City of Chula Vista First Amendment to Agreement No.: 2018-075 RIDA Chula Vista, LLC
FIRST AMENDMENT
TO REIMBURSEMENT AGREEMENT
WITH RIDA CHULA VISTA, LLC
TO CONSTRUCT SPECIFIED BAYFRONT SEWER IMPROVEMENTS
This FIRST AMENDMENT (“Amendment”) is entered into effective as of February 27, 2024 (the “First Amendment Effective Date”) by and among the City of Chula Vista, a chartered municipal corporation (“City”) and RIDA Chula Vista, LLC, a Delaware limited liabi lity company (“Developer”) (collectively, the “Parties and, individually, a “Party”), with reference to the following facts:
RECITALS
WHEREAS, City and Developer previously entered into Reimbursement Agreement to Construct Specified Bayfront Sewer Improvements (the “Original Agreement”) on September 15, 2020; and
WHEREAS, City and Developer desire to amend the Original Agreement to expand the scope of the Project Improvements (as defined in the Original Agreement) to include the construction of in-road sewer facilities in H Street (the “H Street Sewer Improvements”) and an overflow tank for the G Street sewer pump station as more specifically set forth below; and WHEREAS, pursuant to Chula Vista Municipal Code (“CVMC”) Section 13.14.090 (Sewer Capacity C harge), any owner or person making application for a permit to develop or modify use of any residential, commercial, industrial or other property shall pay a sewer capacity charge. All revenue derived from such fees shall be deposited in the “Trunk Sewer C apital Reserve” fund; and
WHEREAS, pursuant to CVMC Chapter 3.14 (Trunk Sewer Capital Reserve Fund), all revenues collected under CVMC Section 13.14.090 shall be deposited into the “Trunk Sewer Capital Reserve Fund” and may be used, in the discretion of th e City Council, for the planning, design, or construction of sewage collection or treatment or water reclamation purposes or purposes incidental to paying all or any part of the cost and expense to enlarge sewer facilities of the City so as to enhance effi ciency of utilization and/or adequacy of capacity in order to effectively serve the needs of the City or paying all or any part of the cost and expense to plan and/or evaluate any future proposals for area -wide sewage treatment and/or water reclamation systems or facilities; and
WHEREAS, City, Developer, and the San Diego Unified Port District (“District”) entered into a Disposition and Development Agreement for the Resort Hotel Convention Center Project (Chula Vista Bayfront Master Plan Parcel H-3), effective May 7, 2018 (the “DDA”); and
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WHEREAS, the Scope of Development attached to the DDA provided that the G Street sewer pump station would be constructed by or on behalf of the City and financed by the City, which financing may be through any financing mechanism in City’s sole and absolute discretion; and
WHEREAS, the G Street sewer pump station requires the construction of an overflow tank (the “Pump Station Overflow Tank”), which is most efficiently placed within Developer’s leasehold interest; and
WHEREAS, City has completed preliminary design of the Pump Station Overflow Tank; and
WHEREAS, in order to achieve certain financial, construction management, and schedule efficiencies, City recommends, and Developer agrees, that construction of the Pump Station Overflow Tank shall be performed by Developer; and
WHEREAS, the estimated cost of constructing the Pump Station Overflow Tank is $5,555,000; and
WHEREAS, the construction of the Pump Station Overflow Tank is eligible for reimbursement from the Trunk Sewer Capital Reserve Fund; and WHEREAS, costs for the H Street Sewer Improvements were not part of the Original Agreement, but are also eligible for reimbursement and were included in the budget for the Project Improvements approved by the City Council in May 2022; and WHEREAS, City has completed preliminary design of the H Street Sewer Improvements; and
WHEREAS, in order to achieve certain financial, construction management, and schedule efficiencies, City recommends, and Developer agrees, that construction of the H Street Sewer Improvements shall be performed by Developer; and
WHEREAS, the City has sufficient funds in the Sewer Income Fund and Trunk Sewer Capital Reserve to reimburse Developer for the final design and construction of the Pump Station Overflow Tank and the H Street Sewer Improvements; and
WHEREAS, Developer desir es to enter into this Amendment, so that it may obtain reimbursement for eligible costs incurred by Developer in the final design and construction of the Pump Station Overflow Tank and the H Street Sewer Improvements; and WHEREAS, the final design and construction of the Pump Station Overflow Tank and the H Street Sewer Improvements shall be self -performed by Mortenson McCarthy Joint Venture (“MMJV”) on a lump sum basis, with additional second-tier subcontracts to be awarded ancillary scopes; and
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WHEREAS, such procurement has been found to be in the best interest of the public and that appropriate safeguards are in place to protect the public interest and approved by the City Manager’s designee, as authorized by City Council Resolution 2019-170.
NOW, THEREFORE, in consideration of the above recitals and the mutual obligations of the parties set forth herein, City and Developer agree as follows:
1. Article I of the Original Agreement is hereby amended as follows:
a. The defined term “Estimated Cost” is amended to mean the total cost of the design, development and construction of the Project Improvements, as estimated by preliminary engineering studies to total $14,793,639, as shown in Exhibit A attached hereto. As Estimated Cost is not initially the result of competitive bids for the actual design, development and construction, it is subject to change during the competitive bid process as well as during the design and construction phases, subject to approval of the Parties. b. The defined term “General Contractor” is amended to mean party or parties under any contract with the Developer to perform the work or provide supplies for the Project Improvements.
c. The defined term s “Project Improvements” and “Improvements” are amended to mean the Developer’s Sewer Improvements , the Pump Station Overflow Tank, and the H Street Sewer Improvements.
d. The defined term “Reimbursable Costs” is amended to mean costs of the design, development and construction (including (i) the premium cost of builder’s risk insurance, (ii) the premium cost of liability insurance, (iii) all other approved premium insurance costs, and (iv) builder’s risk insurance deductible, liability insurance deductible, an d self-insured retention (SIR) costs not-to-exceed $25,000 per occurrence and with an aggregate cap in an amount approved by the City) of the Project Improvements that have been expended by Developer and approved by the City through approval procedures described in the Agreement.
e. The defined term “Sewer Income Fund Eligible Expenses” is amended to mean means costs for which the City shall reimburse Developer from the Sewer Income Fund or the Trunk Sewer Capital Reserve Fund (or an alternative source of fu nds identified by the City) for the design, development and construction (including the cost of builder’s risk insurance and all other insurance costs) of the Project Improvements, not to exceed the Reimbursable Costs.
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f. The defined term “ Subcontractor” is a mended to mean a party or parties under any subcontract with the General Contractor to perform the work or provide supplies for the Project Improvements.
2. Article I of the Original Agreement is hereby further amended by adding the following definitions in alphabetical order:
a. Amendment. “Amendment” means that certain First Amendment to Reimbursement Agreement with RIDA Chula Vista, LLC, to Construct Specified Bayfront Sewer Improvements, dated as of February 27, 2024, by and between City and Developer.
b. H Street Sewer Improvements. “H Street Sewer Improvements” means in- road sewer facilities in H Street as shown in the Phase 1A Construction Documents.
c. Pump Station Overflow Tank . “Pump Station Overflow Tank” means an overflow tank for the G Street sewer pump station.
d. Trunk Sewer Capital Reserve Fund. “Trunk Sewer Capital Reserve Fund” means the fund designated as the “Trunk Sewer Capital Reserve Fund” in accordance with CVMC Chapter 3.14.
3. Exhibit A of the Original Agreement is hereby replaced with Exhibi t A attached hereto.
4. Section 2.1 of the Original Agreement is amended to read as follows:
2.1 Developer’s Sewer Improvements. Except as expressly provided in this Agreement, Developer shall cause (a) the design and development of the Developer’s Sewer Improvements in accordance with the Schematic Plans (as defined in the DDA) for the development of Phase 1A Infrastructure Improvements (as defined in the DDA) that the District shall submit to Developer pursuant to Section 4.4(b) of the DDA , (b) the design a nd development of the Pump Station Overflow Tank in accordance with the plans and specifications approved by the City for the Pump Station Overflow Tank project , and (C) the design and development of the H Street Sewer Improvements in accordance with the plans and specifications approved by the City for the H Street Sewer Improvements project , and Developer shall cause the Project Improvements to be constructed so that the Project Improvements are in accordance with the applicable Contract Documents within the timeframe described in Section 5.1, in each case, in accordance with all the terms and conditions of this Agreement and for the Maximum Reimbursement Amount; provided, however, that the Developer shall have no obligation to develop
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or construct any of the Project Improvements unless and until DDA Close of Escrow occurs in accordance with the DDA.
5. Section 2.2 of the Original Agreement is amended to read as follows:
2.2. Complete and Functional Improvements. Developer shall provide complete and functional Project Improvements that meet the Contract Documents and all other applicable standards identified herein.
6. Section 2.4 of the Original Agreement is amended to read as follows:
2.4. City Payment. City shall reimburse Developer, in an amount not to exceed the Maximum Reimbursement Amount and subject to the terms and conditions herein, for the Sewer Income Fund Eligible Expenses of design, development, and construction of Project Improvements. City acknowledges and agrees that all of the Estimate d Costs identified in Exhibit A are Sewer Income Fund Eligible Expenses. The City represents and warrants to Developer that, as of the First Amendment Effective Date (as defined in the First Amendment) , the aggregate amount of funds on deposit in the Sewer Income Fund and the Trunk Sewer Capital Reserve Fund is equal to or greater than the Maximum Reimbursement Amount and that the City will use its reasonable efforts to manage the Sewer Income Fund and the Trunk Sewer Capital Reserve Fund in a manner so that the aggregate amount of funds on deposit in the Sewer Income Fund and the Trunk Sewer Capital Reserve Fund during the term of this Agreement is sufficient to pay all Reimbursable Costs in accordance with this Agreement. To the extent that the amount of funds in the Sewer Income Fund and the Trunk Sewer Capital Reserve Fund are insufficient to pay all Reimbursable Costs, City shall identify alternative funds from which to pay City’s Sewer Facility Contribution obligation pursuant to the DDA and the costs related to the Pump Station Overflow Tank and the H Street Sewer Improvements.
7. Section 4.2.1 of the Original Agreement is amended to read as follows:
4.2.1. Revisions to the Estimated Cost. The City Manager or his/her designee shall review complete sets of the drawings and specifications for the Project Improvements promptly after Developer provides them to the City. In the event that the City Manager or designee reviews the drawings and specification s for the Project Improvements and determines that the cost of design, development, and construction will exceed the then current Estimated Cost, the Estimated Cost shall be increased to reflect the revised estimate in accordance with subsection 4.2.2.
8. Section 4.2.2 of the Original Agreement is amended to read as follows:
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4.2.2. Adjustments Based on Other Cost Increases . The Estimated Cost may be increased due to: (i) acts of God, acts of any governmental authority, the elements, war, litigation, shortages of material, labor strikes, inflation, later commonly accepted or adopted higher standards and specifications of construction, concealed or unknown conditions encountered in the completion of Project Improvements, or other cause beyond Developer’s control; (ii) actual bids received being greater than estimated; (iii) other factors not the result of unreasonable conduct by Developer; or (iv) the presence of any Hazardous Material on the Project Site (as defined in the DDA). Subject to the prior written app roval by the City Manager or his/her designee, which approval shall not be unreasonably withheld, conditioned, or delayed, the Estimated Cost shall be increased by the amount of the increase in the cost of the design, development, and construction of the Project Improvements that are determined by the City Manager or his/her designee (in such person’s reasonable, good faith discretion) to be caused by such events or circumstances.
9. Section 9.1.2.1 of the Original Agreement is amended to read as follows:
9.1.2.1. Funds for Project. Funds for payment of costs/expenses for Project shall be limited to the City’s Sewer Facility Contribution and the funds in the Trunk Sewer Capital Reserve Fund.
10. Notwithstanding anything to the contrary in the Original Agreement, City acknowledges and agrees that (a) the final design and construction of the Pump Station Overflow Tank and the H Street Sewer Improvements shall be self - performed by Mortenson McCarthy Joint Venture (“MMJV”) on a lump sum basis, with additional second-tier subcontracts to be awarded ancillary scopes, (b) such procurement is in the best interest of the public and that appropriate safeguards are in place to protect the public interest and approved by the City Manager’s designee, as authorized by City Coun cil Resolution 2019 -170, and (c) such procurement complies with all applicable laws, rules, regulations and ordinances.
11. City represents that City has sufficient funds in the Trunk Sewer Capital Reserve to reimburse Developer for the final design and construction of the Pump Station Overflow Tank and the H Street Sewer Improvements.
12. Except as expressly provided herein, all other terms and conditions of the Original Agreement shall remain in full force and effect.
13. Each Party represents that it has the full right, power, and authority to execute this Amendment and to perform its obligations hereunder, without the need for any further action under its governing instruments, and the individuals executing this
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Amendment on behalf of such Party are duly authorized agents with authority to do so.
[Signature Pages Follow]
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SIGNATURE PAGE TO FIRST AMENDMENT
TO
REIMBURSEMENT AGREEMENT
WITH RIDA CHULA VISTA, LLC
TO CONSTRUCT SPECIFIED BAYFRONT SEWER IMPROVEMENTS
CITY
CITY OF CHULA VISTA, a California
charter city and municipal corporation
By:
Maria Kachadoorian
City Manager
APPROVED AS TO FORM:
By:
Jill D.S. Maland
Lounsbery Ferguson Altona & Peak
Acting City Attorney
DEVELOPER
RIDA CHULA VISTA, LLC, a Delaware
limited liability company
California Contractor License Number:
109979
By:
Ira M. Mitzner
Manager
City of Chula Vista First Amendment to Agreement No.: 2018-075 RIDA Chula Vista, LLC
Exhibit A
Estimated Cost
Improvement Description Original Amended Value as of
05/10/2022
Current Cost Estimate as
of 02/27/2024
E Street (G Street to H Street) $ 730,000 $ 1,695,826 $ 1,695,826 G Street Connection 85,000 561,871 561,871
H-3 Utility Corridor 380,000 1,192,664 1,192,664
H Street (Bay Blvd to Street A) 10,380 10,380
H Street (Marina Pkwy to E Street) 965,843 965,843
G Street Pump Station Overflow Tank $ 5,555,000
Change Orders to Date $ 1,812,055
Projected Exposure $ 3,000,000
Total $ 1,195,000 $ 4,426,584 $ 14,793,639