HomeMy WebLinkAbout2026 Troutdale Village, LLC - Reimbursement Agmt - Public Improvements ConstructionREIMBURSEMENT AGREEMENT
FOR CONSTRUCTION OF PUBLIC IMPROVEMENTS
(La Quinta Village Apartments Project)
Between
THE CITY OF LA QUINTA,
a California municipal corporation and charter city
and
TROUTDALE VILLAGE, LLC,
an Oregon limited liability company
PARTIES AND DATE.
This Reimbursement Agreement for Construction of Public Improvements
(La Quinta Village Apartments Project) ("Agreement") is entered into as of this 16th day
of June, 2026, by and between the City of La Quinta, a California municipal corporation
and charter city ("City") and Troutdale Village, LLC, an Oregon limited liability
company ("Developer"). City and Developer are sometimes hereinafter individually
referred to as "Party" and hereinafter collectively referred to as the "Parties."
II. RECITALS.
A. WHEREAS, on November 21, 2023, the City Council of the City of La Quinta
adopted Resolution No. 2023-039, approving General Plan Amendment 2022-0002
("GPA"), conditionally approving Specific Plan 2022-0001 (SP 2004-071, Amendment 2)
("SPA2"), and conditionally approving Site Development Permit 2022-0001 ("SDP"), and
conditions of approval ("COAs") attached thereto (collectively, the "Approvals") related to
the development of a 252-unit apartment project, which includes 74 moderate -income
rental units, on approximately 14.03 acres (APN 646-070-016) located on the northeast
corner of Washington Street and Avenue 50 (the "Property") in the City, referred to as
the La Quinta Village Apartments Project, as more specifically described, approved, and
conditioned as set forth in said Resolution and Approvals (the "Project").
B. WHEREAS, on October 21, 2025, the City Council of the City of La Quinta
adopted Resolution No. 2025-025, approving Site Development Permit 2025-0005,
granting a two-year time extension of the SDP and COAs.
C. WHEREAS, the Project is a private development on private property
proposed by the Developer and the City maintains no proprietary interest in the Project.
D. WHEREAS, the COAs for the SDP include, among other conditions, as a
condition of regulatory approval of the Project, require the construction, alteration,
demolition, installation, or repair work on public works of improvement. Those required
public works of improvement include, without limitation, public street, water, and electrical
off -site improvements, as more particularly set forth in Exhibit A attached hereto and
incorporated herein by this reference (each, a "Conditioned Public Improvement" and,
collectively the "Conditioned Public Improvements"). Furthermore, for purposes of this
Agreement, the term "over which the City has permitting jurisdiction" means the street
and other right of way improvements described in Exhibit A.
E. WHEREAS, Developer has requested of the City, and the City has agreed,
to contribute to the costs to complete the Conditioned Public Improvements, and no other
costs related to the Project, as more particularly set forth herein. For good and valuable
consideration as acknowledged and agreed by the Parties hereto, the City will provide to
Developer, through payment or reimbursement of actual costs to be incurred or incurred,
in an amount not to exceed Five Million Dollars ($5,000,000.00) (the "City Funds
Amount") solely for use for the construction, alteration, demolition, installation, or repair
of the Conditioned Public Improvements as more particularly set forth in this Agreement.
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F. WHEREAS, California Labor Code section 1720(c)(2) provides, "If the state
or a political subdivision requires a private developer to perform construction, alteration,
demolition, installation, or repair work on a public work of improvement as a condition of
regulatory approval of an otherwise private development project, and the state or political
subdivision contributes no more money, or the equivalent of money, to the overall project
than is required to perform this public improvement work, and the state or political
subdivision maintains no proprietary interest in the overall project, then only the public
improvement work shall thereby become subject to [state requirements under Labor Code
section 1720 et seq.]." For purposes of Labor Code section 1720, "political subdivision"
of the state includes, without limitation, the City, the Coachella Valley Water District, a
public agency of the State of California ("CVWD"), and the Imperial Irrigation District, an
irrigation and electric district organized and existing under the laws of the State of
California ("IID").
G. In furtherance of the private development of the Project by Developer, and
to facilitate the construction, alteration, demolition, installation, and/or repair of the
Conditioned Public Improvements pursuant to the COAs, and payment or reimbursement
for the same. Developer and City enter into this Agreement.
III. TERMS.
1. Effectiveness. This Agreement shall not be effective unless and until: (a) The City
Council for the City of La Quinta approves at a duly noticed public meeting this Agreement
and the appropriation of funding for the Conditioned Public Improvements to be paid for
or reimbursed under this Agreement; and (b) Developer and City execute this Agreement
(the "Effective Date"). The Effective Date shall be inserted into the Preamble of this
Agreement. The Recitals in this Agreement are substantive and shall be interpreted as
such as incorporated to the substantive terms of this Agreement as set forth below.
1.1 Definitions; City Manager Authority to Implement Agreement. For purposes
of enforcing this Agreement, the term "City" shall include, but shall not be limited to, City
Council, City Engineer (Public Works Director), Design and Development Director,
Building Official, or any of their authorized representatives. Unless a City public body
(such as the La Quinta Planning Commission or City Council) is required by State or City
law to take official action, and absent a City public official or City public employee
identified in this Agreement, the City Manager of the City ("City Manager") or authorized
designee shall have the authority to act on behalf of the City for the implementation and
interpretation of this Agreement, and the City Manager shall have the sole and absolute
discretion to determine which public body, public official or public employee may act on
behalf of City for any particular purpose.
2. Conditioned Public Improvements. Subject to the payment and reimbursement
provisions in Section 17 below, Developer shall or shall cause construction, alteration,
demolition, installation, and/or repair of the Conditioned Public Improvements (individually
and collectively, "Work"). The Work includes, as required, replacement, relocation, or
removal of any component of any utility system or public improvement in conflict with the
Work. The Work shall be performed to the complete satisfaction of the City Engineer over
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which City has permitting jurisdiction and otherwise to the satisfaction of the owner of
such utility system or public improvement. Developer shall cause all equipment, tools,
materials, labor, tests, design work, and engineering services necessary or required to
fully and adequately complete the Conditioned Public Improvements.
2.1 Permits; Notices; Utility Statements. Prior to commencing any work,
Developer shall cause all necessary permits and licenses to be obtained, all necessary
and incidental notices required for the Work to be given and performance of Developer's
obligations under this Agreement. The work shall be performed in full compliance with
the regulations, rules, and other requirements contained in any permit or license issued
for the Work. Prior to commencing any Work over which City has permitting authority,
Developer shall cause the filing of a written statement with the City Clerk and the City
Engineer, signed by Developer and each utility which will provide utility service to the
Property, attesting that all deposits legally required by the utility for the extension and
provision of utility service to the Property. City agrees to timely review any submittals
pursuant to this Section.
2.2 Pre -approval of Plans and Specifications. The applicable Work shall not be
performed until all plans, specifications, estimates and bonds for the applicable Work
have been submitted to and approved by the political subdivision (public agency) with
jurisdiction over the Work. For each Conditioned Public Improvement over which the City
has permitting jurisdiction, Section 1.1 of this Agreement shall govern for purposes of pre -
approval of plans and specifications. City agrees to timely review any submittals pursuant
to this Section.
2.3 Quality of Work; Compliance With Laws and Codes. The construction plans
and specifications for each Conditioned Public Improvement shall be prepared in
accordance with all applicable federal, state and local laws, ordinances, regulations,
codes, and standards. Each Conditioned Public Improvement shall be completed in
accordance with all approved maps, conditions, plans, specifications, standard drawings,
and special amendments thereto on file with applicable permitting authority, as well as all
applicable federal, state, and local laws, ordinances, regulations, codes, standards, and
all other requirements applicable at the time the Work is actually commenced.
2.4 Standard of Performance. Developer shall cause all Work to be performed
in a good and workmanlike manner, and consistent with the standards generally
recognized as being employed by professionals in the same discipline in the State of
California. For any Work within the City's permitting authority, Developer represents and
maintains that it or its contractors shall be skilled in the professional calling necessary to
perform the Work, that they shall have all licenses, permits, qualifications and approvals
of whatever nature that are legally required to perform that Work, and that such licenses,
permits, qualifications and approvals shall be maintained throughout the performance of
that Work.
2.5 Alterations to Improvements. All Work shall be done and improvements
made and completed as shown on approved plans and specifications, and any
subsequent alterations thereto. If during the course of performing the Work it is
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determined that the law requires alterations in that Work, Developer shall cause such
design and construction changes as may be reasonably required by the applicable
political subdivision (public agency). Any alterations in the plans and specifications for
any Conditioned Public Improvement to be completed may be accomplished without
giving prior notice thereof to Developer's surety for this Agreement. Notwithstanding
anything herein to the contrary, any such design and construction changes shall be
subject to the payment and reimbursement provisions in Section 17 below, and shall
automatically extend the time for completion of that Conditioned Public Improvement for
the time reasonably necessary to implement such design and construction changes, as
mutually determined by City and Developer, each in their reasonable discretion.
3. Maintenance of Conditioned Public Improvements. Except for any Conditioned
Public Improvement over which the City has permitting jurisdiction and the City has
accepted as dedicated to the City after the completion of the work for that Conditioned
Public Improvement, City shall not be responsible or liable for the maintenance or care of
any of the Conditioned Public Improvements. City shall exercise no control over any
Conditioned Public Improvements except through its generally applicable regulatory
authority and pursuant to COAs. Subject to the payment and reimbursement provisions
in Section 17 below, for Work performed by Developer, Developer shall maintain each
Conditioned Public Improvement in a state of good repair until all work for that
Conditioned Public Improvement is completed by Developer and is thereafter dedicated
to and accepted by the political subdivision (public agency) with jurisdiction over that
Conditioned Public Improvement. It shall be Developer's responsibility to initiate all
maintenance work for all Work performed by Developer, but if Developer shall fail to do
so, Developer shall promptly perform such maintenance work when notified to do so by
City. If Developer fails to properly prosecute its maintenance obligation for the applicable
Work under this section within ten (10) days of Notice from City pursuant to Section 20.4
of this Agreement, City, at its sole cost, may do all work necessary for such maintenance;
provided, however, Developer shall be responsible to pay to City (i) a fifteen percent
(15%) administrative fee, based on the costs City incurs (including staff overhead) in
performing such work, and (ii) all "City Enforcement Costs" (as defined in Section 10
below) incurred by City pursuant to Section 10 below in obtaining Developer's compliance
with this Agreement. City shall not be responsible or liable for any damages or injury of
any nature in any way related to or caused by Developer's maintenance or failure to
maintain any of the Conditioned Public Improvements as required by this Section.
4. Construction Schedule. Subject to Section 20.14 of this Agreement, unless
extended pursuant to Section 4.1 of this Agreement, Developer shall fully and adequately
complete or cause to be completed the Conditioned Public Improvements according to
the following: (A) For each Conditioned Public Improvement over which the City has
permitting jurisdiction, prior to issuance of the final certificate of occupancy for the Project,
subject to any extensions allowable under any permit or approval for the completion of
construction for the applicable Conditioned Public Improvement; (B) For each
Conditioned Public Improvement over which the City does not have jurisdiction, the Work
shall be completed or caused to be completed pursuant to the permit(s), approval(s),
contract(s), or other arrangement with the political subdivision (public agency) with
jurisdiction over the Conditioned Public Improvement.
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4.1 Extensions. City may, in its sole and absolute discretion, provide Developer
with additional time within which to complete a Conditioned Public Improvement over
which the City has permitting jurisdiction; provided, however, City shall not unreasonably
withhold its consent to Developer's request for additional time within which to complete
any Conditioned Public Improvement as long as the Work is being diligently pursued to
completion. It is understood that by providing the security required under Section 13.0 et
seq. of this Agreement, Developer and its surety consent in advance to any extension of
time as may be given by City to Developer, and waives any and all right to notice of such
extension(s). In connection with granting any such extension to Developer, City reserves
the right to review the sufficiency of the improvement security provided by Developer, and
to require adjustments thereto when warranted as a result of such extension, according
to City's reasonable discretion.
5. Grading. Developer agrees that any and all grading done or to be done in
conjunction with the Work will be required to conform to all federal, state, and local laws,
ordinances, regulations, codes, and standards including, without limitation, and as
applicable, the City's grading regulations, the National Pollutant Discharge Elimination
Systems (NPDES), and stormwater regulations thereunder as administered by the State
Water Resources Control Board and Regional Water Quality Control Boards. In order to
prevent damage to any Conditioned Public Improvement over which the City has
permitting jurisdiction by improper drainage or other hazards relating to said Conditioned
Public Improvements, the grading shall be completed in accordance with the time
schedule for completion of a Conditioned Public Improvement established by this
Agreement, and prior to City's approval and acceptance of any Conditioned Public
Improvement and release of the Security as set forth in Section 13.0, et seq., of this
Agreement. Developer further agrees that the indemnification as set forth in Section 14.0
of this Agreement shall extend to and include any and all grading contemplated by this
Agreement, including but not limited to, any partial or rough grading work.
6. Utilities. Developer shall provide utility services, including water, power, gas, and
telephone service to serve, if applicable, the Conditioned Public Improvements.
7. Fees and Charges. Subject to the payment and reimbursement provisions in
Section 17 below, Developer shall pay all fees, charges, and taxes arising out of the Work,
including, but not limited to, all plan check, report review, engineering, inspection, testing,
and other service fees, and any impact or connection fees established by, as applicable,
City ordinance, resolution, regulation, or policy, or by any political subdivision (public
agency) with jurisdiction over the applicable Conditioned Public Improvement.
8. City Inspection of Conditioned Public Improvements. Developer shall, at its sole
cost and expense (but subject to the payment and reimbursement provisions in Section
17 below), and liability, and at all times during construction, installation, and/or repair of
the Conditioned Public Improvements, maintain reasonable and safe facilities and, when
subject to the City's permitting jurisdiction, provide safe access for inspection by the City
of the areas where the Work is occurring or will occur.
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9. Default: Notice: Remedies.
9.1 Notice. If Developer neglects, refuses, or fails to fulfill or timely complete
any obligation, term, or condition of this Agreement, or if City determines any Conditioned
Public Improvement over which the City has permitting jurisdiction, is being constructed
in a manner which is both inconsistent with the approved plans or permits and violates
any applicable federal, state, or local law, ordinance, regulation, code, or standard, and
Developer fails to substantially commence the work required to remedy the default or
violation within thirty (30) days of Developer's receipt written notice ("Notice") by the City,
then Developer shall be in default hereunder ("Event of Default"). City shall concurrently
provide a copy of any Notice of default or violation to Developer's surety and Developer's
surety shall have the right to cure the default or violation in accordance with the terms of
the Security (defined below). If the default or violation constitutes an immediate threat to
the public health, safety, or welfare, City may provide the Notice verbally, and Developer
shall substantially commence the required work within twenty-four (24) hours thereof.
Immediately upon City's issuance of the Notice, Developer and its surety shall be liable
to City for all "City Enforcement Costs" (as defined in Section 10 below) incurred by City
pursuant to Section 10 below in obtaining Developer's compliance with this Agreement;
provided, however, the surety's liability for such City Enforcement Costs shall be subject
to the terms and conditions of the "Security" (as defined in Section 13 below).
9.2 Failure to Remedy; City Action. If the Work required to remedy the noticed
default or violation given pursuant to Section 9.1 is not diligently prosecuted to a
completion acceptable to City within the time frame contained in the Notice, City may, at
its sole cost, complete all remaining work, arrange for the completion of all remaining
work, and/or conduct such remedial activity as in its sole and absolute discretion it
believes is required to remedy the default or violation; provided, however, Developer shall
be responsible to pay to City (i) a fifteen percent (15%) administrative fee, based on the
costs City incurs (including staff overhead) in completing or arranging for the completion
of such work, and (ii) all "City Enforcement Costs" (as defined in Section 10 below)
incurred by City pursuant to Section 10 below in obtaining Developer's compliance with
this Agreement. City's right to take such actions shall in no way be limited by the fact that
Developer or its surety may have constructed any, or no portion of a Conditioned Public
Improvement at the time of City's demand for performance. In the event City elects to
complete or arrange for completion of the remaining Work , City may require all work by
Developer or its surety on the applicable Work to cease in order to allow adequate
coordination by City.
9.3 Other Remedies. In the event that City does not take action pursuant to
Section 9.0, et seq. of this Agreement with respect to Work over which the City has
permitting jurisdiction, City shall not be prohibited or prevented from exercising any other
right or pursuing any other legal or equitable remedy available under this Agreement or
any federal, state, or local law. City may exercise its rights and remedies independently
or cumulatively, and City may pursue inconsistent remedies. City may institute an action
for damages, injunctive relief, or specific performance.
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10. City Enforcement Costs. If Developer fails to construct the Work over which the
City has permitting jurisdiction within the time required by this Agreement, or if Developer
fails to comply with any other obligation contained herein related to the same, Developer
and its surety shall each be liable to City for all administrative expenses, fees, and costs,
including reasonable attorney's fees and costs, incurred in obtaining compliance with this
Agreement or in processing any legal action or for any other remedies permitted by law,
(collectively, the "City Enforcement Costs"); provided, however, the surety's liability for
such City Enforcement Costs shall be subject to the terms and conditions of the Security.
Notwithstanding anything to the contrary in this Agreement, any City Enforcement Costs
that Developer incurs pursuant to this Section 10 shall not be subject to payment or
reimbursement pursuant to Section 17 below.
11. Acceptance of Improvements; As -Built or Record Drawings. If the Conditioned
Public Improvements over which the City has permitting jurisdiction are properly
completed by Developer and approved by the City Engineer, and if said Conditioned
Public Improvements comply with all applicable federal, state and local laws, ordinances,
regulations, codes, and standards as reflected in the approved plans or permits for the
applicable Work, the City Engineer shall accept the improvements that constitute said
Conditioned Public Improvements over which the City has permitting jurisdiction.
For Conditioned Public Improvements over which the City does not have jurisdiction,
Developer's obligations under this Agreement shall be fully performed if the public agency
with permitting jurisdiction determines said Conditioned Public Improvements are
properly completed in accordance with the standards imposed by the public official of the
political subdivision (public agency) with jurisdiction over the applicable Conditioned
Public Improvement.
12. Warranty and Guarantee. Developer agrees, or shall cause any contractor
completing the work to agree, to the following:
12.1 General Provisions for Warranty. (A) For each Conditioned Public
Improvement over which the City has permitting jurisdiction, Developer hereby warrants
and guarantees against any defective work or labor done, or defective materials furnished
in the performance of this Agreement (but not including the maintenance of any
landscaping within the Property), for a period of one (1) year following completion of the
Work and acceptance by City Engineer (or the period of time specified in any guarantee
or warranty provided by any manufacturer or supplier of equipment of materials
incorporated into a Conditioned Public Improvement, whichever is later); and (B) For each
Conditioned Public Improvement over which the City does not have jurisdiction,
Developer shall warrant and guarantee against any defective work or labor done, or
defective materials furnished in the performance of this Agreement (but not including the
maintenance of any landscaping within the Property), for the period required by the
political subdivision (public agency) with jurisdiction over the Conditioned Public
Improvement (each, a "Warranty" and, collectively, the "Warranties").
12.2 Duty to Repair Defects During Warranty Period. During the Warranty for
any Work over which the City has permitting jurisdiction, Developer shall, within thirty (30)
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days after being notified in writing by City of any defect or non-conformance to the
approved plans and specifications, repair, replace, or reconstruct that Work in accordance
with the applicable ordinances, resolutions, regulations, codes, standards, or other
requirements of City and to the approval of the City Engineer. Developer shall act sooner
as requested by City in response to a demonstrated emergency.
12.3 Costs Borne by Developer. All repairs, replacements, or reconstruction
during the Warranty shall be at the sole cost, expense, and liability of Developer and its
surety to the extent resulting from Developer's negligence or willful misconduct. With
respect to all Work over which the City has permitting jurisdiction, if all or any portion of
an identified Conditioned Public Improvement has been repaired, replaced, or
reconstructed during the Warranty pursuant to this subsection, Developer and its surety
hereby agree to extend the Warranty with respect to such repaired, replaced, or
reconstructed portions of the identified Conditioned Public Improvement for an additional
one (1) year period following the City's acceptance of the repaired, replaced, or
reconstructed portions of the identified Conditioned Public Improvement in accordance
with this Agreement.
12.4 Nonexclusive Remedy. Nothing in this Section 12 and Sections 12.1-12.4
shall relieve Developer from any other liability it may have under federal, state, or local
law to repair, replace, or reconstruct any of the Work over which the City has permitting
jurisdiction following expiration of the Warranty or any extension thereof as provided in
this Agreement. Developer's warranty obligation under this Section 12 and
subsections 12.1-12.4 shall survive the expiration or termination of this Agreement. All
warranties and guarantees of subcontractors, suppliers and manufacturers with respect
to any portion of the work, whether express or implied, are deemed to be obtained by
Developer for the benefit of the City for Conditioned Public Improvements over which the
City has permitting jurisdiction, regardless of whether or not such warranties and
guarantees have been transferred or assigned to the City or political subdivision (public
agency) by separate agreement. Developer shall enforce such warranties and
guarantees, if necessary, on behalf of the City. Following the expiration of the Warranty,
Developer shall, at no out of pocket cost to Developer, reasonably cooperate with City in
the enforcement of such warranties and guarantees for any Conditioned Public
Improvement over which the City has permitting jurisdiction, . In the event that Developer
fails to perform its obligations under this Section 12 or Sections 12.1-12.4, or under any
other warranty or guaranty under this Agreement or required pursuant to this Agreement,
then, for any Work over which the City has permitting jurisdiction, the City, at its sole cost,
shall have the right to correct and replace any defective or non -conforming work for the
identified Conditioned Public Improvement and any work damaged by such work or the
replacement or correction thereof; provided, however, Developer shall be responsible to
pay to City (i) a fifteen percent (15%) administrative fee, based on the costs City incurs
(including staff overhead) in performing such corrective and/or replacement work, and (ii)
all "City Enforcement Costs" (as defined in Section 10 below) incurred by City pursuant
to Section 10 below in obtaining Developer's compliance with this Agreement.
13. Security; Surety Bonds. Subject to the payment and reimbursement provisions in
Section 17 below, Developer shall provide to City, for all Work over which the City has
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permitting jurisdiction, with surety bonds in the amounts and under the terms set forth
below ("Security") within fifteen (15) days after the issuance by the City's Building Official
of the first permit (such as grading permit or building permit) that authorizes Developer to
commence the construction of a Conditioned Public Improvement over which the City has
permitting jurisdiction and prior to commencing any work on that Conditioned Public
Improvement. Nothing in this Section 13.0 is intended to prevent City, in its sole
discretion, from requiring Developer to submit, or prevent Developer from submitting,
security in a form other than bonds which may be acceptable to the City for the
Conditioned Public Improvements over which the City has permitting jurisdiction. For the
Conditioned Public Improvements over which the City has permitting jurisdiction, the
amount of the Security shall be based on the City Engineer's approximation of the actual
cost of that Work ("Estimated Costs"); if the City determines that the City's Estimated
Costs have changed for any Conditioned Public Improvement over which the City has
permitting jurisdiction, Developer shall adjust the Security in the amount requested by
City. Developer's compliance with this provision (Section 13.0, et seq.) shall in no way
limit or modify Developer's indemnification obligation provided in Section 14.0 of this
Agreement.
13.1 Performance Bond. To guarantee the faithful construction of the relevant
Conditioned Public Improvements and performance of all the provisions of this
Agreement, and to protect City if Developer is in default as set forth in Section 9.0, et
seq., of this Agreement, and to secure Developer's one-year guarantee and warranty of
the Conditioned Public Improvements over which the City has permitting jurisdiction (not
including any maintenance of any landscaping), Developer shall, subject to the payment
and reimbursement provisions in Section 17 below, provide to the City, a faithful
performance bond which sum shall be not less than one hundred percent (100%) of the
Estimated Costs. Unless the Developer provides a warranty bond on or prior to the
commencement of the Warranty period, in which case the City shall immediately release
the faithful performance bond, the security provided under this section shall be released
at the end of the Warranty period, or any extension thereof as provided in Section 12.0 of
this Agreement, provided that Developer is not in default on any provision of this
Agreement.
13.2 Labor and Material Bond. To secure payment to the contractors,
subcontractors, laborers, material men, and other persons furnishing labor, materials, or
equipment for construction of the Conditioned Public Improvements over which the City
has permitting jurisdiction, Developer shall, subject to the payment and reimbursement
provisions in Section 17 below, provide to the City a labor and materials bond equal to
one hundred percent (100%) of the Estimated Costs. For Conditioned Public
Improvements over which the City has permitting jurisdiction, the security provided under
this section may be released by written authorization of the City Engineer after one (1)
year or within the time limits established in California Government Code section 66499.7
from the date City, at its reasonable discretion, accepts as complete the improvements
that constitute the identified Conditioned Public Improvement; thereafter, for Conditioned
Public Improvements over which the City has permitting jurisdiction, the amount of such
security shall be reduced by the total of all stop notice or mechanic's lien claims of which
City is aware, plus an amount equal to ten percent (10%) of such claims for
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reimbursement of City's anticipated administrative and legal expenses arising out of such
claims.
13.3 Additional Requirements. The surety for any surety bonds provided as
Security shall have a current A.M. Best's rating of no less than A:VII and be authorized to
do business in the State of California or otherwise allowed to place insurance through
surplus line brokers under applicable provisions of the California Insurance Code or any
federal law, and shall be satisfactory to City. As part of the obligation secured by the
Security and in addition to the face amount of the Security, Developer or its surety shall
secure the costs and reasonable expenses and fees, including reasonable attorney's fees
and costs, incurred by City in enforcing the obligations of this Agreement. Developer and
its surety stipulate and agree that no change, extension of time, alteration, or addition to
the terms of this Agreement, the Conditioned Public Improvements, or the plans and
specifications for the Conditioned Public Improvements shall in any way affect its
obligation on the Security.
13.4 Evidence and Incorporation of Security. Evidence of the Security shall be
provided on the forms deemed acceptable by the City Engineer and the City Attorney.
When such forms are completed to the satisfaction of City, the forms and evidence of the
Security shall be attached hereto as Exhibit B and incorporated herein by this reference.
13.5 City Alternative for Developer's Authorized Contractor Security.
Notwithstanding anything to the contrary in this Agreement and Sections 13.0, et seq.,
the City Manager is hereby authorized, for Conditioned Public Improvements over which
the City has permitting jurisdiction, to accept Security issued to "Developer's Authorized
Contractor" (as defined in Section 17 below) that lists each of Developer and City as a
dual obligee and otherwise satisfies all of the requirements of this Section ("Developer's
Authorized Contractor Security") in lieu of Security issued to Developer, if the City
Manager determines, in his or her sole and absolute discretion and after consultation with
City's Risk Manager, that Developer's Authorized Contractor Security provides protection
to the City equivalent to Security issued to Developer. In such event the costs of the
Developer's Authorized Contractor Security shall be subject to payment and
reimbursement pursuant to Section 17 below. In the event the City Manager determines
not to accept Developer's Authorized Contractor Security in lieu of Security issued to
Developer, and Developer reasonably determines that Developer's Authorized Contractor
Security is necessary to protect Developer, the costs of the Developer's Authorized
Contractor Security shall be subject to payment and reimbursement pursuant to Section
17 below.
13.6 Surety and Bonding Requirements for Non -City Agencies. For Conditioned
Public Improvements over which the City does not have permitting jurisdiction, Developer
shall comply with any and all requirements of the public agency with the permitting
jurisdiction in connection with any and all obligations to secure and bond for the payment
and completion of performance of the Work for said Conditioned Public Improvements.
In the event that CVWD does not have any surety or bonding requirement, then the City
shall have the right to hold the funds for the Work that relates to that Conditioned Public
Improvement in an independent escrow account so that the City Manager or City
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Engineer may review and confirm that the disbursement of City -funds shall be used only
to pay the costs of the Work to be completed or completed for the Conditioned Public
Improvement over which the City does not have permitting jurisdiction. The City and
Developer shall cooperate in executing any escrow instructions for opening and
administering an escrow for the purposes identified in this Section 13.6.
14. Indemnification. Developer shall defend, indemnify, and hold harmless the City,
its elected officials, officers, employees, agents and volunteers from any and all actual or
alleged claims, demands, causes of action, liability, loss, damage, or injury, to property
or persons, including wrongful death, whether imposed by a court of law or by
administrative action of any federal, state, or local governmental body or agency, arising
out of or incident to any acts, omissions, negligence, or willful misconduct of Developer,
its personnel, employees, agents, or contractors (which term does not include CVWD, IID
or any contractors retained by the same) in connection with or arising out of the Work of
any of the Conditioned Public Improvements, or performance under this Agreement. This
indemnification includes, without limitation, the payment of all penalties, fines, judgments,
awards, decrees, attorneys' fees, and related costs or expenses, and the reimbursement
of City, its elected officials, officers, employees, and/or agents for all legal expenses and
costs incurred by each of them. This indemnification excludes only such portion of any
claim, demand, cause of action, liability, loss, damage, penalty, fine, or injury, to property
or persons, including wrongful death, to the extent arising from (i) the active negligence
or willful misconduct of City as determined by a court or administrative body of competent
jurisdiction, or (ii) City's failure to timely provide reimbursement payments for which
Developer is entitled pursuant to Section 17 below. Developer's obligation to indemnify
shall survive the expiration or termination of this Agreement, and shall not be restricted
to insurance proceeds, if any, received by City, its elected officials, officers, employees,
agents or volunteers.
15. Insurance.
15.1 Time for Compliance. Developer shall not commence construction of the
Work over which the City has permitted jurisdiction until it has provided evidence
satisfactory to the City that it has secured all insurance required under this section. In
addition, Developer shall not allow any contractor or subcontractor to commence work on
any contract or subcontract until it has provided evidence satisfactory to the City that the
contractor or subcontractor has secured all insurance required under this section.
15.2 Types of Insurance Required. As a condition to Developer's performance
under this Agreement, and without limiting the indemnity provisions of this Agreement,
Developer, in partial performance of its obligations under the Agreement, shall, subject to
the payment and reimbursement provisions in Section 17 below, procure and maintain
and/or (as applicable pursuant to the provisions in this Section 15.2) shall require its
contractors and subcontractors to procure and maintain, during construction, installation,
and/or repair of the Conditioned Public Improvements pursuant to this Agreement and
(except for Builder's Risk Insurance) during the ownership of the Property and/or the
Project, the following policies of insurance listed below ("Required Insurance"). If any
of the Required Insurance contains a general aggregate limit, such insurance shall apply
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separately to this Agreement or be no less than two times the specified occurrence limit.
The Required Insurance shall contain standard separation of insured provisions, and shall
contain no special limitations on the scope of its protection to the City, its elected officials,
officers, employees, agents and volunteers. If the existing policies do not meet the
Insurance Requirements set forth herein, Developer agrees to amend, supplement or
endorse the policies to do so.
15.2.1 Commercial General Liability. Developer and Developer's
contractor shall procure and maintain Commercial General Liability Insurance which
affords coverage at least as broad as Insurance Services Office "occurrence" form CG
0001 (or its equivalent reasonably approved by City), with minimum limits of at least
$5,000,000 per occurrence, and if written with an aggregate, the aggregate shall be two
times the per occurrence limit; provided, however, that Developer and Developer's
contractor may satisfy the foregoing insurance requirements by maintaining (i) the
foregoing Commercial General Liability Insurance with minimum limits of at least
$1,000,000 per occurrence and $2,000,000 in the aggregate, and (ii) an umbrella or
excess liability insurance policy with an aggregate limit of not less than $8,000,000.
Developer's subcontractors shall maintain Commercial General Liability Insurance which
affords coverage at least as broad as Insurance Services Office "occurrence" form CG
0001 (or its equivalent reasonably approved by City), with minimum limits of at least
$1,000,000 per occurrence, and if written with an aggregate, the aggregate shall be two
times the per occurrence limit. Defense costs shall be paid in addition to the limits.
Products and completed operations coverage shall be maintained for a minimum of two
(2) years after completion of the applicable Conditioned Public Improvement.
The above policies (other than the umbrella and excess liability
policies) shall contain no endorsements or provisions limiting coverage for (1) explosion,
collapse or underground hazard (XCU); (2) products and completed operations; (3)
contractual liability; (4) third party action over claims; (5) cross liability exclusion for claims
or suits by one insured against another; or (6) contain any exclusions contrary to the
Agreement.
15.2.2 Automobile Liability. Developer's contractor shall procure and
maintain Automobile Liability Insurance with coverage at least as broad as Insurance
Services Office Form CA 0001 covering "Any Auto" (Symbol 1) with minimum limits of
$3,000,000 each accident; provided, however, Developer's contractor may satisfy the
foregoing insurance requirement by maintaining (i) the foregoing Automobile Liability
Insurance with minimum limits of at least $1,000,000 each accident, and (ii) an umbrella
or excess liability insurance policy with an aggregate limit of not less than $2,000,000. If
Developer's contractor does not own any company vehicles, the requirement may be
satisfied by providing (1) a Personal Automobile Liability for Developer's contractor's own
vehicle (as specified to the following paragraph); and (2) a non -owned auto endorsement
to the Commercial General Liability policy if Developer's contractor may use vehicles of
others (e.g., vehicles of employees).
15.2.3 Workers' Compensation. Developer and its contractors and
subcontractors shall procure and maintain workers' compensation insurance with limits
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as required by the State of California and Employers' Liability Insurance of not less than
$1,000,000 per accident for bodily injury and disease.
15.2.4 Professional Liability. Developer's contractor shall procure and
maintain Professional Liability Insurance with minimum limits of $3,000,000. Covered
professional services shall specifically include all work to be performed under the
Agreement and delete any exclusions that may potentially affect the work to be performed
(for example, any exclusions relating to lead, asbestos, pollution, testing, underground
storage tanks, laboratory analysis, soil work, etc.). If coverage is written on a claims -
made basis, the retroactive date shall precede the effective date of the initial Agreement
and continuous coverage will be maintained or an extended reporting period will be
exercised for a period of at least three (3) years from termination or expiration of this
Agreement.
15.2.5 Contractors Pollution Liability. Developer's contractor shall
procure and maintain Contractors Pollution Liability Insurance covering all of Developer's
contractor's operations to include onsite and offsite coverage for bodily injury (including
death and mental anguish), property damage, defense costs and cleanup costs with
minimum limits of $5,000,000 per loss and $10,000,000 total all losses. The policy shall
contain no endorsements or provisions limiting contractual liability or coverage for cross
liability of claims or suits by one insured against another. Non -owned disposal site
coverage shall be provided if handling, storing or generating hazardous materials or any
material/substance otherwise regulated under environmental laws/regulations.
For projects involving transportation of hazardous waste/materials,
include coverage for loading/unloading from the project site to final disposal locations,
and all disposal locations shall be scheduled as non -owned disposal sites.
If coverage is written on a claims -made basis, the retroactive date
shall precede the effective date of the initial Agreement and continuous coverage will be
maintained or an extended reporting period will be exercised for a period of at least three
(3) years from termination or expiration of this Agreement.
15.3 Endorsements.
15.3.1 The policy or policies of insurance required by Section 15.2.1
(Commercial General Liability) and Section 15.2.5 (Contractors Pollution Liability), if the
latter is required by City, shall be endorsed to provide the following:
Additional Insured: The City, its officials, officers,
employees, agents, and volunteers shall be additional
insureds with regard to liability and defense of suits or claims
arising out of the performance of this Agreement.
"Additional Insured Endorsements" shall not (1) be
restricted to "ongoing operations"; (2) exclude "contractual
liability"; (3) restrict coverage to "sole" liability of Developer; or
(4) contain any other exclusions contrary to the Agreement.
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Cancellation: Required insurance policies shall not be
canceled or the coverage reduced until a thirty (30) day written
notice of cancellation has been served upon the City except
ten (10) days shall be allowed for non-payment of premium.
15.3.2 The policy or policies of insurance required by Section 15.2.3
(Workers' Compensation) shall be endorsed to provide the following:
Waiver of Subrogation: A waiver of subrogation stating that
the insurer waives all rights of subrogation against the
indemnified parties.
Cancellation: Required insurance policies shall not be
canceled or the coverage reduced until a thirty (30) day written
notice of cancellation has been served upon the City except
ten (10) days shall be allowed for non-payment of premium.
15.3.3 The policy or policies of insurance required by Section 15.2.2
(Automobile Liability) and Section 15.2.4 (Professional Liability), if required by City, shall
be endorsed to provide the following:
Cancellation: Required insurance policies shall not be
canceled or the coverage reduced until a thirty (30) day written
notice of cancellation has been served upon the City except
ten (10) days shall be allowed for non-payment of premium.
15.3.4 The policy or policies of insurance required by Section 15.2.6
(Builder's All Risk) shall be endorsed to provide the following:
Waiver of Subrogation: A waiver of subrogation stating that
the insurer waives all rights of subrogation against the
indemnified parties.
Cancellation: Required insurance policies shall not be
canceled or the coverage reduced until a thirty (30) day written
notice of cancellation has been served upon the City except
ten (10) days shall be allowed for non-payment of premium.
Loss Payee: Losses payable under this policy shall be
adjusted with the Named Insured and paid to City as its
interests may appear.
15.4 Primary and Non -Contributing Insurance. All insurance coverages shall be
primary and any other insurance, deductible, or self-insurance maintained by the
indemnified parties shall not contribute with this primary insurance. Policies shall contain
or be endorsed to contain such provisions.
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15.5 Waiver of Subrogation. Required insurance coverages shall not prohibit
Developer from waiving the right of subrogation prior to a loss. Developer shall waive all
subrogation rights against the indemnified parties. Policies shall contain or be endorsed
to contain such provisions.
15.6 Deductible. Any deductible or self -insured retention must be approved in
writing by the City and shall protect the indemnified parties in the same manner and to
the same extent as they would have been protected had the policy or policies not
contained a deductible or self -insured retention.
15.7 Evidence of Insurance. Developer, within fifteen (15) days after the
issuance by the Building Official of the first permit (such as grading permit or building
permit) that authorizes Developer to commence the construction of an identified
Conditioned Public Improvement, shall deliver either certified copies of the required
policies, or original certificates and endorsements on forms approved by the City. The
certificates and endorsements for each insurance policy shall be signed by a person
authorized by that insurer to bind coverage on its behalf. At least fifteen (15 days) prior
to the expiration of any such policy, evidence of insurance showing that such insurance
coverage has been renewed or extended shall be filed with the City. If such coverage is
cancelled or reduced, Developer shall, within ten (10) days after receipt of written notice
of such cancellation or reduction of coverage, file with the City evidence of insurance
showing that the required insurance has been reinstated or has been provided through
another insurance company or companies.
15.8 Failure to Maintain Coverage. Developer agrees to suspend and cease all
operations hereunder during such period of time as the required insurance coverage is
not in effect and evidence of insurance has not been furnished to the City. The City shall
have the right to withhold any payment due Developer until Developer has fully complied
with the insurance provisions of this Agreement.
In the event that Developer's operations are suspended for failure to
maintain required insurance coverage, Developer shall not be entitled to an extension of
time for completion of the Conditioned Public Improvements (or any remaining to be
completed Conditioned Public Improvement) because of production lost during any
suspension.
15.9 Acceptability of Insurers. Each such policy shall be from a company or
companies with a current A.M. Best's rating of no less than A:VII and authorized to do
business in the State of California, or otherwise allowed to place insurance through
surplus line brokers under applicable provisions of the California Insurance Code or any
federal law.
15.10 Insurance for Contractors and Subcontractors. All contractors and
subcontractors shall be included as additional insureds under Developer's policies, or
Developer shall be responsible for causing contractors and subcontractors to purchase
the appropriate insurance in compliance with the terms of these Insurance Requirements,
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including adding the City as an additional insured to the contractor's and subcontractor's
policies.
16. Signs and Advertising. Developer understands and agrees to City's ordinances,
regulations, and requirements governing signs and advertising structures. Developer
hereby agrees with and consents to the removal by City of all signs or other advertising
structures erected, placed, or situated in violation of any City ordinance, regulation, or
other requirement. Removal shall be at the expense of Developer and its surety.
Developer and its surety shall indemnify and hold City free and harmless from any claim
or demand arising out of or incident to signs, advertising structures, or their removal.
17. Payment of Costs for Conditioned Public Improvements. Subject to Developer's
compliance with the terms of this Agreement, City shall pay to Developer, by funding
advance payment or reimbursement paid in arrears, in a total amount not to exceed the
City Funds Amount, the "Conditioned Public Improvements Costs" (as defined in Section
17.1 below) pursuant to the following process:
17.1 Costs. As used herein the "Conditioned Public Improvements Costs"
means all costs actually incurred or owed by Developer for the Work, including, without
limitation, (i) amounts paid by Developer to cause design and completion of the Work to
any contractor hired by Developer, and approved by the City if the City has permitting
jurisdiction over the Work ("Developer's Authorized Contractor"), for (ii) amounts owed
or paid by Developer to cause design and completion of the Work, including without
limitation, payments owed to the City or other respective public agencies as evidenced
by a cost summary, invoice or other written documentation provided by the public agency
(iii) actual impact, permit, inspection, supervision, and testing costs paid by Developer to
City or (as applicable) paid or owed to a political subdivision (public agency) with
jurisdiction over the identified Conditioned Public Improvement, independent third party
engineers, architects, or consultants in conjunction with the Work, (iv) all insurance
premiums, deductibles, self-insurance retentions and other costs applicable to the Work,
including, without limitation, all amounts paid by Developer for the insurance maintained
by Developer pursuant to Section 15 above, (v) the costs of periodic on -site inspections
required to be made by Developer's Authorized Contractor or other consultants in order
to certify completion of the identified Conditioned Public Improvement, (vi) any cost
incurred by Developer to maintain (including security) any Conditioned Public
Improvement from date of commencement until the date of acceptance, by either the City
or (as applicable) political subdivision (public agency) with jurisdiction over the identified
Conditioned Public Improvement, as complete the improvements that constitute the
identified Conditioned Public Improvement, (vii) the costs incurred by Developer of
monitoring required pursuant to any Storm Water Pollution Prevention Plan, or the
equivalent as may be required by the applicable governmental authorities ("SWPPP") with
respect to the Conditioned Public Improvements, (viii) the costs of the bonds or other
Security obtained by Developer pursuant to Section 13 above and the legal fees paid by
Developer in connection therewith, (ix) a "Construction Oversight Fee" (as defined below)
where Developer is overseeing the Work, and (x) all other costs and expenses incurred
by Developer with respect to the Work that are in a budget or listing of estimated costs
for the Conditioned Public Improvements submitted by Developer (or Developer's
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Authorized Contractor) to and approved by the City Engineer with costs and expenses
similar to or the same as the items listed in Exhibit B (the "Conditioned Public
Improvements Budget Costs"). As used herein, the term "Construction Oversight
Fee" shall mean a fee payable to Developer for providing construction management and
supervision of the design and development of the Conditioned Public Improvements
(including, without limitation, the out-of-pocket costs paid by Developer to a construction
manager and overhead costs incurred by Developer in providing construction
management services) in an amount equal to four percent (4%) of the portion of the
Conditioned Public Improvements that is comprised of actual and documented hard
construction costs, including labor, materials and equipment costs, but not including
design costs, administration costs, or internal overhead (collectively, "Eligible
Construction Costs"). The Construction Oversight Fee shall be payable on a monthly
basis, based on the actual documented Eligible Construction Costs incurred during such
month.
17.2 Payments. Subject to any request for funding advancement or
reimbursement, not exceeding the City Funds Amount, Developer shall comply with the
following process for requesting a payment from City for a portion of the Conditioned
Public Improvements Costs (any such payment a "Partial Payment"): Subject to the
terms of Section 17.3 below, not more than once per month commencing on the date the
Work commences or the payment is otherwise owed to a public agency related to the
Work, Developer may seek a payment from City by submitting to City a written request
for payment, accompanied by conditional lien releases (for any work for which a lien may
be filed), and detailed receipts, invoices or other documentation which evidence the
amount owed, work completed and/or all expenses and labor costs associated therewith
(collectively, a "Payment Request"). City shall review each Payment Request within
thirty (30) days after receipt if the Payment Request concerns completed work or ten (10)
days after receipt for a Payment Request that does not require the City to evaluate what
Work has been completed. If (i) City determines that the Payment Request is complete
and complies with the terms of this Section 17.2, (ii) to the extent applicable, City confirms
the work for which a Partial Payment is requested has been satisfactorily completed, (iii)
for a Payment Request not related to a payment to IID, the funds requested in the
Payment Request (plus the ten percent (10%) retention amount allocated to such funds
to the extent applicable) relate to Conditioned Public Improvements identified on the City
(and if applicable, CVWD) approved public improvement plans and falling within the
categories of Conditioned Public Improvements identified on Exhibit B; , and (iv) the
Payment Request, if paid, does not exceed the total City Funds Amount, then within
fifteen (15) days after City completes its review, City shall provide the requested Partial
Payment to Developer. If City disputes any amount set forth in a Payment Request, City
shall provide written notice of the amount in dispute and shall specify with reasonable
particularity the grounds for such dispute within thirty (30) days after City's receipt of the
Payment Request. City shall pay all undisputed amounts within fifteen (15) days after
City completes its review of the Payment Request and shall promptly meet and confer
with Developer to resolve the dispute. Upon resolution of the dispute, City shall pay the
agreed upon amount to Developer within fifteen (15) days following resolution of the
dispute.
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17.3 Payment of Retention. Except where the Payment Request is for payment
to a public agency for some of the Work, Developer may not obtain a Partial Payment for
the ten percent (10%) retained from each Partial Payment pursuant to Section 17.2 above
until (i) completion of the portion of the Work that is the subject of the Payment Request,
as evidenced by Developer's receipt of an engineer's certification certifying completion,
together with copies of unconditional lien releases from all contractors, subcontractors
and material suppliers providing work or materials in connection with the identified
Conditioned Public Improvement(s), and (ii) the City, for any Work for which the City has
permitting jurisdiction, or, for all other Work, the political subdivision (public agency) with
jurisdiction over the identified Conditioned Public Improvement(s), has accepted as
complete the construction that constitutes the identified Conditioned Public
Improvement(s). City shall pay such amount within ten (10) days following satisfaction of
items (i), (ii), and (iii) of this Section 17.3.
17.4 Plans and Budget. For Work over which the City has permitting jurisdiction,
concurrently with or as part of the processing of the construction permit (or other
ministerial permit) submitted by Developer pursuant to this Agreement or the COAs, as
applicable, Developer shall submit to the City Engineer a budget for review and approval
(the "City -Approved Conditioned Public Improvements Budget"), which may include
line items, with estimated costs and expenses, for line items that fall under the categories
and within the costs for the Estimated Conditioned Public Improvements Budget Costs
identified in Exhibit B of this Agreement. For the City -Approved Conditioned Public
Improvements Budget, and notwithstanding provisions in Section 17.3 to the contrary, if
funds remain in the "Contingency" or other line item in the City -Approved Conditioned
Public Improvements Budget, Developer may allocate funds from the "Contingency" or
that other line item in the City -Approved Conditioned Public Improvements Budget to a
line item in the City -Approved Conditioned Public Improvements Budget for which the
funds requested in a Payment Request exceed the amount remaining in that line item.
17.5 Estimated Conditioned Public Improvement Budgeted Cost. Exhibit B
includes a conceptual and preliminary cost estimate for each of the different Conditioned
Public Improvement categories (the "Estimated Conditioned Public Improvements
Budget Costs"). The individual line amounts identified on Exhibit B for each category
are not binding on the Parties and do not limit or dictate the amounts the City will pay to
Developer under each category. Provided at least some of the Conditioned Public
Improvements within each category are paid for out of the City Funds Amount and the
total of all Payment Requests for the Work does not exceed the maximum City Funds
Amount, the Parties acknowledge and agree that Payment Requests and the City
payments in response to the same will reflect a reallocation of costs identified on Exhibit B
from one line item or category to a different line item or category.
18. Prevailina Waaes.
18.1 Prevailing Wage Requirements for Conditioned Public Improvements.
Developer shall comply with all applicable provisions of Chapter 1 (commencing with
Section 1720) of Part 7 of Division 2 of the California Labor Code with respect to
construction, installation, and/or repair of the Conditioned Public Improvements. Nothing
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in this Agreement constitutes a representation or warranty by City that the construction of
any of the Conditioned Public Improvements is or is not subject to Chapter 1 of Part 7 of
the California Labor Code, and all applicable statutory regulatory provisions related
thereto. Further, Developer agrees that City has not previously affirmatively represented
or guaranteed to Developer, or its contractor(s) for the Work, in writing or otherwise, in a
call for bids or otherwise, that the work to be covered by this Agreement is not a "public
work," as defined in Section 1720 of the Labor Code. Developer shall indemnify, defend,
with counsel reasonably acceptable to City , and hold City and its respective officials,
officers, employees, agents, and volunteers (collectively, the "City Parties") harmless for,
from and against any suit, cost, attorneys' fees, claim, administrative proceeding,
damage, wage award, fine, penalty or liability directly or indirectly arising out of or relating
to the payment or non-payment of prevailing wages in connection with the Work
performed by Developer or its general contractor, including, without limitation, any action
by a contractor or subcontractor pursuant to California Labor Code Section 1781, or
otherwise, to recover any "increased costs" (as defined in California Labor Code Section
1781(c)(2), or otherwise) incurred in relation to the Conditioned Public Improvements.
The obligation of Developer to so indemnify, defend and hold the Successor Agency and
City Parties harmless shall survive any termination of this Agreement. Notwithstanding
anything to the contrary in this Agreement, no costs incurred by Developer pursuant to
this Section shall be subject to reimbursement by City.
18.2 Indemnification Requirements Regarding Private Development. Developer
acknowledges and agrees that, in connection with Developer's development of the
Project on the Property, Developer is required to develop and operate the Property
pursuant to the Approvals. Developer hereby agrees as between the City and Developer
with respect to (i) the construction, installation, and/or repair of the Conditioned Public
Improvements and (ii) the private development o the Project, that Developer shall be
solely responsible, expressly or impliedly, and legally and financially, for determining and
effectuating compliance with all applicable federal, state and local public works
requirements, prevailing wage laws, and labor laws and standards, and the City has
neither made nor hereby makes any representation, either legally and/or financially, as to
the applicability or non -applicability of any federal, state and local laws, either onsite or
offsite, with respect to the development of the Project on the Property. Developer
expressly, knowingly and voluntarily acknowledges and agrees that the City has not
previously represented to Developer or to any representative, agent or affiliate of
Developer, or its contractor or any subcontractor(s) for the construction, installation,
and/or repair of the Conditioned Public Improvements, in writing or otherwise, in a call for
bids or otherwise, that the work undertaken for the Conditioned Public Improvements
pursuant to this Agreement is or is not a "public work," as defined in Section 1720 of the
Labor Code or under Davis Bacon.
Developer knowingly and voluntarily agrees that with respect to the Work as
provided in this Agreement and the COAs, to the extent applicable and between the City
and Developer, Developer shall have the obligation to provide any and all disclosures or
identifications as required by Labor Code Section 1781 and/or by Davis Bacon, as the
same may be amended from time to time, or any other similar law or regulation. In
addition to any other Developer indemnifications of the City Parties set forth in this
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Agreement, Developer shall indemnify, protect, pay for, defend (with legal counsel
reasonably acceptable to the City) and hold harmless the City Parties from and against
any and all loss, liability, damage, claim, cost, expense and/or "increased costs" (including
reasonable attorneys' fees, court and litigation costs, and fees of expert witnesses) which,
in connection with the Work, results or arises in any way from any of the following: (i) the
noncompliance by Developer with any applicable local, state and/or federal law or
regulation, including, without limitation, any applicable federal and/or state labor laws or
regulations (including, without limitation, if applicable, the requirement to pay state and/or
federal prevailing wages); (ii) the implementation of Section 1781 of the Labor Code
and/or of Davis Bacon, as the same may be amended from time to time, or any other
similar law or regulation; and/or (iii) failure by Developer to provide any required
disclosure or identification as required by Labor Code Section 1781 and/or by Davis
Bacon, as the same may be amended from time to time, or any other similar law or
regulation. It is agreed by the parties that as between themselves, in connection with the
development and construction (as defined by applicable law or regulation) of the Property,
including, without limitation, any and all public works (as defined by applicable law or
regulation), Developer shall bear all risks of payment or non-payment of prevailing wages
under applicable federal, state and local law or regulation and/or the implementation of
Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from
time to time, and/or any other similar law or regulation. "Increased costs," as used in this
Section 18.2, shall have the meaning ascribed to it in Labor Code Section 1781, as the
same may be amended from time to time. The foregoing indemnity shall survive
termination of this Agreement and shall continue after completion of the construction and
development of both (i) the Conditioned Public Improvements and (ii) the private Project
on the Property, by Developer.
19. Relationship Between the Parties. The Parties hereby mutually agree that neither
this Agreement nor any other entitlement, permit, or approval issued by City for the
Property, including the Approvals, shall operate to create the relationship of partnership,
joint venture, or agency between City and Developer. Developer's contractors and
subcontractors are exclusively and solely under the control and dominion of Developer.
Nothing herein shall be deemed to make Developer, its contractors or subcontractors an
agent, contractor or subcontractor of City or vice versa.
20. General Provisions.
20.1 Authority to Enter Agreement. Each Party warrants that the individuals who
have signed this Agreement have the legal power, right, and authority make this
Agreement and bind each respective Party.
20.2 Cooperation; Further Acts. The Parties shall fully cooperate with one
another, and shall take any additional acts or sign any additional documents as may be
necessary, appropriate, or convenient to attain the purposes of this Agreement.
20.3 Construction; References; Captions. It being agreed the Parties or their
agents have participated in the preparation of this Agreement, the language of this
Agreement shall be construed simply, according to its fair meaning, and not strictly for or
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against any Party. Any term referencing time, days, or period for performance shall be
deemed calendar days and not business days unless otherwise noted in this Agreement.
All references to Developer include all personnel, employees, agents, and subcontractors
of Developer, except as otherwise specified in this Agreement. All references to City
include its elected officials, officers, employees, agents, and volunteers except as
otherwise specified in this Agreement. The captions of the various articles and
paragraphs are for convenience and ease of reference only, and do not define, limit,
augment, or describe the scope, content, or intent of this Agreement.
20.4 Notices. All notices, demands, invoices, and written communications shall
be in writing and delivered to the following addresses or such other addresses as the
Parties may designate by written notice:
CITY:
CITY OF LA QUINTA
Attention: Director, Design &
Development Department
78495 Calle Tampico
La Quinta, California 92253
Email: dnewell@laquintaca.gov
clflores@laquintaca.gov
with copy to:
Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attention: William H. Ihrke, Esq.
(T) (714) 641-5100
(F) (714) 546-9035
DEVELOPER:
Name: Troutdale Village, LLC
Attention: Jeff Parker
1800 Blankenship Rd, Suite 325
West Linn, OR, 97068
jeff@blackhawkdevelopment.com
Depending upon the method of transmittal, notice shall be deemed received as follows:
by facsimile, as of the date and time sent; by messenger, as of the date delivered; by U.S.
Mail first class postage prepaid, as of 72 hours after deposit in the U.S. Mail; and by email,
as of the next business day upon confirmation of receipt by the Party sending the email.
20.5 Amendment; Modification. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing and signed by both Parties.
20.6 Waiver. A Party's failure to insist upon strict compliance with any provision
of this Agreement or to exercise any right or privilege provided herein, or a Party's waiver
of any breach of this Agreement, shall not relieve the other Party of any of its obligations
under this Agreement, whether of the same or similar type. The foregoing shall be true
whether the Party's actions are intentional or unintentional. Developer agrees to waive,
as a defense, counterclaim or set off, any and all defects, irregularities or deficiencies in
the construction, installation, and/or repair of the Conditioned Public Improvements, or
698/015610-0203
23697730.7 a06/11/26 -21 -
authorization, execution or performance of this Agreement, as well as the laws, rules,
regulations, ordinances or resolutions of City with regards to the construction, installation,
and/or repair of the Conditioned Public Improvements, or authorization, execution or
performance if this Agreement.
20.7 Assignment or Transfer of Agreement. Developer shall not assign,
hypothecate, or transfer, either directly or by operation of law, this Agreement or any
interest herein without prior written consent of City, which consent shall not be
unreasonably withheld or delayed. Any attempt to do so shall be null and void, and any
assignee, hypothecatee, or transferee shall acquire no right or interest by reason of such
attempted assignment, hypothecation, or transfer. Unless specifically stated to the
contrary in City's written consent, any assignment, hypothecation, or transfer shall not
release or discharge Developer from any duty or responsibility under this Agreement. In
the event that the City consents in writing to such an assignment, any assignee,
hypothecatee or transferee shall expressly assume Developer's obligations hereunder by
a written agreement in a form, and containing such security, as is reasonably acceptable
to the City.
The assignment agreement shall be to the satisfaction of the City Attorney
and shall include provisions requiring the assignee to post bonds or submit another form
of financial security, satisfactory to the City and approved by the City Attorney, to
guarantee the construction, installation, and/or repair of the Conditioned Public
Improvements or identified Conditioned Public Improvement(s) subject to any
assignment. The agreement shall survive the recordation of any subdivision map or any
other instrument recorded against each and every APN/parcel that comprises the
Property, and shall inform successors and assigns of the required Conditioned Public
Improvements to be constructed and the time frame for construction.
Following any permitted assignment of the construction, installation, and/or
repair of the Conditioned Public Improvements, or performance of this Agreement as set
forth in this Section 20.7, the City shall release Developer from its obligations so assigned
and shall release to Developer any bonds or other security posted to secure the
Conditioned Public Improvements or identified Conditioned Public Improvement(s) so
assigned; provided, however, that the City shall not release any security or undertakings
given to secure the construction of any Conditioned Public Improvements, or performance
of this Agreement, not assigned.
20.8 Binding Effect. Each and all of the covenants and conditions shall be
binding on and shall inure to the benefit of the Parties, and their successors, heirs,
personal representatives, or assigns. This section shall not be construed as an
authorization for any Party to assign any right or obligation.
20.9 No Third Party Beneficiaries. Except for the City Parties and other officers,
employees, and agents of the City expressly authorized by this Agreement to implement
this Agreement on behalf of the City, there are no intended third party beneficiaries of any
right or obligation assumed by the Parties.
698/015610-0203
23697730.7 a06/11/26 -22-
20.10 Invalidity; Severability. If any portion of this Agreement is declared invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions shall continue in full force and effect to the extent the fundamental purposes
of this Agreement can still be achieved without the severed provision.
20.11 Consent to Jurisdiction and Venue. This Agreement shall be construed in
accordance with and governed by the laws of the State of California, without regard to
conflict of law principles. Any legal action or proceeding brought to interpret or enforce
this Agreement, or which in any way arises out of the Parties' activities undertaken
pursuant to this Agreement, shall be filed and prosecuted in the appropriate California
State Court in the County of Riverside, California. Each Party waives the benefit of any
provision of state or federal law providing for a change of venue to any other court or
jurisdiction including, without limitation, a change of venue based on the fact that a
governmental entity is a party to the action or proceeding, or that a federal right or
question is involved or alleged to be involved in the action or proceeding. Without limiting
the generality of the foregoing waiver, Developer expressly waives any right to have
venue transferred pursuant to California Code of Civil Procedure section 394.
20.12 Attorneys' Fees and Costs. If any arbitration, lawsuit, or other legal action
or proceeding is brought by one Party against the other Party in connection with this
Agreement, , the prevailing party, whether by final judgment or arbitration award, shall be
entitled to and recover from the other Party all costs and expenses incurred by the
prevailing party, including actual attorneys' fees ("Costs"). Anyjudgment, order, or award
entered in such legal action or proceeding shall contain a specific provision providing for
the recovery of Costs, which shall include, without limitation, attorneys' and experts' fees,
costs and expenses incurred in the following: (a) post judgment motions and appeals, (b)
contempt proceedings, (c) garnishment, levy, and debtor and third party examination, (d)
discovery, and (e) bankruptcy litigation. This section shall survive the termination or
expiration of this Agreement.
20.13 Counterparts. This Agreement may be executed in counterpart originals,
which taken together, shall constitute one and the same instrument.
20.14 Force Majeure. Notwithstanding anything contained in Section 4 or
elsewhere in this Agreement to the contrary, Developer's time for commencement and
completion of the Conditioned Public Improvements or other performance under this
Agreement shall be extended for the period of any enforced delay caused by or due to
circumstances beyond the control of Developer, including to the extent applicable,
adverse weather conditions, flood, earthquakes, strikes, lockouts, general shortage of
labor or materials, pandemics, epidemics, civil disorder, acts or failures to act of a public
agency (except the City if any asserted event of Force Majeure equally is asserted by the
City to prevent its performance under this Agreement, or if Developer is in default or
otherwise subject to a dispute with City under this Agreement), and similar causes that
are beyond the control of either Developer or City; provided, however, that other
unexpected or significant increases in costs to complete any or all of the Conditioned
Public Improvements expressly shall not be an event of Force Majeure under this Section.
698/015610-0203
23697730.7 a06/11/26 -23-
20.15 City Approvals and Actions. In addition to the authority set forth in
Section 1.1 of this Agreement, the City shall maintain authority of this Agreement and the
authority to implement this Agreement through the City Manager. The City Manager shall
have the authority to make approvals, issue interpretations, waive provisions, negotiate
and enter into amendments to this Agreement and/or negotiate and enter into
implementing agreements or documents on behalf of City so long as such actions do not
materially or substantially change the business terms of this Agreement or substantially
add to the costs incurred or to be incurred by City as specified in this Agreement. Such
approvals, interpretations, waivers, amendments, and/or implementing agreements or
documents may include extensions of time to perform. Wherever the approval of the City
is required under this Agreement, other than approvals required of the City acting in its
governmental capacity, such approval shall not be unreasonably withheld, conditioned or
delayed, unless expressly stated to the contrary in this Agreement.
[Signatures on following page.]
698/015610-0203
23697730.7 a06/11/26 -24-
CITY
DEVELOPER
City of La Quinta, a California municipal Troutdale Village, LLC, an Oregon limited
corporation and charter city liability company
cMillen, City Manager
Attest:
—�&OO r
Monika Radeva, City C14rk
Approved as to Form:
William H. Ihrke, City Attorney
SIGNED IN COUNTERPART
Name: Jeff Parker
Title:
698/015610-0203
23697730.7 a06/11/26 -25-
CITY
DEVELOPER
City of La Quinta, a California municipal Troutdale Village, LLC, an Oregon limited
corporation and charter city liability company
Jon McMillen, City Manager
Attest:
Monika Radeva, City Clerk
Approved as to Form:
William H. Ihrke, City Attorney
,i -
698/015610-0203
23697730.7 a06111126 -25-
EXHIBIT A
LIST OF CONDITIONED PUBLIC IMPROVEMENTS
(attached)
698/015610-0203
23697730.7a06/11/26 EXHIBIT A
LIST OF CONDITIONED PUBLIC IMPROVEMENTS
(La Quinta Village Apartments Project)
Conditioned Public Improvements fall into three (3) general categories:
1. "Offsite Improvements" under City jurisdiction
2. "Electric Utility Improvements" under IID jurisdiction
3. "Water System Improvements" under CVWD jurisdiction
Offsite Improvements. The Offsite Improvement category includes all public improvement
work identified on the City approved public improvement plans for the Project including,
without limitations, the following that qualify as Conditioned Public Improvements:
Washington Street
Bus Stop Turnout
Washington Street Right of Way
Avenue 50 Related
Improvements*
*Offsite Improvements on Avenue 50 are those to be constructed within the "orange
shaded area" as shown in the "Avenue 50 Improvement Phasing" graphic below and
those improvements include an upsized storm drain and transition structure. The
improvements that are to be constructed in the "yellow shaded area" that may have
potentially been part of the COAs for the Project are not Conditioned Public Improvements
as the City will design, permit and construct those improvements as part of a planned
Avenue 50 Bridge Capital Improvement Program project, as noted on the Avenue 50
Improvement Phasing graphic.
(Exhibit A continues on next page)
698/015610-0203
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Electric Utility Improvements. The Electric Utility Improvements category includes public
improvements subject to the jurisdiction of IID and include, without limitation,:
Marshall Substation 50MVA Transformer/Upgrade
2. Extension of New Feeder Circuit from Marshall Substation to the Property
3. Electric utility undergrounding work along Washington Street and Avenue 50:
Water System Improvements. The Water System Improvements category includes public
water utility related public improvements subject to the jurisdiction of CVWD and identified
on the CVWD approved public improvement plans for the Project.
(End of Exhibit A)
698/015610-0203
23697730.7 a06/11/26 -3-
EXHIBIT B
CONDITIONED PUBLIC IMPROVEMENTS BUDGETED COSTS
Estimated Cost
OFFSITE PUBLIC IMPROVEMENTS (City with Jurisdiction) $1,344,102.00
ELECTRIC UTILITY IMPROVEMENTS (IID with Jurisdiction) $3,216,000.00
WATER SYSTEM IMPROVEMENTS (CVWD with Jurisdiction) $941,379.00
* Notwithstanding the estimated costs in this Exhibit B, the Parties recognize that
reallocation will occur in accordance with Section 17.5 of this Agreement and the City has
no obligation to pay any portion of a Payment Request that would result in the total
payments received by Developer to exceed the maximum City Funds Amount (see
Section 17.2 of the Agreement).
1OVA :11:31r:3
BUSINESS SESSION ITEM NO. 3
City of La Quinta
CITY COUNCIL MEETING: June 16, 2026
STAFF REPORT
AGENDA TITLE: APPROVE REIMBURSEMENT AGREEMENT FOR CONSTRUCTION
OF PUBLIC IMPROVEMENTS ATTACHED TO THE LA QUINTA VILLAGE
APARTMENTS PROJECT AS CONDITIONS OF REGULATORY APPROVAL, AND
AUTHORIZE APPROPRIATION OF CITY GENERAL FUND UNASSIGNED RESERVES
THEREFOR; PROJECT LOCATION: NORTHEAST CORNER OF WASHINGTON
STREET AND AVENUE 50; CEQA: CONFORMS WITH ENVIRONMENTAL
ASSESSMENT 2022-0001 (MITIGATED NEGATIVE DECLARATION)
RECOMMENDATION
Approve a Reimbursement Agreement for Construction of Public Improvements attached
to the La Quinta Village Apartments project as Conditions of Regulatory Approval;
authorize the appropriation of City General Fund Unassigned Reserves in the amount of
$5 million for payment of costs pursuant to the Reimbursement Agreement; and authorize
the City Manager to execute the Reimbursement Agreement, substantially in the form
attached to this staff report, and to take any additional actions necessary or proper to
implement the Reimbursement Agreement.
EXECUTIVE SUMMAR`
• On November21, 2023, Council adopted: (1) Resolution No. 2023-038 approving a
Mitigated Negative Declaration (Environmental Assessment (EA) 2022-0001), and
(2) Resolution No. 2023-039 approving General Plan Amendment (GPA 2022-
0002), Specific Plan (SP 2022-0001), and Site Development Permit (SDP 2022-
0001) with Conditions of Regulatory Approval (COAs), for the La Quinta Village
Apartments project consisting of 252 units total, with 74 units reserved for moderate
income level residents (Project). On October 21, 2025, Council adopted Resolution
No. 2025-025, approving Site Development Permit 2025-0005 (SDP 2025-0005),
which granted a two-year time extension of the SDP 2022-0001 and COAs.
• The Project was approved and intended to be a private development, although
multiple off -site public improvements were attached to the COAs. Since being
entitled, property owner and developer notified the City that the costs have increased
and requested a subsidy to assist with payment of public improvements.
• Staff proposes a not -to -exceed subsidy of $5 million to pay costs for water, electric,
storm drain, street, sidewalk, and other public improvements, to be implemented via
the proposed Reimbursement Agreement for Construction of Public Improvements
(Reimbursement Agreement) (Attachment 1).
367
The total funding commitment from the City would be $5 million, funded through an
appropriation from the City's General Fund Unassigned Reserve in fiscal year (FY)
2025/26. The City would hold the funds and make progress payments as may be
requested by the developer and verified by City staff as eligible for reimbursement.
Requests for any progress payment can be no more than once per month. Eligible
reimbursement expenses fall into three general categories of public improvements-
(1) Offsite Improvements under the City's jurisdiction, which primarily consist of storm
drain, street, sidewalk, curb, and gutter improvements along the portion of Washington
Street fronting the Project and along a portion of Avenue 50 between Washington Street
and the entryway of the Project from Avenue 50; (2) Electric Utility Improvements under
Imperial Irrigation District's (IID) jurisdiction, which include undergrounding of existing
powerlines and increasing power supply and delivery from the Marshall Substation; and
(3) Water System Improvements under Coachella Valley Water District's (CVWD)
jurisdiction. Current estimated costs for eligible public improvements are higher than $5
million, but, under the Reimbursement Agreement, the City's maximum funding
commitment for any eligible expenses is $5 million, with the developer responsible for
paying any difference in costs for those public improvements. The City's funding may not
be used for the residential buildings or amenities, or other privately funded construction
costs associated with the Project.
BACKGROUND/ANALYSIS
On November 21, 2023, Council adopted: (1) Resolution No. 2023-038 approving a
Mitigated Negative Declaration (EA 2022-0001), and (2) Resolution No. 2023-039
approving GPA 2022-0002, SP 2022-0001, and SDP 2022-0001 with COAs for the La
Quinta Village Apartments project consisting of 252 units total, with 74 units designated
as moderate income units, on a 13.84-acre parcel, located at the northeast corner of
Washington Street and Avenue 50. On October 21, 2025, Council adopted Resolution
No. 2025-025, approving SDP 2025-0005 and granting a two-year time extension for SDP
2022-0001 and COAs.
The Project was approved as and intended to be a private development although multiple
off -site public improvements were attached to the COAs. Since being entitled, the original
applicant, property owner, and developer, Troutdale Village LLC (developer), notified the
City that the costs have increased substantially since originally being entitled in 2023.
Notably, costs associated with electric utility public improvements, water infrastructure,
and street and sidewalk improvements have increased, such that the developer
requested a subsidy to assist with payment of specified public improvements.
The proposed Reimbursement Agreement has eligible reimbursement expenses divided
into three general categories of public improvements:
1) Offsite Improvements under the City's jurisdiction, which primarily consist of storm
drain, street, sidewalk, curb, and gutter improvements along portions of
Washington Street and Avenue 50;
.:
2) Electric Utility Improvements under IID's jurisdiction, which include
undergrounding of existing powerlines and increasing power supply and delivery
from the Marshall Substation; and
3) Water System Improvements under CVWD's jurisdiction.
Current estimated costs of the eligible expenses, as preliminarily determined by the City
Engineer and developer's retained engineer, exceed $5 million. Actual costs incurred may
be more or less for public improvements under these three general categories. The
Reimbursement Agreement provides some flexibility to "shift funding buckets" among the
three general categories, depending upon payment timing and actual costs for the
respective public improvements.
However, the City's total funding commitment for all public improvements, whether under
the City's, IID's, or CVWD's jurisdiction, will not exceed $5 million. Prior to any progress
payment being made to the developer, the City has the right and obligation to verify the
proposed expense is eligible for reimbursement.
Typical provisions relating to the construction of public improvements under the City's
jurisdiction are included in the Reimbursement Agreement, such as posting bonds for
completion of the public improvements' construction, and completing the public
improvements prior to issuance of the final certificate of occupancy for the Project. Other
standard provisions are included in the Reimbursement Agreement.
ENVIRONMENTAL REVIEW
The proposed Reimbursement Agreement does not change the Project because it serves
as a public subsidy contract for public improvements under the COAs that attach to the
development of the Project. As such, the proposed Reimbursement Agreement conforms
with the previously adopted Environmental Assessment 2022-0001 (Mitigated Negative
Declaration). No changes to the approved Project are proposed as a result; therefore, no
new environmental documentation is required.
ALTERNATIVES
Council may elect not to approve the Reimbursement Agreement. The COAs remain in
place, but, according to the developer, the lack of the proposed City subsidy will render
the Project unfeasible.
Prepared by: Bill Ihrke, City Attorney
Approved by: Jon McMillen, City Manager
Attachment: 1. Reimbursement Agreement
369