City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 5 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025 “will endeavor” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents, or representatives” or any similar language must be deleted from all certificates. The required certificates and endorsements should otherwise be on industry standard forms. The City reserves the right to require, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications.
3.10 Claims Made Policy Requirements. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are required and are provided on a claims-made form, the following requirements also apply:
a. The “Retro Date” must be shown, and must be before the date of this Agreement or the beginning of the work required by this Agreement.
b. Insurance must be maintained, and evidence of insurance must be provided, for at least five (5) years after completion of the work required by this Agreement. c. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a “Retro Date” prior to the effective date of this Agreement, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of the work required by this Agreement. d. A copy of the claims reporting requirements must be submitted to the City for review.
3.11 Not a Limitation of Other Obligations. Insurance provisions under this section shall not be construed to limit the Consultant’s obligations under this Agreement, including Indemnity.
3.12 Additional Coverage. To the extent that insurance coverage provided by Consultant maintains higher limits than the minimums appearing in Exhibit B, City requires and shall be entitled to coverage for higher limits maintained.
4. INDEMNIFICATION
4.1. General. To the maximum extent allowed by law, Consultant shall timely and fully protect, defend, reimburse, indemnify and hold harmless City, its elected and appointed officers, agents, employees and volunteers (collectively, “Indemnified Parties”), from and against any and all claims, demands, causes of action, costs, expenses, (including reasonable attorneys’ fees and court costs), liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Consultant, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of the Required Services, the results of such performance, or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses arising from the sole negligence or willful misconduct of the Indemnified Parties. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the Indemnified Parties which may be in combination with the active or passive negligent acts or omissions of the Consultant, its employees, agents or officers, or any third party.
4.2. Intentionally Omitted.
4.3 Costs of Defense and Award. Included in Consultant’s obligations under this Section 4 is Consultant’s obligation to defend, at Consultant’s own cost, expense and risk, and with counsel approved in writing by
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 6 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025 City, any and all suits, actions or other legal proceedings that may be brought or instituted against one or more of the Indemnified Parties. Subject to the limitations in this Section 4, Consultant shall pay and satisfy any judgment, award or decree that may be rendered against one or more of the Indemnified Parties for any and all related legal expenses and costs incurred by any of them.
4.4. Consultant’s Obligations Not Limited or Modified. Consultant’s obligations under this Section 4 shall not be limited to insurance proceeds, if any, received by the Indemnified Parties, or by any prior or subsequent declaration by the Consultant. Furthermore, Consultant’s obligations under this Section 4 shall in no way limit, modify or excuse any of Consultant’s other obligations or duties under this Agreement.
4.5. Enforcement Costs. Consultant agrees to pay any and all costs and fees City incurs in enforcing Consultant’s obligations under this Section 4.
4.6 Survival. Consultant’s obligations under this Section 4 shall survive the termination of this Agreement.
5. CONFLICTS OF INTEREST
5.1 Form 700 Filing. The California Political Reform Act and the Chula Vista Conflict of Interest Code require certain government officials and consultants performing work for government agencies to publicly disclose certain of their personal assets and income using a Statement of Economic Interests form (Form 700).
In order to assure compliance with these requirements, Consultant shall comply with the disclosure requirements identified in the attached Exhibit C, incorporated into the Agreement by this reference.
5.2 Disclosures; Prohibited Interests. Independent of whether Consultant is required to file a Form 700, Consultant warrants and represents that it has disclosed to City any economic interests held by Consultant, or its employees or subcontractors who will be performing the Required Services, in any real property or project which is the subject of this Agreement. Consultant warrants and represents that it has not employed or retained any company or person, other than a bona fide employee or approved subcontractor working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants and represents that it has not paid or agreed to pay any company or person, other than a bona fide employee or approved subcontractor working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Consultant further warrants and represents that no officer or employee of City, has any interest, whether contractual, non-contractual, financial or otherwise, in this transaction, the proceeds hereof, or in the business of Consultant or Consultant’s subcontractors. Consultant further agrees to notify City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. For breach or violation of any of these warranties, City shall have the right to rescind this Agreement without liability.
5.3 Levine Act. California Government Code section 84308, commonly known as the Levine Act, prohibits public agency officers from participating in any action related to a contract if such officer receives political contributions totaling more than $500 within the previous twelve months, and for twelve months following the date a final decision concerning the contract has been made, from the person or company awarded the contract. The Levine Act also requires disclosure of such contribution by a party to be awarded a specific contract. In order to assure compliance with these requirements, Consultant shall comply with the disclosure requirements identified in the attached Exhibit D, incorporated into the Agreement by this reference.
6. REMEDIES
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 7 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025
6.1 Termination for Cause. If for any reason whatsoever Consultant shall fail to perform the Required Services under this Agreement, in a proper or timely manner, or if Consultant shall violate any of the other covenants, agreements or conditions of this Agreement (each a “Default”), in addition to any and all other rights and remedies City may have under this Agreement, at law or in equity, City shall have the right to terminate this Agreement by giving five (5) days written notice to Consultant. Such notice shall identify the Default and the Agreement termination date. If Consultant notifies City of its intent to cure such Default prior to City’s specified termination date, and City agrees that the specified Default is capable of being cured, City may grant Consultant up to ten (10) additional days after the designated termination date to effectuate such cure. In the event of a termination under this Section 6.1, Consultant shall immediately provide City any and all ”Work Product” (defined in Section 7 below) prepared by Consultant as part of the Required Services.
Such Work Product shall be City’s sole and exclusive property as provided in Section 7 hereof. Consultant may be entitled to compensation for work satisfactorily performed prior to Consultant’s receipt of the Default notice; provided, however, in no event shall such compensation exceed the amount that would have been payable under this Agreement for such work, and any such compensation shall be reduced by any costs incurred or projected to be incurred by City as a result of the Default.
6.2 Termination or Suspension for Convenience of City. City may suspend or terminate this Agreement, or any portion of the Required Services, at any time and for any reason, with or without cause, by giving specific written notice to Consultant of such termination or suspension at least fifteen (15) days prior to the effective date thereof. Upon receipt of such notice, Consultant shall immediately cease all work under the Agreement and promptly deliver all “Work Product” (defined in Section 7 below) to City. Such Work Product shall be City's sole and exclusive property as provided in Section 7 hereof. Consultant shall be entitled to receive just and equitable compensation for this Work Product in an amount equal to the amount due and payable under this Agreement for work satisfactorily performed as of the date of the termination/suspension notice plus any additional remaining Required Services requested or approved by City in advance that would maximize City’s value under the Agreement.
6.3 Waiver of Claims. In the event City terminates the Agreement in accordance with the terms of this Section, Consultant hereby expressly waives any and all claims for damages or compensation as a result of such termination except as expressly provided in this Section 6.
6.4 Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out of this Agreement against City unless a claim has first been presented in writing and filed with City and acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may be amended, the provisions of which, including such policies and procedures used by City in the implementation of same, are incorporated herein by this reference. Upon request by City, Consultant shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement.
6.5 Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in San Diego County, State of California. Consultant hereby waives any right to remove any action from San Diego County as may otherwise be permitted by California Code of Civil Procedure section 394.
6.6 Service of Process. Consultant agrees that it is subject to personal jurisdiction in California. If Consultant is a foreign corporation, limited liability company, or partnership that is not registered with the California Secretary of State, Consultant irrevocably consents to service of process on Consultant by first class mail directed to the individual and address listed under “For Legal Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be effective five days after mailing.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 8 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025
7. OWNERSHIP AND USE OF WORK PRODUCT
All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced in whole or in part under this Agreement in connection with the performance of the Required Services (collectively “Work Product”) shall be the sole and exclusive property of City. No such Work Product shall be subject to private use, copyrights or patent rights by Consultant in the United States or in any other country without the express, prior written consent of City. City shall have unrestricted authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in part, any such Work Product, without requiring any permission of Consultant, except as may be limited by the provisions of the Public Records Act or expressly prohibited by other applicable laws. With respect to computer files containing data generated as Work Product, Consultant shall make available to City, upon reasonable written request by City, the necessary functional computer software and hardware for purposes of accessing, compiling, transferring and printing computer files.
8. GENERAL PROVISIONS
8.1 Amendment. This Agreement may be amended, but only in writing signed by both Parties.
8.2 Assignment. City would not have entered into this Agreement but for Consultant’s unique qualifications and traits. Consultant shall not assign any of its rights or responsibilities under this Agreement, nor any part hereof, without City’s prior written consent, which City may grant, condition or deny in its sole discretion.
8.3 Authority. The person(s) executing this Agreement for Consultant warrants and represents that they have the authority to execute same on behalf of Consultant and to bind Consultant to its obligations hereunder without any further action or direction from Consultant or any board, principle or officer thereof.
8.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one Agreement after each Party has signed such a counterpart.
8.5 Entire Agreement. This Agreement together with all exhibits attached hereto and other agreements expressly referred to herein, constitutes the entire Agreement between the Parties with respect to the subject matter contained herein. All exhibits referenced herein shall be attached hereto and are incorporated herein by reference. All prior or contemporaneous agreements, understandings, representations, warranties and statements, oral or written, are superseded.
8.6 Record Retention. During the course of the Agreement and for three (3) years following completion of the Required Services, Consultant agrees to maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating to the performance of the Agreement, including accounting for costs and expenses charged to City, including such records in the possession of subcontractors/sub-consultants.
8.7 Further Assurances. The Parties agree to perform such further acts and to execute and deliver such additional documents and instruments as may be reasonably required in order to carry out the provisions of this Agreement and the intentions of the Parties.
8.8 Independent Contractor. Consultant is and shall at all times remain as to City a wholly independent contractor. Neither City nor any of its officers, employees, agents or volunteers shall have control over the
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 9 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025 conduct of Consultant or any of Consultant’s officers, employees, or agents (“Consultant Related Individuals”), except as set forth in this Agreement. No Consultant Related Individuals shall be deemed employees of City, and none of them shall be entitled to any benefits to which City employees are entitled, including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Furthermore, City will not withhold state or federal income tax, social security tax or any other payroll tax with respect to any Consultant Related Individuals; instead, Consultant shall be solely responsible for the payment of same and shall hold the City harmless with respect to same. Consultant shall not at any time or in any manner represent that it or any of its Consultant Related Individuals are employees or agents of City. Consultant shall not incur or have the power to incur any debt, obligation or liability whatsoever against City, or bind City in any manner.
8.9 Notices. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any Party shall be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such Party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified in this Agreement at the places of business for each of the designated Parties as indicated in Exhibit A, or otherwise provided in writing.
8.10 Electronic Signatures. Each Party agrees that the electronic signatures, whether digital or encrypted, 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 any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a Party with the intent to sign such record, including facsimile or email electronic signatures, pursuant to the California Uniform Electronic Transactions Act (Cal. Civ. Code §§ 1633.1 to 1633.17) as amended from time to time. (End of page. Next page is signature page.)
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 10 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025
SIGNATURE PAGE
CONSULTANT SERVICES AGREEMENT
IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and Consultant agree that they have read and understood all terms and conditions of the Agreement, that they fully agree and consent to be bound by same, and that they are freely entering into this Agreement as of the Effective Date.
CLAIMS MANAGEMENT ASSOCIATES,
INC.
CITY OF CHULA VISTA
BY:________________________________ BY: ________________________________
ED GARBO TIFFANY ALLEN
PRESIDENT CITY MANAGER
APPROVED AS TO FORM
BY: _______________________________
Marco A. Verdugo
City Attorney
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 11 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025
EXHIBIT A
SCOPE OF WORK AND PAYMENT TERMS
1. Contact People for Contract Administration and Legal Notice A. City Contract Administration:
David Steward
276 Fourth Avenue
Building A
Chula Vista, CA 91910
619-476-5372
[email protected]
For Legal Notice Copy to:
City of Chula Vista
City Attorney
276 Fourth Avenue
Chula Vista, CA 91910
619-691-5037
[email protected]
B. Consultant Contract Administration:
CLAIMS MANAGEMENT ASSOCIATES, INC.
10755 Scripps Poway Parkway, Suite 501
San Diego, CA 92131
858-592-6742
[email protected]
For Legal Notice Copy to:
Claims Management Associates, Inc.
10755 Scripps Poway Parkway, Suite 501
San Diego, CA 92131
858-592-6742
[email protected]
2. Required Services
A. General Description:
Consultant will provide handling of California Government Tort Liability, Property and Recovery Claims including onsite inspections and in person contact with claimants and witnesses material to investigations. The Consultant will act as the representative of the City in the investigation, adjustment, and resolution of claims and will be required to provide Program Administration by providing professional/clerical claims service and technically proficient staff.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 12 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025 B. Detailed Description:
Claim Adjustment and Investigation Services
1. Within 30 days of receipt of claim, or sooner, Consultant will:
a. Complete initial investigation of liability, property, and recovery claims to include recorded or written statements from involved participants, verification of damage or loss, obtain relevant documents, including but not limited to, medical releases, police reports, internal departmental reports and other records and documentation necessary to complete a proper and thorough investigation of the claim and place initial loss reserves. List detailed services to be provided by consultant. Best practice is to list tasks and outline expectations and target completion dates.
b. Provide City an electronic preliminary report of findings addressing facts, liability, damages, work remaining and recommendations.
2. Consultant will provide electronic status reports every 30 days thereafter as may be appropriate; sooner if case developments warrant until case resolves. Thirty Day Reports shall include copies of correspondence in lieu direct copies of routine daily email communications with claimants/others. Closing Reports shall include a final invoice. Interim monthly invoices are welcome.
3. Consultant will provide any and all documentation to support liability/damages.
4. Consultant shall have the discretion to retain City's vehicle damage appraiser, LADCO, and arrange for LADCO to invoice the City directly.
5. Consultant shall issue Claim Insufficiency letters, and a) notify City when claim denials will be issued; b) inform claimants in advance why claim(s) will be denied; and c) Issue Claim Rejection Letters including a signed, dated Proof of Service document. PDF copies are to be transmitted to City.
6. Discretionary claim loss settlement authority of up to $10,000 is extended by City to a specific representative of the Consultant. City will provide an authorization document to memorialize this authority. File documentation must include a brief statement of settlement rationale.
7. Where settlement value is believed to be in excess of $10,000, Consultant will notify City’s Claim contact, via email, of the recommended settlement amount and/or range including documentation of settlement rationale. Email subject line to include "Settlement Authority Requested" statement.
8. Positions & Transactions. Consultant will be available during the course of the engagement to answer City’s questions, provide relevant information, and render advice.
9. Consultant shall prepare and email to City a “claim payment request form” when matters are settled and include a PDF version of the fully executed release document. Consultant shall deliver or mail the original release document to City.
10. Consultant shall attend Small Claims Hearings upon request by City.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 13 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025
11. Consultant shall place third parties on notice of City recovery/subrogation rights where appropriate.
12. Consultant shall handle to conclusion City’s Open Transfer files on a case-by-case basis subject to all terms of the agreement as may be needed and requested by City.
13. Consultant will be required to set up new files, including claims data entry for electronic files, for import of documents.
3. Term: In accordance with Section 1.10 of this Agreement, the term of this Agreement shall begin July 1, 2026 and end on June 30, 2027 for completion of all Required Services.
4. Compensation:
A. Form of Compensation
☒ Time and Materials. For performance of the Required Services by Consultant as identified in Section 2.B., above, City shall pay Consultant for the productive hours of time spent by Consultant in the performance of the Required Services, at the rates indicated below:
All Inclusive Hourly Rate for Casualty Claims $ 84.50
Minor Property Claims using a JR Adjuster $ 67.50
B. Reimbursement of Costs
☒ Invoiced or agreed-upon amounts as follows: Cost such as non-ordinary investigative services, independent medical examinations, professional engineering services, laboratory tests, professional photography, statement transcriptions and special delivery charge - Consultant to obtain City Approval prior to engaging services.
Notwithstanding the foregoing, the maximum amount to be paid to the Consultant for services performed through June 30, 2031 provided that all extensions are executed, shall not exceed $500,000 .
5. Special Provisions:
☐ Permitted Sub-Consultants: None
☐ Security for Performance: None
☒ Notwithstanding the completion date set forth in Section 3 above, City has option to extend this Agreement for Four (4) additional one-year terms. The City Manager or Director of Finance/Treasurer shall be authorized to exercise the extensions on behalf of the City. If the City exercises an option to extend, each extension shall be on the same terms and conditions contained herein, provided that the amounts specified in Section 4 above may be increased by up to $0.00 for each extension. The City shall give written notice to Consultant of the City’s election to exercise the extension via the Notice of Exercise of Option to Extend document.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 14 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025
EXHIBIT B
INSURANCE REQUIREMENTS
Consultant shall adhere to all terms and conditions of Section 3 of the Agreement and agrees to provide the following types and minimum amounts of insurance, as indicated by checking the applicable boxes (x).
Type of Insurance Minimum Amount Form
☒ General Liability:
Including products and
completed operations,
personal and
advertising injury
$2,000,000 per occurrence for
bodily injury, personal injury
(including death), and property
damage. If Commercial General
Liability insurance with a general
aggregate limit is used, either the
general aggregate limit must apply
separately to this Agreement or the
general aggregate limit must be
twice the required occurrence limit
Additional Insured Endorsement
or Blanket AI Endorsement for
City*
Waiver of Recovery Endorsement
Insurance Services Office Form
CG 00 01
*Must be primary and must not
exclude Products/Completed
Operations
☒ Automobile Liability $1,000,000 per accident for bodily injury, including death, and
property damage
Insurance Services Office Form
CA 00 01
Code 1-Any Auto
Code 8-Hired
Code 9-Non Owned
☒ Workers’
Compensation
Employer’s Liability
$1,000,000 each accident
$1,000,000 disease policy limit
$1,000,000 disease each employee
Waiver of Recovery Endorsement
☒ Professional Liability
(Errors & Omissions)
$2,000,000 each occurrence
$2,000,000 aggregate
Other Negotiated Insurance Terms: NONE
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 15 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025
EXHIBIT C
CONSULTANT CONFLICT OF INTEREST DESIGNATION
The Political Reform Act1and the Chula Vista Conflict of Interest Code2(“Code”) require designated state and local government officials, including some consultants, to make certain public disclosures using a Statement of Economic Interests form (Form 700). Once filed, a Form 700 is a public document, accessible to any member of the public. In addition, consultants designated to file the Form 700 are also required to comply with certain ethics training requirements.3
☒ A. Consultant will not exert influence over the official or contracting decisions of City and is therefore EXCLUDED4from disclosure.
☐ B. Consultant WILL exert influence over the official or contracting decisions of City and their disclosure designation is as follows:
APPLICABLE DESIGNATIONS FOR INDIVIDUAL(S) ASSIGNED TO PROVIDE SERVICES (Category descriptions available at www.chulavistaca.gov/departments/city-clerk/conflict-of-interest-code.) Name Email Address Applicable Designation
Enter Name of Each Individual
Who Will Be Providing Service
Under the Contract – If
individual have different
disclosure requirements,
duplicate this row and
complete separately for each
individual
Enter email address(es) ☐ A. Full Disclosure
☐ B. Limited Disclosure (select one or more of
the categories under which the consultant shall file):
☐ 1. ☐ 2. ☐ 3. ☐ 4. ☐ 5. ☐ 6. ☐ 7.
Justification:
☐ C. Excluded from Disclosure
1.Required Filers
Each individual who will be performing services for the City pursuant to the Agreement and who meets the definition of “Consultant,” pursuant to FPPC Regulation 18700.3, must file a Form 700.
2.Required Filing Deadlines
Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk via the City's online filing system, NetFile, within 30 days of the approval of the Agreement. Additional Form 700 filings will be required annually on April 1 during the term of the Agreement, and within 30 days of the termination of the Agreement.
3. Filing Designation
The City Department Director will designate each individual who will be providing services to the City pursuant to the Agreement as full disclosure, limited disclosure, or excluded from disclosure, based on an analysis of the services the Consultant will provide. Notwithstanding this designation or anything in the Agreement, the Consultant is ultimately responsible for complying with FPPC regulations and filing requirements. If you have any questions regarding filing requirements, please do not hesitate to contact the City Clerk at (619)691-5041, or the FPPC at 1-866-ASK-FPPC, or (866) 275-3772 *2.
Pursuant to the duly adopted City of Chula Vista Conflict of Interest Code, this document shall serve as the written determination of the consultant’s requirement to comply with the disclosure requirements set forth in the Code.
Completed by: David Steward
1 Cal. Gov. Code §§81000 et seq.; FPPC Regs. 18700.3 and 18704. 2 Chula Vista Municipal Code §§2.02.010-2.02.040.
3 Cal. Gov. Code §§53234, et seq.
4 CA FPPC Adv. A-15-147 (Chadwick) (2015); Davis v. Fresno Unified School District (2015) 237 Cal.App.4th 261; FPPC Reg. 18700.3 (Consultant defined as an “individual” who participates in making a governmental decision; “individual” does not include corporation or limited liability company).
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 16 City of Chula Vista Agreement No.: 2026-131
Consultant Name: Claims Management Associates, Inc. Rev. 10/8/2025
EXHIBIT D
CONSULTANT LEVINE ACT DISCLOSURE
California Government Code section 84308, commonly referred to as the Levine Act, prohibits any City of Chula Vista Officer5(“Officer”) from taking part in decisions related to a contract if the Officer received a political contribution totaling more than $500 within the previous twelve months, and for twelve months following the date a final decision concerning the contract has been made, from the person or company awarded the contract.
The Levine Act also requires disclosure of such contribution by a party to be awarded a specific contract. The Levine Act does not apply to competitively bid, labor, or personal employment contracts; contracts valued at under $50,000; contracts where no party receives financial compensation; or contracts between two or more agencies.
☐ A. The Levine Act (Govt. Code §84308) DOES NOT apply to this Agreement. ☒ B. The Levine Act (Govt. Code §84308) does apply to this Agreement and the required disclosure is as follows:
Current Officers can be located on the City of Chula Vista’s websites below:
Mayor & Council - https://www.chulavistaca.gov/departments/mayor-council City Attorney - https://www.chulavistaca.gov/departments/city-attorney/about-us Planning Commissioners – www.chulavistaca.gov/pc
Candidate for Elected Office – www.chulavistaca.gov/elections
1. Have you or your company, or any agent on behalf of you or your company, made political contributions totaling more than $500 to any Officer in the 12 months preceding the date you submitted your proposal, the date you completed this form, or the anticipated date of any Council action related to this Agreement? YES:☐ If yes, which Officer(s): Click or tap here to enter text.
NO: ☒
2. Do you or your company, or any agent on behalf of you or your company, anticipate or plan to make political contributions totaling more than $500 to any Officer in the 12 months following the finalization of this Agreement or any Council action related to this Agreement?
YES:☐ If yes, which Officer(s): Click or tap here to enter text.
NO: ☒
Answering yes to either question above may not preclude the City of Chula Vista from entering into or taking any subsequent action related to the Agreement. However, it may preclude the identified Officer(s) from participating in any actions related to the Agreement.
5 “Officer” means any elected or appointed officer of an agency, any alternate to an elected or appointed officer of an agency, and any candidate for elective office in an agency. GC § 84308
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda v . 0 0 5 P a g e | 1
June 2, 2026
ITEM TITLE
Animal Care and Control Services: Approve an Agreement Between the City of Chula Vista and the City of Lemon Grove for Animal Care and Animal Control Services Report Number: 26-0181
Location: No specific geographic location
Department: Animal Services
G.C. § 84308 Regulations Apply: No
Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt a resolution approving an agreement between the City of Chula Vista and the City of Lemon Grove to provide animal care and animal control services.
SUMMARY
The City of Chula Vista has provided animal control and sheltering services for the City of Lemon Grove since 1995. The City of Lemon Grove desires to continue contracting for animal care and animal control services through City of Chula Vista Animal Services Department.
ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with the California Environmental Quality Act (CEQA), and it has been determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not Applicable
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda P a g e | 2
DISCUSSION
The City owns and operates an animal care facility located at 130 Beyer Way in the City of Chula Vista that provides a range of animal care and animal control services to the Chula Vista community and jurisdictions with whom the City contracts.
Since 1995, the City of Lemon Grove has contracted with the City of Chula Vista’s Animal Services Department to provide animal control and shelter services to its residents. The City of Lemon Grove desires to continue to contract for these services with the City of Chula Vista. Through this agreement, the City will continue to provide animal care and animal control services, including but not limited to impounding, adoption, redemption, the care and disposition of dogs, cats, and other small animals, and related administrative services.
The agreement with will be for a one-year term, with four one-year options to extend, for a total term of up to five years, beginning July 1, 2026. For these services, the City of Lemon Grove will pay the City of Chula Vista $28,740 per month for fiscal year 2026-27, for total annual amount of $344,880. The monthly compensation amount includes costs associated with the City’s provision and operation of an animal control vehicle utilized in connection with services performed within Lemon Grove.
The pricing for each one‑ year extension may be adjusted by the City based on operational costs, animal intake volume, staffing costs, and other relevant factors; provided, however, that any increase in the annual payment amount for a one‑ year extension does not exceed five percent (5%) over the annual payment amount in effect during the immediately preceding year.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and have determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act. (Gov. Code, § 87100, et seq.) Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no current-year fiscal impact as the services for this agreement will begin on July 1, 2026.
ONGOING FISCAL IMPACT
There is no new net ongoing fiscal impact to the General Fund as a result of approving this resolution, as the appropriation is fully offset by the revenue generated through this agreement. Future allocations for these costs will be considered as part of the annual budget process.
ATTACHMENTS
1. Lemon Grove Animal Care and Animal Control Services Agreement Staff Contact: Ashley Milo, Director of Animal Services
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Form Rev 9/30/2025
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AGREEMENT BY AND
BETWEEN THE CITY OF CHULA VISTA AND THE CITY OF
LEMON GROVE FOR ANIMAL CARE AND ANIMAL
CONTROL SERVICES
WHEREAS, the City of Chula Vista (“City”) owns and operates an animal care facility located at 130 Beyer Way, Chula Vista, California, that provides a range of animal care and control services to the Chula Vista community and jurisdictions with whom the City contracts; and WHEREAS, the City of Lemon Grove (“Lemon Grove”) has contracted with City for animal care and animal control services since 1995; and WHEREAS, Lemon Grove desires to enter into an agreement with the City whereby the City will continue to provide animal care and animal control services, including, but not limited to impounding, adoption, redemption, the care and disposition of dogs, cats, and other small animals, and related administrative services (“Services”); and
WHEREAS, Lemon Grove desires to continue contracting for such Services for a one-year term, with four options to extend, for a total term of up to five years, commencing July 1, 2026.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it approves the agreement between the City of Chula Vista and City of Lemon Grove for animal care and animal control services, in the form presented, with such modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City Clerk, and authorizes and directs the City Manager to execute the same.
Presented by Approved as to form by
Ashley Milo Marco A. Verdugo
Director of Animal Services City Attorney
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June 2, 2026 Post City Council/Housing Authority Agenda 1 | P a g e
ANIMAL CARE AND ANIMAL CONTROL SERVICES AGREEMENT
BETWEEN THE CITY OF CHULA VISTA
AND CITY OF LEMON GROVE
This agreement (“Agreement”) between the City of Chula Vista (“City”), a California charter city and municipal corporation, and the City of Lemon Grove (“Lemon Grove”), a municipal corporation, is effective on July 1, 2026 (“Effective Date”). The City and Lemon Grove may be referred to herein individually as a “Party” or collectively as the “Parties.”
RECITALS
WHEREAS, the City owns and operates an animal care facility located at 130 Beyer Way in the City of Chula Vista (“Facility”) that provides comprehensive animal care and animal control services to City residents and jurisdictions with whom it contracts; and WHEREAS, Lemon Grove desires to enter into an agreement with the City, whereby the City will provide animal care and animal control services, including but not limited to impounding, adoption, redemption, the care and disposition of dogs, cats, and other small animals, and related administrative services (“Services”); and
WHEREAS, the City is authorized to enter contracts with other agencies to provide Services.
NOW, THEREFORE, in consideration of mutual promises and other good and valuable consideration, the Parties agree as follows:
AGREEMENT
1. TERM. This Agreement will commence on the Effective Date and will remain in effect for a period of one (1) year (“Initial Term”), unless sooner terminated pursuant to this Agreement.
1.1. Options to Extend. Following the Initial Term, the Parties may extend this Agreement up to four (4) additional one (1) year terms (each, an “Extension Term”) by mutual written agreement. The Initial Term and any Extension Term will collectively be referred to herein as the “Term.”
1.2. Extension Request. To extend the Agreement Term, Lemon Grove must submit a written request to the City at least sixty (60) calendar days prior to the expiration of the current Term.
1.2.1. City Discretion. The City will have sole discretion to approve or deny any request to extend the Agreement Term.
2. SCOPE OF SERVICES. The City will provide Services to the residents of Lemon Grove as described herein.
2.1. Field Services. The City will provide the following field services.
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2.1.1. Officer. The City will provide animal control services to Lemon Grove through a uniformed Animal Control Officer (“Officer”). The City retains full authority over the direction, supervision, and delivery of such services, and the Officer will act at all times under the City’s control. Lemon Grove may request priority responses, and the City will make reasonable efforts to accommodate such requests.
2.1.1.1. Hours. The City schedules patrol services in Lemon Grove four (4) days per week, Monday through Thursday, from 9:00 a.m. to 5:30 p.m., for up to 32 hours per week. The City may modify this schedule at any time, in its discretion, based on staffing, operational needs, emergencies, or other priorities. This schedule does not establish a guaranteed level of service or minimum number of hours.
2.1.1.2. Extra Hours. If mutually agreed upon, Lemon Grove may extend the City’s patrol days to five (5) days per week, Monday through Friday, or Tuesday through Saturday, between the hours of 9:00 a.m. and 5:30 p.m., for no more than 40 hours per week. Lemon Grove will request extra hours by notifying the City in writing at least thirty (30) calendar days before the extended patrol schedule would take effect. The Parties will memorialize the extra hours in writing and Lemon Grove will reimburse the City for associated staffing costs.
2.1.1.3. Overtime Hours. The City will endeavor to respond to reported emergencies occurring before or after the patrol hours identified in Section
2.1.1.1 above. Lemon Grove will reimburse the City for all costs associated with emergency responses as set forth in Section 4.
2.1.2. Type of Services. Except as provided in Section 3, field services will include emergency transportation of injured or sick animals, issuing citations for violations of state and local laws and ordinances, impounding stray animals, investigating biting incidents, investigating complaints regarding vicious or dangerous animals, trapping animals, investigating abuse and animal noise complaints, removing dead animals, and educating the public regarding responsible pet ownership.
2.1.3. Responses to Requests for Service. The City will respond to requests for Services in accordance with the Priority Response Chart and Priority Response Guidelines below.
2.1.3.1. Priority Response Chart.
Type of Service In Progress Not in Progress
Dangerous Animal Threatening Human 1 3
Possible Rabid/Biter Animal at Large 1 3
Major Injury to Animal 1 3
Cruelty to Animal 1 3
Animal Inside Vehicle 1 3
Fighting Animals 1 3
Dog Harassing Livestock 1 3
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Sick or Minor Injury to Animal 2 3
Animal Welfare Investigation 2 3
Quarantine Biter Animal 3 N/A
Confined Stay Animal 3 N/A
Field Relinquished Animal 3 N/A
Dog Running at Large 3* 4*
Wildlife N/A N/A
2.1.3.2. Priority Level and Response Guidelines.
Level 1 First Priority: Officer will respond as soon as possible Level 2
Second Priority: Officer will attempt to respond within 12 hours of request
Level 3 Third Priority: Officer will attempt to respond within 24 hours of request
Level 4 Fourth Priority: Officer will attempt to respond within 72 hours of request
*An Officer will respond as soon as possible during normal business hours.
2.1.4. Additional Field Services. The City will provide the following additional field services as requested.
2.1.4.1. Special Enforcement. The City will conduct special enforcement animal control patrols as requested by Lemon Grove if there are no conflicts with the City's needs. This will include special animal control patrol hours, sweeps, and enforcement. Lemon Grove will pay all overtime costs for special enforcement patrols as set forth by Section 4.1.3 below.
2.1.4.2. Special Events. The City will provide Officers for scheduled special events as requested by Lemon Grove if there are no conflicts with the City's needs.
Lemon Grove will reimburse the City as set forth by Section 4.1.3.
2.1.5. Livestock. The City will use a contractor of its choice to remove livestock and bill Lemon Grove for costs associated with the removal, including trailering, board, and other related fees.
2.2. Shelter Services. The City will provide shelter services to the residents of Lemon Grove as described below:
2.2.1. Shelter Location. Shelter services will be provided at the Facility.
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2.2.2. Hours of Operation.
2.2.2.1. The Facility is open to the public between 10:00 a.m. and 5:00 p.m. Tuesday through Friday and 10:00 a.m. to 4:00 p.m. on Saturday.
2.2.2.2. The Facility is closed daily for lunch between 12:00 p.m. and 1:00 p.m. and on Sunday, Monday, and all major holidays.
2.2.2.3. Changes in Hours of Operation. The City will notify Lemon Grove of changes to Facility hours of operation in advance of such changes.
2.2.3. Types of Services.
2.2.3.1. Stray Animals. For purposes of this Agreement, “Stray Animal” means an animal that is “at large” as defined in Chula Vista Municipal Code section
6.01.010, as may be amended from time to time. The City will accept Stray Animals at no charge to Lemon Grove residents. (CVMC § 6.01.010.)
2.2.3.2. Relinquishing Animals. Lemon Grove residents may relinquish owned animals to the Facility for euthanasia if medically or behaviorally appropriate, or adoption, subject to available capacity and City policies. The City will charge a fee for these Services.
2.2.3.3. Redeeming Animals. Lemon Grove residents may redeem animals from the Facility. The City will charge a fee for these services.
2.2.3.4. Holding.
2.2.3.4.1. The City agrees to hold all dogs and cats for the minimum holding period required by the California Food and Agricultural Code and other applicable laws. Animals with communicable diseases or severe injury or illness may be euthanized prior to expiration of the holding period.
2.2.3.4.2. The City will provide veterinary care as needed during the holding period and will make reasonable efforts to notify owners of identified animals and advise them of the applicable holding period.
2.2.3.4.3. Any animal that is not redeemed or otherwise reclaimed during the holding period will be deemed relinquished to the City for disposition in accordance with applicable laws, policies, and procedures, as determined by the City.
2.2.3.4.4. Upon payment of all applicable fees, the City will release an impounded animal to its legal owner. The City may waive fees under special circumstances.
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2.2.3.5. No Medical Research. The City will not sell or give any live animal to a medical research facility.
2.2.3.6. Spaying and Neutering. The City will ensure that all dogs, cats, and rabbits adopted from the Facility are spayed or neutered at the time of adoption.
Additionally, the Facility will provide the public with low-cost spay/neuter information and assistance when grants and donations are available.
2.2.3.7. Administrative Hearings. The City will conduct all impound and administrative hearings as required by law, including Lemon Grove’s Municipal Code. Lemon Grove will provide a hearing officer if the City is unable to do so. The per-hearing fee is listed in Section 4.1.9.
2.2.3.8. Maintenance of Facility. The City will maintain a safe and sanitary Facility. The City will use humane methods in the care, euthanasia, and disposition of animals coming under its jurisdiction.
2.3. Administrative Services. The City will provide the following administrative services:
2.3.1. Meetings. The City will provide a representative to attend any Lemon Grove meetings that involve animal control issues upon request and with reasonable notice.
2.3.2. Meet and Confer. A City representative will meet and confer in good faith with Lemon Grove staff over operational issues associated with the administration of this Agreement.
2.3.3. Reports. The City will provide monthly reports to Lemon Grove describing the number of impounds, redemptions, euthanizations, service responses, and adoptions.
2.3.4. Notification. The City will work with Lemon Grove to establish an Officer notification policy that addresses the nature, circumstances, and status of the incident.
The City will also provide, if requested, copies of all supporting documents and information involving the incident. Lemon Grove will designate staff for notification purposes.
2.3.5. Testimony. When requested by Lemon Grove, the City will make its employees and/or other percipient witnesses under its control, available to testify in a court of law, administrative hearing, or other proceeding, at no additional cost for any legal or administrative proceeding arising out of the Services. This duty will survive the termination of this Agreement.
3. EXCLUDED SERVICES. The following services are not considered Field Services and are not covered under this Agreement.
3.1. Indigenous Animals. The City will not trap skunks, opossums, or other indigenous small animals for the purpose of nuisance control. The City will only handle wildlife for purposes of public safety or for humane reasons. The City will provide and monitor cat traps.
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3.2. Snakes. Only dangerous snakes will be removed from private property.
3.3. Dead Animals. Property owners are responsible for dead animals on private property.
3.4. Sick or Injured Animals. Sick or injured animals are the responsibility of the animal owner.
3.5. Licensing.
3.5.1. Lemon Grove acknowledges and agrees that the City may administer animal licensing services and related animal records through DocuPet, or any successor third-party licensing vendor designated by the City, in connection with the Services provided under this Agreement.
3.5.2. Lemon Grove shall cooperate with the City’s licensing program requirements and use of DocuPet in connection with the Services provided under this Agreement. The manner and method of providing field services shall remain within the City’s operational discretion. Lemon Grove shall provide information requested by the City, to the extent legally permissible, to support licensing activities related to animals originating within Lemon Grove.
3.5.3. The City shall retain responsibility for administration and oversight of its DocuPet licensing platform and vendor relationship, including management of vendor-related matters and or licensing services associated with the Services provided under this Agreement.
3.5.4. License fee revenue attributable to animals licensed within Lemon Grove shall be retained by Lemon Grove. Any license fee revenue actually received or collected by the City in connection with Services under this Agreement shall be remitted or credited to Lemon Grove in the manner established by the Parties.
4. LEMON GROVE OBLIGATIONS.
4.1. Payment. Lemon Grove will pay the City the following in the amount and manner set forth herein.
4.1.1. Monthly Payments. Commencing on the Effective Date, Lemon Grove will pay the City $28,740 per month for Fiscal Year 2026-27 (July 1, 2026 through June 30, 2027).
4.1.1.1. This amount includes an animal control truck rental charge of $20,455 annually, payable as part of the monthly payment in the amount of $1,704.58 per month. This truck rental charge was calculated to include estimated vehicle-related costs, including maintenance and fuel, and an estimated 4.9 percent inflation adjustment.
4.1.1.2. The City will retain ownership, possession, operation, control, maintenance responsibility, and scheduling authority over the truck, and the truck will be used by City personnel or authorized City contractors in connection with the
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Services. Nothing in this Agreement shall be construed to create a separate vehicle lease granting Lemon Grove any possessory or operational rights with respect to the truck.
4.1.1.3. Unless otherwise agreed in writing, Lemon Grove will not be separately invoiced for the truck rental charge during Fiscal Year 2026-27 because that charge is included in the monthly payment described in this Section.
4.1.1.4. This Agreement supersedes any prior letter agreement, lease, amendment, extension, or other arrangement between the Parties regarding Lemon Grove’s rental of a vehicle from the City for animal care or animal control services, including the Letter of Agreement - Lease entered into on or about May 13, 2022, except for any payment obligations that accrued before the Effective Date.
4.1.2. Invoices and Payment Date. The City will submit quarterly invoices to Lemon Grove on or before the 15th day of the month following the billing period. Payment is due within thirty (30) calendar days of the invoice date.
4.1.3. Overtime for Officers. The City will bill Lemon Grove for overtime costs incurred in responding to emergencies outside of regular patrol hours or for additional services described in Section 2.1.4. Overtime will be billed at the applicable overtime rate for a minimum of two (2) hours per response, plus a $60 call-back charge for each response.
4.1.4. Emergency Veterinary Services for Stray Animals.
4.1.4.1. Lemon Grove will be responsible for all costs incurred for necessary, reasonable, and non-elective veterinary care provided by third-party emergency veterinary hospitals or clinics for Stray Animals originating within Lemon Grove that are received by such facilities outside of the City’s normal operating hours and are subsequently transferred to the City’s custody, including services provided prior to transfer of custody to the City.
4.1.4.1.1. Covered costs may include, but are not limited to, examination, diagnostics, treatment, stabilization, boarding, and related veterinary services.
4.1.4.1.2. The City may, at its discretion, either (i) pay such costs directly and invoice Lemon Grove for reimbursement, or (ii) require Lemon Grove to pay the veterinary provider directly. Lemon Grove agrees to reimburse the City for any such costs within thirty (30) calendar days of invoice.
4.1.4.1.3. The City will make reasonable efforts to notify Lemon Grove of such incidents as soon as practicable; however, failure to provide such notice will not relieve Lemon Grove of its obligation to pay for such Services.
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4.1.4.1.4. This subsection applies only to Stray Animals, as defined in this Agreement, and does not apply to owned animals unless
otherwise agreed in writing by the Parties.
4.1.5. Redemption Fees. For purposes of this Agreement, the term “Redemption Fee” will mean any fee charged by the City for the return of an impounded animal to its legal owner, as set forth in the City Municipal Code and operating policies, as may be amended from time to time. Lemon Grove’s monthly payment obligations may be reduced by any Redemption Fees the City collects under this Agreement.
4.1.6. Late Payments. The City will assess a penalty of five percent (5%) on late payments.
Additionally, a one and one half (1.5%) finance charge per month will be assessed on the original delinquent amount.
4.1.7. Pricing of Agreement Extensions. Pricing for each Extension Term following the Initial Term may be adjusted by the City based on operational costs, animal intake volume, staffing costs, and other relevant factors; provided, however, that any increase in the annual payment amount for an Extension Term will not exceed five percent (5%) over the annual payment amount in effect during the immediately preceding Term.
4.1.7.1. No later than April 30 of each year, the City will notify Lemon Grove of the proposed annual payment amount applicable to the upcoming Extension Term.
4.1.7.2. Any extension of the Agreement Term pursuant to Section 1 must be memorialized in writing and identify the annual payment amount applicable to the Extension Term.
4.1.8. Cat and Dog Spay/Neuter Clinics. The City will provide low cost spay/neuter clinics at no cost to Lemon Grove if the City receives grants/donations that cover the costs of these services. Lemon Grove will pay the City $1,500 per clinic for up to four clinics per year if grants/donations do not cover the expense.
4.1.9. Administrative Hearings. Lemon Grove will pay the City $500 per hearing if the City provides the hearing officer and $300 per hearing if Lemon Grove provides the hearing officer.
4.2. Support Services.
4.2.1. Provision of Data. Lemon Grove will provide the City with a current listing of all animal licenses issued, including permits or licenses for dogs, cats, dangerous dogs or animals, exotic animals, kennels, pet shops, ranches or farms, dog shows, obedience trials, and circuses.
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4.2.2. Notice of Scheduled Meetings. Lemon Grove will notify the City at least 72 hours in advance of any legislative or administrative hearing where animal-related issues are agendized and City employees will be required to appear.
4.2.3. Police Services. Lemon Grove will provide all police services necessary to carry out its duties including police backup upon request of an Officer.
4.2.4. Weapons. Lemon Grove will permit Officers to carry and use tasers and tranquilizer guns within the Lemon Grove city limits while on duty and in uniform.
5. FEES AND COSTS.
5.1. Fees Charged Lemon Grove Residents. Lemon Grove residents will be required to pay fees for certain City-provided animal care and control services.
5.1.1. Relinquishment and Redemption. Unless otherwise agreed upon, the City will charge fees in accordance with its Master Fee Schedule.
5.2. Fee Updates. The City may update fees to account for increased costs. As new fees are adopted, such fees will replace those currently in effect.
6. INDEMNIFICATION.
6.1. Indemnity. Lemon Grove will defend, indemnify, protect, and hold harmless the City, its elected and appointed officials, officers, directors, employees, agents, and volunteers (“Indemnitee”), from and against any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons in any manner arising out of, related to, or in connection this Agreement, including but not limited to, the destruction of any animal delivered to and accepted by the Facility. In addition, this indemnity provision covers all alleged acts, omissions, negligence, or willful misconduct of Lemon Grove, its officials, officers, directors, employees, agents, and volunteers (“Indemnitor”). This indemnity provision does not include any suits, damages, costs, or expenses (including without limitation, attorneys’ fees) arising from the sole negligence or willful misconduct of the Indemnitee.
6.2. Defense Obligations. Included in the obligations in this Section 6 is the Indemnitor’s obligation to defend (with counsel reasonably approved by Indemnitee), at Indemnitor’s sole cost, expense, and risk, all aforesaid claims, suits, actions, or other legal proceedings of every kind that may be brought or instituted against the Indemnitee. Indemnitor will pay and satisfy any judgment, award or decree that may be rendered against Indemnitee, for all legal expense and cost incurred by each of them in connection therewith.
6.3. Insurance Proceeds. Indemnitor’s obligation to indemnify will not be restricted to insurance proceeds, if any, received by the Indemnitee, its directors, officials, officers, employees, agents, or volunteers.
6.4. Enforcement Costs. Indemnitor will pay all costs Indemnitee incurs enforcing the indemnity and defense provisions set forth in this Section 6.
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6.5. Survival. Indemnitor’s obligations under Section 6 will survive the termination of this Agreement.
7. FORCE MAJEURE.
7.1. Definition. An event of Force Majeure means an occurrence beyond the control and without the fault or negligence of a Party, including unusually severe weather, flood, earthquake, fire, lightning, and other natural catastrophes, acts of God or the public enemy, war, terrorist act, riot, insurrection, civil disturbance or disobedience, strike, labor dispute, road impediments, expropriation or confiscation of facilities, changes of applicable law, laws or orders related to pandemics, such as COVID-19, or sabotage of facilities, so long as such Party makes good faith and reasonable efforts to remedy the delays or failures in performance caused thereby.
7.2. Force Majeure.
7.2.1. The City will be excused from any delay or failure in performing its obligations under this Agreement to the extent such delay or failure is caused by an event of Force Majeure described in Section 7.1. Any delay or failure in performance resulting from an event of Force Majeure will be excused only for the duration of the event causing the delay or failure.
7.2.2. The City reserves the right, at its sole discretion, to temporarily suspend, change, and resume the type and frequency of services provided to comply with Federal, State, County and City laws or orders in response to an event of Force Majeure. Examples of changed or limited services include closing the Facility to the public or offering essential services by appointment only, such as identifying a lost pet, and suspending in-person services such as vaccinations, licensing, owner surrenders, microchipping, trap rental, and spay-neuter services. Resources and staffing allowing, the City will make reasonable efforts to inform the public of service changes through its webpage and social media platforms, and to provide services such as adoptions and licensing through its website or by email.
7.3. Notice. The City will give written notice to Lemon Grove as soon after becoming aware of the delay or failure in performance caused by an Event of Force Majeure as is reasonably possible, but in any event within five (5) working days after the City becomes aware of such delay or failure.
7.4. No Adjustments. No Event of Force Majeure will be a basis for monetary adjustment to amounts payable under this Agreement.
8. TERMINATION OF AGREEMENT.
8.1. Termination for Convenience. Either Party may terminate this Agreement at any time and for any reason by giving written notice of such termination and specifying the effective date thereof at least ninety (90) calendar days before the effective date of such termination. If Lemon Grove terminates the Agreement as provided herein, the City is entitled to receive
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just and equitable compensation for all services performed prior to the effective date of such termination.
8.2. Termination for Cause. If, through any cause, either party substantially fails to fulfill in a timely and proper manner any obligation under this Agreement, or violates any of its covenants, agreements, or conditions, the Party not in breach may terminate this Agreement by giving written notification of such termination and specifying the effective date thereof at least five (5) calendar days before termination. If the Agreement is terminated by Lemon Grove as provided for herein, the City is entitled to receive just and equitable compensation for all services performed prior to the effective date of such termination.
9. NOTICE.
9.1. Method of Notification. All notices and demands will be given in writing by email, personal delivery or first-class mail, postage prepaid, addressed to the Administrator, or his/her designee, designated below for the respective Party.
9.2. Designation and Contact Information. The following are hereby designated as Administrators for the purposes of this Agreement only:
9.2.1. City of Chula Vista
Deputy City Manager or designee
276 Fourth Avenue
Chula Vista, CA 91910
[Email Address]
9.2.2. City of Lemon Grove
City Manager or designee
3232 Main Street
Lemon Grove, CA 91945
[Email Address]
9.3. Changes. If the Administrator or address of either Party changes, notice of the change will be sent to the other Party. After the receipt of the notice of change, all future notices or demands will be sent as required by the notice of change.
10. MISCELLANEOUS PROVISIONS.
10.1. Headings. All section and paragraph headings are for convenience only and will not affect the interpretation of this Agreement.
10.2. Gender & Number. Whenever the context requires, the use herein of (i) the neuter gender includes the masculine and the feminine genders and (ii) the singular number includes the plural number.
10.3. Reference to Paragraphs. Each reference in this Agreement to a section refers to a section in this Agreement unless otherwise stated.
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10.4. Incorporation of Recitals and Exhibits. All recitals herein and exhibits attached hereto are incorporated into this Agreement and are made a part hereof.
10.5. Covenants and Conditions. All provisions of this Agreement expressed as either covenants or conditions on the part of the City or Lemon Grove will be deemed to be both covenants and conditions.
10.6. Integration. This Agreement and any exhibits or references incorporated into this Agreement fully express all understandings of the Parties concerning the matters covered in this Agreement. No amendment, alteration, or modification of the terms or conditions of this Agreement, and no verbal understanding of the Parties, their officers, agents, or employees will be valid unless agreed upon in writing by both Parties. All prior negotiations and agreements are merged into this Agreement.
10.7. Severability. In the event that any phrase, clause, paragraph, section or other portion of this Agreement will become illegal, null, or void, or against public policy, for any reason, or will be held by any court of competent jurisdiction to be illegal, null, or void, against public policy, or otherwise unenforceable, the remaining portions of this Agreement will not be affected and will remain in force and effect to the fullest extent permitted by law.
10.8. Drafting Ambiguities. The Parties are aware that they have the right to be advised by counsel with respect to the negotiations, terms, and conditions of this Agreement, and the decision of whether or not to seek advice of counsel with respect to this Agreement is a decision that is the sole responsibility of each Party. This Agreement will not be construed in favor of or against either Party by reason of the extent to which each Party participated in the drafting of the Agreement.
10.9. Conflicts Between Terms. If an apparent conflict or inconsistency exists between the main body of this Agreement and any exhibits, the main body of this Agreement will control. If a conflict exists between an applicable federal, state, or local law, rule, regulation, order, or code and this Agreement, the law, rule, regulation, order, or code controls. Varying degrees of stringency among the main body of this Agreement, the exhibits, and laws, rules, regulations, orders, or codes are not deemed conflicts, and the most stringent requirement will control. Each Party will notify the other immediately upon the identification of any apparent conflict or inconsistency concerning this Agreement.
10.10.Compliance With Law. The Parties will, at their sole cost and expense, comply with all the requirements of municipal, state, and federal authorities now in effect or which may hereafter be in effect related to this Agreement.
10.11.Reserved.
10.12.Administrative Claims Requirements and Procedures. No suit or arbitration will be brought arising out of this Agreement against the City unless a claim has first been presented in writing and filed with the City and acted upon by the City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as may be amended from time to time, the provisions of which are incorporated by this reference as if fully set forth herein, and such policies and procedures used by the City in the implementation of
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same. Upon request by the City, Lemon Grove will meet and confer in good faith with the City for the purpose of resolving any dispute over the terms of this Agreement.
10.13.Attorneys’ Fees. In the event either Party institutes legal action arising out of or relating to this Agreement, in any forum, each Party will bear its own attorneys’ fees and costs, except as otherwise expressly provided in Section 6 regarding indemnification and defense obligations.
10.14.Governing Law and Venue. This Agreement will be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement will be brought only in the federal or state courts located in San Diego County, State of California, and if applicable, the City of Chula Vista, or as close thereto as possible.
10.15.Municipal Powers. Nothing contained in this Agreement will be construed as a limitation upon the powers of the City as a chartered municipality of the State of California.
10.16.Assignment. Lemon Grove will not assign this Agreement or any right or privilege hereunder to any Party without the express written consent of the City. Consent to an assignment by the City will not be deemed to be consent to any subsequent assignment. Any such assignment without such consent will be void.
10.17.No Waiver. No failure of either Party to insist upon the strict performance by the other Party of any covenant, term, or condition of this Agreement, nor any failure to exercise any right or remedy consequent upon a breach of any covenant, term, or condition of this Agreement, will constitute a waiver of any such breach of such covenant, term, or condition. No waiver of any default hereunder will be implied from any omission to take any action on account of such default. The consent or approval to or of any act requiring consent or approval will not be deemed to waive or render unnecessary future consent or approval for any subsequent similar acts. No waiver of any breach will affect or alter this Agreement, and each and every covenant, condition, and term hereof will continue in full force and effect to any existing or subsequent breach.
10.18.Additional Rights. No rights other than those specifically identified herein will be implied from this Agreement.
10.19.Cumulative Remedies. All rights, options, and remedies of the City contained in this Agreement will be construed and held to be cumulative, and no one of them will be exclusive of the other, and the City will have the right to pursue any one or all of such remedies or to seek damages or specific performance in the event of any breach of the terms hereof or to pursue any other remedy or relief which may be provided by law or equity, whether or not stated in this Agreement.
10.20.Independent Contractor. Unless otherwise stated in this Agreement, all persons employed in the performance of services and functions for Lemon Grove under this Agreement will be City employees, agents, or contractors thereof. No Lemon Grove employee will perform services or functions that the City is obligated to provide under this Agreement. All City employees who are employed by the City to perform the services pursuant to this Agreement will be entitled solely to the rights and privileges given to City employees and will not be
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 14 | P a g e
entitled, as a result of providing services pursuant to this Agreement, to any additional rights and privileges given to Lemon Grove employees. Lemon Grove will not be liable for the direct payment of any salaries, wages, or the compensation to City personnel, agents, or contractors performing services pursuant to this Agreement, or any liability other than that provided for in this Agreement. Unless specified otherwise, Lemon Grove will not be liable for compensation or indemnity to any City employee, agent, or contractor for injury or sickness or any other claims arising out of his or her employment. The City is an independent contractor, and no agency relationship, either expressed or implied, is created by the execution of this Agreement.
10.21.Good Faith. The Parties promise to use their best efforts to satisfy all conditions to this Agreement and to take all further steps and execute all further documents reasonably necessary to put this Agreement into effect. Both Parties agree to meet and confer in good faith with the City's Animal Care Facility Administrator regarding operational matters upon request.
10.22.Signing Authority. The representative for each Party signing on behalf of a governmental entity hereby declares that authority has been obtained to sign on behalf of the entity and agrees to hold the other Party or Parties hereto harmless if it is later determined that such authority does not exist.
[Signature Page Follows]
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 15 | P a g e
SIGNATURE PAGE TO
ANIMAL CARE AND ANIMAL CONTROL SERVICES AGREEMENT
CITY OF CHULA VISTA
Date:
Approved as to form:
Marco A. Verdugo Tiffany Allen
City of Chula Vista, City Attorney City of Chula Vista, City Manager
CITY OF LEMON GROVE
Date:
Approved as to form:
Kristen Steinke Tony Winney
City of Lemon Grove, City Attorney City of Lemon Grove, Interim City Manager Attest:
________________________________
Joel Pablo
City of Lemon Grove, City Clerk
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda v . 0 0 5 P a g e | 1
June 2, 2026
ITEM TITLE
Contract Award and CIP Budget Transfer: Accept Bids and Award a Contract to Pavement Coatings Co. for “Pavement Major Rehabilitation FY23/FY24/FY25” (STM0411/0414/0404) Project; and Amend the FY26 CIP Program Budget by Transferring Funds to STM0411
Report Number: 26-0135
Location: No specific geographic location
Department: Engineering and Capital Projects
G.C. § 84308 Regulations Apply: No
Environmental Notice: The Project qualifies for a Categorical Exemption pursuant to California Environmental Quality Act State Guidelines Section 15301 Class 1 (Existing Facilities) and Section 15302 Class 2 (Replacement or Reconstruction).
Recommended Action
Adopt a resolution: (1) accepting bids and awarding a public works contract to Pavement Coatings Co. for the “Pavement Major Rehabilitation FY22/23, FY23/24 and FY24/25” (STM0411, STM0414, and STM0404) project; and (2) amending the fiscal year 2025-26 Capital Improvement Program (CIP) budget by transferring $980,850.00 from the available balance of “Pavement Major Rehabilitation FY26” (STM0416) project to CIP Project STM0411, for completion of the project. (4/5 Vote Required)
SUMMARY
On May 8, 2026, the Director of Engineering and Capital Projects received seven (7) sealed bids for the “Pavement Major Rehabilitation FY22/23, FY23/24 and FY24/25” (STM0411, STM0414, and STM0404) project. After review of the bids, staff recommends awarding a public works contract to the lowest responsive and responsible bidder, Pavement Coatings Co. Adoption of the resolution would: (1) accept bids and award the public works contract to Pavement Coatings Co. in the amount of $9,899,577; (2) amend the fiscal year 2025-26 CIP Budget by transferring $980,850 from the available fund balance of “Pavement Major Rehabilitation FY26” (STM0416) project to CIP project STM0411.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda P a g e | 2
ENVIRONMENTAL REVIEW
The Project was reviewed for compliance with the California Environmental Quality Act (CEQA), and it was determined the Project qualifies for a Categorical Exemption pursuant to State CEQA Guidelines Section 15301 Class 1 (Existing Facilities), which consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use; Section 15302 Class 2 (Replacement or Reconstruction), which consists of replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced; and where the exceptions listed in State CEQA Guidelines Section 15300.2 would not apply in that no cumulative impacts were identified, no significant effects on the environment were identified, the project is not adjacent to a scenic highway, no historical resources would be affected by the action, and the project was not identified on a list of hazardous waste sites pursuant to Section 65962.5 of the Government Code. Thus, no further environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
The “Pavement Major Rehabilitation FY22/23, FY23/24 and FY24/25” (STM0411, STM0414, and STM0404) project will primarily consist of the following improvements:
Roadway rehabilitation at various locations; and
Pavement striping and markings; and
Curb and gutter improvements at various locations; and Curb ramp improvements at various locations.
Bidding Process
On April 17, 2026, Engineering and Capital Projects Department advertised and solicited bids for the project.
Seven (7) sealed bids were received on May 8, 2026. The submitted base bid totals from the prime contractors were as follows:
Ranking Contractor Submitted Base Bid
1 Pavement Coatings Co. $ 9,899,577.00
2 Eagle Paving LLC $ 10,325,217.00
3 Calmex Engineering, Inc. $ 10,511,361.20
4 Rove Engineering $ 10,826,725.75
5 Romero General Construction Corp. $ 11,011,011.00
6 Hazard Construction Eng LLC $ 11,129,599.50
7 R.J. Noble Company $ 12,882,000.00
The low bid of $9,899,577.00 by Pavement Coatings Co. is approximately 21% below the Engineer’s estimate of $12,623,500.00. Staff has included an Additional Street List to the contract to complete more street locations, at the City’s option, with this contract if there are remaining funds within the project budget.
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June 2, 2026 Post City Council/Housing Authority Agenda P a g e | 3
Pavement Coatings Co. is currently an active licensed contractor (License No. 303609) with the following classification: A-General Engineering.
Staff recommends accepting bids and awarding the public works contract for the “Pavement Major Rehabilitation FY22/23, FY23/24 and FY24/25” (STM0411 / STM0414 / STM0404)” project to the lowest responsive and responsible bidder, Pavement Coatings Co., and transferring $980,850.00 in Transportation Sales Tax funds from the available fund balance of “Pavement Major Rehabilitation FY26” (STM0416) to CIP project STM0411 to cover the projected construction costs as shown in more detail in the Current-Year Fiscal Impact section below.
Disclosure Statement
Attachment 1 is a copy of the Contractor’s Disclosure Statement.
Wage Statement
The Contractor that is awarded the contract and its subcontractors are required to pay prevailing wages to persons employed by them for work under the proposed contract. The prevailing wage scales are those determined by the Director of Industrial Relations, State of California.
This project is also subject to the City’s Project Labor Agreement (PLA). The Contractor and all subcontractors shall comply with all applicable terms and conditions of the PLA.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found that Mayor John McCann has property holdings within 1,000 feet of the boundaries of the property which is the subject of this action.
However, the decision solely concerns repairs, replacement or maintenance of existing streets, water, sewer, storm drainage or similar facilities, and the member’s property will not be affected disproportionately to other properties receiving the same services. Consequently, pursuant to California Code of Regulations Title 2, sections 18700 and 18702.2(d)(1)), this item does not present a real property-related conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.)
CURRENT-YEAR FISCAL IMPACT
Adoption of the resolution amends the fiscal year 2025-26 CIP budget by transferring $980,850.00 in Transportation Sales Tax funds from the available balance of the “Pavement Major Rehabilitation FY26” (STM0416) to CIP project STM0411 for the completion of the project. STM0416 remains within the planning and allocation phase of the pavement program, and there is currently no construction contract or activity that will be impacted as a result of this action.
A summary of expected project costs and available funding for STM0411 is as follows.
FUNDS REQUIRED FOR CONSTRUCTION
A. Contract Amount $ 9,899,577
B. Additional Street List $2,500,000
C. Contract Contingency $1,249,933
D. Construction Support $1,520,000
E. Design Support $186,140
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June 2, 2026 Post City Council/Housing Authority Agenda P a g e | 4
F. Survey $6,210
Total Funds Required to Complete Project $ 15,361,860
FUNDS AVAILABLE FOR CONSTRUCTION
A. 227- Transportation Sales Tax – STM0411 $3,448,040.00 B. 227 – Transportation Sales Tax - STM0414 $7,327,021.00 C. 221 – Transportation Grants - Gas Tax - STM0414 $63,052.00 D. 227 – Transportation Sales Tax -STM0404 $3,542,897.00 E. Transfer Transportation Sales Tax Funds from STM0416 $980,850.00 TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $15,361,860.00
ONGOING FISCAL IMPACT
The proposed award and funds transfer will have no ongoing fiscal impact. All costs associated with the completion of CIP project STM0411 will be covered within the project budget, with no additional funding required. Upon completion of the project, the improvements will require routine roadway maintenance.
These expenses will be considered as part of the annual budget development process in future years.
ATTACHMENTS
1. Disclosure Statement
2. Bid Proposal
Staff Contact: Luis Schaar, PE, City Engineer / Director of Engineering & Capital Projects Rosina Constanza, PE, Assistant Director of Engineering Nolan Huelsman, PE, Principal Civil Engineer
José Serrato, PE, Senior Civil Engineer
Kyra Wright, Associate Engineer
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Form Rev 3/6/2023
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA (1) ACCEPTING BIDS AND AWARDING A
PUBLIC WORKS CONTRACT FOR THE “PAVEMENT MAJOR
REHABILITATION FY22/23, FY23/24 AND FY24/25”
(STM0411 / STM0414 / STM0404) PROJECT TO PAVEMENT
COATINGS CO., AND (2) AMENDING THE FY 2025-26 CIP
BUDGET BY TRANSFERRING FUNDS FROM THE
“PAVEMENT MAJOR REHABILITATION FY26” PROJECT
(STM0416) TO THE “PAVEMENT MAJOR REHABILITATION
FY22/23” PROJECT (STM0411)
WHEREAS, on April 17, 2026, the Department of Engineering and Capital Projects solicited bids for the “Pavement Major Rehabilitation FY22/23, FY23/24 and FY24/25” (STM0411 / STM0414 / STM0404) project (“Project”) in accordance with Chula Vista Municipal Code section 2.56.160(A); and
WHEREAS, on May 8, 2026, the Director of Engineering and Capital Projects received seven (7) sealed bids for the Project; and
WHEREAS, the low bid for the Project was submitted by Pavement Coatings Co. in the amount of $9,899,577.00 which is lower than the Engineer’s estimate of $12,623,500.00 by $2,723,923.00 (or approximately 21%); and
WHEREAS, staff have determined that the bid submitted by Pavement Coatings Co. is responsive in all material respects to the bid specifications and requirements, and that Pavement Coatings Co. is the lowest responsive and responsible bidder; and WHEREAS, staff recommends awarding the public works contract for the Project to Pavement Coatings Co. in the amount of $9,899,577.00.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it:
1. Accepts bids and awards the public works contract for “Pavement Major Rehabilitation FY22/23, FY23/24 and FY24/25” (STM0411 / STM0414 / STM0404) project to Pavement Coatings Co. in the form presented, with such minor modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City Clerk, and authorizes and directs the City Manager to execute same in the amount of $9,899,577.00.
2. Amends the FY 2025-26 CIP Program Budget by transferring $980,850.00 from the available Transportation Sales Tax Fund (Fund 227) balance from CIP STM0416 to CIP STM0411.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Resolution No.
Presented by Approved as to form by
Luis Schaar Marco A. Verdugo
Director of Engineering and City Attorney
Capital Projects/City Engineer
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda
CITY OF CHULA VISTA DISCLOSURE STATEMENT
Pursuant to Council Policy 101- 01, prior to any action upon matters that will require discretionary action by the Council, Planning Commission and all other official bodies of the City of Chula Vista (the " City"), a statement of disclosure of certain ownership or financial interests, payments, or campaign contributions for a City election must be filed. The following information must be disclosed:
List the names of all persons having a financial interest in the property that is the subject of the application or the contract, e. g., owner, applicant, contractor, subcontractor, material supplier.
Tim Schmid - President
James Wu - Vice President Secretary
Rick Yauney - Treasurer/ CFO
2. If any person* identified pursuant to item one ( 1) above is a corporation or partnership, list the names of all individuals with a two thousand dollars ($ 2, 000) investment in the business corporation/ partnership) entity.
N/ A N/ A
3. If any person* identified pursuant to item one ( 1) above is a non-profit organization or trust, list the names of any person serving as director of the non- profit organization or as trustee or beneficiary or trustor ofthe trust.
N/ A N/ A
4. Please identify every person, including any agents, employees, consultants, or independent contractors you have assigned to represent you before the City in this matter.
Tim Schmid - President
James Wu - Vice President/ Secretary
Rick Yauney - Treasurer/ CFO
5. Has any person* associated with this contract had any financial dealings with an official** of the City as it relates to this contract within the past twelve ( 12) months? Yes No X
N/ A N/ A
If Yes, briefly describe the nature ofthe financial interest the official** may have in this contract.
Re'. 1110712025
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Have you made a contribution of more than two hundred fifty dollars ($ 250) within the past twelve 12) months to a current member of the Chula Vista City Council? No _ Yes — If yes, which Council member?
NIA
7. Have you provided more than three hundred forty dollars ($ 340), or an item of equivalent value, to an official** ofthe City in the past twelve ( 12) months? ( This includes being a source of income, money to retire a legal debt, gift, loan, etc.) Yes _ No If Yes, which official** and what was the nature ofitem provided? h! A
Date: Is[g12 i
Applicant
Pavement Coatings Co. Jtaf t Wu
Name of Company. Firm or Entity r
Priptr type name of Contractor/ Applicant
Vice President/ Secretary
Title
Person is defined as: any individual, firm, co -partnership, joint venture, association, social club, fraternal organization, corporation, estate, trust, receiver, syndicate, any other county, city, municipality, district, or other political subdivision, or any other group or combination acting as a unit.
Official includes, but is not limited to: Mayor, Council member, Planning Commissioner, Member of a board, commission, or committee ofthe City, employee, or staff members.
Rev. 1110712025
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June 2, 2026 Post City Council/Housing Authority Agenda v . 0 0 5 P a g e | 1
June 2, 2026
ITEM TITLE
Gann Limit: Establish Appropriations Limit for Fiscal Year 2026-27 Report Number: 26-0059
Location: No specific geographic location
Department: Finance
G.C. § 84308 Regulations Apply: No
Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt a resolution establishing the appropriations limit (“Gann Limit”) for the City of Chula Vista (“City”) for Fiscal Year 2026-27.
SUMMARY
Article XIIIB of the California Constitution requires each local government to establish a Gann Limit for the General Fund by resolution each year at a regularly scheduled meeting or noticed special meeting. The purpose of the Gann Limit is to restrict spending of certain types of revenues to a level predicated on a base year amount increased annually by an inflation factor.
ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with CEQA, and it has been determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of a governmental fiscal/administrative activity which does not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda P a g e | 2
DISCUSSION
Article XIIIB of the California Constitution imposes the concept of spending limits on local governments. This Constitutional provision and related implementing legislation specifies that annual increases in general fund appropriations financed from Proceeds of Taxes are limited to a base year amount increased annually by an inflation factor. By definition, “Proceeds of Taxes” includes such revenues as property taxes, sales and use taxes, utility user taxes, transient occupancy taxes, and state subventions. Revenues from other sources like fees, charges, and federal grants are considered “Non-Proceeds of Taxes” and are not subject to the annual spending limit. The proceeds of taxes for City have historically been less than the statutory Gann Limit.
Under current guidelines, local jurisdictions may choose among measures of population growth and inflation to compute the annual inflation factor. These measures of growth are provided by the State Department of Finance and the San Diego Assessor’s Office. According to these sources, the City’s population increased 0.41 percent. California per capita personal income increased by 4.95 percent and the City’s local assessment roll increased by 6.00 percent from the addition of local, nonresidential new construction.
The City of Chula Vista’s annual population growth (0.41%) and the annual change in new non-residential construction (6.00%) were selected to calculate the fiscal year 2026-27 Gann Limit.
The fiscal year 2026-27 Gann Limit has been calculated as follows:
Fiscal Year 2025-26 Gann Limit $1,452,743,519
Increased by an inflation factor composed of the
Increase in population and
Increase in New non-residential construction X 1.0643693 Fiscal Year 2026-27 Gann Limit $1,546,255,595
The Proceeds of Taxes included in the fiscal year 2026-27 budget that are subject to the Gann Limit are estimated to be $240,503,192 (see Attachment 1). The City has what is referred to as an appropriation “gap” of $1,305,752,403 ($1,546,255,595 - $240,503,192). As a result, the City may collect and spend up to $1,305,752,403 more in taxes during fiscal year 2026-27 without exceeding the Constitutional limit.
DECISION-MAKER CONFLICT
Staff have reviewed the decision contemplated by this action and have determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff are not independently aware, and have not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no current-year fiscal impact as a result of this action.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda P a g e | 3
ONGOING FISCAL IMPACT
This action will enable the City to appropriate and spend tax revenues estimated at $240,503,192 included in the fiscal year 2026-27 budget.
ATTACHMENTS
1. Fiscal Year 2026-27 Gann Limit
Staff Contact: Adrian Del Rio, Director of Finance/Treasurer
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Form Rev 9/30/2025
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ESTABLISHING THE APPROPRIATIONS
LIMIT (GANN LIMIT) FOR THE CITY OF CHULA VISTA FOR
FISCAL YEAR 2026-27
WHEREAS, Article XIIIB of the California Constitution, approved by the voters in 1979, imposed the concept of spending limits on local governments; and WHEREAS, this Constitutional provision and related implementing legislation specifies that annual increases in appropriations financed from "Proceeds of Taxes" are limited to a base year (1978-79) amount increased annually by an inflation factor comprised of the change in population of the City combined with the greater of the change in new non-residential construction or the change in the California per capita personal income; and WHEREAS, by definition, "Proceeds of Taxes" includes such revenues as property taxes, sales and use taxes, utility users taxes, transient occupancy taxes, and state subventions; and WHEREAS, revenues from other sources like fees/charges and federal grants are considered "Non-Proceeds of Taxes" and are not subject to the annual spending limit; and WHEREAS, this calculation has always been perfunctory for the City of Chula Vista (“City”), since the proceeds of taxes for City are far less than the statutory appropriation limit; and WHEREAS, the State Department of Finance and the San Diego County Assessor's Office are charged with providing the data necessary for local jurisdictions to establish their Gann Limit; and
WHEREAS, according to these sources, for purposes of the fiscal year 2026-27 calculation, the population increased 0.41 percent; and
WHEREAS, California per capita personal income increased by 4.95 percent and new nonresidential construction increased by 6.00 percent. Consequently, new non-residential construction change was used in the formula to compute the Gann Limit as this increase is the greater of the two amounts; and
WHEREAS, the fiscal year 2026-27 Gann Limit has been calculated to be $1,546,255,595; and
WHEREAS, the "Proceeds of Taxes" as included in the fiscal year 2026-27 Proposed Budget that are subject to the appropriations limit are estimated to be $240,503,192; and
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Resolution No.
WHEREAS, the City has what is referred to as an appropriation “gap” of $1,305,752,403 ($1,546,255,595 - $240,503,192) (“Appropriation Gap”); and WHEREAS, as a result of this Appropriation Gap the City may collect and spend up to $1,305,752,403 more in taxes during fiscal year 2026-27 without exceeding the Constitutional limit.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby establish a Gann Limit of $1,546,255,595 for fiscal year 2026-27 pursuant to the requirements of Article XIIIB of the California Constitution and California Government Code section 7910.
Presented by Approved as to form by
Adrian Del Rio Marco A. Verdugo
Director of Finance/Treasurer City Attorney
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Attachment 1
FY 2026-27
Proceeds of Taxes Proposed Budget
Property Taxes 58,653,484
Property Tax in Lieu of VLF 36,098,746
Sales and Use Taxes 116,040,762
Transient Ocupancy Taxes 19,188,252
Utility Taxes 3,712,619
Other Local Taxes
Real Property Transfer Tax 1,475,278
Cannabis Excise Tax 2,771,800
Business License 1,244,862
Cardroom Fees/Business License 1,091,214
State Homeowners Property Taxes 226,175
Total Proceeds of Taxes 240,503,192
Appropriation Limit 1,546,255,595
GAP (Under Limit) (1,305,752,403)
Appropriation (Gann) Limit Gap Calculation
For Fiscal Year 2026-27
0 200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
FY 22-23 FY 23-24 FY24-25 FY25-26 FY26-27 Millions
Proceeds of Taxes Compared to Legal Spending Limit
Proceeds of Taxes Appropriation Limit
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda v . 0 0 5 P a g e | 1
June 2, 2026
ITEM TITLE
Contract Amendment: Approve the First Amendment of the Project Implementation Agreement Related to the Financing and Development of the Bayfront Resort and Convention Center Report Number: 26-0204
Location: Parcel H-3 of the Chula Vista Bayfront Master Plan Area Department: City Manager
G.C. § 84308 Regulations Apply: No
Environmental Notice: The Project is adequately covered in a previously certified Final Environmental Impact Report (“FEIR”) for the Bayfront Master Plan and Port Mast Plan Amendment(UPD #83356-EIR-658; SCH No. 2005081077; certified by City Council Resolution No. 2010-113 on May 18, 2010).
Recommended Action
Adopt resolutions A) Approving the first amendment to the Project Implementation Agreement between the City of Chula Vista, the Bayfront Project Special Task Financing District, the San Diego Unified Port District, the Chula Vista Bayfront Facilities Financing Authority, and RIDA Chula Vista, LLC., and B) Acting as the legislative body of the Bayfront Project Special Tax Financing District, approving the first amendment to the Project Implementation Agreement between the City of Chula Vista, the Bayfront Project Special Task Financing District, the San Diego Unified Port District, the Chula Vista Bayfront Facilities Financing Authority, and RIDA Chula Vista, LLC.
SUMMARY
In June of 2021, the City Council approved the principal financing and implementation documents for the Gaylord Pacific Resort and Convention Center project (“RHCC Project”). This approval included the Project Implementation Agreement (PIA), which obligated RIDA Chula Vista, LLC (“RIDA”) to cause the development and construction of the Convention Center and extensive public infrastructure improvements.
Staff is recommending a first amendment to the PIA. This amendment would update the timing of releasing Chula Vista Bayfront Facilities Financing Authority (“Authority”) trustee funds to the Authority for application in accordance with the Fourth Amended and Restated Revenue Sharing Agreement (“Revenue Sharing Agreement”) between the City and the San Diego Unified Port District.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda P a g e | 2
The proposed revisions maintain sufficient reserves for any remaining Developer-related obligations while providing flexibility for the City and Port District to access reimbursements that were incorporated into each agency’s financial planning and budgets.
ENVIRONMENTAL REVIEW
The Project has been reviewed for compliance with the California Environmental Quality Act (CEQA), and it has been determined that the Project was adequately covered in the previously certified Final Environmental Impact Report (“FEIR”) for the Bayfront Master Plan and Port Mast Plan Amendment (UPD #83356-EIR-658; SCH No. 2005081077; certified by City Council Resolution No. 2010-113 on May 18, 2010). Therefore, no further environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
This amendment to the Project Implementation Agreement will be presented to the Chula Vista Bayfront Facilities Financing Authority on June 17, 2026.
DISCUSSION
The Chula Vista Bayfront Master Plan (CVBMP) represents a long-term collaborative effort between the City of Chula Vista (“City”) and the San Diego Unified Port District (“Port District”) to transform approximately 535 acres of underutilized bayfront property into a regional waterfront destination featuring visitor-serving uses, parks, habitat restoration, infrastructure improvements, and economic development opportunities.
Phase 1 implementation of the CVBMP includes the development of the Gaylord Pacific Resort and Convention Center project (“RHCC Project”), associated public infrastructure improvements, parks, and related amenities.
In 2018, the City and Port District approved a Disposition and Development Agreement and an initial Revenue Sharing Agreement establishing the framework for public participation in the financing and implementation of the RHCC Project. Subsequent actions refined the financing structure, public agency contributions, and implementation responsibilities associated with the project.
On June 15, 2021, the City Council approved the principal financing and implementation documents necessary to advance the RHCC Project including the Project Implementation Agreement (“PIA”).
On May 10, 2022, the City Council approved additional financing-related actions associated with increased project construction costs and modifications to the financing structure resulting from market volatility, inflationary pressures, and construction cost escalation. These actions included approval of additional public contributions, amendments to financing agreements, and revisions to the Revenue Sharing Agreement intended to preserve the financial feasibility of the RHCC Project while maintaining the overall financing framework previously approved by the City and Port District.
Under the approved financing structure, the City and Port District committed to financing a public contribution toward construction of the convention center and certain Phase 1A infrastructure improvements through Authority-issued debt and other pledged revenue sources. RIDA Chula Vista, LLC (“RIDA”) was obligated to construct the resort hotel, convention center, parking structure, and developerrelated infrastructure improvements.
The PIA is between the City, the Bayfront Project Special Tax Financing District, the Port District, The Chula Vista Bayfront Facilities Financing Authority (“Authority”), and RIDA. The PIA obligated RIDA to develop and
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda P a g e | 3
construct the Convention Center and certain Phase 1A Infrastructure Improvements. The Gaylord Pacific Resort and Convention Center opened on May 15, 2025 and the City, Port District and RIDA have been working together to finalize the remaining details.
As part of the financing structure, for Bonds issued by the Authority on May 26, 2022, an Authority Surplus Fund was established to hold certain residual project revenues. Staff recommend amending two sections of the PIA to clarify how the Authority Surplus Fund may be used.
Both the City and the Port District anticipated the availability of these reimbursements for Bayfront-related expenditures and incorporated the projected reimbursements into their respective budgets.
Proposed Amendment to the PIA
The proposed amendment to the PIA revises Section 9.2.1.5(c) and Section 9.5.1 to allow the Authority to transfer a portion of the funds held in the Authority Surplus Fund for use in accordance with the Revenue Sharing Agreement, as long as the balance remaining in the Authority Surplus Fund is at least $3,000,000 (or a lesser amount with the consent of the Developer).
This amendment preserves the original intent of maintaining sufficient funds to satisfy any remaining Developer-related obligations, while establishing a minimum balance requirement that is consistent with other reserve provisions within the PIA. It also clarifies that, so long as the minimum reserve balance is maintained, the Authority may direct transfers from the Authority Surplus Fund for any lawful purpose permitted under the Indenture and Revenue Sharing Agreement.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Approval of this resolution will allow the Authority to reimburse the City’s General Fund per the Revenue Sharing Agreement for 73.6% of the Bayfront Fire Station operating costs. This reimbursement was included in the fiscal year 2025-26 budget.
ONGOING FISCAL IMPACT
This amendment will allow the Authority to make annual distributions to reimburse the City’s General Fund consistent with the Revenue Sharing Agreement for 73.6% of the Bayfront Fire Station operating costs. The revenue is estimated to be $3,099,702 in the fiscal year 2026-27 budget and will continue to be incorporated into the annual budget process.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda P a g e | 4
ATTACHMENTS
1. First Amendment to Project Implementation Agreement
2. Project Implementation Agreement
Staff Contact: Sarah Schoen, Deputy City Manager
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Form Rev 9/30/2025
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING FIRST AMENDMENT TO THE
PROJECT IMPLEMENTATION AGREEMENT BETWEEN THE
CITY, BAYFRONT PROJECT SPECIAL TAX FINANCING
DISTRICT, THE SAN DIEGO UNIFIED PORT DISTRICT, THE
CHULA VISTA BAYFRONT FACILITIES FINANCING
AUTHORITY, AND RIDA CHULA VISTA, LLC
WHEREAS, the Chula Vista Bayfront Master Plan represents a long-term collaborative effort between the City and the San Diego Unified Port District (the “Port District”) to transform approximately 535 acres of underutilized bayfront property into a regional waterfront destination featuring visitor-serving uses, parks, habitat restoration, infrastructure improvements, and economic development opportunities; and
WHEREAS, Phase 1 implementation of the Chula Vista Bayfront Master Plan includes the development of the Gaylord Pacific Resort and Convention Center project (the “RHCC Project”), associated public infrastructure improvements, parks, and related amenities; and WHEREAS, in 2018, the City and Port District approved a Disposition and Development Agreement and an initial Revenue Sharing Agreement establishing the framework for public participation in the financing and implementation of the RHCC Project; and WHEREAS, on June 15, 2021, the City Council approved the principal financing and implementation documents necessary to advance the RHCC Project, including the Project Implementation Agreement (the “PIA”); and
WHEREAS, on May 10, 2022, the City Council approved additional financing-related actions associated with increased project construction costs and modifications to the financing structure, including approval of additional public contributions, amendments to financing agreements, and revisions to the Fourth Amended and Restated Revenue Sharing Agreement (the “Revenue Sharing Agreement”); and
WHEREAS, the PIA executed by the City, the Bayfront Project Special Tax Financing District, the Port District, the Chula Vista Bayfront Facilities Financing Authority (the “Authority”), and RIDA Chula Vista, LLC (“RIDA”), and obligated RIDA to cause the development and construction of the convention center and certain Phase 1A infrastructure improvements; and
WHEREAS, the Gaylord Pacific Resort and Convention Center opened on May 15, 2025, and the City, Port District, and RIDA continue to collaborate to finalize post-completion administrative and financial close-out items; and
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Resolution No.
WHEREAS, as part of the financing framework for the bonds issued by the Authority on May 26, 2022, the Authority Indenture of Trust established an Authority Surplus Fund to hold certain residual project revenues; and
WHEREAS, the Authority Indenture of Trust provisions restrict the Authority’s ability to access surplus funds for reimbursement purposes contemplated under the Revenue Sharing Agreement between the City and the Port District; and
WHEREAS, the City and Port District anticipated the availability of these reimbursements for Bayfront-related expenditures and incorporated the projected reimbursements into their respective financial planning and budgets; and
WHEREAS, the proposed First Amendment to the PIA revises Sections 9.2.1.5(c) and
9.5.1 to allow the Authority to transfer a portion of the funds held in the Authority Surplus Fund for use in accordance with the Revenue Sharing Agreement, provided that the balance remaining in the Authority Surplus Fund is at least $3,000,000, or a lesser amount with the consent of the Developer; and
WHEREAS, the proposed First Amendment preserves the original intent of maintaining sufficient funds to satisfy any remaining Developer-related obligations while allowing transfers from the Authority Surplus Fund for lawful purposes permitted under the Authority Indenture of Trust and Fourth Amended and Restated Revenue Sharing Agreement; and WHEREAS, approval of the First Amendment will allow distributions from the Authority Surplus Fund that may reimburse the City’s General Fund consistent with the Revenue Sharing Agreement, including reimbursement for an amount equivalent to 73.6% of the cost of Bayfront Fire Station operations; and
WHEREAS, the Project has been reviewed for compliance with the California Environmental Quality Act (“CEQA”), and it has been determined that the Project was adequately covered in the previously certified Final Environmental Impact Report (“FEIR”) for the Bayfront Master Plan and Port Mast Plan Amendment (UPD #83356-EIR-658; SCH No. 2005081077; certified by City Council Resolution No. 2010-113 on May 18, 2010).
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it approves the First Amendment to Project Implementation Agreement, between the City, Bayfront Project Special Tax Financing District, The San Diego Unified Port District, The Chula Vista Bayfront Facilities Financing Authority, and RIDA Chula Vista, LLC, in the form presented, with such minor modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City Clerk, and authorizes and directs the City Manager to execute same.
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Resolution No.
Presented by Approved as to form by
Sarah Schoen Marco A. Verdugo
Deputy City Manager City Attorney
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Form Rev 9/30/2025
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA, ACTING AS THE LEGISLATIVE BODY OF
THE BAYFRONT PROJECT SPECIAL TAX FINANCING
DISTRICT APPROVING FIRST AMENDMENT TO THE
PROJECT IMPLEMENTATION AGREEMENT BETWEEN THE
CITY, BAYFRONT PROJECT SPECIAL TAX FINANCING
DISTRICT, THE SAN DIEGO UNIFIED PORT DISTRICT, THE
CHULA VISTA BAYFRONT FACILITIES FINANCING
AUTHORITY, AND RIDA CHULA VISTA, LLC
WHEREAS, the City of Chula Vista (the “City”) is a municipal corporation and charter city duly organized and existing under a charter pursuant to which the City has the right and power to make and enforce all laws and regulations with respect to municipal affairs and certain other matters in accordance with and as more particularly provided in Sections 3, 5, and 7 of Article XI of the Constitution of the State of California and the Charter of the City; and WHEREAS, the City and the San Diego Unified Port District (the “Port District”), are undertaking a collaborative planning process with the community to develop a comprehensive Chula Vista Bayfront Master Plan (the “CVBMP”) for the Chula Vista Bayfront Project; and WHEREAS, Chapter 3.61 of the Chula Vista Municipal Code (“Chapter 3.61”) was enacted for the purpose of establishing a procedure for financing certain public and private improvements and maintenance and services to serve the Chula Vista Bayfront Project through the establishment of a financing district, the levy and collection of special taxes within such district and the issuance of bonds of such district secured by such special taxes for the purpose of financing a Convention Center Facility (as defined in Chapter 3.61), and certain other public and/or private improvements; and
WHEREAS, the City Council of the City, has previously initiated proceedings, held a public hearing, formed the Bayfront Project Special Tax Financing District (the “District”), conducted an election and received a favorable vote from the qualified electors of the District, authorizing the levy of special taxes in the District, a bonded indebtedness of the District in an amount not to exceed $175,000,000 and an appropriations limit for the District, all as authorized pursuant to Chapter 3.61; and
WHEREAS, the Chula Vista Bayfront Master Plan represents a long-term collaborative effort between the City and the San Diego Unified Port District (the “Port District”) to transform approximately 535 acres of underutilized bayfront property into a regional waterfront destination featuring visitor-serving uses, parks, habitat restoration, infrastructure improvements, and economic development opportunities; and
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Resolution No.
WHEREAS, Phase 1 implementation of the Chula Vista Bayfront Master Plan includes the development of the Gaylord Pacific Resort and Convention Center project (the “RHCC Project”), associated public infrastructure improvements, parks, and related amenities; and WHEREAS, in 2018, the City and Port District approved a Disposition and Development Agreement and an initial Revenue Sharing Agreement establishing the framework for public participation in the financing and implementation of the RHCC Project; and WHEREAS, on June 15, 2021, the City Council, acting as the legislative body of the District approved the principal financing and implementation documents necessary to advance the RHCC Project, including the Project Implementation Agreement (the “PIA”); and WHEREAS, on May 10, 2022, the City Council approved additional financing-related actions associated with increased project construction costs and modifications to the financing structure, including approval of additional public contributions, amendments to financing agreements, and revisions to the Fourth Amended and Restated Revenue Sharing Agreement (the “Revenue Sharing Agreement”); and
WHEREAS, the PIA was entered into by the City, the Bayfront Project Special Tax Financing District, the Port District, the Chula Vista Bayfront Facilities Financing Authority (the “Authority”), and RIDA Chula Vista, LLC (“RIDA”), and obligated RIDA to cause the development and construction of the convention center and certain Phase 1A infrastructure improvements; and
WHEREAS, the Gaylord Pacific Resort and Convention Center opened on May 15, 2025, and the City, Port District, and RIDA continue to collaborate to finalize post-completion administrative and financial close-out items; and
WHEREAS, as part of the financing framework for the bonds issued by the Authority on May 26, 2022, the Authority Indenture of Trust established an Authority Surplus Fund to hold certain residual project revenues; and
WHEREAS, the Authority Indenture of Trust provisions restrict the Authority’s ability to access surplus funds for reimbursement purposes contemplated under the Revenue Sharing Agreement between the City and the Port District; and
WHEREAS, the City and Port District anticipated the availability of these reimbursements for Bayfront-related expenditures and incorporated the projected reimbursements into their respective financial planning and budgets; and
WHEREAS, the proposed First Amendment to the PIA revises Sections 9.2.1.5(c) and
9.5.1 to allow the Authority to transfer a portion of the funds held in the Authority Surplus Fund for use in accordance with the Revenue Sharing Agreement, provided that the balance remaining in the Authority Surplus Fund is at least $3,000,000, or a lesser amount with the consent of the Developer; and
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda Resolution No.
WHEREAS, the proposed First Amendment preserves the original intent of maintaining sufficient funds to satisfy any remaining Developer-related obligations while allowing transfers from the Authority Surplus Fund for lawful purposes permitted under the Authority Indenture of Trust and Fourth Amended and Restated Revenue Sharing Agreement; and WHEREAS, approval of the First Amendment will allow distributions from the Authority Surplus Fund that may reimburse the City’s General Fund consistent with the Revenue Sharing Agreement, including reimbursement for an amount equivalent to 73.6% of the cost of Bayfront Fire Station operations; and
WHEREAS, the Project has been reviewed for compliance with the California Environmental Quality Act (“CEQA”), and it has been determined that the Project was adequately covered in the previously certified Final Environmental Impact Report (“FEIR”) for the Bayfront Master Plan and Port Mast Plan Amendment (UPD #83356-EIR-658; SCH No. 2005081077; certified by City Council Resolution No. 2010-113 on May 18, 2010).
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, acting as the legislative body of the Bayfront Project Special Tax Financing District, that it approves the First Amendment to Project Implementation Agreement, between the City, Bayfront Project Special Tax Financing District, The San Diego Unified Port District, The Chula Vista Bayfront Facilities Financing Authority, and RIDA Chula Vista, LLC, in the form presented, with such minor modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City Clerk, and authorizes and directs the Authorized Officers and other officers, employees and agents of the City, acting for and in the name and on behalf of the District to execute same.
Presented by Approved as to form by
Sarah Schoen Marco A. Verdugo
Deputy City Manager City Attorney
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 4934-9930-6630/024036-0079
US-DOCS\170582605.1
FIRST AMENDMENT TO PROJECT IMPLEMENTATION AGREEMENT
by and among
THE CITY OF CHULA VISTA,
a California charter city and municipal corporation,
THE BAYFRONT PROJECT SPECIAL TAX FINANCING DISTRICT,
a financing district,
THE SAN DIEGO UNIFIED PORT DISTRICT,
a public corporation,
THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY, a joint exercise of powers entity,
and
RIDA CHULA VISTA, LLC,
a Delaware limited liability company
dated as of ___________, 2026
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 4934-9930-6630/024036-0079
US-DOCS\170582605.1
THIS FIRST AMENDMENT TO PROJECT IMPLEMENTATION AGREEMENT (“Amendment No. 1”), is entered into as of ___________, 2026 (the “Date of Agreement”) by and among the City of Chula Vista, a chartered municipal corporation (“City”), the Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance (the “Financing District”), the San Diego Unified Port District, a public corporation (the “Port District”), the Chula Vista Bayfront Facilities Financing Authority, a joint exercise of powers entity created by the City and the Port District pursuant to the Joint Exercise of Powers Act (the “Authority”), and RIDA Chula Vista, LLC, a Delaware limited liability company (the “Developer”) (collectively, the “Parties” and, individually, a “Party”).
This Amendment No. 1 amends that certain Project Implementation Agreement, dated as of May 26, 2022 (the “Project Implementation Agreement”), by and among the City, the Financing District, the Port District, the Authority, and the Developer. Capitalized terms used in this Amendment No. 1 and not otherwise defined herein have the meanings given such terms in the Project Implementation Agreement, including the Definitions Addendum thereto.
RECITALS:
WHEREAS, the Parties entered into the Project Implementation Agreement in order to provide for the development of certain public capital improvements referred to therein as the Convention Center, the Developer’s Phase 1A Infrastructure Improvements, and the Remaining Phase 1A Infrastructure Improvements.
WHEREAS, on May 26, 2022, the Authority issued its Authority Taxable Bonds and its Authority Tax-Exempt Bonds pursuant to the Authority Indenture.
WHEREAS, pursuant to the Authority Indenture, certain moneys are on deposit, and additional moneys are to be deposited from time to time, in funds and accounts maintained under the Authority Indenture, including the Authority Existing Revenues Account and the Authority Surplus Fund (as such terms are defined in the Authority Indenture).
WHEREAS, Sections 9.5 and 9.5.1 of the Project Implementation Agreement provide that, prior to Full Payment, the Authority shall not direct the Trustee to transfer moneys out of the Authority Surplus Fund.
WHEREAS, on or about March 4, 2026, RIDA provided notice to the Port District, the City, the Financing District and the Authority (collectively, the “Public Entities”) stating that RIDA had determined that the conditions for Acceptance of Developer’s Phase 1A Infrastructure Improvements have been satisfied (other than the condition set forth in Section 10.1.2 of the Project Implementation Agreement, which the City, the Port District and the Authority confirmed was satisfied in a letter dated March 18, 2026) and requesting confirmation of the foregoing from the applicable Public Entities.
WHEREAS, in a letter dated March 18, 2026, the Authority confirmed that the Convention Center is Complete and acknowledged its Acceptance of the Convention Center in accordance with Section 10.2 of the Project Implementation Agreement.
WHEREAS, the Parties now desire to amend the Project Implementation Agreement to permit the Authority to withdraw moneys from the Authority Surplus Fund, subject to certain limitations
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described herein, and the Parties further wish to confirm the City and the Port District’s Acceptance of Developer’s Phase 1A Infrastructure Improvements in accordance with Section 10.1.2 of the Project Implementation Agreement.
AGREEMENT:
In consideration of the mutual promises and covenants set forth herein, and for other consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree that the foregoing recitals are true and correct and further make the agreements set forth below.
Section 1. Amendment to Section 9.2.1.5(c) of the Project Implementation Agreement to allow transfers from Authority Surplus Fund prior to Full Payment. The Project Implementation Agreement is hereby amended by amending, replacing, and superseding subsection (c) of Section
9.2.1.5 in its entirety with the following:
“c. Until Full Payment or, with respect to the Authority Surplus Fund, except as provided in Section 9.5.1, the Authority shall (a) neither direct nor authorize the Trustee to transfer amounts out of the 2022A Construction Account or the Authority Surplus Fund for any purpose other than to Developer for payment of the Convention Center Contract Sum pursuant to Section 9.2 of this Agreement, interest due to Developer pursuant to Sections 9.2.3 and
9.2.4.2(b) of this Agreement, and amounts to be paid to Developer pursuant to Section 5.1.3, and (b) direct or authorize the Trustee to transfer amounts out of the 2022A Construction Account or the Authority Surplus Fund only to the account or accounts designated by Developer in writing.”
Section 2. Amendment to Section 9.5.1 of the Project Implementation Agreement to allow transfers from Authority Surplus Fund prior to Full Payment. The Project Implementation Agreement is hereby amended by amending, replacing, and superseding Section 9.5.1 in its entirety with the following:
“9.5.1. The Authority shall not deliver a Request described in the last sentence of Section 4.4 of the Indenture for transfers out of the Authority Surplus Fund for purposes other than payments to Developer pursuant to Sections 5.1.3 and 9.2 unless immediately following such transfer the balance in the Authority Surplus Fund is at least $3,000,000 (or a lesser amount with the consent of the Developer). For the avoidance of doubt, so long as at least $3,000,000 will be on deposit in the Authority Surplus Fund immediately following a transfer, the Authority may deliver a Request to the Trustee directing the Trustee to transfer moneys out of the Authority Surplus Fund at any time and from time to time, to any fund or account directed by the Authority, and for any purpose.”
Section 3. Acceptance of Developer’s Phase 1A Infrastructure. The City and the Port District hereby confirm Acceptance of Developer’s Phase 1A Infrastructure Improvements in accordance with Section 10.1.2 of the Project Implementation Agreement.
Section 4. Administrative Agent Consent. The prior written consent of the Administrative Agent to this Amendment No. 1 has been obtained and is attached hereto as required by Sections 5.14 and 6.06 of the Bond Purchase Agreement.
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Section 5. Counterparts. This Amendment No. 1 may be executed in counterparts, each of which shall be deemed an original.
Section 6. Interpretation of Agreement. Captions used in this Amendment No. 1 are for convenience of reference only and shall not affect the interpretation or meaning of this Amendment No. 1 or the Acquisition Agreement.
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June 2, 2026 Post City Council/Housing Authority Agenda (Signatures to First Amendment to Project Implementation Agreement) 4934-9930-6630/024036-0079
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IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of the day and year first-above written.
CITY OF CHULA VISTA, a California charter
city and municipal corporation
By:
Tiffany Allen, City Manager
APPROVED AS TO FORM:
By:
Marco A. Verdugo, City Attorney
SAN DIEGO UNIFIED PORT DISTRICT,
a public corporation
By:
Scott Chadwick,
President & Chief Executive Officer
APPROVED AS TO FORM AND LEGALITY:
By:
Thomas A. Russell, General Counsel
[Signatures continue on following page]
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[Signatures continued from previous page]
BAYFRONT PROJECT SPECIAL TAX
FINANCING DISTRICT
By:
Tiffany Allen, City Manager
APPROVED AS TO FORM:
By:
Marco A. Verdugo, City Attorney
CHULA VISTA BAYFRONT FACILITIES
FINANCING AUTHORITY, a joint exercise of
powers authority
By:
Scott Chadwick, Executive Director
APPROVED AS TO FORM AND LEGALITY:
By:
Co-Counsel, Thomas A. Russell, General
Counsel of the San Diego Unified Port
District
By:
Co-Counsel, Marco A. Verdugo, City
Attorney of the City of Chula Vista
[Signatures continue on following page]
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[Signatures continue from previous page]
DEVELOPER
RIDA CHULA VISTA, LLC,
a Delaware limited liability company
By: *
Ira Mitzner
President
California Contractor License Number: 1039979
* Signatories to provide signature authority for signatory
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 4934-9930-6630/024036-0079
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ADMINISTRATIVE AGENT CONSENT TO FIRST AMENDMENT
TO PROJECT IMPLEMENTATION AGREEMENT
Pursuant to Sections 5.14 and 6.06 of that certain Bond Purchase and Continuing Covenant Agreement dated May 26, 2022 (the “BPCCA”), by and among the Chula Vista Bayfront Facilities Financing Authority (the “Authority”), the Purchasers (defined therein), and JPMorgan Chase Bank, National Association, as Administrative Agent (the “Administrative Agent”), the prior written consent of the Administrative Agent is required for material amendments to the Project Implementation Agreement (defined in the BPCCA).
The Authority has requested the Administrative Agent to consent to the foregoing First Amendment to Project Implementation Agreement dated as of _________, 2026. In connection with such request, the undersigned hereby represents and warrants to the Authority, the City, the Financing District, the Port District, and the Developer as follows:
1. He(she) is a duly authorized officer of the Administrative Agent, qualified to execute this Administrative Agent Consent to First Amendment to Project Implementation Agreement (this “Consent”) on behalf of the Administrative Agent and is knowledgeable as to the matters set forth herein.
2. The Administrative Agent hereby consents to the execution and delivery of the First Amendment to Project Implementation Agreement in substantially the form to which this Consent is attached.
JPMORGAN CHASE BANK, National Association,
as Administrative Agent,
By:____________________________________
Name: ______________________________
Title: _______________________________
City of Chula Vista - City Council
June 2, 2026 Post City Council/Housing Authority Agenda 4825- 3218- 1203/ 024036- 0079
PROJECT IMPLEMENTATION AGREEMENT
by and among
THE CITY OF CHULA VISTA,
a California charter city and municipal corporation,
THE BAYFRONT PROJECT SPECIAL TAX FINANCING DISTRICT,
a financing district,
THE SAN DIEGO UNIFIED PORT DISTRICT,
a public corporation,
THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY a joint exercise of powers entity,
and
RIDA CHULA VISTA, LLC
a Delaware limited liability company
Dated as of May 26, 2022
Relating to
372,562,201
CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY
REVENUE BONDS
CHULA VISTA BAYFRONT CONVENTION CENTER)
SERIES 2022A (FEDERALLY TAXABLE)
10,000,000
CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY
REVENUE BONDS
CHULA VISTA BAYFRONT PHASE 1A INFRASTRUCTURE IMPROVEMENTS) SERIES 2022B (TAX-EXEMPT)
City of Chula Vista - City Council
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ARTICLE I
DEFINITIONS
1.1. Definitions Addendum .............................................................................................................. 5
ARTICLE II
SUBJECT OF THE AGREEMENT GENERALLY
2.1. Developer’ s Phase 1A Infrastructure Improvements................................................................. 5
2.2. Convention Center ..................................................................................................................... 9
2.3. Sweetwater Park ........................................................................................................................ 9
ARTICLE III
DURATION OF AGREEMENT
3.1. Term of Agreement ................................................................................................................. 14
ARTICLE IV
PROJECT COSTS
4.1. Phase 1A Infrastructure Improvements ................................................................................... 14
4.2. Convention Center ................................................................................................................... 15
4.3. Cost Reporting ......................................................................................................................... 15
ARTICLE V
CONSTRUCTION OF THE PROJECT AND THE REMAINING
PHASE 1A INFRASTRUCTURE IMPROVEMENTS
5.1. Construction of the Project ...................................................................................................... 16
5.2. Reserved .................................................................................................................................. 22
5.3. Reserved .................................................................................................................................. 22
5.4. Project Schedule and Schedule Updates .................................................................................. 22
5.5. Unavoidable Delay .................................................................................................................. 22
5.6. Completion Guaranty .............................................................................................................. 25
5.7. Entitlements ............................................................................................................................. 25
5.8. Energy Requirements .............................................................................................................. 27
ARTICLE VI
PROCUREMENT REQUIREMENTS AND EQUAL OPPORTUNITY
6.1. Award of Sole Source Prime Contract .................................................................................... 27
6.2. Subcontractor Bid and Award Process for the Developer’ s Phase 1A Infrastructure Improvements .......................................................................................................................... 27
6.3. Bid and Award Process for the Remaining Phase 1A Infrastructure Improvements .............. 28
6.4. The Convention Center as a Special Purpose Project.............................................................. 28
6.5. Procurement of Alterations ...................................................................................................... 28
6.6. Bid Opening and Award .......................................................................................................... 29
6.7. Authority Procurement Policy Acknowledgement .................................................................. 29
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ARTICLE VII
DESIGN AND CONSTRUCTION STANDARDS
7.1. Standard of Care ...................................................................................................................... 29
7.2. Compliance with Laws ............................................................................................................ 30
7.3. Compliance with Design and Construction Standards; Chula Vista Building Code ............... 32
7.4. Construction Period ................................................................................................................. 34
7.5. Authority Approval Not a Waiver of Obligations ................................................................... 34
ARTICLE VIII
CONSTRUCTION
8.1. Site Safety, Security ................................................................................................................ 34
8.2. Public Right-of-Way ............................................................................................................... 35
8.3. Traffic Control ......................................................................................................................... 35
8.4. Maintenance ............................................................................................................................ 35
8.5. Construction Cooperation ........................................................................................................ 36
ARTICLE IX
PAYMENT OF PROJECT COSTS
9.1. Developer’ s Phase 1A Infrastructure Improvements Costs ..................................................... 36
9.2. Convention Center Costs ......................................................................................................... 44
9.3. Investment of Amounts in the Construction Fund .................................................................. 53
9.4. Calculation of Specified Default Rate ..................................................................................... 53
9.5. Redemption of Authority Bonds and Certain Amendments Prior to Full Payment ................ 53
9.6. Survival ................................................................................................................................... 55
ARTICLE X
ACCEPTANCE OF IMPROVEMENTS
10.1. Developer’ s Phase 1A Infrastructure Improvements............................................................... 55
10.2. Convention Center ................................................................................................................... 56
10.3. Sweetwater Park ...................................................................................................................... 56
ARTICLE XI
WARRANTIES
11.1. Enforcement of Warranties ...................................................................................................... 57
11.2. Term of Warranties.................................................................................................................. 57
11.3. Additional Warranties ............................................................................................................. 58
ARTICLE XII
DEFECTIVE WORK
12.1. Correction, Removal, or Replacement .................................................................................... 58
12.2. Extension of Warranty ............................................................................................................. 58
12.3. Right of Authority to Correct .................................................................................................. 58
12.4. No Limitation on Other Remedies .......................................................................................... 58
12.5. Disputes ................................................................................................................................... 59
12.6. Applicability ............................................................................................................................ 59
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ARTICLE XIII
SECURITY FOR CONSTRUCTION
13.1. Bonds ....................................................................................................................................... 59
13.2. Insolvency or Bankruptcy ........................................................................................................ 60
13.3. Calling a Bond ......................................................................................................................... 60
ARTICLE XIV
INDEMNITY AND DUTY TO DEFEND
14.1. General Indemnity ................................................................................................................... 61
14.2. Damage to Other Properties .................................................................................................... 62
14.3. Hazardous Materials Indemnity .............................................................................................. 62
14.4. Illegal Discharge to Storm Drains ........................................................................................... 64
14.5. Implementation of Authority Resolution 2020-002 ................................................................ 64
14.6. Costs of Defense and Award ................................................................................................... 64
14.7. Insurance Proceeds .................................................................................................................. 65
14.8. Declarations ............................................................................................................................. 65
14.9. Survival ................................................................................................................................... 65
ARTICLE XV
INSURANCE REQUIREMENTS
15.1. Insurance Requirements .......................................................................................................... 65
15.2. Forms and Amounts of Coverage ............................................................................................ 66
15.3. General Requirements ............................................................................................................. 68
15.4. Waiver of Subrogation ............................................................................................................ 69
15.5. Authority Obligation to Maintain Insurance ........................................................................... 69
ARTICLE XVI
RECORDS AND AUDITS
16.1. Retention of Project Records ................................................................................................... 70
16.2. Audit of Records...................................................................................................................... 70
ARTICLE XVII
TITLE TO ALTERATIONS AND IMPROVEMENTS
17.1. Title to Project ......................................................................................................................... 71
17.2. Survival ................................................................................................................................... 71
ARTICLE XVIII
LIENS
18.1. No Right to Bind Port District ................................................................................................. 71
18.2. Notice of Non-Responsibility .................................................................................................. 71
18.3. Mechanics’ Liens..................................................................................................................... 72
18.4. Contest of Lien ........................................................................................................................ 72
18.5. Port District’ s Right to Pay...................................................................................................... 72
18.6. Notice of Liens ........................................................................................................................ 72
18.7. Right of Entry .......................................................................................................................... 73
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ARTICLE XIX
TAXES
19.1. Reporting ................................................................................................................................. 73
19.2. Tax Claims .............................................................................................................................. 74
19.3. Property Expenses ................................................................................................................... 75
19.4. Property Tax Contest Cooperation .......................................................................................... 76
ARTICLE XX
EQUAL EMPLOYMENT OPPORTUNITY/ NONDISCRIMINATION AND OFAC
20.1. Nondiscrimination ................................................................................................................... 77
20.2. Compliance with Employment and Labor Requirements........................................................ 77
20.3. OFAC Compliance .................................................................................................................. 77
ARTICLE XXI
EVENTS OF DEFAULT AND REMEDIES
21.1. Events of Default ..................................................................................................................... 78
21.2. Remedies for Events of Default .............................................................................................. 79
21.3. Sweetwater Park ...................................................................................................................... 81
21.4. Reserved .................................................................................................................................. 81
21.5. Authority Events of Default .................................................................................................... 81
21.6. Remedies for Authority Events of Default (Rent Offset) ........................................................ 82
21.7. Payment Sources for Convention Center ................................................................................ 82
ARTICLE XXII
ASSIGNMENT PARTICIPATION FEE
22.1. Assignment Participation Fee .................................................................................................. 83
22.2. Assignment and Collateral Assignment .................................................................................. 84
22.3. Non-Disturbance Agreement ................................................................................................... 85
ARTICLE XXIII
NONDISTURBANCE
23.1. Port District Nondisturbance of Lessee and Sublessee Rights under the Convention Center Leases........................................................................................................................... 86
23.2. Authority Nondisturbance of Lessee and Sublessee Rights under the Convention Center Leases ...................................................................................................................................... 86
ARTICLE XXIV
Operation of the Site and the Convention Center
24.1. Approved Agreements ............................................................................................................. 87
24.2. Reservations ............................................................................................................................ 87
24.3. Cooperation in connection with Condemnation ...................................................................... 89
ARTICLE XXV
AS-IS” LEASE AND WAIVERS
25.1. Developer’ s Acknowledgment ................................................................................................ 89
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25.2. Only Express Written Agreements Binding ............................................................................ 90
25.3. As-Is ........................................................................................................................................ 90
25.4. Waivers, Disclaimers and Indemnity ...................................................................................... 90
25.5. Survival ................................................................................................................................... 92
ARTICLE XXVI
MISCELLANEOUS PROVISIONS
26.1. Notices ..................................................................................................................................... 92
26.2. Captions ................................................................................................................................... 94
26.3. No Merger ............................................................................................................................... 94
26.4. Recording ................................................................................................................................ 94
26.5. Port District Transfer ............................................................................................................... 94
26.6. Time of Essence ...................................................................................................................... 95
26.7. Partial Invalidity ...................................................................................................................... 95
26.8. Entire Agreement..................................................................................................................... 95
26.9. Joint and Several...................................................................................................................... 95
26.10. Developer’ s Authority ............................................................................................................. 95
26.11. Interaction with Sewer Agreement .......................................................................................... 95
26.12. Resolution of Specified Disputes ............................................................................................ 96
26.13. Attorneys’ Fees ........................................................................................................................ 99
26.14. Transaction Costs .................................................................................................................... 99
26.15. Provisions Regarding Authority Operations ......................................................................... 100
26.16. Replacement Trustees ............................................................................................................ 100
26.17. Effect of Section 365(h)(1) Election ..................................................................................... 100
26.18. Financial Information Regarding Continuous Operations..................................................... 100
26.19. Governing Law ...................................................................................................................... 101
26.20. Modification .......................................................................................................................... 101
26.21. Counterparts; Electronic Signatures ...................................................................................... 102
26.22. Drafting Presumption; Review Standard ............................................................................... 102
26.23. Administrative Claims ........................................................................................................... 102
26.24. Non-liability of Public Entity Officials and Employees ........................................................ 102
26.25. Authority Executive Director; Authority Approvals and Actions ......................................... 103
26.26. Further Assurances ................................................................................................................ 103
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EXHIBIT A-1 LEGAL DESCRIPTION OF THE SITE ........................................................ A-1-1 EXHIBIT A-2 LEGAL DESCRIPTION OF THE GROUND LEASE PROPERTY ............ A-2-1 EXHIBIT A-3 LEGAL DESCRIPTION OF THE DEVELOPER’ S PHASE 1A INFRASTRUCTURE IMPROVEMENTS SITE ........................................... A-3-1 EXHIBIT B-1 DEPICTION OF THE SITE ............................................................................ B-1-1 EXHIBIT B-2 DEPICTION OF THE GROUND LEASE PROPERTY ................................ B-2-1 EXHIBIT B-3 DEPICTION OF THE DEVELOPER’ S PHASE 1A
INFRASTRUCTURE IMPROVEMENTS SITE ............................................ B-3-1 EXHIBIT C-1 DEVELOPER’ S PHASE 1A INFRASTRUCTURE IMPROVEMENTS ......... C-1 EXHIBIT C-2 SOURCES FOR DEVELOPER’ S PHASE 1A INFRASTRUCTURE IMPROVEMENTS COST.................................................................................. C-2 EXHIBIT C-3 DEVELOPER’ S PHASE 1A INFRASTRUCTURE IMPROVEMENTS BUDGET ............................................................................................................ C-3 EXHIBIT D-1-A REMAINING PHASE 1A INFRASTRUCTURE IMPROVEMENTS SWEETWATER PARK) .............................................................................. D-1-A EXHIBIT D-1-B SOURCES FOR REMAINING PHASE 1A INFRASTRUCTURE IMPROVEMENTS (SWEETWATER PARK) .............................................. D-1-B EXHIBIT D-1-C ENGINEERING BUDGET FOR SWEETWATER PARK ........................... D-1-C EXHIBIT E CONSTRUCTION REQUIREMENTS .............................................................. E-1 EXHIBIT F CONVENTION CENTER PLANS .................................................................... F-1 EXHIBIT G-1 APPROVED SUBCONTRACTOR BID AND AWARD PROCESS ........... G-1-1 EXHIBIT G-2 SUBCONTRACTOR BIDS AWARDED PRIOR TO EFFECTIVE DATE .............................................................................................................. G-2-1 EXHIBIT G-3 APPROVED CONSTRUCTION CONTRACTS ............................................... G-3 EXHIBIT H FORM OF COMPLETION GUARANTY ......................................................... H-1 EXHIBIT I REAL ESTATE AGREEMENTS ....................................................................... I-1 EXHIBIT J TOTAL CONVENTION CENTER DEVELOPMENT FEE .............................. J-1 EXHIBIT K-1 DEVELOPER’ S PHASE 1A PAYMENT REQUEST ................................... K-1-1
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EXHIBIT K-2 FORM OF CONVENTION CENTER PAYMENT REQUEST .................... K-2-1
EXHIBIT L SOLE SOURCE SUBCONTRACT AWARD APPROVAL
DEVELOPER’ S PHASE 1A INFRASTRUCTURE IMPROVEMENTS) ...... L-1
EXHIBIT M BEST QUALIFIED CONTRACTOR SUBCONTRACT AWARD
APPROVAL (DEVELOPER’ S PHASE 1A INFRASTRUCTURE
IMPROVEMENTS) .......................................................................................... M-1 EXHIBIT N-1 LIST OF APPROVED ARBITRATORS ....................................................... N-1-1 EXHIBIT N-2 LIST OF APPROVED MEDIATORS ........................................................... N-2-1 EXHIBIT O ENERGY REQUIREMENTS ............................................................................ O-1 EXHIBIT P FORM OF DEVELOPER’ S CONVENTION CENTER BUDGET .................. P-1 EXHIBIT Q PORT DISTRICT TRANSFER DOCUMENTS ................................................ Q-1 EXHIBIT R FORM OF MEMORANDUM OF AGREEMENT ............................................ R-1 EXHIBIT S APPROVED AGREEMENTS ........................................................................... S-1 EXHIBIT T DISTRICT DOCUMENTS ................................................................................ T-1 EXHIBIT U PRIOR AGREEMENTS ..................................................................................... U-1 EXHIBIT V-1 APPROVED DRAWINGS AND SPECIFICATIONS FOR
DEVELOPER’ S PHASE 1A INFRASTRUCTURE IMPROVEMENTS ..... V-1-1 EXHIBIT V-2 APPROVED DRAWINGS AND SPECIFICATIONS FOR REMAINING PHASE 1A INFRASTRUCTURE IMPROVEMENTS ................................. V-2-1
EXHIBIT W FORM OF EQUAL EMPLOYMENT OPPORTUNITY
CERTIFICATION ............................................................................................. W-1 EXHIBIT X-1 FORM OF EARLY WORK AGREEMENT ................................................. X-1-1 EXHIBIT X-2 REIMBURSEMENT AGREEMENT ............................................................ X-2-1 EXHIBIT X-3 SEWER AGREEMENT ................................................................................ X-3-1 EXHIBIT Y HOTEL OPERATOR NON-DISTURBANCE AGREEMENT ......................... Y-1 EXHIBIT Z CONSTRUCTION STANDARDS FLYER ....................................................... Z-1 EXHIBIT AA IN-BALANCE CERTIFICATE ...................................................................... AA-1
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PROJECT IMPLEMENTATION AGREEMENT
BY AND AMONG
THE CITY OF CHULA VISTA, THE BAYFRONT PROJECT SPECIAL TAX FINANCING
DISTRICT, THE SAN DIEGO UNIFIED PORT DISTRICT, THE CHULA VISTA
BAYFRONT FACILITIES FINANCING AUTHORITY, AND RIDA CHULA VISTA, LLC This PROJECT IMPLEMENTATION AGREEMENT (“ Agreement”) is entered into as of May 26, 2022 ( the “ Date of Agreement”) by and among the City of Chula Vista, a chartered municipal corporation (“ City”), the Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance ( the “ Financing District”), the San Diego Unified Port District, a public corporation ( the “ Port District”), the Chula Vista Bayfront Facilities Financing Authority ( the “ Authority”; and, collectively with the City, the Financing District, and the Port District, the “ Public Entities” or each separately, a “ Public Entity”), a joint exercise of powers entity created by the City and the Port District pursuant to the Joint Exercise of Powers Act ( defined herein below), and RIDA Chula Vista, LLC, a Delaware limited liability company ( together with its permitted successors and assigns, including without limitation any Foreclosure Purchaser, the “ Developer”) ( collectively, the “ Parties” and, individually, a “ Party”), with reference to the following Recitals:
RECITALS
A. The City and the Port District are parties to that certain Amended and Restated Joint Exercise of Powers Agreement, dated and effective July 25, 2019 (the “ JEPA Agreement”), which amended and restated that certain Joint Exercise of Powers Agreement, dated as of May 1, 2014, by and between the City and the Port District. The JEPA Agreement forms the Authority for the purpose of assisting in the financing and refinancing of capital improvement projects of the City and the Port District as permitted under the Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code ( the “ Joint Exercise of Powers Act”) relating to the Chula Vista Bayfront.
B. Pursuant to a “ Site Lease” dated as of the Date of Agreement ( as amended, amended and restated, supplemented, or otherwise modified from time to time, the “ Site Lease”), the Port District has leased to the Authority and the Authority has leased from Port District certain real property described in Exhibit A-1 and depicted in Exhibit B-1 attached hereto ( the “ Site”), upon which an approximately 275,000 net usable square foot convention center (the “ Convention Center” and, together with the Site, the “ Facility”) will be constructed by Developer pursuant to this Agreement and operated by Developer pursuant to the Sublease, as described in more detail below.
C. Pursuant to a “ Facility Lease” dated as of the Date of Agreement ( as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Facility Lease”), the Authority has in turn subleased the Site and leased the Convention Center to the City.
D. Pursuant to a “ Sublease Agreement” dated as of the Date of Agreement ( as amended, amended and restated, supplemented or otherwise modified from time to time, together with any New Sublease ( as defined in the Sublease), the “ Sublease”), the City has in turn subleased the Facility to Developer. The Site Lease, Facility Lease, and Sublease are referred to collectively herein as the “ Convention Center Leases.”
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E. Port District and Developer have entered into a ground lease dated as of the Date of Agreement ( as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Ground Lease”), pursuant to which the Port District has leased to Developer approximately 19.281 acres of land located in the City of Chula Vista, California, described in Exhibit A-2 and depicted in Exhibit B-2 attached hereto ( the “ Ground Lease Property”), together with all improvements currently located on the Ground Lease Property. Pursuant to the Ground Lease, the Developer is obligated to construct, operate and maintain ( or cause to be constructed, operated and maintained) the Resort Hotel ( defined herein) and Parking Improvements ( defined herein) on the Ground Lease Property.
F. The City, the Port District, the Authority and the County of San Diego ( the County”) entered into that certain Chula Vista Bayfront Project Funding Agreement dated as of December 13, 2019, (the “ County Funding Agreement”) pursuant to which the County will assist the City, the Port District and the Authority in financing the construction of the Phase 1A Infrastructure Improvements by contributing the County Funds ( defined in the Definitions Addendum) as provided for in the County Funding Agreement.
G. To create a vehicle to generate special tax revenues initially equal to 5.5% of the transient occupancy revenues collected within the CVBMP (defined below), to pay or reimburse the cost of the Phase 1A Infrastructure Improvements ( defined below) and/or to support payments with respect to the Revenue Bonds ( defined below), the City Council of the City (the “ City Council”), took certain actions under and pursuant to the powers reserved to the City under Sections 3, 5, and 7 of the Constitution and the Charter of the City, and enacted Chapter 3.61 of the Chula Vista Municipal Code (“ Chapter 3.61”) for the purpose of establishing a procedure for financing certain public and private improvements and maintenance and services to serve development within the boundaries of the Financing District through the establishment of the Financing District, the levy and collection of special taxes ( the “ Special Tax Revenues”) therein by the Financing District and the issuance of bonds or other indebtedness of such Financing District secured by such special taxes for the purpose of financing the Convention Center and certain other public improvements, including the Phase 1A Infrastructure Improvements, as described below.
H. On September 10, 2019, the City Council initiated proceedings pursuant to Chapter 3.61 to establish the Financing District, to authorize the Financing District to finance the purchase, construction, expansion, improvement, and rehabilitation of the Convention Center and certain other public improvements and certain maintenance and services, to authorize the levy of a special tax pursuant to the amended and restated rate and method of apportionment thereof to pay for such improvements and services and to declare the necessity of the Financing District to incur an indebtedness to contribute to the financing of such improvements.
I. On February 16, 2021, the City Council adopted a resolution declaring its intention and initiating proceedings to make changes to the rate and method of apportionment of the Financing District to increase the special tax rates to be levied initially on taxable property in the Financing District, to extend the term of the special tax to June 30, 2086 and to give the City Council the ability to lower the special tax rates in future fiscal years.
J. The City and the Port District entered into an Amended and Restated Joint Community Facilities Agreement ( Chula Vista Bayfront Project Special Tax Financing District) effective as of February 24, 2020 (as amended, the “ JCFA”) to set forth some of the essential terms for the development, operation, maintenance, and servicing of various improvements within the
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Chula Vista Bayfront Master Plan Area (the “ CVBMP”) or outside the CVBMP as further described in the JCFA. Such essential terms included the priorities for the allocation of the Special Tax Revenues, as such term is defined in the JCFA, and to provide that the Special Tax Revenues dedicated to the Convention Center and the Developer’ s Phase 1A Infrastructure Improvements shall be disbursed pursuant to an agreement between the Port District, the City and/or the Authority, on the one hand, and the Developer, the Project lenders and/or the Developer’ s contractors, on the other hand.
K. On May 20, 2020, the Authority Board adopted its Resolution 2020-007 ratifying the final form of a procurement policy for developer-performed public improvements for the Authority attached as Exhibit A to such resolution ( the “ Authority Procurement Policy”) and ratifying the final form of Authority Resolution 2020-002 in the form presented and attached as Exhibit B to Resolution 2020-007 ( the “ Authority Resolution 2020-002”) applying the Authority Procurement Policy to the construction of developer-performed public works for the Project.
L. Pursuant to Authority Resolution 2020-002 and in accordance with Procurement Policy Section 2.a., the Authority Board authorized the Developer to proceed with the development and construction of the Developer’ s Phase 1A Infrastructure Improvements and the Convention Center subject to the terms, conditions, and obligations of the Authority Procurement Policy, Authority Resolution 2020-002, all applicable Project agreements, including this Agreement, and all applicable federal, state, and local laws and regulations.
M. The Authority, the Port District and the City have determined it to be beneficial to have the Financing District finance certain of the Phase 1A Infrastructure Improvements in connection with the construction of the Resort Hotel, Parking Improvements and the Convention Center. To assist in the financing of the Convention Center and the Phase 1A Infrastructure Improvements, the Authority has determined to issue its “ Authority Taxable Bonds” and its Authority Tax-Exempt Bonds” ( together with bond or other indebtedness incurred to refinance the Authority Taxable Bonds and/or the Authority Tax-Exempt Bonds, collectively referred to herein as the “ Authority Bonds”) pursuant to the terms of the “ Authority Indenture,” as defined herein. The Authority Bonds will be secured in part and be repaid from loan payments made by the Financing District on the “ Loan,” as defined herein, and any loan payable on a parity with the Loan, made under the “ Loan Agreement,” as defined herein, “ Lease Payments,” as defined herein, payable by the City pursuant to the Facility Lease and payments to be made by the Port District pursuant to the Port Support Agreement. JPMorgan Chase Bank, National Association, a banking association organized and existing under the laws of the United States, will serve as administrative agent ( in such capacity referred to herein as the “ Administrative Agent”) for the purchasers of the first series of Authority Bonds, which will be issued on the Effective Date under the Bond Purchase Agreement defined herein).
N. Pursuant to the Sublease and this Agreement, the Developer is required to cause the development and construction of the “ Project” which consists of the Developer’ s Phase 1A Infrastructure Improvements and the Convention Center (as such terms are defined herein).
O. Certain Laws may require that certain of the Phase 1A Infrastructure Improvements as defined herein) be constructed in connection with the construction of the Convention Center, the Resort Hotel, and the Parking Improvements.
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P. Developer and the Public Entities desire that Developer construct the Convention Center, and in connection with the construction of the Convention Center, the Resort Hotel, and the Parking Improvements, construct the Developer’ s Phase 1A Infrastructure Improvements on certain real property described in Exhibit A-3 and depicted in Exhibit B-3 attached hereto (the “ Developer’ s Phase 1A Infrastructure Improvements Site”, together with the Site, the “ Project Site”), as set forth in this Agreement.
Q. City, Authority and Developer have entered into that certain Chula Vista Bayfront Project Phase 1A Early Work Implementation and Right of Entry License Agreement, dated as of September 1, 2021 and filed in the Office of the District Clerk as Document No. 73207 (the “ Early Work Agreement”), a copy of which is attached hereto as Exhibit X-1. The Early Work Agreement provides for the reimbursement of certain costs described therein by the Authority to the Developer.
However, City, Authority and Developer intend that such costs be reimbursed as part of the Developer’ s Phase 1A Infrastructure Improvements Costs payable hereunder to the extent such amounts are not reimbursed under the Early Work Agreement.
R. City and Developer have entered into ( i) that certain City of Chula Vista Reimbursement Agreement to Design Specified Bayfront Infrastructure Improvements, dated as of September 15, 2020 ( the “ Reimbursement Agreement”), a copy of which is attached hereto as Exhibit X-2, and ( ii) that certain City of Chula Vista Reimbursement Agreement to Construct Specified Bayfront Sewer Improvements, dated as of September 15, 2020 (the “ Sewer Agreement”), a copy of which is attached hereto as Exhibit X-3. Each of the Reimbursement Agreement and the Sewer Agreement provide for the reimbursement of certain costs described therein by City to Developer, and therefore such costs are excluded from the Developer’ s Phase 1A Infrastructure Improvements Costs payable hereunder to avoid double counting.
S. The Parties desire to enter into, and Authority has required that Developer enter into, this Agreement to establish the terms and conditions in compliance with the applicable provisions of the Authority Procurement Policy and Authority Resolution 2020-002 pursuant to which the Developer may develop and construct the Project and obtain payment for all of the eligible costs of developing and constructing the Developer’ s Phase 1A Infrastructure Improvements from proceeds of the Authority Tax-Exempt Bonds and the County Funds, reimbursements pursuant to the Sewer Agreement, and credits to the Developer pursuant to the BFDIF Program, which is on file in the office of the City Clerk, and a portion of the overall costs of developing and constructing the Convention Center from the proceeds of the Authority Taxable Bonds and certain amounts to be provided by the City and Port District, all as further described herein.
T. The Parties desire to provide for the development and construction of the Remaining Phase 1A Infrastructure Improvements” ( as defined herein) by the Port District, pursuant to the procurement rules of the Port District.
U. The Parties further desire to set forth certain provisions relating to nondisturbance, indemnification, and other continuing covenants of the Parties relating to the Resort Hotel, Parking Improvements, and Convention Center Project and the Phase IA Infrastructure Improvements which shall remain in effect for the Term hereof.
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AGREEMENT
NOW THEREFORE, in consideration of the above Recitals, the covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, the Authority, the Port District, the City, the Financing District and the Developer agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions Addendum. Defined terms used in this Agreement and not specifically defined herein shall have the meanings set forth in the Definitions Addendum attached hereto, which is incorporated herein by this reference. Any reference in this Agreement to this Agreement or any other agreement is a reference to such agreement as the same may be amended or amended and restated from time to time.
ARTICLE II
SUBJECT OF THE AGREEMENT GENERALLY
All Exhibits attached to this Agreement are incorporated into this Agreement by this reference.
2.1. Developer’s Phase 1A Infrastructure Improvements.
2.1.1. Access to the Developer’s Phase 1A Infrastructure Improvements Site. The Developer Parties shall have the non-exclusive right to enter upon the Developer’ s Phase 1A Infrastructure Improvements Site in connection with the construction and development of the Developer’ s Phase 1A Infrastructure Improvements commencing on the Commencement Date and ending on the earlier of the following dates: ( x) as to each portion of the Developer’ s Phase 1A Infrastructure Improvements Site, the date on which the Developer’ s Phase 1A Infrastructure Improvements corresponding to such portion of the Developer’ s Phase 1A Infrastructure Improvements Site is Accepted, ( y) the date on which this Agreement is terminated, and (z) the date on which this Agreement expires.
2.1.2. Construction of Developer’s Phase 1A Infrastructure Improvements.
Except as expressly provided in this Agreement, Developer shall cause the development of the Developer’ s Phase 1A Infrastructure Improvements on the Developer’ s Phase 1A Infrastructure Improvements Site substantially in accordance in all material respects with the Approved Drawings and Specifications for the development of the Developer’ s Phase 1A Infrastructure Improvements within the timeframe described in Section 5.1, in each case, in accordance with all the terms and conditions of this Agreement. For the avoidance of doubt, Harbor Park is not included as part of the Developer’ s Phase 1A Infrastructure Improvements.
2.1.3. Complete and Functional Improvements. Developer shall provide complete and functional Developer’s Phase 1A Infrastructure Improvements substantially in accordance in all material respects with the Approved Drawings and Specifications. Neither recommendation of any progress payment, nor any payment by the Authority to Developer under this Agreement, nor any use or occupancy of the Project or any part thereof by the Authority, the City, or the Port District, nor any failure to act, nor any review of a shop drawing or sample submittal, will constitute an approval
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by any of the Public Entities of work which is not completed by Developer substantially in accordance with the Approved Drawings and Specifications. The foregoing shall not limit claims pursuant to Articles XI or XII.
2.1.4. Payment of Developer’s Phase 1A Contract Sum, Reimbursements under Sewer Agreement, Credits under BFDIF Program, and Developer’s Phase 1A Project Administration Fee. In consideration for the Developer’s development and delivery of the Developer’s Phase 1A Infrastructure Improvements as required by this Agreement, ( a) the Authority shall pay the Developer’ s Phase 1A Contract Sum to Developer, ( b) the City shall provide to Developer a credit towards the amount payable by Developer pursuant to the BFDIF Program, as a condition of developing the Resort Hotel, Parking Improvements, and Convention Center ( as applicable), ( c) the City shall pay to Developer amounts required to be reimbursed to Developer pursuant to the Sewer Agreement, and ( d) the City shall provide payment to or credit for Developer, as applicable, in the amount of the Developer’ s Phase 1A Project Administration Fee. The Authority acknowledges and agrees that, without limitation, all of the Public Entity’ s Estimated Developer’ s Phase 1A Infrastructure Improvements Costs identified in Exhibit C-3 are Developer’ s Phase 1A Infrastructure Improvements Costs, except as noted in Exhibit C-3. The Parties acknowledge that concurrent with requesting payment of Developer’ s Phase 1A Contract Sum, Developer will identify amounts to be paid pursuant to the Sewer Agreement and City will issue payment for same consistent with the terms of the Sewer Reimbursement Agreement. Further, Developer will identify BFDIF credit amounts requested with each payment request. City shall incrementally accrue BFDIF credits toward Developer’ s ultimate BFDIF obligation, subject to true-up and final calculation of credits earned and BFDIF amounts to be paid to City. City shall pay ( pursuant to the Sewer Agreement) or credit pursuant to the BFDIF Program), as applicable, to Developer a fee ( the “ Developer’ s Phase 1A Project Administration Fee”) in the amount of $ 737,109, which shall accrue in three equal installments of $ 245,703 as of the sixth, eighteenth and thirtieth months following the Commencement Date, and shall be reflected on the Developer’ s Phase 1A Payment Requests submitted during or after the month in which such amounts have accrued; provided, that if all Developer’ s Phase 1A Infrastructure Improvements Costs have been paid to Developer prior to the thirtieth month, then the final installment of the Developer’ s Phase 1A Project Administration Fee shall accrue on the date on which Developer submits to the Authority the final Developer’ s Phase 1A Payment Request. Each installment of the Developer’ s Phase 1A Project Administration Fee shall be paid to Developer as follows: 78% of each installment of the Developer’ s Phase 1A Project Administration Fee shall be applied as an additional credit to the Developer under the BFDIF program and 22% of each installment of the Developer’ s Phase 1A Project Administration Fee shall be paid as an additional reimbursement to Developer under the Sewer Reimbursement Agreement.
2.1.5. Sources of Funding for Developer’s Phase 1A Infrastructure Improvements Cost. The Parties anticipate that the sources of funding for the payment of the Developer’s Phase 1A Infrastructure Improvements Cost are as set forth on Exhibit C-2.
2.1.6. Changes to Developer’ s Phase 1A Infrastructure Improvements.
2.1.6.1. Changes Requested by Developer.
a. In accordance with the Authority Procurement Policy, any change to the Contract Documents or the Approved Drawings and Specifications with respect to the Developer’ s Phase 1A Infrastructure Improvements shall be subject to Authority’ s prior written approval, except for changes or change orders that result in none of the following (as determined in
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Authority’ s reasonable discretion): ( i) any additional payment by Authority in excess of the contingency set forth in the Developer’ s Phase 1A Infrastructure Improvements Budget; ( ii) any additional maintenance or overhead costs to the Authority; ( iii) any material delay to the date on which Completion of the Developer’ s Phase 1A Infrastructure Improvements occurs; ( iv) any material modifications to the design or construction of the Developer’ s Phase 1A Infrastructure Improvements nor ( v) any adverse effect with respect to the Developer’ s Phase 1A Infrastructure Improvements’ compliance with Law. Authority shall provide written approval or a reasonable basis for denial of such changes ( a “ Change Order Response”) within ten ( 10) Business Days after Authority receives written notice thereof from Developer. If Authority does not provide a Change Order Response within such ten ( 10) Business Day period, then Developer may provide written notice thereof to Authority. If Authority does not provide a Change Order Response within two (2) additional Business Days after receipt of such notice from Developer, then Developer shall be entitled to an Expedited Review Process as described below. Without limitation of the foregoing, Authority shall consider reasonably and in good faith any change to the Contract Documents or the Approved Drawings and Specifications with respect to the Developer’ s Phase 1A Infrastructure Improvements that is proposed by Developer to address conditions affecting the Project Site that are unknown to Developer as of the Effective Date.
b. Developer shall also be entitled to an Expedited Review Process for any change to the Contract Documents or the Approved Drawings and Specifications whether such change results in a change order that is subject to approval by the Authority or not) if Developer determines in good faith that such changes or change orders may be required to Complete the Resort Hotel, Parking Improvements, and Convention Center on or before the completion date set forth in the then-current CPM schedule for the Resort Hotel, Parking Improvements, and Project, a copy of which shall be provided by the Developer to the Authority. c. Each “ Expedited Review Process” shall proceed as
follows: Developer shall initiate each Expedited Review Process by sending notice to the Authority by electronic mail to the Authority Email Addresses. Such email shall have the subject line “ RHCC Project Expedited Review Process Request” notice shall include all information necessary to enable the Authority to make a determination of whether to approve or deny the change, change order, or other request that is the subject of the Expedited Review Process. Within 24 Business Hours of receipt of such emailed notice, the applicable Expedited Review Individual shall provide either an approval, a denial, or a request for clarification and/or documentation. The response from the Expedited Review Individual shall be provided to the Developer via email. Should the Expedited Review Individual fail to respond within 24 Business Hours from the time the email initiating the Expedited Review Process is sent by the Developer, the change shall be deemed disapproved. d. In the event of a deemed disapproval under Section
2.1.6.1c, Developer may proceed in accordance with the Contract Documents and Approved Drawings and Specifications then in existence, without the requested change, or may request approval of an alternative change through an Expedited Review Process as described in this Section. e. If Authority disapproves a requested change or change order and Authority’ s Change Order Response indicates that the sole reason for such disapproval is the increased cost of the proposed change pursuant to Section 2.1.6.1(a)(i), then Developer may elect to require Authority to approve the change; provided that the increased cost of such change will not constitute a Developer’ s Phase 1A Infrastructure Improvements Cost and Authority shall have no obligation to pay or reimburse Developer for the cost of such change; provided, however, that if upon
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Acceptance of the Developer’ s Phase 1A Infrastructure Improvements and payment of all Developer’ s Phase 1A Infrastructure Improvements Cost, the total Developer’ s Phase 1A Infrastructure Improvements Cost was less than the total original Developer’ s Phase 1A Infrastructure Improvements Budget ( as revised from time to time to reflect any change order requested by a Public Entity), the Authority shall reimburse Developer for the increased costs associated with such change orders actually paid by Developer pursuant to this Section, without interest, up to the amount by which the original Developer’ s Phase 1A Infrastructure Improvements Budget ( as revised from time to time to reflect any change order requested by a Public Entity) exceeds the actual final amount of the Developer’ s Phase 1A Infrastructure Improvements Cost paid to Developer. Developer shall provide written notice to Authority of its election to proceed with a change without Authority approval pursuant to this Section 2.1.6.1e. f. All changes and change orders requested pursuant to this Section 2.1.6.1 shall be requested by Developer by email delivered to the Authority Email Addresses with a subject line indicating a “ Developer’ s Phase 1A Infrastructure Improvements Change” is being requested.
2.1.6.2. Changes Requested by Authority. Developer shall meet and confer in good faith with Authority regarding, and will reasonably consider in good faith, any changes that Authority desires to make to the Approved Drawings and Specifications with respect to the Developer’ s Phase 1A Infrastructure Improvements, and Developer shall use commercially reasonable efforts to implement any such changes, to the extent Developer reasonably determines that such changes result in none of the following: (i) any delay to the date on which Completion of the Developer’ s Phase 1A Infrastructure Improvements occurs; (ii) any adverse effect with respect to the Developer’ s Phase 1A Infrastructure Improvements’ compliance with Law nor (iii) any adverse effect on the development, maintenance or operation of ( including any adverse effect on the compliance with Law by) the Convention Center or the Private Improvements ( as defined in the Ground Lease). Subject only to the following sentence, if and to the extent changes requested by the Authority and approved by the Developer under this Section result in a net increase in the Developer’ s Phase 1A Infrastructure Improvements Costs, then the net increase in Developer’ s Phase 1A Infrastructure Improvements Costs resulting from such change shall be paid as follows: (A) by the City, if the City requested the change; ( B) by the Port District, if the Port District requested the change; and (C) by the City and Port District, equally, or in such other proportion as may be agreed to by the City and Port District; provided that the Developer shall not be required to implement the requested change until the Authority has confirmed to the Developer in writing which Public Entity will be responsible for payment of such increased cost and such amounts are deposited into the appropriate subaccounts under the Indenture pursuant to Section 2.1.6.3 below. Changes required to comply with this Agreement, Contemporaneous Agreements, permits, the CDP, or Laws shall not be considered requested by the Authority, the Port District, or the City under this Section 2.1.6.2.
2.1.6.3. If the City is required to contribute money to pay all or a portion of the increased Developer’ s Phase 1A Infrastructure Improvements Costs relating to a change approved pursuant to Section 2.1.6.2, then the City shall deposit the required amount into the Phase 1A Infrastructure Improvements Subaccount of the 2022B Construction Account. If the Port District is required to contribute money to pay all or a portion of the increased Developer’ s Phase 1A Infrastructure Improvements Costs relating to a change pursuant to Section 2.1.6.2, then the Port District shall deposit the required amount into the Phase 1A Infrastructure Improvements Subaccount of the 2022B Construction Account.
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2.1.6.4. Nothing in this Agreement amends or waives the regulatory process for amending permits or plans approved by the City or the Port District, which shall be governed by the City’ s and Port District’ s established entitlement and permitting processes and applicable Laws.
2.2. Convention Center. Developer shall cause the development of the Convention Center substantially in accordance in all material respects with the Convention Center Plans, within the timeframe described in Section 5.1 and in accordance with all the terms and conditions of this Agreement.
2.2.1. Complete and Functional Improvements. Developer shall provide a complete and functional Convention Center substantially in accordance in all material respects with the Convention Center Plans and the Convention Center Costs incurred shall not be less than the Project Public Investment Amount.
2.2.2. Payment of Convention Center Costs. In consideration for the work performed or caused to be performed by Developer pursuant to this Section 2.2, the Authority shall pay the Convention Center Contract Sum to Developer pursuant to the procedures set forth in Section 9.2.
2.3. Sweetwater Park. Port District shall Sufficiently Complete development of Sweetwater Park. “Sufficient Completion” or “Sufficiently Complete” means that the Port District, in its sole and good faith discretion, determines that Sweetwater Park, as developed, satisfies the following criteria: ( 1) the Sweetwater Park on parcel S2 shall be open to the public and include improvements such as landscaping, public parking lots and restrooms, which may be temporary in nature and ( 2) the development within the Transition Buffer Areas and Limited Use zones of parcel SP-1 and the fencing of the No Touch Buffer Area of parcel SP-1 shall be completed. The Transition Buffer Areas and Limited Use zones of parcel SP-1 and the No Touch Buffer Area of parcel SP-1 are described in the certified PMP. Port District may, in its sole and absolute discretion, further develop Sweetwater Park following achievement of Sufficient Completion, including but not limited to the development of additional features, elements and/or landscaping, without any obligation to the Developer and without requiring Developer’ s approval or consent.
2.3.1. Sweetwater Park Updates. Until such time as Developer exercises a Sweetwater Park Option, Port District shall provide, not less frequently than monthly, written updates to the Developer of the progress of the development of Sweetwater Park and shall provide written notice to Developer when Port District determines that Sweetwater Park is Sufficiently Complete.
2.3.2. First Sweetwater Park Option. Port District shall provide written notice to Developer at least thirty (30) days before Port District advertises for bids for the construction of Sweetwater Park and shall provide Developer with all Sweetwater Park Materials to the extent available at such time. On or before 5:00 p.m. (Pacific Time) on the last day of such thirty (30) day period ( such date, the “ First Sweetwater Park End Date”), Developer may, but shall not be obligated to, exercise the option to Sufficiently Complete Sweetwater Park (the “ First Sweetwater Park Option”). If Developer exercises the First Sweetwater Park Option, then: (a) Sweetwater Park shall thereafter be considered part of Developer’ s Phase 1A Infrastructure Improvements for purposes of this Agreement ( except as otherwise set forth herein), and Developer shall expeditiously Sufficiently Complete Sweetwater Park, and ( b) subject to section 2.3.2.1, Developer’ s costs to
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Sufficiently Complete Sweetwater Park shall be considered Developer’ s Phase 1A Infrastructure Improvements Costs and shall thereafter be payable in the same manner as other Developer’ s Phase 1A Infrastructure Improvements Costs.
2.3.2.1. Developer may exercise the First Sweetwater Park Option only by giving written notice to the Port District and the Authority (which notice must be acknowledged by the Permitted Lenders), with a copy to the Administrative Agent (“ First Developer Completion Notice”) prior to the First Sweetwater Park End Date. If Developer does not deliver the First Developer Completion Notice prior to the First Sweetwater Park End Date, then ( a) the First Sweetwater Park Option shall terminate, and ( b) the Port District shall expeditiously continue development of the Sweetwater Park until Sufficiently Complete. Notwithstanding delivery of the First Developer Completion Notice, Developer shall not commence any development work for Sweetwater Park at the Remaining Phase 1A Infrastructure Improvements Site until the Developer has the right to enter upon the Remaining Phase 1A Infrastructure Improvements Site in accordance with Section 2.3.2.4 below. Notwithstanding the foregoing, Developer may commence any other work for the performance of the Sweetwater Park that does not require access to the Remaining Phase 1A Infrastructure Improvements commencing on the first calendar day after Developer exercises the First Sweetwater Park Option. The Authority will not issue payment to Developer for work performed on Sweetwater Park if Developer does not exercise any of the First Sweetwater Park Option or the Second Sweetwater Park Option (as defined below). If Developer exercises the First Sweetwater Park Option, then with respect to Sweetwater Park, Developer shall be entitled to reimbursement only of costs incurred by Developer from and after the date the First Developer Completion Notice is delivered to Port District.
2.3.2.2. If Developer timely delivers the First Developer Completion Notice, then ( a) Developer shall Sufficiently Complete Sweetwater Park in accordance with Sweetwater Park Materials on or before the Outside Construction Completion Date, and ( b)within five (5) Business Days after Port District’ s timely receipt of the First Developer Completion Notice, Port District shall deliver to Developer the Sweetwater Park Materials that have not previously been delivered to Developer. After Developer has delivered the First Developer Completion Notice, the Port District shall reasonably cooperate with Developer, at no cost or expense to Developer, in seeking any consent to Developer’ s use of such Sweetwater Park Materials reasonably requested by Developer from the preparer or issuer of any Sweetwater Park Materials.
2.3.2.3. [ Reserved].
2.3.2.4. If Developer exercises the First Sweetwater Park Option, the Developer Parties shall have the non-exclusive right to enter upon the Remaining Phase 1A Infrastructure Improvements Site in connection with the construction and development of Sweetwater Park commencing on the First Sweetwater Park End Date and ending on the earlier of the following dates: ( x) the date on which Sweetwater Park is Accepted; and ( y) the date on which this Agreement is terminated.
2.3.2.5. If Developer exercises the First Sweetwater Park Option, Developer’ s failure to Sufficiently Complete Sweetwater Park by the Original Outside Construction Completion Date shall in no event relieve Developer of the obligation to pay Construction Late Charges.
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2.3.3. Second Sweetwater Park Option. If Developer does not exercise the First Sweetwater Park Option and the development of Sweetwater Park is not Sufficiently Complete on or before the Second Sweetwater Park End Date, then Developer may, but shall not be obligated to, exercise the option to Sufficiently Complete Sweetwater Park ( the “ Second Sweetwater Park Option”; and, together with the First Sweetwater Park Option, the “ Sweetwater Park Option”). If Developer exercises the Second Sweetwater Park Option, then: ( a) Sweetwater Park shall thereafter be considered part of Developer’ s Phase 1A Infrastructure Improvements for purposes of this Agreement ( except as otherwise set forth herein), and Developer shall expeditiously Sufficiently Complete Sweetwater Park and ( b) subject to Section 2.3.3.1, Developer’ s costs to Sufficiently Complete Sweetwater Park shall be considered Developer’ s Phase 1A Infrastructure Improvements Costs and shall thereafter be payable in the same manner as other Developer’ s Phase 1A Infrastructure Improvements Costs. The Second Sweetwater Park Option shall terminate upon Port District irrevocably notifying Developer that Sweetwater Park is Sufficiently Complete.
2.3.3.1. Developer may exercise the Second Sweetwater Park Option only by giving written notice to the Port District and the Authority (which notice must be acknowledged by the Permitted Lenders), with a copy to the Administrative Agent (“ Second Developer Completion Notice”) within ten (10) Business Days after the Second Sweetwater Park End Date, but not sooner than ten (10) days prior to the Second Sweetwater Park End Date. If Developer does not deliver the Second Developer Completion Notice within the time stated in this Section 2.3.3.1, then a) the Second Sweetwater Park Option shall terminate at 5:00 p.m. (Pacific Time) on the date that is ten ( 10) Business Days after the Second Sweetwater Park End Date and Developer shall have no further remedy against Port District with respect to the development of Sweetwater Park, and (b) the Port District shall expeditiously continue development of Sweetwater Park until Sufficiently Complete. Notwithstanding delivery of the Second Developer Completion Notice, Developer shall not commence any development work for Sweetwater Park at the Remaining Phase 1A Infrastructure Improvements Site until the Developer has the right to enter upon the Remaining Phase 1A Infrastructure Improvements Site in accordance with Section 2.3.3.4 below. Notwithstanding the foregoing, Developer may commence any work for the performance of the Sweetwater Park that does not require access to the Remaining Phase 1A Infrastructure Improvements commencing on the first calendar day after the Second Sweetwater Park End Date. The Authority will not issue payment to Developer for work performed on Sweetwater Park if the Port District Sufficiently Completes Sweetwater Park by the Second Sweetwater Park End Date or if Developer does not exercise any of the Second Sweetwater Park Option or the First Sweetwater Park Option. If Developer exercises the Second Sweetwater Park Option, then with respect to Sweetwater Park, Developer shall be entitled to reimbursement only of costs incurred by Developer from and after Developer’ s exercise of the Second Sweetwater Park Option. Developer shall not request reimbursement for such costs until after the Second Sweetwater Park End Date.
2.3.3.2. If Developer timely delivers the Second Developer Completion Notice, then ( a) Developer shall Sufficiently Complete Sweetwater Park in accordance with the Sweetwater Park Materials on or before the Outside Construction Completion Date, and ( b) within five ( 5) Business Days after Port District’ s timely receipt of the Second Developer Completion Notice, Port District shall (i) issue a notice of termination under any outstanding Sweetwater Park Construction Contracts and ( ii) deliver to Developer the Sweetwater Park Materials that have not previously been delivered to Developer. After the Developer has delivered the Second Developer Completion Notice, the Port District shall reasonably cooperate with Developer, at no cost or expense to the Developer, in seeking any consent from the preparer or issuer of any Sweetwater Park Materials. If Port District fails to issue a notice of termination under any outstanding Sweetwater
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Park Construction Contract within five (5) Business Days after Port District’ s timely receipt of the Second Developer Completion Notice as set forth above, then Developer shall have the right to issue such notice of termination on behalf of Port District and on Developer’ s own behalf pursuant to Section 2.3.4.2.
2.3.3.3. Prior to delivery of the Second Developer Completion Notice, but not sooner than six ( 6) months prior to the Second Sweetwater Park End Date, Developer may request, and Port District shall from time-to-time provide, within ten ( 10) Business Days after Developer’ s request therefor, ( i) copies of the Sweetwater Park Materials, all outstanding construction, development and design documents related to Sweetwater Park ( including, without limitation, construction contracts, pay applications and architect certifications), at Developer’ s sole cost and expense, and ( ii)a written description of the work that remains uncompleted in order to cause Sweetwater Park to be Sufficiently Complete.
2.3.3.4. If Developer exercises the Second Sweetwater Park Option, the Developer Parties shall have the non-exclusive right to enter upon the Remaining Phase 1A Infrastructure Improvements Site in connection with the construction and development of Sweetwater Park commencing on the date that is the later of ( a) ten ( 10) days after Developer exercises the Second Sweetwater Park Option or (b) the day after the Second Sweetwater Park End Date and ending on the earlier of the following dates: ( x) the date on which Sweetwater Park is Accepted; and (y) the date on which this Agreement is terminated.
2.3.3.5. If Developer exercises the Sweetwater Park Option, Developer’ s failure to Sufficiently Complete Sweetwater Park by the Original Outside Construction Completion Date shall in no event relieve Developer of the obligation to pay Construction Late Charges.
2.3.3.6. Each Sweetwater Park Design Contract is hereby assigned by Port District to Developer; provided, that such assignment shall be effective only upon Developer’ s exercise of the Second Sweetwater Park Option and only for those Sweetwater Park Contracts that Developer accepts by notifying Port District and the counterparty to such Sweetwater Park Contract in writing. When the Developer accepts the assignment of a Sweetwater Park Design Contract, Developer assumes Port District’ s rights and obligations under such Sweetwater Park Design Contract, but in the case of obligations, only to the extent such obligations are to be performed after the date Developer accepts the assignment. Port District shall not assign any Sweetwater Park Design Contract to, or grant a security interest in any Sweetwater Park Design Contract in favor of, any person or entity other than Developer. Port District hereby grants to Developer a security interest in the Sweetwater Park Design Contracts to secure Port District’ s obligations under the preceding sentence of this Section 2.3.3.6, and Port District shall take such steps as may be reasonably requested by Developer to evidence and perfect such security interest (including, without limitation, by authorizing Developer to file a UCC-1 financing statement with respect to the Sweetwater Park Design Contracts). Developer shall not assign its security interest in any Sweetwater Park Design Contract, except that it may assign or collaterally assign such security interest to a permitted assignee, or permitted collateral assignee, of this Agreement.
2.3.4. Sweetwater Park Contracts.
2.3.4.1. Port District shall include in each Sweetwater Park Design Contract (or, to the extent that any Sweetwater Park Design Contract exists as of the Effective Date, amend such Sweetwater Park Design Contract to include): ( a) a provision that permits Port District
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or its successors or assignees) or Developer to terminate such Sweetwater Park Design Contract for convenience upon not more than ten ( 10) days’ prior written notice, ( b) to the extent applicable, a provision that Developer is entitled to use any drawings, plans or specifications prepared under such Sweetwater Park Design Contract in connection the construction or development of Sweetwater Park, and ( c) the following provision with appropriate conforming modifications: “[ Contractor] consents to the assignment of [ Port District’ s] rights and obligations in this [ Sweetwater Park Design Contract] by [ Port District] to RIDA Chula Vista, LLC, its assigns and/or its lenders and their respective assigns (“ Developer Parties”), and agrees that the warranties and obligations hereunder shall inure to the benefit of Developer Parties, all as if Developer Parties were a party of this Sweetwater Park Design Contract]. Such assignment will be effective when a Developer Party delivers to [ Contractor] and [ Port District] a notice accepting such assignment and assuming Port District’ s obligations under this [Sweetwater Park Design Contract] from and after the date of such notice. From and after Contractor’ s receipt of such notice, [ Contractor] will treat such Developer Party as the [ Port District] under this [ Sweetwater Park Design Contract].” To the extent that Developer assumes Port District’ s obligations under any Sweetwater Park Design Contract, Developer may pay any amounts that are owing to the counterparty under such Sweetwater Park Design Contract which result from a breach by Port District under such Sweetwater Park Design Contract, and such payments shall constitute Developer’ s Phase 1A Infrastructure Improvements Costs. Unless Developer does not exercise the First Sweetwater Park Option prior to the First Sweetwater Park End Date and does not exercise the Second Sweetwater Park Option prior to the Second Sweetwater Park End Date, Port District shall neither assign nor terminate any Sweetwater Park Design Contract without Developer’ s prior written consent, which shall not be unreasonably withheld or delayed.
2.3.4.2. Port District shall include in each Sweetwater Park Construction Contract (or, to the extent that any Sweetwater Park Construction Contract exists as of the Effective Date, amend such Sweetwater Park Construction Contract to include): ( a) a provision that permits Port District ( or its successors or assignees) or Developer to terminate such Sweetwater Park Construction Contract for convenience upon not more than ten ( 10) days’ prior written notice, and b) the following provision with appropriate conforming modifications: “[ Contractor] agrees that RIDA Chula Vista, LLC, its assigns and/or its lenders and their respective assigns (“ Developer Parties”) shall have the right to terminate this [Sweetwater Park Construction Contract] pursuant to cross-reference termination for convenience provision] of this Sweetwater Park Construction Contract as if Developer Parties were a party of this [Sweetwater Park Construction Contract]. Such termination will be effective when a Developer Party delivers to [ Contractor] and [ Port District] a notice of termination pursuant to such Section. Notwithstanding anything to the contrary in this Sweetwater Park Construction Contract], no Developer Party shall have any obligations under this Sweetwater Park Construction Contract].”
2.3.4.3. Developer shall have no right to accept assignment of a Sweetwater Park Design Contract or to terminate for convenience a Sweetwater Park Design Contract or Sweetwater Park Construction Contract, unless and until Developer exercises the First Sweetwater Park Option or the Second Sweetwater Park Option, as applicable. Developer shall provide any notice of its acceptance of assignment or notice of termination for convenience excluding any notice of termination for convenience after Developer’ s acceptance of assignment of the applicable contract) to the Port District and the counterparty of the respective contract within thirty ( 30) days following delivery of the First Developer Completion Notice or the Second Developer Completion Notice, as applicable.
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2.3.5. Sweetwater Park Materials. Port District shall use commercially reasonable efforts to deliver the Sweetwater Park Materials to Developer pursuant to Section 2.3.3.3 or as soon as practicable after Developer exercises the First Sweetwater Park Option or the Second Sweetwater Park Option. After Developer exercise the First Sweetwater Park Option or the Second Sweetwater Park Option, Developer shall have the right to use any and all plans, drawings and specifications that constitute Sweetwater Park Materials for construction and development of Sweetwater Park. The Sweetwater Park Materials ( other than the Sweetwater Park Design Contracts that are assumed by Developer) shall remain the property of the Port District, and Developer shall return or deliver all such Sweetwater Park Materials to the Port District upon Acceptance of Sweetwater Park.
2.3.6. The Port and the Authority represent that based on a 60% Cost Estimate prepared by KTU+A dated January 25, 2022 for the Remaining Phase 1A Improvements, which includes a scope of work adequate for Sufficient Completion, attached hereto as Exhibit D-1-C Engineering Budget”), as of the Date of Agreement, the Authority has identified funds as shown on Exhibit D-1-B that cover the cost of the Engineering Budget provided as Exhibit D-1-C.
ARTICLE III
DURATION OF AGREEMENT
3.1. Term of Agreement. This Agreement shall become effective on the Effective Date, and the term of this Agreement (the “ Term”) shall extend until the earlier of (a) the termination of this Agreement by the Public Entities according to the termination provisions herein, ( b) the termination of the Sublease according to Sections 5.1 or 5.2 of the Sublease ( unless Authority provides written notice to Developer within ten ( 10) Business Days after the termination of this Agreement directing Developer to complete the Developer’ s Phase 1A Infrastructure Improvements, in which case ( i) except with respect to obligations that expressly survive the termination of this Agreement, Developer shall have no further obligations hereunder with respect to the Convention Center and ( ii) the Term shall end upon Acceptance of all Developer’ s Phase 1A Infrastructure Improvements and ( if Developer has exercised a Sweetwater Park Option) the Acceptance of Sweetwater Park, or ( c) the later of (i) the termination or expiration of the Sublease and ( ii) the occurrence of the Expansion Date under and as defined in the Ground Lease. Notwithstanding the foregoing, but subject to the next sentence of this Section 3.1, if the Sublease terminates according to Sections 5.1 or 5.2 of the Sublease, but the Ground Lease remains in effect, then (x) Developer shall have no further obligations hereunder with respect to the Convention Center, but this Agreement shall otherwise remain in effect ( including with respect to Developer’ s Phase 1A Infrastructure Improvements and Sweetwater Park ( including with respect to the payment for each of the foregoing)) and ( y) the Term shall end upon Acceptance of all Developer’ s Phase 1A Infrastructure Improvements and ( if Developer has exercised a Sweetwater Park Option) the Acceptance of Sweetwater Park. Notwithstanding anything to the contrary herein, the Term shall not extend beyond sixty-six (66) years from the Effective Date.
ARTICLE IV
PROJECT COSTS
4.1. Phase 1A Infrastructure Improvements. The provisions of Section 4.1.1 and each subsection thereof shall apply only to the Developer’ s Phase 1A Infrastructure Improvements.
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4.1.1. Public Entity’ s Estimated Developer’ s Phase 1A Infrastructure Improvements Cost.
4.1.1.1. The aggregate Public Entity’ s Estimated Developer’ s Phase 1A Infrastructure Improvements Cost is $ 42,301,555.00 ( including contingency), as shown in Exhibit C-3 attached hereto. Developer’s Phase 1A Infrastructure Improvements Budget as of the Effective Date is attached as Exhibit C-3 hereto. Developer may modify from time to time the Developer’ s Phase 1A Infrastructure Improvements Budget reasonably and in good faith and shall provide written notice of any such modification to the Public Entities. The Developer’ s Phase 1A Infrastructure Improvements Budget shall indicate the Guaranteed Maximum Price for the General Contractor’ s services, which shall not be increased unless (a) the General Contractor is entitled to an increase under the General Contract or (b) as otherwise expressly agreed by the Authority in writing, in the Authority’ s sole and absolute discretion.
4.1.1.2. If, at any time, Developer definitively establishes that the amount expended on the Developer’ s Phase 1A Infrastructure Improvements will exceed the amount set forth in the Developer’ s Phase 1A Infrastructure Improvements Budget (including contingency amounts), Developer shall promptly, and in any case not more than ten (10) Business Days after the Developer definitively establishes the amount of the increase, notify the Executive Director thereof in writing.
This written notification shall include an itemized cost estimate and, to the extent feasible, a list of recommended revisions ( e.g., deductive changes) which Developer believes will bring the cost to within the amount set forth in the Developer’ s Phase 1A Infrastructure Improvements Budget. The Authority may either: ( i) approve an increase in the Developer’ s Phase 1A Infrastructure Improvements Budget ( which approval shall not be unreasonably withheld, conditioned, or delayed) or ( ii) reasonably value engineer, delete or replace subcomponents of a component of the Developer’ s Phase 1A Infrastructure Improvements so that the Developer’ s Phase 1A Infrastructure Improvements can be constructed for the amount set forth in the Developer’ s Phase 1A Infrastructure Improvements Budget, but only if such modification neither has a material and adverse effect on the design, development, or construction of the Resort Hotel, the Parking Improvements, or the Project nor delays the Completion of the Resort Hotel, the Parking Improvements or the Project.
4.1.2. Approved Drawings and Specifications for the Developer’ s Phase 1A Infrastructure Improvements. As of the Effective Date, each of the Port District and the City has reviewed and approved the Approved Drawings and Specifications for the Developer’ s Phase 1A Infrastructure Improvements.
4.2. Convention Center. The provisions of Section 4.2 and each subsection thereof shall apply only to the Convention Center.
4.2.1. Estimated Convention Center Cost. The aggregate Estimated Convention Center Cost is $366,155,925.00. The Convention Center Budget as of the Effective Date is attached as Exhibit P hereto. Developer may modify from time to time the Convention Center Budget reasonably and in good faith and shall provide written notice of any such modification to the Public Entities.
4.3. Cost Reporting. Developer shall, during the Term and, with respect to each record, for a period of seven ( 7) years after the date such record is created ( or such longer period as Developer may decide in its sole discretion), use commercially reasonable efforts to maintain customary records of construction costs incurred by Developer in connection with the Project. Such
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records shall include, but are not limited to, a general ledger, vendor invoices, cancelled checks, agreements with third-party contractors and contractor progress payment billings. Such records may be in electronic format. Developer shall furnish to Authority an itemized statement of the construction costs incurred and paid by Developer in connection with the Improvements, as applicable, within thirty ( 30) days after Developer receives Authority’ s request therefor ( which request shall not be provided to Developer until the respective Improvements have been Completed).
The statement shall be sworn to and signed, under penalty of perjury, by Developer as fairly representing, to the best of Developer’ s knowledge, the construction costs incurred and paid by Developer. Should Developer perform any construction with its own personnel, Developer shall during the Term and, with respect to each record, for a period of seven (7) years after the date of such record (or such longer period as Developer may decide in its sole discretion), maintain the following records with respect to the actual work performed by its own personnel: a payroll journal, copies of cancelled payroll checks, and timecards or other payroll documents which show dates worked, hours worked, and pay rates. Books and records herein required shall be maintained and made available either at the Project Site, the Convention Center, or at such other location in San Diego County, California as is reasonably acceptable to Authority. Authority shall have the right with 48 hours’ advanced notice and at reasonable times to examine and audit said books and records without restriction for the purpose of determining the accuracy thereof, and the accuracy of the aforesaid statement. In the event Developer does not make available the original books and records at the Project Site, the Convention Center, or at such other location in San Diego County, California, then Developer agrees to pay all expenses incurred by the Authority Parties, as applicable, in conducting an audit at the location where said books and records are maintained. After the seven (7) year period has expired for any record subject to this Section 4.3, Developer shall deliver the original or an electronic copy of such record to Authority at the address set forth in Section 26.1 or such other location designated by Authority in writing, which may include the main offices of the City; provided, however, that Developer may elect to deliver all of the records subject to this Section 4.3 that expire in a given year at one time, in one delivery, within twelve (12) months after the end of the applicable year.
ARTICLE V
CONSTRUCTION OF THE PROJECT AND THE REMAINING
PHASE 1A INFRASTRUCTURE IMPROVEMENTS
5.1. Construction of the Project.
5.1.1. Commencement and Completion of the Project.
5.1.1.1. Following the Commencement Date, but not later than the Outside Construction Commencement Date, Developer shall commence the construction of the Project. Developer shall be deemed to have commenced the construction of the Project when Developer delivers a notice to proceed with respect to the construction of the Project to Developer’ s contractor. Thereafter, Developer shall, subject to the terms of Section 5.5, diligently proceed with the construction of the Project to Completion, and Complete the Project by the Outside Construction Completion Date. Without limiting the generality of the foregoing, Developer acknowledges and agrees that the cessation of construction of the Project for more than thirty (30) consecutive days shall, unless caused by a Force Majeure Event, be deemed a failure by Developer to diligently proceed with the construction of the Project to Completion and shall constitute an Event of Default under this Agreement without further notice or cure right by Developer if Developer does not resume construction of the Project within ten ( 10) days after Developer receives notice thereof from
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Authority which notice shall include the following language: “ FAILURE BY DEVELOPER TO
RESUME CONSTRUCTION OF THE PROJECT ( AS SUCH TERM IS DEFINED IN THE PROJECT IMPLEMENTATION AGREEMENT) WITHIN TEN ( 10) DAYS AFTER THE
DATE DEVELOPER RECEIVES, OR IS DEEMED TO HAVE RECEIVED, THIS NOTICE
SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THE PROJECT
IMPLEMENTATION AGREEMENT”.
5.1.1.2. The Convention Center Plans have been previously approved in writing by Port District, Authority and City. Changes to the Convention Center Plans must be approved by the Authority in writing, in Authority’ s sole and absolute discretion, and, once approved, shall be considered a part of the “ Convention Center Plans”; provided, however, Authority’ s approval of any change in the Convention Center Plans shall not be required if: (a) such change does not result in a use that is not a Permitted Use, ( b) such change does not require modifications to the Convention Center Plans for the structural portions of the Convention Center, c) such change does not change the design principles of the exterior appearance of the Convention Center ( if any), as set forth in the CDP, ( d) such change is in compliance with the Chula Vista Building Code, ( e) such change is in compliance with, and does not violate the provisions of, the PMP, CDP, the EIR, CVBMP Documents and any other Laws, (f) such change does not trigger any storm water construction BMP permit or permanent structural BMP permit or alterations to existing permanent structural BMPs, and (g) such change does not pave any area greater than twenty-five (25) square feet unless Developer has previously secured the approval to perform such work from all applicable Governmental Authorities, including the Authority. Within thirty ( 30) days of the Authority’ s notice to Developer, Developer shall provide to Authority a reasonably detailed explanation of all changes that Developer has made to the Convention Center Plans without the Authority’ s approval pursuant to this Section 5.1.1, including, without limitation, an explanation of why such change did not require approval from the Authority, and copies of the revised Convention Center Plans showing the changes, and Authority shall have thirty (30) days from the receipt of such information to object to the changes to the Convention Center Plans as requiring the Authority’ s approval as provided in this Section 5.1.1.2. The Convention Center Plans are by this reference made a part hereof. In the event of any inconsistency between the Convention Center Plans and the terms and conditions of this Agreement, the terms and conditions of this Agreement shall prevail.
5.1.1.3. In constructing the Project, Developer shall comply with all Construction Requirements set forth in Exhibit E attached hereto and all Laws, including, without limitation, the PMP requirements, mitigation measures or conditions of approval under the terms of any of the approvals by any Governmental Authority for the Project, including any CDPs applicable to the Project Site or the use or development thereof and any conditions of approval or mitigation measures or Project changes pursuant to any environmental review under CEQA.
5.1.2. Initial Public Financing Payments; Construction Late Charge. Developer hereby acknowledges that if the Resort Hotel, Parking Improvements, and Convention Center are not Complete by the Original Outside Construction Completion Date, Authority Parties, Port District Parties, Financing District Parties, and City Parties will incur costs not contemplated by this Agreement, the Ground Lease and the Convention Center Leases. Accordingly, in the event Developer does not Complete the Resort Hotel, Parking Improvements, and Convention Center by the Original Outside Construction Completion Date, then, beginning with the first month following the Original Outside Construction Completion Date, and monthly thereafter until the Resort Hotel, Parking Improvements, and Convention Center are Complete, the Developer shall, on or before the first day of each such month, pay to the Trustee, as assignee of Authority under the Authority
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Indenture, the payments ( collectively referred to as the “ DPFP”) based on the formula set forth below (collectively, “ Construction Late Charges”). The Parties further agree that the Construction Late Charges apply whether or not Developer receives notice of its failure to Complete the Convention Center, Resort Hotel, or Parking Improvements, and that said Construction Late Charges are appropriate to compensate the City, Port District, Financing District, and Authority, and are the sole compensation and remedy of the Public Entities, for the Developer’ s failure to construct the Resort Hotel, Convention Center, Developer’ s Phase 1A Infrastructure Improvements, or the Parking Improvements by the Original Outside Construction Completion Date, including any loss resulting from the loss of revenues that the Authority Parties, the Port District Parties, the Financing District Parties and the City Parties would have received if the Resort Hotel, Convention Center, Parking Improvements, and Developer’ s Phase 1A Infrastructure Improvements had been Completed by the Original Outside Construction Completion Date. Notwithstanding the preceding sentence, Developer acknowledges and agrees that, as and to the extent provided in the next sentence, there will be an Event of Default for the failure to Complete the Convention Center if (a) Developer fails to Complete the Convention Center by the date that is three hundred sixty-five ( 365) days after the Outside Construction Completion Date ( the “ Extended Construction Period Deadline”) ( as extended as a result of a Force Majeure Event or Municipal Breach) (“ Late Completion”) and (b) either (i) without limiting Section 21.1.1, Developer does not pay the Construction Late Charges each month until Completion of the Convention Center (a “ Construction Late Charge Failure”) or (ii) if Developer can reasonably Complete the Convention Center within thirty (30) days of the Extended Construction Period Deadline, Developer does not Complete the Convention Center within such thirty (30) days, and if the nature of the Completion of the Convention Center is such that Developer cannot reasonably Complete the Convention Center within such thirty ( 30) days, Developer does not diligently commence such cure within such thirty (30) days or thereafter fails to diligently proceed to rectify and cure such failure ( a “ Completion Cure Failure”, and any Completion Cure Failure or any Construction Late Charge Failure, a “ Post-Late Completion Failure”). Developer acknowledges and agrees that if Late Completion occurs and any Post-Late Completion Failure occurs, then the Public Entities may declare an Event of Default for failure to Complete the Convention Center, and such Event of Default shall constitute a cross-default under the Ground Lease and the Sublease, if Developer does not cure its Post-Late Completion Failure within thirty 30) days of receipt of notice from the Authority, and Developer shall not be entitled to any additional cure periods under Article XXI herein. Developer acknowledges and agrees that the payment of Construction Late Charges does not constitute an exclusive remedy for any Event of Default under this Agreement for failure to construct the Convention Center or the Developer’ s Phase 1A Infrastructure Improvements, Event of Default under the Sublease for failure to Complete the Convention Center, or Event of Default under the Ground Lease for failure to Complete the Resort Hotel and Parking Improvements. Each of the Public Entities acknowledges and agrees that if Developer fails to Complete the Convention Center, the Resort Hotel and Parking Improvements, Developer shall only be required to pay one set of Construction Late Charges monthly and such Construction Late Charges shall not be doubled. Without limiting the generality of the foregoing, Developer acknowledges and agrees that the cessation of construction of the Convention Center for more than thirty (30) consecutive days shall, unless caused by a Force Majeure Event or Municipal Breach, be deemed a failure by Developer to diligently proceed with the construction of the Convention Center to Completion and shall constitute an Event of Default under this Agreement without further notice or cure right by Developer if Developer does not resume construction of the Convention Center within ten ( 10) days after Developer receives notice thereof from the Public Entities which notice shall include the following language: “ FAILURE BY DEVELOPER TO
RESUME CONSTRUCTION OF THE CONVENTION CENTER ( AS SUCH TERM IS DEFINED IN THE PROJECT IMPLEMENTATION AGREEMENT) WITHIN TEN ( 10)
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DAYS AFTER THE DATE DEVELOPER RECEIVES, OR IS DEEMED TO HAVE
RECEIVED, THIS NOTICE SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THE PROJECT IMPLEMENTATION AGREEMENT”.
Calculation of DPFP Formula:
DPFP =
Example of Calculation of DPFP:
Assuming the following annual amounts:
Annual PDSO: $18,000,000
Annual EF: $4,000,000
Annual DSP: $4,000,000
DPFP =
DPFP =
DPFP = $ 833,333.33
For purposes of this Section 5.1.2:
District Support Payment” or “ DSP” means, with respect to any Fiscal Year, the Annual Support Payments under and as defined in the Port Support Agreement as of the Effective Date that are due and payable during such Fiscal Year.
Existing Funds” or “EF” means, collectively, with respect to any Fiscal Year, moneys in an amount equivalent to each of the following sources of funds described in (i), (ii), and (iii), actually received by the Port District or the City, during such Fiscal Year:
i) the Real Estate Revenues ( defined below) received by the Port District during the preceding Fiscal Year, which Real Estate Revenues shall be subject to adjustment pursuant to Section
5.1.3 below;
ii) the TOT attributable to the RV Park Lease; and
iii) an amount equal to $986,625.00, increasing 3% on July 1 of each year, commencing July 1, 2017, which amount is based on the payment made by the Port District to the City in Fiscal Year 2016 pursuant to that certain Municipal Services Agreement No. 88-2012 between the Port District and the City for the provision of Police, Fire and Emergency Medical Services.
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Real Estate Revenues” means all funds actually received by the Port District from the following items on a yearly basis:
a) the funds actually received by the Port District from the premises that are the subject of the real estate agreements as of the date hereof ( each, the “ Original Premises”) set forth in Exhibit I (each, a “ Real Estate Agreement” and collectively, the “ Real Estate Agreements”); provided, however, if any of the Real Estate Agreements are renewed, replaced, assigned, or amended after the Effective Date but before the date on which the Support Agreement terminates in accordance with its terms, then on and after such renewal, replacement, assignment, or amendment, as applicable, the following shall apply:
1) if the Original Premises for such Real Estate Agreement remains the same, then the contribution of the Port District shall be the funds actually received by the Port District from such Real Estate Agreement regardless of whether such amounts are the same as, less, or more than previously contributed by the Port District under such Real Estate Agreement; 2) if the Original Premises for such Real Estate Agreement are decreased either in size or configuration, then the contribution of the Port District shall be the funds actually received by the Port District from such Real Estate Agreement regardless of whether such amounts are the same as, less, or more than previously contributed by the Port District under such Real Estate Agreement; provided, that if the portion of the Original Premises excluded from the aforementioned agreement (“ Remainder Parcel”) becomes the subject of a future Real Estate Agreement, then the contribution of the Port District shall be the funds actually received by the Port District and allocable to such Remainder Parcel pursuant to the Support Agreement; 3) if the Original Premises for such Real Estate Agreement are increased either in size or configuration to include additional premises outside of the Original Premises boundaries of such Real Estate Agreement and such additional premises are immediately adjoining the original premises or are located in the City of Chula Vista ( each a “ Modified Boundary Agreement”), then the contribution of the Port District shall be the funds actually received by the Port District and allocable to the Original Premises for such Real Estate Agreement based on a formula calculated by multiplying the total amount of the funds actually received from the Port District for such Real Estate Agreement in the immediately prior year by a fraction, the numerator of which shall be an amount equal to the Modified Boundary Agreement premises still within the original premises boundary, and the denominator of which shall be the total premises area of the Modified Boundary Agreement as modified. For example, if the Original Premises of a Real Estate Agreement encompasses 5.0 acres, and the Modified Boundary Agreement includes 4.0 acres of the Original Premises, and adds 6.0 acres of premises outside the original premises, then forty percent 40%) of the funds actually received by the Port District under the Modified Boundary Agreement shall be contributed by the Port District for purposes of this Section; the City and the Port District acknowledge and agree that any modification of the RV Park Lease ( listed on and as defined in Exhibit I) to include some or all of parcel S-3 shall not constitute a “ Modified Boundary Agreement” for purposes of this Section; and for any of the scenarios ( 1)-(3) above, if the new Real Estate Agreement is a revenue generating agreement then the Port District may deduct from its contribution under scenarios ( 1)-(3) any related out-pocket operating costs paid by the Port District to the third parties to operate the premises.
4) Subject to paragraph ( a)(3), above, and paragraph ( b), below, of this definition of “Real Estate Revenues,” for the avoidance of doubt, it is the intent of the Port District to
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contribute funds from the Original Premises derived from a Real Estate Agreement that the Port District actually receives under such Real Estate Agreement from such Original Premises during the term of the Support Agreement.
b) less $3,283,970, which is the actual amount of the buyout payment paid solely by the Port District to Chula Vista Marina, LP, dba Chula Vista Marina (“ RV Park Lessee”) to terminate the lease between the RV Park Lessee and the Port District (“ Net RV Park Buyout Credit”), such amount to be amortized over a period of eight years commencing on July 1, 2018 pursuant to the Net RV Park Buyout Credit Schedule ( defined below), as such Net RV Park Buyout Credit Schedule and its contents may be administratively modified from time to time with the mutual consent of the City Manager of the City and the Executive Director of the Port District, without further approval of the BPC or City Council.
Net RV Park Buyout Credit Schedule” means the following schedule:
Fiscal Year (FY) RV Park Buyout Credit Cumulative Credit Public Debt Service Obligation” or “ PDSO” means, for any year, the actual amount payable by the Authority during such year for principal and interest ( including default interest, if applicable) on the Authority Bonds; provided that the principal component of the PDSO for any one year shall not include more than one thirty-fifth (1/35) of the total original principal amount of the Authority Bonds issued on the Effective Date.
TOT” means the transient occupancy taxes levied pursuant to Chula Vista Municipal Code Chapter 3.40, attributable to the RV Park Lease.
The amount of the DPFP will be reduced to the extent the DPFP would otherwise be increased solely because Port District or the City fails to use commercially reasonable efforts to ensure the receipt of amounts that, if received by the City or the Port District, would be Existing Revenues and are due and payable to the City or the Port District.
5.1.3. True-Up Payments. Because the actual amounts of the DPFP may not be known when Developer is required to pay Construction Late Charges ( since some of the amounts used in the calculation of DPFP will not be known), the Authority shall promptly, after any request by Developer, notify Developer of the reasonably expected amount of the applicable DPFP and Developer shall initially pay Construction Late Charges based on such estimated amounts. Within sixty (60) days after the end of each Fiscal Year with respect to which Developer was required to pay Construction Late Charges pursuant to this Section 5.1, the Port District shall reasonably determine the actual Real Estate Revenues it received during such Fiscal Year and present such amount, together with reasonable supporting documentation, to Developer for Developer’ s review and approval. If the amount of such actual Real Estate Revenues received by the Port District exceeds
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the Real Estate Revenues as calculated based on the preceding Fiscal Year, then the Authority shall make a true-up payment to Developer for the difference within twenty (20) Business Days from the Revenue Fund maintained under the Authority Indenture. If the amount of such Real Estate Revenues calculated by the Port District based on the preceding Fiscal Year exceeds the amount of such actual Real Estate Revenues received by the Port District, then Developer shall make a true-up payment to the Trustee as assignee of the Authority for deposit into the Revenue Fund under the Authority Indenture for the difference within twenty (20) Business Days of a notice of deficiency.
5.2. Reserved.
5.3. Reserved.
5.4. Project Schedule and Schedule Updates.
5.4.1. Planned Completion Date. For the Developer’ s Phase 1A Infrastructure Improvements, the Project schedule shall indicate a planned completion date following the Commencement Date that is not later than the Outside Construction Completion Date (the “ Planned Completion Date”). The Planned Completion Date may be extended in the event of a delay, provided that Developer duly requests a time extension in accordance with this Section 5.4 and such extension is authorized under this Article V. Any such schedule is for information purposes only.
5.4.2. Critical Path Method Schedules. Developer shall require that MMJV maintain a detailed, computer-generated, logic-driven, precedence style critical path method CPM”) schedule that is prepared with Primavera or other software used by MMJV and that includes all of MMJV’ s work related to the Project. Developer shall submit to the Authority a courtesy copy of all schedules and schedule updates that Developer receives from MMJV. If requested by the Authority, Developer shall deliver digital copies of any schedules in native computer file format.
5.4.3. Schedule Updates. Developer shall provide to Authority regular schedule updates not less than monthly, which shall include: actual start dates; actual completion dates; and remaining duration of activities in progress. Developer shall promptly notify the Authority of any changes to the schedule.
5.5. Unavoidable Delay. Each of the Developer and the Port District shall be entitled to an extension of the date of the performance of any obligation required of such Party under this Agreement upon the occurrence of a Force Majeure Event as and to the extent set forth in this Section 5.5. For the avoidance of doubt, the Hotel Ground Lease shall control as to a Force Majeure Event with respect to the Resort Hotel and Parking Improvements. a) Definition. The term “ Force Majeure Event” means the occurrence of any of the following events ( and the actual collateral effects of such event), individually or in any combination, to the extent that (x) such event is beyond the reasonable control of the Developer, the Port District, the City, the Financing District, or the Authority, as applicable, that is asserting that a Force Majeure Event has occurred ( the “ Force Majeure Party”) and ( y) such event and/or such actual collateral effect prevents such Force Majeure Party from the performance of its obligations under this Agreement and is approved by the Authority pursuant to Section 5.5(e) below:
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i) A strike, or similar labor disturbances causing a work stoppage, excluding any such strike or work stoppage that could have been avoided had the Force Majeure Party ( or Hotel Operator or a Developer Party, in the case of the Project), complied with Laws or labor agreements with respect to the Project, if any.
ii) Hurricanes, typhoons, tornadoes, cyclones, other severe storms, lightning or floods.
iii) Days of precipitation or high winds in any month in excess of ten (10) year average for the area within City’ s jurisdiction.
iv) An earthquake, volcanic eruptions, explosions, disease, epidemics or other natural disaster.
v) Fires (including wildfires).
vi) Inability to procure labor, utilities, equipment, materials, or supplies in the open market due to lack of availability (but, in each case, not attributable to a mere increase in price or the Force Majeure Party’ s (or Hotel Operator or a Developer Party, in the case of the Project) acts or failure to act).
vii) Acts of war or armed conflict, insurrections, riots, and acts of terrorism ( including hijacking, chemical or biological events, nuclear events, disease related events, arson or bombing) or, with respect to any of the foregoing, any threat thereof. viii) Extraordinary delays in the issuance of any approvals or authorizations from any Governmental Authority (excluding any non-regulatory approvals provided under the terms of this Agreement by the Port District, the Authority or the City) that is necessary to proceed with development or operation of the Convention Center, Developer’ s Phase 1A Infrastructure Improvements or the Remaining Phase 1A Infrastructure Improvements, as applicable provided that Developer has timely and properly filed all applications, submitted all required documents and fees and taken all other reasonable actions that are necessary to obtain such approvals or authorizations and that the Force Majeure Party ( or Hotel Operator or a Developer Party) is not responsible for the delay in the issuance of such approvals or authorizations by such party’ s own actions or inactions). For purposes of this paragraph, (A) “extraordinary delays” with respect to City regulatory approvals or authorizations that are subject to the Staffing and Processing Agreement shall mean delays in City processing actions or approvals that exceed 150% of the time periods for City actions under the terms of the Staffing and Processing Agreement, excluding any such delays caused by Developer’ s own actions or inactions thereunder, and (B) “ extraordinary delays” with respect to any other approval or authorization from any Governmental Authority shall mean delays beyond the reasonably expected time period for such approval or authorization which reasonably expected time period shall include customary or reasonably foreseeable delays in obtaining such approvals. ix) An act of God.
x) Embargoes or blockades.
xi) Pre-Existing Hazardous Material ( that is not the result of Material Exacerbation).
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xii) Closures or work stoppages ordered by any Governmental Authority that do not arise from a breach of this Agreement or the Sublease or misconduct by Force Majeure Party (or Hotel Operator or a Developer Party, in the case of the Project). b) Calculation of Delay. Actual delays resulting from the occurrence of one or more Force Majeure Events occurring concurrently shall be calculated concurrently and not consecutively.
c) Exclusions. For purposes of this Section 5.5, a Force Majeure Event shall not include adverse general economic or market conditions not caused by any of the events described in
5.5(a)(i) through (xii) above.
d) Payment Obligations. In no event will a Force Majeure Event excuse the payment of Project Costs due under this Agreement.
e) Notice and Acceptance Requirement. After the Force Majeure Party learns of any Force Majeure Event, such Force Majeure Party shall endeavor to provide prompt ( under the circumstances) informal written notice to the Executive Director and Authority staff working in the field that a Force Majeure Event has commenced, with a formal written notice to follow as described below. The Force Majeure Party shall notify the Authority, the Administrative Agent, and the other Parties in writing within ten ( 10) Business Days after the Force Majeure Party learns of, and in no event later than thirty (30) days after commencement of a Force Majeure Event. Such notice ( the Initial Force Majeure Notice”) must be made in good faith and describe the Force Majeure Event creating delay, why such delay is occurring, the estimated expected duration of such delay, and the commercially reasonable efforts that the Force Majeure Party is taking to minimize the period of delay. Commencing on the date that is thirty (30) days after the date of the Initial Force Majeure Notice and for so long as the Force Majeure Event or the actual collateral effects of such Force Majeure Event exist (whichever is later), the Force Majeure Party shall provide to the Authority, the Administrative Agent, and the other Parties monthly written updates on the estimated expected duration of such delay and the commercially reasonable efforts that the Force Majeure Party is taking to minimize the period of delay. Within thirty (30) days after the Force Majeure Event or the actual collateral effects of such Force Majeure Event cease to exist (whichever is later), the Force Majeure Party shall notify the Authority, the Administrative Agent, and the other Parties in writing that the Force Majeure Event and the actual collateral effects of such Force Majeure Event, as applicable, have ceased to exist and of the number of days by which Force Majeure Event (including the actual collateral effects of such Force Majeure Event) has delayed the Force Majeure Party’ s construction of the Project ( or, with respect to the Port District, the Remaining Phase 1A Infrastructure Improvements) or Completion ( the “ Force Majeure Notice”). Within thirty ( 30) days after Authority’ s receipt of the Force Majeure Notice, the Authority shall provide notice to the Force Majeure Party and the other Parties (“ Force Majeure Response”) that either the Authority a) requires additional information to make a determination regarding the Force Majeure Party’ s assertion of the existence of a Force Majeure Event or the duration of the delay caused by the Force Majeure Event or the actual collateral effects of such Force Majeure Event, ( b) approves the Force Majeure Notice, or (c) denies some or all of the Force Majeure Notice. The Authority’ s approval or denial of the Force Majeure Notice shall be in the Authority’ s reasonable discretion. If the Authority denies some or all of the Force Majeure Notice, the Authority and the Force Majeure Party will meet and confer in good faith within ten ( 10) days after the Authority’ s delivery of the Force Majeure Response to attempt to reach a mutually acceptable modification to the Force Majeure Notice that will result in the Authority approving the Force Majeure Notice as modified (“ Meet & Confer
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Period”). If the Authority and the Force Majeure Party do not agree on a modification to the Force Majeure Notice during the Meet & Confer Period, the Force Majeure Party may elect to withdraw the Force Majeure Notice and if the Force Majeure Party does not withdraw the Force Majeure Notice, the Authority shall present the Force Majeure Notice to the Authority Board for its consideration to either approve or deny the Force Majeure Notice at a regularly scheduled meeting that shall take place within sixty (60) days after the expiration of the Meet & Confer Period. If the Authority Board denies the Force Majeure Notice, then the dispute shall be resolved by a court of competent jurisdiction. If a court of competent jurisdiction determines in a final and non-appealable decision that the putative Force Majeure Event that was described in such Force Majeure Notice did not constitute a Force Majeure Event, the duration of such delay in the construction of the Project ( or, with respect to the Port District, the Remaining Phase 1A Infrastructure Improvements) or Completion specified therein was not reasonable, or the efforts that the Force Majeure Party took to minimize the period of delay were not commercially reasonable, then, at the Authority’ s sole and exclusive remedy for the Force Majeure Party’ s failure to perform any obligation under this Agreement from which the Force Majeure Party claimed to be excused as a result of such Force Majeure Event, but was not excused, the Force Majeure Party shall make the Authority whole for any loss that the Authority suffered as a result of such failure.
5.6. Completion Guaranty. On or before the Effective Date, Developer shall cause each Completion Guarantor (as defined in each Completion Guaranty) to execute and deliver to Authority, and maintain in effect in accordance with its terms, a Completion Guaranty substantially in the form attached hereto as Exhibit H and incorporated herein by reference (“ Completion Guaranty”), with any deviations from such form being reasonably acceptable to Authority, City, Port District, the Administrative Agent, and Developer.
5.7. Entitlements.
5.7.1. Entitlement Costs. If any discretionary approval, permit or entitlement, including, without limitation, environmental analysis under CEQA or the National Environmental Policy Act, the PMP, a Port Master Plan Amendment (“ PMPA”), stormwater permits, a CDP and/or a Coastal Act exclusion (collectively, “ Discretionary Entitlement”), are necessary, in Port District’ s sole and absolute determination, in connection with any Improvements or Alterations, demolition work, remediation work or other projects undertaken by Developer on or at the Project Site or the Improvements ( each of the foregoing for which a Discretionary Entitlement is required, the Discretionary Project”), then Developer shall enter into agreements, consistent with the Port District’ s applicable standard practices at that time (if any), with third-party experts, professionals and consultants to prepare reports and other materials (“ Consultant Services”) that are required to process the Discretionary Project and for the Port District or any other relevant Governmental Authority to consider the Discretionary Entitlement or Discretionary Project. Developer shall be directly responsible for the costs of the Consultant Services. Developer shall reimburse Port District pursuant to the Reimbursement Procedure for all reasonable costs and expenses incurred by Port District in connection with preparing, processing, considering and approving any Discretionary Project, any Discretionary Entitlement or any appeal of any CDP or Coastal Act exclusion to the CCC. If Developer fails to reimburse Port District for such costs or expenses pursuant to the Reimbursement Procedure, then, in addition to any other remedies that Port District may have, following three ( 3) Business Days’ prior written notice to Developer, Port District may, at its reasonable discretion, discontinue the preparing, processing, considering or approving of such Discretionary Project, Discretionary Entitlement or such appeal of a CDP or Coastal Act exclusion to the CCC, as applicable, until Developer reimburses Port District, and Developer shall be responsible
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for any costs and expenses incurred by Port District related to such discontinuance and if such failure continues for seven (7) additional Business Days after written notice from Port District to Developer, then such failure shall be an Event of Default. Nothing herein shall obligate Port District to seek, process or obtain any Discretionary Entitlement or any other third-party Governmental Authority approval for a Discretionary Project for the benefit of Developer, and Port District makes no warranty or representation to Developer that Developer will obtain any Discretionary Entitlement or ministerial approval. Port District shall not be required to pay any Governmental Authority fees or costs and expenses for any Consultant Services associated with any Discretionary Entitlement or any other third-party Governmental Authority approval for a Discretionary Project. If Developer requests Port District’ s assistance in obtaining from any third-party Governmental Authority any licenses, approvals, notifications, registrations or permits in connection with development, use and operation of the Project Site and the Improvements, including the construction of the Initial Project Improvements, Port District will consider Developer’ s request and inform Developer within thirty 30) days whether it will agree to reasonably assist Developer.
5.7.2. Entitlements Indemnity. Without limitation of Developer’s other obligations under this Agreement, Developer agrees, at its sole cost and expense, and with counsel reasonably selected by the Public Entities and reasonably acceptable to Developer, to indemnify, defend and hold harmless the Port District Parties, Authority Parties, Financing District Parties, and the City Parties from any third-party claims, demands, actions, causes of action, suits and Related Costs, arising out of Port District’ s approval of any Discretionary Project, Discretionary Entitlement or appeal of a CDP or Coastal Act exclusion to the CCC. Port District may, in its sole and absolute discretion, participate in the defense of any claims, demands, actions and causes of action and suits, and Developer shall reimburse Port District for all reasonable costs that are incurred by Port District in connection therewith, including, without limitation, reimbursement for attorneys’ fees, experts’ fees and other costs. Port District’ s participation in such defense shall not relieve Developer of any of its obligations under this Section 5.7.2. The foregoing indemnity obligations of Developer are in addition to, and not in limitation of, any other indemnity obligations of Developer contained in this Agreement, the Ground Lease, and the Sublease, and this Section 5.7.2 shall survive the expiration or earlier termination of this Agreement and the Sublease.
5.7.3. Reservation of Discretion. Developer acknowledges and agrees that, notwithstanding the terms and conditions of this Agreement, and the Sublease, Port District reserves its discretion to condition, approve or disapprove any Discretionary Entitlements or Discretionary Project, including, without limitation, adoption of any and all feasible mitigation measures, alternatives to a Discretionary Project, including a no project alternative, and a statement of overriding consideration, if applicable, and that nothing in this Agreement or the Sublease will be construed as circumventing or limiting Port District’ s discretion with respect to any Discretionary Entitlement, or any Discretionary Project, including, without limitation, the exercise of eminent domain, code enforcement and the making of findings and determinations required by Laws.
Developer acknowledges and agrees that any and all Discretionary Entitlements may be conditioned, approved or denied by Port District, in its sole and absolute determination, and Developer accepts the risk that Port District may deny any and all Discretionary Entitlements, and hereby waives any claims, demands, actions, causes of action, suits against Port District for such conditions or denial.
5.7.4. Ministerial Action by Authority. At Developer’ s request, the Authority will take any reasonable and lawful ministerial action that is reasonably necessary in connection with Discretionary Entitlement or any other third-party Governmental Authority approval for a Discretionary Project ( including, without limitation, signing any application for a Discretionary
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Entitlement in its capacity as the owner of the Convention Center, tenant under the Site Lease or sublandlord under the Facility Lease).
5.8. Energy Requirements. Notwithstanding any other provision of this Agreement to the contrary, the only obligations of Developer with respect to Section 15 and Exhibit 3 of the Settlement Agreement and any indemnification obligations with respect thereto are set forth in Exhibit O attached hereto and incorporated herein by reference and in the Ground Lease.
ARTICLE VI
PROCUREMENT REQUIREMENTS AND EQUAL OPPORTUNITY
6.1. Award of Sole Source Prime Contract. Pursuant to the findings of the Authority Board found in Authority Resolution 2020-002, the Developer may award one or more single sole source prime contracts to MMJV for the partial design and construction of the Project subject to the terms and conditions of Authority Resolution 2020-002 and this Article VI of this Agreement. The Authority has approved the final, executable construction contracts for the Convention Center and the Developer’ s Phase 1A Infrastructure Improvements listed on Exhibit G-3.
6.2. Subcontractor Bid and Award Process for the Developer’s Phase 1A Infrastructure Improvements. The provisions of this Section 6.2 shall apply only to the Phase 1A Infrastructure Improvements that Developer performs. Developer shall award subcontracts in compliance with the Authority Procurement Policy and Authority Resolution 2020-002 and as implemented ( with modifications) and further delineated in the bid and award process that is attached as Exhibit G-1 hereto and as further set out in this Section 6.2. Developer represents and warrants that the subcontracts listed in Exhibit G-2 hereto were awarded in accordance with the bid and award process set forth in Exhibit G-1 hereto, subject to such waivers as have been approved by the Authority under the Authority Procurement Policy and Authority Resolution 2020-002. Developer may utilize subcontracts awarded prior to the Effective Date of this Agreement, provided such subcontracts were procured in accordance with this Section 6.2. Nothing herein is intended to limit the Executive Director’ s authority to implement the Authority Procurement Policy and Authority Resolution 2020- 002 and approve waivers as set forth therein.
6.2.1. Sole Source Subcontract Award. If so intended by Developer, Developer shall provide notice of its intention to award a sole source contract to Authority and Authority shall evidence its approval of the Developer’ s proposed sole source subcontract award ( which approval shall not be unreasonably withheld) by delivering a signed Sole Source Subcontract Award Approval in the form set forth in Exhibit L ( with respect to Developer’ s Phase 1A Infrastructure Improvements) and Authority shall evidence its approval of such sole source subcontract award by counter-signing such Sole Source Subcontract Award Approval. Authority shall counter-sign a Sole Source Subcontract Award Approval or provide written notice of Authority’ s reasons for withholding approval within five ( 5) Business Days after receiving written notice from the Developer. If Authority fails to respond to a written request for Sole Source Subcontract Award Approval within five (5) Business Days, Developer shall notify Authority that such deadline has passed and Authority shall respond in writing within two ( 2) Business Days after receiving written notice from the Developer. If Authority fails to respond within such additional two (2) Business Day period, then Authority shall be deemed to have approved such Sole Source Subcontract Award Approval.
6.2.2. Best Qualified Contractor Subcontract Award. If so intended by Developer, Developer shall provide notice of its intention to award a subcontract on the best qualified contractor
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who is not the lowest bidder) to Authority and Authority shall evidence its approval of the Developer’ s proposed best qualified subcontract award ( which approval shall not be unreasonably withheld) by delivering a signed Best Qualified Contractor Subcontract Award Approval in the form set forth in Exhibit M ( with respect to Developer’ s Phase 1A Infrastructure Improvements) and Authority shall evidence its approval of such best qualified contractor award by counter-signing such Best Qualified Contractor Subcontract Award Approval. Authority shall counter-sign a Best Qualified Contractor Subcontract Award Approval or provide written notice of Authority’ s reasons for withholding approval within five ( 5) Business Days after receiving written notice from the Developer. If Authority fails to respond to a written request for Best Qualified Contractor Subcontract Award Approval within five (5) Business Days, Developer shall notify Authority that such deadline has passed and Authority shall respond in writing within two (2) Business Days after receiving written notice from the Developer. If Authority fails to respond within such additional two 2) Business Day period, then Authority shall be deemed to have approved such Best Qualified Contractor Subcontract Award Approval.
6.2.3. Applicability of Authority Procurement Policy. Notwithstanding anything to the contrary set forth in the Authority Procurement Policy or Authority Resolution 2020-002, to the extent that Developer procures work to construct all or a portion of the Remaining Phase 1A Infrastructure Improvements pursuant to Section 2.3 and to the extent Developer procures work with respect to Remaining Phase 1A Infrastructure Improvements ( or, with the reasonable approval of the Executive Director, Developer’ s Phase 1A Infrastructure Improvements) as a result of a casualty or condemnation event, Developer may procure such work without regard to the bidding requirements set forth in Sections 1 and 2 of the Authority Procurement Policy. Except with respect to Sections 1 and 2 of the Authority Procurement Policy, the requirements of the Authority Procurement Policy and Authority Resolution 2020-002, as modified by this Agreement, shall remain in effect and apply to the Remaining Phase 1A Infrastructure Improvements constructed by Developer and any work with respect to Remaining Phase 1A Infrastructure Improvements ( or, with the reasonable approval of the Executive Director, Developer’ s Phase 1A Infrastructure Improvements) procured by Developer as a result of a casualty or condemnation event. The modifications described above are intended to be modifications by agreement approved by the Authority Board, as expressly authorized in the Authority Procurement Policy.
6.3. Bid and Award Process for the Remaining Phase 1A Infrastructure Improvements. If the Port District constructs or causes the construction of the Remaining Phase 1A Infrastructure Improvements, the Port District shall use its procurement policies, then in effect.
6.4. The Convention Center as a Special Purpose Project. Pursuant to Authority Resolution 2020-002, the Convention Center constitutes a “ special purpose project” as defined in Section 6 of the Authority Procurement Policy, and the requirements of Sections 1.b.ii, 1.b.iii, 2 and 3(b) of the Authority Procurement Policy shall not apply to the provisions of this Agreement pertaining to development and construction of the Convention Center or work for the Convention Center procured by Developer as a result of a casualty or condemnation event pursuant to Article V of the Sublease.
6.5. Procurement of Alterations. Procurement of work for Alterations is governed by the Sublease and not this Agreement, and the requirements of the Authority Procurement Policy shall not apply to Alterations. The modifications described above are intended to be modifications by agreement approved by the Authority Board, as expressly authorized in the Authority Procurement Policy.
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6.6. Bid Opening and Award. In the case of any Competitive Bid or Solicitation Process for the Developer’ s Phase 1A Infrastructure Improvements, Developer shall provide the Authority with a copy of the tabulation of competitive bid results with respect to each contract and subcontract, as applicable. Developer shall provide the Authority with copies of all executed contracts awarded in accordance with this Section 6.6 and Developer shall certify in writing to the Authority that such contracts were awarded in accordance with the process described in Exhibit G-1 hereto, subject to such waivers as have been approved by the Authority in accordance with the Authority Procurement Policy and Authority Resolution 2020-002. A list of the subcontracts awarded for the Developer’ s Phase 1A Infrastructure Improvements prior to the Effective Date is set forth in Exhibit G-2.
Developer hereby certifies to the Public Entities that the subcontracts listed in Exhibit G-2 were bid and awarded in accordance with the process described in Exhibit G-1 hereto, subject to such waivers as have been approved by the Authority under the Authority Procurement Policy and Authority Resolution 2020-002.
6.7. Authority Procurement Policy Acknowledgement. In the event Developer exercises the Second Sweetwater Park Option and only for purposes of Developer’ s procurement of General Contracts for Sweetwater Park, Authority waives the bidding requirement of the Authority Procurement Policy ( including, without limitation, set forth in Sections 1 and 2 of the Authority Procurement Policy). All other requirements of the Authority Procurement Policy and Authority Resolution 2020-002, as modified by this Agreement, shall apply to Developer’ s procurement of contracts for Sweetwater Park. Authority acknowledges that in compliance with the applicable provisions of the Authority Procurement Policy and Authority Resolution 2020-002, Authority has required Developer to enter into this Agreement to establish the terms and conditions pursuant to which the Developer may develop and construct the Project and obtain payment for a portion of the eligible costs of developing and constructing the Developer’ s Phase 1A Infrastructure Improvements and the Convention Center from the proceeds of the Authority Bonds and the County Funds, and that to the extent requirements set forth in this Agreement differ from the requirements set forth in Authority Procurement Policy and Authority Resolution 2020-002, the requirements set forth in this Agreement will govern the procurement, development and funding of the Project, including the Remaining Phase 1A Infrastructure Improvements if Developer has exercised the Second Sweetwater Park Option ( to the extent permitted by Authority Procurement Policy and Authority Resolution 2020-002). Notwithstanding anything to the contrary in this Agreement, Sections 6.2 through 6.2.2 shall not apply to the Remaining Phase 1A Infrastructure Improvements.
ARTICLE VII
DESIGN AND CONSTRUCTION STANDARDS
7.1. Standard of Care. Developer will use commercially reasonable efforts to furnish efficient business administration and supervision and manage the performance of the work with respect to the Project in an expeditious and economical manner consistent with Authority’ s interests.
Developer shall endeavor to cause the General Contractor and all Subcontractors to construct the Project in a workmanlike manner. Developer’ s professional consultants shall be skilled in the profession necessary to perform their respective services and Developer shall cause them to perform their services related to the Project in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals qualified to perform the services in the same discipline in the State of California.
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7.2. Compliance with Laws.
7.2.1. Port District Compliance with Laws. Port District shall in its construction of the Remaining Phase 1A Infrastructure Improvements abide by and comply with, and cause any of its General Contractor, Subcontractors, employees, and agents, to abide by and comply with all Laws.
7.2.2. Developer’ s Compliance with Laws. Developer shall in all activities on or in connection with the Project Site and the Project, and in all uses thereof, including without limitation the Permitted Use and any construction of the Project, abide by and comply with, and cause the Developer Parties (other than Developer) and Hotel Operator to abide by and comply with, all Laws at Developer’ s sole cost and expense, and Authority shall not have any obligations or responsibilities to comply with any Laws as to the Project Site and the Improvements or any use thereby by Developer Parties or Hotel Operator. In particular and without limitation, Developer shall have the sole and exclusive obligation and responsibility, at Developer’ s sole cost and expense, to comply with the requirements of the following, to the extent applicable: ( i) the San Diego Unified Port District Code, including without limitation, Article 10 (Stormwater Management and Discharge Control), ( ii) the ADA, including but not limited to regulations promulgated thereunder, iii) applicable federal, state and local laws and regulations regarding employment and labor practices, including, without limitation, the provisions of Section 7.2.3 and Article XX of this Agreement, (iv) any Coastal Development Permit (“ CDP”) ( including any conditions of approval or mitigation measures or project changes pursuant to the environmental review under the California Environmental Quality Act (“ CEQA”)) or any other California Coastal Commission (“ CCC”) regulations or local, state or federal requirements now or hereafter affecting the Project Site or the Improvements, including the use or development thereof, (v) the Port Master Plan (“ PMP”), ( vi) the Chula Vista Municipal Code, ( vii) any other development permits or approvals accepted by Developer, and ( viii) the policies adopted by the BPC. Until the earlier of such time as all components of the Developer’ s Phase 1A Infrastructure Improvements are Accepted or the Term of this Agreement terminates or expires, neither the BPC nor the City Council shall adopt any Law that only applies to the Developer’ s Phase 1A Infrastructure Improvements, unless the Law is determined by the BPC, in its sole and absolute discretion, or the City Council, in its sole and absolute discretion as applicable), but in either case, in a manner that is neither arbitrary nor capricious, to be necessary for health and safety reasons, to protect the welfare of the people, or to exercise the Port District’ s police powers under the Port Act or the City Council’ s police powers under applicable Laws, including the CVMC. The foregoing limitation shall not apply to the adoption of any ordinance or resolution that authorizes an amendment to this Agreement or any Contemporaneous Agreement, or is adopted to authorize the enforcement of Port District’ s or City’ s rights or the performance of Port District’ s or City’ s obligations under this Agreement or any Contemporaneous Agreement, including without limitation, any ordinances or resolutions adopted by the BPC or City Council as part of any discretionary approval. In the event of any conflict between the terms of a policy adopted by the BPC or City Council and this Agreement, Developer shall deliver notice to Port District or City, as applicable, of such a conflict and the Parties shall meet and confer within ten ( 10) days of Port District’ s or City’ s, as applicable, receipt of the notice to discuss the conflict and attempt to resolve the conflict in good faith prior to commencing mediation pursuant to Section 26.12.10. If the conflict is not resolved pursuant to Section 26.12.10, then the terms of this Agreement shall control and Developer shall be excused from complying with the terms of such policy adopted by the BPC or City Council, to the extent of such conflict only.
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7.2.3. Prevailing Wage.
7.2.3.1. This Section 7.2.3.1 applies only to the Project and does not apply to the Remaining Phase 1A Infrastructure Improvements unless and until Developer exercises a Sweetwater Park Option. Developer acknowledges and agrees that:
a. Any construction, alteration, demolition, installation, or repair work, in each case for the Project, required or performed under this Agreement constitutes public work” under California Prevailing Wage Law, including Labor Code §§ 1720 through 1861, et seq. (“ PWL”), and obligates Developer to cause such work to be performed as “ public work,” including, but not limited to, the payment of applicable prevailing wages to all Persons subject to the PWL.
b. Developer shall cause all Persons performing “ public work” for the Project under this Agreement to comply with all applicable provisions of the PWL and other applicable wage Laws.
c. Developer’ s violations of the PWL shall constitute a breach (subject to cure pursuant to Section 21.1.2) under this Agreement. d. Authority hereby notifies Developer, and Developer
hereby acknowledges, that the PWL includes, without limitation, Labor Code § 1771.1(b) that provides that the following requirements described in Labor Code § 1771.1(a) shall be included in all bid invitations and “ public work” contracts: “ A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of § 4104 of the Public Contract Code, or engage in the performance of any contract for “public work,” as defined in this chapter, unless it is currently registered and qualified to perform “ public work” pursuant to Section 1725.5. It is not a violation of this Section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or by Sections 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform “ public work” pursuant to Section 1725.5 at the time the contract is awarded.”
e. Developer acknowledges that its obligations under the PWL with respect to the Project include, without limitation, ensuring that:
i. pursuant to Labor Code § 1771.1(b), a bid shall not
be accepted nor any contract or subcontract entered into without proof of the contractor or subcontractor’ s current registration to perform “ public work” pursuant to § 1725.5; ii. pursuant to Labor Code § 1771.4(a)(1), the call for bids and contract documents shall specify that the project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations (“ DIR”); iii. pursuant to Labor Code § 1771.4(a)(2), it posts or requires the prime contractor to post job site notices, as prescribed by regulation; and iv. pursuant to Labor Code § 1773.3(a)(1), it provides
notice to the DIR of any “ public works” contract subject to the requirements of the PWL, within thirty (30) days of the award, but in no event later than the first day in which a contractor has workers