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SERVICE AGREEMENT BY AND BETWEEN
CITY OF CATHEDRAL CITY
AND
CATHEDRAL COVE 1.0, LLC
FOR
CATHEDRAL COVE CENTER – EAST PALM CANYON DRIVE
REAS IMPROVEMENTS
This Agreement is entered into this ______ day of ______________________, 2025, by and between the City of Cathedral City , a municipal corporation, (hereinafter “CITY”) and Cathedral Cove 1.0, LLC , a California limited liability company, (hereinafter “DEVELOPER”) for the application of Rubberized Emulsion Asphalt Slurry (REAS) and the installation of striping and pavement markings along the entire DEVELOPER’S East Palm Canyon Drive frontage, located within the jurisdictional boundaries of CITY. The CITY and DEVELOPER are sometimes hereinafter referred to individually as a “PARTY” and collectively as the “PARTIES”.
RECITALS
A. WHEREAS, DEVELOPER has presented to CITY an application for the construction of a commercial retail center on the southerly side of East Palm Canyon Drive, east of Van Fleet Avenue, and has submitted an application for the approval and recordation of a Tentative Parcel Map to divide the site of the commercial retail center into nine (9) parcels and to develop the site subject to several Conditional Use Permits and Design Reviews. The final Parcel Map and the development of the site are subject to the filing and recordation of a final parcel map, pursuant to provisions of the Subdivision map Act of the State of California and the C ITY’s Ordinances and regulations relating to the filing, approval and recordation of subdivision maps. The Subdivision Map Act and the CITY’s ordinances and regulations relating to the filing, approval and recordation of subdivision maps are collectively referred to in this Agreement as the “Subdivision Laws”.
B. WHEREAS, The City Council has reviewed the applications and has approved Tentative Parcel Map No. 37876 for the subdivision of the land and has approved Conditional Use Permits CUP 21- 006, 21-007, 21-008 and 21-009 and Design Reviews DR 21-001 AND 21-002 for the development - 2 -
of various commercial sites within the subdivision, all subject to the Subdivision Laws and to the requirements and conditions of approval imposed thereon by the Approval Action by the City Council on September 28, 2022. The tentative parcel map and all requirements and conditions imposed thereon by the Approval Action are on file in the Office of the City Engineer and are incorporated into this Agreement by reference.
C. WHEREAS, Improvement Plans for the construction, installation, and completion of the improvements have been prepared by D EVELOPER and approved by the City Engineer. The Improvement Plans are on file in the Office of the City Engineer and are incorporated into this Agreement as shown in Exhibit A. All references in this Agreement to the Improvement Plans shall include reference to any specifications for the improvements as approved by the City Engineer.
D. WHEREAS, the CITY and the DEVELOPER entered into an Improvement Agreement for Parcel Map 37876 on May 24, 2023, which outlines DEVELOPER’s obligation to construct improvements.
E. WHEREAS, the DEVELOPER is in the process of developing Phase I of the Planned Unit Development No. 21-001 in the CITY, which includes the following parcels and APNs:
a. Phase I: Parcels No. 1 through 5 and APN 674-500-038 of Parcel Map No. 37876 F. WHEREAS, Per Section 4.41 “PUBLIC IMPROVEMENTS” of the Conditions of Approval , DEVELOPER is required to apply type II Rubberized Emulsion Asphalt Slurry (REAS) from the gutter pan to the centerline of improvements (varies from 29.50 linear feet to 56 linear feet) to the satisfaction of the Director of Engineering/Public Works on East Palm Canyon Drive frontage of Phase I, which is East Palm Canyon Drive from approximately 229 linear feet east of Van Fleet Street/Money Hall Drive to approximately 40 linear feet east of Date Palm Drive (estimated 62,850 square feet), hereinafter referred to as “DEVELOPMENT PROJECT”.
G. WHEREAS, Per Section 4. 41 “PUBLIC IMPROVEMENTS” of the Condi tions of Approval, DEVELOPER is required to restripe all lanes, crosswalks and turning pockets, including legends as generally shown on the TPM ’s Plans to the satisfaction of the Director of Engineering/Public Works on East Palm Canyon Drive frontage of Phase I, which is East Palm Canyon Drive from approximately 229 linear feet east of Van Fleet Street/Money Hall Drive to approximately 40 linear - 3 -
feet east of Date Palm Drive (estimated 62,850 square feet).
H. WHEREAS, DEVELOPER has determined that it requires construction services to comply with Section 4.41 “PUBLIC IMPROVEMENTS” of the Conditions of Approval to apply REAS on the East Palm Canyon Drive frontage of Phase I as shown in Exhibit A and that REAS will be applied that consists of the application of a mixture of wat er, asphalt emulsion, aggregate, and chemical additives to an existing asphalt concrete pavement surface.
I. WHEREAS, CITY is fully qualified to administer the work that includes traffic control, rout and seal random cracks, replacement of any pavement markings , including crosswalks, striping and raised pavement markers.
J. WHEREAS, C ITY conducts REAS improvement projects within the jurisdictional boundaries of CITY and can include the DEVELOPMENT PROJECT with a city-led REAS project, which REAS improvement projects are sometimes hereinafter referred to collectively as “CITY PROJECT”.
K. WHEREAS, DEVELOPER will benefit from the cost savings associated with a larger improvement project, and DEVELOPER desires to work with the C ITY, to construct the DEVELOPMENT PROJECT, together with the CITY PROJECT since CITY has extensive experience in the development and implementation of similar type projects.
L. WHEREAS, CITY will therefore provide the administrative, technical, managerial, and support services necessary for the implementation of the DEVELOPMENT PROJECT as part of the CITY PROJECT.
M. WHEREAS, CITY and DEVELOPER desire to define herein the terms and conditions under which said DEVELOPMENT PROJECT is to be administered, engineered, coordinated, and constructed.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises contained herein, the PARTIES hereto agree as follows:
SECTION 1 • CITY AGREES to:
1. Act as the lead agency on behalf of the DEVELOPER for the overall implementation of the DEVELOPMENT PROJECT. The CITY is providing services on a reimbursable basis and has no - 4 -
obligation to fund any portion of the DEVELOPMENT PROJECT. Nothing in this A greement is intended to commit the C ITY to provide replacement funding for or to continue with the DEVELOPMENT PROJECT, if funds are not available.
2. Direct CITY’s contractor to identify any existing surface utility facilities within the limits of the DEVELOPMENT PROJECT and to protect the facilities in place.
3. Prepare and approve CEQA Notice of Exemption clearance for the CITY PROJECT.
4. Award and administer a public works contract for the construction of the C ITY PROJECT and the DEVELOPMENT PROJECT in accordance with all applicable federal, state or local statutes, ordinances, orders, governmental requirements, laws or regulations, including but not limited to the local agency public construction codes, California Labor Code, and California Public C ontract Code, and in accordance with the encroachment permits issued by CITY.
5. Furnish a representative to perform the function of Resident Engineer during construction of DEVELOPMENT PROJECT.
6. Furnish qualified support staff to assist the Resident Engineer in, but not limited to, construction surveys, soils and compaction tests, measurement and computation of quantities, testing of construction materials, checking submittals, preparation of estimates and reports, preparation of as-built drawings, and other inspection and staff services necessary to assure that the construction is performed in accordance with the project documents.
7. Submit any contract change order that causes the construction contract to exceed 10% of the contract bid amount for DEVELOPMENT PROJECT improvements to DEVELOPER for review and approval prior to final authorization by CITY. If any contract change order causes the construction contract to change by less than 10% of the bid amount for DEVELOPMENT PROJECT, CITY is authorized by DEVELOPER’s approval of this Agreement to move forward with such change.
8. Furnish DEVELOPER a final reconciliation of DEVELOPMENT PROJECT expenses within ninety (90) days following the completion and acceptance of the CITY PROJECT and DEVELOPMENT PROJECT construction contract. If final costs associated with the DEVELOPMENT PROJECT are in excess of the D eposit provided in Section 2, C ITY shall include a final bill with the financial - 5 -
reconciliation. If final costs associated with the DEVELOPMENT PROJECT are less than the Deposit provided in Section 2, C ITY shall include a reimbursement for the difference with the financial reconciliation.
SECTION 2 • DEVELOPER AGREES to:
1. Fund one hundred percent (100%) of the cost of the DEVELOPMENT PROJECT, as shown in Exhibit “B”. DEVELOPER agrees that should unforeseen circumstances arise which result in an increase of any costs over those shown in Exhibit “B” , DEVELOPER will pay such costs pursuant to Subsection 6 and Subsection 7 of Section 1.
2. Deposit with C ITY, prior to C ITY start of work and upon written r equest by CITY, Eighty-Three Thousand One Hundred Nineteen Dollars and Thirteen Cents ($83,119.13) (the “Deposit”), which represents one hundred percent (100%) of the estimated costs to complete construction including construction administration, inspection and contingency for DEVELOPER PROJECT, as provided in Exhibit “B”.
3. Provide prompt reviews and approvals, as appropriate, of submittals by C ITY, and to cooperate in timely processing of the DEVELPOMENT PROJECT.
4. Verify improvements are constructed as required by this Agreement.
5. Pay CITY for any final costs associated with the DEVELOPMENT PROJECT that are in excess of the Deposit as determined pursuant to Subsection 7 of Section 1.
SECTION 3 • IT IS MUTUALLY AGREED AS FOLLOWS:
1. If upon receiving estimates for construction of the DEVELOPMENT PROJECT, the bids indicate a cost overrun of no more than ten percent (10%) of the construction cost estimate will occur, as described in Exhibit “B”, CITY may award the contract.
2. If upon receiving estimates it is found that a cost overrun exceeding ten percent (10%) of the construction cost estimate will occur, CITY and DEVELOPER shall endeavor to agree upon an alternative course of action. If, after fourteen (14) calendar days from the date of bid opening, an alternative course of action is not agreed upon, this Agreement shall be deemed to be terminated by mutual consent. C ITY shall reimburse DEVELOPER with any unspent portion of the Deposit - 6 -
within forty-five (45) days of termination.
3. CITY and DEVELOPER acknowledge and agree that any funding shortfall for the completion of the DEVELOPMENT PROJECT will be the sole responsibility of DEVELOPER . Nothing in this Agreement is intended to commit the C ITY to funding any portion of DEVELOPMENT PROJECT or shall be construed as obligating the C ITY to provide replacement funding for any anticipated funding or to continue with the DEVELOPMENT PROJECT, if funds are no longer available. In the event that adequate funds are not available to move forward or to complete DEVELOPMENT PROJECT, PARTIES agree to meet and confer and collectively work to identify adequate funding for DEVELOPMENT PROJECT.
4. The total cost to DEVELOPER to complete construction, including construction administration, inspection and materials testing and a contingency for DEVELOPMENT PROJECT is estimated to Eighty-Three Thousand One Hundred Nineteen Dollars and Thirteen Cents ($83, 119.13) as detailed in Exhibit “B”.
5. CITY shall not be obligated to commence the DEVELOPMENT PROJECT until after receipt of DEVELOPER's Deposit as required in Section 2.
6. CITY shall cause CITY's contractor to maintain in force, until completion and acceptance of the REAS improvements, a policy of Commercial Liability Insurance, including coverage of Bodily Injury Liability and Property Damage Liability, in the amount of $2,000,000 minimum single limit coverage, and a policy of Automobile Liability Insurance in the amount of $1,000,000 minimum. Endorsements to each policy shall be required which name DEVELOPER , its officers, agents and employees, as additionally insured. CITY shall also require CITY's contractor to maintain Worker's Compensation Insurance. CITY shall cause CITY’s contractor to provide Certificates of Insurance and Additional Insured Endorsements which meet the requirements of this section to CITY prior to the start of construction.
7. Ownership and title to all materials, equipment, and appurtenances installed as part of this Agreement will be automatically vested with the jurisdiction in which the improvements reside, and no further agreement will be necessary to transfer ownership. - 7 -
8. DEVELOPER shall be responsible for the maintenance of the improvements provided by DEVELOPMENT PROJECT per the approved Conditions of Approval Section 4.11.
9. No alteration or variation of the terms of this Agreement shall be valid unless made in writing and signed by all PARTIES and no oral understanding or agreement not incorporated herein shall be binding on each PARTY hereto.
10. Neither CITY nor any officer or employee thereof shall be responsible for any damage or liability occurring by reason of any act or omission of DEVELOPER under or in connection with any work, authority or jurisdiction delegated to DEVELOPER under this Agreement. It is further agreed that pursuant to Government Code Section 895.4, DEVELOPER shall fully indemnify and hold C ITY harmless from any liability imposed for injury (as defined by Government Code Section 810.8) occurring by reason of any act or omission of DEVELOPER under or in connection with any work, authority or jurisdiction delegated to DEVELOPER under this Agreement.
11. Neither DEVELOPER nor any officer or employee thereof shall be responsible for any damage or liability occurring by reason of any act or omission of CITY under or in connection with any work, authority or jurisdiction delegated to CITY under this Agreement. It is further agreed that pursuant to Government Code Section 895.4, CITY shall fully indemnify and hold DEVLOPER harmless from any liability imposed for injury (as defined by Government Code Section 810.8) occurring by reason of any act or omission of CITY under or in connection with any work, authority or jurisdiction delegated to CITY under this Agreement.
12. In the event that either PARTY defaults in the performance of any of its obligations under this Agreement or materially breaches any of the provisions of this Agreement, the non- breaching PARTY shall have the option to terminate this Agreement upon ninety (90) days written notice to the other PARTY. Should the Agreement be terminated as provided herein, DEVELOPER shall reimburse C ITY for service performed pursuant to this Agreement up through the date of termination and C ITY shall reimburse DEVELOPER with any unspent/remaining portion of the Deposit within forty-five (45) days of termination.
13. DEVELOPER and CITY shall retain or cause to be retained for audit, all records and accounts - 8 -
relating to the DEVELOPMENT PROJECT for a period of minimum three (3) years from the date of Notice of Completion of the DEVELOPMENT PROJECT.
14. This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument. Each PARTY to this Agreement agrees to the use of electronic signatures, such as digital signatures that meet the requirements of the California Uniform Electronic Transactions Act ((“CUETA”) Cal. Civ. Code §§ 1633.1 to 1633.17), for executing this Agreement. The PARTIES further agree that the electronic signatures of the PARTIES included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adop ted by a person with the intent to sign the electronic record pursuant to the CUETA as amended from time to time. The CUETA authorizes use of an electronic signature for transactions and contracts among parties in California, including a government agency. Digital signature means an electronic identifier, created by computer, intended by the PARTY using it to have the same force and effect as the use of a manual signature, and shall be reasonably relied upon by the PARTIES. For purposes of this section, a digital signature is a type of "electronic signature" as defined in subdivision (i) of Section 1633.2 of the Civil Code.
15. All notices, demands, invoices, and other communications required or permitted hereunder shall be in writing and delivered to the following addresses or such other address as the PARTIES may designate:
CITY: DEVELOPER:
Cathedral City Cathedral COVE 1.0 LLC
Attn: John A. Corella, PE Attn: Vasanthi Okuma
Director of Public Works Director of Development
68700 Avenida Lalo Guerrero 1401 Quail Street, Suite 100 Cathedral City, CA 92234 Newport Beach, CA 92660
Phone: (760) 770-0327 Phone: (949) 752-2515
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[Signature Page Follows]
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APPROVALS
CITY OF CATEHDRAL CITY Approvals
RECOMMENDED FOR APPROVAL:
_____________________________________
Charles P. McClendon
PRINTED NAME
City Manager
APPROVED AS TO FORM:
CITY LEGAL COUNSEL
_____________________________________
Eric S. Vail
PRINTED NAME
City Attorney
APPROVAL BY THE CITY COUNCIL
_______________________________________
Nancy Ross
PRINTED NAME
Mayor
ATTEST:
_____________________________________
Tracey R. Hermosillo
PRINTED NAME
City Clerk
CATHEDRAL COVE 1.0 LLC Approvals
APPROVED BY:
_____________________________________
_____________________________________
PRINTED NAME
APPROVED AS TO FORM:
_____________________________________
_____________________________________
PRINTED NAME
ATTEST:
_____________________________________
PRINTED NAME
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EXHIBIT A
IMPROVEMENT PLANS
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EXHIBIT B
COST ESTIMATE
Street Beginning End Area (SQ. FT) Unit Price COST
EAST PALM CANYON DRIVE VAN FLEET/MONTY HALL DATE PALM DRIVE 62,850 1.15$ 72,277.50$ ADMIN 2,168.33$
INSPECTIONS 1,445.55$
10% CONTINGENCY 7,227.75$
TOTAL ESTIMATE 83,119.13$
CATHEDRAL COVE 1.0 LLC REAS PROJECT - COST ESTIMATE