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SERVICE AGREEMENT BY AND BETWEEN
CITY OF CATHEDRAL CITY
AND
SILVER ROCK DEVELOPMENT, INC.
FOR
DESIGN REVIEW NO. 23-001 – COVE LANE AND GROVE STREET
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 Silver Rock Development, Inc. , a California limited liability company, (hereinafter “DEVELOPER”) for the application of Rubberized Emulsion Asphalt Slurry (REAS) along the entire DEVELOPER’S Cove Lane and Grove Street frontages, located within the jurisdictional boundaries of CITY. The C ITY and DEVELOPER are sometimes hereinafter referred to individually as a “PARTY” and collectively as the “PARTIES”.
RECITALS
A. WHEREAS, DEVELOPER submitted Design Review (DR) application on July 5, 2023, for the development of a 19- unit residential apartment complex on an approximately 0.68- acre vacant parcel located in the Downtown Residential Neighborhood (DRN) Zoning District where the proposed Project is a permitted use.
B. WHEREAS, the City Planning Commission has reviewed the application and has approved DR No. 23-001 for the development of a 19- unit residential apartment complex that will consist of four connected three-story apartment buildings, attached garages, outdoor surface parking for tenants and guests, and private driveways. Other amenities and improvements will include a common patio area consisting of a metal shade structure consisting of an electric barbecue unit and counter, outdoor furniture, and fountain with an enclosure for fountain equipment. The trash staging room is also proposed and will be accessible to residents through the common area and parking lot.
C. WHEREAS, DR No. 23-001 Section 4.37 “PUBLIC IMPROVEMENTS” contains two (2) conditions that require the DEVELOPER to crack seal and apply Rubberized Emulsion Asphalt Slurry (REAS) on the following streets (hereinafter referred to as “DEVELOPMENT PROJECT”):
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a. Section 4.37A “PUBLIC STREETS” Part 1c: Cove Lane from DR’s north curb face (approximately 14 feet) along the entire length of the DR’s north frontage (west to east DR’s property lines, approximately 295 feet)
b. Section 4.37A “PUBLIC STREETS” Part 2c: Grove Street from DR’s south curb face (approximately 14 feet long) along the entire length of the DR’s south frontage (west to east DR’s property lines, approximately 295 feet)
D. WHEREAS, the DEVELOPER is in the process of developing DR No. 23-001 in the CITY, which includes the following APNs and lot:
a. APNs: 687-195-002, -003, -004, -005, -006, -007, and Lot “AC” E. WHEREAS, DEVELOPER has determined that it requires construction services to comply with Section 4.37 “PUBLIC IMPROVEMENTS” of the DR No. 23-001, to apply REAS on the Cove Lane and Grove Street frontages 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.
F. 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.
G. 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”.
H. 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 C ITY has extensive experience in the development and implementation of similar type projects.
I. 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.
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J. 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 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 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 4937-2257-7499 v1 - 4 -
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 reconciliation. If final costs associated with the DEVELOPMENT PROJECT are less than the Deposit provided in Section 2, C ITY shall include a reimburs ement 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 CITY, prior to CITY start of work and upon written r equest by CITY, Eight Thousand Seventy-Four Dollars and Fifteen Cents ($8,074.15) (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 4937-2257-7499 v1 - 5 -
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 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 Eight Thousand Seventy-Four Dollars and Fifteen Cents ($8,074.15) 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 4937-2257-7499 v1 - 6 -
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.
8. DEVELOPER shall be responsible for the maintenance of the improvements provided by the DEVELOPMENT PROJECT per the approved DR No. 23-001 Section 4.8.
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 4937-2257-7499 v1 - 7 -
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 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:
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Cathedral City Silver Rock Development, Inc.
Attn: John A. Corella, PE Ethan Mezrahi
Director of Public Works Applicant
68700 Avenida Lalo Guerrero 72920 Haskell Road
Cathedral City, CA 92234 Thousand Palms, CA 92276
Phone: (760) 770-0327 Phone: (760) 424-5955
[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
SILVER ROCK DEVELOPMENT 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
COVE LANE CATHEDRAL CANYON DRIVE WEST BUDDY ROGERS AVENUE 4,130.0 0.85$ 3,510.50$ GROVE LANE CATHEDRAL CANYON DRIVE WEST BUDDY ROGERS AVENUE 4,130.0 0.85$ 3,510.50$ SUBTOTAL 7,021.00$
ADMIN 210.63$
INSPECTIONS 140.42$
10% CONTINGENCY 702.10$
TOTAL ESTIMATE 8,074.15$
SILVER ROCK DEVELOPMENT REAS PROJECT - COST ESTIMATE