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CITY COUNCIL AGENDA ITEM NO. 11


Meeting Date: April 10, 2001 

Subject/Title: Sand Creek Crossing Shopping Center Reimbursement and Fee Payment Agreement

Submitted by: John Stevenson, City Engineer

Approved by: Jon Elam, City Manager



RECOMMENDATION 
Approve a Resolution approving a Reimbursement and Fee Payment Agreement with A.I.G. Baker Real Estate, L.L.C. for costs, construction and fees associated with Master Plan Infrastructure Facility Improvements related to the Sand Creek Crossing Shopping Center located south of Sand Creek Road, north of San Jose Avenue and east of the Highway 4 Bypass.

PREVIOUS ACTION
None.

BACKGROUND
The City of Brentwood has a long-standing policy of being “Business Friendly”. In support of this policy, the City Council has directed staff to expedite the processing of new commercial projects through the entitlement and plan check process. The Brentwood General Plan Economic Development Goal No. 5 encourages retail and service growth that corresponds with local regional demands, and generates tax revenues for the City; and the General Plan Economic Development Policy 2.1.2 titled “Incentives” directs the community to identify tax incentives, bonds, assistance programs and other benefits to attract a desirable, diverse range of companies to the City. This Agreement is in accordance with these General Plan Goals as well as City Council policy and direction. 

This proposed 259,522 square foot commercial shopping center is located adjacent to the Highway 4 Bypass and its off-ramp to Sand Creek Road. This area has just started to build out and the infrastructure development is in its infancy. Sand Creek Road will need to be widened, a traffic signal needs to be installed at the entry to the development, the Bypass off-ramp signal needs to be modified, San Jose Avenue needs to be widened, and a Zone II Water Line needs to be built - and that just scratches the surface. Pioneering a new development at this location at this time requires a substantial investment in public infrastructure including not only roads and water, but also storm drainage, sewer and the obligation to pay over $1.7 million in Infrastructure Development Fees. Pioneering new areas is more typically seen as a residential development function because of costs like these. This type of investment is difficult for a commercial project and most cities find themselves faced with sizeable demands from developers in order to induce them to build in their city. Brentwood is fortunate in that it has not been faced with sizeable demands since the Safeway Shopping Center was constructed 13 years ago on Central Boulevard. The developer of this new project suggested to staff about two months ago that the infrastructure costs associated with development in the Northwest Quadrant were making the project difficult to pencil. Since that initial declaration, staff has been working with the developer to identify precisely what the difficulty was, and to craft a solution that resulted in a win for both the City and the developer. Any solution presented must assure that the developer pays his fair share or obligation as established in the Development Fee Program.

The developers concern boiled down to the simple fact that the infrastructure that needed to be built to service the site was more than the project could handle. Part of this was alleviated when the developer realized that his development fees would be reduced because of some of the improvements he was constructing. Another part of the problem went away because of CIFP 2001-1, commonly known as the Northwest Quadrant CIFP, which makes it possible for the developer to pass on some of the infrastructure costs to the end users. That left what amounted to a relatively small but real problem; that problem being the remaining master plan roadway costs still exceeded the developer’s obligation per the Development Fee Program. The solution to this relatively small problem is to shift the developer’s fee obligation to the infrastructure most in need (roads) and to find some other way to pay the remaining fee categories. That other funding source for these remaining fee categories is a 50% pledge of the sales tax revenues from the project over a 4 year period. That means that all the fees are paid, the City gets more roads built faster and enjoys a substantial increase in sales tax revenues into the general fund, all at the same time.

One concern that was brought up early in the negotiations was that this agreement might set a precedent related to other commercial projects in Brentwood. It is staff's belief that this agreement does in fact set a precedent and confirm the City’s policy of being “Business Friendly”. The message that this agreement clearly sends is that Brentwood will work cooperatively with serious commercial developers to craft “win-win” solutions to mutual concerns, while holding the line and insisting that developers pay their obligation for the master plan infrastructure costs, as required by the Development Fee Program. 

This agreement is based on a 12 point program, which is attached as Exhibit “E”.

There are a number of questions that should be answered prior to entering into an agreement like this.

Question #1: Is the developer paying his “fair share” of infrastructure development in the City, or is the City paying it for him?

Answer #1: A review of Exhibit “B” confirms that the developer is paying his “”fair share” and more! The Development Fee Program established the infrastructure obligation for each development in the City. In this case, staff has determined that infrastructure needs in some categories (roads primarily) necessitates a shift of fee dollars from some fee categories to others. This is basically what this agreement is all about. The remaining question then is how do we make the fee categories whole that had funds shifted away from them? The answer to that is that we pledge a percentage of future sales tax revenues from this project to those categories until they are made whole.

Question #2: How much sales tax is projected to be generated by this shopping center and how long will the Sewer, Community Facility, Admin., and Engineering accounts have to wait to be fully funded under the parameters dictated by this agreement?

Answer #2: The State Sales Tax is 8% of annual sales and the City’s portion is 12.5% of that 8%. That works out to be 1% of annual sales. That equation is thrown off for this shopping center because of the supermarket. Food items do not get taxed, so the 1% of sales for a supermarket will only apply to the taxable items. In this case, that is projected to be about 37% of the supermarket sales. The total annual sales of this center are projected to be about $75,000,000 once established, with sales tax revenue to the City estimated at $623,000 per year (remember the reduction for food sales). Based on this information, which is believed by staff to be conservative, the various City accounts would be repaid in 3 years. Staff believes, however, that due to lower sales the first year or two, this payoff is more likely to be 4 years. Following this initial payoff, staff believes that the percentage pledge of sales tax revenues should be reduced by the Finance Director to 40% and extended sufficiently to reimburse fully for the cost of Sand Creek Road easterly across the park site, and the traffic signal into the site.

Question #3: Why go through all this? Why not just waive some of the Facility Fees?

Answer #3: We never waive Facility Fees. The Facility Fee Program is calculated to equitably distribute the cost to all development throughout the City. Waiving fees for one developer, even if that developer is commercial, would shift the infrastructure burden to other developers and that would be a violation of state law. Facility Fees must be in direct proportion to the demands placed on the infrastructure by the development. We can legally find other ways, such as those outlined in this agreement, to pay those development fees, but we cannot waive them.

Question #4: If we do this for this development, why don’t we do it for a residential development?

Answer #4: There are a number of answers to this one. Residential developments don’t pay sales tax, so that portion of this agreement is not available to them. We do offer residential developers the option of using Capital Improvement Financing Program (CIFP) Bonds to pay a portion of their Facility Fees over 30 years and that accomplishes the same thing. You will note that this program also utilizes CIFP Bonds to fund the Northwest Quadrant costs. We count on the residential development fees every year to fund the Capital Improvement Program because the residential income to the Facility Fee Program is fairly predictable. Commercial, office and industrial fees are not as consistent and therefore are not used for budgeting purposes.

Question #5: Why is the City anxious to see commercial developments build? Why do we care?

Answer #5: Commercial centers bring much needed goods and services to this community. They bring jobs to help our jobs-to-housing balance, and they bring substantial sales tax revenue to help support and improve our Police Department and other City services.

Question #6: What happens if the sales and accompanying tax revenues do not live up to the projection?

Answer #6: The Agreement and Council Resolution direct the Finance Director to extend the time of the 50% sales tax revenue pledge to fully fund the appropriate accounts, if necessary. The Agreement and Council Resolution also call for a 7% interest on the unpaid balance which protects the accounts.

Question#7: How do we know that A.I.G. Baker needs this help?

Answer #7: This agreement ensures that A.I.G. Baker pays their “fair share” of infrastructure costs to the City as calculated by the Development Fee Program. The costs associated with developing in the Northwest Quadrant tend to elevate the infrastructure costs above that “fair share” level and this agreement crafts ways to pay some of the excess costs over and above the “fair share” while maintaining the integrity of all of the City’s accounts. Staff has reviewed A.I.G. Baker’s proforma and is convinced that the need is legitimate.

The attached Exhibit “A” depicts the property in question.

The attached Exhibit “B” depicts this developments Development Fee obligation, how they satisfy their obligation, and how all of the City’s accounts are made whole.

The attached Exhibit “C” calculates the annual sales tax revenues to the City.

The attached Exhibit “D” outlines the projected fees, construction estimates, cash contributions, and amounts paid through annual pledging of sales tax revenues.

The attached Exhibit “E” describes the 12 point program that this agreement is based upon.

The Attached Exhibit “F” contains the Preliminary Engineering cost estimates related to the Public Infrastructure.

It is staff's belief that this is a creative and mutually beneficial agreement that promotes Brentwood’s long standing policy and reputation as being “Business Friendly”.

The out of pocket expenses to the Development Fee Program which will be repaid by this agreement are as follows:

Roadway Account (Traffic Signal) $ 140,625.00 (reimbursed through sales tax)
Water Account $ 71,400.97 (reimbursed through sales tax)
Roadway (Right-of-Way) To be determined, probably Fee Credits
Sand Creek Road Adjacent to City Park $ 617,347.00 (reimbursed through sales tax)

Projected Sales Tax Revenue to the City 
(Assuming 3% Inflation)

Tax Revenue Tax Revenue 
To Infrastructure To
Fiscal Year Account General Fund Total
(Assuming 7% Interest)

02/03 $ 150,000.00 $ 150,000.00 $ 300,000.00

03/04 $ 250,000.00 $ 250,000.00 $ 500,000.00

04/05 $ 340,000.00 $ 340,000.00 $ 680.768.00

05/06 $ 350,000.00 $ 350,000.00 $ 701,192.00

06/07 $ 290,000.00 $ 430,000.00 $ 722,227.00

07/08 $ 300,000.00 $ 440,000.00 $ 743,894.00

08/09 -0- $ 765,000.00 $ 765,000.00 
Attachments:

- Exhibit “A” Map of Developers Property
- Exhibit “B” City Development & Engineering Fee Obligation
- Exhibit “C” Annual Sales Tax Revenues to the City
- Exhibit “D” Projected Fees, Construction Estimates, Cash Contributions
- Exhibit “E” 12 Point Program of Agreement
- Exhibit “F” Preliminary Engineering Cost Estimates
- Reimbursement and Fee Payment Agreement
- City Council Resolution




RESOLUTION NO.


A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING A REIMBURSEMENT AND FEE PAYMENT AGREEMENT WITH A.I.G. BAKER REAL ESTATE, L.L.C. FOR COSTS, CONSTRUCTION AND FEES ASSOCIATED WITH MASTER PLANNED INFRASTRUCTURE FACILITY IMPROVEMENTS RELATED TO THE SAND CREEK CROSSING SHOPPING CENTER LOCATED SOUTH OF SAND CREEK ROAD, NORTH OF SAN JOSE AVENUE AND EAST OF THE HIGHWAY 4 BYPASS. 


WHEREAS, the Brentwood General Plan Economic Development Goal No. 5 encourages retail and service growth that corresponds with local and regional demands, and generates tax revenues for the City; and

WHEREAS, the Brentwood General Plan Economic Development Policy 2.1.2 titled “Incentives” directs the community to identify tax incentives, bonds, assistance programs and other benefits to attract a desirable, diverse range of companies to the City of Brentwood; and

WHEREAS, the Brentwood General Plan Economic Development Policy 5.1 titled “Siting Commercial”, encourages high quality commercial development in concentrated locations at intersections of major highways that will draw consumers from a wider regional market; and

WHEREAS, in April 1994 the City Council of the City of Brentwood adopted Resolution No. 94-63 which established a standard Reimbursement Agreement of Master Plan Facilities Improvements; and

WHEREAS, the City Engineer and City Attorney have continually updated, and improved that original base document with subsequent City Council approvals; and

WHEREAS, certain Master Plan Facility Improvements are reimbursable under the City of Brentwood Master Plan Facility Fee Program; and

WHEREAS, A.I.G. Baker Real Estate, L.L.C. will construct certain improvements eligible for reimbursement; and

WHEREAS, A.I.G. Baker Real Estate, L.L.C. has agreed to participate in the Northwest Quadrant CIFP 2001-1; and

WHEREAS, the City Council of the City of Brentwood and A.I.G. Baker mutually agree to the twelve point program described in the accompanying staff report and Reimbursement and Fee Payment Agreement; and 

WHEREAS, the Brentwood Economic Development Council Subcommittee has reviewed this agreement and recommended approval of the attached resolution.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby approve the Reimbursement and Fee Payment Agreement with A.I.G. Baker Real Estate, L.L.C. 



NOW, THEREFORE BE IT FURTHER RESOLVED, that the City Council of the City of Brentwood authorizes the City Finance Director to utilize the sales tax revenue generated by this project to repay the various City accounts in accordance with the staff report and attached agreement.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the10th Day of April, 2001 by the following vote:


REIMBURSEMENT AND FEE PAYMENT AGREEMENT
BRENTWOOD MASTER PLAN INFRASTRUCTURE FACILITIES
AIG BAKER REAL ESTATE, L.L.C.
SAND CREEK CROSSING SHOPPING CENTER

1. PARTIES AND DATE

This Agreement is made this 10th day of April 2001, by and between the City of Brentwood, California, a Municipal Corporation (the City") and AIG Baker Real Estate, L.L.C. (the "Developer").

2. RECITALS

2.1 The Developer, AIG Baker Real Estate, L.L.C. owns a 22.78-acre parcel within the City of Brentwood, generally bounded by the Highway 4 Bypass on the west, Sand Creek Road on the North and San Jose Avenue on the south. Subject property is depicted in Exhibit "A".

2.2 As one of the conditions to develop the Developer's Property, City will require Developer to design, construct, bond, finance and install on-site and offsite Master Plan Infrastructure Improvements. The Improvements are described in the attached Exhibit “B” and “D” and “D”. City-wide Master Plan Infrastructure Improvements are identified in the City of Brentwood 2001 Development Fee Program adopted November 28, 2000. 

2.3 Developer is willing to advance the costs of designing, constructing, installing, bonding, all permitting, financing and inspecting the Improvements subject to fee credits and cash reimbursement as indicated in Section 3.3 of this agreement, and subject to Planning Commission approval of the project.

2.4 The City of Brentwood agrees to design and construct the improvements identified as City Responsibility in Exhibit "B", "D", “E” and "F", and to make cash reimbursements to the developer upon completion to the satisfaction of the City Engineer of other improvements so designated in Exhibit "D" and “E”.

2.5 City has found that this Agreement is in accordance with the requirements of Sections 16.130.030 and 16.130.040 of the Municipal Code and California Government Code Sections 66485 through 66489.

2.6 The City makes no guarantee as to the approval of the project, and both parties agree that this agreement is automatically terminated in the event of City denial of the project.

2.7 The City of Brentwood and AIG Baker Real Estate, L.L.C. both agree to the 12 
point program described in Exhibit "E".

3. TERMS

3.1 Design and Construction of Improvements; Developer shall be solely responsible for designing, bonding, financing, constructing and installing the Improvements described as 

Developer Responsibility in Exhibit “B”, "D" “E” and "F". The Improvements shall be fully completed and ready for acceptance within the time period set forth in the City of Brentwood Planning Commission Conditions of Approval for this Project. City shall approve the plans and specifications for the work prior to construction. The design, construction and installation of the
improvements shall be to the satisfaction of the City in its sole and reasonably exercised discretion. 

3.2 Source of Reimbursement; City shall reimburse Developer in the form of facility fee credits and cash disbursement from the appropriate Infrastructure Facility Fee Funds for the costs associated with the construction and installation of the various Improvements. 

3.3 Method of Reimbursement; the Developer shall receive a combination of facility fee credits and cash reimbursement from the appropriate funds. Fee credits shall become effective upon City Engineers approval of the Improvement Plans and the Developer posting bonds to guarantee the construction. The Developer shall receive 80% of the cash reimbursement from the appropriate Infrastructure Facility Fee Funds upon the City Engineer's approval of the improvements being acceptable for public use. The remaining 20% of the cash reimbursement from the appropriate Infrastructure Facility Fee Funds shall be made to the developer upon the completion of all the final punch list items and City Council approval of the same. 

3.4 Maximum Reimbursement; The total reimbursable amount for the Infrastructure Master Plan Improvements is indicated in Exhibit “D” Reimbursement Calculation, attached hereto. 

3.5 Inspection; The City shall have the right at all times to inspect the construction of the improvements and to measure compliance with City plans and specifications.

3.6 Areas and Quantities; The areas and quantities used to develop this reimbursement agreement are the best estimates available at the time. The actual areas and quantities may change at the time of dedication and/or construction. The reimbursable amount shall be based on actual areas and quantities, using the approved improvements plans for exact lengths. If it is determined by the City Engineer that the areas and/or quantities have changed the reimbursable amount may be adjusted.

3.7 Indemnity and Insurance; (1) Developer shall defend, indemnify and hold City, its elected officials, officers, employees, and agents free and harmless from any and all liability from loss, damage, or injury to or death of persons or property in any manner arising out of or incident to Developer's performance of this Agreement, including without limitation all consequential damages, attorney's fees and court costs, whether or not resulting from the negligence of Developer or Developer's agents. This indemnity shall extend to any claims arising because Developer has failed to properly secure any necessary easements, land rights, contracts, or approvals, but shall not extend to any claims arising out of the sole negligence of City. This indemnity shall also extend to any legal action commenced by any third party against the City challenging the terms of this agreement or seeking judicial review.

(2) Developer or it's agent, General Contractor and/or Sub-contractors shall obtain and maintain insurance of the types and in the amounts described below in a form and with carriers satisfactory to City.

a. Commercial General Liability Insurance; Occurrence version commercial general liability insurance or equivalent form with a limit of not less than $1,000,000.00 (or as otherwise approved, in writing, by the City) each occurrence shall be maintained. If such insurance contains a general aggregate limit, it shall apply separately to this Agreement or be no less than two times the occurrence limit. Such insurance shall:

i. Name City, its officials, officers, employees and agents as insured by endorsement with respect to performance of this Agreement. The coverage shall contain no special limitations on the scope of its protection afforded to the above-listed insured.

ii. Be primary with respect to any insurance or self insurance programs covering City, its officials, officers, employees and agents.

iii. Contain standard subrogation of insured provisions.

b. Business Automobile Liability Insurance; Business automobile liability insurance or equivalent form with a limit of not less than $1,000,000.00 each accident shall be maintained. Such insurance shall include coverage for owned, hired and non-owned automobiles and shall contain the provisions set forth in subsections (a) (i) - (iii) set forth directly above.

c. Worker's Compensation Insurance; Worker's compensation insurance with statutory limits and employers liability insurance with limits of not less than $1,000,000.00 per each accident shall be maintained.

d. Other insurance Requirements; Developer shall:

i. Prior to taking any actions under this Agreement, furnish City with properly executed certificates of insurance which shall clearly evidence all insurance required in this Section and provide that such insurance shall not be canceled, allowed to expire or be materially reduced in coverage except on thirty (30) days prior written notice to City.

ii. Provide to City certified copies of endorsements and policies required in this subsection d, if requested by City, and properly executed certificates of insurance evidencing the insurance required herein.

iii. Replace or require the replacement of certificates, policies and endorsements for any insurance required herein expiring prior to completion and acceptance of the Improvements.

iv. Maintain all insurance required herein from the time of execution of this Agreement until the acceptance of the Improvements.

v. Place all insurance required herein with insurers licensed to do business in California.

3.8 Commencement of Construction and Inspection; Developer and its contractor or subcontractors shall commence construction of the Improvements after Developer has received 

all necessary City approvals including, but not limited to: Planning Commission approval, improvement plan approval, encroachment permits and right of way. All work performed on the Improvements shall be done in strict compliance with City-approved plans, specifications, 
approved revisions and the contract documents and in a good and workmanlike manner. All work performed by Developer, its contractor or agents to construct the Improvements shall be subject to inspection by City. Developer shall require its employees, contractors and agents to comply with all instructions given by City during construction of the Improvements, (subject to approval of Developer and City in the event of a Change Order). All fees and costs to construct the Improvements shall be borne solely by Developer, subject to reimbursement as provided herein. Inspection by City or its employees or agents shall not relieve Developer of its liability for design defects or improper or inadequate workmanship.

3.9 Compliance with Applicable Laws; Developer shall insure that all work performed on the Improvements is performed in a manner which complies with all applicable federal, state, county and local government laws, regulations and rules, including all rules and regulations of City, as these rules and regulations may be modified or changed from time to time, with proper written notice of any such modifications or changes.

3.10 Contractor Licenses; All work performed on the Improvements shall be done only by contractors licensed in the State of California and qualified to perform the type of work required and comply with the City's Business License Ordinance.

3.11 Acceptance of Work; Upon completion of the Improvements to the satisfaction of City Engineer, the Improvements shall be as soon as possible, presented to the City Council for dedication and acceptance, and for authorization to file a Notice of Completion. The City Council will accept the Improvements if it determines that the Improvements were constructed in accordance with the approved plans, specifications and contract documents that they operate satisfactorily, and that all other requirements of this Agreement have been satisfied. Immediately upon, and as a condition of the expiration of the guarantee period set forth in Section 3.13, Developer shall assign to City all of Developer's rights and remedies, including warranties, as set forth in the approved contract documents, and thereafter City shall have the same recourse under said contract documents that City would have had if City itself had engaged Developer's contractor to construct the Improvements. The City shall not unreasonably deny or delay any acceptance or approval required pursuant to this Agreement to be given by the City or any of its employees or agents.

3.12 Liability for Work Prior to Formal Acceptance; Until the City Council has formally accepted the Improvements, Developer shall be solely responsible for all damage to the work, regardless of cause, and for all damages or injuries to any person or property at the work site, except damage or injury due to the sole negligence of City, its agents or employees.

3.13 Guarantee; Developer shall guarantee all work and materials for the Improvements to be free from all defects due to faulty materials or workmanship for a period of one (1) year after the date of formal acceptance of the work by City, except that such guarantee shall be for ninety (90) days after City Council’s acceptance for all landscaping. A guarantee bond in the amount of 15 percent of the total cost of the Improvements as determined by the City and satisfactory to the City in its sole reasonably exercised discretion shall be posted with the City before its acceptance of the Improvements. Developer shall repair or remove and replace and all such work, together 

with any other work which may be displaced in so doing, that is found to be defective in workmanship or materials within the applicable one (1) year period or ninety (90) day period, without any expense whatsoever to City. In the event Developer fails to comply with the above-
mentioned provisions within thirty (30) days after being notified in writing (or in cases of emergency, immediately) City shall be authorized to proceed to have the defects remedied and made good at the sole cost and expense of Developer, who is hereby contractually bound to pay
the costs and charges therefore immediately upon demand. Such action by City will not relieve Developer of the guarantee required by this section. This section shall not, in any way, limit the liability of Developer or any other party for any design or construction defects in the work subsequently discovered by City.

3.14 Record Drawings; Prior to acceptance of the Improvements by the City Council, Developer shall provide City with one mylar copy of record drawings with certification by a licensed engineer in the State of California as to accuracy and completeness. Developer shall be solely responsible and liable for ensuring the completeness and accuracy of the record drawings. The cost of producing the record drawings shall be the responsibility of the Developer.

3.15 Ownership of the Improvements; From and after acceptance of the Improvements by formal action of the City Council, ownership of the Improvements shall be vested exclusively in City. 

3.16 Notice; Any notices required or desired to be sent pursuant to this Agreement shall be addressed as follows:

CITY: DEVELOPER:

City Manager AIG Baker Real Estate, L.L.C.
City of Brentwood Attention: Mike Hopper
150 City Park Way 1701 Lee Branch Lane
Brentwood, CA 945123 Birmingham, Alabama 35242

3.17 Termination; In the event that Developer defaults in the performance of any of its obligations under this Agreement or materially breaches any of the provisions of this Agreement, City Engineer shall have the option to terminate this Agreement upon 45 day advanced written notice to Developer. Notwithstanding, the City agrees to pay for completed work, as per the Improvement plans and approved revisions. Termination shall also occur upon City denial of project entitlement. Termination also occurs upon failure of A.I.G. Baker to pull building permits for a minimum of 70% of the square footage of the project by December 31, 2001.

3.18 Attorney's Fees; In the event, any action is commenced to enforce or interpret 
any term or condition of this Agreement, in addition to costs and any other relief, the prevailing party shall be entitled to reasonable attorney's fees. Jurisdiction over the authority in any dispute shall be maintained in Contra Costa County, State of California.

3.19 Entire Agreement; This Agreement contains the entire agreement of the parties hereto with respect to the matters contained herein.

3.20 Assignment; This Agreement shall not be assigned without the written consent of the parties hereto, and any assignment without such written consent shall be void and ineffective; provided, however, that following the expiration of the guarantee period set forth in Section 3.13, 

the Developer may assign its right to receive reimbursements hereunder by providing City with written notice of such assignment. The written notice shall become effective four (4) months 
following its delivery to the City, provided that the City shall not be responsible for any misdirected written notices under this section.

3.21 Time of Essence; Time is of the essence for this Agreement.




CITY OF BRENTWOOD DEVELOPER: AIG Baker Real Estate, L.L.C.



EXHIBIT "A"

"DEVELOPERS PROPERTY"


EXHIBIT "B"

"IMPROVEMENTS"

1. Zone II Water Line; The developer will construct a Zone II Water Line from the end of the Termo/Shea Zone II improvements east in San Jose Avenue, north through the shopping center and into Sand Creek Road. This is a fee creditable item and the City will reimburse the developer for any associated costs in excess of the developer fee obligation.

2. Sand Creek Road West of Shopping Center (715'); This is an off-site Master Plan Improvement and the developer will receive fee credits for the qualifying costs.

3. Sand Creek Road Adjacent to the Site (1103'); This is a master plan level improvement but the developer has some financial responsibility thru this reach. The costs will be split between the City and the developer according to the formulas in the development fee program. 

4. Sand Creek Road East of the Shopping Center; The City of Brentwood will construct this improvement at it's cost and reimburse itself from the projects future sales tax revenue. This road is adjacent to a City Park and therefore the City's responsibility.

5. Northwest Quadrant CIFP Improvements; These are the responsibility of the developer and are payable through the CIFP Bonds or cash. The developer may choose to increase bonding and pay for other public infrastructure. 

6. Project Entry Traffic Signal; The City will reimburse the developer for this improvement once the signal is complete and operational.


EXHIBIT "C"

"REIMBURSEMENT CALCULATION"


EXHIBIT “B”

CITY DEVELOPMENT & ENGINEERING FEE OBLIGATION
Based on 259,522 sq. ft.


Wastewater Fee $ 316,616.84
Water Fee 386,687.78
Road Fee 890,160.46
Community Facilities Fee 64,880.50
City Admin. Fee 46,713.96

TOTAL $ 1,705,059.54

Normal Engineering Plan Check & Inspection = $367,316.23


A.I.G. Baker Method of Meeting Obligation

Water Construction $ 386,687.78
Road Construction west of site 385,653.76
Eligible Road Construction adjacent to site 245,737.99
C.I.F.P. Bond (Northwest Quadrant) 710,533.00

TOTAL $ 1,728,612.53

Developer will pay ½ of normal Engineering Plan Check & Inspection


Infrastructure and Engineering Fees Paid through future Sales Tax Revenue

Wastewater Fee $ 316,616.84
Community Facilities Fee 64,880.50
Admin. Fee 46,713.96
Entry Traffic Signal 140,625.00
Engineering Plan Check & Inspection 183,658.11

TOTAL $ 752,494.41



EXHIBIT “C”

Estimated Revenue – Sales Tax A.I.G. Baker Sand Creek Crossing Shopping Center

Total Sales Tax = 8% of Yearly Sales – City’s Portion is 12.5% of the Tax Amount (.01 of the .08 collected)


City Portion
Store Name Sq. Ft. Yearly Sales of Sales Tax
(based on taxable
sales of $8 million)

Supermarket 61,017 $ 21,500,000.00 $ 80,000.00

Craft 24,304 $ 5,000,000.00 $ 50,000.00

Cloths Store 28,600 $ 8,500,000.00 $ 85,000.00

Bath & Linen Store 25,500 $ 7,500,000.00 $ 75,000.00

Open 33,614 $ 8,300,000.00 $ 83,000.00

Dept. Store 30,187 $ 8,000,000.00 $ 80,000.00

Various Shops 56,300 $ 17,000,000.00 $ 170,000.00
_______ ___________

Sub-Total Sq. Ft. 259,522 Estimated Yearly $ 623,000.00
Revenue to City
From Sales Tax 




EXHIBIT “D”

A.I.G. BAKER REAL ESTATE, LLC
SAND CREEK CROSSING SHOPPING CENTER (259,522 S.F.) 

AObligationInfrastructure & City Fees BPaid Thru Cash or Construction by Developer CPaid to City Accounts Thru Sales Tax Revenue DCash Reimbursement to Developer from City Infrastructure Account ECity Responsibility FBond Proceeds to City for NW Quad
Wastewater $ 316,616.84 -0- $ 316,616.84 -0- -0- -0-
Water $ 386,687.78 $ 458,088.75 -0- $ 71,400.97 -0- -0-
Road $ 890,160.46 $ 631,391.75 -0- -0- -0- $ 710,533.00
Comm Facilities $ 64,880.50 -0- $ 64,880.50 -0- -0- -0-
Admin. $ 46,713.96 -0- $ 46,713.96 -0- -0- -0-
* Engineering Plan Check & Insp. $ 367,316.23 $ 183,658.11 $ 183,658.11 -0- -0- -0-
Entry Traffic Signal -0- $ 140,625.00 $ 140,625.00 $ 140,625.00 -0- -0-
Sand Creek Road Right-of-Way X 
TOTAL $ 2,072,375.77 $1,413,763.61 $ 752,494.41 $ 212,025.97 Right-of-Way $ 710,533.00

* Does not include $363,000 cash bond needed to guarantee completing of grading.

"IMPROVEMENTS"

1. Zone II Water Line; The developer will construct a Zone II Water Line from the end of the Termo/Shea Zone II improvements east in San Jose Avenue, north through the shopping center and into Sand Creek Road. This is a fee creditable item and the City will reimburse the developer for any associated costs in excess of the developer fee obligation.

2. Sand Creek Road West of Shopping Center (715'); This is an off-site Master Plan Improvement and the developer will receive fee credits for the qualifying costs.

3. Sand Creek Road Adjacent to the Site (1103'); This is a Master Plan level improvement but the developer has some financial responsibility through this reach. The costs will be split between the City and the developer according to the formulas in the Development Fee Program. 

4. Sand Creek Road East of the Shopping Center; The City of Brentwood will construct this improvement at its cost and reimburse itself from the project’s future sales tax revenue. This road is adjacent to a City Park and is, therefore, the City's responsibility.

5. Northwest Quadrant CIFP Improvements; These are the responsibility of the developer and are payable through the CIFP Bonds or cash. The developer may choose to increase bonding and pay for other public infrastructure. 

6. Project Entry Traffic Signal; The City will reimburse the developer for this improvement once the signal is complete and operational.

EXHIBIT “E”

12 POINT PROGRAM OF AGREEMENT


1. The City will ensure that the developer pays his fair share of infrastructure development in the City, but will work with commercial developers to limit their infrastructure costs as much as possible to their fair share and if possible find alternate means of funding excess costs or fees.

2. The City of Brentwood will expand its Sand Creek Road project to include the median curb and one westbound lane north of the median from Highland Way to Linden. The City will bid and award this reach of roadway as part of its Sand Creek Road Capital Improvement Project No. 336-3061. This stretch of road is adjacent to a City Park so the cost of the road is rightly the City’s. The City will reimburse itself for this expense over time from the sales tax revenues produced by this project, since it does not have a developer to reimburse it.

3. A.I.G. Baker will construct the full south half-street improvement plus median improvements plus one westbound lane from Highland Way to their northwest corner. These improvements are the shared financial responsibility of A.I.G. Baker and the City as described in the Facility Fee Program.

4. A.I.G. Baker will construct the westerly extension of Sand Creek Road across the Contra Costa Water District right-of-way to transition into the Bypass intersection including modification of the Bypass traffic signal. This work will be a condition of approval of the shopping center and will be designed and constructed by A.I.G. Baker. This off-site work will be fee creditable through the Development Fee Program.

5. A.I.G. Baker will construct the Zone II Water facilities from the Termo/Shea Development down San Jose Avenue through the shopping center and into Sand Creek Road as a condition of approval of the project. This improvement is considered 100% over-sizing since the project will also build a Zone I waterline. The City will issue water facility fee credits for this construction. In the event the cost of construction exceeds A.I.G. Baker’s fee obligation; the City will reimburse the developer for that overpayment within 30 days of City acceptance of the improvements.

6. A.I.G. Baker will design and construct the traffic signal at the Sand Creek Road entry to the shopping center as a part of their development. Upon completion of the signal, acceptance of the improvement, and City Engineer’s approval of the appropriate associated costs in accordance with the Development Fee Program, the City will reimburse the developer for this expense. The City will reimburse itself over time for this expense through future sales tax revenues received from this project.

7. A.I.G. Baker will pay approximately one half of the normal Engineering Plan Check and Inspection Fees associated with this project in order to limit their up front costs to this project. The remainder of those fees will be paid to that account by future sales tax revenues received from the project.

8. The acquisition of the right-of-way for the north side of Sand Creek Road from Fairview Avenue to the west side of the Contra Costa Water District property will be the responsibility of the City of Brentwood. Funding of this right-of-way will be from the Roadway Fee Program and will not be the responsibility of A.I.G. Baker unless they purchase the Castello property, in which case they will be required to dedicate the right-of-way per the Development Fee Program for fee credits.

9. A.I.G. Baker will design and construct San Jose Avenue adjacent to their property, with appropriate transitions as a condition of their development. No credit for over-sizing will be allowed towards their Development Fee obligations.

10. All facility and engineering fees in excess of the required obligation listed in the staff report, agreement and resolution and in Exhibit “B” will be paid in full through future sales tax revenues of this project. The Finance Director shall transfer 50% of each year’s sales tax revenues into the appropriate Facility Fee, plan check, or inspection account so that the accounts are fully repaid for the Column “C” expenses depicted in Exhibit “D” within 4 years. If at the end of 3 years, in the opinion of the Finance Director, the accounts are not projected to be repaid in full by the end of the 4th year, the Council hereby directs the Finance Director to extend the time of repayment as required to fully fund the accounts. Repayment of the accounts shall include 7% simple interest on the unpaid balance. Once the accounts are repaid for the amounts listed in Exhibit “B”, the Finance Director is directed to reduce the pledge of sales tax revenues from 50% to 40% and continue payments to the roadway account until it has been repaid for the expense of Sand Creek Road adjacent to the City Park.

11. This agreement is based on A.I.G. Baker pulling building permits for this project by December 31, 2001. If building permits are not pulled by December 31, 2001, this agreement is null and void and is mutually agreed by both parties as terminated.

12. A.I.G. Baker has paid their fair share of the Northwest Quadrant Design Engineering Fee and agrees to participate in the Northwest Quadrant CIFP either through the sale of bonds on their property or through a cash payoff of their fair share of Northwest Quadrant Infrastructure as determined by the City Engineer.

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