terminated, Landlord shall be entitled to recover from Tenant: a. the worth at the time of award of the unpaid rent which had been earned at the time of termination; b. the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of rent loss that Tenant proves could reasonably have been avoided; c. the worth at the time of award of the amount by which the unpaid rent for the balance of the Term of this Lease after the time of award exceeds the amount of rent loss that Tenant proves could reasonably be avoided; and d. ,any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lea$e or which in the ordinary course of things would be likely to result from the failure. The "worth at the time of award" of the amount referred to in clauses (A) and (B), above, is computed by allowing interest at the highest rate permitted by law. The "worth at the time of award" of the amount referred to in clause (C), above, is computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (2) Without demand or notice, re-enter and take possession of the Premises or any part of the Premises; repossess the Premises as of the Landlord's former estate; expel the Tenant from the Premises and those claiming through or under Tenant; and remove the effects of all or any, without being deemed guilty of any manner of trespass and without prejudice to any remedies for arrears of rent or preceding breach of covenants or 310492820.2 26 l ' J ,-1 J conditions. If Landlord elects to re-enter as provided in this Subparagraph (c)(2), or if Landlord takes possession of the Premises pursuant to legal proceedings or pursuant to any notice provided by law, Landlord may, from time to time, without terminating this Lease, relet the Premises or any part of the Premises, either alone or in conjunction with other portions of the Project of which the Premises are a part, in Landlord's or Tenant's name but for the account of Tenant, for the term or terins (which may be greater or less than the period which would otherwise have constituted the balance of the Term of this Lease) and on such terms and conditions (which may include concessions of free rent, and the alteration and repair of the Premises) as Landlord, in its uncontrolled discretion, may determine. Landlord may collect and receive the rents for the Premises. Landlord shall not be responsible or liable for any failure to relet the Premises, or any part of the Premises, or for any failure to collect any rent due upon the reletting. No re-entry or taking possession of the Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of the intention is given to Tenant. No notice from Landlord under this Lease or under a forcible entry and detainer statute or similar law shall constitute an election by Landlord to terminate this Lease unless the notice specifically says so. Landlord reserves the right following any re-entry or reletting, or both, to exercise its right to terminate this Lease by giving Tenant written notice, and in that event this Lease shall terminate as specified in the notice. If Landlord elects to taI<:e possession of the Premises according to this Subparagraph (c)(2} without terminating this Lease, Tenant shall pay Landlord the rent and other sums which would be payable under this Lease if the repossession had not occurred, less the net proceeds, if any, of any reletting of the Premises after deducting all of Landlord's expenses incurred in connection with the reletting, including without limitation all repossession costs, brokerage commissions, legal expenses, attorneys' fees, expenses of employees, alteration, remodeling and repair costs, and expenses of preparation for the reletting. If, in connection with any reletting, the new lease term extends beyond the existing Term, or the Premises covered by the reletting include areas that are not part of the Premises, a fair apportionment of the rent received from the reletting and the expenses incurred in connection with the reletting shall be made in determining the net proceeds received from reletting. In addition, in determining the net proceeds from reletting, any rent concessions shall be apportioned over the Term of the new lease. Tenant shall pay the amounts to Landlord menthly on the days on which the rent and all other amounts owing under this Lease would have been payable if possession had not been retaken, and Landlord shall be entitled to receive the rent and other amounts from Tenant on each day. Landlord has the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after Jessee's breach and abandonment and recover rent as it becomes due, if lessee has right to sublet or assign, subject only to reasonable limitations). (3) Have a receiver appointed to take possession of the Premises and to conduct Tenant's business thereon (and neither the filing of a petition for the appointment of a receiver nor the appointment itself shall constitute an election by Landlord to terminate this Lease). (4) Exercise any and all other remedies available to Landlord under this Lease, at Jaw, in equity, by statute, under any other contract or agreement between Landlord and Tenant, or otherwise, in such order and in such manner as Landlord deems appropriate in its sole discretion. 310492820.2 27 r 1 ~I ·~ l :J 24. COMMON AREA. (a) Definition. The term "Common Area" refers only to the area outside the Premises designated as "Common Area" in Exhibit "A" hereto, which Common Area shall be for the non-exclusive use during the Term of Landlord, Tenant and other tenants of the Project, if any, and their respective employees, customers, and invitees, including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, driveways and landscaped areas, if any. (b) Tenant's Right to Use Common Area. During the Term of this Lease, Tenant and its employees, customers and invitees shall have the non-exclusive right to use, in common with others entitled to such use (including, without limitation, Landlord, other tenants of the Project and their respective employees, suppliers, shippers, contractors, customers and invitees), the Common Area as it may be redesignated by Landlord from time-to-time, subject to any rights, powers and privileges reserved by Landlord under this Lease or under the terms of any rules and regulations or restrictions governing the use of the Project or any part thereof. (c) No Storage In Common Area. Under no circumstances shall the right granted under Subparagraph (b), above, be deemed to include the right to store any refuse, boxes, equipment, or other property of any type or kind, whether temporarily or permanently, in or on the Common Area. Any such storage shall be permitted only by the prior written consent of Landlord or Landlord's designated agent, which consent may be revoked at any time. In the event that any unauthorized storage shall occur, Landlord shall have the right, without notice and without liability to Tenant or any other person, in addition to all other rights and remedies Landlord may have under this Lease, to remove any refuse, boxes, equipment, or other property stored, whether permanently or temporarily, within the Common Area without Landlord's prior written consent, and charge the cost of such removal to Tenant, which cost shall constitute Additional Rent and shall be immediately payable upon demand by Landlord. Tenant shall not have any right to use or occupy, or have any other rights respecting, any buildings or structures (other than the Premises), parking areas, roadways, driveways, walkways, trash areas, landscaped areas, loading and unloading areas, sidewalks, or other improvements or areas located within the Project. (d) Rules and Regulations. Tenant agrees that it shall abide by, and keep and observe all Rules and Regulations ("Rules and Regulations") which Landlord may make from time to time for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or tenants of the Project and their invitees. Landlord or such other person(s) as Landlord may appoint shall have the exclusive control and management of the Common Area and shall have the right, from time to time, to establish, modify, amend and enforce the Rules and Regulations. Tenant agrees to cause all Tenant Parties to abide and conform to all such Rules and Regulations. Landlord shall not be responsible to Tenant for the non-compliance with said rules and regulations by other tenants or subtenants of the Project or anyone else occupying or using the Project. (e) Changes. Landlord shall have the right, in Landlord's sole discretion, from time to time: (1) to make changes to the Common Area, including, without limitation, 310492820.2 28 i ' i ~1 J . I I I ' J , I I J changes in the location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways; (2) to close temporarily any of the Common Area for maintenance purposes so long as reasonable access to the Premises remains available; (3) to designate land outside the boundaries of the Project to be a part of the Common Area; (4) to add buildings and improvements to the Common Area; (5) to use the Common Area while engaged in making additional improvements, repairs or alterations to the Project, or any portion thereof; (6) to remove unauthorized persons from the Project; (7) to change the name or address of the Premises or the Project; and (8) to do and perform such other acts and make such other changes in, to or with respect to the Common Area and project as Landlord may, in the exercise ·of sound business judgment, deem to be appropriate. (f) Common Area Maintenance. During the Term, Landlord shall keep the Common Area in good order, condition and repair. The costs incurred by Landlord to do so (including maintenance, repair and replacement costs of any type or kind) are referred to herein as "CAM Costs". Landlord shall periodically (but not more often than monthly) invoice to Tenant, and Tenant shall reimburse to Landlord within fifteen (15) days following Tenant's receipt of Landlord's invoice, all such CAM Costs through the date of the invoice. 25. VEHICLEPARKING. (a) Number of Spaces. Tenant shall be entitled to use [one hundred percent (100%)] of the unreserved parking spaces on those portions of the Common Area designated from time to time by Landlord for Tenant's parking (''Unreserved Parking Spaces"). Tenant shall not be entitled to any reserved or exclusive vehicle parking spaces. Said Unreserved Parking Spaces shall be used for parking by vehicles no larger than full-size passenger automobiles or pick-up trucks, herein called "Permitted Size Vehicles". Vehicles other than Permitted Size Vehicles shall be parked and loaded or unloaded as directed by Landlord in the rules and regulations issued by Landlord. (b) Restrictions on Parking. Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or any Tenant Party to be loaded, unloaded, or parked in areas other than those designated by Landlord for such activities. (c) Removal of Unauthorized Vehicles. If Tenant permits or allows any of the prohibited activities described iii. this Paragraph 25, then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be immediately payable upon demand by Landlord. 26. SECURITY. Tenant acknowledges that Landlord shall have no obligation to provide any guard service or other security measures to the Premises or any other part of the Project, and Tenant assumes all responsibility for the protection of Tenant and each Tenant Party, and the property of Tenant and each Tenant Party from acts of third parties. Nothing in this Lease shall prevent Landlord, at Landlord's sole option, from providing security protection for the Project. 310492820.2 29 i . I r-l l ' I I I ' ' I I j ·. J I j I _) 27. MISCELLANEOUS. (a) No Recordation. Neither this Lease nor a Memorandum thereof shall be recorded. (b) Holding Over. If Tenant remains in possession of the Premises after this Lease expires or sooner terminates, Tenant shall occupy the Premises as a tenant from month-to- month, subject to all conditions, provisions, and obligations of this Lease in effect on the last day of the Term, except that monthly rent shall be increased to an amount which is two hundred percent (200%) of the Base Monthly Rent then in effect immediately prior to the expiration or sooner termination of this Lease. Nothing herein shall grant, or be deemed ·to grant, Tenant any right whatsoever to retain possession of the Premises or any part thereof beyond the expiration or earlier termination of this Lease. (c) Estoppel Certificates. Within no more than ten (10) days after written request by Landlord, Tenant shall execute, acknowledge, and deliver to Landlord a certificate stating: (1) that this Lease is unmodified and in full force and effect, or, if this Lease is modified, the way in which it is modified accompanied by a copy of the modification agreement; (2) the date to which rental and other sums payable under this Lease have been paid; (3) that no notice has been received by Tenant of any default which has not been cured, or, if the default has not been cured, what Tenant intends to do in order to effect the cure, and when it will do so; (4) that Tenant has accepted and occupied the Premises; (5) that Tenant has no claim or offset against Landlord, or, if it does, stating the date of the assignment and assignee (if known to Tenant); and (6) other matters as may be reasonably requested by Landlord. Any certificate may be relied upon by any prospective purchaser of the Premises and any prospective mortgagee or beneficiary under any deed of trust or mortgage encumbering the Premises. If Landlord submits a completed certificate to Tenant, and if Tenant fails to object to its contents within ten ( 10) days after its receipt of the completed certificate, the matters stated in the certificate shall conclusively be deemed to be correct. Furthermore, Tenant irrevocably appoints Landlord as Tenant's attorney- in-fact to execute and deliver on Tenant's behalf any completed certificate to which Tenant does not object within ten (10) days after its receipt. (d) No Waiver. No waiver of any condition or agreement in this Lease by Landlord shall imply or constitute a further waiver by Landlord of the same or any other condition or agreement. No act or thing done by Landlord or Landlord's agents during the Term of this Lease shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept the SUlTender shall be valid unless in writing signed by Landlord. The delivery of Tenant's keys to any employee or agent of Landlord shall not constitute a termination of this Lease unless Landlord has entered into an express written agreement to that effect. No payment by Tenant, or receipt from Landlord, of a lesser amount than the rent or other charges stipulated in this Lease shall be deemed to be anything other than a payment on account of the earliest stipulated rent. No endorsement or statement on any check or any letter accompanying any check or payment as rent shall be deemed an accord and satisfaction. Landlord may accept any check for payment without prejudice to Landlord's right to recover the balance of the rent or to pursue any other right or remedy available to Landlord. If this Lease is assigned, or if the Premises or any part of the Premises are sublet or occupied by anyone other than Tenant, Landlord may collect rent from the assignee, subtenant, or occupant and apply the net amount 310492820.2 30 -1 l ·1 j j 1 J I .J collected to the rent reserved in this Lease. No collection shall be deemed a waiver of the covenant in this Lease against assignment and subletting, the acceptance of the assignee, subtenant, or occupant as Tenant, or a release of Tenant from the complete performance by Tenant of its covenants and obligations under this Lease. Unless otherwise expressly stated to the contrary in this Lease, Landlord may withhold its consent or approval in Landlord's sole and absolute discretion. (e) Authority. If Tenant signs this Lease as a corporation, each of the persons executing this Lease on behalf of Tenant warrants to Landlord that Tenant is a duly authorized and existing corporation, that Tenant is qualified to do business in the state in which the Premises are located, that Tenant has full right and authority to enter into this Lease, and that each and every person signing on behalf of Tenant is authorized to do so. Upon Landlord's request, Tenant shall provide evidence satisfactory to Landlord confirming these representations. (f) Notices. Any notice, request, demand, consent, approval, or other communication required or permitted under this Lease shall be written and shall be deemed to have been given (1) when personally delivered, (2) when served pursuant to the Federal Rules of Civil Procedure, (3) on the second (2nd) business day after it is deposited in any depository regularly maintained by the United States postal service, postage prepaid, certified or registered mail, return receipt requested, or (4) on the date of scheduled delivery when sent by FedEx or other nationally recognized overnight commercial mail service, addressed as follows: If to Landlord: If to Tenant: College Terrace Centre LLC c/o PCS Realty Advisors P.O. Box 620186 Woodside, CA 94062 Attn: Mr. Patrick Smailey Fax: (650) 701-1609 J & A Family Markets, Inc. 274 Redwood Shores Parkway, #201 Redwood Shores, CA 94065 Attn: Mr. James Smailey Fax: Either Landlord or Tenant may change its address or addressee for purposes of this paragraph by giving ten (10) days' prior notice according to this paragraph. Notwithstanding the foregoing, any notice from Landlord to Tenant shall be deemed to have been given if delivered to the Premises, addressed to Tenant, whether or not Tenant has vacated or abandoned the Premises. (g) Attorneys' Fees. In any dispute arising out of this Lease (or the enforcement of interpretation thereof), the prevailing party shall be entitled to all costs and expenses, including reasonable attorneys' fees and expert fees incurred by the prevailing party at trial and on any appeal. 310492820.2 31 I l l J ! (h) Waiver of Jury Trial. Landlord and Tenant waive trial by jury in any action, proceeding, or counterclaim brought by either of them against the other on all matters arising out of this Lease or the use and occupancy of the Premises (except claims for personal injury or property damage). If Landlord commences any summary proceeding for nonpayment of rent, Tenant shall not interpose (and waives the right to interpose) any counterclaim in any proceeding. (i) Binding Effect. This Lease shall inure to the benefit of, and shall be binding upon, Landlord's successors and assigns. This Lease shall inure to the benefit of, and shall be binding upon, Tenant's successors and assigns so long as the succession or assignment is permitted by Paragraph 11, above. G) Termination; Merger. Unless specifically stated otherwise in writing by Landlord, the voluntary or other surrender of this Lease by Tenant, the mutual termination or cancellation hereof, or a termination hereof by Landlord for Breach by Tenant, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, Landlord shall, in the event of any such suITender, termination or cancellation, have the option to continue any one or more of any existing subtenancies. Landlord's failure within ten (10) days following any such event to make a written election to the contrary by written notice to the holder of any such lesser interest, shall constitute Landlord's election to have such event constitute the termination of such interest. (k) Approximations. Unless otherwise provided herein, any statement of square footage set forth in this Lease, or that may have been used in calculating rental and/or CAM Costs, is an approximation which Landlord and Tenant agree is reasonable and the rental is not subject to revision whether or not the actual square footage is more or less. (1) Brokers. Each party warrants to each other that neither has dealt with any real estate agents, brokers or finders in connection with this Lease. Each paity agrees to indemnify, defend, and hold the other harmless from all loss, claim, cost, and expense incuITed as a result of the breach of this warranty. (m) Cumulative Remedies. No remedy or election hereunder made by Landlord shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies available at law, in equity, by statute, under any other contract or agreement between Landlord and Tenant, or which are otherwise available to Landlord. (n) Covenants and Conditions. All provisions of this Lease to be observed or performed by Tenant are both covenants and conditions. (o) Landlord's Liability. The term "Landlord" as used herein shall mean the owner or owners at the time in question of the fee title to the Premises. In the event of a transfer of Landlord's title or interest in the Premises (or any parcel of which the Premises are a part) or in this Lease, Landlord shall deliver to the transferee or assignee (in cash or by credit) any unused se.curity deposit held by Landlord at the time of such transfer or assignment. Upon such transfer or assignment and delivery of the security deposit, as aforesaid, the prior Landlord shall be relieved of all liability with respect to the obligations and/or covenants under this Lease 310492820.2 32 ,-I I I l I I } l J thereafter to be performed by Landlord. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by Landlord shall be binding only upon the Landlord as herein above defined. (p) Reservations. Landlord reserves the right from time to time, to grant, without the consent orjoinder of Tenant, such easements, rights of way, utility raceways, and dedications that Landlord deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights of way, utility raceways, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Tenant. Tenant agrees to sign any documents reasonably requested by Landlord to effectuate any such easement rights, dedication, map or restrictions. (q) Entire Agreement; Amendment. This Lease constitutes the entire agreement between Landlord and Tenant with respect to the subject matter hereof, and there are no agreements, warranties or representations between the parties except as expressly set forth in this Lease. Tenant acknowledges that neither Landlord nor any agent, employee or representative of Landlord have made any representation or warranty as to any matter except as may be expressly set forth in this Lease. Landlord and Tenant acknowledge that there are no oral agreements between them affecting this Lease, and this Lease supersedes and cancels all previous negotiations, arrangements, brochures, agreements, and understandings, if any, between Landlord and Tenant with respect to the subject matter of this Lease. This instrument shall not be legally binding until it is executed by both Landlord and Tenant. No change, modification, amendment or addition to this Lease shall be binding unless in writing and signed by both Landlord and Tenant. 310492820.2 33 : __ j i I I, l J IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the first date in this Lease. Landlord: Tenant: 310492820.2 College Terrace Centre LLC, a California limited liability company College Te1rnce Centre LLC, a California limited liability company . ~@ By: 1Ju~ , ( fl/t./ Name: ~=i Its: Manager y Markets, Inc., By:~-'1---+....=-~--,----...--.-.,....--~..,..._.,~ Name: t---=~!:!:::..!:!~~::::....:...._:_~~~.L...:=¥-­ Its: --1---,--=.l""-='----------+-- 34 I I I I _J u J J J r-1 I ' j I , I r-1 i ·.·•-r·.! • Attachment A Years 1 - 5 $22,500.00 Years 6-10 CPI Index Years 11 -15 CPI Index Years 16-20 CPI Index ~-, : I 'J ' J I ] -I I '. I -I ' l l l _J j J 1 - -.J -j Exhibit 2 , I I I EXHIBITC Guaranty of Lease GUARANTY OF LEASE WHEREAS, COLLEGE TERRACE CENTRE LLC, a California limited liability company ("Landlord"), and J & A FAMILY MARKETS, INC., a California corporation ("Tenant"), "J about to execute or have executed a document entitled "Commercial Lease" dated U I i.o I~ (the "Lease") concerning the premises to be located at the northwest corner ol 210 El Camino Real, City of Palo Alto, California, upon which Tenant will operate a grocery store containing eight thousand (8,000) square feet of floor space, along with an outdoor market of approximately two thousand (2,000) immediately adjacent thereto and approximately six hundred (600) square feet of dry storage in the basement garage (collectively, the "Premises"), wherein Landlord will lease the Premises to Tenant, and WHEREAS, JAMES SMAILEY, an individual ("Guarantor") has a financial interest in Tenant, and WHEREAS, Landlord would not execute the Lease if Guarantor did not execute and deliver to Landlord this Guaranty of Lease. NOW THEREFORE, in consideration of the execution of the Lease by Landlord and as a material inducement to Landlord to execute the Lease, Guarantor hereby unconditionally and irrevocably guarantees the prompt payment by Tenant of "Monthly Base Rent" (as defined in the Lease), Additional Rent (as defined in the Lease), any late charges (as described in Section 4(d) of the Lease) and any interest on past due obligations (as described in Section 4(e) of the Lease) (collectively, the "Tenant's Obligations"). It is specifically agreed by Landlord and Guarantor that: (i) the terms of the Lease may be modified by written agreement between Landlord and Tenant, and (ii) the Lease may be assigned by Landlord or any assignee of Landlord without consent or notice to Guarantor. Landlord shall provide Guarantor with written notice of any amendment to the Lease. This Guaranty shall not be released, modified or affected by the failure or delay on the part of Landlord to enforce any of the rights or remedies of the Landlord under the Lease. No notice of default by Tenant under the Lease need be given by Landlord to Guarantor, it being specifically agreed that the guarantee of the undersigned is a continuing guarantee under which Landlord may proceed immediately against Tenant and/or agai!lst Guarantor following any breach of default by Tenant in the payment of Tenant's Obligations or for the enforcement of any rights which Landlord may have as against Tenant under the terms of the Lease or at law or in equity, resulting from the default by Tenant in the payment of Tenant's Obligations. Landlord shall have the right to proceed against Guarantor following any breach or default by Tenant in the payment of Tenant's Obligations under the Lease without first proceeding against Tenant and without previous notice to or demand upon either Tenant or Guarantor. 310492820.2 Exhibit C-1 \, ) , I l Guarantor hereby waives (a) notice of acceptance of this guaranty, (b) demand of payment, presentation and protest, (c) all right to assert or plead any statute of limitations relating to this Guaranty or the Lease, (d) any right to require the Landlord to proceed against the Tenant or any other Guarantor or any other person or entity liable to Landlord, (e) any right to require Landlord to apply to any default any security deposit or other security it may hold under the lease, (f) any right to require Landlord to proceed under any other remedy Landlord may have before proceeding against Guarantor, (g) any right of subrogation that Guarantor may have against Tenant. Guarantor does hereby subordinate all existing or future indebtedness of Tenant to Guarantor to the obligations owed to Landlord under the Lease and this Guaranty. The term "Landlord" refers to and means the Landlord named in the Lease and also Landlord's successors and assigns. The term "Tenant" refers to and means the Tenant named in the Lease and also Tenant's successors and assigns. · No provision of this Guaranty or right of the Landlord can be waived, nor can the Guarantor be released from their obligations except in writing signed by the Landlord. Any litigation concerning this Guaranty shall be initiated in a state court of competent · . jurisdiction in the county in which the leased premises are located and the Guarantor consents to the jurisdiction of such court. This Guaranty shall be governed by the laws of the State of California and for the purposes of any rules regarding conflicts of law the parties shall be treated as if they were all residents or domiciles of California. In the event any action be brought by the Landlord against Guarantor hereunder to enforce the obligation of Guarantor hereunder, the unsuccessful party in such action shall pay to the prevailing party therein a reasonable attorney's fee. The attorney's fee award shall not be computed in accordance with any comt fee schedule, but shall be such as to full reimburse all attorney's fees reasonably incurred. Each individual executing this Guaranty on said entity's behalf represents and warrants that he or she is duly authorize to execute this Guaranty on behalf of such entity. Exec hlove~W tD rniley, an individual 310492820.2 Exhibit C-2 I I I I ,-1 ~ -1 I _J GUARANTY OF LEASE WHEREAS, COLLEGE TERRACE CENTRE LLC, a California limited liability company ("Landlord"), and J & AF AMIL Y MARKETS, INC., a California corporation ("Tenant"), are about to execute or have executed a document entitled "Commercial Lease" dated November 20, 2013 (the "Lease") concerning the premises to be located at the northwest comer of2108 El Camino Real, City of Palo Alto, California, upon which Tenant will operate a grocery store containing eight thousand (8,000) square feet of floor space, along with an outdoor market of approximately two thousand (2,000) immediately adjacent thereto and approximately six hundred (600) square feet of dry storage in the basement garage (collectively, the "Premises"), wherein Landlord will lease the Premises to Tenant, and WHEREAS, JOE OESCHGER, an individual ("Guarantor") has a financial interest in Tenant, and WHEREAS, Landlord would not execute the Lease if Guarantor did not execute and deliver to Landlord this Guaranty of Lease. NOW THEREFORE, in consideration of the execution of the Lease by Landlord and as a material inducement to Landlord to execute the Lease, Guarantor unconditionally guarantees to Landlord and the successors and assigns of Landlord the full and punctual payment, performance and observance by Tenant of all of the terms, covenants and conditions in the Lease to be kept, performed or observed by Tenant (collectively, the "Tenant's Obligations"). Without limiting the foregoing, Guarantor guarantees the performance or payment of any liability of Tenant which shall accrue under the Lease for any period preceding as well as any period following the term of the Lease. If, at any time, Tenant shall default in the performance or observance of any of the terms, covenants or conditions in the Lease to be kept, performed or observed by Tenant, including, without limitation, the payment of any rent or other charge, Guarantor will keep, perform and observe the same, as the case may be, in place and stead of Tenant. It is specifically agreed by Landlord and Guarantor that: (i) the terms of the Lease may be modified by written agreement between Landlord and Tenant, and (ii) the Lease may be assigned by Landlord or any assignee of Landlord without consent or notice to Guarantor. Landlord shall provide Guarantor with written notice of any amendment to the Lease. This Guaranty shall not be released, modified or affected by the failure or delay on the part of Landlord to enforce any of the rights or remedies of the Landlord under the Lease. No notice of default by Tenant under the Lease need be given by Landlord to Guarantor, it being specifically agreed that the guarantee of the undersigned is a continuing guarantee under which Landlord may proceed immediately against Tenant and/or against Guarantor following any breach of default by Tenant in the payment or performance of Tenant's Obligations or for the enforcement of any rights which Landlord may have as against Tenant under the terms of the Lease or at law or in equity, resulting from the default by Tenant in the payment or performance of Tenant's Obligations. 2924146.1 1 j Landlord shall have the right to proceed against Guarantor following any breach or default by Tenant in the payment of Tenant's Obligations under the Lease without first proceeding against Tenant and without previous notice to or demand upon either Tenant or Guarantor. Guarantor hereby waives (a) notice of acceptance of this guaranty, (b) demand of payment, presentation and protest, ( c) all right to assert or plead any statute of limitations relating to this Guaranty or the Lease, ( d) any right to require the Landlord to proceed against the Tenant or any other Guarantor or any other person or entity liable to Landlord, ( e) any right to require Landlord to apply to any default any security deposit or other security it may hold under the lease, (f) any right to require Landlord to proceed under any other remedy Landlord may have before proceeding against Guarantor, (g) any right of subrogation that Guarantor may have against Tenant. Without limiting the generality of the foregoing, Guarantor hereby expressly waives any and all rights and defenses under California Civil Code Sections 2787 to 2855, inclusive. Guarantor does hereby subordinate all existing or future indebtedness of Tenant to Guarantor to the obligations owed to Landlord under the Lease and this Guaranty. The term "Landlord" refers to and means the Landlord named in the Lease and also Landlord's successors and assigns. The term "Tenant" refers to and means the Tenant named in the Lease and also Tenant's successors and assigns. No provision of this Guaranty or right ofthe Landlord can be waived, nor can the Guarantor be released from their obligations except in writing signed by the Landlord. Any litigation concerning this Guaranty shall be initiated in a state court of competent jurisdiction in the county in which the Premises are located and the Guarantor consents to the jurisdiction of such court. This Guaranty shall be governed by the laws of the State of California and for the purposes of any rules regarding conflicts of law the parties shall be treated as if they were all residents or domiciles of California. · In the event any action be brought by the Landlord against Guarantor hereunder to enforce the obligation of Guarantor hereunder, the unsuccessful party in such action shall pay to the prevailing party therein a reasonable attorney's fee. The attorney's fee award shall not be computed in accordance with any court fee schedule, but shall be such as to full reimburse all attorney's fees reasonably incurred. Each individual executing this Guaranty on said entity's behalf represents and warrants that he or she is duly authorize to execute this Guaranty on behalf of such entity. 2924146.1 2 ~~· 1. I ! l I 1 I· .. GUARANTY OF LEASE ) ~-! 1 ~l i J I I i J GUARANTY OF LEASE WHEREAS, COLLEGE TERRACE CENTRE LLC, a California limited liability company ("Landlord"), and J & A FAMILY MARKETS, INC., a California corporation ("Tenant"), are about to execute or have executed a document entitled "Commercial Lease" dated November 20, 2013 (the "Lease") concerning the premises to be located at the northwest comer of2108 El Camino Real, City of Palo Alto, California, upon which Tenant will operate a grocery store containing eight thousand (8,000) square feet of floor space, along with an outdoor market of approximately two thousand (2,000) immediately adjacent thereto and approximately six hundred (600) square feet of dry storage in the basement garage (collectively, the "Premises"), wherein Landlord will lease the Premises to Tenant, and . WHEREAS, ELDORA MILLER, an individual ("Guarantor") has a financial interest in Tenant, and WHEREAS, Landlord would not execute the Lease if Guarantor did not execute and deliver to Landlord this Guaranty of Lease. NOW THEREFORE, in consideration of the execution of the Lease by Landlord and as a material inducement to Landlord to execute the Lease, Guarantor unconditionally guarantees to Landlord and the successors and assigns of Landlord the full and punctual payment, performance and observance by Tenant of all of the terms, covenants and conditions in the Lease to be kept, performed or observed by Tenant (collectively, the "Tenant's Obligations"). Without limiting the foregoing, Guarantor guarantees the performance or payment of any liability of Tenant which shall accrue under the Lease for any period preceding as well as any period following the term of the Lease. If, at any time, Tenant shall default in the performance or observance of any of the terms, covenants or conditions in the Lease to be kept, performed or observed by Tenant, including, without limitation, the payment of any rent or other charge, Guarantor will keep, perform and observe the same, as the case may be, in place and stead of Tenant. It is specifically agreed by Landlord and Guarantor that: (i) the terms of the Lease may be modified by written agreement between Landlord and Tenant, and (ii) the Lease may be assigned by Landlord or any assignee of Landlord without consent or notice to Guarantor. Landlord shall provide Guarantor with written notice of any amendment to the Lease. This Guaranty shall not be released, modified or affected by the failure or delay on the part of Landlord to enforce any of the rights or remedies of the Landlord under the Lease. No notice of default by Tenant under the Lease need be given by Landlord to Guarantor, it being specifically agreed that the guarantee of the undersigned is a continuing guarantee under which Landlord may proceed immediately against Tenant and/or against Guarantor following any breach of default by Tenant in the payment or performance of Tenant's Obligations or for the enforcement of any rights which Landlord may have as against Tenant under the terms of the Lease or at law or in equity, resulting from the default by Tenant in the payment or performance. of Tenant's Obligations. 2924149.1 1 -1 1 j I I I I I Landlord shall have the right to proceed against Guarantor following any breach or default by Tenant in the payment of Tenant's Obligations under the Lease without first proceeding against Tenant and without previous notice to or demand upon either Tenant or Guarantor. Guarantor hereby waives (a) notice of acceptance of this guaranty, (b) demand of payment; presentation and protest, ( c) all right to assert or plead any statute of limitations relating to this Guaranty or the Lease, ( d) any right to require the Landlord to proceed against the Tenant or any other Guarantor or any other person or entity liable to Landlord, (e) any right to require Landlord to apply to any default any security deposit or other security it may hold under the lease, (f) any right to require Landlord to proceed under any other remedy Landlord may have before proceeding against Guarantor, (g) any right of subrogation that Guarantor may have against Tenant. Without limiting the generality of the foregoing, Guarantor hereby expressly waives any and all rights and defenses under California Civil Code Sections 2787 to 2855, inclusive. Guarantor does hereby subordinate all existing or future indebtedness of Tenant to Guarantor to the obligations owed to Landlord under the Lease and this Guaranty. The term "Landlord" refers to and means the Landlord named in the Lease and also Landlord's successors and assigns. The term "Tenant" refers to and means the Tenant named in the Lease and also Tenant's successors and assigns. No provision of this Guaranty or right of the Landlord can be waived, nor can the Guarantor be released from their obligations except in writing signed by the Landlord. Any litigation concerning this Guaranty shall be initiated in a state court of competent jurisdiction in the county in which the Premises are located and the Guarantor consents to the jurisdiction of such court. This Guaranty shall be governed by the laws of the State of California and for the purposes of any rules regarding conflicts of law the parties shall be treated as if they were all residents or domiciles of California. In the event any action be brought by the Landlord against Guarantor hereunder to enforce the obligation of Guarantor hereunder, the unsuccessful party in such action shall pay to the prevailing party therein a reasonable attorney's fee. The attorney's fee award shall not be computed in accordance with any court fee schedule, but shall be such as to full reimburse all attorney's fees reasonably incurred. Each individual executing this Guaranty on said entity's behalf represents and warrants that he or she is duly authorize to execute this Guaranty on behalf of such entity. 2924149.1 2 ' ' Executed on 0 cJ-t'J' , 20 lf By: ~ iZt1A &t,lkf_~ Eldora Miller, an individual I i ' i I J GUARANTY OF LEASE I I ! ii I , J I I ~, _J -' ,i ' I i ' .I ' ' ! I I I , I : I I I J' i I I I Exhibit 3 I I 1 ' ) ~ I I I I I J _i J I ~ ) URIEL CHAVEZ SUMMARY OF QUAUFICA TIO NS PERSONAL ATTRIBUTES: Results-driven., dynamic, and diligen.t professional, offering extensive years of experience in retail financial management and its full settings, including research, development, A/P and A/R, payroll, and implementation of business solutions, coupled with verifiable success in program and project development. Exemplify efficiency in working within fast-paced, constantly changing, and demanding business environment. LEADERSHIP QUALITIES: Respected and well-admired professional, with consistent success in addressing individual situations, managing programs, promoting team-driven environments, empowering employees, and enhancing performance toward attainment of organizational goals. Display outstanding problem solving, partnership building, as well as exceptional mentoring and persuasion skills. Possess exceptional skills in building trust among members and peers to ensure a successful team. KEY SKILLS: Possess keen eye for detail with proven efficien.cy to multitask within aggressively competitive and fast-paced environments. Able to adapt to diverse working environments, as well as able to manage and complete numerous projects simultaneously. High proficiency in using MS Office Suite (Word, Excel, PowerPoint, and Access), QuickBooks, Silhouette, and Adobe After Effects CSS. Bilingual communicator; fluent in English and Spanish languages. Continuously seeks to self improve, current CPA candidate. CORE STRENGTHS RECENT ACCOMPUSHMENTS ./ Recent winner of the Silicon Valley Business Plan Competition 2012-Best Written Business Plan ./ Displayed outstanding mentoring and teaching skills in educating department managers pertaining to effective organizational approaches toward attainment of organizational goals while constantly improving different processes used in budgeting, cash flow projections, and reporting mechanism ./ Significantly created marketing program that served as effective tool in order to increase awareness and sales, which led to 150% increase in customers' numbers, marking individual purchase average to 70%, and total sales to 200% within 2 years ./ Increased efficiency and on-time departures by 98 % while reducing salary and transportation expenses through effective management and implementation: of projects in aligrunent with standard reporting procedures "" .. .. RHA TED EXPERIENCE MSI (DBA HACIENDA MARKETS) I San Mateo, CA Spearheaded the merge between LG Pharmacies and La Hacienda Markets, overseeing the implementation of new in-store pharmacy services and in-store food services Oversaw the management of three stores and logistic center of grocery, produce, and retail products Carried out relevant contribution in controlling all internal financial systems and analysis in accordance with the company's business' compliance and regulatory standards, weights and measures, sales tax, signage, laws, and accounting principles + Ensured correctness and accuracy of data in preparing financial summaries and reports to be submitted to the executive management, financial institutions, and internal shareholders -# Demonstrated excellent management skills in facilitating staff training on functions within the areas of finance, budget, accounting, purchasing, insurance requirements, workers compensation claims, accident JL.....--___________ _ URIEL CHAVEZ prevention programs, POS training for management and front end employees, payroll, and management information systems ..Y Fostered harmonious relationship with vendors, clients, staff, local city and county officials, and community affairs while demonstrating effective leadership skills in supervising 4 managers and 115 employees . ..;;. Functioned relevant role in determining, reviewing, and expanding the range of products and services offered to consumers ~ Exhibited excellent analysis and recommendation as results of thorough evaluation and management of vendor products and services implementation + Developed media relations and promotions in order to achieve continuous growth and development while implementing and conducting training program in collaboration with the management LATINO GROCERS LLC (DBA LA HACIENDA MARKET) I Sacramento, CA LG PHARMACIES, LLC (DBA SAN MIGUEL PHARMACY) ,j>, Played a pivotal role in the supervision of the entire operations within a 24K square feet Hispanic grocery store + Took full charge of establishing management structure and in-house training and promotion program for management positions ~ Exemplified great intellect in developing a year-round forecasting for procurement and allocation of proper staffing, equipment, POS upgrades, and strategic inventory -~ Utilized commendable communication skills in negotiating pricing and delivery with outside companies in order to acquire ordering, purchasing, and inventory guidelines that helped in maximizing product availability, lowering overstocked inventory levels, as well as reducing cost of goods -;y Orchestrated daily business operations; engaged in accounts payables, payroll, legal documentations, purchasing contracts, insurance requirements, and workers compensation claims; and ensured compliance with federal and state deadlines for documentation and tax reporting OTHER EXPERIENCE INDEPENDENT CONSULTANT I SELF I Menlo Park, CA ROTOSCOPE ARTIST I THE BASE STUDIO I Redwood Shores, CA LEAD SUPERVISOR I UNITED PARCEL SERVICE, OPERATIONS MANAGEMENT I Menlo Park, CA ASSISTANT SECURITY MANAGER I US ARMY RESERVE, MILITARY INTELLIGENCE I Dublin, CA IMAGERY ANALYST I U.S. ARMY RESERVE, MILITARY INTELLIGENCE I Dublin, CA EDUCATION BACHELOR OF SCIENCE IN INTERNATIONAL BUSINESS MANAGEMENT Menlo College I Atherton, CA I 2012 CERTIFICATE OF ACHIEVEMENT IN ACCOUNTING: TAXATION EMPHASIS-ADVANCED De Anza & Foothill College I Cupertino, CA I Conferred June 2012 I CPA Candidate July 2012 Credentials: Certified as an Imagery Analyst (96D-10) I United States Army Intelligence School Top Secret SCI Clearance Holder Jul 2011--Present Mar 2011-Jul 2011 Feb 2000-Dec 2001 May 2000-Apr 2005 Apr 1999-Apr 2005 ~l I I c ] I I I I Mr. Uriel Chavez Uriel Chavez has been in the grocery business since 2002. He started as a project manager for Hacienda Markets where he expanded the range of products and services offered to consumers. In 2005, Uriel became the owner of Latino Grocers, LLC (DBA La Hacienda Market) and LG Pharmacies, LLC (OBA San Miguel Pharmacy). Uriel supervised the operations of the 24,000 square foot Hispanic grocery store, La Hacienda Market. He established the management structure and training and promotion program for management positions. He developed year-round forecasting for procurement and allocation of proper staffing, equipment, POS upgrades, and inventory. He negotiated pricing and delivery with outside companies in order to maximize product availability, lower overstocked inventory levels, as well as reduce the cost of goods. Daily business operations included accounts payables, payroll, legal documentations, purchasing contracts, insurance requirements, and workers compensation claims. Uriel expanded La Hacienda Markets to a total of four stores throughout the Bay Area. Uriel became the Chief Financial Officer of Hacienda Markets. He controlled all internal financial systems and analysis of the company and ensured financial reports were submitted to the executive management, financial institutions, and internal shareholders. He facilitated staff training on functions within the areas of finance, budget, account, purchasing, insurance requirements, workers compensations claims, .accident prevention programs, POS training for management and front end employees, payroll and management information systems. Exhibit 4 : I I I "' 1 j Bank of America~ p,n. H~1x I52S-i \Vilm~n~·trm~ 111'~ 1P.8:'5('1 j & A FAMlLY MARKET IN< Your Business Fundamentals Checking for October 1, 2014 to October 31, 2014 ) & A FAMILY MARKET INC Account summary Beginning balance on October i, 2014 51,665.00 Deposits and other credits 750,000.00 -·-----·------- Withdrawais and oi:her debirs -0.00 Checks -0.00 Service foes -16.00 Ending balance on October 31, 2014 . $751,649.00 Customer service information »} i .BBB.BUSINESS (1.888.287.4637j ·It bankofamerica.com ~ Bank of America, N.A. P.O. Box 25118 Tampa. FL 33622-5118 ;; of depositsicredits: 1 ;; of withdrawals/debii::s: 1 ;:; of items-previous cyde': 2 ;; of days in cycle: 31 Average ledger balance: $74.229.64 ;lnciudes chedr.s paid,deposi£ed ttems&ather debits You_ never stop working to improve your business. Neither do vve. With our fasrer card pmcessing, g.et your funds as soon as the ne~-r business day.1 Plus: • U.S.-based 24/7 wstomer ser11ke • 99.99% authorization uptime Learn more. Just give us a call at 1855.833.3608. • Unparallelerl security i~}P5.~~:~;~~~EZ~~fE~~K~t:fi1f1;~~iE{i;~~Ef~~!~~ff;iE.;z=?E~:~ Sff~·Xes ~ff n1'r: su.e:.ente;:d o: 1!'$.Jred~ ~h~ F0iC r:tr f)t".j ~f."z gr.r~err.-~r ,:;gr.:~J. ~2014 B2P.k ~f .e.rre:ca MerG;...cn~ S:rk~. U.C ?Jl :~ghts re$erv00. foPSVJ4YQH i .t;t,i[4 .. i4--C~25.S Page 1of4 I -·--' I -1 l ! October 1, 2014 to October 31, 2014 .-...... -~------·-oO••• ••·•··~·----------.. --"•"------~-------··-Mo ~·-···-·-----------------·---- IMPORTANT INFORMATION: BANK DEPOSiT ACCOUNTS Change of address· Please call us at the telephone number listed on the front of this statement to tell us about a change of address. Deposit agreement· When you opened your account, you received a deposit agreement and fee schedule and agreed that your account would be governed by the terms of these documents, as we may amend them from time co time. These documents are pan: of the contract for your depos.ii: accourn: and govern all transactions relating to your account, including all deposits and withdrawals, Copies of both the deposit agreement and fee schedule which contain the current version of the terms and conditlons of your accourn: relai:lonship may be obtained at our banking centers. Electronic transfers: ln case of errors or questions about your e!ecuonic nansfers~ If you think your statement or receipt is wrong or you need more information about an eiec:tronic transfer (e.g .. ATM transactions, direct deposits or withdrawals, point-of~saie transactions) on the statement o; receipt, te!ephone or write us at the address and number listed on the front of this statement as soon as you can. We must hear from you no iater than 60 days after we sent you the FIRST statement on which the error or problem appeared. Tell us your name and account number. Describe the error or transfer you are unsure about, and explain as clearly as you can why you believe there is an error or why you need more Information. Tell us the dollar amount of the suspected error. For consumer accounts used primarily for personal, family or household purposes, we will fnvestfgate your complaint and will correct any error promptly. If we take more than 1 O business days (1 O calendar days if you are a Massachusetts customer) (20 business days lf you are a new customer, for electronic transfers occurring during ::he first 30 days after the first deposit is made to your account) to do this .. we will credit your account for the amount you think is in error, so that you wm have use of the money during the tfme it wili take to complete our investigation. For other accounts, we investigate, and lf we find we have made an error, we credit your account at the condusion of our Investigation. Reporting other problems 0 You must examine your statement carefully and promptly. You are in the best position to discover errors and unauthorized i:ransactions on your account If you faH to nor:ify us fn wrl1:ing of suspected problems or an unauthoriz~d transaction wichrn· the tlme period specified In the deposii: agreement (which periods are no more man 60 days after we make the statement available 1:0 you and in some cases are 30 days or iess}, we are no[ liable to you for, and you agree to not make a claim against: us for r.he problems or unaui:horfzed transactions, Direcc deposits -If you have arranged to have direct deposits made ro your account at least once every 60 days from the same person or company, you may calf us at the i;elephone number fisted on the front of mis sratement to find out if the deposit was made as scheduled. You may also review your actfvity online or visit a banking center for informai::lon, © 2013 Bank of America Corporation Bank of America, N.A. Member FDIC ana @ &:Jual Ho11$ing Lemler Page 2 of 4 J I -J I I Bank of America..,. Your checking account October 1, 2014 to October 31, 2014 .. ~ ....................... ~·· .... -_._ ........... "'-' .... ~~'~ ~.-, ....... _ ............ ,..,.,, __ ...... , __ •""·~···· ··--... ---·' . -...... ·--~- Deposits and other credits Date Description 10/29/14 Deposit Total deposits and other credits ,... . ,-:::>erv1ce rees Amount 750,000.00 $750,000.00 Based on the activity on your business accoums for the statemem period ending 09/30/14, a Monthly Fee was charged for your Business Fundamentals checking account (Primary). You can avoid rhe fee in the fu'cure by meeting one of the requirements below: At least one of the following occurred Q $250.,. in net new purchases en a linked Business debit card Q $2.50+ in net new purchases on a linked Business credit card Q $3/looo~ mlnimum daily balance in primary checking account Q $5,000"· average monthly balance in prim.:ry checking account Q Sl 5,000.,. combin~d averagi? monthly ba!am.:e in linked business accounts A ch'1!ck mark indicates th<it you have qualified for a monthly fe<-~ waiver on 1'.hP account based on your usage of these products or ssrvlc.es. For lnformm:ion on how to open a new produce or to !ink an exlsting service co yo•Jr accoum please caH 1-888-BUSfNESS or visit bankofamerica.comismal!bus!ness. Date Transaction description 10/01/74 Monthly Fee for Business Fundamemais Amount -16.00 Total service fees -$16.00 /Vote your E.rrdfng Bafonce already reflects rhe subtraction of Sero.dee Fees. Daily ledger balances Date Balance($) Dare Balance($) i0/29 751.649.00 Spend more time growing your business and less ti me on payroll We've ~med up with Intuit" to bring you efflciem: payroll solw:lons. Pius, get access ro your checking account and payroll ali ln one pJzcz. UiU 1.$66,700.2142. Our team rsf payroll speclalls":.s wm help you find th~ rigm iolution for your bi.1.Slti~55, n1tu11t Pcr,r,oi! J Page 3 of 4 I I I ) &: A FAMJLY MARKET INC I ! October 1, 2014 to October 31, 2014 .............. ---~---· ----------------·------·----·---------·--- To help you BALANCE YOUR CHECKING ACCOUNT, visit bankofame;ica.corn,sta!ementba!ance or ~he Statements and Documents tab in Online Bar.king for a printable version of the How rn Balance Your Account Worksheet. Page4 of 4 --·-, ' .--·, ~. ' 11 ! Exhibit 5 ~-, 'I ~ J ~ '. J ,---, I .----., I, 11 . ) r' j ', f ,. [ I I l I \ , l \ " I J I _: l 700 Airport Blvd., #260 Burlingame, CA 94010 • Tel. 650-343-4244 Fax 650-343-4944 • www.suttiassoc.com EXHIBIT 15 COMPARISON OF JJ&F WITH SUPERIOR PHYSICAL LAYOUT OF COLLEGE TERRACE MARKET This memo compares the physical layout with respect to parking, site amenities, interior floor display and marketing features for the JJ&F market and the proposed College CTM. Interior images, site plans and photographic displays are set forth in Exhibits 8,9,10, & 11. The CTM grocery area at 13,500 square feet is substantially greater than that of JJ&F, which was only at 11,500 square feet. Indoor sales floor area for CTM is 8,000 square feet while JJ&F was less than 6,000 square feet. JJ&F did not have an outdoor market while CTM will provide 2,400 square feet for attractive, inviting, outdoor food sales and service. Both JJ&F and CTM have some areas dedicated to storage and food preparation. CTM will provide 40 dedicated parking spaces compared with twenty-five shared spaces for JJ&F. There will be fifteen bicycle parking spaces on site for CTM compared to JJ &F, which had no controlled bicycle parking spaces. A major change for CTM and an important ARB influence on the PC Zone, CTM provides a full El Camino frontage with highly visible and attractive signage, JJ &F had no visible appearance to El Camino with a windowless wall that was uninviting. A California Corporation o License No. 338908 ' I 1: t, ~ I I ! ,-1 I ,, J I J For CTM there will be elevator access from the garage areas, to the ground floor store, and there will be contemporary, highly functioning entry retail doors on the ground floor. These positive attributes were not provided by JJ &F. Simply stated: The CTM project provides a superior physical condition with respect to size, sales floor area, ADA access, garage access and predominance along El Camino as compared to JJ &F. These improved features alone would allow CTM to proceed with a building permit since it will have met or exceeded the conditions of JJ&F. A California Corporation ° License No. 338908 ..:..:.i : I . I ! : I_: I I ' I . I , : I I ! : I -_J : J ' -j City Consultant, Sutti Associates: 700 P.irport Blvd.: #260 Bur!ingam&, CA 94010 .:;. Tel. 650-343-4244 Fax 650-343-4944 1t .. /\NVV~suttiassoc.com After reviewing the information pr<lvided to the City;s Consultant it is the opinion of the Consultant If that the proposed store layout, marketing, strategy, management team and advisors will create a store that will be a benefit to the community of Palo Alto and will be comparable; if not superior, in quality of products and services to JJ&F". ~-, -I ,. ' I . ) I . I I ; I I ; [ Exhibit 6 ,--1 I I ~ "' ..... r-=i I i ~-I ,-l :-1 :-1 i I I ~ I ' __ j I _J -' I _) ·~ ! .. . . . «;;,. -""'r.~-;;>:,:,_~;]L~ ~/''."~:~,,~,. w :b .t~:r ,, 1~,· ;?. < w (!) w -' ..J) ·O () ~ >-l ~ ~ t:: en ~ ~ ~ z ~ u ~ u < ~ ~ ~ ~· f.Il ~ f.Il i-l i-l 0 u :i_, I :I ·~ I ·~ -i ,.-.... 'i'! I j i c-, I I I . , 11 I i I I I ; I i [ j I ~ J ! f ' l J Exhibit 7 I # p II" m ~ ~ jll I I "' !15'' iifl en I . lO I ~ I' ~ Ill Ill GROCERY - 6 S~ES ~ ~ I . (!) i::::=> I~ mi 'GRQ,CERY.-8 S.PAcr:~ -- I!! -------- P!'~~:O:fi!!.~l Ill POTENTIAL CARPOOL SPACES .... -(6) <::== i::::=> -I -1 --1 I -I -1 -1 I -1 -1 ------------------ _J::__ i ]____ COLLEGE TERRACE CENTRE BASEMENT LEVEL A PARKING ASSIGNED TO GROCERY STORE (40 SPACES) AND PUBLIC (65 SPACES) CARS HARE SPACES (2) MC SPACES· (2) I . j I • J r 1 I ' J '. l ~ I I . I I I • I I ~_I Exhibit 8 ' I ;l I [ " ' 1 I, ' ~ I : I J & A FAMILY MARKET ' ! / [ ' ' -I ' ) ' I J ': l J J Proud To Be A Local Family Owned Provider Of Only The Best! I I ! I r-1~: CASH RE.GISTERS ' • I\ I Ti -~~- OFA:Et..oaSY r~-~~~ ' i. ~ CARRASCO & ASSOCIATES ARCHITECTS • PLANNERS A PROFESSIONAL CORPORATION 1885 EL CAMINO REAL PALO Al TO, CA. 94306 650-322-2288 COLLEGE TERRACE CENTRE 2100 EL CAM!NO REAL PALO AL TO, CA GROCERY STORE LAYOUT DATE: 06-26-2014 ; I .. I ! J : i I I ! I '.J . ) . i ' i Exhibit 9 _....:::.:.:: ~:;. _---. J ;-1 . j r-1 I I ' J 1J I ~J I _) ' ! -------=~----- ~ I I J I ! I ! i I '! . 1-· I ( l I I I , I ) .' I ', ) :· (' ' . ' l '. _J l I _J l i 11 ! il . ) . ) ~ J J . I I ' 1 ' I ' ! : J ,--i ' /_ l ' J ,-----, ' 1- ! ~1 i I _I I -=--------=-- 'I I -J ------------ ! I ~ .~ ~l ' J I ' I ·, J J : I I ~---- --; ' ' ( ' i: ' " l ~ ,·-.... , i I !! --J ' ' , I i ' .' . I I , I ~ _I , I ' i Exhibit 10 06/23/10 Current Period This Year 03/01110 To 03/31/10 i .l~~ Current Period Last Year 03/01/09 To 03/31/09 JJ&F Food Stores Statement of Operations For the Six Periods Ending March 31, 2010 Year To Date This Year 10/01/09 To 03/31/10 The enclosed financial statements and attached supplemental information have been prepared by MJN Consulting. The financial statements have not been audited or reviewed .. The information presented therein has been provided by the client and no opinion is expressed or implied as to the accuracy of such information. The financial statements are intended for the use of internal manangement only. i. r· Financial Statement is incomplete without supplemental information. Year To Date Last Year 10/01/08 To 03/31/09 ~l .,. 06/23/10 JJ&F Food Stores 2 Statement of Operations For the Six Periods Ending March 31, 201 O Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 03/01/10 03/01/09 10/01/09 10/01/08 To To To To 03/31/10 03/31/09 03/31/10 03/31/09 4.5 4.5 Number of Weeks 26. 26. Sales 166,455.04 47.10% 198,848.34 49.71% Grocery 1,020,680.05 48.06% 1, 193,584.10 49.32%0 53,330.38 15.09% 59,778.76 14.95% Meat 333,311.67 15.69% 39{584.10 16.30% 44,494.35 • 12.59% 48,752.90 12.19% Produce 262,932.69 12.38% 292,647.27 12.09% 75,882.83 21.47% 76,541.59 19.14% Delicatessen 423,228.72 19.93% 435,220.55 17.98% 13,269.56 3.75% 16,056.83 4.01% Liquor 83,816.41 3.95% 103,996.93 . 4.30% 353,432.16 100.00% . 399,978.42 100.00% Total Sales 2,123,969.54 100.00% 2,420,032.95 100.00% 78,540 88,884 Average Sales Per Week 81,691 93,078 Gross Profit 64,917.32 39.00% 77,550.96 39.00% Grocery 398,903.44 39.08% 465,497.71 39.00% 18,665.42 . 35.00% 20,916.02 34.99% Meat 117,178.70 35.16% 138,097.66 35.00% 18,687.99 42.00% 20,476.42 42.00% Produce 110,430.97 42.00% 122,911.22 42.00% 34,147.52 45.00% 34,443.96 45.00% Delicatessen 190,454.45 45.00% 195,849.46 45.00% 4,909.83 37.00% 5,941.26 37.00% Liquor 31,013.02 37.00% 38,480.04 37.00% 141,328.08 39.99% 159,328.62 39.83% Total Gross Profit 847,980.58 39.92% 960,836.09 39.70% Rebates & Allowances 0.00 .00% 183.00 .05% All Departments 1,118.29 .05% 3,251.71 .13% 0.00 .00% 183.00 .05% Total Rebates & Allowances · 1,118.29 .05% 3,251.71 .13% 141,328.08 39.99% 159,511.62 39.88% Total Gross with Rebates 849,098.87 39.98% 964,087.80 39.84% Controllable Expenses Salaries 19,415.21 11.66% 24,441.04 12.29% Grocery 113,742.89 11.14% 145,075.52 12.15% 24,247.25 45.47% 25,892.73 43.31% Meat 128,569.42 38.57% 156,720.15 39.72% 14,133.32 4.00% 19,929.00 4.98% Executive 78,848.32 3.71% 116,700.00 4.82% 0.00 :00% 0.00 .00% Holiday 7,111.04 .33% 10,323.63 .43% 2,830.18 .80% 4,117.49 1.03% Vacation 26,562.72 1.25% 18,483.53 .76% 60,625.96 17.15% 74,380.26 18.60% Total Salaries 354,834.39 16.71% 447,302.83 18.48% Benefits 4,815.16 1.36% 5,696.29 1.42% , Employer FICA Tax 27,301.87 1.29% ' 34,219.55 1.41% Financial Statement is incomplete without supplemental information. r· --_-] 06/23/10 JJ&F Food Stores 3 Statement of Operations For the Six Periods Ending March 31, 2010 Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 03/01/10 03/01/09 10/01/09 10/01/08 To To To To 03/31/10 03/31/09 03/31/10 03/31/09 190.92 .05% 274.61 .07% State Unemployment Tax 3,072.66 .14% 4, 178.73 .17% 56.95 .02% 73.30 .02% Federal Unemployment Tax 910.37 .04% 1,109.74 .05% 0.00 .00% 0.00 .00% Workers Comp Audit Adjustment 1,909.00 .09% 0.00 .00% 3,303.79 .93% 1,840.69 .46% Workers Compensation Insurance 12,916.92 .61% 14,/'83.91 .61% 21,996.68 6.22% 24,003.56 6.00% Health and Welfare 125,510.11 5.91% 136,381.40 5.64% 2,082.76 .59% (602.89} -.15% Life Insurance 9,388.10 .44% 12,522.45 .52% 32,446.26 9.18% 31,285.56 7.82% Total Benefits 181;009.03 8.52% 203,195.78 8.40% 93,072.22 26.33% 105,665.82 26.42% Tota! Salaries & Benefits 535,843.42 25.23% . 650,498.61 26.88% Supplies & Laundry 335.32 .09% 167.22 .04% Office 1,749.56 .08% 874.44 .04% 5,040.17 1.43% 4,363.25 1.09% All Departments 28,945.83 1.36% 31,180.11 1.29% 1,004.76 .28% 1,566.21 .39% Laundry-Uniforms 4,694.28 .22% 8,350.36 .35% 6,380.25 1.81% 6,096.68 1.52% Total Supplies & Laundry 35,389.67 1.67% 40,404.91 1.67% Advertising 550.88 .16% 768.95 .19% Advertising 3,253.30 .15% 10,725.92 .44% 571.81 .16% 786.38 .20% Promotional 4,234.23 .20% 5,220.51 .22% 1,781.61 .50% 2,155.43 .54% lnstore Coupons 9,276.19 .44% 10,774.12 .45% 2,904.30 .82% 3,710.76 ·.93% Total Advertising 16,763.72 .79% 26,720.55 1.10% 102,356.77 28.96% 115,473.26 28.87% ·Total Controllable Expenses 587,996.81 27.68% 717,624.07 29.65% Operating Expenses Depreciation & Amortization 667.63 .19% 647.56 .16% Fixtures and Equipment 4,005.78 .19% 3,885.36 .16% 3,471.47 .98% 3,471.47 .87% Leasehold Improvements 20,828.82 .98% 20,828.82 .86% 138.33 .04% 138.33 .03% Parking Lot Improvements 829.98 .04% 829.98 .03% 4,277.43 1.21% 4,257.36 1.06% Total Depreciation &Amortization 25,664.58 1.21% 25,544.16 1.06% Insurance Expense 1,755.78 .50% 1,498.33 .37% Property 10,144.50 .48% 8,657.00 .36% 1,755.78 .50% 1,498.33 .37% Total Insurance 10,144.50 .48% 8,657.00 .36% Financial Statement is incomplete without supplemental information. :-,-_ l __ _ ---1 -·1 06/23/10 JJ&F Food Stores 4 Statement of Operations For the· Six Periods Ending March 31, 2010 Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 03/01/10 03/01/09 10/01/09 10/01/08 To To To To 03/31/10 03/31/09 03/31/10 03/31/09 Rent 13,611.90 3.85% 13,611.88 3.40% Building 81,671.30 3.85% 81,671.28 3.37% ·0.00 .00% 469.05 .12% Equipment 0.00 .00% 1,226.70 .05% 0.00 .00% 0.00 .00% Leased Equipment 1, 178.62 .06% 232.24 .01% 0.00 .00% . 0.00 .00% Storage_ 831.76 .04% 1,031.30 .04% 13,611.90 3.85% 14,080.93 3.52% Total Rent 83,681.68 3.94% 84,161.52 3.48% Repairs & Maintenance 3,994.45 1.13% 838.68 .21% Repairs and Maintenance 9,076.78 .43% 14,268.79 .59% _Q:QQ .00% 0.00 .00% Common Area Maintenance 160.00 .01% 320.00 .01% 3,994.45 1.13% 838.68 .21% Total Repairs & Maintenance 9,236.78 .43% 14,588.79 .60% Taxes 247.52 .07% 653.36 .16% Personal Property Tax 1,430.12 .07% 1,899.59 .08% 423.15 .12% 401.59 .10% Real Estate Tax 2,753.15 .13% 2,320.31 .10% 670.67 .19% 1,054.95 .26% Total Taxes 4,183.27 .20% 4,219.90 .17% Utilities 5,214.00 1.48% 4,509.83 1.13% Eiectric 32,929.81 1.55% 28,844.19 1.19% 1,220.00 .35% 1,335.89 .33% Gas 6,354.08 .30% 6,246.32 .26% 2,611.00 .74% 4,524.41 1.13% · Sewer 16,456.88 .77% 25,640.54 1.06% 301.47 .09% 331.12 .08% Telephone 2,164.83 .10% 1,899.79 .08% 2,949.00 .83% 484.42 .12% Trash and Sewer 16,276.00 .77% 3,089.62 .13% 2,499.00 .71% 4,358.06 1.09% Water 15,788.04 .74% 24,670.51 1.02% 14,794.47 4.19% 15,543.73 3.89% Total Utilities 89,969.64 4.24% 90,390.97 3.74% Other Operating Expenses 367.41 .10% 214.51 .05% Automobile 1,393.74 .07% 885.36 .04% (127.81) -.04% 5qt.80 .13% Bad Debts Accounts Receivable 2,846.84 .13% 769.49 .03% 0.00 .00% 0.00 .00% Bad Debts Returned Checks (179:01) -.01% 0.00 .00% 203.63 .06% 199.71 .05% Bank Service Charge 1,598.57 .08% 1,572.90 .06% 2,450.00 .69% 0.00 .00% Bank Overdraft Charge 12,355.00 .58% 1,400.00 .06% 262.45 .07% 266.46 .07% Contracted Services 1,670.11 , .08% 1,832.54 . .08% Financial Statement is incomplete without supplemental information. T----1 06/23/10 JJ&F Food Stores 5 Statement of Operations For the Six Periods Ending March 31; 2010 Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 03/01/10 03/01/09 10/01/09 10/01/08 To To To To 03/31/10 03/31/09 03/31/10 03/31/09 6,747.33 1.91% 6,664.62 1.67% Credit Card Fees 31,630.94 1.49% 36,970.34 1.53% 0.00 .00% 1,098.00 .27% Dues 0.00 .00% 3,202.00 .13% 0.00 .00% . 205.44 .05% Employee Training 0.00 .00% 205.44 .01% 1,057.24 .30% 1,277.14 .32% Interest 7,151.73 .34% 9,483.17 .39% 154.50 .04% 0.00 .00% Interest Other ·1,782.33 .08% 0.00 .00% 700.00 .20% 500.00 .13% Janitor Service 5, 150.00 .24% 3,580.00 .15% 0.00 .00% 0.00 .00% Licenses 1,398.00 .07% 1,290.00 .05% 177.00 .05%. 177.00 .04% Pest Control 895.94 .04% 1,048.83 .04% 0.00 .00% 492.10 .12% Postage 1,174.96 .06% 2,053.93 .08% 0.00 .00% 0.00 :00% Professional Services 250.00 .01% 40.00 .00% 553.51 .16% 578.75 .14% Payroll Service 3,022.86 .14% 3,162.20 .13% 715.00 .20% 715.00 .18% Retail Accounting 4,290.00 .20% 4,290.00 .18% 687.00 .19% 692.00 .17% Security 1,959.65 .09% 1,364.00 .06% 0.00 .00% 0.00 .00% Tax Accounting 1,250.00 .06% 1,950.00 .08% 13,947.26 3.95% 13,582.53 3.40% Total Other Operating Expenses 79,641.66 3.75% 75,100.20 3.10% 53,051.96 15.01% 50,856.51 12.71% Total Operating Expenses 302,522.11 14.24% 302,662.54 12.51% 155,408. 73 . 43.97% 166,329.77 41.58% Total All Expenses 890,518.92 41.93% 1,020,286.61 42.16% (14,080.65) -3.98% (6,818.15) -1.70% Operating Profit (41,420.05) -1.95% (56,198.81) -2.32% Other Income & (Expense) 1.41 .00% 101.11 .03% Cash Over I Short 201.11 .01% 578.20 .02% 0.00 .00% 0.00 .00% Coupon Income 0.00 .00% 140.29 .01% 0.00 .00% 0.00 .00% Other Income 245.00 .01% 0.00 .00% 0.00 .00% (2,417.44) -.60% Other Expense 0.00 .00% (9,669.76) -.40% 0.00 .00% 0.00 .00% Recycling Income 26.64 .00% 312.14 .01% . 0.00 .00% 0.00 .00% Insurance Loss (1,000.00) -.05% 0.00 .00% 1.41 .00% (2,316.33) -.58% Total Other Income & (Expense) (527.2_§) -.Q2% _ (8,639.rn -.36% (14,079.24) -3.98% (9,134.48) -2.28% Net Income Before Truces (41,947.30) -1.97% (64,837.94} -2.68% Estimated Taxes '0.00 .00% 0.00 .00% Federal Tax Penalties . 2,454.32 .12% 245.00 ' .01% Financial Statement is incomplete without supplemental informa.tion. 'l~. ---:-T ... 06/23/10 JJ&F Food Stores 6 Statement of Operations For the Six Periods Ending March 31, 2010 Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 03/01/10 03/01/09 10/01/09 10/01/08 To To To To 03/31/10 03/31/09 03/31/10 03/31/09 0.00 .00% 0.00 .00% State Tax Penalties 0.00 .00% 1,762.00 .07% 0.00 .00% 0.00 .00% Local Tax Penalties 336.02 .02% 0.00 .00% 0.00 .00% 0.00 .00% Estimatea Federal Tax 0.00 .00% 6,595.00 .27% 0.00 .00% 0.00 .00% Estimated State Tax 0.00 .00% 3,887.00 .16% 0.00 .00% 0.00 .00% Total tstimated Taxes 2,790.34 .13% ·12,489.00 .52% --- (14,079.24) -3.98% (9,134.48) -2.28% Net Income (44,737.64) -2.11% (77,326.94) -3.20% Earnings Before Interest, Taxes, Depreciation, & Amortization (14,079.24) -3.98% (9,134.48) -2.28% Net Income (44,737.64) -2.11% (77,326.94) -3.20% 0.00 .00% 0.00 .00% Income Taxes 0.00 .00% 10,482.00 .43% 1,211.74 .34% 1,277.14 .32% Interest 8,934.06 .42% 9,483.17 .39% 4,277.43 1.21% 4,257.36 1.06% Depreci;:ition 25,664.58 1.21% 25,544.16 1.06% (8,590.07) -2.43% (3,599.98) -.90% Total EBITDA (10, 139.00) -.48% (31,817.61) -1.31% Financial Statement is ·incomplete without supplemental information . . -,- 06/18/10 Current Period This Year 02/01/10 To 02/28/10 r Current Period Last Year 02/01/09 To 02/28/09 JJ&F Food Stores Statement of Operations For the Five Periods Ending February 28, 2010 Year To Date This Year 10/01/09 To 02/28/10 The enclosed financial statements and attached supplemental information have been prepared by MJN Consulting. The financial statements have not been audited or reviewed. The information presented therein has been provided by the client and no opinion is expressed or implied as to the accuracy of such information. The financial statements are intended for the use of internal manangement only. Financial Statement is incompiete without supplemental information. Year To Date Last Year 10/01/08 To 02/28/09 06/18/10 JJ&F Food Stores 2 Statement of Operations For the Five Periods Ending February 211, 201 O Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 02/01/10 02/01/09 10/01/09 10/01/08 To To To To 02/28/10 02/28/09 02/28/10 02/28/09 4. 4. Number of Weeks 21.5 21.5 Sales 143,656.19 48.35% 183)84.46 50.53% Grocery 854,225.01 48.25% 994,735.76 49.24% 43,447.03 14.62% 53,731.02 14.77% .Meat 279,981.29 15.81% 334,805.34 16.57% 36,545.06 12.30% 43,571.14 11.98% Produce 218;438.34 12.34% 243,894.37 12.07% 61,781.93 20.79% 66,933.73 18.40% Delicatessen 347,345.89 19.62% 358,678.96 17.76% 11,686.99 3.93% 15,661.99 4.31% Liquor · 70,546.85 3.98% 87,940.10 4.35% 297,117.20 100.00% 363,682.34 100.00% Total Sales __ 1,770,537.38 100.00"/o 2,020,054.53 100.00% 74,279 90,921 Average Sales Per Week 82,351 93,956 Gross Profit 56,026.23 39.00% 71,676.01 39.00% Grocery 333,986.12 39.10% 387,946.75 39.00% 15,206.92 35.00% 18,8()5.58 35.00% Meat 98,513.28 35.19% 117,181.64 35.00% 15,348.60 42.00% 18,300.23 42.00% Produce 91,742.98 42.00% 102,434.80 42.00% 27,802.06 45.00% 30,120.16 45.00% Delicatessen 156,306.93 45.00% 161,405.50 45.00% 4,324.62 37.00% 5,794.99 37.00% Liquor 26,103.19 37.00% 32,538.78 37.00% 118,708.43 39.95% 144,696.97 39.79% Total Gross Profit 706,652.50 39.91% 801,507.47 39.68% . Rebates & Allowan.ces 400.22 .13% 264.60 .07% All Departments 1,118.29' .06% 3,068.71 .15% 400.22 .13% 264.60 .07% Total Rebates & Allowances 1,118.29 .06% 3,068.71 .15% 119,108.65 . 40.09% 144,961.57 39.86% Total Gros$ with Rebates 707,770.79 39.97% 804,576.18 39.83% Controllable Expenses Salaries 16,404.07 11.42% 22,213.47 12.09% Grocery 94,327.68 11.04% 120,634.48 12.13% 18,248.11 42.00% 23,466.43 43.67% Meat 104,322.17 37.26% 130,827.42 39.08% 12,000.00 4.01% 18,000.00 4.95% Executive 64,715.00 3.66% 96,771.00 4.79% 0.00 .00% 0.00 .00% Holiday 7,111.04 .40% 10,323.63 .51% 5,175.12 1.74% 4,989.26 1.37% Vacation 23,732.54 1.34% 14,366.04 .71% 51,827.30 17.44% 68,669.16 18.88% Total Salaries 294,208.43 16.62% 372,922.57 18.46% Benefits 3,794.45 1.28% 5,253.20 1.44% Employer FICA Tax , 22,486.71 1.27% 28,523.26 1.41% Financial Statement is incomplete without supplemental information. -r · -· 06/18/10 JJ&F Food Stores 3 Statement of Operations For the Five Periods Ending February .28, 201 O Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 02/01/10 02/01/09 10/01/09 10/01/08 To To To To 02/28/10 02/28/09 02/28/10 02/28/09 948.89 .32% 1,186.67 .33% State Unemployment Tax 2,881.74 .16% 3,904.12 .19% 281.30 .09% 316.45 .09% Federal Unemployment Tax 853.42 .05% 1,036.44 .05% 0.00 .00% 0.00 .00% Workers Crimp Audit Adjustment 1,909.00 .11% . 0.00 .00% 2,902.56 .98% 3,383.43 .93% Workers Compensation Insurance 9,613.13 .54% 12,943.22 .64% 21,001.67 7.07% 21,469.62 5.90% Health and Welfare 103,513.43 5.85% 112,377.84 5.56% 1, 183.61 .40% 2,347.61 .65% Life Insurance 7,305.34 .41% 13,125.34 .65% 30,112.48 10.13% 33,956.98 9.34% · Total Benefits 148,562.77 8.39% 171,910.22 8.51% 81,939.78 27.58% 102,626.14 28.22% Total Salaries & Benefits 442,771.20 25.01% 544,832.79 26.97% Supplies & Laundry 228.56 .08% 489.56 .13% Office 1,414.24 .08% 707.22 .04% 3,364.26 1.13% 4,821.44 1.33% All Departments 23,905.66 1.35% 26,816.86 1.33% 593.40 .20% 1,387.17 .38% Laundry-Uniforms 3,689.52 .21% 6,784.15 .34% 4,186.22 1.41% 6,698.17 1.84% Total Supplies & Laundry 29,009.42 1.64% 34,308.23 1.70% Advertising 600.34 .20% 3,411.26 .94% Advertising 2,702.42 .15% 9,956.97 .49% 671.48 .23% 922.65 .25% Promotional 3,662.42 .21% 4,434.13 .22% 988.15 .33% 1,629.89 .45% lnstore Coupons 7,494.58 .42% 8,618.69 .43% 2,259.97 .76~ 5,963.80 1.64% Total Advertising 13,859.42 .78% 23,009.79 1.14% - 88,385.97 29.75% 115,288.11 31.70% Total Controllable Expenses 485,640.04 27.43% 602,150.81 29.81% Operating Expenses Depreciation & Amortization 667.63 .22% 647.56 .18% Fixtures and Equipment 3,338.15 .19% 3,237.80 .16% 3,471.47 1.17% 3,471.47 .95% Leasehold Improvements 17,357.35 .98% 17,357.35 .86% 138.33 .05% 138.33 .04% Parking Lot Improvements 691.65 .04% 691.65 .03% 4,277.43 1.44% 4,257.36 1.17% Total Depreciation & Amortization 21,387.15 1.21% 21,286.80 1.05% Insurance Expense 1,560.69 .53% 1,331.85 .37% Property 8,388.72 .47% 7,158.67 .35% 1,560.69 .53% 1,3~1.85 .37% Total Insurance · 8 388.72 .47% 7,158.67. .35% Financial Statement is incomplete without supplemental information. [ .. ---: l-l T~ r-·-~ i' ---, 06/18/10 JJ&F Food Stores 4 Statement of Operations For the Five Periods Ending February 28, 201 O Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 02/01/10 02/01/09 10/01/09 10/01/08 To To To To 02/28/10 02128109 02/28/10 02128109 Rent 13,611.88 4.58% 13,611.88 3.74% Building 68,059.40 3.84% 68,059.40 3.37% 0.00 .00% 469.05 .13% Equipment 0.00 .00% 757.65 .04% 0.00 .00% 116.12 .03% Leased Equipment 1,178.62 .07% 232.24 .01% 0.00 .00% 0.00 .00% Storage 831.76 .05% 1,031.30 .05% 13,611.88 4.58% 14,197.05 3.90% Total Rent 70,069.78 3.96% 70,080.59 3.47% Repairs & Maintenance 3,533.63 1.19% 755.44 .21% Repairs and Maintenance 5,082.33 .29% 13,430.11 .66% 0.00 .00% 0.00. .00% Common Area Maintenance 160.00 .01% 320.00 .02% 3,533.63 1.19% 755.44 .21% Total Repairs & Maintenance 5,242.33 .30% 13,750.11 .68% Taxes 220.02 .07% 231.86 .06% Personal Property Tax 1,182.60 .07% 1,246.23 .06% 376.13 .13% 356.97 .10% Real Estate Tax 2,330.00 .13% 1,918.72 .09% 596.15 .20% 588.83 .16% Total Taxes 3 512.60 .20% 3,164.95 .16% Utilities 4,561.63 1.54% 5,461.14 1.50% Electric 27,715.81 1.57% 24,334.36 1.20% 1,091.12 .37% 1,165.19 .32% Gas 5, 134.08 .29% 4,910.43 .24% 2,168.91 .73% 3,911.52 1.08% Sewer 13,845.88 .78% 21,116.13 1.05% 310.49 .10% 338.54 .09% Telephone 1,863.36 .11% 1,568.67 .08% 2,852.00 .96% 541.42 .15% Trash and Sewer 13,327.00 .75% 2,605.20 .13% 2,068.29 .70% 3,758.21 1.03% Water 13,289.04 .75% 20,312.45 1.01% 13,052.44 4.39% 15,176.02 4.17% . Total Utilities 75,175.17 4.25% 74,847.24 3.71% Other Operating Expenses 259.00 .09% 20.00 .01% Automobile 1,026.33 .06% 670.85 .03% 2,298.28 .77% 267.69 .07% Bad Debts Accounts Receivable 2,97.4.65 .17% 267.69 .01% 0.00 .00% 0.00 . 00% Bad Debts Returned Checks (179.01) . -.01% 0.00 .00% 242.27 .08% 196.28 .05% Bank Service Charge 1,394.94 .08% 1,373.19 .07% 3,045.00 1.02% 735.00 .20% Bank Overdraft Charge 9,905.00 .56% 1,400.00 .07% 221.93 .07% 280.85 .08% Contracted Sefvices 1,407.66 .08% 1,566'.08 .08% Financial Statement is incomplete without supplemental information. ·-r :L.-~ ---, 06/18/10 JJ&F Food Stores 5 Statement of Operations For the Five Periods Ending February 28, 201 O Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 02/01/10 02/01/09 10/01/09 10/01/08 To To To To 02/28/10 02/28/09 02/28/10 02128109 5,062.63 1.70% 5,820.41 1.60% Credit Card Fees 24,883.61 1.41% 30,305.72 1.50% 0.00 .00% 0.00 .00% Dues 0.00 .00% 2,104.00 .10% 1,051.50 .35% 1,118.13 .31% Interest 6,094.49 .34% 8,206.03 .41% 290.38 .10% 0.00 .00% Interest Other 1,627.83 .09% 0.00 .00% 770.00 .26% 500.00 .14% Janitor Service 4,450.00 .25% 3,080.00 .15% 0.00 .00% 0.00 .00% Licenses 1,398.00 .08% 1,290.00 .06% 187.94 .06% 179.58 .05% Pest Control 718.94 .04% 871.83 .04% 536.87 .18% 119.42 .03% Postage 1,174.96 .07% 1,561.83 .08% 0.00 .00% 0.00 .00% Professional Services 250.00 .01% 40.00 .00% 443.05 .15% 457.50 .13% Payroll Service 2,469.35 .14% 2,583.45 .13% 715.00 .24% 715.00 .20% Retail Accounting 3,575.00 .20% 3,575.00 .18% 0.00 .00% 0.00 .00% Security 1,272.65 .07% 672.00 .03% 0.00 .00% 0.00 ___ .00% Tax Accounting 1,250.00 .07% 1,950.00 .10% 15,123.85 5.09% 10,409.86 2.86% Total Other Operating Expenses 65,694.40 3.71% 61,517.67 3.05% 51,756.07 17.42% 46,716.41 12.85% Total Operating Expenses 249,470.15 14.09% 251,806.03 12.47% 140,142.04 47.17% 162,004.52 44.55% Total All Expenses 735,110.19 41.52% 853,956.84 42.27% (21,033.39) -7.08% (17,042.95) -4.69% Operating Profit (27,339.40) -1.54% (49;380.66) -2.44% Other Income & (Expense) (12.28) .00% 27.87 .01% Cash Over I Short 199.70 .01% 477.09 .02% 0.00 .00% 0.00 .00% Coupon Income 0.00 .00% 140.29 .01% 0.00 .00% 0.00 .00% Other Income 245.00 .01% 0.00 .00% 0.00 . 00% (2,417.44) -.66% Other Expense 0.00 . .00% (7,252.32) -.36% 0.00 .00% 0.00 .00% Recycling Income 26.64 .00% 312.14 .02% 0.00 .00% 0.00 .00% Insurance Loss (1,000.00) -.06% 0.00 .00% (12.28) .00% (2,389.57) -.66% Total Other Income & (Expense) (528.66) -.03% (6,322.80) -.31% (21,045.67) -7.08% (19,432.52) -5.34% Net Income Before Truces (27,868.06) -1.57% __ (55, 703.46) -2.76% Estimated Taxes 0.00 .00% 0.00 .00% Federal Tax.Penalties 2,454.32 .14% 245.00 .01% 0.00 .00% 0.00 .00% State Tax Penalties 0.00 .00% 1,762.00 .09% Financial Statement is incomplete without supplemental information. [ ·-1· :T--~ c~ l. l . --, . I 06/18/10 JJ&F Food Stores 6 Statement of Operations For the Five Periods Ending February 28, 2010 Current Period Current Period Year To Date Year To Date This Year Last Year This Year Last Year 02/01/10 02/01/09 10/01/09 10/01/08 To To To To 02/28/10 02/28/09 02/28/10 02128109 0.00 .00% 0.00 .00% Local Tax Penalties 336.02 .02% 0.00 .00% 0.00 .00% 0.00 .00% Estimated Federal Tax 0.00 .00% 6,595.00 .33% 0.00 .00%. 0.00 .00% Estimated State Tax 0.00 .00% 3,887.00 .19% 0.00 .00% 0.00 .00% Total Estimated Truces 2,790.34 .16% 12,489.00 .62% (21,045.67) . -7.08% (19,432.52) -5.34% Net Income = (30,658.40) -1.73% (68_,_'1~2.46) -3".38% Earnings Before Interest, Taxes, Depreciation, & Amortization (21,045.67) ·-7.08% (19,432.52) -5.34% Net Income (30,658.40) -1.73% (68, 192.46} -3.38% 0.00 .00% 0.00 .00% Income Taxes 0.00 .00% 10,482.00 .52% 1,341.88 .45% 1,118.13 .31% Interest 7,722.32. .44% 8,206.03 .41% 4,277.43 1.44% 4,257.36 1.17% Depreciation 21,387.15 1.21% 21,286.80 1.05% (15,426.36) -5.19% (14,057.03) -3.87% Total EBITDA (1,54!!_.93) -.09% (28,217.63) -1.40% Financial Statement is incomplete without supplemental information. ,, \. -I Exhibit 11 ,-l , I ' ' ' l ' ( I - 1 ', } 'l -j r· 1 _ j J I . I _ I RETAIL BACKGROUND REPORT Prepared by: In Preparation for the Comprehensive Plan Amendment City of Palo Alto May 5, 2009 APPLIED DEV ELO PM ENT ECONOMICS I 00 Pringle Avenue, Suite 560 Walnut Creek, California 94596 -(925) 934-8712 2151 River Plaza Drive, Suite 150 Sacramento, CA 95833 -(916) 923-1562 'I r---1 .· 1. I \ ; ! I ··' J i ' , . I I~.) '1 i \ I I I I 1. EXECUTIVE SUMMARY The retail market analysis estimates the local demand for retail goods, and compares this demand to the sales patterns for types of retail stores in Palo Alto. This information provides a baseline estimate of how Palo Alto's retail stores currently attract local and regional retail spending. The analysis identifies which store categories are Palo Alto's strongest regional shopping attractors, and which categories have shortcomings that can potentially be addressed with new retail store attraction. The results of the retail analysis support the well-established common knowledge that Palo Alto is a regional attraction that draws shoppers from throughout Silicon Valley and the Peninsula. The key findings from the Retail Market Analysis are summarized below. • Palo Alto draws from a high local household income base (average annual income of $140,000), as well as a large regional market. • The local market spending totals $1.4 billion and comprises a combination of retail spending from Palo Alto households ($891 million), Stanford students and other full-time Stanford residents ($83 million), commuters ($287 million), and out-of- town visitors ($171 million). This local area spending will increase to over $1.5 billion by 2020. • Palo Alto retailers annually generate $1.6 billion in total retail sales. This sales total is greater than the $1.4 billion in local market spending, so the community as a whole has a net capture of retail spending. Despite this overall net capture, retail leakage occurs in specific retail categories, most notably with grocery stores and gasoline service stations where the sales fall well short of the total spending potential. • Department stores and restaurants/ eating places comprise the largest retail sectors in Palo Alto with each generating over $250 million in annual sales. Palo Alto is also a destination for specialty retail stores and apparel stores. • The retail attraction potential for Palo Alto totals approximately $215 million in unmet retail demand that is sufficient to support new retail establishments. Key retail attraction opportunities are in grocery stores and gasoline service stations. However, much of the potential occurs in categories such as home improvement that are already well represented just outside of Palo Alto's city limits. Key retail issues for Palo Alto are as follows: • Retaining regional market capture; • Retaining and strengthening auto dealerships; Applied Development Economics, Inc. I ( 1 I • Addressing unmet demand in local-serving retail sectors; • Potential short-term increase in retail vacancies; and • Staying relevant and competitive as the retail market evolves. Palo Alto's long-standing status as a successful regional retail provider is primarily anchored by the downtown business district and Stanford Shopping Center. The success of these retail centers derives from Palo Alto's location in the middle of an affluent area, as well as the city's strong employment base. Stanford Shopping Center ranks as one of the highest grossing regional malls in the Bay Area, and serves as the primary high-end retail destination between San Francisco and San Jose. In addition, the downtown business district around University Avenue has a large and diverse base of successful businesses that make downtown Palo Alto a destination for local shoppers and residents from surrounding communities. While Palo Alto has maintained success in capturing regional spending and holding onto a specific niche for high-end retail stores, this success has not trickled down to the neighborhood level where Palo Alto households are currently underserved by retail stores that serve a smaller local market area. Generally, overcoming shortcomings with local-serving retail stores is easier than attracting regional spending. In addition, Palo Alto has large gaps in other specific retail niches, such as discount stores and general merchandise stores, that neighboring communities have successfully captured. In the past, Palo Alto has not been supportive of "big box" discount centers, contributing to their successful attraction by other cities. Palo Alto also faces multiple challenges in other retail categories, in particular retaining and attracting automobile dealerships. While this sector is well represented in Palo Alto, local dealerships must contend with declining market conditions for auto sales, as well as competition from surrounding communities that have seen their dealerships expand and consolidate. Palo Alto has limited sites with expansion potential for the dealerships, which reduces its competitiveness with other communities that do have larger sites. Even though regional retail has served as a major source for jobs and sales tax revenue for Palo Alto, there are numerous challenges that should be addressed in order for the City to retain its advantageous position and capitalize on new opportunities. Regional retail in particular is a difficult advantage to maintain because neighboring communities will inevitably try to recapture the spending that leaves their communities and dominate the market niches where Palo Alto's retail performance has been weaker. Competition from both San Francisco and San Jose contributes to ------: the difficulty in maintaining a regional advantage. This analysis will provide a background context from which discussion of planning initiatives can begin. 2 Applied Development Economics, Inc. :j I I __I 2. PALO ALTO'S RETAIL SETTING This retail market analysis consists of two main parts: an estimate of household retail spending and a comparison of overall spending potential and sales by Palo Alto retail establishments. The household retail spending totals are calculated from an analytical model developed by ADE. This model estimates spending for 40 different store types and 100 product categories. The taxable sales data is an annual total listed by retail category. The businesses listed in the analysis encompass all of the retail businesses operating in the City of Palo Alto. The retail sales data comes from the California State Board of Equalization sales tax allocation records, and the data was audited by MuniServices. Because certain retail items, such as food and prescription drugs, are not taxable, the analysis includes a conversion that calculates nontaxable sales.1 As described later in this paper, retail leakage represents the gap between local market demand (which includes household spending by Palo Alto residents, and additional retail spending by visitors and commuters) and retail sales by local retail establishments. This leakage represents an existing shortfall, as well as an opportunity for both retail expansion and possible attraction. Palo Alto has a very healthy and diverse base of retail stores, with strong regional capture across many retail sectors such as department stores, apparel stores, and specialty retail. The major economic engine driving Palo Alto's retail economy is Stanford Shopping Center, which accounts for the largest portion of retail sales among the city's shopping districts and captures sales well beyond the city limits. Stanford Shopping Center generates 27.8 percent of all taxable sales for the City, followed by the Downtown at 13.7 percent. Non-retail areas including Stanford Research Park and the San Antonio Industrial area generate 25 percent of taxable sales. In addition, Palo Alto has a large daily influx of commuters who provide further market support for local retail stores, as well as a large number of out-of-town visitors that come to Palo Alto annually. According to the California Department of Finance, the City of Palo Alto has a population of about 63,400 residents, with just over 27,000 households. The estimated annual income for Palo Alto households is approximately $140,000.2 1 The data provided to ADE did not include the sales data for individual businesses. All data reporting was done at the business category level. 2 The retail analysis uses the income distribution from the 2000 Census, adjusted to the Consumer Price Index. This assumes that the income between 2000 and 2007 grew. However, the Association of Bay Area Governments (ABAG) shows a constant dollar decline in household income from $160,300 in 2000 to $133,100 in 2005. ABAG's projection estimates that Palo Alto's average income will increase to $140,900 in 2010. Because the projected ABAG Applied Development Economics, Inc. 3 i I The 2000 Census identified a commute pattern for Palo Alto showing that only about 36 percent of Palo Alto residents also work in Palo Alto. The total labor force in Palo Alto is approximately 31,300 workers, which means that over 20,000 of them commute out of the city for work. Concurrently, Palo Alto has over 76,000 jobs within the City limits, which equates to a daily influx of more than 65,000 workers who commute to Palo Alto from elsewhere. This creates a sizable daytime commuter base that exceeds the total population of Palo Alto. TABLE 1 PALO ALTO COMMUTE PATTERN Commute Pattern Palo Alto Labor Force Palo Alto Local Commute Rate (2000) Palo Alto Jobs Estimated Local Workers Estimated In-Commuters Source: ADE, Inc.; data from U.S. Census, California EDD LMID, and ABAG. 31,300 35.7% 76,321 11,174 65,147 In terms of local market strength, The Palo Alto Sphere of Influence also includes an additional population of about 15,000 along with 20,500 workers, mostly at Stanford University. These residents and workers also shop heavily in Palo Alto. REGIONAL COMPETITION Palo Alto's regional advantage in the retail sector has historically come from successfully serving the multitude of retail constituencies that pass through the community, including commuters, tourists, and other shoppers living in other Bay Area communities. Historically, Palo Alto has served as the most prominent center for high-end retailing between San Francisco and San Jose, and attracted significant numbers of shoppers from throughout the Bay Area. Maintaining this regional advantage is key to sustaining the sales tax revenue that the city has received for many years. However, competition from neighboring communities and other regional attractions represents the one area where Palo Alto has minimal control over the outcome. TAXABLE SALES PERFORMANCE COMPARISON ' ' Compared to surrounding communities elsewhere along the Peninsula and in Santa Clara County, Palo Alto has the highest per capita sales, as shown in Table 2.3 In 2007, i I -l income was similar to the average income estimated from the Census data, ADE did not make any further adjustments to the income distribution. 3 In addition to the taxable retail sales, the retail market analysis also estimates the nontaxable sales by retail stores in Palo Alto, based on confidential sales tax data. However, because the published Board of Equalization data only 4 Applied Development Economics, Inc. Palo Alto's taxable retail sales averaged nearly $20,400 per household resident. The jurisdiction with the next highest per capita taxable retail sales was Santa Clara, with just over $17,400 in taxable retail sales per household resident~ It should be noted that a portion of Westfield Valley Fair mall is in Santa Clara, while the majority of the mall property is on the San Jose side of the boundary. If all of Valley Fair's sales were wholly contained within either Santa Clara or San Jose, it would significantly change their per capita retail sales. In general, the larger cities along the Peninsula generated higher per capita taxable retail sales than cities elsewhere in Santa Clara County. This is likely due to the near absence of retail stores in affluent areas such as Atherton and Hillsborough, and the relatively low per capita retail sales produced by other neighboring cities such as Los Altos, East Palo Alto, and Woodside. In addition, communities located within San Jose's commute area likely capture significant retail sales from the large number of workers who live in San Jose but work elsewhere. San Jose's lower per capita retail sales performance indicates that its residents support retail activity in neighboring cities. TABLE 2 COMPARISON OF PER CAPITA TAXABLE RETAIL SALES, 2007 City or Town Palo Alto Santa Clara Redwood City San Mateo Menlo Park Mountain View Cupertino Sunnyvale San Jose Los Altos East Palo Alto Woodside Portola Valley Atherton Hillsborough Per Capita Taxable Retail Sales $20,396 $17,241 $16,685 $14,231 $14,202 $13,823 $11,793 $11,510 $9,446 $7,257 $6,987 $6,579 $1,655 $560 $87 Source: ADE, Inc., data from California Department of Finance and Board of Equalization. Notes: Per capita calculations are based on comparison of taxable retail store sales with household population. Taxable sales do not include sales for nontaxable items such as prescription drugs and groceries. In addition, the data for retail sales excludes some store categories such as building materials dealers that are included in the retail market analysis elsewhere in this report. includes a su=ary total of taxable retail sales, this data is insufficient to make an estimate of nontaxable sales in · other co=unities. Applied Development Economics, Inc. s l REGIONAL MALLS Stanford Shopping Center is a regional asset that holds numerous advantages over offerings in other communities, primarily because of its concentration of upscale and high end retail stores. The primary competition for Stanford Shopping Center is the Westfield Valley Fair mall in San Jose/Santa Clara. Valley Fair has aggressively extended its market reach through numerous expansion and remodeling projects that have established the mall as a high end retail destination. In addition, the mall has proposed another expansion project that would add at least another 600,000 square feet to the existing 1.5 million square foot property. Taxable sales trends indicate that Stanford Shopping Center sales only grew by about 13 percent between 2004 and 2007, while sales at Valley Fair mall grew by nearly 44 percent during this same time.4 In addition, the hub of activity created with the development of the mixed use Santana Row "lifestyle center" across the street from Valley Fair has benefited both properties, as Santana Row showed 36 percent growth in taxable sales. Aside from improvements to the store selection and buildings, Valley Fair also benefits from continued population growth south of San Jose. In contrast, the Peninsula is mostly built out, and population and income have not grown much over the past decade. The Westfield Shopping Center in Downtown San Francisco has introduced additional competition, adding a new Bloomingdale's to compete with the one in Stanford Shopping Center. Along the Peninsula, Stanford Shopping Center's other major competition is Hillsdale shopping center in San Mateo. Unlike Valley Fair, Hillsdale showed a steep decline in taxable sales with a 27 percent sales loss between 2004 and 2007. Other market dynamics to be aware of come from the mall redevelopment projects in Cupertino and Sunnyvale. Those communities developed the competing Sunnyvale Town Center and Valko Fashion Park malls in the late 1970s, but after some initial success both properties went into a steep decline with very high vacancy rates. Except for the anchor department stores, Sunnyvale Town Center has been completely demolished and a new mixed use project incorporating office and residential towers along with an outdoor "lifestyle" shopping center is currently under construction. Vallco is in the middle of an ongoing renovation project and has been rechristened as Cupertino Square. The renamed center has recruited a movie theater, new restaurants, 4 MuniServices; City of Palo Alto Sales Tax Digest Summary Quarter 4, 2007, p.7. 6 Applied Development Economics, Inc. 1 and other entertainment uses to the property, although many large spaces remain vacant and the mall owners recently filed for bankruptcy.5 DOWNTOWN DISTRICTS Palo Alto has a thriving downtown business district that has a considerable concentration of upscale retail stores and restaurants. The Peninsula has numerous other traditional downtown business districts that originally developed around commuter rail stops, and some of these districts have also evolved into upscale retail and dining destinations. Neighboring Mountain View has continually evolved as a successful destination for dining and shopping since initial downtown revitalization efforts during the mid 1980s. In addition, Redwood City and San Mateo have made significant recent investments in streetscape improvements and aggressive retail attraction efforts for their downtown areas. Even Santana Row in San Jose functions as a quasi-downtown area, with a mix of attractive pedestrian spaces, and upscale restaurants and retail stores that are comparable to the offerings in Palo Alto. Cumulatively, this has the potential to attract shopping and dining trips away from downtown Palo Alto. AUTOMOBILE DEALERSHIPS Another significant source of regional sales is automobile dealerships. The City has seven automobile dealerships and Palo Alto's automobile sales come very close to matching the local demand. However, these dealers are located throughout the city, with only two of them operating in proximity to one another. This runs contrary to regional and national trends and potentially affects the competitiveness of Palo Alto's automobile dealerships. Along the Peninsula and throughout Silicon Valley in general, automobile dealerships are generally concentrated into auto mall developments or along corridors. This follows a national trend where automobile dealerships increasingly share facilities and joint marketing activities. These include auto malls in San Jose, Daly City, and Redwood City, as well as "auto rows" in San Jose/Santa Clara, Sunnyvale, and Burlingame. In contrast, Palo Alto has a lack of available land to support a consolidated auto center. POWER (ENTERS In the regional retail market, Palo Alto has a significant gap because the community does not have any "power center" developments, which are anchored by large-scale discount retailers. Power centers became the dominant retail development prototype during the 1990s, and have led to a significant decline in retail market share for traditional mall-based retailers. This type of retail center has entailed both new development, as well as renovations of aging shopping centers, but it generally relies 5 Silicon Valley/San Jose Business Journal; "Cupertino Square owner files for bankruptcy"; September 4, 2008. Applied Development Economics, Inc. 7 on large land tracts. Because Palo Alto has not developed any power centers, nearly all of the household spending for these types of retail stores has gone to neighboring communities. In particular, the power center developments and big box anchor stores in East Palo Alto at the Gateway 101 development and in Mountain View (around Charleston Road and San Antonio Road) are situated directly adjacent to the Palo ~· 1 Alto city limits. This places those centers well within the local market area for Palo l Alto households and limits the market potential for attracting comparable stores to Palo Alto. ' i I i. I , I 8 Applied Development Economics, Inc. l I j I l 3. RETAIL DEMAND The local retail market spending for Palo Alto totals approximately $1.4 billion. This market consists of Palo Alto households, Stanford University students and household residents, commuters who work in Palo Alto and live elsewhere, and out-of-town visitors to Palo Alto. LOCAL HOUSEHOLD SPENDING Based on data from AD E's retail demand model, the estimated annual retail spending by Palo Alto's approximately 27,000 households totals about $891 million, as shown in Table 3. It should be noted that not all of this spending occurs in Palo Alto because neighboring communities might provide retail offerings not available locally, and because a high percentage of local residents commute outside of Palo Alto. This commute pattern indicates that at least some portion of household spending will likely continue to leave Palo Alto. Household spending among Palo Alto residents is distributed across the full range of retail store categories. The largest retail store spending categories are department/ discount stores, new car dealers, restaurants/ eating places, gasoline service stations, and grocery stores. Each of these retail store categories accounts for over $85 million in household spending. By 2020, the number of households in Palo Alto is expected to modestly increase to just over 28,300. This household population increase will increase the local household spending from $891 million to $933 million, as shown in Table 4. STANFORD STUDENT AND RESIDENT SPENDING In addition to Palo Alto residents, the local market area also includes students and other full-time residents at Stanford University. Stanford students living in group quarters/ dormitories account for approximately $11.3 million in retail spending annually.6 The largest portion of this spending goes towards off-campus food-related expenses. Other full-time residents at Stanford University create about $72 million of annual retail spending.7 The spending pattern for these residents is higher because it includes a higher average annual income and additional retail expenditures for other family members. Combining Palo Alto households with Stanford residents, the local household retail spending totals about $974 million. 6 The expenditure is based on the Stanford University's estimated annual student budget for incidental expenses, and enrollment of 6,200 students. The retail spending total does not include non-retail expenses, or on-campus expenditures for school supplies and books. 7 Other full-time residents at Stanford University include approximately 3,200 households with an average annual income of about $83,750. Applied Development Economics, Inc. 9 ~- TABLE 3 LOCAL MARKET RETAIL SPENDING DEMAND£ 2007 Stanford Household Stanford Palo Alto Spending Students Total Primary ·1 Household (exc. (Group Commuter Visitor MarketArea I Retail Group Spending Dorms) Quarters) Spending Spending Spending I l j Total i890,668,028 pl,984,077 ill,264,134 p86/02,689 i170,984,486 il,429,001,945 Apparel Store Group $42,527,072 $3,213,506 $509,916 $10,048,852 $10,383,026 $66,682,372 Women's Apparel $11,545,704 $855,785 $125,167 $3,779,449 $3,571,319 $19,877,424 Men's Apparel $3,168,285 $234,922 $31,965 $378,758 $411,520 $4,225,450 Family Clothing $19,776,272 $1,489,597 $228,342 $5,118,029 $5,560,739 $32,172,978 Shoe Stores i8,036,811 i633,202 i124,442 i772,616 $839,448 il0,406,520 l General Merchandise Group $167,556,945 $13,161,753 $2,422,564 $62,606,696 $27,573,668 $273,321,625 Department/Discount Stores $85,331,532 $6,451,070 $977,115 $31,719,402 $19,845,641 $144,324,760 other General Merchandise $48,234,178 $3,841,357 $754,365 $0 $0 $52,829,900 Drug & Proerieta!}:'. Stores p3,991,234 g869,326 i691,084 i30,887,294 p,728,028 p6,166,966 Specialty Retail Group $64,984,741 $4,878,422 $653,584 $26,504,312 $16,081,930 $113,102,989 Gifts & Novelties $3,913,863 $292,735 $40,204 $422,962 $783,224 $5,452,987 Sporting Goods $7,490,511 $594,584 $58,182 $1,471,816 $1,374,435 $10,989,528 Florists $1,772,758 $125,167 $13,548 $86,423 $160,035 $2,157,932 Photographic Equipment $818,174 $58,155 $4,758 $1,602,164 $1,496,158 $3,979,409 Records & Music $3,384,184 $255,794 $34,836 $162,073 $300,120 $4,137,007 Books & Stationery $8,249,188 $620,293 $104,593 $587,699 $1,088,276 $10,650,049 Office Supplies $9,871,146 $714,051 $67,485 $764,723 $714,126 $12,131,531 Jewelry $8,155,338 $549,109 $55,457 $1,789,079 $3,312,941 $13,861,924 Misc. SeecialEz'. Retail Fl,329,579 ~1,668,534 $274,520 ~19,617,373 ~6,852,615 $49/42,621 Food, Eating & Drinking Group $265,222,874 $17,650,063 $3,910,008 $135,182,872 $86,742,202 $464,895,977 Grocery Stores $125,199,417 $10,333,662 $2,328,233 $23,866,755 $8,092,973 $169,821,041 Specialty Food Stores $3,517,771 $292,294 $67,348 $3,020,276 $1,024,145 $7,921,835 Liquor Stores $6,710,510 $517,098 $86,740 $1,280,118 $434,075 $9,028,542 Eating Places i85,983,134 $6,507,008 il,427,687 i107,015,723 i77,191,009 i278,124,560 I Building Materials & I Home Furnishings Group $102,568,382 $7,491,566 $841,990 $23,572,274 $75,357 $134,549,569 I Furniture/Home Furnishings $30,984,323 $2,212,748 $191,202 $2,123,618 $0 $35,511,890 Appliances & Electronics $19,606,767 $1,456,250 $191,363 $19,153,758 $0 $40,408,138 Used Merchandise $2,092,588 $155,038 $20,586 $83,173 $75,357 $2,426,741 Nurseries & Garden Supply $10,149,880 $735,229 $94,963 $531,440 $0 $11,511,512 Lumber/Building Materials $23,760,736 $1,765,337 $210,891 $620,545 $0 $26,357,510 Home Centers/Hardware $14,732,255 $1,071,937 $122,244 $729,701 $0 $16,656,137 Paint & walleaeer il,241,834 i95,027 il0/41 p30,038 $0 il,677,640 Automotive Group $291,620 ,057 $22,273,172 $2,926,071 $28,787,683 $30,842,429 $376A49,413 New cars & RVs $171,077,175 $12,436,194 $1,164,523 $0 $0 $184,677,891 Used Car Dealers $12,608,311 $914,759 $84,045 $0 $0 $13,607,115 Gasoline Service Stations $92,974,550 $7,717,933 $1,497,139 $28,787,683 $30,842,429 $161,819,735 Mobile Homes & Trailers $76,248 $6,191 $1,280 $0 $0 $83,719 Auto Parts & Accessories $8,674,458 $716,928 $139,567 $0 $0 $9,530,954 other Vehicles i6,209,316 i481,167 i39,516 iO ~o ~6,729,999 Source: ADE, Inc., data from City of Palo Alto, California State Board of Equalization, U.S. Census Bureau, California Department of Finance, California EDD, Dean Runyan Associates, International Council of Shopping Centers, UW-Extension, Stanford University, and U.S. Bureau of Labor Statistics. 10 Applied Development Economics, Inc. r--I TABLE 4 ;--·-1 PROJECTED LOCAL MARKET RETAIL SPENDING DEMAND, 2020 I ! Stanford c--i Household Stanford Palo Alto Spending Students Total Primary Household (exc. (Group Commuter Visitor Market Area Retail Groue seending Dorms) Quarters} seending seending seending Total 1933,217,228 pl,984,077 111,264,134 po9,280,692 1222,279,832 11,545,638,730 Apparel Store Group $44,558,685 $3,213,506 $509,916 $10,840,205 $13,497,933 $72,620,245 Women's Apparel $12,097,268 $855,785 $125,167 $4,077,083 $4,642,715 $21,798,017 Men's Apparel $3,319,641 $234,922 $31,965 $408,585 $534,976 $4,530,090 Family Clothing $20,721,029 $1,489,597 $228,342 $5,521,076 $7,228,960 $35,189,004 Shoe Stores 18,420,747 1633,202 1124,442 :£833,460 $1,091,282 111,103,134 General Merchandise Group $175,561,514 $13,161,753 $2,422,564 $67,537,009 $35,845,769 $294,528,608 Department $89,408,010 $6,451,070 $977,115 $34,217,323 $25,799,333 $156,852,851 Other General Merchandise $50,538,432 $3,841,357 $754,365 $0 $0 $55,134,154 Drug & Pro12rieta!}:'. Stores p5,615,072 $2,869,326 1691,084 p3,319,686 110,046,436 182,541,603 Specialty Retail Group $68,089,207 $4,878,422 $653,584 $28,591,542 $20,906,508 $123,119,264 Gifts & Novelties $4,100,837 $292,735 $40,204 $456,271 $1,018,191 $5,908,237 Sporting Goods $7,848,349 $594,584 $58,182 $1,587,723 $1,786,766 $11,875,604 Florists $1,857,447 $125,167 $13,548 $93,229 $208,046 $2,297,437 ' l Photographic Equipment $857,260 $58,155 $4,758 $1,728,335 $1,945,006 $4,593,513 Records & Music $3,545,854 $255,794 $34,836 $174,836 $390,156 $4,401,476 Books & Stationery $8,643,270 $620,293 $104,593 $633,981 $1,414,759 $11,416,896 Office Supplies $10,342,713 $714,051 $67,485 $824,945 $928,364 $12,877,557 .-! Jewelry $8,544,936 $549,109 $55,457 $1,929,970 $4,306,823 $15,386,296 Misc. S12ecial~ Retail 122,348,541 11,668,534 1274,520 121,162,252 18,908,400 :£54,362,247 Food, Eating & Drinking Group $265,222,874 $17,650,063 $3,910,008 $145,828,602 $112,764,863 $512,141,656 Grocery Stores $131,180,473 $10,333,662 $2,328,233 $25,746,275 $10,520,865 $180,109,509 Specialty Food Stores $3,685,823 $292,294 $67,348 $3,258,125 $1,331,388 $8,634,978 Liquor Stores $7,031,086 $517,098 $86,740 $1,380,928 $564,298 $9,580,150 Eating Places 190,090/40 16,507,008 11,427,687 1115,443,273 1100,348,311 $313,817,019 Building Materials & Home Furnishings Group $107,468,303 $7,491,566 $841,990 $25,428,604 $97,964 $141,328,427 Furniture/Home Furnishings $32,464,513 $2,212,748 $191,202 $2,290,855 $0 $37,159,317 Appliances & Electronics $20,543,426 $1,456,250 $191,363 $20,662,128 $0 $42,853,167 Used_ Merchandise $2,192,555 $155,038 $20,586 $89,723 $97,964 $2,555,866 Nurseries & Garden Supply $10,634,762 $735,229 $94,963 $573,291 $0 $12,038,245 Lumber/Building Materials $24,895,840 $1,765,337 $210,891 $669,414 $0 $27,541,481 Home Centers/Hardware $15,436,048 $1,071,937 $122,244 $787,165 $0 $17,417,395 Paint & Wall12a12er 11,301,159 $95,027 110/41 p56,029 10 11,762,956 . Automotive Group $305,551,398 $22,273,172 $2,926,071 $31,054,730 $40,095,158 $401,900,530 New Cars & RVs $179,249,913 $12,436,194 $1,164,523 $0 $0 $192,850,629 Used Car Dealers $13,210,638 $914,759 $84,045 $0 $0 $14,209,442 Gasoline Service Stations $97,416,151 $7,717,933 $1,497,139 $31,054,730 $40,095,158 $177,781,112 Mobile Homes & Trailers $79,890 $6,191 $1,280 $0 $0 $87,361 Auto Parts & Accessories $9,088,857 $716,928 $139,567 $0 $0 $9,945,352 Other Vehicles 16,505,948 1481,167 p9,516 10 10 Fi026,632 Source: ADE, Inc., data from City of Palo Alto, California State Board of Equalization, U.S. Census Bureau, California Department of Finance, California EDD, Dean Runyan Associates, International Council of Shopping Centers, UW-Extension, Stanford University, and U.S. Bureau of Labor Statistics. I I -,,--1 Applied Development Economics, Inc. 71 ,.-----, ' i I i, . I ~-1 'l : ) : l ' J 1 ' l The analysis did not project any spending increases from Stanford students and residents, since the number of students and residents is not expected to increase substantially by 2020. COMMUTER SPENDING Palo Alto's job base far exceeds the size of its labor force, which has the effect of broadening the local market base for retailers. The city has over 76,300 jobs and a local labor force of 31,300. Only about 11,200 Palo Alto residents work in Palo Alto, which means that over 65,100 workers who commute into Palo Alto from other communities (see Table 1 for references for this data). Altogether, these commuters account for approximately $287 million in annual retail spending.8 Restaurant spending represents by far the largest expenditure category for commuters, with about $107 million in annual spending or 37 percent of the total commuter spending. When combined with grocery stores, nearly half of the total commuter spending goes towards food-oriented businesses. The other major expenditure categories for commuters include department stores, drug stores, and gasoline service stations. As with local households, this reflects the estimated amount that commuters into Palo Alto will spend while they are at work, not necessarily that all of their spending while at work will occur in Palo Alto. By 2020, the job base for Palo Alto is expected to increase to just over 82,000 workers. Assuming that the commute patterns will remain similar to the current patterns, this increases the number of daily commuters coming into Palo Alto to over 70,000. Consequently, the total commuter spending will increase to $309 million by 2020. VISITOR SPENDING Santa Clara County's estimated visitor spending across all expenditure categories for 2006 totaled approximately $3.6 billion, as shown in Table 5.9 This visitor spending, a significant part of which is associated with business travel, includes overnight accommodations; transportation, recreation, entertainment, and restaurant as well as retail spending. More than half of the countywide visitor spending goes towards retail stores (retail stores, food stores, food service, and ground transportation/fueD. 8 Data for expenditures comes from the International Council of Shopping Centers(ICSC) and UW-Extension. The ICSC survey data accounts for average weekly expenditures by product type. ADE matched the product-based data to the most appropriate retail store categories to calculate the expenditures by store type. 9 Dean Runyan Associates; Travel Impacts by County; 2008. 12 Applied Development Economics, Inc. I I . ' I 'I ! .-, I I ' J j TABLE 5 VISITOR SPENDING, SANTA CLARA COUNTY AND PALO ALTO, 2006 Visitor Spending by Commodity Santa Clara County Palo Alto (Estimate) Total $3,639,000,000 $269,268,830 Accommodations $643,000,000 $66,840,222 Food Service $889,000,000 $76,050,255 Food Stores $110,000,000 $9,410,043 Ground Trans and Motor Fuel $776,000,000 $30,386,630 Arts, Entertainment, Recreation $524,000,000 $29,325,860 other Retail Sales $615,000,000 $52,610,694 Air Transportation $83,000,000 $4,645,127 Source: ADE, Inc., data from Dean Runyan Associates, California Board of Equalization, and U.S. Economic Census. Based on the city's share of the countywide transient occupancy tax and taxable retail sales receipts, the estimated annual visitor spending that occurs in Palo Alto totaled approximately $269 million in 2006.10 Of this total, approximately $169 million in visitor spending occurred at retail stores. Among the individual retail store categories, restaurants are by far the largest beneficiaries of visitor spending, with over $76 million in retail sales generated by out-of-town visitors. Two other categories - gasoline service stations, and department stores -also attract more than $19 million visitor spending. Using normalized historical growth patterns, the retail sales from visitor spending for 2007 is estimated to total $171 million, while projected visitor spending in 2020 is expected to total $222 million.11 SECONDARY MARKET AREA SPENDING In addition to the local market area spending, Palo Alto also draws potential household spending from residents of surrounding communities, including East Palo Alto, Menlo Park, Mountain View, Los Altos, Los Altos Hills, Atherton, Woodside, Portola Valley, and Redwood City, which are referred to as Palo Alto's secondary market area. Altogether, the retail spending potential for this area totals over $3.2 billion annually. Because these communities have their own base of retail businesses, only a portion of this spending is available for Palo Alto retailers to capture. 10 The countywide visitor spending data separates the spending by visitors requiring overnight accommodations from other visitors. Palo Alto's spending by overnight visitors was based on the city's share of countywide transient occupancy tax (TOT) receipts. Spending by other visitors was based on the city's share of countywide taxable retail sales. 11 The growth in visitor spending is based on a linear regression trend of total visitor spending in Santa Clara County that occurred between 2001 and 2006. This trend is based on inflation adjusted constant dollar growth. Applied Development Economics, Inc. 73 l ~J 1 , I ' _J However, because many of the apparel stores, department stores, and specialty retail stores represented in Palo Alto lack any local presence in the surrounding communities, Palo Alto retailers can capture a significant portion of the secondary market area spending in specific niches. It should be noted that because many residents living in these communities work in Palo Alto, the local market area total already includes some of the retail spending by these households. A more detailed distribution of secondary market area spending by community is included as an appendix table. TABLE 6 SECONDARY MARKET AREA SUMMARY Household Demand By Community Household Spending East Palo Alto $154,734,578 Portola Valley $94,685,371 Los Altos Hills $158,089,043 Los Altos $440,521,833 Mountain View $901,934,963 Atherton $151,688,987 Woodside $108,046,412 Menlo Park $431,431,646 Redwood City $798,322,016 Secondary Market Area $3,239,454,849 Source: ADE, Inc., data from U.S. Census Bureau, California Department of Finance, and U.S. Bureau of Labor Statistics. SERVICES DEMAND In addition to demand for retail goods, another prominent component of household spending is services. The types of services that local residents make use of include rentals, professional services, medical services, repair, personal services, and entertainment/ recreation. Because services are generally nontaxable with no reliable sources available for estimating the revenues by Palo Alto services providers, the analysis will only estimate the services spending by local households and visitors. RENTAL SERVICES This category includes rental and leasing services for items such as automobiles, sports equipment, recreational vehicles, health care equipment, formal wear, appliances, furniture, and office equipment. Generally, most of the demand in this category comes from automobile leasing and rentals. Altogether, local spending on rental services totals about $32 million annually, with Palo Alto residents accounting for $30 million in spending and Stanford students and residents accounting for about $2.3 million, as shown in Table 7. The projected spending for rental services will increase to about $34 million by 2020, as shown in Table 8. 14 Applied Development Economics, Inc. -------! I I I I I I ) l ! I TABLE 7 LOCAL MARKET SERVICES DEMAND, 2007 Palo Alto Stanford Stanford Service Category Households Households Students Visitors Total Total Services Spending $210,263,583 $14,896,305 $1,922,821 $29,325,860 $256,408,569 Rental Services $30,154,136 $2,136,296 $136,161 n/a $32,426,593 Professional Services $14,252,156 $1,009,706 $148,856 n/a $15,410,719 Medical Services $56,955,183 $4,035,039 $688,217 n/a $61,678,438 Repair Services $43,917,682 $3,111,386 $373,859 n/a $47,402,927 Personal Services $40,063,003 $2,838,298 $419,168 n/a $43,320,469 Entertainment/Recreation $44,210,806 $3,132,153 $159,820 $29,325,860 $76,828,639 Source: ADE, Inc., data from U.S. Census Bureau, California Department of Finance, California EDD, Dean Runyan Associates, Stanford University, and U.S. Bureau of Labor Statistics. TABLE 8 PROJECTED LOCAL MARKET SERVICES DEMAND, 2020 Palo Alto Stanford Stanford Service Category Households Households Students Visitors Total Total Services Spending $220,308,344 $14,896,305 $1,922,821 $38,123,618 $275,251,087 Rental Services $31,594,666 $2,136,296 $136,161 n/a $33,867,123 Professional Services $14,933,013 $1,009,706 $148,856 n/a $16,091,576 Medical Services $59,676,059 $4,035,039 $688,217 n/a $64,399,315 Repair Services $46,015,727 $3,111,386 $373,859 n/a $49,500,973 Personal Services $41,976,902 $2,838,298 $419,168 n/a $45,234,368 Entertainment/Recreation $42,433,855 $3,132,153 $159,820 $38,123,618 $83,849,446 Source: ADE, Inc., data from U.S. Census Bureau, California Department of Finance, California EDD, Dean Runyan Associates, Stanford University, and U.S. Bureau of Labor Statistics. PROFESSIONAL SERVICES Professional services encompass a wide range of professional fields and generally derive most of their revenues from services to business clients. Services to household clients are more limited to accounting, financial, and legal services. Local spending on professional services totals about $15 million, and is projected to increase to about $16 million by 2020. MEDICAL SERVICES Medical service providers include physicians, dentists, alternative medical providers, home health care, hospitals, eye care professionals, and child care. The household spending by local households on medical services totals $62 million annually, and will increase to $64 million by2020.12 12 Spending totals only account for potential out-of-pocket expenditures and do not include medical insurance costs. Applied Development Economics, Inc. 75 i ~ l ' 1 l , I REPAIR SERVICES Most of the local household demand for repair services comes frorn automobile repairs. Other repair service categories include shoes, appliances, electronics, furniture, and other household items. The annual spending on repair services by local households totals about $47 million. The demand for repair services expects to increase to about $50 million by 2020. PERSONAL SERVICES Personal services include a wide range of business types such as personal care (including beauty services and hair care), funeral services, laundry services, pet care, photo finishing, and auto parking. The annual household spending for personal services totals about $43 million, and will increase to about $45 million by 2020. ENTERTAINMENT /RECREATION SERVICES . Consumer spending on entertainment and recreation services includes movie theaters, ' performing arts organizations, sporting events, arnusernent parks, other event tickets, participant sports (including bowling, skating, skiing, and golfing), recreational lessons, and club rnernberships. The local market spending in this category totals $77 million, with about $29 million in spending corning frorn out-of-town visitors. By 2020, this total is projected to increase to $84 million. 76 Applied Development Economics, Inc. I ! _j ' 1 ' I 4. PALO ALTO SHOPPING DISTRICTS AND SALES The shopping districts in Palo Alto each serve a distinct retail niche, and greatly differ in the types of retail stores that they offer. Stanford Shopping Center and the downtown district around University Avenue together account for more than half of the taxable retail sales for the entire city. Stanford Shopping Center alone generates over 39 percent of the taxable retail sales for Palo Alto, as shown in Table 9. TABLE 9 PALO ALTO 2007 TAXABLE RETAIL SALES BY SHOPPING DISTRICT 2007 Taxable Shopping District Sales Stanford Shopping Center $560,014,700 Downtown (UniverslfY/We) $242,211,900 California Ave. & Park/Lambert $171,464,900 San Antonio Industrial Park $124,299,300 El Camino Real $87,558,600 Town and Country Shopping Center $24,756,300 Midtown · $18,522,400 Stanford Research Park $12,571,900 Stanford Professional Center $8,787,500 Total Taxable Retail Sales $1,432,000,000 Percent of Taxable Retail Sales 39.1% 16.9% 12.0% 8.7% 6.1% 1.7% 1.3% 0.9% 0.6% Source: ADE, Inc., data from City of Palo Alto and MuniServices Notes: Due to confidentiality restrictions, data from Alma Plaza, Charleston Center, Edgewood Plaza, Embarcadero (East of 101), and SOFA is not shown. Some data overlaps more than one shopping district. CALIFORNIA AVENUE & PARK BLVD./LAMBERT AVE. The retail stores around California A venue are not as prominent at attracting regional retail spending as the nearby shopping district around University Avenue. But, combined with the stores around Park Boulevard and Lambert A venue, the area constitutes a significant concentration of retail spending with over $171 million in taxable sales generated. Together, these stores generate nearly double the taxable sales generated by those located along El Camino Real, and the stores in the area include Fry's Electronics. The dominant sales tax generators in this area are electronics, restaurants, camera stores, specialty store, and service stations. In general, many of the stores around California A venue primarily serve the local market, while Park Blvd/Lambert Avenue's dominant store categories serve more of a regional market. EL CAMINO REAL The stores along El Camino Real are highly visible as they stretch along the primary commercial corridor on the Peninsula. Not including Stanford Shopping Center and the Town and Country shopping center, which are discussed separately below, El Camino Real's other retail stores in Palo Alto generate taxable sales of approximately $88 million. The primary store types represented along El Camino Real encompass a Applied Development Economics, Inc. 77 I I I I , I I combination of local-serving retail store types such as fast food and service stations, and more regionally-oriented retail categories such as new car dealers, specialty stores, and building materials. MIDTOWN The commercial area along Middlefield Road is part of Palo Alto's primary local- serving commercial corridor.13 The taxable retail sales in Midtown are relatively low at $19 million, but this also includes drug stores and supermarkets, which generate a very large amount of nontaxable retail sales. The primary retail sales generators in this area generally serve local spending. Recently, other commercial uses such as offices and fitness centers have located in this area, further reducing sales tax receipts. SAN ANTONIO INDUSTRIAL PARK The San Antonio Industrial Park comprises several large-scale taxable sales generators that serve a more regional market. Located close to the Mountain View city limits, this district generates over $124 million in taxable sales and primarily fills retail niches pertaining to home improvement, light industry, and new car sales. STANFORD SHOPPING CENTER Stanford Shopping Center is a regionally oriented 1.3 million square foot mall that specializes in high end retail stores and attracts shoppers from throughout the Peninsula and Silicon Valley. The mall is anchored by four high end department stores, and has numerous other specialty retail niches that further contribute to its $560 million in taxable retail sales. Based on 2008 sales data, Stanford Shopping Center ranks below Valley Fair in San Jose/Santa Clara. However, its sales exceed those of other regional centers in the market area including Santana Row, Hillsdale, and Oakridge Mall. TOWN AND COUNTRY SHOPPING CENTER Located adjacent to Stanford University, the 100,000 square foot Town and Country shopping center is more of a local-serving shopping center. Even though the center has lacked a supermarket as an anchor tenant, it does have a drug store as well as numerous restaurants and locally-oriented specialty retail stores. In addition, a Trader Joe's market is due to open at the center soon. DOWNTOWN (UNIVERSITY AVENUE) The downtown district is the second largest taxable sales generator in Palo Alto with $242 million in taxable sales. The retail base in the downtown area serves a very 13 The sales totals do not include Charleston Center. Data for Charleston Center is not available due to confidentiality restrictions. 18 Applied Development Economics, Inc. I ----; ' . ' ' [j r-1 ' . : j j l . J . l diverse range of retail markets. While not dominated by any single retail store category, the downtown district is the primary center for both full service and fast food restaurants in Palo Alto. OTHER SHOPPING DISTRICTS Other shopping districts in Palo Alto include Embarcadero (East of 101), Charleston Center, Alma Plaza, and Edgewood Plaza. Taxable sales for these districts cannot be disclosed due to confidentiality restrictions associated with reporting sales tax data. Embarcadero (East of 101) is located in an area dominated by offices. The primary retail sales generators in this district are the two neighboring automobile dealerships. Currently, these are the only auto dealerships in Palo Alto that do not operate alone. Charleston Center is a 41,800 square-foot local-serving commercial center located along Middlefield Road, down the street from other local-serving retail stores in the Midtown shopping district. The center is anchored by a 16,800 square-foot supermarket. The retail sales at this center are dominated by supermarkets, specialty food stores, restaurants, and other specialty stores. Alma Plaza and Edgewood Plaza are local-serving retail centers whose supermarket anchor stores have closed in recent years. Neither center is located in a high visibility location and the anchor spaces are insufficiently sized to accommodate the larger building spaces specified by many major supermarket chains. With 40,000 square feet of space and 16 retail store spaces, Alma Plaza has been completely vacated and is in the process of redeveloping into a mixed use project comprised of a grocery store, limited additional retail, single family homes, and affordable housing . The Eichler-designed Edgewood Plaza still has stores operating on the premises, but the majority of the shopping center is vacant. The City made an effort to redevelop the site but neighboring residents opposed the project. A new proposal to demolish the existing buildings and build a mixed use project on the site with a 20,000 square foot grocery store and detached housing is currently in the preliminary stages of review. PALO ALTO RETAIL SALES In addition to the amount that local households spend at retail stores, the other component that defines the local retail market is the retail sales generated by local stores. Sales tax data from the State Board of Equalization was used to calculate the retail store sales by store category for the City of Palo Alto. The City's finance department provided an audited record of this data, from which ADE estimated the taxable retail sales. After adjusting the sales tax data to account for nontaxable item sales, the 2007 retail sales by businesses in the City of Palo Alto totaled approximately $1.6 billion, as Applied Development Economics, Inc. 19 shown in Table 10. The two largest retail sales categories are department stores and restaurants/ eating places, which each generated more than $260 million in retail sales in 2007. Other retail store categories with more than $100 million in annual sales _J include gasoline service stations, drug stores, new auto dealerships, miscellaneous specialty retail, and appliances/ electronics. - I i I ! I l ' I ' ! I ~ Findings for retail sales by major store group are summarized below. APPAREL STORES Palo Alto generated a total of $155 million in apparel store sales. More than half of these sales ($83 million) occur in family clothing stores. Women's apparel stores account for another $50 million in sales. Stanford Shopping Center accounts for the vast majority of apparel store sales in Palo Alto. Other large concentrations of apparel store sales include Town & Country shopping center and the downtown business district. Midtown generates sales in men's apparel and family clothing, while El Camino Real includes sales from shoe stores. GENERAL MERCHANDISE STORES Department stores constitute by far the largest concentration of retail sales in Palo Alto, with over $296 million in sales. It should be noted that traditional department stores such as Macy's and Bloomingdale's make up all of the department store sales in Palo Alto. Palo Alto does not have any discount department stores, variety/ dollar stores, or warehouse club stores. The remaining general merchandise stores in Palo Alto are drug stores, which generate about $115 million in total retail sales.14 All of the department stores in Palo Alto are located at Stanford Shopping Center. In contrast, drug store sales are scattered throughout Palo Alto, with stores located in the Downtown, Midtown, Town and Country Shopping Center, El Camino Real, and California Avenue. SPECIALTY RETAIL STORES Specialty retail stores include a broad cross-section of different product offerings and store types. These stores generated a total of $240 million in 2007 retail sales. Among the individual store categories, the largest sales generators are miscellaneous specialty retail stores and jewelry stores. Each of these store categories generated more than $40 million in retail sales. However, Palo Alto is well represented in a broad range of specialty retail store categories, with stores specializing in gifts and novelties, sporting goods, music, books, office supplies, and photographic supplies each generating more than $10 million in retail sales. 14 The drug store sales include an adjustment to account for prescription drug sales, which are nontaxable and therefore not included in the sales tax data. 20 Applied Development Economics, Inc. ~-1 :_ ) . ~] i I _! Specialty retail stores are well represented throughout Palo Alto's business districts, and these concentrations vary considerably by retail store category, as shown below. • Gift and novelty stores are primarily concentrated in the downtown district; • Sporting goods stores are well represented in Town and Country shopping center, El Camino Real, Downtown, and California A venue; • Florists are concentrated Downtown; • Music store sales are concentrated along El Camino Real and Park Avenue/Lambert Blvd.; • Stationery /book stores sales are primarily concentrated Downtown with additional sales focused at Stanford Shopping Center, California Avenue, and Town and Country shopping center; • Nearly all jewelry store sales occur at Stanford Shopping Center and Downtown; • Miscellaneous retail store sales are concentrated at Stanford Shopping Center, Downtown, and California A venue . FOOD, EATING, AND DRINKING GROUP Food-oriented retail stores generated about $383 million in retail sales in 2007, with $264 million in sales coming from restaurants/ eating places. Restaurants represent the second largest retail store category in Palo Alto. Grocery stores generate another $101 million in retail sales, with specialty food stores and liquor stores making up the remainder. Restaurant/ eating places generate significant retail sales throughout Palo Alto and are represented in nearly every shopping district in the city. Grocery stores are also located throughout Palo Alto, but the supermarkets are primarily concentrated in Downtown, Midtown, Stanford Shopping Center, Charleston Center, and California Avenue. BUILDING MATERIALS AND HOME FURNISHINGS GROUP The building materials and home furnishings group includes stores that specialize in home improvement products, and also includes electronics/ appliance stores, furniture stores, and used merchandise stores. Altogether, these stores generated about $191 million in retail sales, with sales predominantly occurring in electronics/ appliance stores ($131 million) and furniture/home furnishings ($29 million). Home improvement store categories such as home centers, hardware stores, garden supply stores, paint stores, and building materials stores are minimally represented by comparison. Sales from furniture and home furnishing stores are concentrated in the downtown district, with additional concentrations of retail sales around San Antonio Industrial Park, Stanford Shopping Center, California Avenue, and Park Blvd./Lambert Ave. Applied Development Economics, Inc. 27 I ii . t ) Electronics/ appliance store sales almost entirely occur at Park Blvd./Lambert Ave., Stanford Shopping Center, and the downtown district. Sales from home improvement stores primarily center around San Antonio Industrial Park, El Camino Real, California Avenue, Park Blvd./Lambert Ave., and the downtown district. The IKEA store in East Palo Alto also provides significant competition in the home furnishings sector. AUTOMOTIVE GROUP Retail businesses in the automotive group include new and used automobile dealerships, gasoline service stations, auto parts stores, as well as dealers for other vehicles such as boats, motorcycles, and trailers. In Palo Alto, new car dealerships ($171 million), used car dealerships ($17 million), and gasoline service stations ($64 million) together make up 99 percent of the $252 million in total retail sales for this retail group. Palo Alto does not have significant sales in auto parts and other vehicle dealerships. Geographically, the new car dealerships are concentrated at Embarcadero (east of 101), San Antonio Industrial Park, and El Camino Real. Palo Alto's used car dealerships are primarily concentrated around Park Blvd./Lambert Ave. and San Antonio Industrial Park. Service stations are only located in San Antonio Industrial Park, Edgewood Plaza, El Camino Real, and California Avenue . 22 Applied Development Economics, Inc. I : ! ; J \ I 1 I ! 5. RETAIL LEAKAGE AND ATTRACTION POTENTIAL Retail leakage represents the mismatch between local market spending and the retail sales by Palo Alto retail establishments. Leakage indicates both an existing shortcoming in terms of local retailers not meeting existing household and daytime population demand, as well as an opportunity because unmet retail demand can create potential for new stores or sales expansions for existing stores. Conversely, those store categories with net capture of regional sales extend their market reach into the surrounding region. RETAIL LEAKAGE AND NET CAPTURE Overall, Palo Alto's retail sales total of $1.6 billion exceeds the local consumer spending total of $1.4 billion, as shown in Table 10. This means that Palo Alto overall has a net capture of regional sales where Palo Alto retailers attract spending from outside of the community. The sales leakage trend identified in the analysis shows a mixed trend as Palo Alto is a net regional retail provider in some key retail store categories, but also experiences significant retail leakage in other major store categories. The retail store categories where the sales exceed the local market spending attract a total net capture of $508 million in regional sales, while the retail store categories where sales fall short of local market spending generate a total of $303 million in retail leakage. In general, Palo Alto is a regional provider for apparel stores, general merchandise, and specialty retailers. These retail groups generate sales that far exceed the local market spending, and they generally confirm the strong regional shopping attraction of Stanford Shopping Center and Downtown. By far the largest net capture of regional sales occurs with department stores. This store category alone captures $152 million from outside of the local market. Other strong performing retail store categories where Palo Alto attracts more than $30 million in sales from outside of the local market include family clothing ($51 million), electronics/ appliances ($91 million), women's apparel ($33 million), jewelry stores ($36 million), miscellaneous specialty retail stores ($53 million), and drug stores ($39 million). The projected long-term market growth through 2020 will not substantially change these findings, as shown in Table 11. During this time the retail leakage and capture trends will remain similar to the current situation, unless the makeup of Palo Alto's retail store mix changes during this time. The combined effect of population growth, job growth, and growth in visitor spending will only result in an increase of $119 million of local spending potential, or 8.3 percent over 13 years. In store categories Applied Development Economics, Inc. 23 -l ! ~l ! I ' J I J TABLE 10 PALO ALTO RETAIL SALES LEAKAGE AND NET CAPTURE, 2007 Retail Group Total Apparel Store Group Women's Apparel Men's Apparel Family Clothing Shoe Stores General Merchandise Group Department Stores other General Merchandise Drug & Proprietary Stores Specialty Retail Group Gifts & Novelties Sporting Goods Florists Photographic Equipment Records & Music Books & Stationery Office Supplies/Computer Equipment Jewelry Misc. Specialty Retail Food, Eating & Drinking Group Grocery Stores Specialty Food Stores Liquor Stores Eating Places Building Materials & Home Local Market Area Palo Alto Retail Sales Spending Sales Leakages $1,429,001,945 $1,633,164,290 $303,397,722 $66,682,372 $154,980,800 $0 $19,877,424 $53,306,800 $0 $4,225,450 $6,142,500 $0 $32,172,978 $83,001,600 $0 $10,406,520 $12,529,900 $0 $273,321,625 $411,574,553 $52,829,900 $144,324,760 $296,223,216 $0 $52,829,900 $0 $52,829,900 $76,166,966 $115,351,337 $0 $113,102,989 $240,044,703 $1,472,231 $5,452,987 $11,690,679 $0 $10,989,528 $20,515,315 $0 $2,157,932 $2,388,744 $0 $3,979,409 $22,332,200 $0 $4,137,007 $4,479,700 $0 $10,650,049 $16,244,000 $0 $12,131,531 $10,659,300 $1,472,231 $13,861,924 $49,450,150 $0 $49,742,621 $102,284,615 $0 $464,895,977 $383,086,107 $86,650,729 $169,821,041 $100,853,054 $68,967,987 $7,921,835 $12,762,694 $0 $9,028,542 $5,409,359 $3,619,183 $278,124,560 $264,061,000 $14,063,560 Furnishings Group $134,549,569 $191,225,980 $37,172,911 Furniture & Home Furnishings $35,511,890 $28,718,938 $6,792,953 Household Appliances & Electronics $40,408,138 $131,471,800 $0 Used Merchandise $2,426,741 $1,124,800 $1,301,941 Nurseries & Garden Supply Stores $11,511,512 $7,186,974 $4,324,538 Lumber & Other Building Materials $26,357,510 $8,392,000 $17,965,510 Home Centers and Hardware Stores $16,656,137 $9,868,168 $6,787,969 Paint & Wallpaper $1,677,640 $4,463,300 $0 Automotive Group $376,449,413 $252,252,147 $125,271,952 New Cars & RVs $184,677,891 $171,427,300 $13,250,591 Used Car Dealers $13,607,115 $14,681,800 $0 Gasoline Service Stations $161,819,735 $64,403,247 $97,416,488 Mobile Homes & Trailers $83,719 $0 $83,719 Auto Parts & Accessories $9,530,954 $575,900 $8,955,054 Other Vehicles $6,729,999 $1,163,900 $5,566,099 Net Capture of Regional Sales $507,560,067 $88,298,428 $33,429,376 $1,917,050 $50,828,622 $2,123,380 $191,082,827 $151,898,456 $0 $39,184,371 $128,413,945 $6,237,691 $9,525,787 $230,812 $18,352,791 $342,693 $5,593,951 $0 $35,588,226 $52,541,994 $4,840,860 $0 $4,840,860 $0 $0 $93,849,321 $0 $91,063,662 $0 $0 $0 $0 $2,785,660 $1,074,685 $0 $1,074,685 $0 $0 $0 $0 Source: ADE, Inc., data from City of Palo Alto, California State Board of Equalization, U.S. Census Bureau, California Department of Finance, California EDD, Dean Runyan Associates, International Council of Shopping Centers, UW-Extension, Stanford University, and U.S. Bureau of Labor Statistics. 24 Applied Development Economics, Inc. I -j TABLE 11 PROJECTED PALO ALTO RETAIL SALES LEAKAGE AND NET CAPTURE, 2020 Retail Group Total Apparel Store Group Women's Apparel Men's Apparel Family Clothing Shoe Stores General Merchandise Group Department Stores other General Merchandise Drug & Proprietary Stores Specialty Retail Group Gifts & Novelties Sporting Goods Florists Photographic Equipment Records & Music Books & Stationery Office Supplies/Computer Equipment Jewelry Misc. Specialty Retail Food, Eating & Drinking Group Grocery Stores Specialty Food Stores Liquor Stores Eating Places Building Materials & Home Furnishings Group Furniture & Home Furnishings Household Appliances & Electronics Used Merchandise Nurseries & Garden Supply Stores Lumber & other Building Materials Home Centers and Hardware Stores Paint & Wallpaper Automotive Group New Cars & RVs Used Car Dealers Gasoline Service Stations Mobile Homes & Trailers Auto Parts & Accessories other Vehicles Local Market Area Palo Alto Retail Sales Spending Sales Leakages $1,545,638,730 $1,633,164,290 $382,077,841 $72,620,245 $154,980,800 $0 $21,798,017 $53,306,800 $0 $4,530,090 $6,142,500 $0 $35,189,004 $83,001,600 $0 $11,103,134 $12,529,900 $0 $294,528,608 $411,574,553 $55,134,154 $156,852,851 $296,223,216 $0 $55,134,154 $0 $55,134,154 $82,541,603 $115,351,337 $0 $123,119,264 $240,044,703 $2,218,257 $5,908,237 $11,690,679 $0 $11,875,604 $20,515,315 $0 $2,297,437 $2,388,744 $0 $4,593,513 $22,332,200 $0 $4,401,476 $4,479,700 $0 $11,416,896 $16,244,000 $0 $12,877,557 $10,659,300 $2,218,257 $15,386,296 $49,450,150 $0 $54,362,247 $102,284,615 $0 $512,141,656 $383,086,107 $133,183,265 $180,109,509 $100,853,054 $79,256,455 $8,634,978 $12,762,694 $0 $9,580,150 $5,409,359 $4,170,791 $313,817,019 $264,061,000 $49,756,019 $141,328,427 $37,159,317 $42,853,167 $2,555,866 $12,038,245 $27,541,481 $17,417,395 $1,762,956 $401,900,530 $192,850,629 $14,209,442 $177,781,112 $87,361 $9,945,352 $7,026,632 $191,225,980 $28,718,938 $131,471,800 $1,124,800 $7,186,974 $8,392,000 $9,868,168 $4,463,300 $252,252,147 $171,427,300 $14,681,800 $64,403,247 $0 $575,900 $1,163,900 $41,421,424 $8,440,379 $0 $1,431,066 $4,851,271 $19,149,481 $7,549,226 $0 $150,120,741 $21,423,329 $0 $113,377,865 $87,361 $9,369,452 $5,862,732 Net capture of Regional Sales $469,603,401 $82,360,555 $31,508,783 $1,612,410 $47,812,596 $1,426,766 $172,180,099 $139,370,365 $0 $32,809,734 $119,143,697 $5,782,442 $8,639,712 $91,306 $17,738,687 $78,224 $4,827,104 $0 $34,063,854 $47,922,369 $4,127,716 $0 $4,127,716 $0 $0 $91,318,977 $0 $88,618,633 $0 $0 $0 $0 $2,700,344 $472,358 $0 $472,358 $0 $0 $0 $0 Source: ADE, Inc., data from City of Palo Alto, California State Board of Equalization, U.S. Census Bureau, California Department of Finance, California EDD, Dean Runyan Associates, International Council of Shopping Centers, UW-Extension, Stanford University, and U.S. Bureau of Labor Statistics. where the city currently experiences leakage, the opportunities to attract new stores to fill the gaps will marginally improve as potential spending levels for these store categories increases. But, this level of growth does not open up any new opportunities for retail development that do not already exist. That is, for store categories that are already meeting available demand and there is no leakage currently, the increased demand from future growth would not be sufficient to support additional new stores. In addition, regional competition from San Jose and San Francisco will continue to exert pressure on Palo Alto retailers. Applied Development Economics, Inc. 25 r 1 i I \. J c ' I I I _J ~ I J LINKING RETAIL LEAKAGE TO NEW BUSINESS ATIRACTION POTENTIAL Retail leakage represents potential for new business attraction or business expansion. Retail groups where there was a general trend towards retail leakage include food stores and automotive businesses. While Palo Alto attracts significant retail sales from outside of the community in many retail categories, there are many other retail categories where Palo Alto has significant unmet local demand. Retention of Palo Alto's existing retail economy depends largely on the city's continued capacity to attract spending from throughout the region. In those categories where Palo Alto has retail sales leakage, the community has potential to expand its retail economy by recapturing some local spending that currently goes outside of the area. In terms of expanding total taxable sales in the City, non-retail businesses can also have a significant role. As noted earlier in the report, the Stanford Research Park area and the San Antonio Rd. industrial area generate 25 percent of total taxable sales for the City. Taken as a whole, non-retail businesses generate about $7,000 in taxable sales annually per employee in Palo Alto. Such business to business transactions have potential for this to grow as well and in San Jose, Sunnyvale, Santa Clara and Cupertino such businesses generate more than $10,000 in taxable sales per employee.15 This should be a consideration in the City's economic development program and it is acknowledged in the fiscal analysis for the comprehensive plan update. The present report, however, is concerned with growth and expansion in the retail sector primarily. As shown in Table 12, Palo Alto households spend almost $302 million annually at retail stores outside of Palo Alto. In many retail categories, this spending leakage is large enough to support new retail businesses. The sales leakage can potentially support at least 41 new retail establishments with a total sales capture of $215 million in annual sales, assuming that this retail leakage could be captured. These supportable establishments represent categories where the sales leakage (unmet demand) is large enough to support a viable business for a given retail category. However, other consideration such as the availability of suitable sites and the effect of competitive stores outside Palo Alto would need to be taken into account in order to determine the specific retail expansion potential in the City. The remaining $89 million in retail leakage will either continue to leave Palo Alto, or existing retail stores can potentially capture this continuing leakage through expansion of their business and retail sales. The analysis established a minimum support level for each retail category by estimating the average sales by store type for retail 15 Calculated based on ABAG employment figures and taxable sales data from the State Board of Equalization. 26 Applied Development Economics, Inc. I I I ' .----, I J establishments in the San Jose Metropolitan Statistical Area (MSA) .16 It should also be noted that in addition to showing the types of new businesses that could fill existing vacancies and provide the base for potential new development, this analysis can also be used by existing businesses that want to identify new product lines for business expans10n. The store categories with retail leakage large enough to support potential new retail stores are concentrated in the grocery store, building materials and home furnishings, and automotive retail groups. The specific store categories with potential for new establishments are as follows: • Grocery stores • Liquor stores • Eating places • Furniture and home furnishings • Used merchandise • Nursery/ garden supply stores • Lumber and building materials • Gasoline service stations • Auto parts • Other vehicle dealerships • General retail As shown in Table 12, the retail categories with the most potential for attracting new retail establishments are gasoline service stations and grocery stores with $97 million and $64 million in attraction potential, respectively. The gas station leakage is very significant, but opportunities to develop new gas stations may not be readily available due to high land costs and a lack of sites. The grocery store leakage could support a number of smaller sized stores, such as currently exist in the City, but probably would be consolidated into larger modern store formats. Currently two smaller sized stores are proposed as part of new developments in older commercial centers. The City could support an additional two large grocery stores of 40,000 to 50,000 sq.ft. each. Even though the unmet demand is sufficient to support new establishments, it is unlikely that all of this retail leakage will result in new business formation. For example, the retail leakage shown with restaurants represents less than 5.0 percent of the total market area spending. Sales growth by existing restaurants in Palo Alto can easily absorb this leakage, so it is not likely that 17 new restaurants will develop in 16 Data for average sales per establishment was calculated from the 2002 Economic Census, escalated to 2007 dollars. Applied Development Economics, Inc. 27 ,----, , I ) I -,.! TABLE 12 PALO ALTO RETAIL ATTRACTION POTENTIAL, 2007 Square Sales Potential Attraction Continuing Footage Retail Group Leakages New Stores Potential Leakage Potential Total $303,397,722 41 $214,869,902 $88,527,820 381,725 Apparel Store Group $0 0 $0 $0 0 General Merchandise Group $52,829,900 0 $0 $52,829,900 0 Specialty Retail Group $1,472,231 0 $0 $1,472,231 0 Food, Eating & Drinking Group Grocery Stores $86,650,729 24 $80,856,521 $5,794,208 184,100 $68,967,987 4 $64,914,826 $4,053,161 133,638 Liquor Stores $3,619,183 3 $2,655,240 $963,942 6,701 Eating Places $14,063,560 17 $13,2861455 $777,104 43,761 Building Materials & Home Furnishings Group $37,172,911 10 $26,711,684 $10,461,227 165,308 Furniture/Home Furnishings $6,792,953 3 $5,927,743 $865,210 29,639 Used Merchandise $1,301,941 1 $1,083,938 $218,004 4,336 Nurseries/Garden Supply $4,324,538 1 $2,307,682 $2,016,856 15,385 Lumber/Building Materials $17,965,510 5 $17,392,321 $573,188 115,949 Automotive Group $125,271,952 7 $107,301,697 $17,970,255 32,318 Gasoline Service Stations $97,416,488 n/a $95,084,312 $2,332,176 n/a Auto Parts & Accessories $8,955,054 6 $8,079,479 $875,575 32,318 other Vehicles $5,566,099 1 $4,137,905 $1,428,194 n/a Source: ADE, Inc., data from City of Palo Alto, California State Board of Equalization, U.S. Census Bureau, California Department of Finance, California EDD, Dean Runyan Associates, International Council of Shopping Centers, UW- Extension, Stanford University, Urban Land Institute, and U.S. Bureau of Labor Statistics. Palo Alto as shown in Table 12. In addition, market conditions have shown a general decline in restaurant sales across the Bay Area, a likely reflection of lower demand for eating out. Moreover, with a commute pattern that shows a very high out-commute rate among Palo Alto residents, at least some portion of the retail leakage will continue to leave Palo Alto, even though the City captures significant sales from its daytime in-commuter population (see Table 3). The recent general retail market decline also impacts short-term attraction potential for home improvement (building materials and nurseries) and furniture stores, since those stores depend on a growing market for new home construction and remodeling projects. Furthermore, the square footage potential identified for home improvement and furniture stores in Palo Alto is already tempered by the large concentration of competing stores of this type in East Palo Alto in the Ravenswood 101 center. The general retail category at the bottom of the list above would address the $52 million in leakage in the General Merchandise category. Ideally, more upscale small to medium box outlets would respond best to Palo Alto's market characteristics. 28 Applied Development Economics, Inc. --i . ! I I ! I J TABLE 13 PALO ALTO RETAIL ATTRACTION POTENTIAL, 2020 Square Sales Potential Attraction Continuing Footage Retail Group Leakages New Stores Potential Leakage Potential Total $382,077,841 90 $279,050,307 $103,027,534 542,484 Apparel Store Group $0 0 $0 $0 0 General Merchandise Group $55,134,154 0 $0 $55,134,154 0 Specialty Retail Group $2,218,257 0 $0 $2,218,257 0 Food, Eating & Drinking Group Grocery Stores $133,183,265 71 $124,905,945 $8,277,320 319,594 $79,256,455 4 $72,127,584 $7,128,871 148,487 Liquor Stores $4,170,791 4 $3,540,320 $630,471 8,934 Eating Places $49,756,019 63 $49,238,041 $517,978 162,173 Building Materials & Home Furnishings Group $41,421,424 12 $30,995,280 $10,426,144 190,572 Furniture/Home Furnishings $8,440,379 4 $7,903,6S7 $536,722 39,518 Used Merchandise $1,431,066 1 $1,083,938 $347,128 4,336 Nurseries/Garden Supply $4,851,271 2 $4,615,364 $235,907 30,769 Lumber/Building Materials $19,149,481 5 $17,392,321 $1,757,160 115,949 Automotive Group $150,120,741 7 $123,149,082 $26,971,659 32,318 Gasoline Service Stations $113,377,865 n/a $110,931,697 $2,446,168 n/a Auto Parts & Accessories $9,369,4S2 6 $8,079,479 $1,289,973 32,318 Other Vehicles $5,862,732 1 $4,137,905 $1,724,827 n/a Source: ADE, Inc., data from City of Palo Alto, California State Board of Equalization, U.S. Census Bureau, California Department of Finance, California EDD, Dean Runyan Associates, International Council of Shopping Centers, UW- Extension, Stanford University, Urban Land Institute, and U.S. Bureau of Labor Statistics. Using national benchmark averages, the $215 million of retail attraction potential generates a demand for about 453,700 square feet of retail space. 17 This amount of retail square footage does not necessarily mean that new retail developments are feasible in the short-term, because some of this demand could presumably be accommodated in existing vacant commercial spaces or through sales growth by existing retailers. The likeliest retail stores that can be attracted to Palo Alto in the short-term are grocery stores and gasoline service stations. The estimated unmet demand for grocery stores can support 133,600 square feet of space, which is the equivalent of two large supermarkets. However, since two smaller stores are currently proposed for sites in Palo Alto, Table 12 shows a total of four potential stores. Even though the market potential exists to support new grocery stores, the more pressing question is whether suitable sites for larger stores are available. Gasoline service stations are in short supply in Palo Alto, but accommodating the unmet demand also depends on finding suitable sites for locating these businesses. By 2020, the retail attraction potential will increase to $279 million, with a square footage potential of 626,400 square feet, as shown in Table 13. The growth in local demand is not projected to create new store potential for additional retail categories, 17 Sales per square foot benchmark data comes from the Urban Land Institute Dollars and Cents of Shopping Centers, 2008. Applied Development Economics, Inc. 29 : l I ' I J i I ~ I I I I J but rather increase the retail attraction potential for those store categories that already have large enough unmet spending demand to support new retail stores. In particular, restaurant potential will capture a very high proportion of the new store potential. By 2020, the market growth will create enough unmet demand to support multiple new restaurants. 30 Applied Development Economics, Inc. --l ' I ! I I I I I I 6. KEY RETAIL ISSUES Palo Alto has significant strength in specific retail niches, but also has numerous retail gaps that present both challenges and opportunities for future planning. The city's regionally oriented retail sector has served the community very well by attracting shoppers from throughout the Bay Area and capturing significant sales tax revenue. However, Palo Alto's regional retail centers need to react to shifts in economic trends, and competition from surrounding communities. Moreover, Palo Alto has a significant shortcoming in its local-serving retail centers and the lack of power center discount stores, which have left a large portion of local household demand unmet. A significant challenge here is the difficulty of assembling larger lots from the existing narrow parcels under multiple ownerships in many commercial districts of the City. The City may be able to pursue more upscale, smaller box stores to fill this niche. The following discussion addresses existing shortcomings in Palo Alto's retail sector as well as competitive challenges that Palo Alto needs to meet in order to maintain its position of strength in the retail market. RETAINING AND STRENGTHENING AUTO DEALERSHIPS Auto dealerships represent a significant source of sales and tax revenue for the City. These dealerships are also competitively vulnerable, even under favorable market conditions. The existing dealerships in Palo Alto are in different parts of the City such as Embarcadero, El Camino Real, Park Boulevard, and San Antonio Road, which limits opportunities for shared facilities and marketing. In addition, most of the existing dealerships have limited space for expansion. Given how far the market conditions for the automotive sector have deteriorated in 2008, supporting Palo Alto's dealerships is more of an imperative. In the short-term, developing new dealerships is not a realistic option, given that dealerships have been closing throughout Santa Clara County and some auto manufacturers such as GM and Ford have indicated a desire to reduce the size of their dealer networks in order to strengthen the remaining dealerships.18 Auto malls and auto rows have the advantage of providing shoppers with the opportunity to compare multiple makes and models in close proximity. The newer auto malls in particular use a much larger land area than older dealerships located along mixed commercial streets, and locate in high visibility locations along major highways. In addition, the dealerships band together to not only market themselves collaboratively, but to also address infrastructure and facility issues. 18 Associated Press; "Automakers look to consolidate dealer ranks"; December 4, 2008. Applied Development Economics, Inc. 37 j . l I I ___! Retaining Palo Alto's existing automobile dealerships will require addressing their competitive disadvantages. This entails potentially planning for an alternate location that provides dealerships with sufficient space to run a more modern operation, greater visibility, and/ or the opportunity for dealerships to concentrate together. In other cities, dealerships have expanded operations from landlocked locations by building multilevel parking structures and relocating maintenance and administrative operations off-site. In a novel approach, the City of Cerritos leased land areas underneath utility right-of-ways, which allowed its auto mall dealerships to use this otherwise undevelopable land as overflow storage for new cars. Initiatives like these potentially require modifications to existing regulations. Palo Alto has adopted a "grow in place" strategy with some auto dealers that involves adoption of an auto dealer overlay zone that permits the dealers to expand onto nearby sites. RETAINING EXISTING REGIONAL CAPTURE AND COMMUTER SPENDING Palo Alto has significant retail assets that have made the community a shopping destination for a broad range of Bay Area consumers. In the past, Palo Alto has successfully captured retail spending from neighboring communities partly because those communities lacked regional malls that were competitive with the offerings at Stanford Shopping Center and the attractiveness of its outdoor spaces. As the overall retail market has shifted towards power centers, mall-based retailing has declined nationally. Stanford Shopping Center's sales have held up well despite these trends. Much of the mall's distinctiveness has been in its attraction as a high-end retail destination. With the current economic downturn, sales of luxury goods have taken the biggest hit. This disproportionally affects Palo Alto because of its concentration of stores that carry luxury products . For the long-term however, Palo Alto has a well-established niche as a regional shopping destination and needs to maintain the distinctiveness of its mall and downtown area in order to retain the market capture of regional sales, tourism spending, and commuter spending. Relative to its neighbors, Palo Alto has retail assets in place, as well as an established pattern of shoppers coming into Palo Alto from outside. Because of this, Palo Alto has a strong base from which it can continue to attract shoppers from throughout the Bay Area. ADDRESSING UNMET DEMAND IN LOCAL-SERVING RETAIL SECTORS The retail leakage analysis identified a large shortcoming with grocery stores in Palo Alto. Because grocery stores typically serve as anchors for local-serving shopping centers, this shortfall also points to unmet demand for other locally oriented establishments that currently goes into neighboring communities. The closure of the 32 Applied Development Economics, Inc. j : I 1 --i Albertson's supermarkets at Alma Plaza and Edgewood Plaza eroded grocery store spending in Palo Alto and contributed to the loss of other retail stores at those shopping centers. The grocery store closures occurred because of corporate strategy decisions, but are difficult to rectify because of the small site configurations. However, the favorable market conditions for new grocery stores in Palo Alto have led to Trader Joe's developing a new store at Town and Country shopping center, and have attracted interest from British grocery store operator Tesco to build a Fresh & Easy market in Palo Alto. Both of these grocery store operators tend to develop smaller stores (20,000 square feet or less), and offer a more limited product selection than larger full-service supermarkets. However, even if both of these locations attract new grocery stores, there remains a significant market gap that would likely be filled by a large full-service supermarket. A new full-service supermarket would need contemporary floor configurations that generally take up at least 50,000 square feet and often more than 100,000 square feet of space. Most of the existing shopping centers in Palo Alto are not large enough to support these newer supermarket configurations and also provide space for other local-serving tenants. Therefore, alternative sites would need to be identified if existing shopping centers cannot accommodate new stores of this size. These shopping centers could add space by constructing a second level, but this potentially raises the development costs and increases the number of parking spaces needed. Typical neighborhood and community-level shopping centers with supermarkets anchoring the center include secondary local-serving tenants such as variety stores, auto parts stores, beauty supply stores, fast food restaurants, small clothing stores, dry cleaners, banks, pet stores, florists, and other small-scale specialty retail stores. In addition to supermarkets, Palo Alto also has a significant shortcoming in its gasoline service station sales. Compared to the large volume of commuters that pass through Palo Alto on a daily basis, Palo Alto does not have a very large number of gas stations. In addition, many of the existing gas stations in Palo Alto are located on relatively small sites, which limits the number of pumps that the station can provide and creates access problems. Further development of gas stations is likely hindered also by the high cost of land and the relatively low return compared to other development options. All of these factors create a very large amount of unmet spending potential. ANTICIPATING SHORT-TERM INCREASE IN RETAIL VACANCIES The retail downturn that occurred in 2008 cut deep across a broad range of different retail store categories, retail chains, and individual stores. Analyst projections anticipate that many retail chains and stores will close in 2009 as low consumer confidence reduces discretionary spending. For Palo Alto, this has the potential to significantly increase the number of retail vacancies throughout the city in a short time. Applied Development Economics, Inc. 33 I ' l ,-' ' i l While many of these vacancies will likely be short-term as retail spending rebounds, some of the vacant spaces will remain vacant or need to convert to other uses. Along aging strip commercial corridors such as El Camino Real in particular, there is a general glut of commercial space as communities have added considerable new commercial space closer to freeway interchanges. This trend has affected Palo Alto, as East Palo Alto and Mountain View have built large-scale power centers adjacent to Highway 101 and eroded the market support for other commercial corridors and business districts. Other Peninsula communities such as Redwood City and Sunnyvale have addressed the long-term vulnerability of El Camino Real by adopting plans for the corridor that include mixed use development, streetscape improvements, and transit-oriented configurations. Minimizing the negative impacts of retail vacancies should be a short-term objective. This entails keeping viable businesses that face short-term financial shortfalls from going out of business. Potential actions include mobilizing business retention resources and disseminating information about small business loan and grant programs, City programs, and other business assistance resources. It also includes identifying any applicable assistance that might come through the various economic stimulus approaches currently in discussions at the federal level. STAYING RELEVANT AS RETAIL MARKET EVOLVES Retail trends can evolve quickly, and thus far, Palo Alto has maintained a strong enough retail base to serve its particular niche in the regional retail market. Keeping on top of changes to these trends is vital because Palo Alto's local retail spending growth is expected to be minimal through 2020. Generally, retail markets grow by increases in the population and/or income growth. In Palo Alto's retail market, population and income growth have been minimal. However, shifts in spending habits also present market opportunities even as the overall demand for retail shows little change. Staying relevant means identifying which retail sectors are growing, and adapting as those shifts within the retail sectors occur. The City needs to recognize potential vulnerabilities within its existing retail centers, and be prepared to proactively address market opportunities. For example, the City has allocated funds to update a market study, originally completed in 2000, of the grocery store sector. Nationally, the recent trend in retailing has been towards upscale "lifestyle" centers that place emphasis on architectural amenities, outdoor walkable spaces, and more upscale shopping opportunities mixed with entertainment. This was in response to the rising number of "empty nesters" (working couples whose children have grown up and moved out of the house), who have greater discretionary income because they no longer need to support their kids. To a great extent, potential opportunities with lifestyle centers are already addressed by Palo Alto's existing regional retail centers. The upscale blend of stores and restaurants in downtown Palo Alto and Stanford Shopping Center, with both sites 34 Applied Development Economics, Inc. ,-·1 I i~ r---1 i I featuring outdoor walkable spaces, place Palo Alto ahead of the curve. However, Valley Fair and Santana Row have emerged as formidable competitors for upscale shopping and dining, and those developments have expansion plans of their own. Downtown Palo Alto and Stanford Shopping Center represent assets that surrounding communities cannot readily replicate. Shopping malls create constant opportunities for reinvention, as other malls throughout the country have repositioned themselves into a variety of different configurations. Some malls have incorporated power center anchors, such as discount stores and other big box retail stores that have traditionally shunned or have been shunned by regional malls. In addition, other recent lifestyle center developments such as Santana Row in San Jose and the Paseo Colorado in Pasadena have added housing as a way of reinventing a more traditional shopping center. Currently, the luxury retailing market is most vulnerable, but also represents Palo Alto's greatest strength. Palo Alto's largest unmet retail demand is with local-serving retail uses and middle market big box types of retail stores. In addition, new lifestyle centers have the potential to accommodate entertainment anchors that draw larger shopping crowds. Those types of uses could potentially be accommodated at Stanford Shopping Center and to a lesser extent in the downtown area. However, attracting those types of uses could also detract from the well established image of Stanford Shopping Center as a high end shopping destination and might not generate the high sales per square foot that existing stores do.19 19 Silicon Valley/San Jose Business Journal; "Stanford mall eyes expansion"; August 11, 2006. Applied Development Economics, Inc. 35 ! I APPENDIX TABLES APPENDIX TABLE 1 AREA AND ESTABLISHMENT BENCHMARK SALES Benchmark Sales Benchmark Sales Per Retail Grou~ PerS.F. Establishment Apparel Store Group Women's Apparel $221 $1,294,460 Men's Apparel $275 $990,768 Family Clothing $269 $4,506,418 Shoe Stores $193 il,018,435 General Merchandise Group Department Stores $250 $39,872,575 Other General Merchandise $250 $71,190,146 Drug & Pro~rieta!}'. Stores i429 $5,833,215 Specialty Retail Group Gifts & Novelties $170 $743,912 Sporting Goods $221 $1,746,353 Florists $265 $405,839 Photographic Equipment $630 $1,663,352 ~] I Records & Music $250 $1,851,940 Books & Stationery $220 $2,741,838 Office Supplies/Computer Equipment $202 $4,368,712 Jewelry $303 $1,168,703 Misc. S~ecial~ Retail i245 il,185,116 Food, Eating & Drinking Group Grocery Stores $486 $7,212,758 Specialty Food Stores $193 $765,481 Liquor Stores $396 $885,080 Eating Places po4 p81,556 Building Materials & Home Furnishings Group Furniture & Home Furnishings $200 $1,975,914 Household Appliances & Electronics $302 $2,188,441 Used Merchandise $250 $1,083,938 Nurseries & Garden Supply Stores $150 $2,307,682 Lumber & Other Building Materials $150 $3,478,464 Home Centers and Hardware Stores $150 $9,095,824 Paint & Wall~a~er i150 $9,095,824 Automotive Group New Cars & RVs N/A $41,774,004 Used Car Dealers N/A $2,149,803 Gasoline Service Stations $1,321 $3,169,477 Auto Parts & Accessories $250 $1,346,580 Other Vehicles N/A i4,137,905 Source: ADE, Inc. Applied Development Economics, Inc. 37 I f I ~~-1 APPENDIX TABLE 2 SECONDARY MARKET AREA DEMAND l ~~J __ L !_ - Portola Los Altos Secondary ____ J Primary East Palo Alto Valley Hills Los Altos Mountain View Atherton Woodside Menlo Parle Redwood City Market Area Total Market Market Area Household Household Household Household Household Household Household Household Household Household Area Household Retail Group Spending Spending Spending Spending Spending Spending Spending Spending Spending Spending Spending Spending Total $1,429,001,945 $154,734,578 $94,685,371 $158,089,043 $440,521,833 $901,934,963 $151,688,987 $108,046,412 $431,431,646 $798,322,016 $3,239,454,849 $4,668,456,794 Apparel Store Group Women's Apparel Men's Apparel Family Clothing Shoe Stores General Merchandise Group Department Stores Other General $66,682,372 $6,662,.417 $4,.478,494 $7,S08,907 $20,.433,962 $39,830,459 $7,228,969 $5,120,683 $19,556,250 $35,214,643 $146,034,785 $212,717,157 $19,877,424 $1,763,235 $1,222,687 $2,050,949 $5,571,129 $10,751,866 $1,975,555 $1,398,015 $5,304,776 $9,489,515 $39,527,728 $59,405,152 $4,225,450 $481,284 $338,689 $568,729 $1,535,840 $2,935,791 $548,764 $387,732 $1,456,089 $2,594,985 $10,847,903 $15,073,353 $32,172,978 $3,098,794 $2,077,589 $3,482,442 $9,493,991 $18,564,513 $3,352,814 $2,375,742 $9,097,183 $16,409,732 $67,952,801 $100,125,779 $10,406,520 $1,319,104 $839,530 $1,406,787 $3,833,001 $7,578,289 $1,351,836 $959,194 $3,698,201 $6,720,411 $27,706,353 $38,112,873 $273,321,625 $144,324,760 $28,276,494 $13,620,206 $16,905,995 $8,822,147 $28,217,993 $14,758,254 $78,660,910 $40,653,663 $162,050,609 $81,062,820 $27,045,934 $14,194,381 $19,279,694 $10,078,164 $77,371,989 $39,301,339 $143,595,270 $71,668,900 $581,.404,887 $294,159,872 $854,726,512 $438,484,632 Merchandise $52,829,900 $8,309,510 $4,824,692 $8,046,827 $22,518,354 $46,969,567 $7,704,338 $5,501,229 $22,292,308 $41,648,931 $167,815,756 $220,645,655 Drug & Proprietary Stores $76,166,966 $6,346,777 $3,259,156 $5,412,913 $15,488,893 $34,018,222 $5,147,215 $3,700,301 $15,778,342 $30,277,439 $119,429,259 $195,596,225 Specialty Retail Group $113,102,989 $10,289,629 $6,703,786 $11,209,442 $30,989,572 $61,749,429 $10,780,337 $7,647,763 $29,953,847 $54,635,039 $223,958,844 $337,061,832 Gifts & Novelties $5,452,987 $614,545 $409,784 $686,539 $1,876,603 $3,692,348 $661,465 $469,050 $1,801,184 $3,262,230 $13,473,747 $18,926,734 Sporting Goods $10,989,528 $1,332,232 $687,777 $1,133,177 $3,410,703 $7,632,119 $1,077,982 $770,662 $3,503,357 $6,839,657 $26,387,666 $37,377,194 Florists $2,157,932 $252,133 $190,662 $320,271 $865,850 $1,624,086 $308,968 $217,873 $813,404 $1,429,353 $6,022,599 $8,180,532 Photographic Equipment $3,979,409 $127,909 $81,026 $134,757 $384,558 $798,202 $129,142 $92,202 $377,566 $701,011 $2,826,373 $6,805,782 Records & Music $4,137,007 $556,823 $342,607 $571,791 $1,595,063 $3,285,301 $550,408 $392,333 $1,561,533 $2,904,199 $11,760,058 $15,897,065 Books & Stationery $10,650,049 $1,336,224 $812,414 $1,352,472 $3,852,854 $8,037,085 $1,291,178 $921,567 $3,812,704 $7,093,897 $28,510,396 $39,160,446 Office Supplies/Computer Equipment $12,131,531 $1,483,327 $1,038,572 $1,740,180 $4,767,704 $9,236,312 $1,675,615 $1,185,806 $4,540,208 $8,144,469 $33,812,192 $45,943,722 Jewelry $13,861,924 $1,009,660 $966,875 $1,636,445 $4,171,644 $6,902,344 $1,597,775 $1,115,020 $3,687,523 $6,049,425 $27,136,711 $40,998,635 Misc. Specialty Retail $49,742,621 $3,576,777 $2,174,070 $3,633,811 $10,064,594 $20,541,631 $3,487,804 $2,483,250 $9,856,369 $18,210,797 $74,029,102 $123,771,723 Food, Eating & Drinking Group $464,895,977 $39,687,652 $33,080,210 $41,947,015 $108,542,980 $209,508,323 $42,248,490 $33,036,045 $118,141,922 $223,182,359 $849,374,996 $1,314,270,973 Grocery Stores $169,821,041 $22,784,455 $12,193,908 $20,285,331 $57,513,734 $124,354,660 $19,357,960 $13,890,669 $58,011,116 $110,472,865 $438,864,699 $608,685,740 Specialty Food Stores $7,921,835 $648,662 $338,918 $563,133 $1,607,128 $3,518,137 $536,669 $385,744 $1,631,439 $3,126,280 $12,356,110 $20,277,944 Liquor Stores $9,028,542 $1,084,965 $701,863 $1,176,115 $3,206,410 $6,340,414 $1,132,332 $803,392 $3,089,802 $5,614,712 $23,150,005 $32,178,546 Eating Places $278,124,560 $15,169,570 $19,845,522 $19,922,436 $46,215,708 $75,295,112 $21,221,529 $17,956,240 $55,409,565 $103,968,501 $375,004,182 $653,128,742 Building Materials & Home Furnishings Group Furniture & Home Furnishings Household Appliances & Electrcnics Used Merchandise Nurseries & Garden Supply Stores Lumber & Other Building Materials Home Centers and $134,549,569 $35,511,890 $40,408,138 $2,426,741 $11,511,512 $26,357,510 $15,996,541 $4,714,962 $3,121,146 $326,382 $1,503,753 $3,870,642 $10,507,713 $3,236,852 $2,006,406 $217,753 $1,074,572 $2,322,746 $17,541,713 $5,402,898 $3,351,627 $364,302 $1,802,395 $3,861,525 $48,829,691 $14,897,451 $9,304,944 $1,001,766 $4,911,207 $11,078,267 $97,953,881 $29,296,351 $18,785,900 $1,978,903 $9,418,350 $23,326,729 $16,879,721 $5,231,581 $3,223,699 $351,020 $1,735,427 $3,685,562 $11,992,616 $3,708,439 $2,293,025 $248,955 $1,226,667 $2,633,946 $47,200,525 $14,167,762 $9,034,403 $961,929 $4,664,530 $11,006,867 $86,356,462 $25,795,243 $16,572,630 $1,747,182 $8,302,455 $20,575,727 $353,258,863 $106,451,538 $67,693,780 $7,198,193 $34,639,356 $82,362,009 $487,808,432 $141,963,429 $108,101,918 $9,624,935 $46,150,868 $108,719,519 Hardware Stores $16,656,137 $2,250,110 $1,527,188 $2,555,701 $7,056,748 $13,923,434 $2,457,640 $1,742,505 $6,789,127 $12,277,688 $50,580,142 $67,236,279 Paint & Wallpaper $1,677,640 $209,547 $122,196 $203,265 $579,308 $1,224,214 $194,791 $139,078 $575,908 $1,085,537 $4,333,844 $6,011,485 Automotive Group $376,449,413 $48,421,338 $29,285,720 $48,846,036 $137,120,170 $283,644,265 $46,843,289 $33,.408,669 $134,799,702 $250,93g,008 $1,013,308,198 $1,389,757,612 New Cars & RVs $184,677,891 $26,250,158 $17,838,839 $29,861,184 $82,177,712 $161,717,212 $28,759,303 $20,394,982 $78,740,860 $142,576,004 $588,316,254 $772,994,145 Used Car Dealers $13,607,115 $1,927,889 $1,316,945 $2,204,835 $6,062,349 $11,902,510 $2,123,875 $1,505,756 $5,802,142 $10,492,746 $43,339,046 $56,946,161 Gasoline Service Stations $161,819,735 $17,496,240 $8,747,121 $14,495,334 $42,112,147 $94,687,948 $13,788,042 $9,942,988 $43,280,355 $84,223,093 $328,773,270 $490,593,005 Mobile Homes & Trailers $83,719 $13,489 $7,595 $12,659 $35,452 $74,676 $12,119 $8,668 $35,221 $66,284 $266,163 $349,882 Auto Parts & Accessories $9,530,954 $1,660,467 $793,806 $1,311,732 $3,879,508 $8,998,806 $1,244,220 $902,393 $4,044,174 $7,986,568 $30,821,674 $40,352,628 other Vehicles $6,729,999 $1,073,095 $581,414 $960,291 $2,853,002 $6,263,112 $915,730 $653,883 $2,896,951 $5,594,314 $21,791,791 $28,521,791 Source: ADE, Inc. 38 Applied Development Economics, Inc. I ~ I I C I ~--. I ' -. I . I : j : 1 I . I . I I I Exhibit 12 I '.) I I I Page 9 Sedway Group Downtown Retail Study May 1, 1982 In general, it is recommended that an emphasis be placed on positive incentives rather than restrictive policies to maintain long-term retail vitality. Changing national and local economic conditions, demographics, community needs, and a myriad of other influences will impact the future. Page 58 The issue before the City is the significance of maintaining neighborhood- serving retail uses despite market forces to the contrary. If it is determined that neighborhood-serving uses take priority, the City must implement policies that ·would, in effect, subsidize these uses so that neighborhood- serving retail uses are able to compete. PageA6 Market analyses have shown that people tend to shop for day-to-day items where convenient (i.e., close to home or work), but will travel much further to make "special" purchases. Sedway Retail Study 1982 Page 1of1 ' I I c J l -J l I I I ~ --J .1 I I I i _J Staff Report Revenue Impact Analysis September 6, 1990 Annual Sales Tax per square foot (1989) Location Sales Total Sales Tax Per Foot I Alma Plaza Charleston Plaza Edgewood Plaza *Downtown Stanford Shopping Center * 300-400 Blocks Only I $52, 150 $39,048 $80,849 $197,858 $3,145,417 TABLE II I $0.9s I $1.03 $1.39 $1.97 $2.25 Percentage Palo Alto Taxable Sales Revenues By Sales Category Retail Category Apparel Department Stores Drug Stores !Food Stores Liquor Stores Restaurants Furniture/ Appliance Building Materials Automobile Service Stations Other Retail Subtotal: Retail Business-To-Business 1989 TOTAL REVENUES: Revenue Impact Analysis 1990 Page 1 of 1 Percent Total 6.0% 17.3% 0.7% 2.3% 0.3% 10.2% 3.0% 1.7% 10.6% 2.2% 11.7% 66.0% 34.0% 100.0% i _I ·1 I I '1 l I I ', ~-' ·1 I j L __ I Page 1 Page 3 Gruen Gruen Audit of Retail Areas January 1992 The City of Palo Alto wm need to take a proacfrre stance to encourage the long-run physical maintenance and fiscal health of its retailing base. In the economic climate of the '90's, when Palo Afto is forecast to expelience a slowdown or even a negative trend in the growth, policies which adversely impact the long-run competitive strength of the City's retailing areas need to be re- evaluated if the City wishes to avoid the loss of future sales revenues and the deterioration of some of its shopping centers. 1t will be dit11cult for many of Palo Alto's existing neighborhood centers to avoid becoming increasingly obsolete. In order to increase their ability to respond to the demands of their markets, the City should consider the following policy changes: 1. 2. 3. Parking requirements per square foot of retail and restaurant space should be lowered for neighborhood centers. Empirical studies performed by organizations like The Urban Land Institute suggest a 4.5 ratio to be more than adequate for most sized shopping centers. The cunent cap of 20,000 square feet on grocery stores should be eliminated. If the are not, the City will lose increasing dollars to those adjacent communities that provide sites for large supennarkets. The potential for the conversion of portions of obsolete centers to residential use should be enhanced !by increasing the certainty that densities !between 15 and 25 units to the acre would be allowed on portions of such neighborhood centers. Grnen Grnen Retail Audit 1992 Page 1 of 3 l J ' ' ,---j I ~1 J I _J Page 12 The success of retail sales is being influenced by significant nation-wide trends in the retailing industry. Page 20 There have been both national and regional economic factors exerting downward pressures on retail sales, there has also been changes in the retailing industry that have altered consumer expenditure patterns. Page 20 The 80's saw a proliferation of the off-price, discount and power centers. These new types of discount and off-price centers are attracting an increasing share of those consumer dollars that had heretofore been expended at the traditional department stores. Page 21 During the decade of the 80's, both the nation and the region experienced a significant growth in the number of retail outlets and the amount of built retail space. This increase in retail space has resulted in an oYersupply of square footage in strip, neighborhood and community-sized shopping centers. Page 22 As dynamic new retailers enter the market, the less enterprising, less well-located and less financed of the existing merchants are likely to be forced out. Page 58 All of these Neighborhood Centers are undersized and likely to result in a continuous weakening of the centers' ability to compete with bigger and newer centers offering the mix and scale of retail stores that will draw from a more extensive geographic area. Page 52 The Alma Plaza Center The Center shows its age and the effects of under-maintenance. The layout of the Center is poor with limited visibility from its Alma points of entry. Gruen Gruen Retail Audit 1992 Page 2of3 I I ) J Page 52 The Center's size, layout and location make it a very poor candidate for a major rehabilitation effort. Increasingly, neighborhood centers with undersized and obsolete grocery anchors cannot successfully compete with new centers anchored by the 65,000-square-foot supermarket. While current City policy has kept such supennarkets out of Palo Alto, neighboring c01mnunities such as Menlo Park and Mountain View welcome these megamarkets because of the high volumes they are able to generate. Page 53 Sooner or later pressures are likely to build up within the City for retail agglomerations anchored by the 55-60,000-square-foot anchor. Should such an agglomeration at some future point in time locate on El Camino within a 5-mile radius of a neighborhood center such as Alma Plaza, the potential impact on this smaller obsolete center is likely to be extremely deleterious. Page 53 One possible solution for the long-run Yiabiiity of this Center is to tear rlo\vn the existing Center and create nevv retail space fronting Alma. This repositioning of the retail space would remove one of this Center's current handicaps, which is its limited visibility from Alma. The back of this -L26- acre site could then be put into high-density residential. Page 53 Alma Plaza appears to be operating somewhere between the lowest and second lowest decile in the 20+-year neighborhood shopping center. Page 55 Changes in Sales Tax Revenues for Three Neighborhood Centers: 1988-1990 Edgewood Plaza Charleston Center Alma Plaza Year-end 1988 $6,657,600 $2,093,800 $5,716,800 Year-end 1989 $7,706,700 $1,996,200 $5,916,000 Year-end 1990 $7,361,300 $2,142,000 $4,655,00{) Change 1988-1990 $703,700 10.6% $48,200 2.3% $-],061,800 -18.6% ... Therefore, as suggested above in the section of this Chapter describing market conditions, properties such as the Alma Plaza may best adopt to the conditions that prevail in the marketplace by a combination of downsizing to a convenience center with high-density residential on the less accessible portions of the site. Gruen Gruen Retail Audit 1992 Page 3of3 Staff Report Economic Future Study April 8, 1993 The purpose of the study was to determine whether or not a "structural deficit" existed in the General Fund. It is important to recognize that "structural deficit" may be defined in a number of different ways. In ordinary economic tenns, it can be taken to mean a basic misalignment between ongoing revenues and expenditures such that the General Fund will repeatedly experience a budget shortfall. Sales Tax Revenue 1986-87 1988-89 1991-92 City General Retail $1,848,000 $2,157,000 $1976,000 Alma Plaza NIA $52,750 $46,000 Alma Plaza Percentage NIA 2.4% 2.3% Fiscally Positive Scenario Retail sales activity significantly higher than CPI increases in contrast to recent trends, especially has increased the shifting of significant retail sales to the "'large box deep discount" sellers that are not located in Palo Alto. Fiscally Negative Scenario Closing of two neighborhood shopping centers, in large part as a response to Palo Altans spending more money outside the City. Economic Future Study Page 1of1 c l ~ I I I ' ) City of Palo Alto Economic Resource Plan November 1993 • To develop an economic framework for City Council decision-making. • To revisit past problems affecting the business and development • To establish an internal "market perspective" on issues. While Palo Alto's assets still far outnumber its liabilities, \Ve are showing some signs of decline -in the City's strip commercial and neighborhood retail centers ... Economic Resource Plan 1993 Page 1 of 1 r I I ! -; '-/ I I ,._, ', ! ,: ! ' l j J Keyser Marston Midtown Market Analysis January 1995 Page 29 Page 6 Alma Plaza The center has an awkward L-shaped configuration with no visibility from the street The space has a below par level of sales activity with average sales below $100 per square sq.ft.. The total sales is estimated to be $8,000,000. The trade area served by the Midtown Shopping Center is mostly the residential area bounded by within approximately 1 mile. Midtown Trade Area Midtown Shopping Center Trade Area Midtown Market Analysis Page 1 of2 I f i l, \ l l J I _J Page 16 Midtown is 72,350 total sq.ft. Safeway . Co-op Midtown Market Page 24 17 ,500 sq.ft. 12,070 sq.ft . 12,700 sq.ft. Midtown Food Store Sales Midtown Potential Food Sales Alma Plaza Food Sales Page 25 $21,850,000 $41,000,000 $8,000,000 Collectively, between the Midtown Shopping Center and the other food stores serving the trade area, the demand for food is essentially being met by the existing stores. However, existing food stores at Midtown do not reflect the trend in the industry to develop larger supermarkets. Additionally, we conclude that there is a demand for specialty food stores that can be successful in smaller stores (as evidenced by the recent remodeling of Piazza) Midtown Market Analysis Page 2 of2 Page 2 Page 5 Staff Report Retail Trends August 3, 1995 Neighborhood Shopping Centers fared most poorly showing significant retail sales losses. The state of the City's neighborhood and service commercial areas present some very real policy dilemmas for the City. Upgrading such areas \'till require greater recognition of market-related issues, and, possibly, greater City interwntion in facilitating re-use of structures and private redeYelopment efforts. There has been a substantial loss of certain kinds of retail to surrounding communities that is unlikely to be recaptured in Palo Alto; deep-discount operations will continue to be located outside the City, given land availability in Palo Alto and community sentiment that is often unreceptive to "box" retail operations. There is a difference, however, between regional retail loss to the City and community retail losses. The data indicate that both these losses have taken place; a re-emphasis on attracting conununity commercial uses to the City, however, incorporates an important service component. Page 17 Sales Tax Trend 1989 1990 1991 . 1992 1993 • 1994 Change (89-94) Alma 58,000 46,000 46,000 51,000 43,000 32,000 -45% Cbarluton 40,000 41,000 49,000 58,000 51,000· 53,000 33% Edgewood 44,000 36,000 42,000 46,000 33,000 24,000 -46% Page 18 Retail trends for neighborhood and sh·ip commercial development have changed dramatically over the last two decades; Palo Alto's aging physkaH plant and zoning restrictions have been partially responsible for economic decline in these areas. Retail Trends 1995 Page 1of1 l ' [ _j Page 19 Nolghborhood CY 1989 Shopping Center Alma Plazo; 57,392 ~o change from 1989 Alma PJ:a.a Sales /:q ft $103 Charleston Shopping 39,560 Center: % change rrom 1989 $95 Ch•rles!Dn Sales /sq n Edgewood Shopping 44,013· Cnnter: % change from 1989 $87 Edgewood Sales I aq ft Retail Trends 1996 Page 1 of 1 City of Palo Alto Retail Trends November 1996 August 1997 Sales Tax Data CY 1990 CV 1991 CY1992 . CY1993 CV1994 CY !995 46,056 4?,330 49,102. 42,471 31,998 25,192 ·20% -21% -14~. -26% -44% -56~'. $63 $82 $88 $77 SS8 $45 41,445 46,665 57,839 51,132 53,1~9 58,696 5% 23% 46% 29% 34% 48% $99 $116 $138 $122 $127 $140 36,223 42,341 45,907 33,240 29,813 25,057 -18% -4% 4% -24% -32% -43% $72 $84 $91 $66 $59 $49 Change: Change: CY 1996 1989·95 In 1989·96 In Curren! S 1989 $ 24,169 -Se% -58% ·66% $44 61,181 55% 55% 26% $146 24,116 --t5% .4·53 -5511/0 $48 I j 1 ~ J I, l_ j Gruen Gruen Retail Trends 1996 -1997 There is a relationship, perhaps a strong one, between retail growth in an area and the City's policies with regards to zoning intervention and discretionary approval processes. Examples of such relationships include: Neighborhood Shopping Centers and El Camino real fared most poorly in the study, showing significant retail sales losses throughout the city. \Vhile the City of Palo Alto's land use policies and governmental regulation have played an intermittent role in the City's retail environment, it is both Staff's and the experts' opinions that market considerations have been much more contributory to the City's changing retail climate. \Vhether an area experiences relative success or failure appears to reflect a synergistic relationship behveen public and private sector factors, with a much greater weight on the latter. Data :for the four neighborhood shopping centers indicate a steady and significant decline in sales. In particular, Alma Plaza, Edgewood Shopping Center and Midtown have experienced increasing vacancies and declining neighborhood services. These centers' grocery stores are all less than 20,000 square feet, while the typical, new neighborhood grocery stores being built are often in excess of 50,000 square feet and provide a combination of retail merchandise and non-food items. Palo Alto neighborhood centers have outdated, conventional grocery stores anchoring similarly outdated retail facilities. Factors such as multiple ownership, unrealistic expectations of property values and lack of owner investment in stmctures have also been contributory. That, combined with antiquated zoning codes and rigorous public hearing process, has limited redevelopment efforts. Gruen Gruen Retail Trends 1996-1997 Page 1of1 : j ~ l ] J I _j Page 6 Page 9 Page 6 Sedway Group Retail Strategy for Palo Alto June 8, 2000 Alma Plaza and Edgewood Plaza are characterized as blighted !Alma Plaza! has shown a consistent decline in sales from 1989 to 1999. During this eleven year period sales declined from $7.0 million to $2.5 million, a decrease of 64 percent. This represents a loss of approximately $45,000 per year in sales tax revenue for the city. The most significant barrier to the revitalization of Alma Plaza is obtaining community support. Albertson's will only lmdertake renovation of the center if it is able to expand the size of its supermarket. First opened in 1962, the Alma Plaza Shopping Center is a 40,0DO square foot neighborhood shopping center. Sedway Retail Strategy 2000 Page 1 of 1 I ' J ,-, I J Page 1 Page2 Gruen Gruen Evaluation of Alma Plaza February 2006 Alma Plaza consists of approximately 41, 100 square feet of space on 4.26-acres of land. • The center had limited visibility from points of entry off of Alma Street; • The primary tenant was an older, small-sized, poorly-stocked and unattractive Lucky's grocery store; • The primary base of convenience-oriented tenants served a limited trade area of households in the immediate neighborhood; • Some merchants served a wider trade area because of their advertising and promotional activities but derived limited benefits from operating from within the center; • Sales levels were decreasing and indicated weak productivity; • The center was unlikely to be successfully cured of its competitive and physical obsolescence through rehabilitation and renovation; and • The City of Palo Alto's signage policy and 20,000 square foot limitation on the size of grocery stores served to make it unlikely that the center could be successfully repositioned and restored to economic viability. To make the Alma Plaza property viable in the future, GG+A recommended the following: 0 The demolition of the existing improvements; ~ The creation of new retail space fronting Alma Street; and "' The development of high-density ( 15 to 25 units per acre) residential uses on the rear portion of the site. Evaluation of Alma Plaza 2006 Page 1 of 3 J Page 5 Alma Plaza has Physical Constraints Alma Plaza has been adn~rsely affected by physical constraints related to its small size, poor visibHity, and relative iack of access. Alma Plaza's potential trade area is circumscribed by railroad tracks bordering Alma Street on the west that substantially hinders cross traffic. As opposed to the traditional shopping center location; that is, at a major intersection ·with both a traffic signal and access from t\Yo or more streets, A.Ima Plaza's mid-block location dictates that it have a signal major entry point, limiting its access. The lack of a traffic signal at its single entrance compounds this limitation. Moreover, Alma Plaza's billboard effect is limited by its narrow street frontage and the high traffic speeds along Alma Street. In addition, the center is isolated from other retail uses so that agglomerational advantages cannot be established. Pages 5-6 Competitive Impacts of Larger Sized Grocery-Anchored Shopping Centers Since 1992, \Val-IVfart and Costco have opened stores in Mountain View. l\foreover, in the last eighteen months, Costco expanded its Rengstorff Ave store by 20,000 square feet of space to approximately 138,000 square feet, substantially increasing the area allocated to grocery products. A \Vhole Foods of 55,000 square feet is under construction in Los Altos 1.8 miles away from Alma Plaza. Pages 7-8 Since J 993 Taxable Food Sales in \fountain ·view have increased from $33,746,000 to $47,724,000. This is an increase of $13,978,000 or 41.4%. A dominate retail agglomeration has been established at San Antonio and El Camino real in Mountain View about 1.4 miles from the Alma Plaza site. Tenancies include a 44,000-square-foot Safeway, a 66,000-square-foot Albertson's, a Trader Joes, Wal-Mart and Target. In addition, a 55,000-square- foot Whole Foods is under construction on El Camino real about 1.8 miles from Alma Plaza. Evaluation of Alma Plaza 2006 Page 2of3 ~ 1 I, J Whether a direct result of this increased competition from modem markets in Mountain View or from other factors, it is clear that a number of smaller markets have closed in Palo Alto since the GG+A 1992 report: the All-American Market of 12,500, the Co-Op market of 18,000 square feet and John's Town & County Market, also of 18,000 square feet have all ceased operations. Two closed grocery stores have been replaced by national chain drug stores, entities which now devote a substantial amount of their floor area to the sale of food. Pages 8-9 Page 9 Market area dominance primarily depends upon three factors: location, size and tenant make-up. An isolated, under-sized, retail center such as Alma Plaza, even if built new today, will not have sufficient scale and magnetism to successfully compete with the nearby retail and services agglomeration for the expenditures of time constrained shoppers. The findings summarized above from GG+ A's current reconnaissance suggest the continued use of the site as a neighborhood shopping center is not viable. Shifts in consumer shopping preferences and the development of dominant supply near the site since the 1993 report preclude the feasible continuation of the site for a neighborhood shopping center use. As a result, the Alma Plaza property wm experience further deterioration if it is not repositioned to include a small amount of retail space in the front and residential uses on the rest of the property. Jn the absence of a timely repositioning and reuse, the negative appearance of the property wiU have a blighting effect on the adjacent properties. A wen planned and designed mixed-use project can be expected to enhance the desirability of the acl.iacent uses, contribute to improving the jobs- housing balance in Palo Alto and generate significantly more property tax and other fiscal benefits to the City. Evaluation of Alma Plaza 2006 Page 3 of3 Exhibit 13 ~--1 I I ' ' I I ,. ' I I : I .l . l . I l ' ;· J I i I l : J ) ' ) I I i --I J & A FAMILY MARKET Proud To Be A Local Family Owned Provider Of Only The Best! ,.., i I ~ ' ! j I j ]. ' I -J EXECUTIVE SUMMARY J &AFAMILYMARKET BUSINESS PLAN J&A Family Market (J&A) will continue a 70 year history of serving the College Terrace neighborhood as an independent operator by replacing a historical operation that has vacated the site due to the age of the proprietors, the lack of visibility from El Camino Real (the major north/south interstate highway corridor between San Francisco and San Jose) and the physical obsolescence of an eighty year old structure. By City Ordinance and community preference, Palo Alto California prohibits the construction of new grocery stores larger than 20,000 square feet. As with most retail operations, locally owned and operated businesses are preferred and supported. J&A will open in a new structure facing El Camino Real with the benefit of exposure to approximately 60,000 daily vehicle trips, an all new building and premises, a history of neighborhood support and a growing client base as Stanford University continues to add residential units to the immediate area. With historical sales in excess of $4,000,000 annually and growing demand, the prospects of success for this full service grocery in a community with exceptionally high barriers to entry are very strong. MISSION STATEMENT J&A Family Market is committed to providing our customers the best food and beverage values and the highest quality products, while minimizing our carbon footprint. By providing a full array of products to serve the neighborhood and community, J&A Market is committed to supplying merchandise that is locally grown and sustainable whenever possible and Tobacco Products will not be available in the store. We will provide information to our customers that allows them to make informed buying decisions, and will do so with a dedication to the highest quality of customer satisfaction delivered with a sense of warmth, friendliness, fun, individual pride and company spirit. MANAGEMENT TEAM The Management Team and its advisors have more than 100 years of grocery and retail experience between them. Backgrounds include the current Chairman of the Board of a NYSE listed company, the CFO of a regional grocery chain and extensive direct sales and management of retail stores in the Palo Alto market. This experience coupled with a twenty year history of auditing and observing the operations of the prior grocery store's business provides an excellent base from which to launch this new operation in a growing and proven market. STRATEGIC AND MARKET ANALYSIS J&A Family Market has been developed to provide a full service grocery operation within walking distance to the College Terrace neighborhood, Stanford University housing for professors, grad students and coaching staff, those residing in Escondido Village, and the work force in the adjacent Stanford Research Park. These customer groups have a history of "walk-ability" and rarely use their vehicles to 1 I j I l J -J shop at the store, preferring to either bike or walk to the store to do their shopping. The total customer base adjacent to or within walking distance to the store is in excess of 12,000 individuals (there are over 6,000 residents within the College Terrace neighborhood alone plus the work force within the Stanford Research Park, the existing and to be built Stanford University housing and over 300 employees and clients populating the office and retail portions of the development on a daily basis). This client base has significant disposable income and they have a history of purchasing products that offer the highest profit margin for the grocery, primarily ready to eat meals and delicatessen and sandwich products. Below is historical sales data for JJ & F Sulc~by Dcparom:nt CGnm:ry DDcli •Liquor The viability of the new store and its prospects for success were clearly identified during the entitlement process for the development of the project which houses the grocery. Staff for the City of Palo Alto acknowledged in open forum that they had never seen such strong community support for the construction of a neighborhood grocery. They also acknowledged that the number of signatures submitted in support of the grocery surpassed any previous submitt.al. MARKETING SUMMARY Historical sales indicate a strong client base within the neighborhood. However, to expand the business we have identified prospective clients outside those predisposed to the walk-ability of the grocery and there are new opportunities for business to business sales as well. Companies within a mile radius present an opportunity to provide food for meetings and presentations. Proximity to businesses creates an ease of shopping experience for employees traveling home after work as the grocery offers parking capacity at a 5/1,000 ratio. With parking available for small buses local retirement homes have expressed interest in busing their clientele to the site for shopping and the Stanford Margarite (the free Stanford University shuttle) has agreed to add the project to its daily schedule. Outreach to returning ; ' ' I I ' ) I • J ' i i J ,r-; : l c ) 1 I '. J i ( . j I . ) and new customers will be done through social media, newspapers and local publications with announcements and traditional advertised specials and sales. A strong focus will be placed on joint advertising with suppliers and supplier specials/loss leaders will be utilized. There will also be an on- going outreach program to local neighborhood associations that include: • The College Terrace neighborhood population 6,055 • Evergreen Park neighborhood population 2,589 • Green Acres neighborhood population 921 • Old Palo Alto neighborhood population 3,554 • Proffesorville neighborhood population 543 • Research Park neighborhood population 844 • Southgate neighborhood population 441 • Ventura neighborhood population 2,368 Additionally, a shopping relationship with the houses for Stanford Fraternities and Sororities will be re- established. Exposure will be further enhanced via the 2,000 square foot Open Market facing El Camino Real with its brightly colored awning and food bin displays (please see the project rendering below). A Shop Local campaign will also be emphasized. COMPETITION Palo Alto is made up of distinct neighborhoods and geographically separate areas. For example, CalTrain has tracks running from San Francisco to San Jose that dissect the community, thereby creating distinct shopping areas to the west and east of that divide. In a similar manner El Camino Real is a state highway that also runs north to south and presents the same impression of separation. With this separation in place, it is noted that there are no competing grocery stores west of El Camino Real servicing the client base referenced above. Neither are there competing grocery stores within 2 miles to the north or 4 miles to the south. It is also noteworthy that Big Box retailers do not exist within the city limits of Palo Alto. Therefore, immediate/proximate competition from retailers such as Costco does not exist. However, J&A Market does not plan to compete with outlets such as Costco, but rather it will focus on ---j I ' I r---,,, I . l c j providing a local and convenient shopping experience with a full array of products requested by its client base. It is also worth noting that as a local enterprise with an attentive staff, J&A will be aware of the needs of its clients through surveys and questionnaires, personal interactions and requests for feedback and evaluation. Based on the results of this feedback J&A will have the flexibility to select products in keeping with client needs and demands. To capture and retain customers, on-site/on-line ordering for the 300 +/-office employees plus neighborhood residents and other customers will allow for orders to be prepared and ready for pick up, Leapset is an app that people can download and use to order items ahead of time and allows for frequent shopper programs to be tracked and used, thereby reducing the time needed to shop. Lastly, an Open Account will be reinstated for frequent shoppers and neighborhood residents with monthly billing. FINANCIAL SUMMARY Historical sales for the grocery operation indicate sales figures of approximately $13,000+ per day. While these figures represent sales from a mature operation with a lengthy history, they are from a store that was physically and operationally obsolete, in a building that was ncit visible from El Camino Real and was operated by ownership that was not reinvestfng in the operations, building interior or stock/merchandise. It is acknowledged that as a start up it will take time to reach sales in excess of $4,500,000+/annum, but the base of clients and demand are present, and growing (the addition of the projected 250 units of Stanford University housing two blocks south of the grocery location alone will grow sales). Below is an outline of Gross Profit and Net Profit projections as sales stabilize: DAILY SALES $7,000 x 360 days= $2,520.000 x 40% = $1.008,000 $7,000 x 360 days= $2,520,000 x 45% = $1.134,000 $7,000 x 360 days= $2.520,000 x 50% = $1.260,000 $8,000 x 360 days = $2,880,000 x 40% = $1. 152,000 $8,000 x 360 days = $2,880,000 x 45% = $1,296,000 $8.000 x 360 days = $2.880,000 x 50% = $1.440.000 $9,000 x 360 days = $3,240.000 x 40% = $1,296,000 $9,000 x 360 days = $3,240,000 x 45% = $1,458,000 $9,000 x 360 days = $3,240.000 x 50% = $1.620.000 $10,000 x 360 days= $3,600,000 x 40% = $1.440,000 $10,000 x 360 days = $3,600,000 x 45% = $1 ,620,000 $10,000 x 360 days = $3,600,000 x 50% = $1.800,000 YEARLY EXPENSES $1,380,972 -$1,008,000 = -$372.972 $1,380,972 -$1,134,000 = -$246,972 $1.380,972 -$1,260,000 = -$120.972 $1 ,380,972 • $1!152,000 = -$228,972 $1.380,972 -$1,296,000 = -$84,972 $1,380,972 -$1.440,000 = $59,028 $1,380,972 -$1.296.000 = -$84,972 $1 ,380,972 -$1.458,000 = $77,028 $1,380,972 -$1,620.000 = $239.028 $1,380,972 -$1,440,000 = $59,028 $1 ,380,972 -$1 ,620,000 = $239,028 $1,380,972-$1.800,000 = $419,028 ' ' I I r-··\ ,-----, . I I ~l '--' J ·~ ' l ! -l 1 $11.000 x 360 days = $3.960.000 x 40% = $1,584,000 $11 .000 x 360 days= $3.960,000 x 45% = $1 .782,000 $11.000 x 360 days = $3,960,000 x 50% = $1,980,000 $12.000 x 360 days= $4,320.000 x 40% = $1,728.000 $12.000 x 360 days= $4.320,000 x 45% = $1.944000 $12.000 x 360 days= $4,320,000 x 50% = $2,160,000 $13.000 x 360 days = $4.680,000 x 40% = $1 .872,000 $13.000 x 360 days= $4,680,000 x 45% = $2,106,000 $13,000 x 360 days= $4,680,000 x 50% = $2,340,000 $1,380.972 -$1 .584.000 = $203,028 $1.380.972 -$1.782.000 = $401.028 $1,380.972 -$1,980.000 = $599,028 $1 ,380.972 -$1,728,000 = $347.028 $1.380.972 -$1.944.000 = $563028 $1,380,972 -$2, 160.000 = $779,028 $1 .380,972 -$1 .872.000 = $491.028 $1 .380,972 -$2, 106.000 = $725.028 $1,380.972 -$2,340,000 = $959,028 PROJECTED START UP COSTS • • • • • • • • • • • • • • • • • Inventory $280,000 lean POS (point of sale system) for hardware and software for 4 registers with scales registers 2 U shaped, 1 ADA compliant ~ales for deli/meat (3) ~frigeration all new walk ins, beverages and product refrigeration R3cks for dry goods aisle A"oduce section tables, stands and 1 refrigeration section 8Jpplies, small cutlery/kitchen utensils, desks, work tables, store named supplies, 2-3 computers, video security system Equipment $400,000 1st month payroll $60,000 Tl's $630,000 Start up promotion $50,000 Start up staff approx 1 week $15,000 Overhead/ad min prior to opening $5,000 Deposit $22,500 Working Capital allowance $200,000 Estimate $1,662,500,000 to get started Owner's Equity and funding of $3,000,000 has been obtained for start up _j ----:: . ! ,---, : I • l : ! ; j I OPERATIONS Si!• ~ It! 0 ..I 0 .;a ... ~ ZC> Wz D.-o::.:: ~ ~ Hours of operations Monday thru Friday 6:00am -8:00pm Saturday and Sunday 7:00am -7:00pm. We are assuming the store will be open 360 days a year, closed for Easter, Thanksgiving, Christmas, New Years Day, and the 4th of July. J&A will always provide a butcher, cashier, food prep, stocker and cleaner during business hours which will allow us to have the customer relation/satisfaction we are striving for. J&A will provide delivery services to the building tenants and local residents. The deli will also have warm food entrees and side dishes, a salad bar with soup, pre made meals to take home and re heat or cook, such as marinated meats that can be barbequed or baked. Having full time butchers will also allow us to give customers select cuts of meat or make fresh ground meat such as beef, turkey, chicken with the trend of eating healthy this should be very popular. The "open air market" will also have tables and chairs for people to sit and eat their meals, with free WI-Fl. We will have fresh produce and will also cut and package for sale. We will have fruit platters available for delivery to the offices to go along with bagels, cream cheese, coffee, juices. r-', ~ I : I ,, , I I STRATEGY AND IMPLEMENTATION SUMMARY The months leading to the opening of J&A Family market will be used for oversight of the construction phase, establishing a social network presence to update and build neighborhood awareness, working · with the majority of vendors for product placements and promotions, and training of middle management on system and store policies. Having a licensed contractor background allows for complete understanding and oversight of the construction phase to ensure the grocery store infrastructure is properly established. This background will also allow for more insightful updates during the project for Yelp, Facebook, and Twitter followers. Vendor coordination and negotiation for product placement and promotions are planned during the construction phase. Certain vendors offer additional equipment units and racks for specific products, as well as a marketing coordination of seasonal products and time events. An example is Coca Cola who provides refrigeration units and large display specials, along with promotional prizes for events like Stanford sports which are year round and the local hosting of the next NFL Super B:>wl. These promotional activities can and will be coordinated with a Grand Opening event. Other larger vendors that provide a majority cif the grocery items like Pitco and Unified Grocers design product merchandising layouts, row by row, item by item, with our Management team that best suits the clientele of J&A Family Market. Other vendors like Harris Ranch Meat and Boars Head Deli provide promotional products to be prepared and sampled on an ongoing basis during the opening period to ensure product recognition and awareness is established. All vendors provide database information and support for Point of Sale systems and inventory tracking which is coordinated during the training of middle management and department supervisors for both system understanding and product awareness. With the Fire Department and Police Department conducting their training at the site we have already been promoting J&A Family Market and the possibility of the Fire Houses buying their food from us and both Departments getting a discount on their meals. Over the next 12 months we will be meeting with representives from numerous firms such as UNIFY, Clover and Unified Grocers all of which are well known industry leaders that provide assistance and expertise to independently owned stores just starting up. Primary areas of assistance include but are not limited to purchasing, design, marketing, equipment and the latest industry specific technology. These resources further facilitate space planning and floor lay out to ensure maximum profitability and product placement. We will also reach out to establish delivery services for the local offices/businesses such as breakfast, lunch and dinner delivery along with catering services for their office parties/meetings. Another area of focus will be contracting with suppliers to benefit from both free advertising and displays as well as free fixtures for their products thereby minimizing start up costs. Lastly, we will be pursuing a strategic partnership with a coffee franchise to put in the store as well as sell their brand in bulk on the shelves. Preliminary research indicates in-store kiosk operations require approximately 200 sq ft, yet provide a margin of 70%+. Reaching out to the community to let them know that their demand for a full service grocery store in the College Terrace Centre project has been met will not only act as marketing for the store but overall mutually beneficial goodwill toward the project. Through our cultivation of relationships with the local papers, networking with the Fraternity and Sorority houses on campus, and outreach to the general community reiterating that J&A Market is an independent, family owned market (as was their predecessor of some 70 years on-site) we are assured of not only free press but that they will be purchasing from us as well. Sources I Uses Start up J&A Family Market 2-28-14 Sources & Uses Budget I Key Assumptions r---1 retail sq ft 7000 total sq ft 9000 ; l lease rate per month $ 22,500.00 insurance $ 2,500.00 'j CAM $ 6,000.00 ,, •. J Uses ~1 . I leasehold improvements $ 630,000.00 equipment $ 400,000.00 I 1 inventory $ 280,000.00 overhead/admin prior to opening $ 5,000.00 start up promotion $ 50,000.00 l start up staffing $ 15,000.00 holding site costs/deposit $ 22,500.00 working capitial, allowance $ 200,000.00 sub total uses $ 1,602,500.00 Reserves $ 1,397,500.00 total uses $ 3,000,000.00 Sources owner .contribution $ 3,000,000.00 sub total owner contribution $ 3,000,000.00 landlord contribution $ total sources $ 3,000,000.00 JAFM CONFIDENTIAL Monthly Operating Expenses ' i ,' I c-; MONTHLY EXPENSES ~: RENT $ 22,500.00 1, ~ PAYROLL $ 52,000.00 'j UTILITIES $ 15,000.00 OFFICE SUPPLIES $ 300.00 ALL DEPT $ 2,834.00 LAUNDRY $ 584.00 ; I STATE UNEMPLOYMENT TAX $ 513.00 '. I FEDERAL UNEMPLOYMENT TAX $ 152.00 ' I WORKERS COMP INSURANCE $ 2,167.00 I I CREDIT CARD FEES $ 5,334.00 JANITORS $ 500.00 POSTAGE $ 200.00 i PROFESSIONAL SERVICES $ 42.00 , I PAYROLL SERVICES $ 21.00 RETAIL ACCOUNTING $ 350.00 SECURITY $ 150.00 STATE/FEDERAL/LOCAL TAXES $ 467.00 ADVERTISING $ 550.00 PROMOTIONAL $ 717.00 CAM $ 6,500.00 INSURANCE $ 2,500.00 STATE INCOME TAX $ 1,700.00 TOTAL $ 115,081.00 i __J JAFM CONFIDENTIAL MONDAY 6:00AM·B:OOPM 1 TUESDAY 6:00AM-8:00PM WEDNESDAY 6:00AM-8:00PM ~ ' SCHEDULE THURSDAY 6:00AM-8:00PM FRIDAY 6:00AM-B:OOPM -l SATURDAY 7:00AM-7:00PM l l :___:_-J_' SUNDAY 7:00AM-7:00PM BUTCHER (1) BUTCHER (1) BUTCHER (1) BUTCHER (1) BUTCHER (1) BUTCHER (1) BUTCHER (1) 6:00AM-2:30PM 6:00AM-2:30PM 6:00AM-2:30PM 6:00AM-2:30PM 6:00AM-2:30PM 7:00AM-3:30PM 7:00AM-3:30PM $ CASHIER (2) 6:00AM-CASHIER (2) 6:00AM-CASHIER (2) 6:00AM-CASHIER (2) 6:00AM-CASHIER (2) 6:00AM-CASHIER (2) 7:00AM-CASHIER (2) 7:00AM- 2:30PM 2:30PM 2:30PM 2:30PM 2:30PM 3:30PM 3:30PM $ STOCKER (1) 6:00AM-STOCKER (1) 6:00AM-STOCKER (1) 6:00AM-STOCKER (1) 6:00AM-STOCKER (1) 6:00AM-STOCKER (1) 7:00AM-STOCKER (1) 7:00AM- 2:30PM 2:30PM 2:30PM 2:30PM 2:30PM 3:30PM 3:30PM $ FOOD PREP (3) 6:00AM· FOOD PREP (3) 6:00AM· FOOD PREP (3) 6:00AM· FOOD PREP (3) 6:00AM· FOOD PREP (3) 6:00AM· FOOD PREP (2) 7:00AM· FOOD PREP (2) 7:00AM· 2:30PM 2:30PM 2:30PM 2:30PM 2:30PM 3:30PM 3:30PM $ MANAGER (1) 6:00AM-MANAGER (1) 6:00AM-MANAGER (1) 6:00AM-MANAGER (1) 6:00AM-MANAGER (1) 6:00AM-MANAGER (1) 7:00AM-MANAGER (1) 7:00AM- 2:30PM 2:30PM 2:30PM 2:30PM 2:30PM 3:30PM 3:30PM $ CLEANER (1) 6:00AM-CLEANER (1) 6:00AM-CLEANER (1) 6:00AM-CLEANER (1) 6:00AM-CLEANER (1) 6:00AM· CLEANER (1) 7:00AM-CLEANER (1) 7:00AM- 2:30PM 2:30PM 2:30PM 2:30PM 2:30PM 3:30PM 3:30PM $ BUTCHER (1) BUTCHER (1) BUTCHER (1) BUTCHER (1) BUTCHER (1) BUTCHER (1) BUTCHER (1) 11 :OOAM-7:30PM 11 :OOAM-7:30PM 11 :OOAM-7:30PM 11 :OOAM-7:30PM 11 :OOAM-7:30PM 3:00PM-7:30PM 3:00PM-7:30PM $ CASHIER (1) CASHIER (1) CASHIER (1) CASHIER(1) CASHIER (1) CASHIER (1) 3:00PM-CASHIER (1) 3:00PM- 11:00AM-7:30PM 11:00AM-7:30PM 11:00AM-7:30PM 11:00AM-7:30PM 11:00AM-7:30PM 7:30PM 7:30PM $ CASHIER (1) 2:00PM-CASHIER (1) 2:00PM-CASHIER (1) 2:00PM-CASHIER (1) 2:00PM-CASHIER (1) 2:00PM-FOOD PREP (1) 3:00PM· FOOD PREP (1) 3:00PM- 8:30PM 8:30PM 8:30PM 8:30PM 8:30PM 7:30PM 7:30PM $ FOOD PREP (2) FOOD PREP (2) FOOD PREP (2) FOOD PREP (2) FOOD PREP (2) STOCKER (1) 3:00PM-STOCKER (1) 3:00PM- 11 :00AM-7:30PM 11:00AM-7:30PM 11:00AM-7:30PM 11:00AM-7:30PM 11:00AM-7:30PM 7:30PM 7:30PM $ STOCKER (1) 2:00PM-STOCKER (1) 2:00PM-STOCKER (1) 2:00PM-STOCKER (1) 2:00PM-STOCKER (1) 2:00PM-ASST MANAGER ASST MANAGER 8:30PM 8:30PM 8:30PM 8:30PM 8:30PM 3:00PM-7:30PM 3:00PM-7:30PM $ ASST MANAGER ASST MANAGER ASST MANAGER ASST MANAGER ASST MANAGER CLEANER (1) 3:00PM-CLEANER (1) 3:00PM- 2:00PM-8:30PM 2:00PM-8:30PM 2:00PM-8:30PM 2:00PM-8:30PM 2:00PM-8:30PM 7:30PM 7:30PM $ CLEANER (1) 2:00PM-CLEANER (1) 2:00PM-CLEANER (1) 2:00PM-CLEANER (1) 2:00PM-CLEANER (1) 2:00PM- 8:30PM 8:30PM 8:30PM 8:30PM 8:30PM $ L WAGES 840.00 1,120.00 560.00 1,200.00 840.00 560.00 735.00 490.00 415.00 490.00 433.00 480.00 320.00 TOTAL WAGES TOTAL HOURS 120 TOTAL HOURS 120 TOTAL HOURS 120 TOTAL HOURS 120 TOTAL HOURS 120 TOTAL HOURS 91 TOTAL HOURS 91 $ 8,483.00 JAFM CONFIDENTIAL 'I I '1 J DRY GOODS DOG FOOD CAT FOOD CHIPS BREAD KETCHUP MUSTARD MAYO CANDY TORTILLAS BBQ SAUCE GUM RlCE BEANS SOUP MARINADE SPICES CEREAL UTENSILS PLATES/BOWLS PAPER TOWELS TOILET PAPER SOAP DISH SOAP LAUNDRY SOAP BAGELS SALAD DRESSINGS NUTELLA COOKIES PASTA COFFEE CUPS SUGAR BAKING SODA FLOUR PICKLES NUTS CRACKERS OATMEAL OILS TACO SHELLS HOT SAUCES ASIAN SAUCES CAKE MIX F ABRlC SOFTENER BATTERIES COFFEE FILTERS CANNED VEGETABLES CANNED FRUIT FRUIT SNACKS COFFEECAKE DANISHES FROSTING KLEENEX CUP OF NOODLES TOPRAMEN PEPPERS JAFM DRlNKS JUICES SODAS WATER WINE BEER TEAS ENERGY COOL AID POWDERS PRODUCTS PRODUCE FRUITS VEGETABLES FLOWERS MEAT DELI MEAT HAMBURGER STEAKS CHICKEN TURKEY FISH SAUSAGE SHRIMP CRAB DAIRY MILK CHEESE YOGURT SOUR CREAM BUTTER HYGIENE TOOTHPASTE DEODORANT FLOSS TOOTHBRUSH MOUTHWASH WHIP CREAM CHAP STICK CREAM CHEESE GEL CREAMER SHAMPOO EGGS . CONDITIONER HAIRSPRAY LOTION POWDER DIAPERS NAIL POLISH REMOVER QTIPS COTTON BALLS RUBBING ALCHOL HAIR TIES WIPES CONFIDENTIAL PERSONAL FROZEN TAMPONS ICE PADS ICE CREAM CONDOMS POPSICLES TYLENOL MEALS ASPIRlN PIE CRUSTS COLD MEDICINE DESERTS r I ALLERGY MEDICINE VEGETABLES i MEDICINES COUGH DROPS MAKEUP PANTYHOES BAND AIDS SHA VINO CREAM RAZORS '.J I . I - JAFM PRODUCTS CLEANING BLEACH SPONGES MOP BROOM CLEANERS RUBBER GLOVES LYSOL SPRAYS SWIFTERS WIPES TOILET CLEANER SHOWER CLEANER WIND EX PRE MADE MEALS MACNCHEESE RICE BOWLS POTAOSALAD MACARONI SALAD SALADS SOUPS MEATS CHICKEN FISH CRAB SHRIMP BURRITOS BREAKFAST LUNCH DINNER PASTAS SNADWHICHES FRUIT PLATTER VEGTABLE PLATTER BURGERS TURKEY BURGER VEGITERIAN BURGER HOT DOG HOTLINK. BBQ RIBS FRIES MADE TO ORDER OFFICE SUPPLIES POSTCARDS CARDS TAPE STAPLES THUMBTACKS PENS MARKERS PAPER STAMPS GIFT BAGS WRAPPING PAPER GLUE CONFIDENTIAL c __ :L_ r ~-·---1 r-u_ '-~-_J ill Attachment D CARRASCO & ASSOCIATES A~CTS • PLA.".!NE.RS A AAOr::.SSIONAt. CO~O~TION 1635 El. CAMINO REAL PAlOAJ..TO.CA 94J<Xi 650-322·2268 COLLEGE I TERRACE CENTRE 2100 EL CAMINO REAL I PALO AL TO, CA I I GROCERY STORE LAYOUT DATCc 06·26-2014 L I L I L, l 11 l-1' ) I Attachment E 1. How will rent be structured to give the market the best chance of success, especially during first few years? Response: The rent structure has been agreed to between the operator, the ownership and the lender to provide assurances of success and profitability. The lease and rent structure is identical to that provided to and accepted by John Garcia which the City Attorney has reviewed and approved. 2. What assurances can you give the City that a new market will open if the current market goes out of business? Response: Pursuant to PC Ordinance 5069, "The grocery store space shall remain in continuous operation as a grocery store." Ownership is compelled and committed to ensuring compliance with the requirements of the Ordinance and is doing all it can to ensure the success of this operator. Should the operator close, Ownership will take all necessary steps in the marketplace to procure a replacement operator as required by the Ordinance. 3. What position will former CFO have in new company? What will the structure of the organization actually be? How many total people will you employ? Response: The former CFO will act as the Operations Manager reporting directly to the store owner. In addition to being the CFO of a regional grocery operator he has personally owned and operated grocery and pharmacy stores. The Manager, who oversees all departments and reports to the Operations Manager, has grown up in the grocery business, his family has owned and operated a grocery store since before he was born and he followed into the family business. Agreements are in place with these individuals as to duties/responsibilities, compensation, participation and organizational structure. Obviousiy no one has been "hired" yet because the store will not open for another 16-18 months but when the hiring process starts we have a pool of cashiers, butchers, produce specialists and assistant managers that we will hire from. An outline of duties and a preliminary schedule is attached for your review. 4. You mention a 20 year history of observation of the former market. This is a significant opportunity to provide some detail about what you have learned from those years of observations? Response: The success of the JJ&F operation was built on decades of service to a neighborhood that grew up around the store. As time passed, it was the wish of the operator to relocate to El Camino Real so as to market the store to a larger client base while maintaining the neighborhood feel of the operations. Accomplishing the relocation of the store is step one. Step two will be to expand on a sixty plus year history of providing excellent service and a full spectrum of products. Historical sales data will be used as a basis for stocking the new store with products that have proven demand. The Garcia's made it very clear that the neighborhood does not shop at the store for their large grocery purchases. Historically the main business was the meat department and the deli department. However, buying habits have changed and are fluid. Beef is no longer a primary food source, with poultry and fish now making up a much larger portion of the household diet. By maintaining close communications with the core neighborhood client base, the 300 +/-on site employees and the larger community, products will be adjusted from time-to- time to meet current demands and needs of our clients. With a propensity for prospective customers to buy locally and a commitment to quality product and customer service, we are confident that we can build on a 60 plus· year history of success in a newly designed and better located store. 5. l think it would be helpful if you are able to be more specific about the management team and their experience. I am not suggesting the names of individuals be provided, but listing the specific positions each individual would fill within your organization and detailing the experience or background of each one of those key individuals within the management or advisory team is Important. Response: Please see our response to question #3 above and the schedule and assigned responsibilities outlined therein. 6. How many total people within walking distance? I am sure you have those numbers, and it is generally public knowledge and won't give anything away. Response: J&A Family Market has been developed to provide a full service grocery operation within walking distance of the College Terrace neighborhood, the adjacent housing for professors, grad students and coaching staff, those residing in Escondido Village at Stanford University, and the work force in the adjacent Stanford Research Park. : I ~ J Please reference the attached 1-3-5 Mile Demographic data. These customer groups have a history of "walk-ability" and rarely use their vehicles to shop at the store, preferring to either bike or walk to do their shopping. There are approximately 20,986 residents in a 1 mile radius, 140,425 in a 3 mile radius, 275,708 in a 5 mile radius. Further, 2014-2019 estimated growth trends are positive and reflect a strong and growing sales base. Additionally, there are approximately 20,000 employees in the Stanford Research Park, many of which are within walking distance of the store and have historically provided a strong daytime client base -http://lbre.stanford.edu/realestate/sites/all/lbre- shared/files/docs public/Stanford%20Research%20Park%20September%202012.pdf. 7. This section really needs to be beefed up beyond two sentences. Who will you outreach to? And how? You can keep it broad by giving generally categories of outreach. For example, "senior housing communities" rather than Lytton Gardens. Also how will you outreach to net customers? Response: Marketing professionals will be retained to promote the new store and to accomplish outreach through community associations. Additionally, direct outreach to neighborhood organizations such as the College Terrace Residents Association {CTRA} will be pursued. In reviewing the concerns of the old JJ&F store, it was clear that location setback from El Camino Real was the primary deficiency. The new project design has been built around locating the grocery store to the predominant location on the block. With nearly 50,000 daily vehicle trips on El Camino Real, a European style store with colorful awnings and food displays, outdoor seating and spire signage, the physical asset will be a primary market/outreach tool. In addition, Marketing Professionals will be retained to advertise the grand opening to the community and press, and to market the store {through local publications, store and neighborhood flyers, electronic media, local community and civic organizations, Stanford University, and others) in its on-going operations. 8. I think you need to acknowledge Molly Stones in this statement. While they are not on El Camino Real, they are close by. Response: While we recognize and respect Mollie Stone's as a competitor, our outreach to the community to date indicates that El Camino Real acts as a physical barrier and impediment to shoppers. Therefore, we have focused on our primary client base, serving residents, businesses and employees adjacent to our location, such as employees from the Stanford Research Park and the university, and traffic from El Camino Real. 9. I like the layout, but this isn't a "professional" drawing. I would suggest having an architect or designer lay out the floor plan and include it as an attachment {you can insert the image here). You are going to need a designer to complete a floor plan during the Tl stage anyway. Also, please say why you have selected this floor plan -has it worked well in other locations? Where? Response: The store layout remains a work in progress. For example, the location of the project Grease Trap was finalized just prior to Plan Check submittal and subsequent to our discussions with Staff regarding this preliminary layout. Another factor still effecting the final lay out is the selection of adjacent retail tenants. To be specific, since this initial submittal we have entered into lease negotiations with a higher end restaurant that will occupy nearly one half of the remaining retail space. We have also had discussions with a second retail user that will effect whether or not we have a coffee subtenant/kiosk in the store. The result of these efforts is that we no longer anticipate a "traditional cooking area" in the store, but rather a "food prep" area. The impact of this change is the potential deletion of fire suppression equipment, major venting, gas line and drain locations, etc. Furthermore, these changes affect all display cabinet sizing (dry goods, cold and freezer), lighting locations, isle widths and sight lines within the store. While the basic layout of the store, such as point of sale systems {POS), has been vetted {i.e., the flow of the store will take the customer to the most purchased items: produce, dairy and deli) by visiting other similarly sized stores on the Peninsula, in the South Bay and in San Francisco. To that end we are interviewing firms that specialize in grocery store layouts such as East Bay Restaurant Supply, Berliner, Ouray and Sudie and have also discussed preliminary plans with Carrasco & Associates, but we intend to defer finalizing plans until we have completed the garage and are starting the building structure or within nine (9) months of -I I I I 11 j j I : ( I I : ! I ) -~ our proposed store opening. At that time we will be able to better quantify display areas and needs, and provide plans sufficient to obtain our permit for tenant improvements. 1 O. Sounds great -but where is this on the site plan? Please note. I would also elaborate on this as it is a cool concept that would attract people. Response: The Open Air Market will act as both a primary marketing tool with bright/colorful eye catching displays visible from El Camino Real, and it will also provide an added seating area adjacent to the fence enclosure for this area. The produce bins and merchandise will be located up against the window line so people can't just grab things as they are walking along El Camino Real. The seats and tables will be located along the 4ft high fence that goes around the open air market. We plan on offering free wi-fi and flat screens for viewing. Customers will only be able to acces and exit this area by going through the store. 11. Once again, need examples. You don't need to be specific, but we do need some broad categories of outreach noted. And a timetable of those outreach efforts leading up to the grand opening. Will you be having a ribbon cutting ceremony? Response: As construction progresses, we will have notification signs erected on the project announcing future tenancies. As we progress toward occupancy we will reach out to local publications and periodicals to generate press releases as we did with the announcements of our construction loan. This will be particularly impactful when we announce the restaurant tenant as the operator is a local, very well known and respected person that will generate considerable buzz. As construction nears completion, ribbon cutting ceremonies, Chamber of Commerce announcements and advertisements in local publications will be released leading up to and announcing the Grand Opening. These efforts and a calendar of events will be coordinated with all of the retail tenants to benefit their individual businesses. We are being very careful to emphasize the synergy we anticipate between their products and to maximize cross selling/mutual support as much as possible. We will not create a situation where a business suffers because it is being cannibalized by an adjacent use. 12. In our meeting you explained that the reason you decided to take on the financial risk of being the grocery tenant yourself is that you wanted to ensure that the grocery store would not fail. You did not want the let the community down, as was the case with Mikl's. This was a pretty compelling statement but you have not included that here. You should consider some discussion in your document about the "why?". What is your reason and motivation for tae difficulties that other developers king this on beyond the fact that you believe it will be a financially successful endeavor? Response: Ownership and the development team remain committed to having a successful grocery store as part of the project for another 60 years. When College Terrace Centre was originally envisioned, it went through a series of designs that focused on retaining and improving the grocery store. The grocer "wish list" was solicited from JJ&F and consisted in part of store size, location, access, visibility and numerous other factors that were all considered in the final plan and agreed to by the operator. The family has a sixty year history of supporting that use, as a customer, a public proponent and a generous landlord that provided economic benefits to the tenancy. As part of the planning process, and substantial expenditures in time, effort and money, a grocery location was agreed to and the project moved forward with that design as the keystone to the development. The ownership team remains committed to the successful operation of a grocery in the project. Having observed the difficulties experienced by other noted owners/developers in the Palo Alto market to keep their stores open and operating, the development team elected to open and operate the store themselves. This commitment to operations and service is unwavering. j I LI 1, ,_ .. r1 i I . I f. ,J "·io. :~:\ • Dimograph1c Trend Report Age 0-4 Age 5 -9 Age 10 -14 Age 15 -19 Age 20 -24 Age 25 -29 Age 30-34 Age 35 -39 Age40 -44 Age45-49 Age 50 -54 Age 55 -59 Age60-64 Age 65-69 Age 70-74 Age75-79 Age 80 -84 Age 85+ White Black Am. Indian & Alaskan Asian Hawaiian & Pacific Islander Other Attachment F 1 Mile Radius ' ' < • , , ~ ~ ' ' :-' ,.. • ~ ~ ~ ' < <... '• , .. 'i > l ~, ~ ' , ~ ' , 1 974 4.79% 1,565 7.46% 878 4.32% 1, 119 5.33% 837 4.12% 917 4.37% 2,027 9.97% 1,270 6.05% 3,504 17.23% 2,225 10.60% 3,049 15.00% 2,870 13.68% 1,392 6.85% 2,331 11.11% 970 4.77% 1,483 7.07% 970 4.77% 1,081 5.15% 1,082 5.32% 1,027 4.89% 1,027 5.05% 1,031 4.91% 936 4.60% 986 4.70% 783 3.85% 876 4.17% 614 3.02% 716 3.41% 427 2.10% 530 2.53% 329 1.62% 378 1.80% 246 1.21% 262 1.25% 287 1.41% 319 1.52% 13,265 65.24% 13,569 64.66% 668 3.29% 692 3.30% 100 0.49% 106 0.51% 5,212 25.63% 5,535 26.37% 42 0.21% 45 0.21% 997 4.90% 1,039 4.95% This copyrtghted report contairs researd1 licensed to Casady Turley-628813. 1,752 7.86% 1,505 6.75% 1,208 5.42% 1,134 5.09% 1,482 6.65% 2,095 9.40% 2,389 10.72% 2,104 9.44% 1,589 7.13% 1,233 5.53% 1,094 4.91% 1,043 4.68% 965 4.33% 837 '3.76% 670 3.01% 486 2.18% 323 1.45% 372 1.67% 14,415 64.70% 729 3.27% 108 0.48% 5,878 26.38% 46 1,104 0.21% 4.96% 6/11/2014 Page 1 J J: I r r ' Demographic Trend Report White Black Am. Indian & Alaskan Asian Hawaiian & Pacific Islander Other <$25,000 $25,000 -$50,000 $50,000 -$75,000 $75,000-$100,000 $100,000-$125,000 $125,000 -$150,000 $150,000 -$200,000 $200,000+ 1,358 85.79% 46 2.91% 48 3.03% 48 3.03% 3 0.19% 79 4.99% 1,776 22.23% 1, 176 14.72% 948 11.87% 787 9.85% 367 4.59% 596 7.46% 734 9.19% 1,604 20.08% 1,432 86.06% 48 2.88% 49 2.94% 48 2.88% 5 0.30% 82 4.93% 1,642 19.95% 1,335 16.22% 962 11.69% 737 8.95% 474 5.76% 653 7.93% 677 8.23% 1,751 21.27% This copyrlghted report contalre researe!l llcensed to Cassidy Turley-628813. 1 Mile Radius 1,525 86.30% 49 2.77% 50 2.83% 50 2.83% 3 0.17% 90 5.09% 1,700 19.45% 1,454 16.64% 1,015 11.61% 757 8.66% 535 6.12% 706 8.08% 695 7.95% 1,877 21.48% 6/11/2014 Page 2 I I I I I 'Demographic Summary Report • ' ' ~ , • ' ' ' J ' : ' ; -~ ' ---------------------------------------------------· 2019 Projection 22,280 150,003 2014 Estimate 20,986 140,425 2010 Cens_us 20,332 132,530 Growth 2014 -2019 6.17% 6.82% Growth 2010-2014 3.22% 5.96% White 13,569 64.66% 95,259 67.84% Black 692 3.30% 5,876 4.18% Am. Indian & Alaskan 106 0.51% 708 0.50% Asian 5,535 26.37% 31,108 22.15% Hawaiian & Pacific Island 45 0.21% 1,824 1.30% Other 1,039 4.95% 5,649 4.02% 2019 Projection 8,740 57,001 2014 Estimate 8,231 53,338 2010 Census 7,988 50,437 Growth 2014 -2019 6.18% 6.87% Growth 2010 -2014 3.23% 5.76% Owner Occupied 3,021 36.70% 26,970 50.56% Renter Occupied 5,210 63.30% 26,368 49.44% Income: <$25,000 1,642 19.95% 6,975 13.08% Income: $25,000 • $50,000 1,335 16.22% 7,735 14.50% Income: $50,000 -$75,000 962 11.69% 5,942 11.14% Income: $75,000 -$100,000 737 8.95% 4,798 9.00% Income: $100,000-$125,000 474 5.76% 4,951 9.28% Income: $125,000-$150,000 653 7.93% 3,568 6.69% Income: $150,000 • $200,000 677 8.23% 5, 110 9.58% Income: $200,000+ 1,751 21.27% 14,259 26.73% This copyrighted report contairJl research licensed to Casady Tu~ey • 628613. 294,182 275,788 261,382 6.67% 5.51% 195,774 70.99% 11,437 4.15% 2,118 0.77% 51,638 18.72% 4,059 1.47% 10,763 3.90% 108,838 101,990 96,848 6.71% 5.51% 53,473 52.43% 48,517 47.57% 13,766 13.50% 15,646 15.34% 11,765 11.54% 9,703 9.51% 9,572 9.39% 7,106 6.97% 9,582 9.40% 24,850 24.37% 6111/2014 Page 3 Demographic Market Comparison Report I I !. This copyrighted report contains research licensed to Cassidy Turley-628813. 1 mile radius 6/11/2014 Page 4 I i , I I ! Demographic Market Comparison Report 1 mile radius --------~-------·--------. --_------------------------------ Ir c• .. r· : ''o"r ·c ' •='"•Jr"= l' , '~ \ • •' • ~ .,,. 1 • • •. \ r ( , ,. : r· 1 .. .\JI~ ' County: Santa Clara '!:\ _,' .,, ~~E~;J~f1ttl~t[o1?.·} (~-iC;}~!~111~~;~1~~q~~Tu~5(i~~=~t:;i~~: ~~~ ,-l~ .~ ~. __ ,·~, ~~~~;4~-~;~~ }_:.~~~~:1 x~;3~~~~~~(t~~~~:~:~~~~~l:~f.~if~~~~i~kl~ia ,~~~:~'Ii~j~]~E~~:~:}~J:~i;[fr!~~ ~~~~-:· Growth 201 O' -2014 3.22% Growth 2014 -2019 6.17% Employed 9,652 96.79% Unemployed 320 3.21% White 64.66% Black 692 3.30% Am. Indian & Alaskan 105 0.50% Asian 5,535 26.38% Hawaiian & Pacific Island 45 0.21% Other 1,039 4.95% Growth 2010 -2014 3.23% Growth 2014 -2019 6.18% Renter Occupied 5,210 63,30% Owner Occupied 3,021 36.70% Income <$25K 1,642 19.95% Income $25K -$SOK 1,335 16.22% Income $SOK -$75K 962 11.69% Income $75K -$100K 737 8.95% lncome$100K-$125K 474 5.76% Income $125.K-$150K 653 7.93% Income $150K -$200K 677 8.23% Income $200K+ 1,751 21.27% This copyrighted report contains research licensed to Cassidy Turley -628813. 4.87% 6.75% 914,325 77,330 1,090,706 55,327 26,418 614, 188 9,266 72,469 5.38% 6.86% 269,919 364,259 89,472 97,445 84,063 81,217 69,794 45,544 70,566 96,077 92.20% 7.80% 58.38% 2.96% 1.41% 32.87% 0.50% 3.88% 42.56% 57.44% 14.11% 15.37% 13.26% 12.81% 11.01% 7.18% 11.13% 15.15% 6/11/2014 Page 5 ,.----, I I ,1 , I ! I r· i I r 'Demographic Detail Report . . .' ~ . , ,•' ' ---------------- 2019 Projection 22,280 150,003 294,182 2014 Estimate 20,986 140,425 275,788 2010 Census 20,332 132,530 261,382 Growth 2014 -2019 6.17% 6.82% 6.67% Growth 201 O -2014 3.22% 5.96% 5.51% <~1~µn11iiiil~"":~'flf]flili:!~lii'4'1~i1Ill11P,~1m, :1um!1ll'1mH~m11~um~"l!!~llW~!!l!i'$.'Ji~!l.ifi~mpnmrourr1i1~111~1amJJ~ifil,~m1~1ru·~~!i'iffiru~mmnumm11~1m~~i1fqllin1!ii•1~s1rJliii@liili.il~ll1"1l~lf:iil11111m1m111'Hiumm111i!iiOOi!l!i~ur'~~lllffiil!~ilil!llilil.Jg'jij!rij1H1"1'1•l'""11•"~'1~i@r:m l~i'n'Ali!J1w~1~1~·1BO~: . t~b~l'lt~ffiH\lmli~Y~~n~Jlim!JtfW~f;&~mmtrn~lif~j\l!~~UJ~.IMli.~~1~Ullirl!P.\lli\~~~~\k~~~!lliLTiW.,!~~\~1~.tl•~t~~a~~J.~1W.~Hill~J~~~l!?IJ~~WwJ~ffi~fl~1rul«l'1~~DU~~Nl~~lt1n~1~ Age 0 -4 1,565 7.46% 9, 110 6.49% 18,008 6.53% Age 5 -9 1, 119 5.33% 9,008 6.41 % 18,032 6.54% Age 10 -14 917 4.37% 8,815 6.28% 17,464 6.33% Age 15-19 1,270 6.05% 8,808 6.27% 17,001 6.16% Age 20 -24 2,225 10.60% 9,528 6.79% 17,360 6.29% Age 25 -29 2,870 13.68% 10,459 7.45% 19,400 7.03% Age30-34 2,331 11.11% 10,143 7.22% 20,129 7.30% Age35-39 1,483 7.07% 9,630 6.86% 19,680 7.14% Age40-44 1,081 5.15% 9,723 6.92% 19,678 7.14% Age45-49 1,027 4.89% 9,891 7.04% 19,674 7.13% Age 50 • 54 1,031 4.91% 9,485 6.75% 18,975 6.88% Age55-59 986 4.70% 8,382 5.97% 16,995 6.16% Age 60 -64 876 4.17% 7,195 5.12% 14,668 5.32% Age65-69 716 3.41% 5,823 4.15% 11,735 4.26% Age70-74 530 2.53% 4,438 3.16% 8,794 3.19% Age 75 -79 378 1.80% 3,370 2.40% 6,481 2.35% Age 80 -84 262 1.25% 2,680 1.91 % 4,957 1.80% Age 85+ 319 1.52% 3,938 2.80% 6,758 2.45% Age65+ 2,205 10.51 % 20,249 14.42% This copyrighted report contalra researd! licensed to CssEidy Tu~ay. 628813. 38,725 14.04% 6/11/2014 Page 6 1 :: Demographic Detail Report j ' • < ' , • -, ' : - :-1 I c· I j I I ' j : I ! ! I !J ' ------------------------------------------------------------------ ·~~''1011111-'.1,111,-·,q,11llt=' ·;-.1,v, tjk •r. 9 'I) 0 / m1JJ ~I ' llffi ~~,, ' : ; ~~I °I' ,-u' 'I U *!I! ' .. J •q I ~ ': " ~: White Black Am. Indian & Alaskan Asian Hawaiian & Pacific Island Other Civilian Employed Civilian Unemployed Civilian Non-Labor Force Armed Forces Married Married No Children Married w/Children 13,569 64.66% 692 3.30% 106 0.51% 5,535 26.37% 45 0.21% 1,039 4.95% 9,652 56.36% 320 1.87% 7,155 41.78% 0 0.00% 3,353 1,762 1,592 95,259 67.84% 5,876 4.18% 708 0.50% 31, 108 22.15% 1,824 1.30% 5,649 4.02% 67,121 60.07% 3,669 3.28% 40,928 36.63% 13 0.01% 26,215 12,823 13.~92 195,774 70.99% 11,437 4.15% 2,118 0.77% 51,638 18.72% 4,059 1.47% 10,763 3.90% 134,326 61.37% 8,758 4.00% 75,652 34.56% 147 0.07% 51,303 25,829 25,474 Some High School, No Diploma 238 1.67% 6,538 6.61 % 19,658 9.97% High School Grad (Incl Equivalency) 644 4.51% 7,275 7.35% 20,684 10.49% Some College, No Degree 1,515 10.62% 12,741 12.88% 30,634 15.54% Associate Degree 375 2.63% 3,774 3.81 % 9,261 4.70% Bachelor Degree 4,364 30.59% 27,236 27.53% 50,374 25.55% Advanced Degree 7,129 49.98% 41,367 41.81% 66,573 33.76% This copylighted report contalrs resear<ti Hcensed to Cas!idy Turley -628813. 6/11/2014 Page 7 L, L I r I I' \ I I ( I __ _, ·Demographic Detail Report ------~------------~------------------------------------------ --- ~-;-;oll' "',1\r-:·lMH:• ; IMH:' lf~9.r u 1· fn~1r IJ!"' flffil!~n .; ~ ti!!ill • ! !I . : -'lilli ~1 ~ v • ~n mil , . ~ i ii Ill !1;~11~ u I ,· ! H: I ~., ... 1"' m I ff t • r: 0 0 • ~ 9 ·® "' • 0 ~' l " • ~ I ' ' D Q i' ' Real Estate & Finance 520 1.36% 4,120 1.56% 7,853 1.49% Professional & Management 9,070 23.72% 61,630 23.28% 110,729 20.97% Services 747 1.95% 7,778 2.94% 19,478 3.69% Information 602 1.57% 3,381 1.28% 7,081 1.34% Sales 1,436 3.76% 9,148 3.46% 21,191 4.01% Transportation 452 1.18% 3,193 1.21% 6, 111 1.16% Education & Health 3,857 10.09% 20,294 7.67% 33,723 6.39% Retail 491 1.28% 3,939 1.49% 9,161 1.73% Wholesale 118 0.31% 1,172 0.44% 2,707 0.51% Construction 337 0.88% 4,227 1.60% 12,322 2.33% Agriculture & Mining 24 0.06% 117 0.04% 647 0.12% Farming, Fishing, Forestry 7 0.02% 25 0.01% 299 0.06% <30 Minutes 7,059 80.20% 47,591 76.79% 93,956 75.14% 30-60 Minutes 1,334 15.16% 11,631 18.77% 25,574 20.45% 60+ Minutes 409 4.65% 2,753 4.44% 5,507 4.40% 1-Person Households 2,738 34.28% 15,355 30.44% 27,435 28.33% 2-Person Households 2,870 35.93% 15,880 31.49% 30,161 31.14% 3-Person Households 1,052 13.17% 7,362 14.60% 14,438 14.91% 4-Person Households 921 11.53% 7,295 5-Person Households 288 3.61% 2,720 6-Person Households 93 1.16% 963 7 or more Person Households 25 0.31% 861 2019 Projection 8,740 57,001 2014 Estimate 8,231 53,338 2010 Census 7,988 50,437 Growth 2014 -2019 6.18% 6.87% Growth 2010 -2014 3.23% 5.76% This oopynghted report contalrs research licensed to Cassdy Turley -628813. 14.46% 5.39% 1.91% 1.71% 14,012 14.47% 5,881 2,390 2,532 108,838 101,990 96,848 6.71% 5.51% 6.07% 2.47% 2.61% 6/11/2014 Page 8 J I L I I i I · Demographic Detail Report -.. ' ' ' ., -----------------------------------------------------------------~---·~hof'"r-· 1.'1!th :\i1¥1tlk ·; l,l,[fr, • •) ~ fi.:I ~ !\;l ~; ,, " -I I I r.; l~ I : 1''" II l u ' ! -® l Q : 6 <$25,000 . $25,000 -$50,000 $50,000 -$75,000 $75,000 -$100,000 $100,000 -$125,000 $125,000 -$150,000 $150,000 -$200,000 $200,000+ Owner Occupied Renter Occupied 1,642 19.95% 1,335 16.22% 962 11.69% 737 8.95% 474 5.76% 653 7.93% 677 8.23% 1,751 21.27% 3,021 36.70% 5,210 63.30% 6,975 13.08% 7,735 14.50% 5,942 11.14% 4,798 9.00% 4,951 9.28% 3,568 6.69% 5,110 9.58% 14,259 26.73% 26,970 50.56% 26,368 49.44% 13,766 13.50% 15,646 15.34% 11,765 11.54% 9,703 9.51% 9,572 9.39% 7,106 6.97% 9,582 9.40% 24,850 24.37% 53,473 52.43% 48,517 47.57% 1 Unit 4,229 49.39% 31,922 56.24% 64,556 60.04% 2-4 Units 867 10.12% 4,203 7.40% 7,539 7.01% 13,701 12.74% 5-19 Units 20+ Units 1,435 16.76% 2,032 23.73% 7,511 13.23% 13, 124 23.12% 21,719 20.20% <$100,000 15 0.50% 384 1.42% 1,027 1.92% $100,000-$200,000 35 1.16% 487 1.81% 909 1.70% $200,000 -·$300,000 14 0.46% 664 2.46% $300,000 -$400,000 . 43 1.42% $400,000 -$500,000 $500,000 -$1,000,000 $1,000,000+ 67 2.22% 614 20.32% 2,233 73.92% 1,079 4.00% 1,340 4.97% 7, 111 26.37% 15,905 58.97% 1,435 2,863 2.68% 5.35% 3,169 5.93% 16,364 30.60% 27,705 51.81% Built 201 O+ 344 4.01 % 3,472 6.09% 6,222 5.72% 6.06% Built 2000 -2010 891 10.39% Built 1990 • 1999 766 8.93% Built 1980 -1989 947 11.04% Built 1970 -1979 1,087 12.67% Built 1960 -1969 880 10.26% Built 1950 -1959 1, 120 13.06% Built <1949 2,544 29.65% 4,751 3,599 8.33% 6.31% 3,526 6.18% 7,363 12.91% 8,692 15.24% 13,602 23.85% 12,028 21.09% This copyrighted report contalra research licensed to Casady Turley-628813. 6,589 6,309 5.80% 8,160 7.51% 16,105 14.81% 19,107 17.58% 25,866 23.79% 20,357 18.73% 6/11/2014 Page 9 J -I I I J I I I. I · Daytime Employment Report 1 Mile Radius -' ~ :. , ' ----------------------------------~-----------------~----------~------------------- Retail & Wholesale Trade 133 1,124 Hospitality & Food Service 75 1,367 Real Estate, Renting, Leasing 42 241 Finance & Insurance 96 1,127 Information 50 564 Scientific & Technology Services 556 4,515 Management of Companies 0 0 Health Care & Social Assistance 271 1,348 Educational Services 43 1,068 Public Administration & Sales 8 55 Arts, Entertainment, Recreation 12 176 Utilities & Waste Management 36 415 Construction 32 372 Manufacturing 23 5,327 Agriculture, Mining, Fishing 0 0 Other Serv'ices 102 707 This copyr111lted report contalrs research licensed to Cassdy Turley -628813. 8 18 6 12 11 8 0 5 25 7 15 12 12 232 0 7 6/1112014 Page 10 ·~~~~~~ --·~-~--·----<-~~-~ --, ----L - : -__ --· · ----·-·· -------· ~-J • Traffic Count Report Cambridge Ave 0.03NW 2007 1,529 ADT .15 Grant Ave 0.03 SE 2012 1,645 MPSI .28 S California Ave Princeton St 0.03 SW 2012 5,382 MPSI .33 S California Ave Princeton St 0.03SW 2007 5,173 ADT .33 College Ave Oberlin St 0.03SW 2006 1,659 ADT .35 Princeton St 0.03 NE 2007 8,543 ADT .36 el Camino Real Palo Alto Sq 0.00 2012 39,830 MPSI .36 Park Blvd Grant Ave 0.02SE 2012 10,089 MPSI .37 Oregon Expy Ash St 0.06NE 2012 34,260 ADT .41 CaSSid · This copyrighted report contains research licensed to Cassidy Turtey-628813. 6/1112014 TUOOY/.__ Page 1 -YI~"''""""~- i I ~ I I ,- 1 I ,. .. , : I , ' ' I' i l l , j : l 1 I Exhibit 14 MISSION STATEMENT r I COLLEGE TERRACE MARKET offers a vintage shopping experience with quality food I , I I I , ' ' I selection, service and price. It is a higher-end market that utilizes a price-impact format that breaks the rules of both conventional and natural foods grocery stores by lowering prices, supporting small-scale food manufacturers and local farmers. While creating the ambience of a relaxed, stress free shopping environment while operating as a well- organized business. COLLEGE TERRACE MARKET WILL -Create, operate, and develop a sustainable basis for the Store, its employees and investors, the community, and the environment. -Sell a wide variety of organic, natural, and healthy groceries and other real food and conventional items that fit the Store's profile while continually developing resources and better ways to offer the best possible prices. -Champion the cause for delicious, fresh, local, and seasonal meals and foods while demystifying the basics of shopping for food. -Provide jobs to local employees, offer excellent products and services to customers, and improve shopping options for local residents. -Operate on a sound financial basis of profitable growth and increased value while creating career opportunities and financial rewards for the store's employees. I. -Conduct its business in a consistent manner with honesty and integrity in all matters with its employees, customers, suppliers, and the community in which we live and work. i ·__, -Identify the importance of people as individuals, and recognize that the contribution of our employees is the cornerstone of the Store's success. i I I ' i ; 'i l, - I ' ! ' i ' ' \ I j I Exhibit 15 c 1 ~-1 1 I ; I I I ! I L__J VISION AND VALUES COLLEGE TERRACE MARKET avows that good food should be a right, not a privilege. COLLEGE TERRACE MARKET will create a large, joyous gathering attracting thousands of culinary artists and food connoisseurs, producers and purveyors, grangers and growers, farmers and ranchers, cheese makers and winemakers, bakers and beekeepers, fishermen and foragers -all united by a passion for food and for a sustainable future. COLLEGE TERRACE MARKET is helping foster a new food nation. The whole process of thinking about food, deciding what to eat, shopping for the ingredients, and cooking and eating a meal is the purest pleasure. It is too much fun to be reserved exclusively for "foodies." Indeed, cooking and shopping for food brings rhythm and meaning to our lives. Daily cooking improves the economy of the kitchen. A garden brings life and beauty to the table. There is enormous pleasure in cooking quality food simply, and in sharing the cooking and the eating with friends and family. Cooking creates a sense of well being for yourself and the people you love, and brings beauty and meaning to everyday life. COLLEGE TERRACE MARKET will provide regular shopping routines that are pleasing, efficient, and economical. COLLEGE TERRACE MARKET is a price-driven, upper-end format, obtaining image through merchandising and buying "right." COLLEGE TERRACE MARKET will encourage local and community participation for the benefit of the Company, its employees and investors, ~ i the city of Palo Alto, and the environment. The Company believes in the importance of economic growth and profits in order for it to remain competitive, provide jobs, and preserve its financial strength. COLLEGE TERRACE MARKET will be a leader in the marketplace -never a follower. COLLEGE TERRACE MARKET will quickly capitalize on market trends and growth, offer innovative and dynamic merchandising, implement aggressive buying techniques, and understand and faithfully serve its customer base. COLLEGE TERRACE MARKET believes in astute management and well-trained employees. COLLEGE TERRACE MARKET plays an essential role -acting as a purchasing agent for the consumer. By creating and operating a price-impact, higher end grocery store, allows us to offer delicious, affordable, wholesome food that is organic, local, and seasonal. Freshness is key. There is little comparison to the beauty, smell, taste, and feel of fresh natural ingredients. Touch conveys so much about freshness, ripeness, condition, and texture. Vegetables and fruit just harvested have a vitality that one can see and taste and smell. That is one of the arguments for buying locally produced food: the closer you are to the source, the fresher the food is likely to be. Local quality organic food is critical. It will taste the best because it will have been grown in healthy soil. The food we eat is simply not wholesome if it contains harmful chemical residues. And by choosing to buy food from farmers and ranchers who produce food organically, together we support the people who are taking care of the environment and nurturing the soil. COLLEGE TERRACE MARKET -real food with real quality, selection, and price. Exhibit 16 ~ .. ' I ' . I I '· I l ! \ "··" , , i I i , ( I i r I I i I , : _ J BUSINESS OVERVIEW If you are what you eat, and what you eat is what you become, then it's all about the quality of food you eat. It has also become the fastest growing paradigm in the grocery industry -organic, natural, and healthy foods. And people wanting these real foods are voting both for their health and against a marketplace that has increasingly provided them with "food products" that could hardly be considered real or whole food. In fact, more than 60% of shoppers surveyed considered themselves either health conscious or very health conscious. Format College Terrace Market is a return to basics -real food with real quality, selection, and price. Its format breaks the rules of both conventional and natural foods grocery stores by lowering prices, supporting small-scale food manufacturers and local farmers, and creating the ambience of a relaxed, interesting shopping environment while operating as a well-organized business. The tenets are simple: Develop an attractive store model, an appealing design, a branded store name, an enhanced "esprit de corps" among employees, and improved product lines. The store will be an exceptional mix of local products made by small-scale businesses and farms with local flavor and local appeal on the shelves along side name-brand products, all at moderate prices, in an eclectic atmosphere. It's a viable and extremely successful concept. Viewed as an open-air, European-style market, the proposed College Terrace Market at 2100 El Camino Real in Palo Alto, California, is located in an attractive area, and meets the demographic guidelines: a collegiate community located in a medium-sized, prosperous Bay-area suburb with ·an , I I I u educated population, including lower economic areas, where value is recognized and patronized. Core Ingredients With fresh, local produce making up one-third of the sales floor, the store will offer a wide variety and choice of sustainable, organic foods (grown without chemicals), natural foods (minimally processed), and health foods (highly beneficial to health) that are uniquely integrated with conventional, namebrand products. Also featured will be an assortment of bulk foods, international cheeses, olive oils, vinegars, spices, and coffees, meals-to-go, an "A"-list deli, homemade soups, service meat and fish, range-free, grass-fed angus USDA prime and choice cuts of beef, smoked meats, and cage-free chicken. There will also be dairy products, frozen foods, dry groceries, beer, an outstanding selection of wines, and sundries, all moderately priced and available for everyone. Creating "destination" shopping is key; the store will be a "complete shop." The essential role of College Terrace Market is to act as purchasing agent for the consumer, offering excellent products and services to customers while improving shopping options to local residents. Further, the store will conduct its business in a manner that encourages community participation for the benefit of Palo Alto, College Terrace Market, its principals and employees, and the environment. College Terrace Market will provide new job opportunities and financial rewards for its employees who will be well-trained and well-versed in customer service, and recognizes that their contribution will be the cornerstone of the store's ultimate success. Market Trends The store intends to capitalize on market trends and growth. Shoppers are migrating away from the conventional, chain, and mega-grocery stores because of high prices and gimmicks, and disenchantment with the corporate image. Research demonstrates that the new movement is toward the natural, organic, and healthy life-style foods. This concept is viable and extremely successful. College Terrace Market has expanded upon that movement by developing the concept of a local, community-oriented store. Since the El Camino location is under-stored, College Terrace Market is in a unique position to capture the marketplace in this area. It's also a price-driven format, which obtains a more highly successful image through innovative merchandising and aggressive buying, and always passing the savings on to the customer. In other words, it's buying "right" while understanding the customer base. The store will serve as an exceptional, one-of-a-kind alternative to the chain and conventional supermarkets. I I I --] The store will never be a follower in the marketplace. Advertising Marketing and advertising will not be conventional in nature. Instead, it will be comprised of word of mouth, in-store flyers, radio, strategically located billboards, and a strong internet/website presence. Its campaign will be dynamic and combine both brand image and a sense of merchandising urgency. Customers will shop the store because College Terrace Market will provide a legitimate incentive to shop -providing national brands and organic, natural, and healthy products at moderate prices. Vendor Support After years of nurturing thousands of vendor relationships, and helping develop, introduce, and promote new, unique, organic and natural products, and fresh, l_ocal produce to the marketplace, the vendor support for College Terrace Market and this store is unparalleled. Using moderate and aggressive pricing, utilizing specials offered by vendors and wholesalers, offering the convenience of discovering a wide range of unique grocery items, and making a commitment to healthy living is key to attracting and keeping a wide spectrum of customers -from hip to conventional, from the affluent to the working class to the low-or fixed income families, from professionals and the trades to students and retirees. Equally important, College Terrace Market will provide small-scale organic, natural, and healthy food manufacturers and local farmers and growers sufficient shelf space without the exorbitant real estate prices demanded by larger chains and corporate stores. As a result, customers will have a greater choice while supporting their local community of manufacturers and farmers. In addition, College Terrace Market will also develop high-quality, organic, private-label products. For the store and its vendors, it is providing the customer real food with real quality, selection, and price. Space The store will comprise approximately 9,000 SF. Date of Opening College Terrace Market anticipates opening the store in Fall 2015. Hours of Operation At a minimum, the store will operate as follows: Monday through Friday from 6:00AM-8:00PM, and Saturday-Sunday from 7:00AM-7:00PM. The store will close in observance of certain national holidays. Exhibit 17 . I . I L j ' . i I I . i l I I I I I : i ! ~-j ! i . I I J [j 11 , I , I 1 08/23/2013 66:43 fi5(1 MOLLIE ~1TOHES .ET UilS 11!RM1NAT!ON OF AGREEMENT TO J~EASE ("Agrwment") b dated n~ of August~. 20'13 (the "Effective Date''), and is mitdc l>y and among JOSEPH E. OF,.5CHGER • .ELDORA O. !vfil..LER and PA'.m1CK SMAlLEY, nll a.o trust¢es of the C.'l~A.l<A n. CHJ.l.CO'fP.. TRUST ("Owner'') nt1d JOI-JN GARCIA. an indblidunl ("GllrCfa "). A. Gaicia i~ a party to tb~t "ertnin Agreement to Lease elated Dc¢Cttl'bet 1, 2009 (the "A~t?llt to l.Cll.~e"} for {hat ozruiitl premises kJ~1cd on the norlJ1Woot corner of 2180 El Camino Real, Palo Alto. State of Cnlifomfa ("the Preml~e.~'') and known as College Tetr.'lce Cc1lf.r•~. consisting of approximately 8,ClOO sq1wrc feet on the Pri::rniscs, along with appt<>1d1nntely 2,000 square foot <>f outdoor roark¢ nnd 600 nqunte feet of dry stornge. The capitalized tenn~ U.'!Cd and not otherwise defined herein ~hall hav1~ the same dc:fhiition a.~ se.t forth in the Agn-,cmcmt to U:w;e. U. Ptu:stmnt to Sl'..ction 4 . .3 of the Agreement to Lc1isc. Onrcla desu1:: to t.crruinn~ IJle ~cmcnt to tense upon tbc term~ and condilions ctllll.l'lincc! in this Ar.recment A. .!1lltt. Owner and Gnrcin ogree thn1:, as of the Effective Date, 1hc Aflrecment to Lease shaiJ tcrrninnte u11lon111ti~1lly without. 'l'imhe-1· uction by lho pnrtie..~ (''T~nation bate"}. B. Snf!'Y!ldcr ofJ..ease. S11bjl'.ct to thci r1irrr1s of this Agrc¢tnc11t and effective a~ C•f the Tern1inntlmt Dille., Gru'cia surnmdel':l. farfcits nnd quitclaims any nnd ~U .intme.~t in And to the Agreement to T..ellSc nnd t11e 'li'remi£CS to Owner, including without !imitation any :and nil opti911 rights granted therein. C. .§.1!.'01l.!1!ltr of~. Upon the Tenninntion J)nte, O'JJ:cin shall surrender all rights or intere.~t~ to possess th~ l'temisc.9 t0 Ownet<. D. ~sm,..~. Su~jcct to .an<.l <::011(.litiomlli upon the t~'!'.l.l1s, ng-ccomc11ts, and repi<escntations hctcin contained. Owner acccpli; the reoninaclon of the AgN"..imcnt to Lease as of the Te:rmin»tmn Dn1c. IV. GENf<.iRAL. A. .Mfj}tu.tr's fm. 11m provisions of the Agrccmof\t to Lca.~c re.~pecting oucrney'~ foe~ sh:1ll 11pply lo this Agi-aement 13. Govet1'1ing Ll!.,'IY.· Thi~ Af,TllCment and any enforcement of ~he ngn-,cments, nckrlaw1edgmcnts and n:prcscutatfons Q( Owner nnd G:u'Ci:i set forth above shiill be governed by and construed iii accordnncc with tho J,.aw~ of the State of C~Hforni11. D. ~,9.IJD..~. lf thfo Agre:e111eni in m:ecnted in counterplll'l<;, <11ich connterpart shnll be dr..emed tto origiml. TIJis A,grei;mcnt slmll bQ dec1r.ed cx.ccute<;l nnd dclfvercd t1pon each party's delivery of exec11ted sip,:natnw pnees of th.is Anreeme11t, which sigti~(um pnges may be ifolivero!l by li1r~imill! ur email wilh the i::ime effect as delivery of the o!'igirmls. · Signat1.1rr..1· tm the fo1!11wi11g p<tlJC PAGE 02/02 n . J 08/23/2013 15:18 PAX 208 73A 8500 68i23i2G13 1:~: 42 650 &0:1 Aug 23 13 02:00p Oaschgsr 09/23/2013 . 06! 411 6503232357 '.l'he UPS Store 3386 AD\/ENTERA 4Uti· 7 45·5145 ttU...UE STONES MARKET 11.y: l'Ck.l.< Stnai~ lb;: Tnmr:c" j l @0011001 PAGE 02/1'.12 p.1 PA~ 0lnll ' i I I ~·~. I •. I ~ I I I I , I I I, ' ' I I I ' I i j ' ' ! ! Exhibit 18 ' ' '-~ i .J 1 : ( 11/1/2010 Dear JJ&F Customers, Friends, Family, Since 1948 JJ&F has been an institution in the College Terrace area of Palo Alto. We have been there through thick and thin, good times and bad, births and deaths. 62 years of family and fun. If you add up all our years, Lloyd, Dennis and John have been in this location for over 145 years. You, the Cusfomer have been our family for t~ose 145 years. I rea.lly wish this was to be a happy letter to you, but we can't hide it any longer. It is with great sorrow that r have to tell you that JJ&F has been sold. Between this terrible economy, and the ·new shopping habits, we can no longer compete. We are a union shop so our costs are much higher than non union. We don't have the buying power of our competition, so things cost more. We have tried, but we can;t do this any longer. We have sold our assets to a very nice person that has the means and knowledge to make your neighborhood store much better. He also h'as the means to build the new market, and is planning to do so. We were lucky to find Issa Aho of Emerald Market in the Emerald Hills area of Redwood City, looking for another location. He has a very nice quality store, with a knowledgeable staff, something we think you deserve. If you like JJ&F, we think you will love Emerald Market. Please understand that they ~re here for YOU, because we can't be. REMEMBER THIS ... In order to have a neighborhood market in YOUR neighborhood, you MUST shop there. We also want you to know that JJ&F's leaving has nothing to do with the College Terrace Center, and or our landlords. They have been very forgiving to us this last year. They have tried to help us get through this, been very patient with our late or skipped rents. Since the last City Council meeting a lot has happened to us. Mostly, Trader Joes has opened. We didn't think that they would hit us as hard as 'they did. We have lived through many tough stores, comjngs and goings, why woul.d this be any different. Well they are! JJ&F is not a business, it's a family business, a many family business. We have Joe, John & Frank, Lloyd, Dennis & John, Mike, Mike, Dan, Martin, Lupe, Juan, Gus, Elisa, Elmer, Efrain & Frank. Mostly ·though, we have you. Without you, JJ&F would have been gone a long time ago. We have had tears of J joy, with your families growth, and tears of sadness with loss. ft is now our time. 62 beautiful years! Thank you! Lloyd, Dennis & John Garcia r I --~ ---; . I ,- i I I , I . I -1 I I ( . I -) Exhibit 19 I J ~--1 I i I I '. I ' 1 'j ' 1 '. j I I I l~ l Jam es Smailey Adventara, Inc. P.O.BOX 620186 Wo9dside, CA 94062 Re: Our welcome of a fine replacement store for JJ&F Market. Dear James: I have enjoyed my dental practice for nearly ten years at 1795 El Camino practically across the street from 2100 El Camino at College Avenue. · We have enjoyed the success of this property and medical practice in the College Terrace neighborhood. Please approve the College Terrace Market as rapidly as you can under the ·leadership of Miki Werness and James Smailey. Sincerely yours, Tim Mulcahy, DDS ! i , I ' I ' I James Smailey Adventara Re: Our welcome of Mild's fine replacement store for JJ&F Market. To Whom It May Concern; I have been a principal of Premier Properties for several years, Premier Properties is the largest manager and operator of buildings in the California Avenue District. We and our landlords and tenants look forward to the development of 2100 El Camino with a fine grocery store to replace JJ&F We are especially enthusiastic with the participation and management by Miki Werness. Please approve the College Terrace market as rapidly as you can under Miki Werness' leadership of grocery operations. Sincerely yours, Bradley Ehikian ; ' I I l ' 1. , I I I I I ---' James Smailey Adventara Re: Our welcome of a fine replacement store for JJ&F Market. To Whom It May Concern; I am the owner of about 7 /8 (help me out Brad) proeprteis in the California Aveneu Business District. We are greatly excited by the redevelopment of a neighborhood grocery store to serve where JJ&F has been closed. We will all enjoy a higher quality and larger market store to now be operated by Miki Werness who established a fine Community reputation with his beautiful, fresh Miki's store at Alma Plaza. Please approve the College Terrace market as rapidly as you can. Sincerely yours, Bradley Ehikian ' J 'j I ' J I ) James Smailey Adventara Re: Our welcome of Miki's fine replacement store for JJ&F Market. To Whom It May Concern; I was a principal and general partner with Jim Baer when we developed 555 College that is directly south and across the street from former JJ&F market. I continue to own a few key buildings in the California Avenue District,foremost on the corner of El Camino and California Avenue We look forward to the re-development of 2100 El Camino with a fine grocery store to replace JJ&F. We are especially enthusiastic with the participation and management by Miki Werness. Please approve the College Terrace market as rapidly as you can under Miki Werness' leadership of grocery operations. Sincerely yours, Rick Holmstrom ,'" ~ ') I; c : ' i I ) James Smailey Adventara, Inc. P.O.BOX 620186 Woodside, CA 94062 Re: Our welcome bf a fine replacement store for JJ&F Market Dear James: I have enjoyed my State Farm Insurance office for over ten years at 2255 EI Camino practically across the street from 2100 EI Camino at College Avenue. We have enjoyed the success of our business in the College Terrace neighborhood. Please approve the College Terrace Market as rapidly as you can under the leadership of Miki Werness and James Smailey. We need a walkable grocery store. Sincerely yours Je~· State Farm Insurance ! I ,I ! I i September 15, 2014 J runes Smailey Adventera Inc. 93 9 Laurel Street San Carlos, CA 94070-3943 POL.LOCK REA.LTY CCH'<!PORA.TION Re:. Support for Rapid Approval of Replacement JJ&F Market by Miki Wemess Dear James: Pollock FRB, LLC is the owner of2755 El Camino Real. I have been excited to learn that JJ&F market is to be replaced by a new grocery store that will be managed by Miki Werness in conjunction with you. What a great opportunity for College Terrace and for California Avenue businesses. Please le~ me know how I can help. Sinscerely, ,,,..~-. .. /2/Je -~" (._,_. #cf /Y'(;/<~" /·JC../ Jeffrey 0. Pollock VP Real Estate/Marketing 150 Portola Road, Portola Valley, California 94028-7852 Telephone: (650)529-0500 Fax: (650)529-2131 www.pollockfinancial.com l ' r -~ I. i I I I I Mr. James Smailey Adventara Jeffrey A. Morris 2500 Sand Hill Road, Suite 240 Menlo Park, CA 94025 To Whom It May Concern; I am the general partner of the property at 2275 El Camino Real in Palo Alto where First Republic Bank is located. We are delighted to hear about the neighborhood grocery store that is interested in the space wher~ JJ&F has been clo.sed. The employees of my tenant will enjoy the quality store which will be operated by Miki Werness, who established a fine reputation with his Miki's store at Alma Plaza. Please approve the proposed market at College Terrace as rapidly as you can. I I . l r1 ' ' , James Newman, MD September 14, 2014 James Smailey Adventara, Inc. P.O.BOX 620186 Woodside, CA 94062 Premier Plastic Surgery 1795 El Camino Real, Suite 200 Palo Alto, CA 94306 T 650.321.7100 F 650 .323-3220 PremierPlasticSurgery.com info@PremierPlasticSurgery.com Re: Our welcome of a fine replacement store for JJ&F Market. Dear James; I have been an owner, general partner and developer for nearly 10 years practically across the street from 2100 El Camino at College Avenue. My building is 1795 El Camino where I also maintain my medical offices. We have enjoyed the success of this property and medical practice in the College Terrace neighborhood. Please approve the College Terrace Market as rapidly as you can under the leadership of Miki Werness and James Smailey. · Sincerely yours, /James Newman/ J?tmes Newman, MD r: I 'J i I I I James Smailey Adventara, Inc. P.0.BOX 620186 Woodside, CA 94062 September 15, 2014 Re: Our welcome ofa fine replacement store for JJ&F Market. Dear James: We are the owner of the· property located on the SE corner of Cam bridge and El Camino about 1 block form 2100 El Camino. We are building a new fine building and may have our offices in this building along with other tenants. A fine neighborhood grocery store will add to the experience of our tenants and their business guests. Please approve the College Terr.ace Market as rapidly as you can under the leadership of Miki Werness and James Smailey. We need a walkable grocery store. Sincerely yours, i,11 (\, • i/1 {\ r--.,.,, il.lLQ .. L\... r--.... 11.\.L.L'--- Karen Kam Tai Ning Trading & Investment Co., Inc. I '· I I ' i James Smailey Adventara, Inc. P.O.BOX 620186 Woodside, CA 94062 PALO ALTO LAND USE CONSULTING Re: Our welcome of a fine replacement store for JJ&F Market. Dear James; I have been an owner, general partner and developer of over 10 properties in the California Avenue business district and along El Camino Real near 2100 El Camino. I re-developed an immediate neighbor at 555 College. We have enjoyed the continuing success of these properties in the California Avenue and College Terrace neighborhood. Please approve the College Terrace Market as rapidly as you can under the leadership of Miki Werness and James Smailey. Sincerely yours, James E. Baer 555 Bryant Street, Box 348, Palo Alto, CA 94301 I CELL: 650.814.7709 jimbaer@paloaltoland.com I www.paloaltoland.com . ' ' I Exhibit 20 :1 I~-, , I . ' . i I I . I ) ~) j From: "Silver, Cara" <Cara.Silver@CityofPaloAlto.org<mailto:Cara.Silver@CityofPaloAlto.org>> Date: December 8, 2013 5:03:51 PM PST To: "Polentz, Michael" <MPolentz@manatt.com<mailto:MPolentz@manatt.com>> Cc: "Bohannon, Katerina" <KBohannon@manatt.com<mailto:KBohannon@manatt.com>>, "Reich, Russ" <Russ.Reich@CityofPaloAlto.org<mailto:Russ.Reich@CityofPaloAlto.org>>, "Aknin, Aaron" <Aaron.Aknin@CityofPaloAlto.onz<mailto:Aaron.Aknin(a),CityofPaloAlto.org>> Subject: RE: College Terrace Centre (2180 El Camino real) Michael, Thank you for forwarding the commercial lease for the above project. This email confirms (i) the City Attorney's approval of the Commercial Lease as required by Section 4(b)(3) of Ordinance 5069 and (ii) that the applicant has now satisfied the necessary conditions precedent related to showing proof of a grocery store lease for purposes of pulling the building permit for the project. Feel free to contact me if you have any questions. Regards, Cara [ cid:image002.png@O 1 CDA6CF .CD885FOO] Cara E. Silveri Senior Assistant City Attorney Office of the City Attorney 250 Hamilton Avenue I Palo Alto, CA 94301 D: 650.329.2171 I E: cara.silver@cityofpaloalto.org<mailto:cara.silver@cityofoaloalto.org> Please think of the environment before printing this email -Thank you. This message contains information that may be confidential and privileged. Unless you are the addressee, you may not use, copy or disclose the message or any information contained in the message. If you received the message in error, please notify the sender and delete the message. -----, I r-1 1 c , I '1 I i I -, ! I I I I ! I . I Exhibit 21 r l i ~ j l " J I .. I I J -_J From: "Reich, Russ" <Russ.Reich@CitvofPaloAlto.org> To: "Patrick Smailey" <psmailey@adventerainc.com> Subject: PC ordinance language Date: Thu, Mar 6, 2014 10:34 AM Hello Patrick, Please see the highlighted language below. My only purpose in bringing this to your attention is to assist you and the project in this process. (b) Special limitations on land uses include the following: (1) A grocery store, with an area of at least 8,000 square feet, shall exist within the development for the useful life of the improvements; (2) The grocery store shall be a neighborhood. serving grocery store that provides all the typical grocery store products and services of a neighborhood serving store such that it shall not become a convenience mart facility; (3) A signed lease for the grocery store, enforceable against the tenant and approved by the City Attorney, shall be submitted prior to issuance of any building permits on the site. (4) The grocery tenant shall occupy and begin operations prior to any office tenant occupancy. (5) The below-market rate housing shall be occupied not later than 120 days after the first occupancy of the office building. No more than 50% of the office space shall be occupied prior to occupancy of the housing. (6) The grocery tenant, if it is a party other than John Garcia (DBA JJ&F), shall be subject to the prior approval of the City of Palo Alto and shall not be withheld unless the City reasonably finds that such proposed grocery tenant is not likely to be comparable in quality of products and service as J J &F as it existed and operated on December 7, 2009. (7) The grocery store space shall remain in continuous operation as a grocery store. "Continuous shall be defined to include brief closure for ordinary business purposes. " (8) No medical office shall be permitted within the development; (9) The office uses within the project shall not exceed 38,980 square feet; (10) The 5, 580 square feet of area designated as "Other Retail" on the development plan shall not be converted to ground floor office space; and (11) The "Other Retail" space may be occupied by retail uses, personal service use, or eating and drinking services only. (12) Use of the outdoor market area as shown on the project plans as being 2,447 square feet shall be limited to an open air market for grocery related uses only. Russ Reich Senior Planner City of Palo Alto Department of Planning and Community Environment Attachment D Attachment E ( c) Benefits. Operator will not be eligible to participate in any Company benefits or vacation, sick leave, medical, dental, vision, disability, 401(k) plan, car allowance and other employee benefits plans of the Company. (d) Forfeiture. Notwithstanding the foregoing, the compensation described in this section 3 shall be forfeited if: during the tenn of this Agreement, Operator is (i) tenninated for Cause in accordance with Section 2(b) above or (ii) arrested and charged with a felony or commits any act of moral turpitude in connection with Operator' perfonnance of duties hereunder. 4. Expenses. Operator shall be entitled to reimbursement for ordinary and customary expenses actually incurred in good faith in connection with the performance of services hereunder, provided that requests for reimbursement are accompanied by reasonable detail and supporting documentation. Notwithstanding the foregoing, the Company shall have no obligation to reimburse aggregate expenses incurred in any calendar month in excess of Five Hundred Dollars ($500.00) unless the Board shall have consented to such excess expenses in advance. 5. Confidentiality. In connection with providing services to the Company, Operator will have access to the Company's confidential information. At all times during the term of this Agreement and thereafter, Operator shall not disclose or use any confidential or proprietary information relating to the Company or its affairs, and shall use its best efforts to ensure its sub-operators do not disclose or use any confidential or proprietary information relating to the Company or its affairs, except for the benefit of the Company. This section S shall survive the termination of this Agreement. 6. Disclosure of Opportunities & Conflicts of Interest. (a) Disclosure of Opportunities. During the term of this Agreement, Operator shall disclose and make available to the Company each and every development opportunity related to and within the scope of the Company's business of which it becomes aware. (b) Conflicts of Interest. During the term of this Agreement, Operator shall not enter into any agreement with any other person or entity nor provide services to any other person or entity that would be in conflict with or give rise to a conflict with the best interests of the Company, as reasonably determined by the Company. 7. Return of Property; Transition. Within five (5) days of termination of this Agreement, Operator shall return to the Company all materials, books, files, manuals, equipment and other property that belongs to the Company, including any items purchased by Operator for which it received reimbursement hereunder. This section 7 shall survive the termination of this Agreement. 8. Non-Solicitation & Non-Interference. During the term of this Agreement and for twenty-four (24) months thereafter, Operator and the Company shall not, directly or indirectly, without the written consent of the other, soJicit for employment, or advise or recommend that another employ or solicit for employment, any person that Operator or the Company, respectively, knows is employed by the other or any affiliate of the other. Further, each of Operator and the Company agree that during the term of this Agreement and thereafter, it shall not take any action that interferes with the business of the other in a way that causes material damage to the other, such as, by way of example: (i) interfering with any ongoing business relationship between the other party and any other person or entity; or (ii) interfering with the other party's ability to receive funds from any person or entity that provides or contemplates providing funds to the other party. The obligations of each party under this section 8 shaJI survive the termination of this Agreement. 9. No Partnership. This Agreement does not constitute a partnership or joint venture between the parties. This Agreement does not constitute any legal association which would impose liability upon one party 313251345.2 2 for the act or failure to act of the other. Neither party wilJ have authority to act, to make any representation, to enter into any contract or commitment or to incur any liability on behalf of the other. 1 O. Indemnity. (a) The Company shall indemnify, defend, save harmless and pay all judgments and claims against Operator, any of its affiliates, and any of its officers, directors or shareholders, from any and all claims, losses, costs, damages, liabilities and expenses (collectively, "claims") of any kind whatsoever, including, without limitation, reasonable attorneys' fees and court costs, incurred in connection with its performance of services as a Operator hereunder, except to the extent any such claim arises out of the negligence or intentional misconduct of Operator or its agents. (b) Operator shall indemnify, defend, save harmless and pay all judgments and claims against the Company, any of its affiliates, and any of its officers, directors or shareholders, from any and all claims of any kind whatsoever, including, without limitation, reasonable attorneys' fees and court costs, except to the extent any such claim arises out of the gross-negligence of or intentional misconduct of the Company or its agents. 11. Arbitration. Except for claims by the Company for injunctive relief under Section 1 O(b) above, any controversy, claim or dispute between Operator, on the one hand, and the Company and its officers, directors, employees and/or agents, on the other hand, in any way arising out of, relating in any way to, or connected with this Agreement, its enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of its provisions, or arising out of, relating in any way to, or connected with your employment or termination of the same, shall be resolved through final and binding arbitration conducted by the Judicial Arbitration and Mediation Service (JAMS) (or their successor, and if no successor, then by the American Arbitration Association (AAA)) before a single arbitrator, in Santa Clara County, California. In the event either party initiates arbitration under this Agreement, the party prevailing shall be entitled, in addition to all other relief, to reasonable attorneys' fees relating to the arbitration. The nonprevailing party shall also be solely responsible for all costs of the arbitration, including but not limited to the arbitration fees, court reporter fees, and any and all other administrative costs of the arbitration, and promptly shall reimburse the prevailing party for any portion of such costs previously paid by the prevailing party. Any dispute as to the reasonableness of costs and expenses shall be determined by the arbitrator. Nothing in this paragraph, however, shall affect the party's ability to seek injunctive or other equitable relief, including but not limited to relief for unauthorized use or disclosure of confidential information. 12. No Tax Advice; Independent Counsel. Operator has not relied upon any representation or statement of the Company or its representatives with regard to the tax consequences of the compensation contemplated hereunder. Operator has been advised to seek and has sought independent counsel in connection with all tax and other legal matters pertaining to this Agreement, or has determined not to seek such counsel, having had adequate opportunity to do so. 13. Prohibition of Assignment. Operator may not assign or delegate any of its rights or obligations hereunder without first obtaining the written consent of the Company. 14. Notices. All notices required or permitted by this Agreement shall be in writing, and shall be served personally or by depositing same in the United States mail, addressed to the party to be notified, by registered or certified mail, with postage prepaid, return receipt requested, or may be transmitted by facsimile or electronic transmission, and addressed to the party to its respective addresses set forth below, or to such other address as shall from time to time be supplied in writing by any party to the other in accordance with the procedures of this section. Notice sent by registered or certified mail, postage paid, with return receipt requested, receipt addressed as above provided, shall be deemed given upon actual. receipt or upon the date such notice is tendered and refused delivery at the address provided for herein or the date of failure of delivery by reason of changed address of which no notice was given. If any notice is transmitted by facsimile or electronic 31325134.5.2 3 transmission, the same shall be deemed served or delivered upon actual receipt. Any notice or other document sent or delivered in any other manner shall be effective only if and when received. Company Address: J & A F amity Markets, Inc. 274 Redwood Shores Parkway, #201 Redwood Shores, CA 94065 Attn: Mr. James Smailey Email: jsmailey@adventerainc.com Operator Address: Uriel Chavez Email: uriel.chavez@gmail.com 15. Entire Agreement; Amendment. This Agreement constitutes the entire agreement between the Company and Operator pertaining to the subject matter hereof and supersedes all prior or contemporaneous written or verbal agreements and understandings with Operator in connection with the subject matter hereof. Any amendment of this Agreement will be effective only to the extent such amendment is in writing and signed by duly authorized representatives of the Company and Operator. 16. Governing Law. This Agreement and the rights and obligations hereunder shaJJ be governed by the laws of the State of California. 17. Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall nevertheless continue in fu.11 force and effect. 18. Waiver. Neither the Company nor Operator shall be deemed to have waived any right under this Agreement unless the waiver is in writing and signed by the waiving party. No delay in exercising any right shall be a waiver, nor shall a waiver on one occasion operate as a waiver of such right on a future occasion. 19. Insurance. No less than thirty (30) days prior to the grocery store/market opening for business, the Company and the Operator shall mutually secure and maintain during the term of this Agreement the insurance specified on Schedule 2 attached hereto and comply with the conditions set forth therein. 20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be considered an original, but all of which together shall constitute one and the same instrument. 21. LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGE IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT (INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, USE, DA TA, OR OTHER ECONOMIC ADV ANT AGE), HOWEVER IT ARISES, WHETHER FOR BREACH OR TERMINATION OF TIIIS AGREEMENT, INCLUDING BREACH OF WARRANTY, OR IN TORT, EVEN IF THAT PARTY HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. IN WlTNESS WHEREOF, the parties have executed this Agreement effective as of the date first set forth above. 313251345.2 The Company J&AF a Califo By: Operator By:~ Name: Uriel Chavez 4 Schedule 1 Scope of Services • Operator wiJJ be responsible and have authority for managing aJI grocery operations including, but not limited to, vendor selection, purchasing, displaying, staffing, purchase and leasing of grocery equipment, including refrigeration, marketing, selling grocery inventories and developing recurring neighborhood and community programs for holidays and for periodic special events. • Operator agrees at all times to ensure that the quality, availability, and/or supply of the products at the grocery store/market are in strict accordance with all applicable Company specifications, which Company has the right to modify, change and update at any time and from time to time following sixty (60) days prior written notice. In the event of any such modification, change or update, Operator agrees to comply with such revised specifications immediately following the 60-day notice period. Operator shall promptly notify the Company if at any time he is unable to provide products that meet specifications provided by the Company. Without limiting any of the foregoing, Operator shall also be responsible for any and all product recalls instituted by any product manufacturers and/or distributors. • Operator, along with industry experts of his choosing, will be responsible for designing the grocery store/market, its refrigeration and display racks and other specialty features for the grocery store/market. • Operator will also manage the financial operations of the grocery store/market and implement POS systems, purchasing, display, staffing, marketing, vendor selection and financial accounting. • Operator will perform his services on all days that the grocery store/market is open for substantially all business functions. Operator will be expected to work at and be physically present at the grocery store/market no less than 40 hours per week unless otherwise agreed upon by the Company. 313251345.2 Schedule 2 Jnsurance Requirements [To be determined 30 days prior to market opening.] 313251345.2 URIEL CHAVEZ OBJECTIVE To be an integral team member where my experience, education, and skills will thrive and continuously improve in an environment that will allow for creative solutions based on innovative ideas and sound managerial practice. SKILLS Proven leadership and management skills in overseeing daily operations of corporate headquarters, three retail businesses, four managers, and 115 employees. Ability to develop and implement daily, monthly, and yearly retail growth forecasts and business plans to meet forecasts. Software: Strong Proficiency in all MS Office Applications- Word, Excel, PowerPoint, and Access. Strong proficiency in retail Point of Sale systems including inventory controls and pricing. Certified Military expert in Spanish- verbal and written. EXPERIENCE 02/12-Current Ferma Corporation Division Manager Responsible for both the Debris Box Division and the Recycling Operations. Oversee all aspects of the two divisions with 21 employees. Ensure divisions meet quarterly revenue goals, DOT regulation compliance, Accounts Receivables, city and state reporting, safety program compliance, and assist sales teams with growing market share on continual basis. 10/09-09/10 MSI dba Hacienda Markets, San Mateo, CA 94401 Chief Financial Officer Established a 3 store distribution and logistics center of grocery, produce, and retail products. Responsible for the control of all internal financial systems and analysis necessary to carry out the company’s business in compliance with governing regulations, weights and measures, sales tax, signage, laws and accounting standards. Coordinated and developed company budgets and department financial analysis designed to increase production, lower inventory and hourly costs, and to meet or exceed quarterly budgeting goals. Prepared financial quarterly and annual summaries to present to Executive Management, financial institutions, and internal shareholders. Additional responsibilities included: providing management and development of staff in the areas of finance, budget, accounting, purchasing, insurance requirements, workers compensation claims, accident prevention programs, POS training for management and front end employees, payroll and management information systems. Continuously improved the budgeting process, improved cash flow projection process, and reporting mechanisms through education of department managers. Maintained professional relationships with vendors, clients, staff, local city and county officials, and community affairs. Led 4 managers and 115 employees. 06/05-10/09 Latino Grocers LLC, dba La Hacienda Market, Sacramento, CA 95820 LLC has adopted new name of LG Pharmacies, LLC dba San Miguel Pharmacy LLC Manager, Owner Responsible for the complete operation of a 24,000 sq.ft. Hispanic grocery store. Established management structure and in house training and promotion program for management positions. Developed Year-round forecasting for procurement and allocation of proper staffing, equipment, POS upgrades, and strategic inventory for specific time of year sales. Negotiate pricing and delivery with outside companies to establish ordering, purchasing, and inventory guidelines to maximize product availability, lower overstocked inventory levels, and lower cost of goods. Established employee standard operating procedures to meet business and government requirements for safety practices, job responsibilities, insurance requirements, workers compensation claims, prevention programs and behavior and conduct policies. Developed a marketing program to increase awareness and sales and increased customers 150%, increased individual Attachment F purchase average 70%, and total sales 200% within 2 years. Maintained accounts payables, payroll, legal documentations, purchasing contracts, insurance requirements, workers compensation claims, and meeting Federal and state deadlines for documentation and tax reporting. Led 2 managers and 22 employees. 02/02-03/05 MSI dba Hacienda Markets, San Mateo, CA 94401 06/02-03/05 Chief Financial Officer Responsible for the control of all internal financial systems and analysis necessary to carry out the company’s business in compliance with governing regulations, laws and accounting standards. Coordinated and developed company budgets and department financial analysis designed to increase production, lower inventory and hourly costs, and to meet or exceed quarterly budgeting goals. Prepared financial quarterly and annual summaries to present to Executive Management, financial institutions, and internal shareholders. Additional responsibilities included: providing management and development of staff in the areas of finance, budget, accounting, purchasing, insurance requirements, workers compensation claims, accident prevention programs, payroll and management information systems. Continuously improved the budgeting process, improved cash flow projection process, and reporting mechanisms through education of department managers. Maintained professional relationships with vendors, clients, staff, local city and county officials, and community affairs. Led 4 managers and 65 employees. 02/02-06/02 Project Manager Identified, defined and expanded the range of products and services offered to consumers. Coordinated and conducted business analysis, facilitating and producing specifications for staff and vendor products services. Evaluating, selecting, and managing implementation of vendor products and services. Expanded media relations and promotions for continued growth and development. Developed, implemented, and maintained Management Training program. 04/99-04/05 US Army Reserve, Military Intelligence, Dublin, CA Imagery Analyst Managed the collection, analysis, and interpretation of geographic information for strategic planning. Researched and prepared maps and other spatial data for legal, political, education, and design purposes. Top Secret SCI Clearance Granted Assistant Security Manager Responsible for the management and maintaining security documents, personnel records, administering security interviews, and ensuring security policies were accurately maintained. 02/00-12/01 United Parcel Service, Operations Management, Menlo Park, CA Lead Supervisor Successfully managed and implemented projects that established standard reporting procedures, which increased efficiency, reduced salary and transportation expenses, and increased on-time departures to 98%. Directed daily operations, managed policies and procedures documentation, oversaw inspections for quality controls, training of new employees, conducted strategic operation information meetings, and supervised air and ground operations for on time departures. Coordinated operational planning and staffing with logistics, human resources, and corporate headquarters for optimum effectiveness. EDUCATION Menlo College, Atherton, CA Bachelor of Science in International Business Management US Army Intelligence School, Certified as an Imagery Analyst (96D-10), Fort Huachuca, AZ Attachment G City Council Members cl o Planning DireCtor Hillary Oitelman 250 Hamilton Ave., 5th floor Palo Alto, CA 94301 November 9, 2014 .,. Page2 success and, to work expeditiously to replaceithe ~naI).cy should College Terrace Market cease business operations. ' .· . . I We appreciate your consideration of this proposal and look forward to your acceptance of same. Sincerely, ~J{)~ . Jqseph ~s~~ger ' Trustee of the Clara E. Chilcote Trust eel/Michael C. Polentz (via email) _.....,......·-- City of Palo Alto (ID # 5315) City Council Staff Report Report Type: Action Items Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: City Hall Remodel Review Title: Review of City Hall Remodel Project (Continued From November 10, 2014) From: City Manager Lead Department: City Manager At the August 4, 2014 Council meeting, several Council Members asked to add a review of the City Hall remodel project as a follow-up to previous Council action. On June 16, 2014 Council approved the construction contract and Budget Amendment Ordinance to continue work on the City Hall remodel project. Attached is the June 16, 2014 staff report (Attachment A). This item was on the Council Agenda in October and rescheduled by Council and placed on the November 10, 2014 Council agenda. At that meeting, this item was rescheduled until November 17. Staff will be prepared to make a presentation and update Council on the project’s progress and answer any questions. Attachments:  Attachment A - Staff Report 4754 (PDF)  Attachment B - Doc Letters 11-17-14 City Hall Remodel (PDF) City of Palo Alto (ID # 4754) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/16/2014 City of Palo Alto Page 1 Summary Title: City Hall Remodel Contract Title: Approval of a Construction Contract with D.L. Falk Construction, Inc. in the Amount of $2,718,350, Approval of Amendment Number 2 to Contract No. C12144101 with WMB Architects, Inc. in the Amount of $141,565 for a Not-to-Exceed Amount of $426,256 for the City Hall Remodel Project PE- 12017, and Adoption of a Budget Amendment Ordinance for Fiscal Year 2014 to Provide an Additional Appropriation in the Amount of $1,607,109 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1.Approve and authorize the City Manager or his designee to execute the attached contract with D.L. Falk Construction, Inc.in the amount of $2,718,350 (Attachment A) for the City Hall Remodel Capital Improvement Program Project PE-12017; 2.Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with D.L. Falk Construction, Inc.for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed a ten percent contingency of $271,835; 3.Approve and authorize the City Manager or his designee to execute the attached amendment to Contract C12144101 with WMB Architects, Inc. (Attachment B) in the amount of $141,565 for construction administration services for the City Hall Remodel Project (Capital Improvement Program Project PE-12017), adding $128,695 to basic services and adding $12,870 City of Palo Alto Page 2 for additional services for a total contract amount not-to-exceed $426,256; and 4.Approve the attached Budget Amendment Ordinance (BAO) in the amount of $1,607,109 (Attachment C) for construction to selected areas on the first floor, mezzanine, and second floor of City Hall. Background Palo Alto City Hall opened 44 years ago in 1970. Although the building has recently undergone a thorough mechanical, electrical, and exterior refurbishment under the Civic Center Infrastructure Upgrade Project (PF-01002), some of the interior areas remain functionally inadequate and aesthetically dated. Specifically, there are several public meeting and gathering areas that hinder effective interaction between the community and city staff and Council due to small seating capability and technical limitations. In particular, the Council Conference Room has a limited seating capacity, has outdated architectural treatments and furnishings, and lacks modern amenities such as flexible seating, efficient lighting,and technological resources for audio-visual presentations. Staff has identified the need for additional building elements similar to the Council Conference Room for the first floor of City Hall, and included them in the scope of this comprehensive project. These include a more welcoming and accommodating lobby area; a new community conference room with a capacity to seat 55 to better serve larger Council Committee and Commission meetings, and several areas for efficient use of space for enhanced customer services for residents. Additionally, the elevator cabs have worn-out wall and floor finishes, harsh lighting, and inadequate building information and directional signage. There is also a significant need to improve the signage and other wayfinding information at the various building entrances and on the first floor of City Hall in order to assist members of the public with finding the staff members and services that can meet their needs. During the project design, the goal of the first floor renovation was broadened in scope to achieve a more open atmosphere to encourage public participation and community access to City Hall. The final plan also includes moving the Utilities City of Palo Alto Page 3 Department’s customer service counter from the second floor to the lobby area to be located near the Revenue Collections customer service counter.The People Strategy & Operations conference room behind the Council Chambers would then become a new,larger conference room that could also be used for Council and staff sessions and the current (very inadequate) Council Conference Room would be transformed into a staff training and multi-use room. To relocate People Strategy & Operations (PSO)out of the lobby level, a number of other staff reconfigurations and relocations are necessary. PSO would be consolidated on the mezzanine level by relocating the Information Technology (IT) Department staff currently using the space. The IT Department will be consolidated on the second floor using more densely configured desks in an open floor plan similar to what many high tech firms use. They will also expand into the portion of the second floor vacated by the Utilities Department’s customer service counter staff that will move to the first floor. The plan accomplishes the goal of consolidating customer service functions on the first floor and providing improved public spaces to promote public involvement. In addition, PSO and IT staff are currently split between different floors. Following construction,they will each be located together on their respective floors, improving employee interaction and increasing efficiency. Additional aspects of the project include reconfiguration of the existing restrooms serving the Council to conform to Americans with Disabilities Act (ADA) accessibility requirements. The kitchenette serving evening Council meetings will also be relocated. Since the project will include extensive carpeting on much of the first floor, mezzanine and second floor, staff combined the new carpeting and the reupholstery of the seating for the Council Chambers. Council Chamber carpeting is funded through CIP PF-11001. Open government and technology are the key principles for this project. The new community conference room and renovated public spaces have been designed for better interaction and public engagement. The rooms will be equipped with broadcast media capabilities, including multiple LCD screens, High Definition cameras, and wall-mounted speakers. Flexibility is also a key theme of the design. The rooms will allow multiple table and chair configurations. Most importantly, for very large events, the proposed glass partition separating the lobby from the City of Palo Alto Page 4 new community conference room can be opened and folded away to allow even greater space flexibility. The project will also coordinate with a new interactive digital media public art element to be installed on the main lobby wall facing the main building entry doors. An open call to new media artists was recently conducted by the Community Services Department (CSD). Their call for artists resulted in 104 responses that were narrowed to 29 by a selection panel that included staff and Public Art Commissioners. Further selection panels brought the field down to 5, then to 3, and now a final artist selection is nearly complete. CSD will bring the artist’s contract and full details of the proposed digital art piece for Council approval in late summer. A portion of the funding for the artist is included in the attached Budget Amendment Ordinance. Wayfinding and building signage aspects of the overall project are also still in final design stages. Exterior signage is expected to be reviewed by the Architectural Review Board (ARB) this summer. Following ARB approval, an invitation for bids (IFB) will be issued to procure the services of a specialty signage fabrication and installation contractor. Discussion Scope Overview The scope of work for the attached construction contract includes: 1)Main Lobby remodel including coordination with an interactive digital media public art element; 2)Enhance the lobby area heating, ventilation, and air conditioning (HVAC) system in order to handle the increased loads from the new community meeting room and the new digital art installation; 3)Restore the terrazzo floor of the main lobby; 4)Convert existing PSO conference room into a new Council Conference Room; 5)Convert existing Council Conference Room into a new Training and Multi- purpose Meeting Room for staff and the public; 6)Create a new Community Meeting Room beside the Main Lobby; 7)Install broadcast media capabilities for all the new lobby-level meeting spaces, including multiple LCD screens, High Definition cameras, and wall- mounted speakers; City of Palo Alto Page 5 8)Modify the lobby payment counter to match the new architectural style of the lobby and provide a lower ledge for writing checks and signing forms; 9)Convert the Revenue Services offices into new Utilities Customer Service counter and offices; 10)Reconfigure and renovate mezzanine level offices (PSO and Purchasing); 11)Reconfigure and renovate second floor offices (IT and Utilities); 12)New carpeting and new bench upholstery for Council Chambers; and 13)Remodel the three (3)building elevator cabs. The building will remain occupied during the course of the project. Work will be scheduled to keep systems operational during working hours and to minimize the impacts of construction on staff and the public. There may be some temporary relocation of department staff to accommodate construction. The entire PSO Department will temporarily relocate to Cubberley Community Center Room H-5 for the duration of the project. This move will provide space in the building for other temporary office relocations that are necessary for construction. Bid Process Notices inviting formal bids for the City Hall Remodel Project were posted at City Hall and sent to 32 contractors on April 18, 2014. The bidding period was 19 days. Bids were received from one qualified contractor on May 6, 2014. Summary of Bid Process Bid Name/Number City Hall Remodel Project –IFB 153838 Proposed Length of Project 225 calendar days Number of Bid Packages Mailed to Contractors 32 Number of Builder’s Exchanges receiving Bid Packages 0 Total Days to Respond to Bid 19 Pre-Bid Meeting April 23, 2014 Number of Company Attendees at Pre-Bid Meeting 10 firms attended of which 5 were General Contractors and 5 were Subcontractors Number of Bids Received: 1 Base Bid Price Range $2,664,000 City of Palo Alto Page 6 *The submitted bid form from D.L. Falk is provided as Attachment D. Staff reviewed the bid submitted and recommends that D.L. Falk Construction be declared the lowest responsible bidder. Staff recommends that the City award the Base Bid ($2,664,000) plus Add Alternates 1 through 6 ($54,350)for a total contract award amount of $2,718,350. The base bid is approximately 19% above the construction cost estimate for the scope of work included. Staff believes that the busy local construction industry has resulted in higher prices and the higher bid is still reasonable for the complex nature of this project. Staff also inquired as to why other contractors did not submit bids. Smaller firms indicated that bonds for projects over $1.5 million are difficult to obtain. One firm that worked on City Hall previously indicated they no longer bid on public projects. Another unionized firm indicated they did not think they could prepare a competitive bid for a non-prevailing wage project. Others said the project did not fit their schedule. A contingency amount of $271,835 equal to 10 percent of the total contract is requested for unforeseen conditions which may be discovered during construction. With renovation of an existing facility, there is a high likelihood of additional required repairs or system replacement triggered by the base construction. In addition, due to the time constraints placed upon the contractors to complete their work during off hours, the majority of change orders will be billed at a premium rate for night or weekend work. Staff confirmed with the Contractor’s State License Board that the contractor has an active license on file. Staff checked references supplied by the contractor for previous work performed and found that their projects were similar to this project and were completed to the satisfaction of the owners. WMB Contract –Construction Administration The contract amendment with the design architect, WMB Architects (Attachment B) will provide for the architect’s general construction administration oversight during project work. As the designer of record, WMB Architects will respond to design questions and issues raised by the contractor, attend meetings at the job site,make construction observations, review material submittals, and assist in the preparation of the record documents at the completion of City of Palo Alto Page 7 construction. The contract also includes work related to wayfinding signage design for the exterior and interior areas of the City Hall complex. The signage fabrication and installation will be let as a separate invitation for bid (IFB) to be awarded to a specialty contractor in late summer or early fall. Timeline The construction of the architectural upgrades to City Hall are to be completed in four phases. The first phase encompases the majority of the work for the first floor and the duration is anticipated to be ninety days. The subsequent three remaining phases at forty-five days each will be used for work on the mezzanine level and second floors. Note that some construction in the first floor lobby may be delayed towards the end of the project to keep the current Council Conference Room available for meetings during Phase 1 and to allow for construction to include a new public art display on the large lobby wall near the main building entrance. Resource Impact Funding for this project has been allocated in several capital projects, including: City Hall First Floor Renovations (PE-12017), Facility Interior Finishes Replacement (PF-02022), and Council Chambers Carpet (PF-11001). Remaining funding from the Civic Center Infrastructure Upgrade project (PF-01002) will also be used for the project. All of these projects are budgeted in the Capital Improvement Fund, which receives the majority of its funding from the annual General Fund transfer. As referenced earlier in the staff report, the bids for the project came in higher than previously estimated as a result of the local construction environment, the public art element, and changes in scope. In order to complete the project, a Budget Amendment Ordinance (BAO) is required. The Budget Amendment Ordinance recommended as part of this report would increase the City Hall First Floor Renovations project by $1,607,109. This increase would allow for the construction contract, contingency, design fees, wayfinding systems construction, furniture, temporary office space, permit fees, architectural construction administration, and a portion of the public art costs. Offsetting the increased costs would be transfers from various funding sources, resulting in no reduction to the Infrastructure Reserve. The transfers from other funding sources, which will recover each fund’s respective fair share of the costs, will enable a return of City of Palo Alto Page 8 funds to the Infrastructure Reserve upon completion of the project. In determining the amounts and funding sources for the BAO, staff carefully reviewed the bid and the work units benefitting from the work. A concerted effort has been made to align the cost of the project to the benefitting department/fund. For example, the cost of renovating the space to meet the functional requirements of the Utilities Department will be charged to the Utility Funds. Similarly, the cost of improving the Information Technology Department’s space will be charged to the Technology Fund, while the cost of improving the Administrative Services and People Strategies and Operations Departments will be charged to the Capital Improvement Fund. Much of the work involves improvements to common areas. The common area costs can be divided into two categories: the first floor community room and improvements to the rest of the facility that do not primarily benefit one exclusive department. As part of the BAO, the cost of the new community room is recommended to be charged to the Community Center Development Impact Fee Fund. The remaining common areas are charged to the Capital Improvement Fund, with the City’s various Enterprise Funds paying a share proportionate to their anticipated utilization of space in City Hall. It should be noted that after accounting for the transfers from the various Utility Funds, Technology Fund, and the Community Center Development Impact Fee Fund, some portion of the funding in the Capital Improvement Fund is expected to be returned to the Infrastructure Reserve. A summary of the funding sources, as well as anticipated uses, is included in the table on the following page. Summary of Project Funding Existing Funding Source (from Capital Improvement Fund) Amount allocated City Hall First Floor Renovations (PE-12017)$2,183,733 Facility Interior Finishes Replacement (PF-02022)$380,000 Council Chambers Carpet (PF-11001)$80,000 Civic Center Infrastructure Upgrade (PF-01002)$61,643 Total Current Funding $2,705,376 City of Palo Alto Page 9 Funding Source (BAO)Amount allocated Transfer from Community Center Development Impact Fee Fund $686,298 Transfer from Electric Fund $133,687 Transfer from Gas Fund $133,687 Transfer from Wastewater Collection Fund $133,687 Transfer from Water Fund $133,687 Transfer from Fiber Optics Fund $133,687 Transfer from Technology Fund $499,335 Total New Funding $1,854,068 Total Project Funding $4,559,444 Summary of Project Expenditures Construction Contract $2,718,350 Contract Contingency (10%)$271,835 Design Fees $278,285 Architectural Construction Administration $141,565 Public Art $150,000 Furniture $300,000 Wayfinding Systems Construction $307,450 Other $145,000 Total Project Expenditures $4,312,485 Anticipated Return to Infrastructure Reserve $246,959 Policy Implications This recommendation does not represent any change to existing City policies. Environmental Review This project is categorically exempt from California Environmental Quality Act (CEQA) under Sections 15301 and 15302 of the CEQA guidelines as an alteration to an existing facility and no further environmental review is necessary. Attachments: ·A -D.L. Falk Construction Contract (PDF) City of Palo Alto Page 10 ·B -WMB Architects Contract Amendment No. 2 (PDF) ·C -BAO -City Hall Remodel (DOC) ·D -D.L. Falk Bid Form (PDF)     Invitation for Bid (IFB) Package  1 Rev. January 2014  CONSTRUCTION CONTRACT                      CONSTRUCTION CONTRACT    Contract No. C14153838        City of Palo Alto    And    D.L. Falk Construction, Inc.    PROJECT  City Hall Remodel Project         Invitation for Bid (IFB) Package  2 Rev. January 2014  CONSTRUCTION CONTRACT    CONSTRUCTION CONTRACT  TABLE OF CONTENTS    SECTION 1  INCORPORATION OF RECITALS AND DEFINITIONS. ......................................................... 5  1.1 Recitals. ................................................................................................................................................... 5  1.2 Definitions. ............................................................................................................................................ 5  SECTION 2  THE PROJECT. .................................................................................................................... 5  SECTION 3  THE CONTRACT DOCUMENTS. ......................................................................................... 6  SECTION 4  CONTRACTOR’S DUTY. ...................................................................................................... 7  SECTION 5  PROJECT TEAM. ................................................................................................................. 7  6.1 Time Is of Essence. .............................................................................................................................. 7  6.2 Commencement of Work. ................................................................................................................ 7  6.3 Contract Time. ...................................................................................................................................... 7  6.4 Liquidated Damages. .......................................................................................................................... 8  6.4.1       Other Remedies. ....................................................................................................... 8    6.5 Adjustments to Contract Time. ....................................................................................................... 8  SECTION 7  COMPENSATION TO CONTRACTOR. ................................................................................ 8  7.1 Contract Sum. ....................................................................................................................................... 8  7.2 Full Compensation. ............................................................................................................................. 8  SECTION 8  STANDARD OF CARE. ........................................................................................................ 9  SECTION 9  INDEMNIFICATION. ........................................................................................................... 9  9.1 Hold Harmless. ..................................................................................................................................... 9  9.2 Survival. .................................................................................................................................................. 9  SECTION 10  NONDISCRIMINATION. ................................................................................................... 9  SECTION 11  INSURANCE AND BONDS. ............................................................................................... 9  SECTION 12  PROHIBITION AGAINST TRANSFERS............................................................................... 10  SECTION 13 NOTICES ……………………………………………………………………………………………………………………. 10  13.1 Method of Notice ………………………………………………………………………………………………………………10  13.2 Notice Recipents ……………………………………………………………………………………………………………….10  13.3 Change of Address. ........................................................................................................................... 11  SECTION 14  DEFAULT. ......................................................................................................................... 11      Invitation for Bid (IFB) Package  3 Rev. January 2014  CONSTRUCTION CONTRACT    14.1 Notice of Default. .............................................................................................................................. 11  14.2 Opportunity to Cure Default. ........................................................................................................ 11  SECTION 15  CITY'S RIGHTS AND REMEDIES. ...................................................................................... 12  15.1 Remedies Upon Default. ................................................................................................................. 12  15.1.1   Delete Certain Services. .......................................................................................... 12  15.1.2   Perform and Withhold. ........................................................................................... 12  15.1.3   Suspend The Construction Contract. .................................................................... 12  15.1.5   Invoke the Performance Bond. .............................................................................. 12  15.1.6   Additional Provisions. ............................................................................................. 12    15.2 Delays by Sureties. ............................................................................................................................ 12  15.3 Damages to City. ................................................................................................................................ 13  15.3.1   For Contractor's Default. ........................................................................................ 13  15.3.2   Compensation for Losses. ...................................................................................... 13    15.4 Suspension by City ............................................................................................................................ 13   15.4.1  Suspension for Convenience. .......................................................................................... 13  15.5 Termination Without Cause. ......................................................................................................... 14  15.5.1   Compensation. ......................................................................................................... 14  15.5.2   Subcontractors. ........................................................................................................ 14  15.6 Contractor’s Duties Upon Termination. ..................................................................................... 14  SECTION 16  CONTRACTOR'S RIGHTS AND REMEDIES. ...................................................................... 15  16.1 Contractor’s Remedies. ................................................................................................................... 15  16.1.1   For Work Stoppage. ................................................................................................. 15  16.1.2   For City's Non‐Payment. ......................................................................................... 15    16.2 Damages to Contractor. .................................................................................................................. 15  SECTION 17  ACCOUNTING RECORDS. ................................................................................................ 15  17.1 Financial Management and City Access. ................................................................................... 15  17.2 Compliance with City Requests. ................................................................................................... 16  SECTION 18  INDEPENDENT PARTIES. ................................................................................................. 16  SECTION 19  NUISANCE. ...................................................................................................................... 16  SECTION 20  PERMITS AND LICENSES. ................................................................................................ 16  SECTION 21  WAIVER. .......................................................................................................................... 16  SECTION 22  GOVERNING LAW AND VENUE. ...................................................................................... 16      Invitation for Bid (IFB) Package  4 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 23  COMPLETE AGREEMENT. ................................................................................................ 17  SECTION 24  SURVIVAL OF CONTRACT. ............................................................................................... 17  SECTION 25  PREVAILING WAGES. ...................................................................................................... 17  SECTION 26  NON APPROPRIATION. ................................................................................................... 17  SECTION 27  AUTHORITY. .................................................................................................................... 17  SECTION 28  COUNTERPARTS .............................................................................................................. 18  SECTION 29  SEVERABILITY. ................................................................................................................. 18  SECTION 30  STATUTORY AND REGULATORY REFERENCES . ............................................................. 18  SECTION 31 WORKERS’ COMPENSATION CERTIFICATION. ................................................................ 18                     Invitation for Bid (IFB) Package  5 Rev. January 2014  CONSTRUCTION CONTRACT    CONSTRUCTION CONTRACT    THIS CONSTRUCTION CONTRACT entered into on June 5, 2014 (“Execution Date”) by and between the CITY  OF PALO ALTO, a California chartered municipal corporation ("City"), and D.L. Falk Construction, Inc.  ("Contractor"), is made with reference to the following:    R E C I T A L S:    A. City is a municipal corporation duly organized and validly existing under the laws of the State of  California with the power to carry on its business as it is now being conducted under the statutes of the  State of California and the Charter of City.    B. Contractor is a California Corporation duly organized and in good standing in the State of  California, Contractor’s License Number 683837. Contractor represents that it is duly licensed by the State  of California and has the background, knowledge, experience and expertise to perform the obligations set  forth in this Construction Contract.    C. On April 18, 2014, City issued an Invitation for Bids (IFB) to contractors for the City Hall Remodel  Project (“Project”).  In response to the IFB, Contractor submitted a Bid.    D. City and Contractor desire to enter into this Construction Contract for the Project, and other  services as identified in the Contract Documents for the Project upon the following terms and conditions.    NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth  and for other good and valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, it is mutually agreed by and between the undersigned parties as follows:    SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS.    1.1 Recitals.    All of the recitals are incorporated herein by reference.    1.2 Definitions.    Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the  General Conditions.  If there is a conflict between the definitions in this Construction Contract and  in the General Conditions, the definitions in this Construction Contract shall prevail.  SECTION 2 THE PROJECT.    The Project is the City Hall Remodel Project, located at 250 Hamilton Avenue, Palo Alto, CA. 94301  ("Project").        Invitation for Bid (IFB) Package  6 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 3 THE CONTRACT DOCUMENTS.    3.1  List of Documents.  The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist  of the following documents which are on file with the Purchasing Division and are hereby incorporated by  reference.       1) Change Orders    2) Field Orders    3) Contract    4) Bidding Addenda    5) Special Provisions    6) General Conditions    7)    Project Plans and Drawings    8)    Technical Specifications    9) Instructions to Bidders    10) Invitation for Bids    11) Contractor's Bid/Non‐Collusion Affidavit    12)   Reports listed in the Contract Documents    13)   Public Works Department’s Standard Drawings and Specifications (most current version at  time of Bid)    14) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current  version at time of Bid)    15)  City of Palo Alto Traffic Control Requirements    16)  City of Palo Alto Truck Route Map and Regulations    17) Notice Inviting Pre‐Qualification Statements, Pre‐Qualification Statement, and Pre‐ Qualification Checklist (if applicable)    18) Performance and Payment Bonds    3.2  Order of Precedence.    For the purposes of construing, interpreting and resolving inconsistencies between and among the  provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the  preceding section.  If a claimed inconsistency cannot be resolved through the order of precedence, the City      Invitation for Bid (IFB) Package  7 Rev. January 2014  CONSTRUCTION CONTRACT    shall have the sole power to decide which document or provision shall govern as may be in the best  interests of the City.  SECTION 4 CONTRACTOR’S DUTY.    Contractor agrees to perform all of the Work required for the Project, as specified in the Contract  Documents, all of which are fully incorporated herein.  Contractor shall provide, furnish, and supply all  things necessary and incidental  for the timely performance and completion of the Work, including, but not  limited to, provision of all necessary labor, materials, equipment, transportation, and utilities, unless  otherwise specified in the Contract Documents.  Contractor also agrees to use its best efforts to complete  the Work in a professional and expeditious manner and to meet or exceed the performance standards  required by the Contract Documents.  SECTION 5 PROJECT TEAM.    In addition to Contractor, City has retained, or may retain, consultants and contractors to provide  professional and technical consultation for the design and construction of the Project.  The Contract  requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other  members of the Project Team and other contractors retained by City to construct other portions of the  Project.    SECTION 6 TIME OF COMPLETION.    6.1 Time Is of Essence.    Time is of the essence with respect to all time limits set forth in the Contract Documents.    6.2 Commencement of Work.    Contractor shall commence the Work on the date specified in City’s Notice to Proceed.       6.3 Contract Time.    Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be  completed    not later than      .   within 225  calendar days () after the commencement date specified in City’s Notice to  Proceed.    By executing this Construction Contract, Contractor expressly waives any claim for delayed early  completion.      Invitation for Bid (IFB) Package  8 Rev. January 2014  CONSTRUCTION CONTRACT    6.4 Liquidated Damages.  Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial  Completion of the entire Work within the Contract Time, including any approved extensions  thereto, City may assess liquidated damages on a daily basis for each day of Unexcused Delay in  achieving Substantial Completion, based on the amount of Five Hundred dollars ($500.00) per  day, or as otherwise specified in the Special Provisions. Liquidated damages may also be  separately assessed for failure to meet milestones specified elsewhere in the Contract  Documents, regardless of impact on the time for achieving Substantial Completion.  The  assessment of liquidated damages is not a penalty but considered to be a reasonable estimate of  the amount of damages City will suffer by delay in completion of the Work.  The City is entitled to  setoff the amount of liquidated damages assessed against any payments otherwise due to  Contractor, including, but not limited to, setoff against release of retention.  If the total amount of  liquidated damages assessed exceeds the amount of unreleased retention, City is entitled to  recover the balance from Contractor or its sureties.  Occupancy or use of the Project in whole or in  part prior to Substantial Completion, shall not operate as a waiver of City’s right to assess  liquidated damages.    6.4.1 Other Remedies.    City is entitled to any and all available legal and equitable remedies City may have where City’s  Losses are caused by any reason other than Contractor’s failure to achieve Substantial Completion  of the entire Work within the Contract Time.    6.5 Adjustments to Contract Time.    The Contract Time may only be adjusted for time extensions approved by City and memorialized  in a Change Order approved in accordance with the requirements of the Contract Documents.  SECTION 7 COMPENSATION TO CONTRACTOR.     7.1 Contract Sum.    Contractor shall be compensated for satisfactory completion of the Work in compliance with the  Contract Documents the Contract Sum of two million seven hundred eighteen three hundred fifty  Dollars ($2,718,350).      [This amount includes the Base Bid of $2,664,000 and Additive Alternates 1 for  $7,800, Additive Alternate 2 for $13,400, Additive Alternate 3 for $5,050,  Additive Alternate 4 for $3,000, Additive Alternate 5 for $17,200, and Additive  Alternate 6 for $7,900.]    7.2 Full Compensation.    The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor  and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all  Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties  or obstructions which may arise or be encountered in performance of the Work until its Acceptance by  City, all risks connected with the Work, and any and all expenses incurred due to suspension or  discontinuance of the Work, except as expressly provided herein.  The Contract Sum may only be adjusted  for Change Orders approved in accordance with the requirements of the Contract Documents.           Invitation for Bid (IFB) Package  9 Rev. January 2014  CONSTRUCTION CONTRACT      SECTION 8 STANDARD OF CARE.    Contractor agrees that the Work shall be performed by qualified, experienced and well‐supervised  personnel.  All services performed in connection with this Construction Contract shall be performed in a  manner consistent with the standard of care under California law applicable to those who specialize in  providing such services for projects of the type, scope and complexity of the Project.     SECTION 9 INDEMNIFICATION.    9.1 Hold Harmless.    To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its  City Council, boards and commissions, officers, agents, employees, representatives and volunteers  (hereinafter individually referred to as an “Indemnitee” and collectively referred to as  "Indemnitees"), through legal counsel acceptable to City, from and against any and liability, loss,  damage, claims, expenses (including, without limitation, attorney fees, expert witness fees,  paralegal fees, and fees and costs of litigation or arbitration) (collectively, “Liability”) of every  nature arising out of or in connection with the acts or omissions of Contractor, its employees,  Subcontractors, representatives, or agents, in performing the Work or its failure to comply with  any of its obligations under the Contract, except such Liability caused by the active negligence,  sole negligence, or willful misconduct of an Indemnitee.  Contractor shall pay City for any costs  City incurs to enforce this provision.  Except as provided in Section 9.2 below, nothing in the  Contract Documents shall be construed to give rise to any implied right of indemnity in favor of  Contractor against City or any other Indemnitee.    Pursuant to Public Contract Code Section 9201, City shall timely notify Contractor upon receipt of  any third‐party claim relating to the Contract.    9.2 Survival.    The provisions of Section 9 shall survive the termination of this Construction Contract.    SECTION 10 NONDISCRIMINATION.    As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of  this Agreement, it shall not discriminate in the employment of any person because of the race, skin color,  gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,  familial status, weight or height of such person. Contractor acknowledges that it has read and understands  the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination  Requirements and the penalties for violation thereof, and will comply with all requirements of Section  2.30.510 pertaining to nondiscrimination in employment.    SECTION 11 INSURANCE AND BONDS.    Within ten (10) business days following issuance of the Notice of Award, Contractor shall provide City with  evidence that it has obtained insurance and shall submit Performance and Payment Bonds satisfying all  requirements in Article 11 of the General Conditions.          Invitation for Bid (IFB) Package  10 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 12 PROHIBITION AGAINST TRANSFERS.    City is entering into this Construction Contract in reliance upon the stated experience and qualifications of  the Contractor and its Subcontractors set forth in Contractor’s Bid.  Accordingly, Contractor shall not  assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by  operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or  transfer without said consent shall be null and void, and shall be deemed a substantial breach of contract  and grounds for default in addition to any other legal or equitable remedy available to the City.    The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of  Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor  is a partnership or joint venture or syndicate or co‐tenancy shall result in changing the control of  Contractor, shall be construed as an assignment of this Construction Contract. Control means more than  fifty percent (50%) of the voting power of the corporation or other entity.     SECTION 13 NOTICES.    13.1 Method of Notice.    All notices, demands, requests or approvals to be given under this Construction Contract shall be given in  writing and shall be deemed served on the earlier of the following:  (i) On the date delivered if delivered personally;  (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and   addressed as hereinafter provided;   (iii) On the date sent if sent by facsimile transmission;   (iv) On the date sent if delivered by electronic mail; or   (v) On the date it is accepted or rejected if sent by certified mail.     13.2 Notice Recipients.     All notices, demands or requests (including, without limitation, Change Order Requests and  Claims) from Contractor to City shall include the Project name and the number of this  Construction Contract and shall be addressed to City at:      To City:  City of Palo Alto     City Clerk     250 Hamilton Avenue     P.O. Box 10250     Palo Alto, CA 94303     Copy to:   City of Palo Alto     Public Works Administration     250 Hamilton Avenue     Palo Alto, CA 94301     Attn: Matt Raschke        AND    [Include Construction Manager, If Applicable.]       City of Palo Alto     Utilities Engineering     250 Hamilton Avenue      Invitation for Bid (IFB) Package  11 Rev. January 2014  CONSTRUCTION CONTRACT       Palo Alto, CA 94301     Attn:             In addition, copies of all Claims by Contractor under this Construction Contract shall be provided  to the following:    Palo Alto City Attorney’s Office  250 Hamilton Avenue  P.O. Box 10250  Palo Alto, California 94303       All Claims shall be delivered personally or sent by certified mail.    All notices, demands, requests or approvals from City to Contractor shall be addressed to:    D.L. Falk Construction, Inc.  3526 Investment Blvd.  Hayward, CA 94545  Attn: David L. Falk      13.3 Change of Address.    In advance of any change of address, Contractor shall notify City of the change of address in  writing.  Each party may, by written notice only, add, delete or replace any individuals to whom  and addresses to which notice shall be provided.    SECTION 14 DEFAULT.    14.1 Notice of Default.    In the event that City determines, in its sole discretion, that Contractor has failed or refused to  perform any of the obligations set forth in the Contract Documents, or is in breach of any  provision of the Contract Documents, City may give written notice of default to Contractor in the  manner specified for the giving of notices in the Construction Contract, with a copy to  Contractor’s performance bond surety.    14.2 Opportunity to Cure Default.  Except for emergencies, Contractor shall cure any default in performance of its obligations under  the Contract Documents within two (2) Days (or such shorter time as City may reasonably require)  after receipt of written notice. However, if the breach cannot be reasonably cured within such  time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as  City may reasonably require) and will diligently and continuously prosecute such cure to  completion within a reasonable time, which shall in no event be later than ten (10) Days after  receipt of such written notice.        Invitation for Bid (IFB) Package  12 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 15 CITY'S RIGHTS AND REMEDIES.    15.1 Remedies Upon Default.    If Contractor fails to cure any default of this Construction Contract within the time period set forth  above in Section 14, then City may pursue any remedies available under law or equity, including,  without limitation, the following:    15.1.1 Delete Certain Services.    City may, without terminating the Construction Contract, delete certain portions of the Work,  reserving to itself all rights to Losses related thereto.    15.1.2 Perform and Withhold.    City may, without terminating the Construction Contract, engage others to perform the Work or  portion of the Work that has not been adequately performed by Contractor and withhold the cost  thereof to City from future payments to Contractor, reserving to itself all rights to Losses related  thereto.    15.1.3 Suspend The Construction Contract.    City may, without terminating the Construction Contract and reserving to itself all rights to Losses  related thereto, suspend all or any portion of this Construction Contract for as long a period of  time as City determines, in its sole discretion, appropriate, in which event City shall have no  obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor  for damages if City directs Contractor to resume Work.    15.1.4 Terminate the Construction Contract for Default.    City shall have the right to terminate this Construction Contract, in whole or in part, upon the  failure of Contractor to promptly cure any default as required by Section 14.  City’s election to  terminate the Construction Contract for default shall be communicated by giving Contractor a  written notice of termination in the manner specified for the giving of notices in the Construction  Contract.  Any notice of termination given to Contractor by City shall be effective immediately,  unless otherwise provided therein.    15.1.5 Invoke the Performance Bond.    City may, with or without terminating the Construction Contract and reserving to itself all rights to  Losses related thereto, exercise its rights under the Performance Bond.    15.1.6 Additional Provisions.    All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in  addition to those rights and remedies available in law or in equity.  Designation in the Contract  Documents of certain breaches as material shall not waive the City’s authority to designate other  breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the  City from terminating the Agreement for breaches that are not material.  City’s determination of  whether there has been noncompliance with the Construction Contract so as to warrant exercise  by City of its rights and remedies for default under the Construction Contract, shall be binding on  all parties.  No termination or action taken by City after such termination shall prejudice any other  rights or remedies of City provided by law or equity or by the Contract Documents upon such  termination; and City may proceed against Contractor to recover all liquidated damages and  Losses suffered by City.    15.2 Delays by Sureties.          Invitation for Bid (IFB) Package  13 Rev. January 2014  CONSTRUCTION CONTRACT    Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange  for completion of the Work in accordance with the Performance Bond, within seven (7) calendar  days from the date of the notice of termination, Contractor’s surety shall be deemed to have  waived its right to complete the Work under the Contract, and City may immediately make  arrangements for the completion of the Work through use of its own forces, by hiring a  replacement contractor, or by any other means that City determines advisable under the  circumstances.  Contractor and its surety shall be jointly and severally liable for any additional cost  incurred by City to complete the Work following termination.  In addition, City shall have the right  to use any materials, supplies, and equipment belonging to Contractor and located at the  Worksite for the purposes of completing the remaining Work.    15.3 Damages to City.    15.3.1 For Contractor's Default.    City will be entitled to recovery of all Losses under law or equity in the event of Contractor’s  default under the Contract Documents.     15.3.2 Compensation for Losses.   In the event that City's Losses arise from Contractor’s default under the Contract Documents, City  shall be entitled to deduct the cost of such Losses from monies otherwise payable to Contractor.   If the Losses incurred by City exceed the amount payable, Contractor shall be liable to City for the  difference and shall promptly remit same to City.    15.4 Suspension by City      15.4.1 Suspension for Convenience.    City may, at any time and from time to time, without cause, order Contractor, in writing, to  suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an  aggregate of fifty percent (50%) of the Contract Time.  The order shall be specifically identified as  a Suspension Order by City.  Upon receipt of a Suspension Order, Contractor shall, at City’s  expense, comply with the order and take all reasonable steps to minimize costs allocable to the  Work covered by the Suspension Order.  During the Suspension or extension of the Suspension, if  any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered  by the Suspension Order.  If a Suspension Order is canceled or expires, Contractor shall resume  and continue with the Work.  A Change Order will be issued to cover any adjustments of the  Contract Sum or the Contract Time necessarily caused by such suspension.    A Suspension Order  shall not be the exclusive method for City to stop the Work.    15.4.2 Suspension for Cause.  In addition to all other remedies available to City, if Contractor fails to perform or correct work in  accordance with the Contract Documents, City may immediately order the Work, or any portion  thereof, suspended until the cause for the suspension has been eliminated to City’s satisfaction.   Contractor shall not be entitled to an increase in Contract Time or Contract Price for a suspension  occasioned by Contractor’s failure to comply with the Contract Documents.  City’s right to  suspend the Work shall not give rise to a duty to suspend the Work, and City’s failure to suspend  the Work shall not constitute a defense to Contractor’s failure to comply with the requirements of  the Contract Documents.      Invitation for Bid (IFB) Package  14 Rev. January 2014  CONSTRUCTION CONTRACT    15.5 Termination Without Cause.    City may, at its sole discretion and without cause, terminate this Construction Contract in part or  in whole upon written notice to Contractor. Upon receipt of such notice, Contractor shall, at City’s  expense, comply with the notice and take all reasonable steps to minimize costs to close out and  demobilize.  The compensation allowed under this Paragraph 15.5 shall be the Contractor’s sole  and exclusive compensation for such termination and Contractor waives any claim for other  compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue,  lost opportunity, or other consequential, direct, indirect or incidental damages of any kind  resulting from termination without cause.  Termination pursuant to this provision does not relieve  Contractor or its sureties from any of their obligations for Losses arising from or related to the  Work performed by Contractor.     15.5.1 Compensation.    Following such termination and within forty‐five (45) Days after receipt of a billing from  Contractor seeking payment of sums authorized by this Paragraph 15.5.1, City shall pay the  following to Contractor as Contractor’s sole compensation for performance of the Work :    .1 For Work Performed.  The amount of the Contract Sum allocable to the portion of the  Work properly performed by Contractor as of the date of termination, less sums previously paid to  Contractor.    .2 For Close‐out Costs.  Reasonable costs of Contractor and its Subcontractors:  (i) Demobilizing and  (ii) Administering the close‐out of its participation in the Project (including, without  limitation, all billing and accounting functions, not including attorney or expert fees) for a  period of no longer than thirty (30) Days after receipt of the notice of termination.    .3 For Fabricated Items.  Previously unpaid cost of any items delivered to the Project Site  which were fabricated for subsequent incorporation in the Work.    .4 Profit Allowance.    An allowance for profit calculated as four percent (4%) of the sum of  the above items, provided Contractor can prove a likelihood that it would have made a profit if  the Construction Contract had not been terminated.    15.5.2 Subcontractors.      Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts  permitting termination for convenience by Contractor on terms that are consistent with this  Construction Contract and that afford no greater rights of recovery against Contractor than are  afforded to Contractor against City under this Section.    15.6 Contractor’s Duties Upon Termination.    Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the  notice directs otherwise, do the following:  (i) Immediately discontinue the Work to the extent specified in the notice;  (ii) Place no further orders or subcontracts for materials, equipment, services or facilities,  except as may be necessary for completion of such portion of the Work that is not  discontinued;  (iii) Provide to City a description in writing, no later than fifteen (15) days after receipt of the  notice of termination, of all subcontracts, purchase orders and contracts that are  outstanding, including, without limitation, the terms of the original price, any changes,  payments, balance owing, the status of the portion of the Work covered and a copy of      Invitation for Bid (IFB) Package  15 Rev. January 2014  CONSTRUCTION CONTRACT    the subcontract, purchase order or contract and any written changes, amendments or  modifications thereto, together with such other information as City may determine  necessary in order to decide whether to accept assignment of or request Contractor to  terminate the subcontract, purchase order or contract;  (iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions  thereof, that City elects to accept by assignment and cancel, on the most favorable terms  reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof,  that City does not elect to accept by assignment; and  (v) Thereafter do only such Work as may be necessary to preserve and protect Work already  in progress and to protect materials, plants, and equipment on the Project Site or in  transit thereto.  Upon termination, whether for cause or for convenience, the provisions of the Contract  Documents remain in effect as to any Claim, indemnity obligation, warranties, guarantees,  submittals of as‐built drawings, instructions, or manuals, or other such rights and obligations  arising prior to the termination date.    SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES.    16.1 Contractor’s Remedies.    Contractor may terminate this Construction Contract only upon the occurrence of one of the  following:    16.1.1 For Work Stoppage.     The Work is stopped for sixty (60) consecutive Days, through no act or fault of  Contractor, any  Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of  an order of a court or other public authority other than City having jurisdiction or due to an act of  government, such as a declaration of a national emergency making material unavailable.  This  provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension  notice issued either for cause or for convenience.    16.1.2 For City's Non‐Payment.     If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of  notice from Contractor, Contractor may terminate the Construction Contract (30) days following a  second notice to City of Contractor’s intention to terminate the Construction Contract.    16.2 Damages to Contractor.   In the event of termination for cause by Contractor, City shall pay Contractor the sums provided  for in Paragraph 15.5.1 above.  Contractor agrees to accept such sums as its sole and exclusive  compensation and agrees to waive any claim for other compensation or Losses, including, but not  limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential,  direct, indirect and incidental damages, of any kind.  SECTION 17 ACCOUNTING RECORDS.    17.1 Financial Management and City Access.    Contractor shall keep full and detailed accounts and exercise such controls as may be necessary  for proper financial management under this Construction Contract in accordance with generally  accepted accounting principles and practices. City and City's accountants  during normal business  hours, may  inspect, audit and copy Contractor's records, books, estimates, take‐offs, cost reports,  ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase      Invitation for Bid (IFB) Package  16 Rev. January 2014  CONSTRUCTION CONTRACT    orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these  documents for a period of three (3) years after the later of (i) Final Payment or (ii) final resolution  of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by  law.    17.2 Compliance with City Requests.    Contractor's compliance with any request by City pursuant to this Section 17 shall be a condition  precedent to filing or maintenance of any legal action or proceeding by Contractor against City  and to Contractor's right to receive further payments under the Contract Documents.  City many  enforce Contractor’s obligation to provide access to City of its business and other records referred  to in Section 17.1 for inspection or copying by  issuance of a writ or a provisional or permanent  mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such  court, without the necessity of oral testimony.    SECTION 18 INDEPENDENT PARTIES.    Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’  of the other party.  City, its officers or employees shall have no control over the conduct of Contractor or  its respective agents, employees, subconsultants, or subcontractors, except as herein set forth.    SECTION 19 NUISANCE.    Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in  connection in the performance of services under this Construction Contract.    SECTION 20 PERMITS AND LICENSES.    Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall  provide, procure and pay for all licenses, permits, and fees, required by the City or other government  jurisdictions or agencies necessary to carry out and complete the Work.  Payment of all costs and expenses  for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation  shall be paid to the Contractor for these items or for delays caused by non‐City inspectors or conditions set  forth in the licenses or permits issued by other agencies.    SECTION 21 WAIVER.    A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be  deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition  contained herein, whether of the same or a different character.    SECTION 22 GOVERNING LAW AND VENUE.    This Construction Contract shall be construed in accordance with and governed by the laws of the State of  California, and venue shall be in a court of competent jurisdiction in the County of Santa Clara, and no  other place.        Invitation for Bid (IFB) Package  17 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 23 COMPLETE AGREEMENT.    This Agreement represents the entire and integrated agreement between the parties and supersedes all  prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended  only by a written instrument, which is signed by the parties.  SECTION 24 SURVIVAL OF CONTRACT.    The provisions of the Construction Contract which by their nature survive termination of the Construction  Contract or Final Completion, including, without limitation, all warranties, indemnities, payment  obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect  after Final Completion or any termination of the Construction Contract.  SECTION 25 PREVAILING WAGES.          This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in  the performance and implementation of the Project, because the City, pursuant to its authority as a  chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages.  The City  invokes the exemption from the state prevailing wage requirement for this Project and declares that the  Project is funded one hundred percent (100%) by the City of Palo Alto.  This Project remains subject to all  other applicable provisions of the California Labor Code and regulations promulgated thereunder.    Or     The Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the  California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code.   Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has  obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work  in this locality for each craft, classification, or type of worker needed to execute the contract for this  Project from the Director of the Department of Industrial Relations.  Copies of these rates may be obtained  at the Purchasing Office of the City of Palo Alto.  Contractor shall provide a copy of prevailing wage rates to  any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a  minimum.  Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, 1810, and 1813 of  the Labor Code.  SECTION 26 NON APPROPRIATION.    This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto  Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the  event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time  within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds  for this Construction Contract are no longer available.  This section shall take precedence in the event of a  conflict with any other covenant, term, condition, or provision of this Agreement.   SECTION 27 AUTHORITY.    The individuals executing this Agreement represent and warrant that they have the legal capacity and  authority to do so on behalf of their respective legal entities.        Invitation for Bid (IFB) Package  18 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 28 COUNTERPARTS    This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties,  constitute a single binding agreement.  SECTION 29 SEVERABILITY.    In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity,  legality and enforceability of the remaining provisions shall not be affected.    SECTION 30 STATUTORY AND REGULATORY REFERENCES.      With respect to any amendments to any statutes or regulations referenced in these Contract Documents,  the reference is deemed to be the version in effect on the date that the Contract was awarded by City,  unless otherwise required by law.    SECTION 31 WORKERS’ COMPENSATION CERTIFICATION.      Pursuant to Labor Code Section 1861, by signing this Contract, Contractor certifies as follows: “I am aware  of the provisions of Section 3700 of the Labor Code which require every employer to be insured against  liability for workers’ compensation or to undertake self‐insurance in accordance with the provisions of that  code, and I will comply with such provisions before commencing the performance of the Work on this  Contract.”    IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the   date and year first above written.         CITY OF PALO ALTO    ____________________________   Purchasing Manager   City Manager      APPROVED AS TO FORM:    ____________________________  Senior Asst. City Attorney    APPROVED:    ____________________________  Public Works Director      D. L. Falk Construction, Inc.    By:___________________________    Name:__David L. Falk____________    Title:____President _____________    Date: _________________________        AMENDMENT NO.2 TO CONTRACT NO. C12144101 BETWEEN THE CITY OF PALO ALTO AND WMB ARCHITECTS, INC. This Amendment No.2 ("Amendment") to Contract No. C12144101 ("Contract") is entered into and made effective on June _,2014, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and WMB Architects, Inc., a California Corporation, located at 5757 Pacific Avenue, Suite 226, Stockton, CA 95207, ("CONSULTANT"). RECIT ALS WHEREAS, the Contract was entered into between the parties for the provision of professional design services relating to the City Hall Remodel Project ("Project"); and WHEREAS, on September 16, 2013, the parties amended the Contract to add $105,974 of compensation for a total Contract amount not to exceed $284,691; and WHEREAS, the parties seek by this Amendment No.2 to increase the scope of services, schedule of performance, and compensation; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section A of RECITALS is hereby amended to read as follows: "A. CITY intends to implement the City Hall Renovation Project ("Project") and desires to engage a consultant to provide professional architectural design services and construction administration services for architectural upgrades in connection with the Project ("Services")." SECTION 2. Section 4 of the Contract, NOT TO EXCEED COMPENSATION, Paragraph 1, is hereby amended to read as follows: "The compensation to be paid to CONSULT ANT for performance of the Services described in Exhibit "A", including both payment for professional services and reimbursable expenses, shall not exceed Three Hundred Eighty-Seven Thousand Five Hundred Five Dollars [$387,505.00]. In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed Four Hundred Twenty-Six Thousand Two Hundred Fifty·Six Dollars [$426,256.00]. The applicable rates and schedule of payment are set out in Exhibit "C-2", entitled "CONSTRUCTION ADMINISTRATION FEE SCHEDULE", which is attached to and make a part of this Agreement." 1 Revision April 28, 2014 SECTION 4. The following exhibit(s) to the Contract is/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibit "A" entitled "Scope of Work". b. Exhibit "B" entitled "Schedule". c. Exhibit "C" entitled "Compensation". SECTION 5. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO WMB Architects, Inc. City Manager ::!!:~ APPROVED AS TO FORM: Title: nZW/ectOr Senior Asst. City Attorney Attachments: EXHIBIT "A": EXHIBIT "B": EXHIBIT "C": SCOPE OF PROJECT TIME SCHEDULE COMPENSATION SCHEDULE 2 Revision Apli12S, 2014 EXHIBIT “A” - SCOPE OF WORK CONTRACT C12144101 - AMENDMENT No. 2 CIP PROJECT PE-12017 Task 1: City Hall Lobby Design Modifications The Lobby is intended to serve as a space that welcomes members of the public to the building and helps direct them to their destination within City Hall. The Lobby should also be modified to better accommodate the display of public art and to create opportunities for small, informal gatherings of staff and the public. A) Transform the Lobby into an attractive and welcoming space to display public art and facilitate gatherings and events. B) Remove the current furniture and cabinets. C) Refinish walls and design an improved display mounting system to create a more attractive, functional, and safe environment for the display of artwork. D) Establish lighting conducive to displaying art, both on walls and freestanding that allows for safe, easy, and efficient bulb replacement. E) Establish signage and an electronic information kiosk to provide wayfinding information to the public. F) Create paths for foot traffic through the lobby which create protected spaces conducive to small gatherings. G) Design and select furniture and carpets which create space for gatherings & meetings. H) Consider changes to ceiling fixtures to modernize the lobby’s appearance. Task 2: City Hall Council Conference Room Design Modifications The Council Conference Room is intended to serve as a less formal, more intimate meeting space for the Finance Committee and Policy & Services Committee of the City Council, various advisory Boards and Commissions, public gatherings, and to host larger staff meetings. A) Transform the Council Conference Room into a more modern and usable space which will more readily accommodate the multitude of departments and Committees, Boards, and Commissions that utilize the area. B) Explore opportunities to enlarge the existing area via the removal of the existing east wall and incorporation of the adjoining corridor into a larger and more usable meeting space. A structural analysis for this portion of the design will be required. C) Provide room layout and seating arrangements that will improve the interface between Contract C12144101 Amendment No. 2 Page 3 Committee/Board/Commission members and audience members during public meetings. D) Provide flexible room layout and seating arrangements to accommodate a larger number of occupants during public meetings, public multi-media presentations, and staff meetings. E) Design a more modern method for effective presentation delivery to accommodate conferences and public presentations via electronic media. Seating arrangements will be critical to allow for easy viewing of the material presented by both board/commission members as well as audience members. F) Modernize the area utilizing newly-designed lighting, wall coverings, flooring, and furniture. Task 3: City Hall Human Resources Conference Room Design Modifications The Human Resources Conference Room serves as one of the larger staff meeting rooms in City Hall and is used by the City Council for private discussion during closed sessions. A) Transform the Human Resources Conference Room into a more modern and usable space which will more readily accommodate the multitude of departments that utilize the area. B) Design a more modern method for effective presentation delivery to accommodate conferences and small department presentations via electronic media. C) Modernize the area utilizing newly-designed lighting, wall coverings, flooring, and furniture. Task 4: City Hall Wayfinding Design Modifications Existing directional signage in City Hall is sparse and inadequate. The proposed wayfinding modifications should provide a simple, attractive, uniform, intuitive system of signage and other directional elements to assist members of the public to locate the service provider within City Hall that can address their needs and to find their vehicle upon returning to the garage. A) Integrate the signage and an electronic information kiosk from Task 1 into a programmatic and unified City Hall signage program that will readily direct members of the public to service locations throughout the various departments on all levels of City Hall (including the Police Wing); including paths of travel from the exterior of the building. B) Improve signage on the building exterior to direct members of the public to the Police Department offices on Forest Avenue. Coordinate the new signage with the signage on the Downtown Library across the street. C) Provide an easy means of identifying parking locations in the underground City Hall Garage which will readily assist customers in relocating their vehicle. D) Incorporate signage to direct customers from the parking garage to the location of an information kiosk on the First Floor. E) Provide signage and terminology that assists the customer to readily locate the service provider Contract C12144101 Amendment No. 2 Page 4 within City Hall that can address their needs. Integrate service descriptions with department names into unified naming conventions. F) Coordinate the design of informational signage in the elevator lobbies with ongoing efforts by the City Manager’s Office to integrate photographs evocative of the services provided on each floor of the building with the accompanying signage. Task 5: City Hall Way Elevator Cabs Refurbishment A) Upgrade and modernize interior cab panels, including all sides, doors, flooring, and ceiling. B) Provide a more energy-efficient lighting system that will provide softer, more diffused illumination. C) Modernize the signage direction/display systems. Integrate same with Task 4, Wayfinding. D) Enhance the appearance of exterior door panels. Possibilities include integration with Task 4, Wayfinding, as well as including artistic concepts that correlate with department themes associated with that individual floor level. B. SCOPE OF SERVICES 1. Study Phase City Hall is an occupied building and will remain so during the entire design process and through the completion of construction. The Consultant will be responsible for surveying all the various departments and end-users that will be utilizing the areas of refurbishment to effectively address their desired needs and concerns. The study shall identify strategies and alternatives that will provide maximum benefit to endusers and optimize the functionality and usefulness of the work spaces. The analysis and resulting recommendation shall take into account both feasibility and economics. The Consultant shall work with the City’s Project Manager to develop the survey strategy, identify the existing conditions and needs, and develop recommended modifications to meet the critical needs. Consultant shall identify implementation methodologies for the renovation to assist in accommodating existing occupants. Relocation alternatives, rebuilding on a “fast-track” basis, and other alternatives proposed by Consultant shall be considered during this phase to accomplish the work with the least cost and/or minimum disruption to the occupants. Consultant shall present the study with alternates and recommendations to the Project Manager and appropriate departmental managers in the affected work areas for review and comment. Once a decision on approach, alternates, and recommendations is made by the City, the next phase of the project shall commence. 2. Conceptual Design Consultant’s second phase shall be to prepare a preliminary design with estimated construction costs for the City’s review. Consultant shall evaluate all parameters and observations in preparing a conceptual design to accomplish the City’s objectives as outlined in the four tasks described above. A proposed methodology for completing the renovations during time periods of least impact to the functions of the departments will be proposed; along with refining the full scope of the project. Consultant shall provide conceptual (30%) drawings for review and approval and shall attend Contract C12144101 Amendment No. 2 Page 5 meetings with City staff to describe and discuss the elements of the conceptual design. Consultant shall provide a preliminary engineer’s estimate of the construction contract cost for City review at the 30% design stage to aid the City in determining the final scope of work. 3. Construction Documents In the third phase, Consultant shall prepare the construction documents, including plans, technical specifications, an engineer’s estimate, and a preliminary construction schedule which minimizes disruptions to building occupants. Consultant shall prepare the final construction documents for all components defined in the Conceptual Design. Plans and specifications shall be presented to the City at 60% and 90% completion for review and comment. An engineer’s estimate shall be prepared at the 90% design stage. Consultant shall assist the City in obtaining all building permits, and other permits as applicable, required for implementation of the work. 4. Bid and Construction Phase The Consultant shall provide assistance to City staff (e.g. pre-bid meeting with prospective bidders, issuance of addenda, etc.) during the bidding phase of the project. Upon award of a construction contract to a general contractor, the City will negotiate with the Consultant an appropriate scope of work for construction phase services to be provided (e.g. assistance with Requests for Information, review of contractor submittals, review of change order requests, periodic site inspections, preparation of record drawings, etc.). Construction phase services will be added to the Consultant’s contract at the City’s discretion via a contract amendment. C. PROJECT ELEMENTS Preparation Work • City will provide any available existing plans for the City Hall work spaces to be modified during this project. • Consultant will meet with City representatives to develop a schedule for the work. Some tasks will hold a higher priority and may need to be fast tracked in comparison to some of the other tasks. Site Assessment • Consultant will conduct site visits. • Consultant will review and evaluate all available information and determine procedure for acquiring any necessary additional information. Equipment Evaluation • Consultant will evaluate existing lighting for anticipated needs. • Consultant will suggest possible audio/visual equipment to satisfy requirements. Economic Analysis and Feasibility • Consultant will recommend equipment based on functionality and cost. Contract C12144101 Amendment No. 2 Page 6 WORK PLAN ARCHITECTURAL AND ENGINEERING TASK LIST TASK 1: INVESTIGATION PHASE Subtask 1.1 On-site review of existing building documents. Subtask 1.2 On-site verification and measurement of lobby, elevator lobbies and conference rooms, mezzanine and second floor. Subtask 1.3 On-site photographing of existing building areas. Subtask 1.4 CADD input of base floor plans, reflected ceiling plans and interior elevations. Subtask 1.5 CADD input of parking levels and site plan for wayfinding. TASK 2: NEEDS ASSESSMENT PHASE Subtask 2.1 Prepare program survey forms Subtask 2.2 On-site meetings with departmental end-user groups to establish needs for conference spaces and lobby areas Subtask 2.3 On-site meetings with departmental end-user groups to establish needs for wayfinding. Subtask 2.4 Summarize in written and graphic format the needs assessment information. Subtask 2.5 Meet with Project Manager, Project Engineer to review needs assessment data. Subtask 2.6 Working with Project Manager and Project Engineer, refine needs assessment and set priorities. Subtask 2.7 Prepare final Needs Assessment document that will serve as the basis for the design Subtask 2.8 Meet with design team to review completed needs assessment document. TASK 3: CONCEPT DESIGN DEVELOMENT PHASE Subtask 3.1 Utilizing the approved Final Needs Assessment, design team will develop concept design solutions that meet the criteria set forth in the Final Needs Assessment. Design concepts to be illustrated by floor plan(s), reflected ceiling plans, 3 dimensional sketches, interior finish materials samples, AV concepts and modifications to building electrical and mechanical systems Subtask 3.2 Develop concept budget estimates for design options. Subtask 3.3 Meet with City’s Project Manager to review concept design/cost estimates. Subtask 3.4 Prepare base floor plans, reflected ceiling plans and interior elevations of existing conditions. Subtask 3.5 Per Project Managers Direction, Present concept design to City Staff for review and input. Subtask 3.6 Refine concept design documentation and budget estimate incorporating City input. Subtask 3.7 Prepare Concept Design package (30%) for City review and approval. TASK 4: CONSTRUCTION DOCUMENTS PHASE Subtask 4.1 Based on approved concept design and budget, develop construction documents (including plans, specifications, calculations and budget estimate) for plan review, permitting and bidding. Prepare City review packages at 60% and 90%. Subtask 4.2 60% document review meeting with Project Manager and Project Engineer. Subtask 4.3 90% document review meeting with Project Manager and Project Engineer. Subtask 4.4 In-house peer review of documents. Contract C12144101 Amendment No. 2 Page 7 Subtask 4.5 Prepare 100% construction document submittal package. Subtask 4.6 Review meeting with Project Manager and Project Engineer of final construction document package. TASK 5: PLAN REVIEW | PERMITTING PHASE Subtask 5.1 Assist City in submittal of construction documents package for plan review for building permit. Subtask 5.2 Make revisions to construction documents to address plan review comments. Subtask 5.3 Assist City in re-submittal of construction documents package incorporating plan review comments. TASK 6: BIDDING PHASE Subtask 6.1 Provide assistance to City staff during bid process including: attendance at pre-bid meeting, assist City in responding to bid questions, and issue addenda as required. Subtask 6.2 Assist City in review of submitted bids. TASK 7: CONSTRUCTION ADMINISTRATION PHASE (Amendment No. 2) Subtask 7.1 Twenty-four (24) Weekly Construction site meetings with architect (assume 6 months construction timeframe). Subtask 7.2 Six (6) monthly Site visits for mechanical, electrical and audio visual engineers. Subtask 7.3 Process and document as required General Contractor’s Requests for Information (RFI’s). Subtask 7.4 Process product submittals and shop drawings. Subtask 7.5 Review and evaluate substitutions to products and equipment submitted by the General Contractor. Subtask 7.6 General Contractor payment request and progressive lien waiver review. Sub-contractor lien waiver documentation and verification responsibility of the General Contractor. Subtask 7.7 Punch-list site at substantial completion. Develop punch list of items for correction. Follow-up evaluation of punch list items at final completion. Subtask 7.8 Review of General Contractor’s Operations and Maintenance Manual and warranties. Subtask 7.9 Perform project closeout activities and prepare final record plan set from contractor markups. Contract C12144101 Amendment No. 2 Page 8 WORK PLAN WAYFINDING TASKS PARAGRAPH 5.4 SCOPE OF WORK | WORK PLAN PROPOSAL SCOPE OF WORK The Square Peg Proven Project Approach and Design Process Square Peg employs a proven project process and design approach based on a well defined schedule of evaluation, progress and milestone review meetings with the Client and the Design team. The checks and balances built in the this highly collaborative process ensures that the • Vision and goals are clearly understood at the onset of the project • Pertinent information is collected and analyzed • Design work is concepted and refined based on multiple reviews by the Client and Design Team • Documentation is subjected to multiple reviews • One or more of the key sign types are prototyped prior to final production for Client and Design Team approval. • Construction administration and installation oversight services ensure continuity and control throughout the entire process. Square Peg will thoroughly review the existing signing, study circulation etc in preparation to develop a new wayfinding and signing program. The new program will address the following: 1. Integrate the signage and an electronic information kiosk from Task 1 into a programmatic and unified City Hall signage program that will readily direct members of the public to service locations throughout the various departments on all levels of City Hall (including the Police Wing); including paths of travel from the exterior of the building. 2. Improve signage on the building exterior to direct members of the public to the Police Department offices on Forest Avenue. Coordinate the new signage with the signage on the Downtown Library across the street. 3. Provide an easy means of identifying parking locations in the underground City Hall Garage which will readily assist customers in relocating their vehicle. 4. Incorporate signage to direct customers from the parking garage to the location of an information kiosk on the First Floor. 5. Provide signage and terminology that assists the customer to readily locate the service provider within City Hall that can address their needs. Integrate service descriptions with department names into unified naming conventions. 6. Coordinate the design of informational signage in the elevator lobbies with ongoing efforts by the City Manager’s Office to integrate photographs evocative of the services provided on each floor of the building with the accompanying signage. Contract C12144101 Amendment No. 2 Page 9 Based on the scope outline from the RFP and past experience with similar projects we anticipate the scope of signs to include, but is not limited to: Based on the scope outline from the RFP and information gained at the interview with the City, we anticipate the scope of signs may include, but is not limited to: SITE SIGNING  Project/Building Identity Signing  Parking Garage Entrance ID Sign  Directional Signing  Accessibility Signing  Signing at Entry Doors  Entrance ID Signing  Pedestrian Directional & Information Signing  Building Entry Identification Graphics at Entry Doors (Address, HC Accessibility, No Smoking, etc.)  Emergency Assembly Area Signing  Building Address PARKING  Parking Entry ID  Clearance Bar  Vehicular Directional Signing  Pedestrian Directional Signing  Column and Core Graphics  Misc Room ID Signing INTERIOR SIGNING  Orientation Directory/Information Display or Kiosk (Static / Dynamic) - Main Lobby - Secondary Entry Lobbies - Elevator Lobbies at Upper Levels  Floor Level ID in Elevator Lobbies  Floor Level Directories and/or Orientation Maps  Directional Signing  Changeable Displays for Daily Events, Information, etc ( Digital System and/or Static)  Service Window Signing ( Digital System and/or Static)  Informational Signing in Elevator Cabs ( Digital System and/or Static) NOTE: The design process for signing will be closely coordinated with WMB Architects and GB Engineers to insure a well integrated design solution. Contract C12144101 Amendment No. 2 Page 10 Square Peg will explore and incorporate technology as potential solutions at multiple locations throughout the project. A combination of design, cost and evaluation of benefits will be provided to the client with regard to proposed technology solutions as a means to inform the design decisions and approvals. SCOPE EXCLUSIONS Items that are specifically excluded from the scope of work include:  Signing for Non Public Areas such as office areas and back of house: Room Identification Signing Department/Area Identification Office ID Workstation ID Conference Room ID Misc Room ID Back of House Room ID Evacuation Maps at Elevators, Stairs and Exits  Preparation of building floor plans for use in sign location plans. It is assumed that the client will provide SPD with building plans for use in preparation of sign location plans and documents.  Logo design  Print & Amenity design  Sculptures / Feature pieces  Content Design of Digital Media for Digital Displays. Note: SPD can provide content solutions as additional service if requested, or recommend other means of creating and/or obtaining content. Should any of these items be required Square Peg Design can provide them as an additional service. PHASE 1 WAYFINDING STRATEGY AND SCHEMATIC DESIGN During this phase of work, SPD will meet with the Client and consultants to review the project goals, existing design concepts, program criteria, and design influences. This phase shall include, but not limited to, the following tasks and design work: 1. Meet with Client and consultants to review the project goals, existing design concepts, program criteria, design influences etc. 2. Conduct wayfinding survey to determine overall signage strategy. Systematically study pedestrian and vehicular traffic flow as it relates to ingress, egress and circulation within the development. 3. Conduct appropriate research on potential design influences, available technologies, materials and finishes. 4. Collect all relevant data available for the Project to include: -Architectural plans and drawings -Existing design themes and details -Details of architectural elements Contract C12144101 Amendment No. 2 Page 11 5. Prepare preliminary programming for sign locations and message schedules. 6. Confirm required sign types and environmental graphic elements. 7. Review of municipality and authorities regulations. 8. Produce three (3) design concepts for physical form and scale of signage including proposed materials, finishes, colors. 9. Coordinate design concepts with the architecture and lighting. 10. Based on design concepts and proposed sign quantities, prepare implementation budgets for review and discussion with client. 11. Present Schematic Design Concepts, budgets and phasing options for comment and approval. MEETINGS 1. Kickoff Meeting 2. Interim Meetings with City Staff and Design Team as needed for coordination 3. Schematic Design presentation PHASE DELIVERABLES 1. Schematic drawing package showing three (3) signage concepts 2. Preliminary power, data and structural requirements. 3. Preliminary sign location plans and phasing options 4. Preliminary implementation budgets. PHASE ACTION REQUIRED BY CLIENT Client review, comment, selection of one Schematic design direction and final approval of all phase deliverables to proceed into Phase 2. PHASE 2 DESIGN DEVELOPMENT Based on the approved Schematic Design direction from Phase 1, Square Peg will develop and apply the approved design direction to all remaining sign types. The following is expected during this phase of work: 1. Develop the approved Schematic Design per comments from Phase 1 and apply to all remaining sign types. 2. Coordinate all sign sizes, locations, power and structural requirements with the Design Team and project Consultants. 3. Refine and finalize signing typography, icons, materials and finishes 4. Prepare sign message schedules listing all proposed sign types and message copy. 5. Prepare Design Development presentation 6. Present developed materials for approval MEETINGS 1. Interim design coordination with the city and design consultants as needed 2. Present Final Design Contract C12144101 Amendment No. 2 Page 12 PHASE DELIVERABLES 1. Design Development drawings for all sign types. 2. Sign location plans and message schedule(s) for all required sign types. 3. Power, data and structural requirements per sign type 4. Sign implementation budget. 5. Material samples as necessary for review. PHASE ACTION REQUIRED BY CLIENT Client review, comment and final approval of all phase deliverables to proceed into Phase 3. PHASE 3 DOCUMENTATION The purpose of Phase 3 is to provide design intent documentation and technical detailing sufficient in detail to facilitate tendering and fabrication by a qualified sign fabricator. The Documentation Phase shall include, but not limited to, the following: 1. Prepare design intent documentation drawings sufficient in detail to facilitate bidding and fabrication by a qualified sign fabricator. 2. Coordinate all sign sizes, locations, power and structural requirements with the design team. 3. Document design details for all sign types. 4. Specify and document signing colors, illumination and materials. 5. Write performance specifications for all signing colors, illumination, materials and installation as required. 6. Finalize typography. 7. Finalize sign location plans and message schedules. 8. Produce final set of documentation drawings for signing and graphic elements. MEETINGS 1. Coordination with the city and design consultants as required PHASE DELIVERABLE At the completion of the Documentation Phase, we will deliver Final Documents to the Client. Documents shall include, but not limited to, the following deliverables and presentation materials: 1. Design Intent documentation sufficient in detail to facilitate tendering and fabrication by a qualified sign fabricator. 2. Specifications 3. Final sign location plans and message schedule(s) for all required sign types. Contract C12144101 Amendment No. 2 Page 13 Documents will be issued as follows: 1. Design documentation drawings for signing elements in Illustrator CS4 on Mac OS X platform: CD and three (3) hard copies, Tabloid format 2. Location Plans - CAD 2010, CD and three (3) hard copies 3. Message Schedule - Filemaker: CD and three (3) hard copies PHASE 4 CONSTRUCTION ADMINISTRATION The purpose of Phase 4 is to provide Construction Administration services for the Exterior, Parking and Interior Signing. To insure the design intent and desired quality of fabrication is achieved, SPD will coordinate with the selected fabricator through the submittal, fabrication and installation phases of work to answer questions, provide details and information. SPD will also review submittals, installation and a final inspection of the completed installation. Tasks to included: 1. Review, comment and approval of shop drawings, materials, mock-ups and samples. 2. Review Prototypes and Samples. 3. Provide details and sketches to clarify design intent. 4. Coordinate with the fabricator on Site regarding sign locations. 5. Up to four (4) site visits. 6. Respond to requests made by fabricator for clarification of Contract Documents. 7. Inspect final Installations and prepare punchlist of items for correction. 8. Follow-up evaluation of punch list items at final completion. 9. Perform project closeout activities and prepare final record plan set from contractor markups. Contract C12144101 Amendment No. 2 Page 14 WMB ARCHITECTS Contract C12144101 - Amendment No. 2 Exhibit "B" - Project Schedule City Hall Remodel A M J J A S O N D J F M A M J J A S O N D J Program Confirmation Design Development Construction Documents Plan Review Bidding Construction Co n t r a c t R e v i s i o n 2013 2014 2015 Co n t r a c t R e v i s i o n EXHIBIT “C” COMPENSATION CONTRACT C12144101 - AMENDMENT No. 2 The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as EXHIBIT “C-1” up to the not-to-exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in EXHIBIT “A” (“Scope of Work”) and reimbursable expenses shall not exceed Three Hundred Eighty-Seven Thousand Five Hundred Five Dollars [$387,505.00]. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed Four Hundred Twenty-Six Thousand Two Hundred Fifty-Six Dollars [$426,256.00]. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s project manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed Three Hundred Eighty-Seven Thousand Five Hundred Five Dollars [$387,505.00] and the total compensation for Additional Services does not exceed Thirty-Eight Thousand Seven Hundred Fifty-One Dollars [$38,751.00]. Attachment C ORDINANCE NO.XXXX ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR FISCAL YEAR 2014 TO PROVIDE ADDITIONAL APPROPRIATION OF $1,607,109 IN THE FIRST FLOOR RENOVATIONS PROJECT (PE-12017), BUDGETED IN THE CAPITAL IMPROVEMENT FUND, FOR ENHANCEMENTS TO CITY HALL, RESULTING IN NO IMPACT TO THE INFRASTRUCTURE RESERVE. A SERIES OF TRANSFERS INTO THE CAPITAL IMPROVEMENT FUND WILL OFFSET THE INCREASED BUDGET AMOUNT, INCLUDING: $686,298 FROM THE COMMUNITY CENTER DEVELOPMENT IMPACT FEE FUND, $499,335 FROM THE TECHNOLOGY FUND, AND $668,437 FROM THE UTILITIES ADMINISTRATION FUND. THE TRANSFERS FROM THE COMMUNITY CENTER DEVELOPMENT IMPACT FEE FUND ($696,298), TECHNOLOGY FUND ($517,962), AND UTILITIES ADMINISTRATION FUND ($685,121) WILL BE OFFSET BY DECREASES TO THE FUND BALANCES TO EACH RESPECTIVE FUND. THESE TRANSFERS FROM OTHER FUNDS WILL ALLOW FOR AN INCREASE TO THE INFRASTRUCTURE RESERVE IN THE AMOUNT OF $246,961. The Council of the City of Palo Alto does ordain as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 10, 2013 did adopt a budget for Fiscal Year 2014; and B.At the time the 2014 Adopted Budget was being considered by the City Council, the costs associated with the First Floor Renovation project were not known; and C. The project will provide for enhancements to City Hall in order to allow for better civic engagement. Improvements include: a remodel to the main lobby, including coordination with a new digital public art element; an enhancement to the heating, ventilation, and air conditioning (HVAC) system in the lobby area in order to handle the increased loads from the new community meeting room and digital art installation; a restoration to the terrazzo floor of the main lobby; conversion of the existing People Strategy and Operations conference room to a new City Council conference room; conversion of the existing City Council conference room to a new training and multipurpose meeting room; creation of a new community meeting room beside the main lobby; installation of broadcast media capabilities for all the new lobby-level meeting spaces; modification of the lobby payment counter to match the new architectural style of the lobby and provide a lower ledge for writing checks and signing forms; conversion of the Revenue Services offices into new Utilities Customer Service counter and offices; reconfiguration and renovation of mezzanine level offices; reconfiguration and renovation of second floor offices; new carpeting and bench upholstery for City Council chambers; and remodeling the three building elevator cabs. D.In April 2014, the City posted a notice inviting formal bids (IFB) for the project, with a bidding period of nineteen calendar days; and E. Bids were received from one qualified contractor on May 6, 2014 with a base bid of $2,664,000, plus add alternates of $54,350, bringing the total bid to $2,718,350. This bid amount is 19% higher than the construction cost estimate, indicative of the busy local construction climate. F. Staff recommends that the bid of $2,718,350 submitted by D.L. Falk Construction, Inc. be declared the lowest responsible and responsive bid; and G. A contingency amount of $271,835, equal to ten percent of the total base bid contract amount, is requested for related, additional, but unforeseen work which may develop during the project. SECTION 2.The sum of One Million Six Hundred Seven Thousand One Hundred and Nine Dollars is hereby appropriated for the City Hall First Floor Remodel Project. To offset the increased a portion of the increased costs in the Capital Improvement Fund, a series of transfers are recommended, including Six Hundred Eighty Six Thousand Two Hundred Ninety Eight Dollars from the Community Center Development Impact Fee Fund, One hundred thirty three thousand six hundred eighty seven dollars from the Electric Fund, One hundred thirty three thousand six hundred eighty seven dollars from the Gas Fund, One hundred thirty three thousand six hundred eighty seven dollars from the Wastewater Collection Fund, One hundred thirty three thousand six hundred eighty seven dollars from the Water Fund, One hundred thirty three thousand six hundred eighty seven dollars from the Fiber Optics Fund, and four hundred ninety nine thousand three hundred and thirty five dollars from the Technology Fund. The transfers in from the various funds would be offset by reductions to each respective funds ending fund balance. Finally, as a result of the transfers in to the Capital Improvement Fund from the various funds, the Infrastructure Reserve can be increased by two hundred forty six thousand nine hundred sixty one dollars. SECTION 4. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 5.The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Manager Director of Public Works Director of Administrative Services " ---------- City Council/City Manager City of Palo Alto Palo Alto, California BID FORM (Revised per Addendum No.1) Name of Company D.L. Falk Construction Inc. In response to this Invitation For Bids (IFB), the undersigned, as Bidder, declares that the only persons or parties interested in this Bid as principals are those named herein; that this Bid is made without collusion with any other person, firm or corporation; that the Bidder has carefully examined the location of the proposed work and the plans and specifications herein referred to; and that the Bidder proposes and agrees, if this Bid is accepted, ~o contract with the City of Palo Alto (City), to provide all' necessary materials, equipment, tools, apparatus, and other means of transport services, and to do all the Work and comply with all the specified requirements in this IFB, in the manner herein prescribed and for the prices stated in the following Bid: Project Title: CITY HALL REMODEL A: Base Bid: Provide all labor, equipment material, transportation and applicable taxes, profit, insurance, bonds and other overhead to perform the Work in accordance with the Project Plans and Technical Specifications, herein: BID APPROX UNIT DESCRIPTION, WITH UNIT PRICE IN WORDS UNIT TOTAL ITEM ITEM (EACH BID ITEM SHALL INCLUDE ALL APPLICABLE TAXES, PRICE PRICE QUANTI PROFIT, INSURANCE, BONDS, AND OTHER OVERHEAD) TV 1. 1 LS Upgrade the aesthetic and functionality of the Council $ fPC I~ Conference Room, Human Resources Conference Room, Lobby Area, Mezzanine, Level 2, and Elevator Cabs at Palo 1\"" I Alto City Hall. rv~ . ~'V~ 2. 1 lS Moving Allowance $70,000 $70,000 0 Base Bid Total (item 1 and 2) $ cfJ 1.\1 (Total in words: -It-Jo ~1'~·f2V1. t A~[~ ~;Jr-&IAL ~~ \b\J ~/K (\..-\ II II II II ADDENDUM NO. ONE TO CITY OF PALO ALTO IFB 153838 PAGE 3 OF 6 B: Additive Alternate Bid: Provide all labor, equipment material, transportation and applicable taxes, profit, insurance, bonds and other overhead to perform the Work in accordance with the Project Plans and Technical Specifications, herein: -BID APPRO UNIT ITEM X.QTY. 1. 1 LS 2. 1 .LS 1 LS 4. 1 LS s. 1 LS DESCRIPTION, WITH UNIT PRICE IN WORDS .' ..... _.-'" -UNlt·--'TOTAL ITEM (EACH BID ITEM SHALL INCLUDE ALL APPLICABLE TAXES, PRICE PRICE PROFIT, INSURANCE, BONDS, AND OTHER OVERHEAD) Community Meeting Room: Upgrade AV01-Allow $ $ multiple video camera feeds to be displayed on LCD screens, i.e. Camera #1 may be displayed on LCD #1 while Camera #2 is displayed on LCD #2. Routing will be achieved 1/ 'boo 7, Sera via intuitive controls on Community Meeting Room touch panel display. . ~e,J P/of\ .\{...ov.'.J,ilrl.J e.;\~"'( h .... ,,~( e! (Unit Price in Words) Lobby: Upgrade AV02 -Allow each LCD screen to show separate sources (in addition to ability to send one source scaled across the entire LCD screen array). Routing to individual displays will be achieved via intuitive controls on associated touch panel display. Lobby: Upgrade AV03 -One LCD screen (at ADA-compliant height) shall be touch-capable, and allow users to access way-finding information on.theLCD screen array. For example, if a user would like directions to the Flexible Meeting Space, they may use the touch-enabled LCD screen to get directions to the room from their current location. LiVv +t-.~\I\.V\!. C\ C\-'I' (Unif Price in Words) Conference Room: Upgrade AV04 -Allow multiple video camera feeds to be displayed on LCD screens, i.e. Camera #1 may be displayed on LCD #1 while Camera #2 is displayed on LCD #2. Routing will be achieved via intuitive controls on Conference Room touch panel display. (Unit Price in Words) ~l «.. ~~cl Flexible Meeting Space: Upgrade AVOS -Include (2) Panasonic AW-HE60S cameras on ceiling for routing to recording hardware in Council Chambers Control Room. Allow either camera feed to be displayed on LCD screen in room (Unit Price in "r,ords) , l I~'\IJ.AI .n -W\.O\,\,~\/\U-\-wo llA.vt.4.,« t! $ $ $ $ (O~O ~DC-O , .. ,..J) $ $ ., I CJOO $ $ ADDENDUM NO. ONE TO CITY OF PALO ALTO IFB 153838 PAGE 4 OF6 BID APPRO UNIT DESCRIPTION, WITH UNIT PRICE IN WORDS UNIT TOTAL ITEM ITEM X.QTY. (EACH BID ITEM SHALL INCLUDE ALL APPLICABLE TAXES, PRICE PRICE PROFIT, INSURANCE, BONDS, AND OTHER OVERHEAD) 6. 1 LS Expand existing AMAG Security Access Control System to $ $ include Doors No: 107.1, 109.1, 126.1, 122.1, 122.2, 123.1, MOS.l, Mo6.1 and.20S.1. 1,~OO +~OO &)tJufN\. ~ lztNifl. A tIlilft-l kJ.'lt-J.. Additive Alternate Bid Total (item 1 through 6) $ (Total in words: 6~~¥ ~\W' ~tA~~ lctL ~JctJ cJhf ) :;4 Ii:> 'fiV C: Deductive Alternate Bid Total: Provide all labor, equipment material, transportation and applicable taxes, profit, insurance, bonds and other overhead to perform the Work in accordance with the Project Plans and Technical Specifications, herein: BID APPRO UNIT DESCRIPTION, WITH UNIT PRICE IN WORDS UNIT TOTAL ITEM ITEM X.QTY. (EACH BID ITEM SHALL INCLUDE ALL APPLICABLE TAXES, PRICE PRICE PROFIT, INSURANCE, BONDS, AND OTHER OVERHEAD) 1. 1 LS Delete Elevator Interiors Package $ $ ~-1S' i\~~l--1r k Ib",~ C'"'-I ~~!h! ~~~ ~Ve.., ~~~1S' (Unit rice in words) 'b't-, 2. 1 LS Delete AV @ Entry Wall including power, data and $ $ monitors refer to Sheet AV2.1, Note 1 ':00 e.ttv tiN ~~s,."J. eir;tt-~~V\cLftJ e::\~~'f 'J(o~~O ~ q,\ol ( nit Price in Words) 3. 1 LS Delete metal panels at entry surrounding restroom core. $ $ As shown on sheet A 2.4. On lieu of install 5/8" gyp board over th e specified new furring. Tape, texture and paint (n) t;DO gyp board. ~1~oO ~Chl ~l> ~""c"tAMJ t;\It hl.lMclH~ e;1.1 (Unit Price in Words) 4. 1 LS Delete decorative glazing at doors to Community Meeting $ $ Room (refer to door schedule Sheet A 8.1) and replace with X" clear tempered glazing. 0° \6D ~ ... t ~ ~~ I)ttt.. "'~~u" \ " \" (Unit Price in Words) S. 1 LS Delete Folding walls at Community Meeting Room, replace $ $ with fixed anodized aluminum frame storefront system 00 00 ~~i:~nst:;~:rrf<::ed Cl-ea 'II\J ~ 1\;\ I (Unit Price in Words) ADDENDUM NO. ONE TO CITY OF PALO ALTO IFB 153838 PAGE 5 OF 6 BID APPRO UNIT DESCRIPTION, WITH UNIT PRICE IN WORDS UNIT TOTAL ITEM ITEM X.QTY. (EACH BID ITEM SHALL INCLUDE ALL APPlicABLE TAXES, PRICE PRICE PROFIT, INSURANCE, BONDS, AND OTHER OVERHEAD) 6. 1 LS Delete Drinking Fountain Replacement with Water Filling $ $ stations on Floor level A, 1, 2, 3, 4, 5, 6, and 7. See Sheet P.01Note P of General Plumbing Notes. .. qOb ,\00 ~i '\:)I sttc ~,a-V'l-J "".V\t U(-eJ (~nit Price iti or s)· ~lP' ~l 7. 1 LS Delete all work associated with Finance Department $ $ counter including casework, decorative glazing and terrazzo floor infill as shown on sheets D2.1,A2.1, A2.4 and L{"I .. P .;..",0 Ani r.",(vy -S~\C ~S~ ~w '-t~tJ. ~v..hl yIJ 1 I.\,tp\ (Unit Price in Words) 8. 1 LS Delete all work in City Council Chambers as shown of Sheet $ $ A1D.l-CC, including installation of new carpeting and ~tP reupholster of existing bench style seating. 0° ~~~"'" f1.,vw~~ M~ ~ ~ i,() \ 'h01 ( nit Price in Words) 9. 1 LS In lieu of replacing suspended ceiling systems as specified $ $ on the Mezzanine and Second Floor levels, maintain existing suspended grid system as currently installed. Modify existing grid system as required to accommodate 'lr 0 1/0 new specified fixtures and mechanical diffusers. Replace 7~ ceiling' tiles with specified tiles. Refer to sheet A 9.2 ~~ ~t.t-~\II.<"~ e.Aj"-\-",IAI"-ar~! +-wev--~I (Unit Price in Words) Deductive Alternate Bid Total (items 1 through 9) $ (Total in words: ) 4~11n~ ~\.W ~ ~f~" .h.J& ./-L.IL~ J ,u,u.t. l. ..J "...,~ .u.. ;,-1.,'1/ t:.a "tlf!... D. Addenda During the Bid process there may be changes to the Contract Documents, which would require an issuance of an addendum or addenda. City disclaims any and all liability for loss, or damage to any Bidder who does not receive any addendum issued by City in connection with this IFB. Any Bidder in submitting a Bid is deemed to waive any and all claims and demands Bidder may have against City on account of the failure of delivery of any such addendum to Bidder. Any and all addenda issued by City shall be deemed included in this IFB, and the provisions and instructions therein contained shall be incorporated to any Bid su bmitted by Bidder. To assure that all Bidders have received each addendum, the following acknowledgment and sign-off is required. Failure to acknowledge receipt of an addendum/addenda may be considered an irregularity in the Bid: ADDENDUM NO. ONE TO CITY OF PALO ALTO IFB 153838 PAGE 6 OF6 Carnahan, David From: Sent: To: Subject: Burt, Patrick Tuesday, November 11, 2014 10:56 PM Tom DuBois; Council, City RE: Review of City Hall Remodel CITY Of PALO ALTO. OA €f:TY CLERK'S OFFICE . f 4 NOV 12 AH 8: 91 Interesting that Liz responded to all. She has a bad habit of doing that. She's been admonished repeatedly, but to no avail. Pat From: Tom DuBois [mailto:tom.dubois@qmail.com] Sent: Tuesday, November 11, 2014 6:18PM To: Council, City Subject: Fwd: Review of City Hall Remodel Nancy, Thanks for the response and correcting my date that this occurred in July. The review was requested in August. I'm not suggesting it wasn't in fact an open process, just that the impression being created by continuing to schedule and then defer the discussion is not a positive one. If it's important please consider moving it up so that it actually occurs. Jim mentioned that the city is incurring cost each time this happens. . . Respectfully,· Tom · ----------Forwarded message ---------- From: Liz Kniss <lizkniss@earthlink.net> Date: Tue, Nov 11,2014 at 5:43PM Subject: Re: Review of City Hall Remodel To: "Shepherd, Nancy (internal)" <Nancy.Shepherd@cityofpaloalto.org> Cc: Tom DuBois <tom.dubois@gmail.com>, "Keene, James" <James.Keene@cityofpaloalto.org>, "Kniss, Liz (internal)" <Liz.~iss@cityofpaloalto.org> An excellent very stateswoman like answer. Sent from my iPhone >On Nov 11,2014, at 3:13PM, Shepherd, Nancy (internal) <Nancy.Shepherd@CityofPaloAlto.org> wrote: > >Hi Tom, > >You don't need to be so formal. You may call me Nancy. > >This item was open and transparent when council voted for it back in July. It has run through 5 years of capital improvement budgets with finance committee, and, as is normal, went into the routine of consent calendar as all capital improvement projects would that have been approved in the budget. If a council member has im issue they can find others to pull the item, then it is taken up on the action calendar using the same packet material. > > The reason why this is at the end of the meeting is that we do not need to have special staff in attendance, or expensive consultants who sit around for hours listening to other items. Jim will be managing this update himself > > As you know, when this item first came to council in July there were no questions, comments or requests made by council members or the public either at the meeting or in an email. It was noticed and printed and delivered to all entities, candidates and community members that the clerk has listed in their delivery schedule, and is available online in accordance with policy. > >We have another packed agenda on Monday with time constraints like the open comment period on the VTA BRT EIR. > >Take care, > > Nancy Shepherd >Mayor > Palo Alto City Council > > __________________________________ __ >From: Tom DuBois [tom.dubois(CV,gmail.com] >Sent: Tuesday, November 11, 2014 9:07AM >To: Shepherd, Nancy (internal) > Cc: Council, City > Subject: Review of City Hall Remodel > > Mayor Shepherd, > > Please agendize the City Hall Remodel review as the first action item at the next meeting. Since it's approval on Aug 4, the Review has twice been scheduled as the last item on a long, ambitious agenda, and twice been continued to a future meeting-first on Oct 20, 2014 and again on Nov 10, 2014. > > My understanding is that the purpose of review is to increase transparency and what occurred. This should take place soon and early in the meeting when more people are present. These delays are creating the an impression opposite of what I believe you desire. The impression is that council does not want to review it and does not want to be transparent. > ·>Best, > >Tom DuBois > 3310 South Court Carnahan, David From: Sent: To: Subject: Nancy, .-.. Tom DuBois <tom.dubois@gmail.com> Tuesday, November 11, 2014 6:18 PM Council, City Fwd: Review of City Hall Remodel GffY OF PALO A~TO.CA CITY CLERK'S 0"PFI0E I~ NOV 12 AM 8: 62 Thanks for the response and correcting my date that this occurred in July. The review was requested in August. I'm not suggesting it wasn't in fact an open process; just that the impression being created by continuing to schedule and then defer the discussion is not a positive one. If it's important please consider moving it up so that it actually occurs. Jim mentioned that the city is incurring cost each time this happens. Respectfully, Tom ----------Forwarded message ---------- From: Liz Kniss <lizkniss@earthlink.net> Date: Tue, Nov 11,2014 at 5:43PM Subject: Re: Review of City Hall Remodel To: "Shepherd, Nancy (internal)" <Nancy.Shepherd@cityofpaloalto.org> . Cc: Tom DuBois <tom.dubois@gmail.com>, "Keene, James" <James.Keene(il)cityofpaloalto.org>, "Kniss, Liz (internal}" <Liz.Knissr@,cityofualoalto.org> An excellent very stateswoman like answer. Sent from my iPhone >On Nov 11, 2014, at 3:13PM, Shepherd, Nancy (internal) <Nancy.Shepherd@CityofPaloAlto.org> wrote: > >Hi Tom, > >You don't need to be so formal. You may call me Nancy. > > This item was open and transparent when council voted for it back in July. It has run through 5 years of capital improvement budgets with finance committee, and, as is normal, went into the routine of consent calendar as all capital improvement projects would that have been approved in the budget. If a council member has an issue they can find others to pull the item, then it is taken up on the action calendar using the same packet material. > > The reason why this is at the end of the meeting is that we do not need to have special staff in attendance, or expensive consultants who sit around for hours listening to other items. Jim will be managing this update himself. > > As you know, when this item first came to council in July there were no questions, comments or requests made by council members or the public either at the meeting or in an email. It was noticed and printed and delivered to all entities, candidates and community members that the clerk has listed in their delivery schedule, and is available online in accordance with policy. > ...... . •.·~ .. , - >We have another packed agenda on Monday with time constraints like the open comment period on the VTA BRT EIR. > >Take care, > >Nancy Shepherd >Mayor > Palo Alto City Council > > ---------------------------------->From: Tom DuBois [tom.dubois@gmail.com] >Sent: Tuesday, November 11,2014 9:07AM >To: Shepherd, Nancy (internal) > Cc: Council, City >Subject: Review of City Hall Remodel > > Mayor Shepherd, > > Please agendize the City Hall Remodel review as the first action item at the next meeting. Since it's approval on Aug 4, the Review has twice been scheduled as the last item on a long, ambitious agenda, and twice been continued to a future meeting-first on Oct 20, 2014 and again on Nov 10,2014. > > My understanding is that the purpose of review is to increase transparency and what occurred. This should take place soon and early in the meeting when more people are present. These delays are creating the an impression opposite of what I believe you desire. The impression is that council does not want to review it and does not want to be transparent. - > >Best, > >Tom DuBois > 3310 South Court Carnahan, David From: Sent: To: Cc: Subject: Mayor Shepherd, ~· .. • • ~ •• ;-< • ..: •• <. • Tom DuBois <tom.dubois@gmail.com> Tuesday, November 11, 2014 9:07 AM Shepherd, Nancy (internal) Council, City Review of City Hall Remodel ~~-..... 0t1Y ®F PALO ALTO. &A etTY CLERK'S &FFICE 14 NOV I 2 AM 8: Q 3 Please agendize the City Hall Remodel review as the first action item at the next meeting. Since it's approval on Aug 4, the Review has twice been scheduled as the last item on a long, ambitious agenda, and twice been continued to a future meeting-first on Oct 20, 2014 and again on Nov 10,2014. My understanding is that the purpose of review is to increase transparency and what occurred. This should take place soon and early in the meeting when more people are present. These delays are creating the an impression opposite of what I believe you desire. The 'impression is that council does not want to review it and does not want to be transparent. Best, Tom DuBois 3310 South Court City of Palo Alto (ID # 5143) City Council Staff Report Report Type: Action Items Meeting Date: 11/17/2014 City of Palo Alto Page 1 Summary Title: Policy discussion about conducting open session for Management & Professional Compensation Plan Title: Policy Discussion on Whether to Conduct a Closed Session Prior to an Open Session to Discuss the 2014-2015 Management & Professional Compensation Plan; Possible Referral to Policy & Services Regarding Closed/Open Session Practice for Compensation Matters From: City Manager Lead Department: Human Resources Recommendation Staff recommends that the City Council: 1) Continue the current practice of discussing appropriate elements of the FY 2015 proposed Management & Professional Compensation Plan (“Plan”) in closed session as permitted under the Ralph M. Brown Act (“Brown Act”), followed by a presentation, discussion and adoption of the Plan in open session as an Action Item. 2) Refer to the Policy and Services Committee the discussion of alternatives regarding the use and sequence of closed and open sessions for discussing compensation and benefits changes for the various labor groups and the unrepresented Management and Professional group. Executive Summary Council voted on September 22, 2014 not to follow its traditional practice of holding a scheduled closed session to review its position on recommended compensation and benefits changes for the unrepresented Management and Professionals employee group with instructions to the City’s representative (City Manager), in advance of conducting an open session on the matter. Instead, Council agreed to consider on Oct. 6 the City's policies and practices regarding the use and sequence of closed and open sessions to consider compensation and benefits changes. Background The Brown Act, Gov. Code Sections 54950 through 54963, requires local government bodies to meet in public to discuss items of business, take public input and take action. The Brown Act provides exceptions for certain topics that may be discussed in closed sessions. One such exception is salaries, compensation and benefits for represented and unrepresented employees City of Palo Alto Page 2 (and other matters within the scope of representation for represented employees). A city council may meet in closed session to review its position on these matters and instruct its designated representative. Final action on these matters must be taken in open session. At the September 22, 2014 City Council meeting, Council voted not to hold a scheduled closed session to discuss recommended compensation and benefits changes of the unrepresented management and professionals employee group. Instead, Council agreed to consider on November 17 the City's policies and practices on the use and sequence of closed and open sessions, prior to scheduling discussion on the Management and Professional Compensation Plan for FY 2015. Discussion Of the cities in the San Francisco Bay area, almost all treat salary discussions in the same manner as Palo Alto has historically done, with discussion of salary and benefits recommendations in Closed Session, followed by negotiations or consultations, and ultimately discussion and adoption of changes in Open Session. Based on a preliminary review, only the City of San Jose has experience with public discussion of compensation in open session, applying to both represented and unrepresented employees. This practice was instituted as San Jose wrestled with annual $100 million plus budget shortfalls during the Great Recession. Staff recommends referring this discussion to Policy and Services to further evaluate the San Jose process, allow sufficient time to collect experiences from other cities and School Districts, research other relevant trends, explore the policy and practical implications of a change in process, and review the procedures that would apply if a change is contemplated for represented groups. Following the Council’s direction on September 22, the City Manager met with employee representatives on the Management Compensation Committee. There was significant concern expressed about this potential change in direction and that unrepresented employees were being singled out and treated differently from other employee groups. Added to the fact that the Management and Professional Compensation decisions again this year trailed decisions made for SEIU, the contrast between going last on compensation decisions but going first on such a policy change was not well received. Staff expressed that they thought this should be a larger policy discussion related to all employees. That said, a timely decision on FY 2015 compensation for this group (we are already in the second quarter of the fiscal year and new health care premiums will go into effect in January, 2015) would be in order. For these reasons the City Manager recommends proceeding with the closed session for direction on Management/Professional compensation for FY 2015, followed by an open session, with the open/closed session on labor and compensation policy for all employee groups referred to Policy and Services Committee. Timeline If Staff’s recommendation is accepted, Staff intends to return to closed session regarding City of Palo Alto Page 3 compensation and benefits changes for the Management and Professional employee group on December 1, to be followed thereafter by an open session. Further, if procedures for conducting closed and open sessions regarding labor negotiations and compensation are referred to the Policy and Services Committee, staff suggests adding this to the agenda for theDecember 9, 2014 committee meeting Resource Impact Resources required for this policy discussion will be absorbed by existing Staff. Policy Implications Environmental Review (If Applicable) This item is not a project subject to environmental review.