HomeMy WebLinkAboutAGENDA REPORT 2019 0619 REG CCSA ITEM 09BCITY OF MOORPARK,
CALIFORNIA
City Council Meeting
of June 19, 2019
ACTION Approved Staff
Recommendation No. 1.
Unanimous Consensus
f or Appointment o f
Councilmembers Enegren
and Mikos t o t he Ad Hoc
Committee. BY B.Garza
B. Consider Exclusive Negotiating Agreement with Grand Pacific Asset 2, LLC, for
450 Charles Street (APN 512-0-081-050) 460 Charles Street (APN 512-0-081-
060), 484 Charles Street (APN 512-0-081-080), Remnant Parcel Corner of
Spring Road and Charles Street (APN 512-0-081-090) and 467 High Street (APN
512-0-081-110); and Appointing City Council Ad Hoc Committee Related to
Development of Disposition and Development Agreement. Staff
Recommendation: 1) Approve Exclusive Negotiating Agreement with Grand
Pacific Asset 2, LLC, subject to final language approval of the City Manager, and
authorize City Manager to execute the agreement; and 2) Select two members
of the City Council to participate on the Ad Hoc Committee. (Staff: Jessica
Sandifer)
Item: 9.B.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Jessica Sandifer, Community Services Manager
DATE: 06/19/19 Regular Meeting
SUBJECT: Consider Exclusive Negotiating Agreement with Grand Pacific Asset
2, LLC. for 450 Charles Street (APN 512-0-081-050) 460 Charles Street
(APN 512-0-081-060), 484 Charles Street (APN 512-0-081-080),
Remnant Parcel Corner of Spring Road and Charles Street (APN 512-
0-081-090) and 467 High Street (APN 512-0-081-110); and Appointing
City Council Ad Hoc Committee Related to Development of
Disposition and Development Agreement
BACKGROUND
The Redevelopment Agency of the City of Moorpark (“Agency”) acquired several
properties located at 450, 460, and 484 Charles Street for future affordable housing
development. The City was deeded an additional property adjacent to 484 Charles
Street from Pardee Homes after they made the improvements required by their
entitlements along Spring Road. The property located at 467 High Street was
purchased as an economic development property by the Agency. Prior to any projects
being developed on the properties, the Agency was dissolved pursuant to AB X1 26
(”Dissolution Act”), as upheld and modified by the Supreme Court in California
Redevelopment Association, et al. v. Ana Matosantos, et al. (53 Cal.4th 231(2011)). As
part of the dissolution process, the City of Moorpark elected to become the Successor
Housing Agency of the Redevelopment Agency of the City of Moorpark (Successor
Housing Agency) and acquired all the housing related properties and assumed the
affordable housing obligations of the former Agency. On January 1, 2014, SB 341
became effective, adding additional rules relative to the Successor Housing Agency
including the establishment of a five (5) year time limit to develop the housing related
properties. The law allowed for one extension of that five (5) year timeline, which the
City, acting as the Successor Housing Agency, exercised in 2017. The new deadline to
develop the housing related properties is August 27, 2022. Additionally, the Successor
Agency prepared a Long Range Property Management Plan (“LRPMP”) addressing the
disposition of real properties acquired by the former Redevelopment Agency. The
LRPMP provides that the Property identified in the LRPMP as Property No. 3, APN 512-
0-081-110 (467 High Street) will be retained by the City of Moorpark (“City”), provided
that the City pays compensation to the taxing entities. Pursuant to the LRPMP, as
approved by the California State Department of Finance, the Property was conveyed to
Item: 9.B.
10
Honorable City Council
06/19/19 Regular Meeting
Page 2
the City, upon the City’s payment of $305,000 in compensation to the taxing entities in
October 2016.
DISCUSSION
In March 2019, the City Council approved a Development Agreement and Residential
Planned Development 2013-01 with Grand Pacific Asset 2, LLC. (Grand Pacific). Under
the requirements of the approved entitlements Grand Pacific is required to develop 26
units of affordable housing for first-time home buyer. Due to the nature of the Grand
Pacific project, they are looking to develop those units off their project site. Grand
Pacific has approached the City about purchasing 450, 460, 484 Charles Street, the
remnant parcel on Charles Street, and 467 High Street. Grand Pacific’s proposal is to
develop their required affordable housing units on the Charles Street property and a
mixed-use residential/commercial project on the High Street property. Grand Pacific is
proposing to use the grade separation between the Charles Street properties and the
High Street property to provide subterranean parking for both the affordable units and
the mixed use development. The mixed use development is proposed to contain 22
market rate rental apartments and 3,000 square feet of ground floor commercial space.
Grand Pacific has asked that the City not consider any other development proposals or
conduct negotiations with any other parties while they perform their research,
conceptual site planning, and due-diligence for the project.
Staff has prepared an Exclusive Negotiating Agreement (ENA) with Grand Pacific with a
six-month term and a three-month extension upon the request of Grand Pacific and the
City Manager’s approval. The ENA provides a period of exclusivity during which the
steps of site planning, property negotiation, and environmental review can be
undertaken. The ENA also sets forth time periods for key milestones and a framework
for reimbursement of City costs. At the conclusion of the ENA period, if all deliverables
meet with City Council approval, staff would be authorized to negotiate a Disposition
and Development Agreement (DDA) for the property. Staff is also seeking appointment
of an Ad Hoc Committee of the City Council to participate in discussions about the
project with the Developer and negotiate the terms of the DDA.
FISCAL IMPACT
There is no fiscal impact from signing the ENA. The ENA provides that all City costs
associated with the ENA period would be reimbursed by Grand Pacific.
STAFF RECOMMENDATION
1. Approve Exclusive Negotiating Agreement with Grand Pacific Asset 2, LLC, subject
to final language approval of the City Manager, and authorize City Manager to execute the
agreement; and
2. Select two members of the City Council to participate on the Ad Hoc Committee.
Attachment – Exclusive Negotiating Agreement
11
ATTACHMENT
EXCLUSIVE NEGOTIATING AGREEMENT
This EXCLUSIVE NEGOTIATING AGREEMENT (“ENA”) is dated as of , 2019,
and is entered into by and between the CITY OF MOORPARK, a municipal corporation (the
“City”), and Grand Pacific Asset 2, LLC, a Limited Liability Company (the “Developer”). The
City and Developer are sometimes individually referred to herein as a “Party” and are sometimes
collectively referred to herein as the “Parties.”
R E C I T A L S
A. The City owns the land in the City of Moorpark, California that is described on
Exhibit “A” (the “Property”).
B. The City and the Developer desire that Developer construct and operate the
project described on Exhibit “B” on the Property (the “Project”). Developer’s proposed project
will assist with fulfilling Developer’s affordable housing requirement pursuant to the approved
Development Agreement with Grand Pacific Asset 2, LLC and Residential Planned
Development (RPD) 2013-01.
C. Developer intends to incur significant costs analyzing the Property and designing
the Project, and City intends to incur significant costs in negotiating and preparing a Disposition
and Development Agreement (the “DDA”) for the Property and Project. Developer has therefore
requested that the City agree to negotiate with Developer on an exclusive basis to establish the
terms and conditions of the DDA.
D. It is anticipated that during the term of this ENA, City staff and consultants and
attorneys of the City will devote substantial time and effort in meeting with Developer and its
representatives and consultants, reviewing proposals, plans and reports, negotiating and
preparing the DDA, obtaining consultant advice and reports (possibly including an appraisal),
and to the extent necessary, further complying with the California Environmental Quality Act
(“CEQA”).
NOW, THEREFORE, the Parties hereto agree as follows:
1. The term of this ENA shall commence on the date hereof and shall end on
the earlier of: (i) the date that is six (6) months after the date of this ENA, as may be extended by
the City Manager as set forth below in this Section 1, or (ii) the date on which the Developer and
City, enter in to a DDA for the Project, or (iii) the date on which the City or Developer
terminates this ENA as provided in Section 2 below (in either case, the “ENA Period”).
Provided that neither Party has terminated this ENA pursuant to Section 2 below, the ENA
Period may be extended by the City Manager, in writing, at the written request of Developer, for
up to three (3) months; provided, however, that the Developer is not then in material default
under this ENA (following notice to Developer and expiration of cure periods in accordance with
Section 3 below).
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2. The City may terminate this ENA if Developer should fail to comply with
or perform any provisions of this ENA and such failure is not cured within ten (10) days after
written notice from the City Manager to Developer, or if reasonable progress is not being made
in negotiations hereunder as determined by the City Manager in good faith. Developer may
terminate this ENA by written notice to City if the Developer determines, in its sole discretion,
that it does not wish to pursue the Project further.
3. During the ENA Period (as extended under Section 1 above, if applicable),
the City shall not negotiate with any person or entity other than the Developer for the sale, lease,
or development of the Property.
4. The Project must include the features/elements described on Exhibit “B”
attached hereto. Developer shall deliver the materials and information identified on Attachment
No. 1 attached hereto to the City within the times set forth on Attachment No. 1. Within ten (10)
days after each calendar month during the ENA Period (as extended under Section 1 above, if
applicable), Developer shall provide a written report to the City describing in reasonable detail
Developer’s activities with respect to the Project during such calendar month.
5. During the ENA Period, the City shall use good faith efforts to complete
(or cause to be completed) the tasks set forth in Attachment No. 2 attached hereto.
6. Developer shall reimburse the City for its actual out-of-pocket costs and
expenses (including legal fees and consultants costs) incurred in preparing this ENA and
fulfilling its obligations under this ENA, including, but not limited to: (i) the costs of negotiating
and preparing the DDA; and (ii) the costs of appraisals, economic consultants and the like used
by City to evaluate the Project, proposed transaction terms, and/or DDA (collectively, the
“Reimbursable Costs”). Concurrently with its execution of this ENA, Developer shall deposit
with the City the sum of ____________________ Dollars ($_______) (the “Reimbursement
Funds”). The Reimbursement Funds may be used and applied from time to time by the City to
pay or reimburse itself for Reimbursable Costs not otherwise paid or reimbursed by Developer.
Developer shall deposit with the City funds sufficient to replenish the Reimbursement Funds
held by City within ten (10) days after written demand by the City Manager. The City shall
provide Developer with a monthly accounting identifying in reasonable detail the Reimbursable
Costs to which Reimbursement Funds have been applied. Any Reimbursement Funds not
applied shall be delivered to the Developer (along with a final accounting of the City’s
application of the Reimbursement Funds) within thirty (30) business days after the earlier of: (i)
the execution of the DDA by the Parties, or (ii) the expiration or earlier termination of this ENA.
The provisions of this Section shall survive the expiration or earlier termination of this ENA, to
the extent that the City has incurred actual Reimbursable Costs for which there are insufficient
Reimbursement Funds then on deposit with the City, and provided that the City shall not enter
into any further agreements or incur any further costs for which Developer is responsible
subsequent to termination or expiration of this ENA. Notwithstanding anything to the contrary
in this ENA, express or implied, the City shall have the right in its sole and absolute discretion to
cease evaluation of submittals relating to the Project, stop any other staff work and/or work of its
consultants and stop negotiating or discussing the Project or DDA, in the event that the City
Manager determines that the sums then on deposit with City are not clearly sufficient to pay for
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all of the projected/established Reimbursable Costs projected/estimated in good faith by the City
Manager.
7. The City and Developer acknowledge that all applicable requirements of
CEQA must be met in order for City to approve Project entitlements and enter into the DDA, and
that this may require reports and/or analyses for CEQA purposes (collectively, the “CEQA
Documents”). Developer will, at its cost, fully cooperate with the City in the City’s preparation
of any CEQA Documents.
8. Developer shall bear all costs and expenses of any and all title,
environmental, physical, engineering, financial, and feasibility investigations, reports and
analyses and other analyses or activities performed by or for Developer. During the ENA
Period, the City shall deliver to Developer complete copies of any and all material non-
privileged reports and other material non-privileged documents pertaining to the Property which
are in City’s possession, at no cost to Developer other than the actual cost (if any) of duplicating
such documents.
9. The Developer and the City understand and agree that neither Party is
under any obligation whatsoever to enter into a DDA, and that notwithstanding its approval of
this ENA, the City shall have the right to disapprove any proposed DDA in its sole and absolute
discretion, and in that regard, Developer hereby expressly agrees that the City shall not be bound
by any implied covenant of good faith and fair dealing in connection with such approval or
disapproval of any proposed DDA. In the event of the expiration or earlier termination of this
ENA, the City shall be free to negotiate with any persons or entities with respect to the Property.
No consents, approvals, comments or discussions by staff shall diminish, affect or waive: (i)
rights of the City to later impose conditions and requirements under CEQA; (ii) the right of the
City not to approve the DDA; or (iii) the City’s other governmental rights, powers and
obligations.
10. Developer shall indemnify, defend, and hold the City and the City’s
respective officers, directors, members, employees, agents, contractors and affiliated entities
harmless from any and all claims, liabilities, damages, costs and expenses relating to or arising
out of this ENA or Developer’s failure to perform any obligation of Developer under this ENA,
or any challenges to this ENA. Developer’s obligations under the preceding sentence shall
survive the expiration or earlier termination of this ENA.
11. Developer shall maintain prior to the beginning of and for the duration of
this ENA insurance coverage as specified in Exhibit C, attached hereto and incorporated herein
by this reference as though set forth in full.
12. Developer represents and warrants that its undertakings pursuant to this
ENA are for the purpose of development of the Property and not for speculation in land, and
Developer recognizes that, in view of the importance of the development of the Property to the
general welfare of the community, the qualifications and identity of Developer and its principals
are of particular concern to City; therefore, this ENA may not be assigned by Developer without
the prior express written consent of the City Manager in his or her sole and absolute discretion.
However, the City acknowledges that Developer may form a new entity to be the Developer
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entity that will be party to the potential DDA, provided that such new entity is controlled and
partially but materially owned by Developer or owners of the Developer entity.
13. Any notice, request, approval or other communication to be provided by
one Party to the other shall be in writing and provided by certified mail, return receipt requested,
or a reputable overnight delivery service (such as Federal Express) and addressed as follows:
If to the Developer:
Grand Pacific Asset 2, LLC
300 East Esplanade Drive, Suite 1550
Oxnard, CA 93036
Attn: Gil Priel, Managing Member
If to the City:
City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Attn: City Manager
Notices shall be deemed delivered: (i) if sent by certified mail, then upon the date
of delivery or attempted delivery shown on the return receipt; or (ii) if delivered by overnight
delivery service, then one (1) business day after delivery to the service as shown by records of
the service.
14. This ENA constitutes the entire agreement of the Parties hereto with
respect to the subject matter hereof. There are no agreements or understandings between the
Parties and no representations by either Party to the other as an inducement to enter into this
ENA, except as may be expressly set forth herein, and any and all prior discussions and
negotiations between the Parties are superseded by this ENA.
15. This ENA may not be altered, amended or modified except by a writing
duly authorized and executed by all Parties.
16. No provision of this ENA may be waived except by an express written
waiver duly authorized and executed by the waiving Party.
17. If any Party should bring any legal action or proceeding relating to this
ENA or to enforce any provision hereof, or if the Parties agree to arbitration or mediation
relating to this ENA, the Party in whose favor a judgment or decision is rendered shall be entitled
to recover reasonable attorneys’ fees and expenses from the other. The Parties agree that any
legal action or proceeding or agreed-upon arbitration or mediation shall be filed in and shall
occur in the County of Ventura.
18. The interpretation and enforcement of this ENA shall be governed by the
laws of the State of California.
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19. Time is of the essence of each and every provision hereof in which time is
a factor.
20. This ENA may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same ENA.
21. Executed counterparts of this ENA may be delivered electronically by
email to: jsandifer@moorparkca.gov (for the City), and vince@dalygroupinc.com (for the
Developer).
IN WITNESS WHEREOF, the Parties hereto have executed this ENA as of the
day and year first written above.
OWNER:
CITY OF MOORPARK
By:
Troy Brown, City Manager
DEVELOPER:
Grand Pacific Asset 2, LLC. ,
a California Limited Liability Company
By:
Print Name: Gil Priel
Title: Managing Member
Attest:
, City Clerk
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EXHIBIT “A”
DESCRIPTION OF PROPERTY
Address: 450 Charles Street
APN: 512-0-080-050
Address: 460 Charles Street
APN: 512-0-080-060
Address: 484 Charles Street
APN: 512-0-080-080
Exhibit “A”
Page 1 of 2
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Address: NA
APN: 512-0-081-090 (as to a portion of the property)
PART OF AN UNNUMBERED LOT LOCATED AT THE EAST END OF BLOCK"F"AS THE SAME 1S DESIGNATED
AND DELINEATED UPON THAT CERTAIN MAP ENTITLED "M, L. WICKS SUBDIVISION OF PART OF TRACT
"U" AND ADDITION TO MOORPARK IN THE RO. SIMI, VENTURA CO., CAL.", IN THE CITY OF MOORPARK,
COUNTY OF VENTURA,STATE OF CALIFORNIA AND RECORDED IN BOOK 5, PAGE 37 OF MISCELLANEOUS
RECORDS (MAPS) IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY AND DESCRIBED AS
FOLLOWS:
BEGINNING AT A POINT IN THE SOUTH LINE OF CHARLES STREET 74 FEET EAST OF THE NORTHEAST
CORNER OF THAT CERTAIN PARCEL OF LAND CONVEYED BY PERCY L. WICKS TO VICTOR REMOS, BY
DEED RECORDED IN BOOK 149, PAGE 495 OF DEEDS, RECORDS OF VENTURA COUNTY, SAID POINT OF
BEGINNING BEING ALSO DISTANT 319.6 FEET EAST FROM THE NORTHEAST CORNER OF LOT 18 OF SAID
BLOCK"F"OF MOORPARK,ABOVE REFERRED TO;THENCE FROM SAID POINT OF BEGINNING.
1ST: EAST 7L1 FEET ALONG THE SOUTH LINE OF CHARLES STREET TO ITS INTERSECTION WITH THE
EXTENSION NORTH OF THE WEST LINE OF SPRING STREET;THENCE AT RIGHT ANGLES.
2N': SOUTH 155 FEET ALONG SAID WEST LINE OF SPRING STREET TO A POINT IN THE NORTH LINE OF
LANDS OF JOHN BARRETT;THENCE AT RIGHT ANGLE.
3RQ: WEST 71.1 FEET ALONG THE NORTH LINE OF SAID LANDS OF JOHN BARRETT TO A POINT 74 FEET
EAST OF THE SOUTHEAST CORNER OF SAID PARCEL OF LAND SO CONVEYED TO VICTOR REMOS,THENCE
AT RIGHT ANGLES.
4T11: NORTH 155 FEET TO THE POINT OF BEGINNING.
Address: 467 High Street
APN: 512-0-081-110
THAT PORTION OF LOT U, TRACT L, RANCH SIMrII, IN TEE COUNTY OF VENTURA, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 5 PAGE 5 OF MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY, BEING ALSO A PORTION OF THAT CERTAIN PARCEL
MARKED "JOHN BARRETT" ON MAP OF M. L. WICKS SUBDIVISION, RECORDED IN BOOK 5 PAGE
37 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS
FOLLOWS:
BEGINNING AT A POINT IN THE CENTERLINE OF HIGH STREET, 80 FEET WIDE, DISTANT
ALONG SAID CENTERLINE AND EASTERLY PROLONGATION THEREOF WEST 176 FEET FROM THE
CENTERLINE OF SPRING STREET, 60 FEET WIDE, AS SAIL) STREETS ARE SHOWN ON SAID LAST
METIONED MAP; THENCE CONTINUING ALONG THE CENTERLINE OF SAID HIGH STREET,
1ST: - WEST 150 FEET; THENCE.
2ND: - NORTH 185 FEET TO A 2" X 2" REDWOOD STAKE MARKED "LS 1642"; THENCE,
3RD: - EAST 150 FEET TO A 2" X 2" REDWOOD STAKE MARKED "LS 1842"; THENCE,
4TH: - SOUTH 185 FEET TO THE POINT OF BEGINNING.
EXCEPT THAT PORTION THEREOF LYING WITH SAID HIGH STREET.
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EXHIBIT "B"
REQUIRED PROJECT FEATURES/ELEMENTS
Conceptual plan for a 3-story mixed-use project that fronts on High Street containing 22 market
rate apartment units and 3,000[A1] square feet of commercial on the ground floor with
subterranean parking under the Charles Street properties to the north. The Charles Street
properties would would utilize the subterranean parking area and contain up to 26 affordable
First Time Home Buyer units, to satisfy the Developer’s affordable housing requirement for RPD
2013-01.
Exhibit “B”
Page 1 of 4
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ATTACHMENT NO. 1
SPECIFIC DEVELOPER TASKS
All timelines stated below begin after execution of the ENA. All days are in calendar days.
1. Within ninety (90) days, Developer shall deliver the following items for City staff review
and preliminary approval:
i) Schedule for processing of General Plan and Zoning Amendment for the
Project, if applicable.
ii) Preliminary site plan and revised architectural concept drawings
identifying the location, building envelopes, general configuration, uses of
the buildings and site, parking and traffic circulation, and proposed design
characteristics of the Project.
iii) Conceptual development program (“Development Program”) for the
Project that includes a breakdown of the proposed scope of development
including a range of building square footage by land use and range of
square footage and number of parking spaces and landscaped areas,
improvements, proposed public amenities, circulation, and other general
uses.
2. Within one-hundred twenty (120) days, Developer and City staff shall determine the
likely type and schedule for obtaining entitlements necessary for construction of the Project
including, but not limited to, discretionary permits.
3. Once Developer has concluded that project is financially viable, Developer will
participate in a community meeting to hear comments, concerns, questions, and suggestions from
residents and business owners in the City.
4. Within one hundred twenty-days (120) days, Developer shall deliver to the City for City
staff review and approval, a preliminary financing plan for the proposed Project.
5. Within ninety (90) days, Developer shall submit to the City a schedule of development
setting forth the proposed timetable for the commencement, substantial completion and final
completion of the Project (the “Development Schedule”).
6. Within one hundred twenty (120) days, Developer shall obtain and review a Phase I
environmental (hazmat) report for the Property, and if recommended by the Phase I, Developer
shall promptly obtain a Phase II report subject to entering into a reasonable right of entry
agreement with City. Developer shall promptly deliver copies to the City when received.
7. Developer shall obtain and review a preliminary report for the Property from a title
company selected by Developer and copies of the documents listed as title exceptions therein and
an ALTA survey and shall deliver copies of the reports, documents and survey to the City
together with a written description of any objections Developer may have to any of the title
exceptions (and the rationale for the objections).
Exhibit “B”
Page 2 of 4
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8. Within thirty (30) days, Developer shall deliver to City for City staff review and
approval, an organizational chart of the proposed Developer entity proposed to be a party to the
DDA.
9. By the end of the ENA term (and extended term, if applicable), Developer shall deliver to
the City a fully completed and executed development application.
Exhibit “B”
Page 3 of 4
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ATTACHMENT NO. 2
SPECIFIC CITY TASKS
All timelines stated below begin after execution of the ENA. All days are in calendar days.
1. Within thirty (30) days, City shall provide to Developer copies of all currently existing
plans, studies and other written information regarding the Property in its possession, to the extent
not previously delivered to Developer and to the extent material to the Project and not subject to
any attorney-client or attorney work product privilege or other privilege.
2. City shall use good faith efforts to prepare and process any required CEQA Documents as
soon as reasonably possible after submission by Developer of a complete development
application and payment of applicable fees/deposits.
3. City shall provide initial drafts of the DDA to Developer and shall thereafter revise them
to the extent reasonably permitted by the negotiations.
Exhibit “B”
Page 4 of 4
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EXHIBIT C
INSURANCE REQUIREMENTS
Prior to the beginning of and throughout the duration of this Agreement, Developer will maintain
insurance in conformance with the requirements set forth below. Developer will use existing
coverage to comply with these requirements. If that existing coverage does not meet
requirements set forth here, Developer agrees to amend, supplement or endorse the existing
coverage to do so. Developer acknowledges that the insurance coverage and policy limits set
forth in this section constitute the minimum amount of coverage required. Any insurance
proceeds available to the City in excess of the limits and coverage required in this Agreement
and which is applicable to a given loss, will be available to the City.
Developer shall provide the following types and amounts of insurance:
Commercial General Liability Insurance using Insurance Services Office (ISO) “Commercial
General Liability” policy form CG 00 01 or the exact equivalent. Defense costs must be paid in
addition to limits. There shall be no cross liability exclusion for claims or suits by one insured
against another. Limits are subject to review but in no event less than $1,000,000 per occurrence
for all covered losses and no less than $2,000,000 general aggregate.
Business Auto Coverage on ISO Business Auto Coverage form CA 00 01 including symbol 1
(Any Auto) or the exact equivalent. Limits are subject to review, but in no event to be less than
$1,000,000 per accident. If Developer owns no vehicles, this requirement may be satisfied by a
non-owned auto endorsement to the general liability policy described above. If Developer or
Developer’s employees will use personal autos in any way on this project, Developer shall
provide evidence of personal auto liability for each such person.
Workers’ Compensation on a state-approved policy form providing statutory benefits as required
by law with employer’s liability limits no less than $1,000,000 per accident or disease.
Excess or Umbrella Liability Insurance (Over Primary) if used to meet limit requirements, shall
provide coverage at least as broad as specified for the underlying coverages. Coverage shall be
provided on a “pay on behalf” basis, with defense costs payable in addition to policy limits.
Policy shall contain a provision obligating insurer at the time insured’s liability is determined,
not requiring actual payment by the insured first. There shall be no cross liability exclusion
precluding coverage for claims or suits by one insured against another. Coverage shall be
applicable to the City for injury to employees of Developer, subconsultants or others involved in
the Work. The scope of coverage provided is subject to approval by the City following receipt of
proof of insurance as required herein. Limits are subject to review.
Insurance procured pursuant to these requirements shall be written by insurers that are admitted
carriers in the State of California and with an A.M. Bests rating of A- or better and a minimum
financial size of VII.
General conditions pertaining to provision of insurance coverage by Developer. Developer and
the City agree to the following with respect to insurance provided by Developer:
Exhibit “B”
Page 1 of 4
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1. Developer agrees to have its insurer endorse the third party general liability coverage
required herein to include as additional insureds the City, its officials, employees, and agents,
using standard ISO endorsement CG 2010 with an edition prior to 1992. Developer also agrees to
require all contractors and subcontractors to do likewise.
2. No liability insurance coverage provided to comply with this Agreement shall prohibit
Developer, or Developer’s employees, or agents, from waiving the right to subrogation prior to a
loss. Developer agrees to waive subrogation rights against the City regardless of the applicability
of any insurance proceeds, and to require all contractors and subcontractors to do likewise.
3. All insurance coverage and limits provided by Developer and available or applicable to
this Agreement are intended to apply to the full extent of the policies. Nothing contained in this
Agreement or any other agreement relating to the City or its operation limits the application of
such insurance coverage.
4. None of the coverages required herein will be in compliance with these requirements if
they include limiting endorsement of any kind that has not been first submitted to the City and
approved in writing.
5. No liability policy shall contain any provision or definition that would serve to eliminate
so-called “third party action over” claims, including any exclusion for bodily injury to an
employee of the insured or of any contractor or subcontractor.
6. All coverage types and limits required are subject to approval, modification, and
additional requirements by the City, as the need arises. Developer shall not make any reductions
in scope of coverage (e.g. elimination of contractual liability or reduction of discovery period)
that may affect the City’s protection without the City’s prior written consent.
7. Proof of compliance with these insurance requirements, consisting of certificates of
insurance evidencing all of the coverages required and an additional insured endorsement to
Developer’s general liability policy, shall be delivered to city at or prior to the execution of this
Agreement. In the event such proof of any insurance is not delivered as required, or in the event
such insurance is canceled or reduced at any time and no replacement coverage is provided, the
City has the right, but not the duty, to obtain any insurance it deems necessary to protect its
interests under this or any other Agreement and to pay the premium. Any premium so paid by the
City shall be charged to and promptly paid by Developer or deducted from sums due Developer,
at the City’s option.
8. Certificate(s) are to reflect that the insurer will provide 30 days notice to the City of any
cancellation or reduction of coverage. Developer agrees to require its insurer to modify such
certificates to delete any exculpatory wording stating that failure of the insurer to mail written
notice of cancellation or reduction of coverage imposes no obligation, or that any party will
“endeavor” (as opposed to being required) to comply with the requirements of the certificate.
Exhibit “B”
Page 2 of 4
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9. It is acknowledged by the parties of this Agreement that all insurance coverage required
to be provided by Developer or any subcontractor, is intended to apply first and on a primary,
non-contributing basis in relation to any other insurance or self-insurance available to the City.
10. Developer agrees to ensure that subcontractors, and any other party involved with the
Work who is brought onto or involved in the Work by Developer, provide the same minimum
insurance required of Developer. Developer agrees to monitor and review all such coverage and
assumes all responsibility for ensuring that such coverage is provided in conformity with the
requirements of this section. Developer agrees that upon request, all agreements with
subcontractors and others engaged in the Work will be submitted to the City for review.
11. Developer agrees not to self-insure or to use any self-insured retentions or deductibles on
any portion of the insurance required herein and further agrees that it will not allow any
contractor, subcontractor, Architect, Engineer, or other entity or person in any way involved in
the performance of Work contemplated by this Agreement to self-insure its obligations to the
City. If Developer’s existing coverage includes a deductible or self-insured retention, the
deductible or self-insured retention must be declared to the City. At that time, the City shall
review options with the Developer, which may include reduction or elimination of the deductible
or self-insured retention, substitution of other coverage, or other solutions.
12. The City reserves the right at any time during the term of the Agreement to change the
amounts and types of insurance required by giving the Developer 90 days advance written notice
of such change. If such change results in substantial additional cost to the Developer, the City
will negotiate additional compensation proportional to the increased benefit to the City.
13. For purposes of applying insurance coverage only, this Agreement will be deemed to
have been executed immediately upon any party hereto taking any steps that can be deemed to be
in furtherance of or towards performance of this Agreement.
14. Developer acknowledges and agrees that any actual or alleged failure on the part of the
City to inform Developer of non-compliance with an insurance requirement in no way imposes
any additional obligations to the City nor does it waive any rights hereunder in this or any other
regard.
15. Developer will renew the required coverage annually as long as the City, or its employees
or agents face an exposure from operations of any type pursuant to this Agreement. This
obligation applies whether or not the Agreement is canceled or terminated for any reason.
Termination of this obligation is not effective until the City executes a written statement to that
effect.
16. Developer shall provide proof that policies of insurance required herein expiring during
the term of this Agreement have been renewed or replaced with other policies providing at least
the same coverage. Proof that such coverage has been ordered shall be submitted prior to
expiration. A coverage binder or letter from Developer’s insurance agent to this effect is
acceptable. A certificate of insurance and/or additional insured endorsement as required in these
Exhibit “B”
Page 3 of 4
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specifications applicable to the renewing or new coverage must be provided to the City within
five days of the expiration of coverage.
17. The provisions of any Workers’ Compensation or similar act will not limit the obligations
of Developer under this Agreement. Developer expressly agrees not to use any statutory
immunity defenses under such laws with respect to the City, its employees, officials, and agents.
18. Requirements of specific coverage features or limits contained in this section are not
intended as limitations on coverage, limits, or other requirements nor as a waiver of any
coverage normally provided by any given policy. Specific reference to a given coverage feature
is for purposes of clarification only as it pertains to a given issue, and is not intended by any
party or insured to be limiting or all-inclusive.
19. These insurance requirements are intended to be separate and distinct from any other
provision in this Agreement and are intended by the parties here to be interpreted as such.
20. The requirements in this section supersede all other sections and provisions of this
Agreement to the extent that any other section or provision conflicts or impairs the provisions of
this section.
21. Developer agrees to be responsible for ensuring that no contract used by any party
involved in any way with the Work reserves the right to charge the City or Developer for the cost
of additional insurance coverage required by this Agreement. Any such provisions are to be
deleted with reference to the City. It is not the intent of the City to reimburse any third party for
the cost of complying with these requirements. There shall be no recourse against the City for
payment of premiums or other amounts with respect thereto.
22. Developer agrees to provide immediate notice to City of any claim or loss against
Developer arising out of the work performed under this Agreement. The City assumes no
obligation or liability by such notice, but has the right (but not the duty) to monitor the handling
of any such claim or claims if they are likely to involve the City.
Exhibit “B”
Page 4 of 4
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