AGENDA
Garden Grove City Council
Tuesday, March 26, 2024
6:30 PM
Community Meeting Center
11300 Stanford Avenue
Garden Grove, California 92840
Steve Jones
Mayor
Cindy Tran
Mayor Pro Tem –District 3
George S. Brietigam
Council Member – District 1
John R. O’Neill
Council Member – District 2
Joe DoVinh
Council Member – District 4
Stephanie Klopfenstein
Council Member – District 5
Kim B. Nguyen-Penaloza
Council Member – District 6
Meeting Assistance: Any person requiring auxiliary aids and services, due to a disability, to address the City Council, should contact the City Clerk's Office 72 hours prior to the meeting to arrange for accommodations. Phone: (714) 741-5040.
Agenda Item Descriptions: Are intended to give a brief, general description of the item. The City Council may take legislative action deemed appropriate with respect to the item and is not limited to the recommended action indicated in staff reports or the agenda.
Documents/Writings: Any revised or additional documents/writings related to an item on the agenda distributed to all or a majority of the Council Members within 72 hours of a meeting, are made available for public inspection at the same time (1) in the City Clerk's Office at 11222 Acacia Parkway, Garden Grove, CA 92840, during normal business hours; (2) on the City's website as an attachment to the City Council meeting agenda; and (3) at the Council Chamber at the time of the meeting.
Public Co mments: Members of the public who attend the meeting in -person and would like to address the City Council are requested to complete a pink speaker card indicating their name and address, and identifying the subject matter they wish to address. This card sh ould be given to the City Clerk before the meeting begins. General comments are made during "Oral Communications" and should be limited to matters under consideration and/or what the City Council has jurisdiction over. Persons wishing to address the City C ouncil regarding a Public Hearing matter will be called to the podium at the time the matter is being considered.
Manner of Addressing the City Council: After being called by the Mayor, you may approach the podium, it is requested that you state your nam e for the record, and proceed to address the City Council. All remarks and questions should be addressed to the City Council as a whole and not to individual Council Members or staff members. Any person making impertinent, slanderous, or profane remarks or who becomes boisterous while addressing the City Council shall be called to order by the Mayor. If such conduct continues, the Mayor may order the person barred from addressing the City Council any further during that meeting.
Time Limitation: When any group of persons wishes to address the City Council on the same subject matter, the Mayor may request a spokesperson be chosen to represent the group, so as to avoid unnecessary repetition. At the City Council's discretion, a limit on the total amount of time for public comments during Oral Communications and/or a further limit on the time allotted to each speaker during Oral Communications may be set.
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PLEASE SILENCE YOUR CELL PHONES DURING THE MEETING.
AGENDA
ROLL CALL: COUNCIL MEMBER BRIETIGAM, COUNCIL MEMBER O'NEILL, COUNCIL MEMBER DOVINH, COUNCIL MEMBER KLOPFENSTEIN, COUNCIL MEMBER K. NGUYEN -
PENALOZA, MAYOR PRO TEM TRAN, MAYOR JONES
INVOCATION
PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA
1. PRESENTATIONS
1.a. Community Spotlight in recognition of Joe Hammer for being named Cypress College 2024 Americana Awards' Garden Grove Citizen of the Year.
2. ORAL COMMUNICATIONS (TO BE HELD SIMULTANEOUSLY WITH OTHER
LEGISLATIVE BODIES)
RECESS
CONDUCT OTHER LEGISLATIVE BODIES' BUSINESS
RECONVENE
3. CONSENT ITEMS (CONSENT ITEMS WILL BE ACTED ON SIMULTANEOUSLY
WITH ONE MOTION UNLESS SEPARATE DISCUSSION AND/OR ACTION IS
REQUESTED BY A COUNCIL MEMBER)
3.a. Adoption of a Resolution commending Joe Hammer for being named the Cypress College Americana Citizen of the Year. (Action Item)
3.b. Adoption of a Proclamation recognizing April as Donate Life Month. (Action Item)
3.c. Adoption of a Proclamation celebrating April as Arab American Heritage Month. (Action Item)
3.d. Adoption of a Proclamation recognizing Black April Month. (Action Item)
3.e. Consideration of Final Parcel Map No. PM-2020-174 for the property located at 9852 Chapman Avenue, Garden Grove. (Action Item)
3.f. Appropriation of Fiscal Year 2023-24 Public Safety Realignment and Post- Release Community Supervision funds. (Action Item)
3.g. Receive and file minutes from the meeting held on February 27, 2024. (Action Item)
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3.h. Receive and file warrants. (Action Item)
3.i. Approval to waive full reading of ordinances listed. (Action Item)
4. ITEMS FOR CONSIDERATION
4.a. Approval of Project Agreement with Edgemoor Garden Grove Civic Partners LLC for the design and construction of the Civic Center Revitalization Project including a new Public Safety Facility, Parking Garage, and a new Civic Center Park. (Cost: $152 million) (Action Item)
5. ORDINANCES PRESENTED FOR SECOND READING AND ADOPTION
5.a. Second Reading of Ordinance No. 2953
Entitled: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GARDEN GROVE APPROVING AN AMENDMENT TO ATTACHMENT 706.5 OF THE GARDEN
GROVE POLICE DEPARTMENT MILITARY EQUPIMENT USE POLICY PURSUANT TO GOVERNMENT CODE 7071. (Action Item)
6. MATTERS FROM THE MAYOR, CITY COUNCIL MEMBERS, AND CITY
MANAGER
7. ADJOURNMENT
The next Regular City Council Meeting is scheduled for Tuesday, April 9, 2024, at 5:30 p.m. in the Community Meeting Center, 11300 Stanford Avenue, Garden Grove, California 92840.
Happy Belated Birthday to Mayor Pro Tem Tran
3 City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Ana Pulido
Dept:
City Manager Dept:
Date: 3/26/2024
Subject: Adoption of a Resolution commending Joe Hammer for being named the Cypress College Americana Citizen of the Year. (Action Item)
Attached is a Resolution of Commendation recognizing Joe Hammer as the Cypress College Americana Award Citizen of the Year recipient for 2024 recommended for adoption.
ATTACHMENT(S):
1. Resolution of Commendation
4 Resolution
Joe Hammer
Garden Grove Citizen of the Year
Cypress College 2024 Americana Awards
WHEREAS, Joe Hammer’s meaningful work in the community has earned him the prestigious title of Garden Grove Citizen of the Year from the Cypress College 2024 Americana Awards; and
WHEREAS, A United States Air Force and Army National Guard veteran, Joe opened his moving and storage business, California Relocation Services, Inc., in Anaheim in 1990 before moving the business to Garden Grove in 1995, where he retired in 2006; and
WHEREAS, Inspired by his father and with his wife’s encouragement to become more involved in the community, he joined the Garden Grove Chamber of Commerce, Healthy Aging Center Acacia, and Garden Grove Rotary Club; and
WHEREAS, Joe currently serves as treasurer for the Garden Grove Rotary Club, and he plans to continue serving the organization to help support the Garden Grove community; and
WHEREAS, Joe was awarded the Garden Grove Director of the Year in 2012 and 2015, and was named the 2023 Garden Grove Man of the Year from the Garden Grove Chamber of Commerce for his lifetime of volunteerism in the city; and
WHEREAS, Joe Hammer’s humanitarian, philanthropic, and partnership efforts with the community and the City of Garden Grove goes beyond words and is further exemplified by his selection as this year’s Cypress College 2024 Americana Awards’ Garden Grove Citizen of the Year.
NOW, THEREFORE, BE IT RESOLVED, that the City of Garden Grove does hereby commend the achievements of Joe Hammer, and his meritorious recognition as the Cypress College 2024 Americana Awards’ Garden Grove Citizen of the Year.
March 26, 2024
5 City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Teresa Pomeroy
Dept:
City Manager Dept: City Clerk
Date: 3/26/2024
Subject: Adoption of a Proclamation recognizing April as Donate Life Month. (Action Item)
Attached is a Proclamation recognizing April as Donate Life Month recommended for adoption.
ATTACHMENT(S):
1. Proclamation
6 PROCLAMATION
DONATE LIFE MONTH
WHEREAS, organ, tissue, marrow and blood donation are life -giving acts recognized worldwide as expressions of compassion to those in need;
WHEREAS, one person can save eight lives and enhance 75 others through organ, eye and tissue donation;
WHEREAS, Nearly 114,000 Americans are currently waiting for an organ transplant, nearly 22,000 live in California, where an organ transplant is their only remaining medical option;
WHEREAS, on average, 150 people are added to the nation’s organ transplant waiting list each – one every ten minutes;
WHEREAS, a single individual’s donation of the heart, lungs, liver, kidneys, pancreas and small intestine can save up to eight lives; donation of tissue can save and heal the lives of more than 75 others; and a single blood donation can help three people in need;
WHEREAS, millions of lives each year are saved and healed by donors of organs, tissues, marrow and blood;
WHEREAS the spirit of giving and decision to donate are not restricted by age or medical condition;
WHEREAS, over sixteen million Californians have signed up with the state - authorized Donate Life California Donor Registry to ensure their wishes to be organ, eye and tissue donors are honored;
WHEREAS, California residents can sign up with the Donate Life California Donor Registry when applying for or renewing their driver’s licenses or ID cards at the California Department of Motor Vehicles; and
WHEREAS, California residents interested in saving a life through living kidney donation are encouraged to visit www.LivingDonationCalifornia.org for more information.
NOW, THEREFORE, BE IT PROCLAIMED the Garden Grove City Council recognizes April 2024 as “Donate Life Month” in the City of Garden Grove, and in doing so encourage all Californians to check “YES!” when applying for or renewing their driver’s license or I.D. card, or by signing up at www.donateLIFEcalifornia.org or www.doneVIDAcalifornia.org.
March 26, 2024
7 City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Teresa Pomeroy
Dept:
City Manager Dept: City Clerk
Date: 3/26/2024
Subject: Adoption of a Proclamation celebrating April as Arab American Heritage Month. (Action Item)
Attached is a Proclamation celebrating April as Arab American Heritage Month recommended for adoption.
ATTACHMENT(S):
1. Proclamation
8 PROCLAMATION
PROCLAIMING THE MONTH OF APRIL 2024
AS ARAB AMERICAN HERITAGE MONTH
WHEREAS, for over a century, Arab Americans have been making valuable contributions to virtually every aspect of American society, including art, medicine, law, business, technology, government, architecture, literature, and culture; and
WHEREAS, since migrating to the United States, men and women of Arab descent have shared their rich culture and traditions with neighbors and friends, while also setting fine examples of model citizens and public servants; and
WHEREAS, Arab Americans have also enriched our society by embracing the American spirit of opportunity that makes our nation free and prosperous; and
WHEREAS, issues currently affecting Arab Americans, such as civil rights abuses, harmful stereotyping, harassment, and bullying, can be combatted by education and awareness; and
WHEREAS, Arab Americans join all Americans in the desire to see a peaceful and diverse society, where every individual is treated equally and feels safe; and
WHEREAS, the immense contributions and heritage of Arab Americans have helped us build a better nation.
NOW, THEREFORE, BE IT PROCLAIMED, by the Garden Grove City Council that the City celebrates the countless contributions that Arab Americans have made to American society and the City of Garden Grove, therefore hereby proclaims the month of April 2024 to be Arab American Heritage Month in Garden Grove.
March 26, 2024
9 City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Teresa Pomeroy
Dept:
City Manager Dept: City Clerk
Date: 3/26/2024
Subject: Adoption of a Proclamation recognizing Black April Month. (Action Item)
Attached is a Proclamation recognizing April 30, 2024, and the month of April as Black April Month recommended for adoption.
ATTACHMENT(S):
1. Proclamation
10 PROCLAMATION
PROCLAIMING THE MONTH OF APRIL
AS BLACK APRIL MEMORIAL MONTH
WHEREAS, April 30, 2024, marks the 49th anniversary of the fall of Saigon on April 30, 1975, to communism; and
WHEREAS, For many Vietnam and Vietnam-era veterans who were directly involved in the war and Vietnamese Americans who have settled in the United States, the Vietnam War was a tragedy full of great suffering and the loss of American, Vietnamese, and Southeast Asian lives; and WHEREAS, Fifty-eight thousand one hundred sixty-nine Americans were killed and 304,000 were wounded out of the 2.59 million people who served in the Vietnam War. One out of every ten Americans who served in Vietnam became a casualty of war; and
WHEREAS, The Vietnam War resulted in the deaths of 250,000 South Vietnamese soldiers and two million Vietnamese civilians; and
WHEREAS, After the fall of Saigon, over 135,000 Vietnamese people and their families fled to the United States, including former military personnel, government officials, and those who had worked for the United States during the war; and
WHEREAS, Hundreds of thousands of people took boats in order to leave Vietnam in the late 1970s to mid-1990s. The successful emigrants reached refugee camps in Thailand, Malaysia, Indonesia, the Philippines, and Hong Kong; while approximately one-half of the people fleeing Vietnam perished at sea; and
WHEREAS, Human rights, religious freedom, democracy, and protection against threats of aggression are important concerns of Vietnamese Americans; and
WHEREAS, We must teach our children and future generations important lessons from the Vietnam War, including how the plight of the Vietnamese refugees following the end of war serves as a powerful example of the values of freedom and democracy; and
WHEREAS, We, should actively rededicate ourselves to the principles of human rights, individual freedom, sovereignty, and equal protection under the laws of a just and democratic world. We should set aside moments of time every year on April 30 to give remembrance to the soldiers, medical personnel, and civilians who died during the Vietnam War in pursuit of freedom; and
11 WHEREAS, Vietnamese American communities throughout California will commemorate April 30, 2024, as Black April, a day of remembrance and rededication to the principles of freedom, including freedom of expression, freedom of press, and internet freedom;
NOW, THEREFORE, BE IT PROCLAIMED, by the Garden Grove City Council, that in recognition of the great tragedy and suffering and lives lost during the Vietnam War, the month of April 2024 shall be proclaimed as Black April Memorial Month, a special time for citizens to remember the countless lives lost during the Vietnam War era, and to hope for more justice and liberty for the people of Vietnam.
March 26, 2024
12 City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: William E. Murray
Dept:
City Manager Dept: Public Works
Date: 3/26/2024
Subject: Consideration of Final Parcel Map No. PM-2020-174 for the property located at 9852 Chapman Avenue, Garden Grove. (Action Item)
OBJECTIVE
To receive City Council approval for a Final Parcel Map No. PM -2021-174 for the property located at 9852 Chapman Avenue, Garden Grove (south side of Chapman Avenue, west of Brookhurst Street).
BACKGROUND
On February 18, 2021, pursuant to Planning Commission Resolution No. 6083-24, the Applicant received approval of Site Plan No. SP -096-2021 and Tentative Parcel Map No. PM-2020-174. A copy of Planning Resolution No. 6083-24 is attached.
DISCUSSION
The proposed Final Parcel Map PM-2020-174 will subdivide the 7.03-acre (306,411 square feet) property into two (2) parcels to create a new 0.45-acre (19,459 square feet) parcel for the proposed drive-thru restaurant pad building.
Staff has reviewed all of the subdivision documentation mandated by City Ordinances, conditions of approval, and the Subdivision Map Act and finds this map to be in compliance. The owner has complied with all conditions of the final parcel map.
FINANCIAL IMPACT
There is no financial impact.
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RECOMMENDATION
It is recommended that the City Council:
Approve Final Parcel Map No. PM -2020-174 for the property located at 9852 Chapman Avenue, Garden Grove (south side of Chapman Avenue, west of Brookhurst Street); and
Authorize the City Clerk to sign the Final Parcel Map.
By: Kamyar Dibaj, M.S., Project Engineer
ATTACHMENT(S):
1. Final Parcel Map No. PM-2020-174
2. Planning Resolution No. 6083-24
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16 17
18 19
RESOLUTION NO. 6083-24
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF GARDEN GROVE APPROVING TENTATIVE PARCEL MAP NO. PM-2020-174 (REINSTATEMENT-2024)
FOR A PROPERTY LOCATED ON THE SOUTH SIDE OF CHAPMAN AVENUE, WEST OF BROOKHURST STREET, AT 9852 C HAPMAN AVENUE , ASSESSOR’S PARCEL NO. 133-111-20.
BE IT RESOLVED that the Planning Commission of the City of Garden Grove, in a regular session assembled on February 15, 2024, hereby approves Tentative Parcel Map No. PM-2020-174 (Reinstatement-2024) to sub divide a 7.03 -acre (306,411 square feet) property into two (2) parcels to create a new 0.45-acre (19,459 square feet) parcel for a drive -thru restaurant pad building at the Pavilion Plaza west shopping cent er for the property located on the south side of C hapman Avenue, west of Brookhurst Street, at 9852 Chapman A venue, Assessor’s Parcel No. 133-111-20. Tentative Parcel Map No. PM-2020-174 was originally approved in conjunction with Site Plan No. SP-096-2021, Conditional U se Permit No. CUP-200-2021, and Variance No. V-032-2021, which facilitated the construction of the Pavilion Plaza West shopping center.
BE IT FURTHER RESOLVED in th e matter of Tentative Parcel Map No. PM-2020-174 (Reinstatement-2024) the Planning Commission of the City of Garden Grove does hereby report as follows:
1. The subject case was initiated by SVAP II Chapman, LLC.
2. The applicant is requesting to reinstate the approval of Tentative Parcel Map No. PM -2020-174 to subdivide a 7.03 -acre (306,411 square feet) property into two (2) parcels to create a new 0.45-acre (19,459 square feet) parcel for a drive -thru restaurant pad building at the Pavilion Plaza West shopping center. Tentative Parcel Map No. PM-2020-174 was originall y approved in conjunction with Site Plan No. SP-096-2021, Con ditional Us e Permit No. CUP-200-2021, and Variance No. V-032-2021, which facilitated the construction of the Pavi lion Plaza West shopping center. No changes to the previously approved Project are proposed.
3. On February 18, 2021, the Planning Commission ado pted Resolution No. 6018-21 adopting a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program for the Project pursuant to the California Environmental Quality Act (CEQA), Public Resources Code Section 21000 et seq. and the CEQA Guid elines, California Code of Regulations, Title 14, Sections 15000 et seq. The Planning Commission hereby determines that the potential environmental impacts of the Project were analyzed in the Mitigated Negative Declaration for the Project adopted by the Pl anning Commission on February 18, 2021 and that no further environmental review pursuant to 20 Resolution No. 6083-24 Page 2
CEQA is required pursuant to Section 21166 of the Public Resources Code and Section 15162 of the CEQA Guidelines.
4. The property has a General Plan Land Use Designa tion of Residential/Commercial Mixed Use 2, and is zoned NMU (Neighborhood Mixed Use). The subject property is currently improved with an approximately 65,980 square foot shopping center, Pavilion Plaza West, in the form of a 3,500 square foot drive -thru restaurant pad building, an 11,200 square foot commercial multi-tenant pad building, and a 51,280 square foot multi-tenant commercial building.
5. Existing land use, zoning, and General Plan designation of property in the vicinity of the subject property have been reviewed.
6. Report submitted by the City staff was reviewed.
7. Pursuant to a legal notice, a public hearing was held on February 15, 2024, and all interested persons were given an opportunity to be heard.
8. Planning Commission gave due and careful consideration to the matter during its meeting on February 15, 2024.
BE IT FURTHER RESOLVED, FOUND AND DETERMINED that the facts and reasons supporting the conclusion of the Planning Commission, as required under Municipal Code Section 9.32.030 and Government Code Section 66412, are as follows:
FACTS:
The subject property is located on the west side of Brookhurst Street, south of Chapman Avenue, with frontage along Chapman Avenue . The site , approximately
7.03 acres ( 306,411 square feet), was previously developed with a 76,000 square foot, vacant grocery store building, formerly known as Vons Pavilion, which ceased operation in 2005. The subject site has a General Plan Land Use Designation of Residential/Commercial Mixed Use 2 and is zoned NMU (Neighborhood Mi xed Use).
The property abuts NMU zoned properties. The Pavilion Plaza shopping center and Southland Integrated Servic es medical building are located to the east of the subject site , the Sydney Plaza shopping center to the west, the Promenade shopping center to the north across Chapman Avenue, and a portion of the OCTA Pacific Electric Right-of-Way (ROW) to the south.
On February 18, 2021, the Planning Commission approved Site Plan No. SP-096-2021, to construct an approximately 65,980 square foot shoppin g center, Pavilion Plaza West, in the form of a 3,500 square foot drive-thru restaurant pad building, a n 11,200 square foot commercial multi-tenant pad building, and a 21 Resolution No. 6083-24 Page 3
51,280 square foot multi -tenant commercial building. The applicant also obtained approval of Conditional Use Permit No. CUP-200-2021 to operate and construct the drive-thru restaurant pad building, Variance No. V -032-2021 to deviate from the Title 9 Municipal Code Section 9.18.090.070.B (Neighborhood Mixed Use Zone Development Standards) requirement that the gross building footprint of a structure at ground level not exceed 40,000 square feet of contiguous floor area, and Tentative Parcel Map No. PM-2020-174 to subdivide the 7.03-acre (306,411 square feet) property into two (2) parcels to crea te a new 0.45 -acre (19,459 square feet) parcel for the drive -thru restaurant pad building. The project included site improvements, such as new parking and drive aisles, landscaping, and trash enclosures to comply with the requirements of Title 9 of the Municipal Code.
As a part of the approval in 2021, the project was reviewed and an Initial Study report and Mitigated Negative Declaration (IS/MND) was prepared pursuant to the California Environmental Quality Act (CEQA), Public Resources Code Section 21000 et seq. and the CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq.). A Mitigation Monitoring and Reporting Program (MMRP) was prepared for the project.
Construction of the Pavilion Plaza West shopping center began in 2021 , prior to the end of the two (2) year expiration date for the land use entitlements, as established by the Conditions of Approval. To date , all commercial buildings and site improvements have been constructed, and the majority of the tenant spaces are now occupied. Thus, the Site Plan, Conditional Use Permit, and Variance approvals for the project have now been exercised. However, since approval of the land use entitlements for the project, the applicant has continued to work with the County of Orange and the Garden Grove Engineering Division to finalize Tentative Parcel Map No. PM-2020-174. Due to the COVID-19 global pandemic, there have been delays in the process ; however the final parcel map is near completion. Therefore, the applicant is requesting to rein state the tentative parcel map approval in order to finalize the parcel map for the drive-thru restaurant pad building, which is currently in operation by Habit Burger Grill, since it has been more than two (2) years since the tentative parcel map was originally approved.
As part of the approval to reinstate the tentative parcel map, all conditions of approval as originally approved in February 2021 by Resolution No. 6018 -21 will continue to apply for the life of the project.
FINDINGS AND REASONS:
TENTATIVE PARCEL MAP
1. The proposed map is consistent with the General Plan.
22 Resolution No. 6083-24 Page 4
The property has a land use designation of Residential/ Commercia l Mixed Use 2 and is zoned NMU. The General Plan adopted the
Residential/Commercial Mixed Use 2 Land Use designation in 2008 to help revitalize these areas that surround the shopping centers near the intersection of Brookhurst Street and Chapman Avenue. The City of Garden Grove adopted mixed-use zoning, including the NMU zone, to implement the General Plan Land Use designa tion of Residential/Commercial Mixed Use 2.
The project will further the City’s General Plan Goal LU -1, which strives to establish a well -planned community with sufficient land uses and intensities to meet the needs of anticipated growth and achieve the co mmunity’s vision.
Policy LU-1.4 encourages a wide variety of retail and commercial services, such as restaurants and cultural arts/entertainment, in appropriate locations.
Policy LU-1.5 also encourages active and inviting pedestrian -friendly street environments that include a variety of uses within commercial and mixed-use areas. Finally, Policy LU -1.8 encourages the design of new commercial developments as integrated centers, rather than as small individual strip developments. In accordance with the State Subdivision Map Act, the applicant is requesting to subdivide the existing property into two (2) lots for the existing drive-thru pad building to be situated on its own separate lot.
The Tentative Parcel Map is in conformance with the City’s General Plan, the zoning requirements, the City’s Subdivision Ordinance, and the State’s Subdivision Map Act for this site. Subdividing the subject lot into two parcels, complies with Title 9, Zoning Code NMU development standards for the minimum lot area requirement of 15,000 square feet and minimum lot width requirement of 75’ -0”. In addition, the Residential/Commercial Mixed Use 2 Land Use designation allows a Floor A rea Ratio (FAR) of 0.50 for non-residential uses. As a result of the subdivision, the parcels will co mply with the FAR threshold. Therefore, the proposed map is consistent with the City’s adopted General Plan.
2. The design and improvement of the proposed subdivision are consistent with the General Plan.
The property has a land use designation of Residenti al/ Commercial Mixed Use 2 and is zoned NMU. In accordance with the State Subdivision Map Act, the applicant is requesting to subdivide the existing property into two (2) lots for the existing drive-thru pad building to be situated on its own separate lot.
The Tentative Parcel Map is in conformance with the City’s General Plan, the zoning requirements, the City’s Subdivision Ordinance, and the State’s Subdivision Map Act for this site. Subdividing the subject lot into two parcels, complies with Title 9, Z oning Code NMU development standards for the minimum lot area requirement of 15,000 square feet and minimum lot width requirement of 75’ -0”. In addition, the Residential/Commercial Mixed Use 2 allows a Floor Area Ratio (FAR) of 0.50 for non-residential uses. As a result of 23 Resolution No. 6083-24 Page 5
the subdivision, the parcels will comply with the FAR threshold. In addition, the project meets all other Municipal Code requirements, including parking, setbacks and landscaping. Therefore, the proposed map is consistent with the City’s adopted General Plan.
3. The site is physically suitable for the proposed type of development.
Approval of the Tentative Parcel Map to subdivide the existing property into two (2) lots for the purpose of constructing the drive -thru restaurant pad building on its own separate lot is suitable for shopping centers. The NMU zone requires a minimum lot size of 15,000 square feet and has a minimum lot width requirement of 75’-0”. Parcel 1, approximately 6.59 acres (286,952 square feet) , is developed with a 51,280 square foot in -line commercial multi-tenant building toward the rear of the site and an 11,200 square foot commercial multi -tenant pad building fronting Chapman Avenue. Parcel 2, approximately 0.45 acres ( 19,459 square feet) , is developed with a 3,500 square foot drive -thru pad building. After the subdivision, each parcel will meet the minimum lot size and lot width required by the NMU zone.
Therefore, the site is physically suitable for the proposed type of development.
4. The design of the subdivision and the proposed improvements are not likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat.
Per the Initial Study report and Mitigated Negative Declaration (IS/MND) previously prepared pursua nt to the California Environmental Quality Act (CEQA), the improvements are not anticipated to impact any existing fish or wildlife habitat. Moreover, the subject site is located in a developed urban area.
5. The requirements of the California Environmental Quality Act have been satisfied.
In 2021, the project was reviewed and an Initial Study report and Mitigated Negative Declaration (IS/MND) was previously prepared pursuant to the California Environmental Quality Act (CEQA), Public Resources Code Section 21000 et seq. and the CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq.). Based on the Initial Study and supporting technical analyses, it was determined that all potentially adverse environmental impacts can be mitigated to a level of less than significant. On this basis, a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program (MMRP) have been prepared.
24 Resolution No. 6083-24 Page 6
6. The site is physically suitable for the proposed density of the development.
The subject site has a Land Use designation of Residential/Commercial Mixed Use 2 and is zoned NMU. Both the Land Use designation and zone allow a maximum Floor Area Ratio (FAR) of 0.50 for non-residential uses. The project is an integrated shopping center with a total bu ilding floor area of 65,980 square feet, and a total lot size of 306,411 square feet, resulting in an FAR for this project of 0.2, which complies with the requirements of the Municipal Code. As a result of the subdivision, the parcels will comply with the FAR threshold. Therefore, the site is physically suitable for the proposed density of the development.
7. The design of the subdivision and the proposed improvements are not likely to cause serious public health problems.
In 2021, t he City’s Public Works Department, Community Development Department, Police Department, and Orange County Fire Authority, reviewed the development, and have previously applied conditions of approval to minimize against any potential impacts. The conditions of approval for on- and off-site improvements will safeguard the public health. As long as the conditions of approval are adhered to for the life of the project, the design of the subdivision, and the improvements, are not likely to cause serious public health problems.
8. The design of the subdivision and the proposed improvements will not conflict with easements of record or easements established by court judgment acquired by the public at large for access through or use of property within the proposed subdivision; or, if suc h easements exist, that alternate easements for access or for use will be provided, and that these will be substantially equivalent to the ones previously acquired by the public.
The desi gn of the subdivision and the improvements will not conflict with easements of record, or easements established by court judgment acquired by the public at large for access through or use of property within the proposed subdivision. The project has been designed to avoid development over existing easements.
9. The design and improvement of the proposed subdivision are suitable for the uses proposed, and the subdivision can be developed in compliance with the applicable zoning regulations.
The subject site is zoned NMU, which allows for commercial shopping centers.
The pr operty currently consists of one (1) parcel. As a result of the subdivision, Parcel 1, approximately 6.59 acres ( 286,952 square feet), is 25 Resolution No. 6083-24 Page 7
developed with a 51,280 square foot in-line commercial multi-tenant building toward the rear of the site and an 11,200 square foot c ommercial multi-tenant pad building fronting Chapman Avenue, and Parcel 2, approximately 0.45 acres ( 19,459 square feet) , is developed with a 3,500 square foot drive -thru pad building. After the subdivision, each parcel will meet the minimum lot size of 15,000 square feet, and lot width of 75’ -0”, as required by the NMU zone. Additionally, the development was designed to comply with the development standards of the NMU zone, and complies with the required parking, setbacks, and landscaping. Therefore, the design and improvement of the proposed subdivision are suitable for the existing uses, and the subdivision can be developed in compliance with the applicable zoning regulations.
10. The design of the subdivision provides, to the extent feasible, for future passive or natural heating and cooling opportunities in the subdivision (Gov.
Code Sec. 66473.1).
To the extent feasible, the project has been designed in accordance with Government Code Section 66473.1, such as to allow for passive or natura l heating opportunities in the subdivision design, to encourage the orientation of structures to take advantage of shade and prevailing breezes, to allow solar access for passive heating and opportunities for placement of shade trees and other vegetation for cooling.
11. The design, density and configuration of the subdivision strikes a balance between the effect of the subdivision on the housing needs of the region and of public service needs of City residents and available fiscal and environmental resources.
The development consists of a shopping center on property that has historically been commercially used. The property has a Residential/ Commercial Mixed Use 2 Land Use designation and is zoned NMU . Thus, approval of the proposed Tentative Parcel Map wil l not affect the housing needs of the region, public service needs, or available fiscal and environmental resources.
12. That the character of the subdivision is compatible with the design of existing structures and that the lot sizes of the subdivision are substantially the same as the lot sizes within the general area.
As approved in 2021, the request included the demolition of a 76,000 square foot, vacant grocery store building to construct an approximately 65,980 square foot shopping center. Approval of the Tentative Parcel Map is to subdivide the existing property into two (2) lots for the drive -thru restaurant 26 Resolution No. 6083-24 Page 8
pad building to be located on its own separate lot. Parcel 1, approximately
6.59 acres (286,952 square feet), will be developed with the existing 51,280 square foot in-line commercial multi-tenant building and the existing 11,200 square foot commercial multi -tenant pad building while Parcel 2, approximately 0.45 acres ( 19,459 square feet) , will be developed with existing 3,500 square foot drive -thru pad building. The buildings, along with the associated site improvements, were designed to comply with the zoning code requirements, and are architecturally compatible with the surrounding area. Moreover, the proposed parcels are substantially similar in size to those within the general area.
13. The subject property is not located within a state responsibility area or a very high fire hazard severity zone, the proposed is served by local fire suppression services, and the proposed subdivision meets applica ble design, location, and ingress-egress requirements.
The development has been reviewed by the Orange County Fire Authority and meets all applicable design, location, and ingress -egress requirements.
The subject property is not located within a state responsibility area or a very high fire hazard severity zone.
14. The discharge of waste from the proposed subdivision into the existing sewer system will not result in violation of existing requirements prescribed by the California Regional Water Quality Contro l Board. The conditions of approval for on- and off-site improvements will ensure permitted capacity of the public sewer system is not exceeded.
The development was previously reviewed by the City’s Public Works, Water Services Division, to ensure complia nce with applicable requirements by the California Regional Water Quality Control Board. Conditions of Approval were previously included to ensure that the sewer system meets all requirements and that all on - and off-site improvements ensure the permitted capacity of the public sewer system is not exceeded.
INCORPORATION OF FACTS AND FINDINGS SET FORTH IN STAFF REPORT
In addition to the foregoing, the Planning Commission incorporates herein by this reference, the facts and findings set forth in the staff report.
BE IT FURTHER RESOLVED that the Planning Commission does conclude:
1. The Tentative Parcel Map possesses characteristics that would indicate justification of the request in accordance with Municipal Code Sections
9.32.030 and 9.40.060 and the Subdivision Map Act.
27 Resolution No. 6083-24 Page 9
2. The overall development and subsequent occupancy and operation of the site shall be subject to those environmental mitigation measures identified in the Mitigated Negative Declaration, which are summarized in the Mitigation Monitoring a nd Reporting Program, Exhibit “A”, attached to Resolution No. 6018-21.
3. In order to fulfill the purpose and intent of the Municipal Code, and, thereby, promote the health, sa fety, and general welfare, the Conditions of Approval, Exhibit “B”, attached to Resolution No. 6018 -21, shall continue to apply to Tentative Parcel Map No. PM-2020-174 (Reinstatement-2024).
Adopted this 15th day of February 2024
ATTEST: /s/ JOSH LINDSAY ___
CHAIR
/s/ ROSEMARIE JACOT _____
RECORDING SECRETARY
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS:
CITY OF GARDEN GROVE )
I, ROSEMARIE JACOT, Secretary of the City of Garden Grove Planning Commission, do hereby certify that the foregoing Resolution was duly adopted by the Planning Commission of the City of Garden Grove, California, at a meeting held on February 15, 2024, by the following vote:
AYES: COMMISSIONERS: (6) ARBGAST, CUEVA, LARICCHIA, LINDSAY,
PAREDES, RAMIREZ
NOES: COMMISSIONERS: (0) NONE
ABSENT: COMMISSIONERS: (1) CUNNINGHAM
/s/ ROSEMARIE JACOT
RECORDING SECRETARY
PLEASE NOTE: Any request for court review of this decision must be filed within 90 days of the date this decision was final (See Code of Civil Procedure Section 1094.6).
A decision becomes final if it i s not timely appealed to the City Council. Appeal deadline is March 7, 2024.
28 City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Amir El-Farra
Dept:
City Manager Dept: Public Works
Date: 3/26/2024
Subject: Appropriation of Fiscal Year 2023-24 Public Safety Realignment and Post- Release Community Supervision funds. (Action Item)
OBJECTIVE
To obtain City Council approval to use funding allocated by the State for Public Safety Realignment and Post -Release Community Supervision, and to appropriate these funds for FY 2023-24 budget.
BACKGROUND
Assembly Bill 109, titled “2011 Realignment Legislation Addressing Public Safety,” became effective on July 1, 2011, and provided for the enactment of the “2011 Post- release Community Supervision Act” (herein after referred to as “AB 109”). AB 109 requires that certain offenders be released into the community under the supervision of a designated county agency (Orange County Probation).
Prior to this legislation, these offenders would have either remained incarcerated in State prison or been released under the supervision of State Parole. AB 109 shifted the burden of “supervision” from the State to local law enforcement agencies.
DISCUSSION
Garden Grove received an allocation of approximately $194,022 in FY 2023-24 State AB 109 funding for local law enforcement agencies. Additional FY 2023 -24 growth funds may also be disbursed to the city after July 1, 2024, but the amount will not be known until the disbursement is made. This funding provides additional resources for local law enforcement services, and supplanting is prohibited by statute.
FINANCIAL IMPACT
29
AB 109 funds will supplement the City's public safety related funding needs, and there is no matching requirement for using such funds.
RECOMMENDATION
It is recommended that the City Council:
Authorize additional appropriation in the Police Department's operating budget for FY 2023 -24 in the amount of AB 109 funding allocated to the City for approximately $194,022, and unspent FY2023-24 AB 109 funding be carried over to the future fiscal year.
by: C. Cibosky
Police Fiscal Analyst
ATTACHMENT(S):
1. AB109 BOS Approved FY2023-24 LLE Allocation
30 Community Corrections Partnership (AB 109)
County Local Revenue 2011 (Fund 100, Department 003, Budget Control 090) On February 23, 2023, the Community Corrections Partnership (CCP) unanimously approved the allocation and distribution of the 2 percent of base funding received to the Local Law Enforcement at the entity level for the 2011 Public Safety Realignment (AB 109). The 2 percent allocation is estimated at $2,446,687 based on the State’s January Proposed budget. The basis of the following estimated allocations is current State estimates multiplied by approved allocation percentages:
31 City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Teresa Pomeroy
Dept:
City Manager Dept: City Clerk
Date: 3/26/2024
Subject: Receive and file minutes from the meeting held on February 27, 2024. (Action Item)
Attached are the minutes from the meeting held on February 27, 2024, recommended to be received and filed as submitted or amended.
ATTACHMENT(S):
1. Minutes
32 -1- 02/27/24
MINUTES
GARDEN GROVE CITY COUNCIL
Regular Meeting
Tuesday, February 27, 2024
Community Meeting Center
11300 Stanford Avenue, Garden Grove, CA 92840
CONVENE MEETING
At 6:35 p.m., Mayor Jones convened the meeting.
ROLL CALL PRESENT: (7) Council Members Brietigam, O’Neill, DoVinh, Klopfenstein, Nguyen-Penaloza, Mayor Pro
Tem Tran, Mayor Jones
ABSENT: (0) None
INVOCATION
PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA
INFORMATION ON THE 49TH ANNUAL AMERICANA AWARDS AS PRESENTED BY
HOWARD KUMMERMAN, EXECUTIVE DIRECTOR OF CYPRESS COLLEGE FOUNDATION (F: 90.3)
ORAL COMMUNICATIONS
Speaker: Aaron Leal
RECESS
At 6:46 p.m., Mayor Jones recessed the meeting.
RECONVENE
At 6:52 p.m., Mayor Jones reconvened the meeting with all City Council Members present.
33 -2- 02/27/24
ACCEPTANCE OF PROJECT NO. CP1205000 – MAGNOLIA RESERVOIRS AND
BOOSTER PUMP STATION REHABILITATION PROJECT AS COMPLETE (F: 92.PROJ.7402)
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:
Project No. CP1205000 - Magnolia Reservoirs and Booster Pump Station Rehabilitation Project be accepted as complete;
The City Manager be authorized to execute the Notice of Completion of Public Improvement and Work; and
The Finance Director be authorized to release the retention payment when appropriate to do so.
The motion carried by a 7-0 vote as follows:
Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
APPROVAL OF THE FIRST AMENDMENT TO THE LEASE AGREEMENT WITH STRIVE HEALTH FOR OFFICE SPACE LOCATED AT 12966 EUCLID STREET, GARDEN GROVE (F: 55-Strive Health)
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:
The First Amendment to the Strive Health Lease Agreement, be approved; and The City Manager be authorized to execute the First Amendment, including any minor modifications as appropriate, and any other pertinent documents necessary to effectuate and/or implement the First Amendment, on behalf of the City.
The motion carried by a 7-0 vote as follows:
Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
34 -3- 02/27/24
APPROVAL OF THE PROPOSED FISCAL YEAR 2024-25 WEST ORANGE COUNTY
WATER BOARD COST SHARING BUDGET AND AMENDMENT TO THE JOINT POWERS AUTHORITY AGREEMENT (F: 112.9)
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:
The West Orange County Water Board Fiscal Year 2024/25 proposed cost sharing budget for operational expenses and cathodic protection system project cost, be approved;
The sixth amendment for the Joint Powers Agreement with the West Orange County Water Board to provide stipends up to a maximum of $200 for board members and alternate board members for the purpose of reimbursing traveling expenses, be approved; and
The Mayor be authorized to execute the Sixth Amendment to the Joint Powers Agreement, on behalf of the City.
The motion carried by a 7-0 vote as follows:
Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
APPROVAL OF AMENDMENT NO. 1 TO THE AGREEMENT WITH PARKWOOD LANDSCAPE MAINTENANCE, INC. TO PROVIDE MEDIAN LANDSCAPING SERVICES (F: 55-Parkwood Landscape Maintenance, Inc.)
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:
The amendment to the agreement to add $50,000 per contract term ($250,000) to the agreement with Parkwood Landscape Maintenance, Inc. for a new contract total of $1,200,753.93, be approved; and
The City Manager be authorized to execute the agreement on behalf of the City and make minor modifications as needed.
The motion carried by a 7-0 vote as follows:
Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
35 -4- 02/27/24
RECEIVE AND FILE MINUTES FROM THE MEETING HELD ON JANUARY 23, 2024 (F: Vault)
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:
The minutes from the meeting held on January 23, 2024, be received and filed.
The motion carried by a 7-0 vote as follows:
Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
APPROVAL TO WAIVE FULL READING OF ORDINANCES LISTED
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:
Full reading of ordinances listed be waived.
The motion carried by a 7-0 vote as follows:
Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
WARRANTS
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:
Demands covered by EFT numbers 00034922 through 00035557 and check numbers 00185657 through 00185667 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed.
The motion carried by a 7-0 vote as follows:
Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
36 -5- 02/27/24
APPROVAL OF A COOPERATIVE AGREEMENT FOR EUCLID STREET CORRIDOR TRAFFIC SIGNAL SYNCHRONIZATION PROJECT (CP1325000)
(F: 100.PROJ.CP1325000) (F: 55-City of La Habra)
Following staff introduction, and City Council comments, it was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:
The Cooperative Agreement, with an estimated cost of $286,377, with the City of La Habra as the lead agency and to include the cities of Fullerton, Anaheim, Santa Ana, and Fountain Valley for the Euclid Street Corridor Traffic Signal Synchronization Project (CP1325000), be approved; and
The City Manager be authorized to execute the Cooperative Agreement on behalf of the City.
The motion carried by a 7-0 vote as follows:
Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
SECOND READING AND ADOPTION OF ORDINANCE NO. 2952 (F: 128.5A) (F: 20.GPA-001-2023)
(It was moved earlier in the meeting by Council Member Brietigam, seconded by Council Member Klopfenstein and approved unanimously that full reading of the ordinances listed be waived.)
Following introduction by City Attorney Sandoval, it was moved by Council Member O’Neill, seconded by Council Member Nguyen-Penaloza that:
Ordinance No. 2952 entitled: An Ordinance of the City Council of the City of Garden Grove approving Zoning Amendment No. A-036-2023 to amend the City’s official zoning map to change the zoning designation of properties located at 13252 Brookhurst Street and 10052 Central Avenue and identified as Assessor’s Parcel Nos. 099-031-01, 099-031-02, 099-031-008, and 099-031-09 from C-1 (Neighborhood Commercial) and R-2 (Limited Multiple Residential) to R-3 (Multiple- Family Residential), be adopted.
The motion carried by a 7-0 vote as follows:
Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
37 -6- 02/27/24
MATTERS FROM THE MAYOR, CITY COUNCIL MEMBERS, AND CITY MANAGER
UPDATE ON THE CIVIC CENTER REVITALIZATION PROJECT AS REQUESTED BY CITY MANAGER KIM (F: 48.11)
Consultants Craig Beck and the Edgemore Team provided a PowerPoint presentation that reviewed the current progress for the Public Safety Building. Phase 1 and Phase 2 for the project have been completed, and Phase 3 is scheduled to be completed in March and is in process with finalizing the design, entering negotiations to select a developer, and financing the project; the construction phase will start in April 2024 through December 2025 with the operational move in to begin in January 2026.
The Design Principles have been identified for the Police Building, Parking Structure, and the Park with the Key Principles to include: Operational Efficiency, Maintainability, Campus-Style Site and a Statement Building; with the outcomes to foster a connected community, increased productivity, retention and recruitment, and long term affordability.
The Building concept selection and upcoming design advancement is in progress and includes the refinement of an architectural statement; the material selection, the building height confirmation, and the public entry design.
Programming Advancement leverages diagramming tools, established weekly representatives with the Garden Grove Police Department to refine building layout and operation, and includes a full department summit to ensure a wide range of feedback. The public access areas will be easily accessible from Acacia Parkway and will have a lobby, the Emergency Operation Command and community room, the Police Memorial and public parking. The park design is circular with an outer promenade and central green space.
The Environmental Quality Act, the Conditional Use Permit, the onboarding of Dudek to address the pond and a Wildlife Management plan is complete. There were eleven community engagement events between March 2023 through December 2023 with approximately 2000 people in attendance and approximately 300 comment cards were received. The December outreach summary included the Tree Lighting Event and Pop Up Booth held December 2, 2023; and the Open House – Town Hall event was held on December 6, 2023. The Upcoming events include the Small Business Outreach Event on March 5, 2024, the March 7, 2024, Clementine Trolly display, and the March 9, 2024 Art in the Park at the Village Green Park.
Project Financing is primarily from the Lease Revenue Bonds approved jointly by the City Council and Public Financing Authority. Fieldman Rolapp & Associates were hired as primary advisors for project financing; the project funding is projected at $152 million; the preliminary project estimate was not within the affordability limit, however, a value engineering exercise reduced costs by $10 million to achieve 38 -7- 02/27/24
affordability. The pricing trends indicate construction labor wages have increased by
4.3 percent over the past 12 months with prices remaining high for disrupted materials, and prices for select materials declined in recent months due to overstocking with metals and glass prices holding.
Council Member DoVinh suggested using AI construction management software to stay on top of project costs, and that bollards be installed to prevent anyone from driving onto the public safety grounds.
Council Member Klopfenstein is pleased with the progress to date and appreciates the continuing community outreach that is crucial for residents to feel they have a seat at the table for this very historic project for our downtown area. She commented that this Public Safety Building will be an anchor for the entire Civic Center, which is very exciting. She asked for the community events coming up be published on social media that can be shared with all stakeholders. She expressed importance of touch points throughout the city for this project to bring awareness and an opportunity for residents to provide feedback.
Council Member O’Neill expressed his thanks for the presentation and his confidence in the financing and design of the project. He stressed the importance for the subcontractors to be held accountable for the timeline and that they order materials immediately upon entering into a construction contract.
Council Member Brietigam expressed his excitement to see this project come to fruition after these many years in need of a new Public Safety facility. He stressed the importance for including a catwalk in the roof design for officers’ safety.
MATTERS FROM THE MAYOR, CITY COUNCIL MEMBERS, AND CITY MANAGER (Continued)
Council Member Brietigam noted the opening day parade for baseball was held over the weekend, and the grand opening for Animalia Pet Supplies on Valley View that offers discount brands for pets.
Council Member O’Neill cautioned drivers to drive at safe speeds especially around schools and parks, noting that baseball season for kids has started. He encouraged changing batteries on smoke detectors. He noted that the playground equipment is being installed at Magnolia Park.
Mayor Pro Tem Tran praised the students from the Garden Grove Unified School District who were recently recognized for their achievements. She noted, for the benefit of the residents, that the City Council recently held a retreat study session to discuss council priorities, with one of the main priorities identified as infrastructure. She thanked Shawn Park for following up on a resident complaint regarding a code enforcement violation. She announced the one year anniversary 39 -8- 02/27/24
of the Uni Japanese Restaurant coming up on Saturday and encouraged everyone to come by for a free drink.
Council Member DoVinh noted that he attended the Garden Grove Unified School District’s State of the District, which was an impressive event with many performances by the students. He noted that the council reaffirmed the priorities at the recent retreat study session from last year and that the priorities identified as Tier 1 and Tier 2 were condensed as each of the priorities are equally important with many of the goals stated in last year’s study session were achieved. He is happy that cultural events are a priority with events coming up in the near future.
Council Member Klopfenstein noted the opening day baseball parades, one for Youth Baseball on the west side of Garden Grove, and Pony Baseball in District 5 held over the weekend; and the Garden Grove Unified School District State of the Unified with Superintendent Dr. Mafi, the teachers, and hundreds of students being recognized for their accomplishments, which aligns with the City’s motto of “Youth and Ambition.” She stated that the future is bright here in Garden Grove. She reminded those who wish to participate in having a Trespass Letter notarized, to come to Coastline Community College on Euclid Street on Thursday, February 29, 2024; more information can be found on the Garden Grove Chamber of Commerce website and on Council Member Klopfenstein’s facebook page.
Council Member Nguyen-Penaloza appealed to the public for donations through a Go Fund Me Account for five year old Luna Bui, a District 6 resident who is fighting liver cancer. She noted that we are a week away from the primaries and is concerned that there is not enough public awareness; she asked that the City work with the Registrar of Voters to ensure equity by having a vote center in every district for future elections.
City Manager Kim announced that the City of Garden Grove is one of 1800 cities, under Finance Director Song’s leadership, that received the Distinguished Budget Presentation Award from the Government Finance Officers Association (GFOA) for the Fiscal Year 2024-25 biennial budget. The award recognizes budget documents of the very highest quality that reflect both the guidelines established by the National Advisory Council on State and Local Budgeting and best practices. .
ADJOURNMENT
At 7:36 p.m., Mayor Jones adjourned the meeting. The next Regular City Council Meeting is scheduled on Tuesday, March 12, 2024, at 5:30 p.m. at the Community Meeting Center, 11300 Stanford Avenue, Garden Grove, California.
Teresa Pomeroy
City Clerk
40 City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Patricia Song
Dept:
City Manager Dept: Finance
Date: 3/26/2024
Subject: Receive and file warrants. (Action Item)
Attached are the warrants recommended to be received and filed.
ATTACHMENT(S):
1. 01312024 warrants
2. 02012024 warrants
3. 02072024 warrants
4. 02142024 warrants
5. 02212024 warrants
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City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Amir El-Farra
Dept:
City Manager Dept: Police
Date: 3/26/2024
Subject: Approval of Project Agreement with Edgemoor Garden Grove Civic Partners LLC for the design and construction of the Civic Center Revitalization Project including a new Public Safety Facility, Parking Garage, and a new Civic Center Park. (Cost: $152 million) (Action Item)
OBJECTIVE
To secure City Council approval for a Project Agreement with Edgemoor Garden Grove Civic Partners LLC (Edgemoor), for the design and construction of the Civic Center Revitalization Project including a new public safety facility, parking garage, and re-imagined Civic Center Park (the Project).
BACKGROUND
In 2018, Garden Grove residents approved a ballot measure, “Measure O,” that increased sales tax by one percent to fund infrastructure and public safety. Consistent with the Measure O funding priorities, staff engaged the architectural and engineering firm Dewberry to inspect, analyze, and develop a facility needs assessment for the Garden Grove Police Department (GGPD) with the intention of creating a road map for more efficient and ef fective operations. The report was completed in January 2020 and concluded that the current Police buildings are outdated, poorly configured, and have inefficient building systems that are at the end of their planned useful life. Further, the facilities do not support current staffing levels and lack any opportunity for future growth. Lastly, the report recommended the City prioritize the construction of a new public safety building and parking structure that would unify operations from the current five locations into one facility, improve productivity and address needs of city residents today and into the future.
In July 2022, the City retained Project Finance Advisory, Limited (PFAL) to review the feasibility of developing a new Public Safety Facility (PSF) consistent with the finding in the Dewberry report. Their initial work focused on reviewing technical 107
data, financial impacts, and the physical environment within the Civic Center area. Looking at cost implications of different sites and program alternatives, PFAL concluded that the recommendation in the Dewberry report to construct a new PSF would be more cost effective than upgrading the existing facilities. This was based on a number of factors including the benefit of cost savings by keeping P olice operations in current facilities while the new Project was constructed. The project phasing would focus on constructing a new PSF and parking garage, then demolishing the old building, and constructing a new re-envisioned Civic Center Park (the Park) on what will be the decommissioned GGPD facility. PFAL further concluded the corner of Euclid Street and Acacia Parkway was the best site for the PSF.
In January 2023, PFAL’s scope was expanded to assist in developing a design-build- finance procurement structure for the Project. To align project priorities, key design principles and outcomes were embraced. These priorities include:
Key Design Principles Key Design Outcomes
Operational Efficiency Connected Community
Sustainable Increased Productivity
Campus-Style Site Retention and Recruitment
Statement Building Long Term Affordability
With the basic PSF program requirements established, the team, comprised of City interdepartmental staff and PFAL, advanced outreach to gauge developer interest. Preliminary project information was shared at industry trade shows and a survey was distributed via a City Request for Information. The feedback was positive, and it was evident the development community was very interested in the Project.
With better understanding of the marketplace, the team concentrated on preparing the specifications document for developer selection. Site tours of other new police stations were conducted to hear directly from users what worked best in their facilities and what could be improved. The team worked with HOK Architects to prepare a program validation from the work initiated by Dewberry. HOK also prepared initial massing studies to show how new facilities could fit within the site. The finalized specifications (program requirements, site massing, mechanical system standards, etc.) established the “basis-of-design” for the Project.
In July 2023, the City released a Request for Qualifications (RFQ) seeking proposals from developers who could facilit ate the design, construction, and financing of the proposed project. Six developers responded to the RFQ, and after a thorough review of proposals and in-person interviews, the team of Edgemoor (Developer)/AC Martin (Architect)/Clark Construction (Contractor) was selected. In September 2023, City Council approved a six -month Exclusive Negotiation Agreement (ENA) with 108
Edgemoor to prepare design drawings, update pricing, outline a legal framework and structure a financial package.
DISCUSSION
With the Civic Center Revitalization Project Team fully assembled, a project kick-off meeting was held in October 2023, to introduce the Edgemoor Project Team, including different specialty consultants (public safety design, lighting design, park design, building system design, civil engineering design, etc.) The meeting detailed what to expect during the design development phase of the Project and desired outcome goals during the ENA period. To focus efforts, the workload and various team members were di vided into five work streams (Design & Construction; Entitlements, Permitting, & Engagement; Project Financing; Commercial/Legal; Building Commissioning). Over the past six months, a significant amount of progress has been achieved. Provided is a detaile d summary of the PSF activities and significant milestones to date:
Design & Construction Work Stream – Initial work focused on reviewing site conditions and preparing different massing studies. That effort was narrowed into two conceptual plans, then in to the final base design. With the base design accomplished, the team worked to optimize the program and workgroup adjacencies. Working closely with the GGPD team, different program options were explored and refined. Each iteration improved work efficie ncy within GGPD operations and improved building layout (location of elevators, mechanical systems, technology spaces, etc.) Concurrently, building façade options were explored with a focus on achieving a “statement building”, a key design principle identified. While ongoing refinement is expected, the team feels confident in meeting the intended design principles. When the final design is complete, the process will transition to preparing construction drawings. It is estimated the construction drawings will be completed this summer. The building is currently designed at 102,300 sf and connects to a four-level parking garage.
Entitlements, Permitting & Engagement Work Stream -
Environmental Review - The City, and its consultant, Michael Baker In ternational, prepared an Initial Study and Mitigated Negative Declaration (MND), along with an associated Mitigation Monitoring and Reporting Program (MMRP), in accordance with the California Environmental Quality Act (CEQA) to analyze the potential environmental impacts of the proposed Project. The IS/MND concludes that the proposed Project will have no, or a less than significant, impact on all relevant environmental factors, provided certain specified mitigation measures are incorporated (examples of required mitigation measures include, but are not limited to: procedures for inadvertent discovery of tribal cultural resources found during ground-disturbing activities, and preparing a construction traffic management 109
plan). A link to the digital copy of the IS/MND and MMRP are available on the City’s project website (https://ggcity.org/civic-center) under the “Resources” tab.
In December 2023, the Planning Commission held a public hearing, received comments, and adopted Resolution No. 6075 -23 approving Conditional Use Permit No. CUP-250-2023, detailing certain conditions of approval required for use of the PSF. Action was also taken for the adopted Resolution No. 6080 -23 adopting the MND and MMRP.
In addition to meeting CEQA requirements, the City hired the firm Dudek (Biologist) to assist with the process of draining and removing the pond in the existing Civic Center Park. The pond removal is necessary as it is located within the new PSF footprint. Dudek completed preparation of a Wildlife Managemen t Plan that details the approach for removal and relocation of the different species that exist in the pond. Dudek Biologists will be on-site supervising the entire wildlife removal process and to ensure proper treatment of the wildlife, and transportation of aquatic wildlife to a rescue facility. The Wildlife Management Plan is available on the City’s project website (https://ggcity.org/civic-center) under the “Resources” tab.
Community Outreach - Public engagement and community outreach is an important component of the Project. Different venues were used as touchpoints with the community to share information about the Project and seek input, especially about priorities for the re -envisioned Civic Center Park. Supporting this effort, the City contracted with Placeworks to create a holistic approach for engagement with residents and key stakeholders. Through a collaborative approach, connection with approximately 3,000 individuals within the community, including numerous online interactions was achieved. Some outreach examples include:
June 2022: The City hosted in-person and virtual open houses, respectively, to present details of the Project and to elicit feedback. August 2022 : The City launched an online survey to provide additional opportunities for the community to learn about the project and to share their comments and ideas.
Spring 2023: Created Project webpage offering up to date project information (https://ggcity.org/civic-center).
Summer 2023: City Staff presented information and gathered feedback cards at booths across multiple community events throughout the City. December 2023 : The City hosted a Developer Open House, allowing community members to meet the development team.
March 2024 : The City hosted a Small Business Coordination Event, connecting with businesses interested in opportunities to participate in the Project with over 75 attendees.
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The community response has been very positive with nearly unanimous support of the new PSF. For future park amenities, flexible programming, shad e and landscaping, safety, and walking paths/trails emerged as top priorities, informing the Design team on elements to include in the redesigned Park (Attachment No. 1 provides further details on community engagement).
Project Financing Work Stream – During the ENA period, staff worked with Edgemoor to review different financing strategies. Five potential options were proposed and evaluated, including General Obligation Bonds, City issued Lease Revenue Bonds, Conduit Lease Revenue Bonds, Certificates of Participation, and Project Certificate Revenue Bonds. These evaluations were based on the cost of issuance, timeline, and the ongoing administrative requirements. To assist in the evaluation, staff engaged the City’s municipal advisor, Fieldman Rolapp & Associates, as well as its bond counsel, Stradling. After a comprehensive review, it was concluded that given the City’s strong credit rating, sufficient cash on hand, aggressive project schedule, and the current market condition, it is most cost effective to finance the Project through debt issued by the Garden Grove Public Financing Authority, in the form of lease revenue bonds.
In February 2024, the City conducted a RFP and selected Stifel Public Finance as the bond underwriter. Financing documents are progressing, and it is anticipated that the final documents including a preliminary official statement, ground lease and lease agreement, bond indenture and other related financing and legal documents will be presented to the City Council for approval in April 2024. The bonds are anticipated to be issued in early June 2024. Additional information regarding project budget is provided in the “Financial Impact” section.
Commercial/Legal Work Stream – The City and Edgemoor have agreed on terms and finalized the Project Agreement (PA), subject to Council approval (Attachment No. 2). The PA is the primary document that details responsibilities for the design, construction, and financing o f the Civic Center Revitalization Project. The PA term will run for two years after the final completion of the Park, to ensure all warranties and pertinent responsibilities are met. The current master schedule anticipates the Park will be completed in May 2027. Major components of the PA include:
Edgemoor is responsible for designing and building a new PSF, a new parking structure, and a new reconfigured Civic Center Park of approximately 2.7 - acres.
The parties agree to work collectively to finalize t he project design, which is anticipated in May 2023. The final construction scope will be based on City approved construction drawings meeting all required codes pertinent to the Project.
The PSF will be sustainable and designed and certified at “LEED Sil ver” or higher.
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The PSF and parking structure will function as “Essential Service Facilities” and meet standards of a category four building.
The Project will be delivered for a guaranteed maximum price that is within the affordability limit of $152 millio n and subject to “open book” cost review to ensure market pricing. A budget cost review will occur after completion of construction drawings to ensure pricing is set at values based on final design. The City is responsible for securing financing for the p roject and will pay Edgemoor for its work monthly. If for any reason the PA is terminated, the City will owe Edgemoor for the value of work completed and will own all design documents, materials, improvements, etc. completed to that point. Construction of the project will proceed under a Project Labor Agreement with the Building Trades that prioritizes local hires.
Building Commissioning Work Stream – An important component of the Project relates to a cost -effective building mechanical system with long -term reliable operability. Edgemoor has hired a commissioning agent, Altura, to work hand in hand with the Mechanical, Electrical & Plumbing (MEP) designers (GLUMAC) throughout the Project. Their work implemented in three phases: Design, Construction, a nd Warranty.
During the design phase, Altura will review the design packages, specifications, and bases of design to ensure compliance with project goals, LEED requirements, and industry best practices. They will also support decision -making to ensure l ifecycle costs are being considered along with all building systems decisions. They will also lead the review of Building Automated System (BAS) sequences of operation, to ensure early coordination of controls processes.
During Construction, Altura will review all MEP and BAS submittals to ensure the project requirements are met and enforced. Once the systems are installed, Altura will work with the MEP trades to ensure systems are ready to be tested and will follow testing procedures developed by Altur a. They will be responsible for witnessing and documenting all testing procedures and will track all commissioning issues until resolution. After commissioning is completed, Altura will ensure all materials are delivered and provide all relevant training to City staff.
During the warranty period, Altura will continue to monitor the building in an enhanced commissioning effort. Leveraging analytics and working with key facilities stakeholders, they will continue to optimize the building performance. This will also verify the building systems quality for the enhanced commissioning LEED points and will be a key component to receiving LEED certification at a level of “LEED Silver” or higher.
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FINANCIAL IMPACT
The Project is estimated to cost $152 million. This is being funded from a combination of cash on hand and bond proceeds. A total of $12 million is set aside from the General Fund and $140 million will be financed through the issuance of tax- exempt Lease Revenue Bonds. Pre-development expenses are funded as part of the ENA budget of $3 million and are not included in the planned project budget of $152 million.
On November 14, 2023, the City Council adopted Resolution 9833 -23 directing the City Manager to take actions necessary to finance the Project through the issuance of Lease Revenue Bonds with a par amount not to exceed $140 million. Bonds will be issued through the Garden Grove Financing Authority. Annual debt service is estimated to be less than $9 million and will be paid by the g eneral revenues from the City’s General Fund in the form of lease payments.
Ancillary cost for issuing the bonds, including financial and legal consultants will be paid from proceeds of the debt. The issuance of the debt will not result in additional taxes or fees to our taxpayers.
Staff is further proposing to enter into a short -term lease with Edgemoor/Clark Construction for occupancy of existing vacant space within the City owned facility at 11277 Garden Grove Blvd. (Purcell) for construction related activities in connection with the Project to minimize the need for construction trailers.
RECOMMENDATION
It is recommended that the City Council:
Approve the Project Agreement and authorize the City Manager to execute the Project Agreement by and between the City of Garden Grove and Edgemoor Garden Grove Civic Partners LLC, in an amount not to exceed $152 million, and to make minor modifications as appropriate thereto, on behalf of the City; and Direct the City Manager to finalize documents necessary to issue lease revenue bonds with a par amount of $140 million consistent with Resolution 9833 -23 approved on November 14, 2023, and return to City Council for final approval and authorization to issue bonds.
Authorize the City Manager to negotiate an d execute a short -term lease with Edgemoor/Clark Construction for occupancy of existing vacant space within the City owned facility at 11277 Garden Grove Blvd. (Purcell) for construction related activities in connection with the Civic Center Revitalization Project.
By: Craig Beck, Consultant and Grace Kim, Project Manager 113
ATTACHMENT(S):
1. Attachment No. 1 Community Engagement
2. Attachment No. 2 Project Agreement
3. Attachment No. 3 Agreement Exhibits
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Civic Center Revitalization Project
Community Outreach Summary
March 2024
City Council Meetings January 24, 2023 – Project update March 14, 2023 – CEQA consultant
June 13, 2023 – Project update
July 25, 2023 – Project update
September 26, 2023 – Developer ENA
November 14, 2023 – Project conceptual design
March 26, 2024 – Project Agreement Approval (planned) April 23, 2024 – Project Financing Approval (planned) Digital Media Corner sign (Euclid Street and Acacia Parkway) Community Events Calendar and email blast
City website banner
Open Houses June 1, 2022 – In-person event requesting feedback on Civic Center Park facilities June 9, 2022 – Virtual open house requesting feedback on Civic Center Park facilities
December 6, 2023 – Provide summary of work completed, and outreach responses to-date
Planning Commission
Meetings
October 19, 2023 – Project update
December 21, 2024 – Public hearing for Conditional Use Permit Pop-Up Booths March 18, 2023 – Art in the Park at Village Green Park April 8, 2023 – Eggscavation at Atlantis Play Center
June 22, 2023 – Summer Concert Series at Garden Grove Park June 29, 2023 – Summer Concert Series on Historic Main Street July 7, 2023 – Summer Movie Series at Eastgate Park
July 13, 2023 – Summer Concert Series at Eastgate Park July 20, 2023 – Summer Concert Series at Eastgate Park July 27, 2023 – Summer Concert Series at Eastgate Park August 1, 2023 – National Night Out on Civic Center Parkway August 3, 2023 – Summer Concert Series at Eastgate Park August 11, 2023 – Summer Movie Series at Garden Grove Park December 2, 2023 – Winter in the Grove at Village Green Park March 7, 2024 – Clementine Trolley at Buena Clinton Youth & Family Center March 9, 2024 – Art in the Park at Village Green Park Press Releases May 23, 2022 – Community invited to upcoming Open Houses July 5, 2022 – Survey available for input on Civic Center Park improvements July 31, 2023 – City seeking developer for Garden Grove Civic Center Revitalization Project
November 7, 2023 – Community invited to upcoming Open House for Civic Center Revitalization Project
February 28, 2024 – Local Small Businesses Invited to Upcoming Event on Potential Contracting Opportunities for Civic Center Revitalization Project Promotional Video
(GGTV3)
April 11, 2024 – State of the City release date
Social Media City’s Facebook
May 23, 2022 (5 likes)
May 27, 2022 (1 likes)
June 1, 2022 (8 likes; 1 share)
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June 8, 2022 (2 likes; 1 share)
July 6, 2022 (1 comment; 8 shares)
July 6, 2022 on Garden Grove Neighborhood Watch and Friends July 6, 2022 on Residents and Friends of Garden Grove CA (1 like) July 6, 2022 on West Garden Grove Neighborhood Watch (1 like; 1 comment) July 7, 2022 on Garden Grove Neighborhood Association June 13, 2023 (5 likes; 4 comments; 3 shares)
June 22, 2023 (4 likes, 2 comments; 1 share)
July 25, 2023 (3 likes)
August 1, 2023 (2 likes; 2 shares)
November 8, 2023 (8 likes; 5 shares)
November 8, 2023 on EastWest Garden Grove
November 9, 2023 on Garden Grove Neighborhood Association (1 like) November 22, 2023 (5 likes)
November 30, 2023 (4 likes, 1 comment, 2 shares)
December 5, 2023 (2 likes, 1 share)
February 16, 2024 (7 likes)
February 29, 2024 (6 likes, 4 shares)
March 4, 2024 (5 likes, 1 share)
Police Department’s Facebook
May 25, 2022 (31 likes; 1 comment; 5 shares)
June 1, 2022 (22 likes; 5 shares)
June 1, 2022 on Residents and Friends of Garden Grove CA (7 likes; 2 comments) June 1, 2022 on Garden Grove Neighborhood Watch (9 likes; 2 comments) June 1, 2022 on West Garden Grove Neighborhood Watch (4 likes; 1 comment) June 1, 2022 on Garden Grove Neighborhood Watch and Friends (1 like; 3 comments)
June 1, 2022 on West Garden Grove Neighborhood Watch Less Restricted (2 likes; 4 comments)
June 1, 2022 on GGNA News & Views (3 likes; 1 comment) June 1, 2022 on Garden Grove Real Neighborhood Watch (4 likes; 8 comments) June 8, 2022 on GGNA News & Views (6 likes; 4 comments) June 8, 2022 (31 likes; 1 comment; 2 shares)
June 8, 2022 on Garden Grove Neighborhood Watch (6 likes) June 8, 2022 on Garden Grove Real neighborhood Watch (4 likes) June 8, 2022 on West Garden Grove Neighborhood Watch Less Restricted (2 likes) June 8, 2022 on Garden Grove Neighborhood Watch and Friends (2 likes) June 8, 2022 on West Garden Grove Neighborhood Watch (8 likes)
City’s Twitter/X
June 13, 2023 (230 views)
June 22, 2023 (1 like, 244 views)
July 25, 2023 (1 comment, 249)
August 1, 2023 (193 views)
November 8, 2023 (2 retweets, 2 likes, 353 views)
November 22, 2023 (108 views)
November 22, 2023 (1 comment, 114 views)
November 22, 2023 (1 comment, 214 views)
December 5, 2023 (114 views)
February 16, 2024 (168 views)
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February 29, 2024 (2 comments, 139 views)
March 5, 2024 (96 views)
City’s Nextdoor
June 13, 2023 (1 like 267 impressions)
June 22, 2023 (245 impressions)
July 25, 2023 (1 like 170 impressions)
August 1, 2023 (175 impressions)
November 8, 2023 (1 like 241 impressions)
November 22, 2023 (89 impressions)
November 30, 2023 (68 impressions)
November 5, 2023 (40 impressions)
February 16, 2024 (646 impressions)
February 29, 2024 (618 impressions)
City’s Instagram
June 13, 2023 (29 likes)
June 22, 2023 (26 likes, 2 comments)
June 25, 2023 (18 likes, 1 comment)
August 1, 2023 (14 likes, 1 comment)
November 8, 2023 (16 likes)
November 22, 2023 (19 likes, 3 comments)
November 30, 2023 (26 likes)
December 5, 2023 (15 likes)
February 16, 2024 (24 likes, 1 comment)
February 29, 2024 (15 likes, 1 comment)
March 4, 2024 (23 likes, 1 comment)
Survey June 9, 2022 to August 2, 2022 – Online survey asking for feedback on Civic Center Park facilities
Translations Civic Center Community Engagement Flyer – Korean, Spanish, Vietnamese Press releases – Vietnamese
Local Small Business Event Flyer – Korean, Spanish, Vietnamese Vietnamese Cultural
Media
May 23, 2022 – Vietnamese TV talk shows
July 5, 2022 – Vietnamese TV talk shows
July 31, 2023 – Vietnamese talk shows and radio show
November 7, 2023 – Vietnamese talk shows and radio show, neighborhood meeting at Buena Clinton and bi-monthly Vietnamese newsletter
Small Business
Outreach Event
March 5, 2024 – Contracting opportunities for local and/or small businesses
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CITY COUNCIL REVIEW DRAFT
4153-2470-0750.45
PROJECT AGREEMENT
By and Among
CITY OF GARDEN GROVE;
and
EDGEMOOR GARDEN GROVE CIVIC PARTNERS LLC, a Maryland limited liability company
Dated as of March ___, 2024
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TABLE OF CONTENTS
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ARTICLE 1 GENERAL: PARTIES, TERM, DEFINITIONS, AND PAYMENTS. ........... 2
1.1 THE CITY .................................................. ........................................................... 2
1.2 EDGEMOOR .................................................. ....................................................... 2
1.3 SITE ...................................................... ................................................................. 2
1.4 CITY COMMITMENT TO FUND THE PAYMENT OF THE
GUARANTEED MAXIMUM PRICE. ................................................................. 2
1.5 TERM OF THIS AGREEMENT .................................... ....................................... 2
1.6 DEFINITIONS; RECITALS ..................................... ............................................ 3
1.7 TERMINATION; SURVIVAL; HIERARCHY .......................... .......................... 3 ARTICLE 2 GMP PROCESS AND PAYMENT ...................................................................... 3
2.1 EXECUTION OF THE PROJECT AGREEMENT AND DESIGN/BUILD AGREEMENT ....................................................................................................... 3
2.2 SITE ACCESS ............................................... ........................................................ 3
2.3 GMP CHANGE ORDER PROCESS .................................. .................................. 4
2.4 NOTICE TO PROCEED WORK & CITY RIGHTS IN THE SITE ..................... 5
2.5 TAXES AND ASSESSMENTS ..................................... ....................................... 5
2.6 MILESTONE PAYMENTS AND PAYMENT OF THE GMP ................. ........... 5
2.7 PAYMENT PROCEDURES ........................................ ......................................... 6
2.8 UNINCORPORATED MATERIALS. ................................. ................................. 7
2.9 SUSPENSION OF WORK / INTEREST ............................. ................................. 7
2.10 GMP OPEN BOOK. ........................................... ................................................... 8
2.11 GMP SAVINGS............................................... ...................................................... 8 ARTICLE 3 FINANCIAL CLOSE. ........................................................................................... 8
3.1 PROJECT FUNDING ........................................... ................................................. 8
3.2 COOPERATION OF PARTIES. ................................... ........................................ 8
3.3 FINANCIAL CLOSE TARGET DA TE; RIGHTS OF TERMINATION ............ 8
3.4 CONDITIONS PRECEDENT TO FINANCIAL CLOSE ................... ................. 9
3.5 FINANCIAL CLOSE ........................................... ............................................... 10
3.6 TERMINATION PRIOR TO GMP CHANGE ORDER ..................... ................ 10 ARTICLE 4 SITE CONDITION; INDEMNIFICATION; COMPLIANCE WITH LAWS. ................................................................................................................. 10 119
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4.1 SITE CONDITION ............................................ .................................................. 10
4.2 ENVIRONMENTAL MATTERS AND DIFFERING SITE
CONDITIONS ..................................................................................................... 10
4.3 COMPLIANCE WITH LAWS ...................................... ...................................... 12
4.4 INDEMNITY ................................................. ...................................................... 13 ARTICLE 5 CONSTRUCTION OF THE PROJECT. .......................................................... 14
5.1 OWNERSHIP OF IMPROVEMENTS ................................. .............................. 14
5.2 EDGEMOOR’S CONSTRU CTION OBLIGATIONS........................................ 15
5.3 CITY’S RIGHT TO APPROVE ................................... ....................................... 15
5.4 UTILITIES ................................................. .......................................................... 16
5.5 THE CONSTRUCTION DOCUM ENTS FOR THE PROJECT ........................ 16
5.6 COMPLIANCE WITH THE FINA L CONSTRUCTION DOCUMENTS ......... 16
5.7 PREPARATION OF F INAL CONSTRUCTION
DOCUMENTS/APPROVAL OF LICENSED PROFESSIONAL ...................... 17
5.8 SUBMISSION OF CONSTRUCTION DOCUMENTS ...................... ............... 17
5.9 SCOPE OF THE CITY’S REVIEW OF THE FINAL CONSTRUCTION DOCUMENTS ..................................................................................................... 17
5.10 SCOPE OF EDGEMOOR SUBMISSION OF THE FINAL
CONSTRUCTION DOCUMENTS ..................................................................... 18
5.11 CHANGES IN FINAL CONS TRUCTION DOCUMENTS ............................... 18
5.12 CONFLICT BETWEEN THE CIT Y’S APPROVAL AND OTHER
GOVERNMENTAL REQUIREMENTS ............................................................ 18
5.13 CONSTRUCTION DOCUMENT REVIEW PROCEDURES ........................... 18
5.14 PROGRESS MEETINGS/ CONSULTATIONS .................................................. 19
5.15 MASTER PROJECT SCHEDULE................................... ................................... 19
5.16 SUBMITTALS AFTER COMPLETION/AS-BUILT DOCUMENTS ........... .... 21
5.17 INSURANCE REQUIREMENTS ................................... .................................... 21
5.18 PERMIT APPROVAL PROCESS .................................. .................................... 21
5.19 REPORTS .................................................. .......................................................... 21
5.20 RIGHTS OF ACCESS AND USE ................................. ...................................... 21
5.21 CHANGE EVENTS AN D CHANGE ORDERS ................................................ 22
5.22 WARRANTIES ............................................... .................................................... 25 120
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5.23 PREVAILING WAGE........................................... .............................................. 26
5.24 NON-DISCRIMINATION ....................................... ........................................... 26
5.25 CHANGE IN PROJECT STANDARDS .............................. ............................... 26
5.26 SUBCONTRACTOR LIST ....................................... .......................................... 27
5.27 FURNITURE, FIXTURE S AND EQUIPMENT ................................................ 27 ARTICLE 6 DETERMINATION OF SUBSTANTIAL & FINAL COMPLETION. ......... 28
6.1 NOTICE .................................................... ........................................................... 28
6.2 DEFINITION OF SUBSTANTIALLY COMPLETED ..................... ................. 28
6.3 PUNCH LIST ITEMS........................................... ............................................... 28
6.4 SPECIFIC APPROVALS CONTROLLING ............................ ........................... 29
6.5 TERMINATION OF AGREEMENT .................................. ................................ 29
6.6 DELAY CREDITS ............................................. ................................................. 29 ARTICLE 7 ENCUMBRANCES AND LIENS. ..................................................................... 29
7.1 NO MORTGAGE ............................................... ................................................. 29
7.2 MECHANICS’ LIENS .......................................... .............................................. 30
7.3 PERFORMANCE AND PAYMENT BONDS ............................. ...................... 30 ARTICLE 8 ASSIGNMENT AND TRANSFER. ................................................................... 30
8.1 RESTRICTION AGAINST TRANSFER............................... ............................. 30
8.2 EFFECT OF VIOLATION ....................................... ........................................... 31
8.3 ASSIGNMENT OF THE DES IGN/BUILD AGREEMENT .............................. 31 ARTICLE 9 DEFAULTS, REMEDIES AND TERMINATION. ......................................... 31
9.1 BEFORE APPLICABLE CLOSING DATE ............................ ........................... 31
9.2 EDGEMOOR EVENTS OF DEFAULT ................................ ............................. 31
9.3 REMEDIES OF THE CITY ...................................... .......................................... 32
9.4 CITY EVENTS OF DEFAULT .................................... ....................................... 34
9.5 REMEDIES OF EDGEMOOR ...................................... ...................................... 34
9.6 GENERAL ................................................... ........................................................ 35
9.7 RETURN OF SITE ............................................ .................................................. 35
9.8 PLANS AND DATA ............................................ ............................................... 35
9.9 FORCE MAJEURE SUSPENSI ON / TERMINATION RIGHT ........................ 36 121
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ARTICLE 10 GENERAL PROVISIONS. ............................................................................... 36
10.1 NOTICES .................................................. ........................................................... 36
10.2 TIME OF PERFORMANCE ...................................... ......................................... 38
10.3 TIME OF THE ESSENCE ...................................... ............................................ 38
10.4 INTERPRETATION OF AGREEMENT .............................. .............................. 38
10.5 SUCCESSORS AND ASSIGNS ................................... ...................................... 39
10.6 NO THIRD PARTY BENEFICIARIES .............................................................. 39
10.7 REAL ESTATE COMMISSIONS .................................. .................................... 39
10.8 CALIFORNIA PUBLI C RECORDS ACT .......................................................... 39
10.9 ENTIRE AGREEMENT ......................................... ............................................. 40
10.10 AMENDMENT................................................ .................................................... 40
10.11 GOVERNING LAW ........................................... ................................................. 41
10.12 EXTENSIONS BY THE CITY OR EDGEMOOR ...................... ....................... 41
10.13 DISPUTE RESOLUTION ...................................... ............................................. 41
10.14 FURTHER ASSURANCES ...................................... .......................................... 44
10.15 ATTORNEYS’ FEES AND COSTS ............................... .................................... 44
10.16 RELATIONSHIP OF PARTIES.................................. ........................................ 44
10.17 SEVERABILITY ............................................ ..................................................... 44
10.18 SECTION 179D ............................................ ....................................................... 44
10.19 ACTS OF AGENTS .......................................... .................................................. 45
10.20 LEED .................................................... ............................................................... 45
10.21 ADDITIONAL SCOPE ........................................ ............................................... 45
10.22 MONTHLY REPORTING ....................................... ........................................... 45
10.23 COUNTERPARTS ............................................ .................................................. 45
10.24 SITUS OF SALES .......................................... ..................................................... 45
10.25 LOCAL ENTERPRISES ....................................... .............................................. 46
10.26 COOPERATION ............................................. .................................................... 46
10.27 SUPPLIER DIVERSITY ...................................... ............................................... 47
10.28 IRC SECTION 48(A)(10) ................................... ................................................. 47 ARTICLE 11 REPRESENTATIONS AND WARRANTIES ................................................ 47 122
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11.1 REPRESENTATIONS AND WARRANTIES OF EDGEMOOR ............... ....... 47
11.2 REPRESENTATIONS AND WARRANTIES OF THE CITY ............... ........... 48
11.3 SURVIVAL. ................................................ ........................................................ 49 ARTICLE 12 DEFINITIONS. .................................................................................................. 49 123
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List of Attachments
Attachment A-1 Legal Description of Site
Attachment A-2 Site Map
Attachment 2.6 Schedule of Values
Attachment 2.7 Form of Requisition
Attachment 4.3(c) Responsibilit y for Regulatory Approvals Attachment 5.2(c) General Conditions
Attachment 5.4 Initial Draft of Division of Responsibility for Off-Site Utilities Attachment 5.5(a)
Attachment 5.15
List of Effective Date Design Documents
Master Project Schedule
Attachment 5.17
Attachment 5.21
Attachment 5.22
Required Insurance
Form of Change Order
Required Warranties
Attachment 5.24
Attachment 5.26
Attachment 5.27
Project Labor Agreement
Subcontractor List
Furniture, Fixtures and Equipment
Attachment 6.2
Attachment 6.5
Form of Certificate of Substantial Completion
Form of Certificate of Final Completion
Attachment 10.18 Form of 179D Letter Agreement
Attachment 12-2
Existing Site Reports
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4153-2470-0750.45
PROJECT AGREEMENT
THIS PROJECT AGREEMENT (this “Agreement” or “Project Agreement” ) is dated for reference purposes as of March __, 2024 (the “Effective Date”), and is entered into by and among the City of Garden Grove (the “City”), and Edgemoor Garden Grove Civic Partners LLC , a Maryland limited liability company (the “Edgemoor”).
RECITALS
THIS AGREEMENT is made with reference to the following facts and circumstances:
A. The City owns certain real property located in the City of G arden Grove at Acacia Parkway and Euclid Street and is legally described in Attachment A-1 and shown on the attached Attachment A-1 (the “ Site”). California Public Contracts Code § 22160 et seq. and Section
2.52.020 of the Garden Grove Municipal Code authorize the City to use design-build procurement for the design and construction of certain public works projects.
B. The City issued a Request for Qualifications (the “ RFQ”) seeking an experienced entity to design and develop the Site to include space for (i) a new public safety facility and (ii) a new parking structure ((i) and (ii) the “ PSF”) and (x) the demolition of the existing police headquarters building following the completion of the new PSF, and (y) a new reconfigured 2.7- acre park ((x) and (y), the “ Civic Center Park ”) described in more detail in Attachment 5.5(a) (collectively, the “Project”).
C. After an extensive best value evaluation process the City de termined that Edgemoor’s responses to the RFQ demonstrated best value to the City and therefore warranted entering into exclusive negotiations with Edgemoor.
D. The City and Edgemoor entered into that certain Exclusive Ne gotiation Agreement, dated as of October 2, 2023 (collectively, with any letter agre ements between the Parties the “ENA”), as the same may from time to time be amended, pursuant to w hich Edgemoor and the City have agreed to negotiate documents for the design and construction of the Project.
E. The City, subject to the terms of this Agreement, through bo th a lease-revenue bond financing by GGPFA on the financial close date (the “Financial Close Date”) of one hundred and forty million dollars ($140,000,000) and separate appropriation s of twelve million dollars ($12,000,000) commits collectively an amount not to exceed one hundred and fifty two million ($152,000,000) (“Total Available Funds”) to fund the Guaranteed Maximum Price to be paid to Edgemoor to design and construct the Project.
F. The Parties now desire to enter into this Agreement to set f orth the actual terms and conditions upon which the Project will be designed and construc ted subject to certain conditions precedent set forth in this Agreement, including (i) Edgemoor w ill, subject to the terms of this Agreement, design, develop, and construct the Improvements in a c c o r d a n c e w i t h t h e P r o j e c t Requirements, and obtain certain specified Project approvals in connection therewith (“Edgemoor’s Work ” or “ Work”), (ii) the City will pay for Edgemoor’s Work with Total Available Funds, and (iii) Edgemoor will enter into the Design/ Build Agreement (“Design/Build Agreement” or “ DBA”) with the Design Builder with respect to the design and const ruction of 125
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the Project as described in Section 2.3(a)(iii).
G. It is the intent of the Parties that Edgemoor will execute the design, development, and construction of the Project’s entire scope of work within the Total Available Funds, at or below the negotiated Guaranteed Maximum Price.
AGREEMENT
ACCORDINGLY, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
GENERAL: PARTIES, TERM, DEFINITIONS, AND PAYMENTS.
1.1 The City
The City is a municipal corporation in the State of California.
1.2 Edgemoor
Edgemoor is a Maryland limited liability company.
1.3 Site
The Site is located in the City of Garden Grove, California, and is described in Attachment A-1 and shown on the site map attached hereto as Attachment A-2 (the “Site Map”), which Site Map may be subject to change from time to time during the Term upon Substantial Completion of the various Improvements to reflect the location and dimensions of the completed Improvements.
1.4 City Commitment to Fund the Payment of the Guaranteed Maximum Price. (a) The City hereby commits an amount not to exceed the Total Avail able Funds to payment of the Guaranteed Maximum Price (defined below ), which Guaranteed Maximum Price includes any Work carried out prior to the execut ion of the GMP Change Order (defined below).
(b) Prior to the GMP Change Order’s execution, Edgemoor will be paid for all Work performed in accordance with this Agreement and any Notice to Proceed issued by the City i n a n a m o u n t t o b e a g r e e d b e t w e e n t h e P a r t i e s a s s e t f o r t h i n Section 2.4, and all such Work performed is part of the Guaranteed Maximum Price and will be paid in accordance with Section
2.7. 1.5 Term of this Agreement
Unless terminated sooner in acco rdance with this Agreement, the term of this Agreement (the “Term”) shall be from the Effective Date until two (2) years after F inal Completion of the last Improvement to achieve Final Completion under this Agreement, except any payment obligations which are due and payable prior to such expiration and other performance or indemnity obligations 126
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and rights which accrued during the term but by their nature mu st survive termination and/or expiration of this Agreement (e.g. pre-existing Change Event or indemnity claims not otherwise settled).
1.6 Definitions; Recitals
Initially capitalized terms used in this Agreement are defined in Article 12 or have the meanings given them when first defined. The Recitals are incorporated into this Agreement by reference.
1.7 Termination; Survival; Hierarchy
Upon expiration of the Term, this Agreement will terminate in i ts entirety, except solely the following provisions: Sections 4.4, 5.1, 5.23, 6.6, 7.2, 9.3( d), 9.6, 9.7, 9.8, 10.1, 10.7, 10.11,
10.13, 10.15, 10.18, 11.1, 11.2, and statutory warranties and/o r construction defect statutes of limitation. Each of the provisions of this Agreement, includin g the Attachments are an essential part of the agreement between the Parties and are intended to b e complementary and to be read together with this Agreement as a complete agreement. Except as otherwise expressly provided in this Section 1.7 above, if there is any conflict, ambiguity or inconsistency between the provisions within this Agreement, the order of precedence from highest to lowest will be as follows:
(i) any amendment to this Agreement, any Notice to Proceed, or a Change Order;
(ii) the Effective Date Design, and respectively upon approval, the Approved Design Documents and thereafter the Final Construction Documents; (iii) the provisions of the main body of this Agreement; and (iv) the provisions of the Attachments.
If either Party becomes aware of any conflict, ambiguity or inc onsistency between the provisions of this Agreement or between o r among this Agreement, a Change Order, the Final Construction Documents, and/or the Attachments, it must promptly notify the other Party in writing of the conflict, ambiguity or inconsistency and its assessment of which provision should prevail in light of the application of the rules set forth in this Section 1.7.
ARTICLE 2
GMP PROCESS AND PAYMENT
2.1 Execution of the Project Agreement and Design/Build Agreement Concurrently with, or prior to, the Notice to Proceed the City and Edgemoor will have executed this Project Agreement, and Edgemoor and Design Builder will ha ve executed the Design/Build Agreement.
2.2 Site Access
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The City hereby grants Edgemoor (subject to the limitations in this Agreement) access to the Site for the purpose and on the conditions set forth in this Agreeme nt upon issuance of a Notice to Proceed.
2.3 GMP Change Order Process
(a) The Parties acknowledge and agree that:
(i) as of the Effective Date, the Project’s design is not complete and is at the level of the Effective Date Design;
(ii) prior to Financial Close, the Parties will work collaboratively and iteratively to advance the Effective Date Design and Edgemoor w ill deliver 100% Design Development Documents, a Schedule of Values and Master Project Schedule and the Parties will mutually agree on an estimated guaranteed maximum price (the “Guaranteed Maximum Price” or “GMP”) in an amount not to exceed the Total Available Funds, in accordance with this Section
2.3;
(iii) following Financial Close and subject to Section 2.3(b), a bind ing Guaranteed Maximum Price, Schedule of Values and Master Project Schedule will be finalized and established in a Change Order to be executed by the Parties promptly following Edgemoor’s completion of Final Construction Documents (the “GMP Change Order”). As part of establishing the estimated Guaranteed Maximum Price described in Section 2.3 (a)(ii) above and the binding Guaranteed Maximum Price in the GMP Change Order at, or below, the Total Available Funds, the Parties agree that it may be necessary to adjust the Effect ive Date Design, the Design Development Documents, Approved Design Documents, the Final Construction Documents (and any modifications thereto), the M aster Project Schedule and/or the Project scope through an iterative, collaborative and cooperative design, cost estimating (which may be impacted by price escalations) and time impact analysis process. The Parties ackn owledge and agree that the contingency to be established in the GMP Change Order shall be s o l e l y f o r t h e b e n e f i t o f Edgemoor’s design and construction component of the Work and su ch design and construction contingency is estimated not to exceed five percent (5%) of the Guaranteed Maximum Price, and the Parties acknowledge that they will work collaboratively to minimize and reduce contingency in the GMP Change Order, but acknowledge contingency amounts ma y be adjusted (with both Parties’ agreement, acting reasonably) in either direction. The Guaranteed Maximum Price development and calculations will be subject to open book review by the City in accordance with Section 2.10; and
(iv) if the Parties cannot agree on scope, schedule, price or design changes to achieve the City’s objectives for the Project at or below the Total Available Funds, then the City (in its sole and absolute discretion) may obtain addit ional funding beyond the Total Available Funds to fund the Project or, failing that, either Pa rty may terminate this Agreement in accordance with Section 2.3(b).
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may be terminated for no fault, by either Party in writing. In such event, the City shall pay Edgemoor within 14 days for all amounts due and payable in accordance with Section 3.6. (c) In connection with termination or expiration of this Agreement for any reason, including under Section 2.3(b), then following payment in full of all amounts due and payable by the City for all Work performed by Edgemoor in conformance with this Agreement, the City shall, subject to providing the indemnity in Section 9.8, be entitled to receive and use all Construction Documents (including Design Development Documents) existing at the time, free of any liens, claims, or encumbrances by Edgemoor or any Edgemoor subcontractor.
2.4 Notice to Proceed Work & City Rights in the Site
(a) Notice to Proceed. Prior to finalizing a Guaranteed Maximum Pr ice under Section 2.3, Edgemoor may perform certain Work under a price or payment method agreed between the Parties under one or more Notices to Proceed (a “ Notice to Proceed ”). Within ten (10) days following the first Notice to Proceed from the City, Edgemoor will proceed with the performance of such authorized Work and the City will pay for s uch Work in accordance with Sections 2.6 and 2.7 for any such Work performed by Edgemoor. P rior to commencing any such Work, Edgemoor will deliver proof of insurance which is required to perform the applicable Work as agreed between the Parties and will deliver, or cause to be delivered on its behalf, a performance bond and payment bond as required under applicable Law in an am ount equal to the value of the design and construction portion of such Work to be performed under the Notice to Proceed, naming Edgemoor the obligee and the City an additional obligee under a multiple obligee rider. (b) Reservation of Rights by the C ity. The City shall retain right s in the Site consistent with the activities described herein, including the right to continue certain uses on the Site during Edgemoor’s Work as described in Section 5.20.
2.5 Taxes and Assessments
(a) It is agreed that the City will be responsible for all real-pro perty taxes and assessments arising from or relating to the Project or Site and Edgemoor shall have no obligation to pay any such taxes or assessments arising from or relating to the Project or Site. If any obligation to pay such tax or assessment is imposed by any authority havin g jurisdiction arising from or in relation to the Project or the Si te, the City shall be responsi ble for either authorizing payment of such tax from the change contingency or challenging the imposition of such tax or assessment.
2.6 Milestone Payments and Payment of the GMP
(a) The Parties will agree on a schedule of values that sets out th e break-down of amounts to be paid by the City to Edgemoor under this Agreem ent, to be attached initially as Attachment 2.6, and updated from time to time, in accordance wi th this Agreement, including in connection with Financial Close and execution of a Change Order, or as otherwise agreed between the Parties (the “Schedule of Values”).
(b) Following execution of the GMP Change Order, the City shall pay the Guaranteed Maximum Price in accordance with the Schedule of Val ues, Section 2.7 with the understanding that any fixed-price components will be paid base d o n a p e r c e n t a g e o f W o r k 129
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described in the Schedule of Values attached to the GMP Change Order.
2.7 Payment Procedures
(a) Disbursements – The process for payments to Edgemoor under and in connection with this Agreement (“ Disbursement(s)”) shall be in accordance with the following process:
(i) Edgemoor will submit a requisition (a “ Requisition” ) f o r W o r k performed substantially in the form of Attachment 2.7 to this Agreement; and (ii) within ten (10) calendar days following submittal of the Requisition, the City shall either approve the Requisition or identify which portion, if any, is disputed. The undisputed portion of the Disbursement shall be paid to Edgemoo r by the City within five (5) calendar days after approval as to an undisputed portion of the Requisition. As to any disputed portion of the Requisition, the Parties shall continue to discuss the disputed portion until the matter is resolved or either Party invoke s expedited dispute resolutio n procedures in Section 10.13(d).
The City’s obligation to pay amounts due under this Agreement i s an absolute and unconditional obligation to pay agreed upon amounts and will not be contingen t, or conditional on receiving funds from GGPFA, any trustee or other third-party.
(b) Retainage –
(i) Retainage Amount - All amounts for PSF Construction disbursed pursuant to this Section 2.7 shall be subject to a five percent (5%) retention to be held by the City in accordance with applicable Law, which shall not exceed three million five hundred thousand dollars ($3,500,000) in the aggregate, until released by the City in accordance with Section 2.7(c).
Upon commencement of the Civic Center Park Construction, all am ounts for Civic Center Park Construction disbursed pursuant to this Section 2.7 shall be subject to a five percent (5%) retention to be held by the City in a separate account and in accordance with applicable Law, and will be released by the City in accordance with Section 2.7(c). Retainage shall not be held against design costs, general conditions, and any amounts for “Development Man agement” identified in the Schedule of Values. In accordance with Cal. Pub. Cont. Code § 2 2185.7 Work performed to establish the guaranteed maximum price shall not be subject to retention. All amounts retained by the City shall be held in an interest bearing account, in a financial institution selected by Edgemoor in accordance with the California Public Contracts Code. The Pa rties will enter into a retainage agreement agreed between the Parties which will govern the proc edures for this interest bearing account or any securities in lieu of retainage, including distribution of interest earned to Edgemoor, in each case, to the extent perm itted by applicable Law, including § 22300 of California Public Contracts Code.
(ii) Draw - Retainage may be drawn and held by the City under this Agreement or under any applicable escrow account solely to the extent of an Edgemoor Event of Default for non-payment of undisputed amounts where the City otherwise is unable to setoff such amounts due and payable by Edgemoor.
(c) Release of Retainage –
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(i) Upon Substantial Completion of the PSF, the City will release a ll retainage held by the City or retainage held pursuant to an esc row agreement will be released, subject to holding back 200% of the value of the PSF “Punch List Items”. (ii) Upon Substantial Completion of the Civic Center Park, the City will release all held retainage held by the City or retainage held p ursuant to an escrow agreement will be released, subject to holding back 200% of the value of the Civic Center Park “Punch List Items”. (iii) All Punch List retainage for the PSF and the Civic Center Park, as applicable, will be released in accordance with the Requisition procedures in Section 2.7(a) as and when the applicable Punch List Items are completed.
(iv) In connection with the release of each retainage amount under subsections (i) through (iii) above, Edgemoor shall submit an u nconditional waiver and release upon receipt of such payment pursuant to California Civil Code Section 8134 for itself, and for each subcontractor and supplier pa rticipating in the Constructi on Work completed during the period for which retainage is being released.
2.8 Unincorporated Materials.
To the extent required to deliver the Work, the City shall be obligated to pay Edgemoor for all “Unincorporated Materials” paid for by Edgemoor, which will be included in the Guaranteed Maximum Price and will include any of the following: (i) advance deposits required to be paid to vendors and suppliers necessary to acquire materials or equipment, (ii) materials and other personal property purchased or manufactured for incorporation into the Improvements in accordance with this Agreement (including the Final Construction Documents) but, at the time a Disbursement is made hereunder to pay the costs thereof, not yet incorporated into the Improvements, (iii) personal property to be installed in or used in connection with the Project, but not intended to be incorporated into the Improvements, and in the case of (ii)-(iii) (A) have been secured and segregated, or (B) are in the custody or control of Edgemoor.
2.9 Suspension of Work / Interest
(a) Suspension - Where Edgemoor has complied with its obligations regarding Disbursements under this Agreement (including in connection wit h a Change Order) and the relevant undisputed Disbursement is not made by the City by the time required in Section 2.7, or the City fails to otherwise respond to a properly and timely submitted Requisition, Edgemoor may, after fifteen (15) days’ written notice to the City, (and witho ut prejudice to any other right under this Agreement or applicable Law) suspend Work on the Project f or nonpayment of undisputed amounts.
(b) Interest - If a Disbursement or any other payment under this Agreement is not paid in full on, or prior to, the applicable due date, then the unpaid amount shall accrue interest from the date which is 15 days after notice from Edgemoor to the City, until such amount is paid, at an annual rate equal to the higher of the Prime Rate plus tw o percent (2%) per annum or the highest rate allowed under applicable Laws.
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2.10 GMP Open Book.
All amounts (other than lump sum amounts agreed between the Parties or fixed amounts for insurance, bonding, Edgemoor personnel/staffing costs) paid under this Agreement will be subject to open book review by the City (and its consultants) to confirm amounts (including subcontractor bids, contingency and administrative development costs) requested have actually been incurred by Edgemoor; provided, however the Parties acknowledge that insurance costs, surety costs, and personnel costs are lump sum amounts that have been mutually agreed by the Parties and are recognized as reasonable costs and neither Party will utilize the open book process after the GMP Change Order to further review or renegotiate amounts previously agreed between the Parties.
2.11 GMP Savings
In connection with the final payment at Final Completion of the Civic Center Park and in accordance with Cal. Pub. Cont. Code § 22185.5(b)(2), to the extent that the City has paid Edgemoor less than the Guaranteed Maximum Price (including any contingencies therein), the Parties will share in such savings 50/50, which amount will be disbursed with the final payment on or around such Final Completion.
ARTICLE 3 FINANCIAL CLOSE.
3.1 Project Funding
(a) Funding.
(i) City Funding. The City will be solely responsible for securing the financing and funding for the Project, which is expected not to exceed the Total Available Funds and is unconditionally (whether through financing or appropriated funds or otherwise) responsible for paying Edgemoor for all Edgemoor’s Work performed in accordance with this Agreement not to exceed the Guaranteed Maximum Price. The Parties acknowledge that the City’s failure to cause Financial Close is a failure of a condition precedent to Edgemo or performing any further Work under this Agreement entitling Edgemoor to terminate this Agreement, but is not a City Event of Default.
3.2 Cooperation of Parties.
Edgemoor will provide reasonable and customary assistance to the City in providing the necessary information from Edgemoor regarding Edgemoor, its subcontractors and the Project in order to achieve the Financial Close.
3.3 Financial Close Target Date; Rights of Termination The “ Financial Close Target Date ” shall mean the expected date for achieving the Financial Close, which is ninety (90) days following the Effective Date. Subject to Extension, or mut ual written agreement executed by the Parties in their sole and abs olute discretion, extending the 132
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Outside Financial Closing, if the Financial Close, notwithstand ing any other provision of this Agreement, has not occurred by the date that is one hundred and fifty (150) days from the Effective Date (the “Outside Financial Closing Date”), then the City or Edgemoor shall have the right to terminate this Agreement (without fault), and upon such termination none of the Parties shall have any further obligations under this Agreement except as otherwis e expressly provided in this Agreement, including the City’s payment under Section 3.6. In the event of such termination, each of the Parties shall execute and deliver such documents and tak e such acts as may be reasonably required to unwind this Agreement.
3.4 Conditions Precedent to Financial Close
(a) Conditions Precedent. The following are conditions precedent t o proceed with the Financial Close:
(i) The Effective Date shall have occurred and Edgemoor has provided an estimated Guaranteed Maximum Price as described in Section 2.3(a)(ii), and from and after the later of such dates, both Parties have continued to perform in all material respects all material obligations under this Agreement required to be performed befor e the Financial Close, and all of the representations and warranties made in Article 11 of this A greement, respectively, shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of Financial Close;
(ii) Any additional documents to be executed by Edgemoor and City on or before the Financial Close, which were not executed on or before the Effective Date, shall have been executed and delivered to the other Party;
(iii) From and after the Effective Date, there shall not have occurred any action or proceeding before any court, tribunal, or other judic ial, adjudicative or legislative decision-making body, including a ny administrative appeal, by a third party which seeks to challenge this Agreement, the Financial Close, the DBA, or the development of any portion of the Project;
(iv) the Parties have agreed on all Change Events as of the Financia l Close and the estimated Guaranteed Maximum Price does not exceed the expected Total Available Funds; and
(v) 100% Design Development Documents have been submitted by Edgemoor.
(b) Satisfaction of Conditions Precedent. The conditions precedent set forth in Section 3.4(a) above are intended for the benefit of the both P arties. If any such condition precedent is not satisfied on or before the Financial Close Tar get Date either Party shall have the right to (i) waive in writing the condition precedent in question and the City may proceed with the Financial Close; (ii) in the case of the City, postpone the Fin ancial Close for the time period reasonably necessary for such condition to be satisfied, provided that, except as expressly provided herein, in no event shall the Financial Close occur after the O utside Financial Closing or (iii) terminate this Agreement and Edgemoor will be paid in accordance with Section 3.6. 133
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3.5 Financial Close
Provided that the conditions precedent set forth in Section 3.4 have all been satisfied or expressly waived by the applicable Party on or before the Outside Financi al Closing, the City will achieve Financial Close within ten (10) days thereafter or where the City chooses not to achieve Financial Close within such time period then Edgemoor may terminate this Agreement and the City shall compensate Edgemoor in accordance with Section 3.6.
3.6 Termination Prior to GMP Change Order
Without limiting either Party’s rights due to a termination for either, a City Event of Default or Edgemoor Event of Default under Article 9, if this Agreement is terminated prior to the GMP Change Order being executed by both Parties, the City shall pay Edgemoor an amount equal to:
(i) the cost incurred (but not yet paid) for all Work performed by Edgemoor and any Edgemoor Responsible Party in accordance with this Agreement and any Notice to Proceed, (ii) Edgemoor’s and any Edgemoor Responsible Party’s costs incurred as a result of such termination and (iii) an amount equal to $75,000.
ARTICLE 4
SITE CONDITION; INDEMNIFICATION; COMPLIANCE WITH LAWS.
4.1 Site Condition
(a) Site Delivery. Subject to the City Permitted Site Uses, on and from the Effective Date, the City shall deliver and provide to Edgemoor full access to the Site for the purposes of performing Edgemoor’s Work. The Site will be delive red by the City in a condition acceptable to Edgemoor.
(b) Site Ready Obligations. Without limiting the foregoing, subject to the City’s continued use of the Site and adjacent property as described in Edgemoor’s Site coordination plan prepared by Edgemoor and agreed with the City, each when necess ary, Edgemoor shall be permitted space at the Site for parking, locating office traile rs, and storage/staging areas for the purposes of performing Edgemoor’s Work.
(c) Damage or Destruction.
(i) If any damage or destruction of t he Site occurs after the Effec tive Date, which is not caused by an act or failure to act of any Edgemoor Responsible Party in breach of this Agreement, and which the Parties reasonably determine would add $50,000 or more (in the aggregate) to the cost of developing the Project (a “Material Damage Event”), the City shall issue a Change Order. Following issuance of the Change Order, Edgemoor shall remedy the damage or destruction and the City will pay Edgemoor for its costs and expenses incurred in connection with performing any such restoration work pursuant to the Change Order.
4.2 Environmental Matters and Differing Site Conditions (a) Environmental Matters. Edgemoor shall comply with all Hazardou s Materials Laws applicable to the Site in performing Edgemoor’s Work. If any Hazardous 134
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Materials are discovered on the Site, Edgemoor shall (i) if req uired by applicable Law, immediately contain, remediate or remedy such Hazardous Materials or (ii) if immediate action is not required, promptly notify the City after which the Parties will expedititously determine the most cost effective and appropriate course of action. Thereafter, Edgemoor will perform all agreed upon required and necessary remediation and other work needed t o remove such Hazardous Materials from the Site and to properly dispose the same off-Site, all in accordance with applicable Laws, including Hazardous Materials Laws. So long as the disco vered Hazardous Materials are not part of Edgemoor Assumed Hazardous Materials Obligations (defined below), such discovery shall be deemed a Change Event. Without any double counting in connection with the aforementioned Change Event process, and excluding Edgemoor Ass umed Hazardous Materials Obligation (as defined below), the City shall be solely respons ible for, and shall Indemnify Edgemoor, from any and all costs to comply with Hazardous Mater ials Laws, including, without limitation, (i) all direct third party documented costs and exp enses for investigating, remediating and/or removing any such Hazardous Materials to the extent such investigation, remediation and/or removal is required, and (ii) all Hazardous Materials Laws applicable to the use of the Site and the Improvements. The Parties acknowledge that to the extent that C alifornia Code, Public Contract Code - PCC § 7104 applies to the Work, to the extent required b y Law, it is incorporated herein by this reference as if fully set forth herein.
(b) The City shall not be relieved from any liability that the City m a y h a ve under applicable Laws that relate to pre-existing Hazardous Materials on the Site or by reason of the existence of any Hazardous Materials on the Site for which it is a responsible party, and in no event shall Edgemoor Indemnify th e City with respect to such en vironmental conditions which existed on the property prior to the Effective Date or which are not Edgemoor Assumed Hazardous Materials Obligations (defined below).
(c) Notwithstanding the foregoing, Edgemoor shall be solely respons ible for, and shall Indemnify the City fro m, any and all costs to bring t he Site into compliance with Hazardous Materials Laws to the extent caused by Hazardous Mate rials brought by Edgemoor or its contractors or subcontractors onto the Site in connection w ith Edgemoor’s Work for which Edgemoor or its contractors or subcontractors are liable under Hazardous Materials Laws, including where such Hazardous Materials materially adversely i mpact subsurface conditions (collectively, the “ Edgemoor Assumed Hazardous Materials Obligations ”). Edgemoor shall not be responsible for environmental conditions which existed on the Site prior to Edgemoor taking control of the Site or which are not otherwise Edgemoor Assumed Hazardous Materials Obligations.
(d) Differing Site Conditions. Without limiting the foregoing, if any Differing Site Conditions are discovered on the Site, then Edgemoor shall promptly perform all required and necessary work required pursuant to applicable Law given the cu rrent use of the Site (e.g., not residential) needed to mitigate, address or correct such Differing Site Conditions to the extent such Differing Site Conditions either ( i) directly impact the perfor mance of Edgemoor’s Work or (ii) are required to be addressed under applicable Law, and in each case, such discovery and necessary work shall be deemed a Change Event.
(e) Existing Site Reports. The City agrees that, with respect to the surface and subsurface conditions of the Site, Edgemoor has relied upon and will rely upon, all representations 135
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and warranties of the City provided to Edgemoor and as otherwise expressly set forth in the Project Agreement, and that as of the date of the Effective Date it has delivered to Edgemoor all reports, studies, assessments, audits or other similar documents in conn ection with the condition of the Site, utilities, Hazardous Materials, geotechnical conditions, soil conditions, or any other Site condition that the City has in its possession or is aware of an d that all such reports are listed in Attachment 12-2, (collectively, the “Existing Site Reports”). Notwithstanding the foregoing, the Parties acknowledge and agree that, upon execution of the GMP Change Order, Attachment 12-2 will be updated with Existing Site Reports that the City has in its possession or is aware of between the Effective Date and execution of the GMP Change Order, which will be considered as part of the GMP Change Order process. The City will attempt to obtain w ritten acknowledgements in form and substance reasonably sa tisfactory to Edgemoor from the consultants engaged by or on behalf of the City who prepared t he Existing Site Reports speci fically stating that Edgemoor is entitled to rely upon the information contained in such Existing Site Reports.
4.3 Compliance with Laws
(a) Except as to Edgemoor Assumed Hazardous Materials Obligations, no term or provision of this Agreement shall be construed to deem or require Edgemoor to be the generator, shipper, arranger, and/or trans porter of any Hazardous Material s disposed of from the Project or the Site or otherwise as part of Edgemoor’s Work, or parts thereof encountered during Edgemoor’s Work; neither will Edgemoor be required to take any action that would cause it to be listed or identified as the generator, shipper, arranger, or owner for th e purposes of applying any statute, rule, guideline, or regulation. The City will be identified as the generator and arranger of all Hazardous Materials on any transport manifests for the Project, except for the Edgemoor Assumed Hazardous Materials Obligations.
(b) Compliance with Laws. Edgemoor shall comply at all times throughout the Term, with respect to the Project and the Site, with: (i) all Laws; (ii) all requirements of all policies of insurance that may be applicab le to the Site, the Improvemen ts, and Edgemoor’s personal property; and (iii) all other appl icable Project Requirements. Subject to the City’s obligations in Section 4.2 and Section 5.21 regarding Change Events, the cost to comply with this Section 4.3(b) shall be allocated to Edgemoor. Notwithstanding anything herei n to the contrary, the Parties acknowledge that the provisions of this Section 4.3(b) are not intended to modify the allocation of responsibilities contained herein, and in no event shall this Section 4.3(b) be interpreted such that neither Party will be obligated to perform obligations that are expressly allocated to the other Party.
Edgemoor shall, promptly upon request from time to time, provid e the City with evidence of compliance with Edgemoor’s obligations under this Section 4.3(b). (c) Regulatory Approvals and Permits. Edgemoor and the City each understand that the construction of the Improvements on the Site and development of the Project may require certain Regulatory Approvals. Accordingly, Attachm ent 4.3(c) sets forth which of Edgemoor or City shall be responsible for each such Regulatory Approval. The Regulatory Approvals required to be obtained by Edgemoor are referred to h ereunder as the “ Edgemoor Assumed Regulatory Approvals.” The Regulatory Approvals required to be obtained by the City are referred to hereunder as the “City Assumed Regulatory Approvals.” Throughout the process for obtaining any Regulatory Approval, Edgemoor and the City shall consult and coordinate with each other to obtain any required Regulatory Approvals and shall reasonably cooperate with each 136
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other. However, Edgemoor shall not agree to the imposition of obligations, conditions or restrictions in connection with its efforts to obtain a Permit from any regulatory agency if the City is required to be a co-permittee under such Permit or the conditions or restrictions could create any obligations on the part of the City whether on or off of the Si te, unless in each instance the City has previously approved such conditions in writing. The City s hall provide Edgemoor with its approval or disapproval thereof in writing within five (5) Busi ness Days after receipt of Edgemoor’s written request. Subj ect to the conditions of this Section 4.3(c), the City shall join any application by Edgemoor for a required Regulatory Approval and in executing any such Permit issued in connection therewith where required. Edgemoor shall bear all costs associated with applying for and obtaining any necessary Edgemoor Assumed Regulatory Approvals described on Attachment 4.3(c). The cost of obtaining and complying with Re gulatory Approvals shall be allocated between Edgemoor and City as set forth in this Agreem ent. Each of the City and Edgemoor shall have the right to appeal or contest any condition or Permit in any manner permitted by Law imposed upon any such Regulatory Approval required to be obtained by the City or Edgemoor, as applicable. The City or Edgemoor, as applicable, shall provide the other Party with prior notice of any such appeal o r contest and keep the non-con testing Party informed of such proceedings. The Party responsible for obtaining a certain Reg ulatory Approval shall pay or discharge any fines, penalties or corrective actions imposed as a result of the failure of such Party to comply with the terms and conditions of any Regulatory Appro val except to the extent such failure results from the acts or omissions of the other Party. Without limiting any other provisions of this Agreement, it shall be a Change Event if the City fails to (i) timely obtain any City Assumed Regulatory Approval by the time or times established in the Mas ter Project Schedule, (ii) timely maintain any City Assumed Regulatory Approval, or (iii) comply with the terms and conditions of any City Assumed Regulatory Approval. The City and Edgemoor each agree to use diligent efforts to obtain any Regulatory Approval required to be obtained by such Party.
4.4 Indemnity
(a) Edgemoor’s Indemnity. To the greatest extent permitted by applicable Law, Edgemoor hereby Indemnifies the City, and its Indemnified Parti es from and against any third- party claims or third-party Losses due to bodily injury or property damage (each, a “City Claim”) to the extent caused by the acts or omissions of any Edgemoor Responsible Party in breach of this Agreement, negligence, fraud or willful midconduct; provided, however, that Edgemoor shall have no obligation to Indemnify any Indemnified Party to the extent a C i t y C l a i m a r o s e f r o m t h a t Indemnified Party’s (i) failure to comply with its obligation u nder this Agreement, (ii) gross negligence or fraud, or (iii) willful act or omission of such Indemnified Party. (b) City’s Indemnity. To the greatest extent permitted by applicab le Law, the City hereby Indemnifies Edgemoor, and its Indemnified Parties f rom and against any third-party Claims or third-party Losses (each, an “Edgemoor Claim”) to the extent caused by the the acts or omissions of any City Responsible Party in breach of this Agreement, negligence, fraud or willful midconduct; provided, however, that the City shall have no obli gation to Indemnify any Indemnified Party to the extent an Edgemoor Claim arose from that Indemnified Party’s (i) failure to comply with its obligation under this Agreement, (ii) gross negligence or fraud, or (iii) willful act or omission of such Indemnified Party.
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(i) Costs. The foregoing allocation of responsibly for certain Los ses shall include, without limitation, reasonable fees and costs of attorneys, consultants and experts, laboratory costs, and related cos ts, as well as the Indemnified Party’s costs of investigating any Loss.
(ii) Immediate Obligation to Defend. A Party that is responsible to another Party pursuant to this Section 4.4 (each, a “ Responsible Party”) shall also pay for the Indemnified Party’s defense even if such claims may be alleged to be groundless, fraudulent or false. The Indemnified Party against whom any claim is made wh ich may be within the scope of the indemnity provisions of this Agreement shall provide notice to the Responsible Party of such claim within a reasonable time after learning of such claim, and thereafter shall cooperate with the Responsible Party in the defense of such claim; provided that a ny failure to provide such notice shall not affect Responsible Party’s obligations under any such indemnity provisions except to the extent Responsible Party is prejudiced by such failure. (iii) Not Limited by Insurance. Insurance may be used to satisfy a Party’s obligation under this Section 4.4, but the insurance re quirements and other provisions of this Agreement shall not limit a Responsible Party’s obligations under this Agreement. (iv) Survival. Notwithstanding any other provision in this Agreement to the contrary, the obligations of any Party set forth in this Se ction 4.4 shall survive the expiration of the Term and any early termination of this Agreement. (v) Additional Obligations. The ri ghts and obligations under this Section 4.4 are in addition to, and in no way shall be construe d to limit or replace, any other obligations or liabilities which the Responsible Party shall ha ve to the other Parties under this Agreement or applicable Laws.
(vi) Defense. The Responsible Party shall, at its option but subjec t to the reasonable consent and appr oval of the Indemnified Party, b e entitled to control the defense, compromise, or settlement of any matter indemnified by it throu gh counsel of the Responsible Party’s own choice; provided, however, in all cases the Indemni fied Party shall be entitled to participate in such defense, compromise, or settlement at its own expense. If the Responsible Party shall fail, however, within a reasonable time following notice from the Indemnified Party describing in reasonable detail the nature of the Responsible Party’s failure to take reasonable and appropriate action to defend such suit or claim, the Indemnified Party shall have the right promptly to hire outside counsel to carry out such defense, the expense of which shall be due and payable to the Indemnified Party within thirty (30) days after receipt by the Responsible Party of each invoice therefor.
ARTICLE 5
CONSTRUCTION OF THE PROJECT.
5.1 Ownership of Improvements
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Without regard to which Person constructs or causes the construction of any Improvement(s), the City shall own all Improvements as they are contracted for (in the case of materials only) and otherwise, as constructed, installed, erected, or placed on the Site.
5.2 Edgemoor’s Construction Obligations
(a) Scope of Edgemoor’s Work; Master Project Schedule. In addition to any Work performed under a Notice to Proceed, if Financial Close occurs and the GMP Change Order is executed by both Parties, Edgemoor shall construct or cause to be constructed the Work described in the GMP Change Order, subject to the terms and co nditions of this Agreement, in the manner set forth in this Article 5 prior to the applicable Target Completion Dates (as the same may be extended as provided in this Agreement) and in accordance with the Project Requirements.
In the event the City’s consent is required for an extension of the applicable Target Completion Date, and the applicable Target Completion Date is so extended, then the City shall not be deemed to be waiving any other rights under this Agreement or implying the extension of any other dates. (b) Costs of the Project. Edgemoor shall, subject to the City’s pa yment obligations under this Agreement, bear all of the cost of devel oping the Site and Construction of all Improvements, including, any and all cost overruns, in acco rdance with the Project Requirements. Without limiting the foregoing, but subject to t he terms of this Agreement, if the GMP Change Order is executed, Edgemoor shall be responsible for performing all off and on-site Site preparation work necessary for Construction of the Improvements. (c) Design and Construction in Accordance with Project Requirements .
Edgemoor shall perform the Work in accordance with (i) Title 24 and those applicable to Essential Service Facilities (Building Codes and Regulations) of the Garden Grove Municipal Code, (ii) the General Conditions attached hereto as Attachment 5.2(c), it bei ng understood that Edgemoor is designing to a category 4 and any deviations from such performance criteria must be approved in writing by the City; (iii) any applicable Standard of Care and in compliance with all Laws, including, Hazardous Materials Laws and Disabled Access Laws, ( iv) as further provided in Section 4.3, all Regulatory Approvals; and (v) the Approved Des ign Documents, and upon approval, the Final Construction Documents. All such requireme nts, together with the approved Final Construction Documents are referred to collectively as the “Project Requirements.” (d) Construction Coordination Meeting. Edgemoor shall work with the City to schedule and hold a design and construction coordination meetings each week, either as part of an existing meeting or as a standalone meeting to coordinate Edgem oor’s performance of the Work with the City’s operations at or around the Site.
5.3 City’s Right to Approve
The City Manager or her designee may review and approve all design and construction documents at the intervals established her ein and in the Schedule of Subm ittals (to be submitted to the City by Edgemoor with the GMP Change Order) and further retains the right to inspect the Construction Work. The City will respond to a ll submittals requiring their approval within the time period set out herein and in the Schedule of Submittals.
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5.4 Utilities
The detailed division of responsibility between the Parties for the provision and construction of all off-Site utilities and improvements required for the installati on of on-Site utilities is provided in Attachment 5.4, which is in initial draft form and is to be fin alized as part of the GMP Change Order process, with the understa nding that Edgemoor shall be re sponsible for coordinating all utility work required on-Site and off-Site for the Project, exc ept that off-Site utility work will be performed at the City’s cost (to the extent such costs are not otherwise covered by a utility). The City agrees that Edgemoor shall be permitted to use, existing C ity electricity, water and other utilities at the Site in connection with its performance under this Agreement. If and to the extent there is a cost associated with such use, such cost will be inc luded in the Guaranteed Maximum Price. Subject to the provisions in this Section 5.4, the City retains responsibility and cost for unknown utilities which constitute a Differing Site Condition a nd for failures by utilities to coordinate with Edgemoor or timely perform any utility obligati on contemplated by the Master Project Schedule or Edgemoor’s utility coordination plan (in each case, after Edgemoor exhausting commercially reasonable efforts to coordinate with such utilities), as may be updated from time to time, for the Project. Edgemoor shall cooperate with the City and provide all reasonable assistance to the City with respect to the coordination with utilities.
5.5 The Construction Documents for the Project
(a) Subject to the provisions of this paragraph, those certain Desi gn Development Documents in Attachment 5.5(a) have been accepted b y Edgemoor and the City as of the Effective Date (the “ Effective Date Design”) and the City shall approve the required and remaining Design Development Documents following the Effective Date as part of the GMP Change Order process (“Approved Design Documents”). Edgemoor and the City acknowledge and agree that the Approved Design Documents supersede, with re spect to the applicable Improvements related thereto, all prior and/or different design d o c u m e n t s r e l a t e d t h e r e t o (including the Effective Date Design), the RFQ, and any formal and/or informal responses thereto, and all other documents related to the applicable Improvements related to such Approved Design Documents.
(b) The City will review, comment and where applicable, approve Construction Documents in accordance with this Agreement and the Schedule of Submittals. Upon the City’s approval of each iteration of the Design Development Documents (including any Approved Design Documents) and any other iterati ve submissions of the Construct ion Documents, such interim approvals shall supersede and replace in their entirety, all other prior interim design approvals, in each case, until the Final Construction Documents are approved in accordance with Section 5.9 below. Once the Final Construction Documents are approved, in t he event of a conflict between the Final Construction Documents and any such other documents, the Final Construction Documents shall control. Any modification by the City to a prio r approved Design Development Document or Construction Document (other than those expressly r equired to comply with applicable Law requirements), will entitle Edgemoor to claim a Change Event if such modification causes a Material Adverse Effect on Edgemoor’s Work or the Master Project Schedule.
5.6 Compliance with the Final Construction Documents
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Edgemoor shall construct all Improvements in compliance with the Project Requirements and the Final Construction Documents. The City’s review of Final Construction Documents shall include a determination of consistency with the Design Development Documents (including any Approved Design Documents).
5.7 Preparation of Final Construction Documents/Approval of Licensed Professional (a) Preparation by Licensed Professional. The Final Construction D ocuments shall be prepared by, signed and sealed by the appropriate licensed professional, who shall be duly licensed to practice architecture or engineering in and by the State of California. The appropriate licensed professional for each of the PSF and Civic Center Park shall coordinate to the exent required by applicable Law, the work of any other associated de sign professionals, including engineers and landscape architects.
(b) Certifications by Licensed Engineers. State licensed engineers shall review, certify and seal all final plans as required by Law.
5.8 Submission of Construction Documents
Edgemoor shall prepare and submit the various Construction Documents to the City and the OCFA for review and approval at the time or times established in the Master Project Schedule.
5.9 Scope of the City’s Review of the Final Construction Documents (a) Scope of Review. Following the City’s iterative review of the Design Development Documents and Constr uction Documents in accordance with the Master Project Schedule, the City’s final review and approval of the Final Con struction Documents under this Agreement shall be in writing and shall be deemed its agreement and approval that such Final Construction Documents reflect the full, complete, and final un derstanding and agreement of the Parties with respect to the Project and the scope of Edgemoor’s Work, and shall supersede, modify and replace in their entirety all Design Development Documents (including any Approved Design Documents) and other Construction Documents, the RFQ, and any f ormal and/or informal responses thereto, and all other documents related to the Improvements. (b) Effect of Review. The City’s review and approval or disapprova l of the Final Construction Documents will be final and conclusive. If the City subsequently disapproves of or requires changes in, or in a manner that is inconsistent with, the Approved Design Documents, such modification shall be a Change Event and a Chan ge Order shall be granted to Edgemoor to the extent it causes a Material Adverse Effect on E dgemoor’s Work as determined under Section 5.21.
(c) Limitation. Notwithstanding the foregoing, the Parties agree that the City’s approval of any Construction Documents, including the Final Construction Documents, shall not be deemed a representation or warranty by the City that such Construction Documents are free of any defects, errors or omissions w ith respect to the design of the Improvements. Nor shall the City’s approval of any Construction Documents, including the Fi nal Construction Documents, relieve Edgemoor of its obligations hereunder for designing and constructing the Project in accordance with all applicable Laws (including the the Californ ia Building Standards Code (Cal. 141
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Code Regs., Title 24) and/or the applicable professional Standard of Care.
5.10 Scope of Edgemoor Submission of the Final Construction Documents The Final Construction Documents shall include all drawings, sp ecifications and documents necessary for the Improvements to be constructed and completed in accordance with this Agreement.
5.11 Changes in Final Construction Documents
(a) Approval of Changes in Required Elements. Changes may not be m ade in any Final Construction Documents as to substantial or material structural, mechanical, electrical, plumbing, security or building control elements, in each case w hich are necessary to the functioning of the Improvements (each a “Required Element”) without the City’s express written approval, in its reasonable discretion; provided, however, that if certain materials approved by the City are not timely available for construction, or are only ava ilable at a cost materially in excess of the amounts budgeted therefor, Edgemoor may substitute mater ials which are the architectural equivalent and of similar quality, all as determined by the Cit y in the exercise of its reasonable discretion, provided that such changes are in compliance with all other Project Requirements. (b) Response. All requests to change any Required Element shall be made in writing by Edgemoor to the City. The City shall approve or dis approve Edgemoor’s request as promptly as reasonably possible, but in no event later than five (5) Business Days after receipt of Edgemoor’s request. Disapproval of such request shall be accom panied by specific reasons for such disapproval.
5.12 Conflict Between the City’s Approval and Other Governmental Requirements (a) Approval by the City. The City s hall not withhold its approval , where otherwise required under this Agreement, of elements of the Fin al Construction Documents required by any other governmental body with jurisdiction if th e City receives written notice of the required change, which is mandated by Law, and the City is afforded (where applicable) ten (10) days to discuss such element or change with the applicable governmental body having jurisdiction and with the appropriate licensed professional (if applicable).
(b) Commercially Reasonable Efforts to Attempt to Resolve Disputes.
Edgemoor and the City recognize that conflict may arise at or after the time of the preparation of the Final Construction Documents and may arise in connection wi t h t h e i s s u a n c e o f P e r m i t s .
Accordingly, time is of the essence when such a conflict arises. Both the City and Edgemoor agree to use commercially reasonable efforts to expeditiously reach a mutually satisfactory solution.
5.13 Construction Document Review Procedures
(a) Role of The City’s Staff. The City shall appoint one or more individuals in writing to whom any items requiring the City’s consent hereunder shall be submitted for approval (the “Authorized Individuals”). Only a signed authorization from any one of such Authorize d Individuals shall be binding on the City. The City may, from t ime to time, replace and/or 142
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supplement any such appointed A uthorized Individuals by written notice to Edgemoor. The Authorized Individuals initially appointed to provide consent o n behalf of the City under this Agreement will be notified in writing by the City to Edgemoor. (b) Method of the City’s Action/Prior Approvals. The City shall ap prove, disapprove or conditionally approve the submitted Final Constru ction Documents, in writing, within the time period set out in the Schedule of Submittals so long as such Final Construction Documents constitute, in the rea sonable judgment of the City, a complete submittal of the applicable documents.
(c) Timing of the City’s Disapproval/Conditional Approval and Edgem oor Resubmission. If the City disapproves any Construction Documents, in whole or in part, the City in its written disapproval shall state the reason or reasons for such disapproval and may recommend changes and other recommendati ons. If the City conditionally a pproves any Final Construction Documents in whole or in part, the conditions shall be stated i n writing and a time shall be stated for satisfying the conditions. Edgemoor shall make any resubmittals as expeditiously as possible.
Edgemoor may continue making resubmissions until the approval o f the submissions, provided that either the City or Edgemoor may at any time submit any disagreements regarding the approval of any Construction Documents to expedited dispute resolution p rocedures contained in Section
10.13(d) below.
(d) Delayed Response. The City’s failure to respond to Edgemoor’s request for consents, reviews or approvals upon the expiration of the time periods set forth in this Agreement, the Master Project Schedule or Schedule of Submittals (as applicable) shall be deemed an approval by the City; provided Edgemoor has first delivered to the City written notice of such expiration date (the “Approval Failure Notice”), and the City has failed to respond within three (3) Business Days (the “ Approval Cure Period ” ) a f t e r t h e l a t e r t o o c c u r o f ( i ) t h e C i t y ’ s r e c e i p t o f s u c h Approval Failure Notice, or (ii) the expiration of such applicable time period. Edgemoor shall be entitled to send an Approval Failure Notice prior to the expira tion of the initial applicable review period, however if it does so, then the City shall not be deeme d to have failed in its obligation to timely respond pursuant to this paragraph unless its response i s s e n t a f t e r t h e l a t e r o f ( A ) t h e expiration of the initial applicab le review period, and (B) the expiration of the Approval Cure Period.
5.14 Progress Meetings/Consultations
During the preparation of the Construction Documents, the City staff and Edgemoor agree to hold periodic progress meetings, as appropriate considering Edgemoor ’s progress, to coordinate the preparation of, submission to, and review of the Final Construc tion Documents by the City.
Edgemoor will also provide for over-the-shoulder design review process with the City. The City staff and Edgemoor (and its applicable consultants) agree to communicate and consult informally as frequently as is reasonably necessary to assure that the for mal submittal of any Final Construction Documents to the City can receive prompt and speedy consideration.
5.15 Master Project Schedule
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By signing this Agreement, Edgemoor represents to the City that the respective completion dates set forth in the Master Projec t Schedule, including without lim i t a t i o n t h e a p p l i c a b l e T a r g e t Completion Dates, are reasonable for Edgemoor to perform all of the applicable obligations set forth therein, and that Edgemoor is able to complete such oblig ations within the durations identified in the Master Project Schedule, including without limitation the Substantial Completion of the PSF and the Civic Center Park by the applicable Target Completion Dates. (a) Start of Construction; Completion Dates. If the Financial Close occurs and a GMP Change Order is executed, Edgemoor shall commence Constru ction of the Project within (30) days of the later of Financial Close and executing a GMP Change Order. (b) Updates and Changes to Master Pr oject Schedule. The original M aster Project Schedule agreed by the Parties prior to the Effective Date and attached as Attachment 5.15 shall be finalized by Edgemoor upon completion of one hundred p ercent (100%) Design Development Documents (which shall be no later than Financial Close) and otherwise as and when required pursuant to the terms and conditions contained in this Agreement, and such updates shall be provided to the City for its review and approval. If the Pa rties are unable to agree upon finalization of the Master Project Schedule, Edgemoor and the City shall meet promptly and try to resolve the dispute, and if they are unable to agree, then either such Party may submit the dispute to expedited dispute resolution procedures contained in Section 10.13(d) below. (c) Edgemoor’s Performance. Edgemoor shall proceed expeditiously w ith adequate forces and shall perform all of its obligations hereun der by the applicable Maximum Completion Dates, in each case subject to any extension provide d under this Agreement for a Change Event or under a Change Order. Edgemoor shall advise City whenever, in their judgment, Edgemoor believes that Substantial Completion will not occur on o r b e f o r e t h e M a x i m u m Completion Date. If at any time the City determines in its reas onable discretion that Edgemoor’s progress is such that Edgemoor is substantially certain not to achieve Substantial Completion of the PSF and/or the Civic Center Park by the applicable Maximum Completion Date, the City shall notify Edgemoor thereof, and Edgemoor shall, within ten (10) business days of the City’s request, provide the City with a schedule demonstrating either (i) that Edgemoor shall achieve Substantial Completion on or before the applicable Maximum Completion Date without the need to accelerate or modify the Construction or (ii) measures Edgemoor intends to take so that such applicable Substantial Completion is achieved by the applicable Maximum Completion Date (the “Proposed Recovery Schedule”). The City shall have fifteen (15) days to approve or disapprov e in writing such Proposed Recovery Schedule, and shall specify the reason for any objections and may present an alternative approach to any proposed actions. Edgemoor shal l have three (3) Business Days after receiving the City’s res ponse to propose a revised Propos ed Recovery Schedule addressing the City’s objections, which may incorporate the City’s propose d alternatives, if any. The City shall have three (3) Business Day s after receiving the revised Proposed Recovery Schedule to approve or reject the same in writing. If the City rejects the revised Proposed Recovery Schedule, any outstanding issues shall b e subject to Section 10.13 below. Once a Proposed Recovery Schedule is finalized pursuant to the terms of this paragraph, then Edgemoor shall promptly implement such schedule (the “Recovery Schedule”) at Edgemoor’s sole cost and expense, except to the extent that such delay is due to (i) the wrongful acts or omissions of City or GGPFA, or their respective Agents, (ii) a Change Event, or (iii) a delay entitl ing Edgemoor to an Extension, in which case it shall be a Change Event, and Edgemoor shall be entitled to seek a City Change Order 144
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under the terms of Section 5.21, for the additional costs and e xpenses incurred by Edgemoor in order to implement the Recovery Schedule. The City’s failure to provide such notice in accordance with this Section 5.15 shall not be considered a waiver of Edge moor’s obligation to timely complete the Project, or any part thereof.
5.16 Submittals after Completion/As-Built Documents
Edgemoor shall furnish to the City copies of as-built plans and specifications with respect to any particular Improvements within one hundred twenty (120) days af ter Substantial Completion of the PSF and the Civic Center Park (as applicable). As used in this Section 5.16, “as-built plans and specifications” means as-built field plans prepared during the course of Construction.
5.17 Insurance Requirements Before the Notice to Proceed. In connec tion with the issuance of the Notice to Proceed , and prior to Edgemoor being granted access to the Site, Edgemoor shall procure and maintain, or caused to be procured a nd maintained, insurance coverage as required by Attachment 5.17 (Part 1).
(a) After the Financial Close. From and after the Financial Close and execution of a GMP Change Order and during the Term of this Agreement, th e requirement to maintain, or caused to be procured and maintained, insurance under this Agre ement will be as set forth in Attachment 5.17 (Part 2).
5.18 Permit Approval Process
As further provided in Section 4.3(c), the City or Edgemoor (as applicable) have the responsibility for obtaining all necessary Permits for the Improvements as set forth on Attachment 4.3(c), and the City or Edgemoor (as applicab le) shall make application for such relevant Permits directly to the applicable regulatory agency. Upon any such submission, the City or Edgemoor (as applicable) shall prosecute the application diligently to issuance.
5.19 Reports
During periods of Construction, Edgemoor shall submit monthly w ritten progress reports to the City, in form and detail as may be reasonably agreed between the Parties.
5.20 Rights of Access and Use
(a) Subject to this Section 5.20, the City and its respective Agent s will have a right of access to the Site, incl uding any Work Area therein fo r City Permitted Site Uses and for the inspection of Edgemoor’s W ork, upon reasonable prior notice to Edgemoor during regular business hours; provided, however , the City shall not interfere with Edgemoor’s Construction activities during such site visits and shall coordinate with Ed gemoor when accessing the Site or when the City may be adversely impacting the Work or access to the Site (whether on or off the Site). Edgemoor shall have the right to accompany the City on any such Site visit and to require all visitors to comply with all safety requirements. The City will provide Edgemoor promptly upon Edgemoor’s written request with a copy of any final and co mplete written reports prepared by the City or its respective Agents with respect to the Site u nder any such inspection, subject to withholding documents otherwise privileged or confidential, and without any representation or 145
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warranty by City as to the truth or accuracy of the contents of such reports. (b) When accessing Edgemoor’s Work Area, the City and its contracto rs, agents or suppliers must timely coordinate with Edgemoor to reasonably and appropriately enable Edgemoor to timely perform its obligations under this Agreement and must not interrupt, damage or interfere with Edgemoor’s Work.
(c) Notwithstanding anything herein to the contrary, the Parties ac knowledge that during Construction and prior to Substantial Completion of the Project, the City shall continue outside of the Work Areas to operate and Edgemoor shall work wi th the City to minimize disruption to the operation of the existing police headquarters building, City Hall, the fire station, parking lots and portions of the park outside the Site. Until Substantial Completion of the PSF, Edgemoor shall be responsible for the security and fencing of i ts Work Areas, including without limitation, damage or destruction caused by theft, vandalism, a nd acts of nature. Outside of the Work Area, Edgemoor must timely coordinate with the City to minimize disruptions to the City’s operations of the foregoing faci lities and will comply with the coordination protocols agreed between the Parties when seeking to access areas outside the Site which might interfere or interact with City operations.
(d) Each Party will timely address any and all concerns raised by the other Party regarding access to the Site or adjacent areas necessary for Edgemoor to perform the Work or the City to operate the facilities described in (c) above, in each case subject to any coordination or site access plans agreed between the Parties.
5.21 Change Events and Change Orders
(a) Change Events and City Change Orders.
(i) If there is a Material Adverse E ffect on the scope of Edgemoor’ s Work, the cost of performing Edgemoor’s Work , or the Master Pr oject Schedule as a result of a Change Event (defined below), then Edgemoor will be entitled to a modification to the Master Project Schedule, the Guaranteed Maximum Price, and/or performa nce relief (as applicable) in accordance with this Section 5.21 through the issuance of a cha nge order for Edgemoor’s Work (each a “City Change Order”). Any City Change Order will only be issued for a Change Eve nt to the extent any such Change Event was not directly caused by Edgemoor’s breach, negligence, willful misconduct or fraud and Edgemoor otherwise satisfies the requirements under this Section
5.21 for a City Change Order. Notwithstanding the foregoing, where damage or destruction to the Project is caused by the breach, or negligence of Edgemoor or its subcontractor, and such damage or destruction is an insurable event, then Edgemoor will be entitled to solely time relief necessary to restore the Project to its prior condition, but in no event would Edgemoor be entitled to any increase to the Guaranteed Maximum Price.
(ii) In seeking any relief under this Section 5.21, Edgemoor has an obligation to exercise reasonable efforts to mitigate the adver se effects of a Change Event and 146
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reduce any delay or damages to the City or the Project, in each case, in accordance with standard industry practice.
(iii) A “Change Event” includes any of the following which occur or are discovered after the Effective Date: (1) a Extra Work Reque st issued by an authorized representative of the City; (2) the City’s, or their respective agent’s, contractor s, employees’ or i n v i t e e s ’ a c t s o r o m i s s i o n s o r f a i l u r e t o c o m p l y w i t h t h i s A g r eement; (3) changes in Laws (including increases in taxes applicable to materials); (4) discovery of a Hazardous Material other than Edgemoor Assumed Hazardous Materials Obligations; (5) disc overy of a Differing Site Condition; (6) an interruption in Edgemoor’s ability to use ele ctricity, water and other utilities at the Site pursuant to Section 5.4; (7) any adverse impact on the Project caused by a third party not controlled by Edgemoor, including utilities or governmental age ncies not cooperating or timely performing; (8) the issuance of any preliminary or permanent in junction or temporary restraining order or other order, legal restraint, action or proceeding, in cluding any admini strative action, appeal, or prohibition, in each case, by a court, tribunal or o ther judicial or adjucative body or by any governmental entity; (9) a Fo rce Majeure Event occurs, (10) if the Construction Documents require additional CEQA compliance efforts not otherwise anticipated in the Effective Date Design or Approved Design Documents; (11) a Material Damage Event; or (12) insurance premiums increase materially in a given year; provided, that such increa se described in this subsection (iii) is not a result of the wrongful acts or failure to act by Edgem oor or any of its contractors, subcontractors, or agents whether with respect to the Project or otherwise; (iv) Except with respect to Extra Work Requests, within fifteen (15) Business Days of Edgemoor becoming aware of any such Change Event, Edgemoor shall provide notice of such Change Event to the City, and shall thereafter, submit to the City a Change Event proposal including, as applicable (1) describing any performanc e relief Edgemoor was seeking, (2) a cost proposal (including all resulting direct and indirec t costs of Edgemoor and the Design Builder (including Design Builder mark-up of 5% and general conditions costs, as applicable) and an Edgmoor management and administrative markup of 5% which inc ludes personnel and overhead costs of Edgemoor, (“Edgemoor’s Change Fees”)), (3) an estimate of any impact such Change Event may have on the Master Project Schedule (including the applicable Target Completion Dates) and (4) when av ailable, all related plans, dr awings, specifications and a narrative, each subject to the requirements in Section 5.21(a)( i) (“Change Request Supporting Materials”).
(v) Within five (5) Business Days after receiving the Change Reques t Supporting Materials required in Section 5.21(a)(iv), the City shall, by written notice to Edgemoor, confirm whether a Change Event has occurred which entitles Edge moor to a City Change Order and whether adequate Change Request Supporting Materials have been provided to approve such City Change Order request. In the event the City does not conf irm all or a portion of a Change Event has occurred or that addi tional Change Request Supporting Materials are needed, the City shall state its specific reasons and the steps that can be take n to render such elements confirmed.
Within ten (10) Business Days after receiving such written noti ce from the City, Edgemoor shall address the City’s comments and such process shall continue unt il a City Change Order is ultimately approved by the City, Edgemoor withdraws its request for a City Change Order or such request is otherwise resolved by the expedited dispute resoluti on procedures pursuant to Section
10.13(d). In the event the request for a City Change Order is u ltimately confirmed by City, 147
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Edgemoor shall prepare a written City Change Order for execution by the City and Edgemoor, and the Master Project Schedule, the applicable Target Completion D ates and the Guaranteed Maximum Price shall be updated as agreed upon, and, if applicable, Edgemoor will be relieved of any performance stated in the Change Order and the Parties shal l promptly proceed with performance in accordance with a City Change Order. At any tim e during the review of Change Request Supporting Materials the Parties may meet to discuss the Change Event. (vi) The City at anytime may issue Edgemoor a written directive prepared and signed by the City ’s Authorized Individual, direct ing Edgemoor to perform extra work beyond the scope of Edgemoor’s Work as defined by this Agr eement (“ Extra Work Request”). Edgemoor is under no obligation to perform any extra work pursuant to any Extra Work Request or City Change Order unless and until either (i) t he Parties have agreed in writing on the terms of a City Change Order memoralizing the Extra Work Request or (ii) if in negotiating such terms of a City Change Order, the Parties have not yet agr eed on a final cost, but are within 10% of each other’s proposed costs, in which case the City will pay Edgemoor for its actual costs incurred as Edgmoor performs the Extra Work, until the Parties reach agreement on the final cost, in each case, subject to proof of applicable funding or appropr iations. If the Parties do not reach an agreement on the final costs, including through the expedited dispute resolution procedures in Section 10.13(d), then Edgemoor will be under no obligation to continue with the Extra Work. (vii) Within ten (10) Business Days after the issuance of an Extra Wo rk Request, Edgemoor shall provide the City with a proposal to pre pare a schematic design and an early cost estimate before proceeding further with the evaluation of City’s Extra Work Request.
(A) If the City decides to proceed further with the Extra Work Request, Edgemoor shall promptly provide the City with a comple te proposal with Change Request Supporting Materials to imp lement the Extra Work Reques t, and the process in Section 5.21(a)(v) shall be followed.
(B) If the City elects not to proceed after Edgemoor prepares a schematic design and early cost estimate under Section 5.21(a)( vii) or with a City Change Order after the complete proposal has been prepared and submitted und er Section 5.21(a)(vii)(A), the City shall issue a City Change O rder to compensate Edgemoor for all reasonable design costs, estimating costs, engineering co sts, and administrative costs a nd expenses necessarily paid to third-parties by Edgemoor as the result of the City’s Extra Work Request. (viii) In the event that the City has unconditionally approved a City Change Order, but the City is de linquent in approving any undis puted payment under said City Change Order, Section 2.9 shall apply.
(ix) In the event the Parties are unable to resolve any issues relating to a Change Event or an outstanding City Change Order, then the matt er shall be subject to expedited dispute resolution procedures (Section 10.13(d)).
(x) Edgemoor will, on a back-to-back basis, share with the Design Builder, who will, in turn, share with the other subcontractors , certain benefits to Edgemoor 148
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derived from the rights, entitlements, and relief afforded to E dgemoor under, and subject to the obligations and limitations under, this Agreement, including rights of Edgemoor under this Section
5.21 (such rights, entitlements and relief, as qualified by suc h obligations and limitations, are collectively “ Edgemoor Project Relief ”). The City acknowledge s and agrees that any circumstance or event impacting the Design Builder or any other subcontractor, which if such same event or circumstance impacted Edgemoor, may serve as the basis for Edgemoor Project Relief, and in each case, Edgemoor may claim relief, damages, costs or expenses on behalf of the Design Builder or any other subcontractor at any tier under and subject to the terms of this Agreement and such third-parties; however, third parties will have no right or entitlement to bring any claim under this Agreement, and the City shall have no liability directly to such third-parties. (b) Edgemoor Change Request. Edgemoor may request in writing to th e City (i) changes in the Work consisting of additions, deletions, or other revisions, (ii) changes and revisions to the Master Project Schedule or (iii) changes in th e cost to perform the Work, where applicable (each a “Edgemoor Change Order”). Along with its request, Edgemoor shall provide to City all Change Request Suppor ting Materials relevant to Edg emoor Change Order (each a “Edgemoor Change Request”).
(c) The City will, by written notice to Edgemoor, confirm whether a Edgemoor Change Request is unconditionally approved or disapproved (i) f or Edgemoor Change Requests which are less than ten percent (10%) (cumulative) of the Guara nteed Maximum Price, within fifteen (15) business days after receiving such Edgemoor Change Request or (ii) for Edgemoor Change Requests which are greater than ten percent (10%) (cumul ative) of the Guaranteed Maximum Price, upon aproval or disapproval by the City Council. The City agrees to not unreasonably withhold approval provided that the need for the Edgemoor Change is not the result, in whole or in part, of Edgemoor’s acts or omissions or where t here is no impact to the Master Project Schedule, the Guaranteed Maximum Price or the quality of the Project. (i) In the event the City disapproves any such items, the City shall state the specific reasons for such disa pproval and the steps, if any , that can be taken to render such items acceptable. Within ten (10) Business Days after receiving written notice of such disapproval, Edgemoor shall revise such items and submit them to the City fo r review. Such process shall continue until such Edgemoor Change Request is ultimately appro ved by the City or withdrawn by Edgemoor. In the event Edgemoor Change Request is ultimately accepted by City, Edgemoor shall prepare a Edgemoor Change Order for execution by the City and Edgemoor, the Master Project Schedule shall be updated as agreed upon, and Edgemoor shall promptly revise the Construction Documents and proceed with performance of a Edgemoor Change Order.
5.22 Warranties
(a) Edgemoor hereby warrants to the City that all materials and equ ipment furnished by Edgemoor as part of the Improvements shall be (i) new, (ii) of good and workmanlike quality, and (iii) in accordance with the Final Construction Do cuments and all other Project Requirements. Edgemoor has an obligation to correct defective Edgemoor’s Work for one year following (A) Substantial Completion of the PSF and (B) Substan tial Completion of the Civic Center Park and (C) solely with respect to the Punch List Items, Final Completion of the PSF and the Civic Center Park, as applicable (the “ Defect’s Warranty Period”). The Defect’s Warranty 149
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Period will be extended for a single additional one (1) year de fect rectification period solely for Edgemoor’s Work that has been rectified or replaced during the initial Defect’s Warranty Period.
The City must provide Edgemoor with at least thirty (30) days ( or such longer period reasonably required to correct a particular defect) to correct a defect co vered by the Required Warranties before the City remedies such defect with third-parties. Where Edgemoor has not fulfilled its Defect’s Warranty Period obligations by the time required in th is Agreement, following 30 days’ w r i t t e n n o t i c e f r o m t h e C i t y o f such failure, and if Edgemoor i s not working in good faith to reasonably and promptly remedy the issue, the City may enforce the Defect’s Warranty Period obligations directly against the Design Builder (which is permi tted under the terms of the Design/Build Agreement).
(b) Additionally, with respect to the Improvements, Edgemoor will o btain the manufacturer warranties descri bed on Attachment 5.23 (collectiv ely the “ Manufacturer Warranties”) naming and for the benefit of Edgemoor and the City. If the re is a defect that is covered by the Manufacturer Warra nties before Substantial Compl etion of either the PSF or the Civic Center Park, as applicable , the City shall first provide written notice of such defect to Edgemoor and Edgemoor must correct such defective work as a condition precedent to Substantial Completion of the relevant Improve ment. On or after Substantial Completion of the PSF or the Civic Center Park (as applicable), Edgemoor shall ensure that a ll Manufacturer Warranties available to Edgemoor have been assigned to the City or its designee, and the City or its designee shall enforce all such Manufactur er Warranties solely and direc tly with the manufacturers or through any of the City’s service provider designees, and the C ity will not seek to enforce such Manufacturer Warranties directly with Edgemoor unless Edgemoor and/or the Design Builder is a necessary party to any such action.
5.23 Prevailing Wage
Edgemoor will cause the Design Builder to enter into a Project Labor Agreement (“ PLA”), including a no-strike clause for the Project and a requirement that reasonable efforts are used to hire workers who reside in the City substantially in the form a ttached hereto as Attachment 5.23.
Prevailing wages in accordance with the PLA and California Law, must be paid for all Construction Work associated with the Project.
5.24 Non-Discrimination
In connection with the performan ce of its obligations under thi s Project Agreement, Edgemoor agrees not to discriminate against any employee or applicant fo r employment because of race, creed, color, national origin, sex, sexual orientation, gender identity or expression, or age. Such agreement shall include, but not be limited to employment, upgr ading, demotion or transfer, recruitment, or recr uitment advertising, layoff or termination, r a t e s o f p a y o r o t h e r f o r m s o f compensation, and selection for training, including apprentices hip. Edgemoor further agrees to insert this provision in its contract with any contractor or subcontractor relating to this Project.
5.25 Change in Project Standards
Edgemoor will be required to notify the City of any change in project standards it becomes aware of. If the City instructs Edgemoor to comply with the change, E dgemoor will be entitled to a 150
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Change Event, if such change in project standards causes Edgemo or to suffer more than a de minimis delay and/or additional costs.
5.26 Subcontractor List
The subcontractors and suppliers identified in Attachment 5.26 were listed in Edgemoor’s proposal submitted to the City under the ENA process as a condition precedent to the City awarding and entering into this Agreement and one or more of which are expected be included in those utilized to design and/or construct the Project.
5.27 Furniture, Fixtures and Equipment
(a) FF&E Generally. Edgemoor shall furnish and install all “ Furniture, Fixtures and Equipment” required for the Project, excluding City Furnished Equipment (defined below). Furniture, Fixtures and Equipment comprises the items s et forth in Attachment 5.27, as amended by the GMP Change Order (if applicable), excluding the City Furnished Equipment. (b) Selection of Furniture, Fixtures and Equipment. The City shall identify and select, in its discretion and in consultation with Edgemoor , all Furniture, Fixtures and Equipment the City requires for the Project. Edgemoor shall pro cure the Furniture, Fixtures and Equipment identified and selected by the City, and the City shall determine the locations at which the Furniture, Fixtures and Equipment is to be installed. The P arties shall agree on a schedule for the selection, procurement, delivery, and installation of the Furniture, Fixtures and Equipment that is consistent with and will not cause a material delay in the Master Project Schedule. (c) Payment for Furniture, Fixtures and Equipment . Edgemoor shall arrange for the acquisition, delivery and installation of the Furniture, Fixtures and Equipment in a timely and proper manner, up to a maximum aggregate amount to b e established in the GMP Change Order (the “ FF&E Allowance ”). Edgemoor shall insure the Furniture, Fixtures and Equipment at all times prior to Substantial Completion of the PSF. The City shall pay Edgemoor directly an amount equal to all su ch costs and sales taxes plus a markup of 5% to Edgemoor (covering Edgemoor’s overhead and profit) for the Furniture, Fi xtures and Equipment, up to the FF&E Allowance. If a consultant is engaged to assist in the ide ntification and selection of Furniture, Fixtures and Equipment, that cost is payable under t he FF&E Allowance. In the event the City directs Edgemoor to acqu ire, furnish and install Furni ture, Fixtures and Equipment exceeding the FF&E Allowance in aggregate cost, Edgemoor shall not be obligated to furnish and install that Furniture, Fixtures and Equipment except following agreement with the City as to the terms of funding and payment for such Furniture, Fixtures and Equipment. (d) City Furnished Equipment. The City shall furnish, pay for and insure all “City Furnished Equipment” as set forth in Attachment 5.27, as amended by the GMP Change Order (if applicable). The City shall advise Edgemoor, in conne ction with the establishment and periodic revision of the Project Schedule, as to the nature and quantity of the City Furnished Equipment the City plans to supply and the expected dates of de livery and installation. The City shall be responsible for the del ivery and installation of any C ity Furnished Equipment and shall not unreasonably interfere with the Work in connection therewit h. Edgemoor shall provide 151
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reasonable assistance to the City in all coordination, scheduling, delivery and installation activities related to City Furnished Equipment. The City shall be responsible, at all times, for the warranty, maintenance, repair and replacement of City Furnished Equipment. (e) Specialties. Edgemoor shall furnish all “ EGGCP Furnished Specialties” required for the project as initially set forth and defined in Attachment 5.27 and revised by the GMP Change Order (“Specialties”). The Specialties outlined in Attachment 5.27 are part of th e Work as defined by the Agreement but will not be included in the FF&E Allowance.
ARTICLE 6
DETERMINATION OF SUBSTANTIAL & FINAL COMPLETION.
6.1 Notice
Edgemoor shall give the City at least thirty (30) days’ prior written notice of the date upon which it expects to achieve Substantial Completion or Final Completion (as applicable) of the PSF or the Civic Center Park (as applicable).
6.2 Definition of Substantially Completed
For purposes of this Agreement, the terms “ Substantially Completed ” or “ Substantial Completion” means the City’s confirmation that Substantial Completion has occurred for either the PSF or the Civic Center Park b y issuing a certificate of su bstantial completion in the form of Attachment 6.2 (the “ Certificate of Substantial Completion ”) which shall occur immediately once the following have occurred: (i) receipt by City of an AIA Notice of Substantial Completion from Edgemoor’s appropriately lic ensed professional for such ap plicable Improvements (the “Licensed Professional’s Certificate ”) certifying substantial co mpletion of the applicable Improvements in accordance with t he Project Requirements, (ii) agreement on the Punch List Items under Section 6.3, and (iii) issuance of a Certificate of Occupancy or a temporary Certificate of Occupancy from the agency having jurisdiction for either the PSF or Civic Center Park, as applicable (together, a “Certificate of Occupancy”). The date of Substantial Completion will be the date Edgemoor has satisfied the conditions set forth in this Section 6.2(i) through (iii).
6.3 Punch List Items
(a) A t s u c h t i m e t h a t t h e P S F o r t h e C i v i c C e n t e r P a r k ( a s a p p l i c a ble) are determined to be Substantially Com pleted, the City, Edgemoor, a nd the Design Builder will conduct a walk-through of the Improvements to review consistency with the Project Requirements and the Final Construction Documents and prepare a list of all Punch List Items (the “Punch List Items”) at that time and an estimated cost and time for rectifying s uch Punch List Items. The Punch List Items shall include delivery of as-builts, equipment m a i n t e n a n c e m a n u a l s f o r a l l installed equipment, completion of training for City maintenanc e s t a f f , a s t a t e m e n t o f r e p a i r s , corrections and adjustments to the Improvements, and incomplete , if any, aspects of the Improvements, which do not have a significant impact to the abi lity to issue the Certificate of Occupancy or temporary Certificate of Occupancy and utilize the PSF or Civic Center Park. (b) The Punch List Items and their estimated value shall be agreed upon by both 152
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Parties acting reasonably. If there is no such agreement by the Parties within ten (10) days of creating the Punch List Items, either Party may refer this matt er to expedited dispute resolution pursuant to Section 10.13(d).
(c) Once Substantial Completion has occurred any held retainage sha ll be released and held in accordance with Section 2.7(b) to secure that all applicable Punch List Items will be diligently pursued to completion within one hundred and twenty (120) days of Substantial Completion of the PSF or the Civic Center Park, as applicable. (d) Completion of all Punch List for the PSF or the Civic Center Pa rk will constitute “Final Completion” for such components of the Project. If the Certificate of Occupancy issued pursuant to Section 6.2 above is only a temporary Certificate of Occupancy, the term Punch List Items shall also include any work needed for the issuance of a final Certificate of Occupancy.
Punch List Items shall be determined separately and independent ly for each of the PSF and the Civic Center Park.
6.4 Specific Approvals Controlling
With respect to the determination of whether or not the PSF or the Civic Center Park are Substantially Completed or have achieved Final Completion (as a pplicable) for purposes of this Agreement, the applicable Final Construction Documents for such Improvements will govern.
6.5 Termination of Agreement
With respect to the PSF or the Civic Center Park, issuance of t he Certificate of Final Completion in the form attached as Attachment 6.5 for such Improvements shall constitute conclusive evidence of the termination of this Agreement with respect to such Impro vements (except that Edgemoor must satisfy any obligations that expressly survive termination of this Agreement, including the items listed in Section 1.7). At the request of Edgemoor, following the issuance of such items, the City shall each execute such other documents, in form reasonabl y satisfactory to the Parties, as may be required to confirm the termination of this Agreement with respect to such Improvements, and following the issuance of all such items with respect to all Improvements comprising a portion of the Project, to execute such other documents, in form reason ably satisfactory to the Parties, as may be required by any Party to confirm the termination of this Agreement in its entirety.
6.6 Delay Credits
The imposition of to Delay Credits pursuant to Section 9.3, bel ow, shall cease to accrue on the date of Substantial Completion for each of the PSF or the Civic Center Park, as applicable.
ARTICLE 7
ENCUMBRANCES AND LIENS.
7.1 No Mortgage
(a) No Mortgage of Fee. Edgemoor may not engage in any financing o r other transaction creating any mortgage, lien or other encumbrance on any City or GGPFA asset, or on the Improvements. No interest of the City or GGPFA in the Site shall be subordinated under any 153
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circumstance whatsoever to any mortgage lien or other encumbrance not approved by the City. (b) Contests. The City shall be permitted to contest the validity or amount of any tax, assessment, encumbrance or lien and to pursue any remedies associated with such contest; and Edgemoor shall reasonably c ooperate, at no cost to Edgemoor unless caused by Edgemoor, with any such contest brought by the City. Notwithstanding the foregoing, in no event shall Edgemoor be obligated to pay any real property or possessory interest tax or assessment regardless of whether the same is caused by any act or omission of Edgemoor.
7.2 Mechanics’ Liens
(a) Compliance with California Lien Laws. Notwithstanding anything to the contrary contained herein, the Parties understand and agree tha t any and all Improvements made to the Site must comply with applicable Law and Edgemoor and its subcontractors shall not have the right to post or file any mechanic’s lien against the Project or the Site. (b) Notice. Not less than five (5) Business Days before Edgemoor commences Work under a Notice to Proceed or following execution of the GM P Change Order, it shall (i) notify the City in writing of (1) the expected date of commencement thereof, and (2) the name and contractor’s license number of the prime contractor performing the work. City shall have the right at any time and from time to time to post and maintain on the S ite, and/or record, such notices as the City reasonably deems necessary to protect the Site and City from liens arising out of any work performed, materials furnished or obligations incurred by Edgemoor or its Agents.
7.3 Performance and Payment Bonds
Prior to performing any Work under a Notice to Proceed or the G MP Change Order, Edgemoor, or the Design Builder on behalf of Edgemoor, must provide a per formance and payment bond sized to 100% of the cost of the design and Construction Work under the Design/Build Agreement.
The Parties acknowledge and agree that upon Substantial Completion of the PSF and satisfaction of the waiver and release in requirements in Section 2.7(c)(iv) , Edgemoor may cause the performance bond and payment bond to step-down in penal sum to cover 100% of the value of the design and Construction Work of the Civic Center Park.
ARTICLE 8
ASSIGNMENT AND TRANSFER.
8.1 Restriction Against Transfer
Edgemoor may not sell, convey, assign, transfer, alienate or ot herwise dispose of all or any of its interest or rights in this Agreement to any Person, including an affiliate of Edgemoor or otherwise do any of the above or make any contract or agreement to do any of the same (“Transfer”). Such consent to a Transfer may be given, withheld, or conditioned in t h e C i t y ’ s s o l e a n d a b s o l u t e discretion. Consent to any one Transfer will not be a waiver o f the requirement for such consent for each and every Transfer. The provisions of this Section 8.1 shall not prohibit Edgemoor from subcontracting with the Design Builder, third parties or any Edgemoor Affiliate. 154
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8.2 Effect of Violation
(a) Event of Default. If Edgemoor makes a Transfer in violation of Section 8.1, then the City may, in its sole discretion, either void the Tran sfer, or declare an Event of Default from and after the time of the Transfer.
(b) No Release of Obligations. Except by the specific written appr oval of the City which may give or withhold in its sole discretion, no Tran sfer will relieve Edgemoor from any obligations under this Agreement.
8.3 Assignment of the Design/Build Agreement
It being the intent of the Parties that the City can assume a contractual relationship with the Design Builder under the Design/Build Agreement in accordance with this Section 8.3, the Design/Build Agreement is hereby assigned by Edgemoor to the City, provided that the assignment is effective only after the undisputed effective date of any termination of this Agreement by the City for an Edgemoor Event of Default, pursuant to Section 9.2, or if this Agreement is terminated upon agreement by the Parties in accordance with this Agreement, and only if the City accepts the assignment by written notification to Edgemoor and the Design Builder the assignment. Such assignment is subject to the prior rights of the surety, if any, obligated under bond relating to the Design/Build Agreement. When the City accepts the assignment of the Design/Build Agreement, the City assumes Edgemoor’s rights and obligations under the Design/Build Agreement and Edgemoor will be fully released from any future obligations under the Design/Build Agreement which had not accrued prior to the City assuming such agreement. Until the City assumes such Design/Build Agreement in writing, the City will have no liability under the Design/Build Agreement, and the Design Builder will have no claims or entitlement directly against the City. Edgemoor agrees to make the City a third-party beneficiary of this assignment right under the Design/Build Agreement and will ensure the Design/Build Agreement includes appropriate assignment language acknowledging and accepting the City’s rights under this Section 8.3.
ARTICLE 9
DEFAULTS, REMEDIES AND TERMINATION.
9.1 Before Applicable Closing Date
If the Financial Close does not occur by the Financial Close Target Date (as each may be properly extended), the Parties shall comply with Sections 3.4(b) and 3.6, as applicable and each Party will have thirty (30) days after such notice to perform any acts req uired of it to permit the Financial Close, as applicable.
9.2 Edgemoor Events of Default
The following constitute “Edgemoor Events of Default” or a “Edgemoor Event of Default”, in each case, subject to any relief afforded to Edgemoor for a Change Event, including an Extension:
(a) Edgemoor fails to commence Construction within thirty (30) days of the Effective Date or the date both Parties execute the GMP Change Order, as applicable; 155
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(b) Edgemoor abandons or suspends Construction for a period of forty-five (45) days absent an entitlement to do so under this Agreement; (c) Edgemoor fails to achieve Substantial Completion of the PSF or Civic Center Park by the applicable Maximum Completion Date;
(d) Edgemoor fails to pay any undisputed amount required to be paid to the City under this Agreement when due, and such failure continues for f ifteen (15) Business Days following written notice from the City;
(e) Edgemoor does not submit Construction Documents as are required to be submitted within the times provided in this Agreement, and Edgemoor does not cure such default within thirty (30) days after the date of written demand specifying the items missing or due by the City to Edgemoor, or, if such cure cannot reasonably be complet ed within such thirty (30) day period, such additional time as needed to cure such violation, but not to exceed ninety (90) days; (f) Edgemoor fails to pay subcontractors in accordance with the Cal ifornia Prompt Payment Act, Government Code, Section 927, et seq; (g) Edgemoor fails to maintain, or cause to be maintained, the insu rance required pursuant to Section 5.17, or fails to deliver certific ates, endorsements, and/or policies as required pursuant to that Section 5.17 , and such failure continues fo r thirty (30) days following written notice from the City to Edgemoor; and
(h) Without limiting any other provisions of this Section 9.2, the representations and warranties of Edgemoor contained in this Ag reement are materially false at the time made, or Edgemoor violates any material covenant, or fails to perform any other material obligation to be performed by Edgemoor under this Agreement at the time such performance is due, and such violation or fail ures continues without cure for more than thirty (30) days after written notice from the City specifying the nature of such viol ation or failure, or, if such cure cannot reasonably be completed within such thirty (30) day period, such additional time as needed to cure such violation, but not to exceed ninety (90) days.
9.3 Remedies of the City
Upon the occurrence of any uncured Edgemoor Event of Default, the City shall have the remedies set forth below:
(a) Termination. Subject to Sections 9.3(d) and 9.6(c) below, the City may terminate this Agreement upon thirty (30) days’ written notice to Edgemoor specifying Edgemoor Event of Default, but subject to the following (1) Edgemoor Event of Default continues for ninety (90) days or more, (2) if the cure for the Edgemoor Event of De fault cannot reasonably be completed within the applicable cure period, such additional time as needed to cure such violation is given to Edgemoor, so long as Edgemoor is working in good faith and reasonably and promptly remedy any Edgemoor Event of Default in accordance with a Propo sed Recovery Schedule provided to the City and agreed between the Parties in accordan ce with Section 5.15(c) and (3) either such Edgemoor Event of Default (i) would make it impossi ble to achieve the Substantial Completion of the PSF or Civic Ce nter Park by the applicable Ma ximum Completion Date for 156
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such Improvement(s) in accordance with the Master Project Schedule, as from time to time revised in accordance with this Agreement, or (ii) would deprive the Ci ty of the material benefits of this Agreement.
(b) Specific Performance. The City may institute an action for spe cific performance;
(c) Other Remedies. Subject to Sections 9.3(d) and 9.6(c) below, the City shall be entitled to all other remedies permitted by Law or at equity or under this Agreement, including, without limitation, damages; provided that the City’s damages s hall be limited to actual, direct damages, and with respect to a Edgemoor Event of Default under Section 9.2(c) Edgemoor’s damages shall be limited to the remedy set forth in Section 9.3 (d). In no event shall the City (except with respect to Edgemoor ’s indemnification obligations for City’s third-party related Losses under Section 4.4(a)) be entitled to consequential, incidental, special or punitive damages (including but not limited to lost profits or revenues); and
(d) Remedy for Late Completion.
(i) If Edgemoor fails to achieve Subs tantial Completion of the PSF or the Civic Center Park by the date for Substantial Completion as s e t o u t i n t h e M a s t e r P r o j e c t Schedule, after taking into account the effect any Extension as permitted therein, (i) the Parties agree that the City is likely to sustain delay damages that are difficult to ascertain, and thus as compensation for such delay damages, the City shall be entitled to, as the sole and exclusive financial remedy for delay, ten thousand ($10,000) dollars per day for the PSF with a maximum amount of three million ($3,000,000) and following Substantial Completion of the PSF, one thousand dollars ($1,000) dollars p er day for the Civic Center Park with a maximum amount of ($300,000) (such sums each, a “Delay Credit”), commencing in each case on the applicable date for Substantial Completion as set out in the Master Project Sch edule and continuing on a daily basis until Substantial Completion for such Improvement is achi eved. The Parties agree to use reasonable efforts to mitigate the relevant delay in advance of any delay occurring. (ii) The Parties hereby agree that the Delay Credits are a fair and reasonable estimate of the damages the City is likely to sustai n as a result of any such delay, are not manifestly unreasonable under the circumstances existing at the time this Agreement is made and are not a penalty. Notwithstanding the use of the phrase “ Delay Credit” City shall not be required to prove or assess actual loss where a delay occurs en titling the City to Delay Credits.
Edgemoor shall pay any Delay Credits hereunder to the City, in cash or other immediately available funds, via wire transfer or otherwise as directed by the City within thirty (30) Business Days after either Substantial Completion is achieved or this Ag reement is terminated, such obligation to survive the expiration of the Term and the termination of this Agreement. (iii) The Parties hereby agree that the Delay Credits are the City’s exclusive monetary remedy for th e City’s losses with respect to Edgemoor’s delay in achieving Substantial Completion, but will not excuse Edgemoor from liabi lity for any other breach of its obligations under this Agreement and will not preclude City from exercising any other rights it has under this Agreement.
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9.4 City Events of Default
The following constitute “City Events of Default” or a “City Event of Default”:
(a) The representations and warranties of the City contained in this Agreement are materially false, or the City violates any material covenan t or fails to perform any material obligations and duties provided in this Agreement after the tim e for any cure or the expiration of any grace period specified therefor in this Agreement, or if no such time is specified, than the thirty (30) days after written demand by Edgemoor to the City to perfo rm such obligation and duty, or, if such cure cannot reasonably be completed within such thirty (30) day period, such additional time as needed to cure such violation, but not to exceed ninety (90) days; or (b) Any failure to pay any amount required to be paid to Edgemoor u nder this Agreement and such failure continues for sixty (60) days following written notice from Edgemoor to the City, unless such payment is the subject of a bona fide dispute pursuant to this Agreement.
9.5 Remedies of Edgemoor
Upon the occurrence of a City Event of Default, Edgemoor shall have the remedies set forth below:
(a) Termination. Subject to Section 9.6(c) below, Edgemoor may ter minate this Agreement immediately following written notice from Edgemoor of the expiration of the cure period for the applicable City Event of Default.
(b) Cessation. In the event Edgemoor has not been timely paid any undisputed amounts under this Agreement, Edgemoor may stop any and all Edgemoor’s Work within fourteen (14) days of such non-payment and will be entitled to a Change Event for its losses incurred due to such stop-work, including, but not limited to its losses inc urred due to its demobilization and remobilization of its forces and subcontractors;
(c) Specific Performance. Edgemoor may institute an action for spe cific performance; and
(d) Other Remedies. Subject to Section 9.6(c) below, Edgemoor shal l be entitled to all other remedies permitted by Law or equity or un der this Agreement, including, without limitation, damages; provided that Edgemoor’s damages s hall be limited to actual, direct damages (which shall include, without limitation, actual documents and reasonable demobilization costs, amounts payable by Edgemoor under the Design/Build Agree ment and other reasonable costs related to such terminati on). In no event shall Edgemoor be entitled to consequential, incidental, special, or punitive damages (including but not lim ited to lost profits) (except with respect to City’s obligations for Edgemoor’s third-party relate d Losses under Section 4.4(b) and any amounts due and payable for Edgemoor’s profits otherwise already due and payable under this Agreement or expressly stated under this Agreement).
(e) Payment Default Procedure. In the event a Disbursement owing t o Edgemoor in accordance with this Agreement (and not otherwise disputed) is not paid as and when 158
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required hereunder, then the Parties agree that City shall have the obligation to cure such non- payment and all amounts due and payable under this Agreement, if not otherwise paid will be paid by the City.
9.6 General
(a) Institution of Legal Actions. S ubject to the rights and obliga tions of the Parties under Section 10.13 below and the other limitations contained in this Agreement, any Party may institute legal action to cure, correct, or remedy any defa ult, to recover damages for any default or to obtain any other remedy consistent with the terms of this Agreement. Such legal actions may be instituted in the Superior Court of Orange County, California. (b) Rights and Remedies Are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties to this Agreement, whether provided by Law, in equity o r by this Agreement, are cumulative, and not in derogation of other rights and remedies found in this Agreement. The exercise by any Party of any one or more of such remedies will not preclude the exercise by it, at the same or a different time, of any other such remedies for th e same default or breach or of any of its remedies for any other default or breach by another Part y. No waiver made by any Party with respect to the performance, or manner or time of performance, or any obligation of the other Parties or any condition to their own obligations under this Agreement will be considered a waiver with respect to the particular o bligations of the other Parties or condition to its own obligation beyond those expressly waived to the extent of such waiver, or a waiver in any respect in regard to any other rights of the Party making the waiver or any other obligations of the other Parties. (c) Non-liability of Parties’ Officer s and Employees, Etc. Excludi ng any criminal behavior, civil fraud, or liability created by the sta tutes or regulations of the State of California, no elected official, member, officer, partner, agent, shareholder, director, attorney, or employee of the City or Edgemoor will be personally liable to a ny other Party hereunder, or any successor in interest, as a result of an Event of Default by th e City or Edgemoor, as the case may be, or for any amount which may become due to Edgemoor, the City or any of their successors, as applicable, under, on account of, or with respect to such Party’s obligations under this Agreement.
9.7 Return of Site
Upon Substantial Completion of the PSF or the Civic Center Park or early termination, Edgemoor shall return the Site to the City in a safe and secure conditio n, and unless otherwise requested by the City, shall remove all loose building materials and debris present at the Site resulting from Edgemoor’s Construction activities. The City shall grant Edgemo or sufficient access to the Site for the purpose of performing Edgemoor’s Final Completion or wa rranty obligations under this Agreement.
9.8 Plans and Data
If this Agreement is terminated before Final Completion of eith er the PSF or Civic Center Park, but after the GMP Change Order is executed by the Parties, then provided that Edgemoor has been paid all amounts then due to Edgemoor under this Agreement, Edgemoor shall assign and deliver 159
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to the City any and all copies of reports in its possession regarding the Site, all properly sealed and certified Final Construction Documents in the possession of, or prepared for Edgemoor, to which E d g e m o o r h a s p o s s e s s i o n o r c o n t r o l , o r i s r e a s o n a b l y a b l e t o g ain possession, and all Design Development Documents within sixty (60) days after such termina tion. Edgemoor shall include in all contracts and authorizati ons for services pertaining to the planning and design of the Improvements, an express agreement by the Person performing suc h services that the City may use such reports and/or sealed and certified Construction Docum ents and/or all Design Development Documents in accordance with this Section 9.8 with out compensation or payment from the City in the event such reports and/or sealed and certi fied Final Construction Documents and/or all Design Development Documents are delivered to the Ci ty under the provisions of this Section 9.8. The City may use any such sealed and certified Construction Documents and reports and/or all Design Development Documents which have been issued in final form by the preparer for any purpose whatsoever relating to the Site, without cost o r liability therefore to Edgemoor, however the City herein fully Indemnifies and releases Edgemoor and Edgemoor Responsible Parties for any claims, losses or damages relating to or arising from any information or documents provided the City pursuant to this Section 9.8.
9.9 Force Majeure Suspension / Termination Right
(a) If a Force Majeure Event that is not caused by the claiming Party continues for sixty (60) consecutive days or more Edgemoor or the City wi ll be entitled cease performance of its obligations Materially A dversely Effected by such Force Majeure Event herender until the Force Majeure Event ceases.
(b) If a Force Majeure Event continues for one hundred eighty (180) consecutive days or more and Materially Adversely Effects Edgemoor’s or the City’s performance, then each of the City and Edgemoor will have the right to termi nate this Agreement upon written notice to the other Party and upon such termination, none of th e Parties shall have any further obligations under this Agreement except as otherwise expressly provided in this Agreement with respect to payment obligations that accrued prior to such termination.
ARTICLE 10
GENERAL PROVISIONS.
10.1 Notices
(a) Manner of Delivery. Except as otherwise expressly provided in this Agreement, all notices, demands, approvals, consents and other formal communications between or among the Parties required or permitted under this Agreement shall be in writing and shall be deemed given and effective (i) upon the date of receipt if give n by personal delivery (including nationally recognized express courier) on a Business Day (or th e next Business Day if delivered personally on a day that is not a Business Day); (ii) upon the date of receipt of email correspondence (followed by personal delivery or mail for legal notices), or if after 5pm or on the weekend, on the next Business Day; or (iii) if mailed three (3) Business Days after deposit with the U.S. Postal Service for delive”y by’United States registered or certified mail, first class postage prepaid, To the Parties at their respective addresses for notice designated below. For convenience of the Parties, copies of notices may also be given by email delivery of documents in .PDF format. 160
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(b) Request for Approval. In order for a request for any approval required under the terms of this Agreement to be effective, it shall be clearly marked “Request for Approval” and state (or be accompanied by a cover letter stating) substantially the following:
(i) the section of this Agreement under which the request is made a nd the action or response required;
(ii) if applicable, the period of time as stated in this Agreement w ithin which the recipient of the notice shall respond; and
(iii) if applicable, that the failure to object to the notice within the stated time period will be deemed to be the equivalent of the recipien t’s approval of or consent to the request for approval which is the subject matter of the notice.
In the event that a request for approval states a period of tim e for approval which is less than the time period provided for in this Agreement for such ap proval, the time period stated in this Agreement shall be the controlling time period. In no event shall a recipient’s approval of or consent to the subject matter of a notice be deemed to have bee n given by its failure to object to such notice if such notice (or the accompanying cover letter) d oes not comply with the requirements of this Section. M oreover, Section 10.1(b)(iii) s hall not apply to any request that would (i) amend this Agreement, or (ii) was not delivered to the correct Party representative. (c) Addresses for Notices. All notices shall be properly addressed and delivered to the Parties at the addresses set forth below or at such other addresses as either Party may designate by written notice given in the manner provided in this Section 10.1:
To the City: City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92842
Attention: Lisa Kim, City Manager
Email: [email protected]
With a copy to: Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Thomas P. Clark, Jr., Special Counsel
Email: [email protected]
Omar Sandoval, Director & Shareholder Woodruff &
Smart
555 Anton Boulevard, Suite 1200
Costa Mesa, California 92626
Attention: Omar Sandoval, City Attorney
Email: [email protected]
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To Edgemoor: Edgemoor Garden Grove Civic Partners LLC
7900 Westpark Drive
McLean, VA 22102
Attn: Brian Dugan, Managing Director
Email: [email protected]
With a copy to: Frank Baltz, Senior Managing Director
Edgemoor Garden Grove Civic Partners LLC
7900 Westpark Drive
McLean, VA 22102
[email protected]
10.2 Time of Performance
(a) Expiration. All performance dates (including cure dates) expir e at 5:00 p.m., California time, on the performance or cure date. (b) Weekends and Holidays. A performance date which falls on a Sat urday, Sunday or federal, City or California state holiday is deemed extended to the next working day. (c) Days for Performance. All periods for performance specified in t h i s Agreement in terms of days shall be calendar days, and not Busi ness Days, unless otherwise expressly provided in this Agreement.
10.3 Time of the Essence. Time is of the essence with respect to each Target Completion Date, subject to Extension.
10.4 Interpretation of Agreement
(a) Exhibits / Attachments. Whenever an “Attachment” is referenced, it means an attachment to this Agreement unless otherwise specifically i dentified. All such Attachments are incorporated in this Agreement by reference.
(b) Captions. Whenever a section, ar ticle or paragraph is referenc ed, it refers to this Agreement unless otherwise specifically identified. The captions preceding the articles and sections of this Agreement and in the table of contents have be en inserted for convenience of reference only. Such captions shall not define or limit the scope or intent of any provision of this Agreement.
(c) Words of Inclusion. The use of the term “including,” “such as” or words of similar import when following any general term, statement or matter shall not be construed to limit such term, statement or matter to the specific items or matters , whether or not language of non- limitation is used with reference thereto. Rather, such terms shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such statement, term or matter.
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(d) No Presumption Against Drafter. This Agreement has been negoti ated at arm’s length and between Persons sophisticated and knowledgeabl e in the matters dealt with herein. In addition, each Party has been represented by experi enced and knowledge able legal counsel. Accordingly, this Agreement shall be interpreted to a chieve the intents and purposes of the Parties, without any presump tion against the Party responsi ble for drafting any part of this Agreement.
(e) Costs and Expenses. The Party on which any obligation is impos ed in this Agreement shall be solely respon sible for paying all costs and expenses incurred in the performance of such obligation, unless the provision imposing s uch obligation specifically provides to the contrary.
(f) Agreement References. Wherever reference is made to any provision, term or matter “in this Agreement,” “herein” or “hereof” or words of similar import, the reference shall be deemed to refer to any and all provisions of this Agreement reasonably related thereto in the context of such reference, unless such reference refers solely to a specific numbered or lettered article, section or paragraph of this Agreement or any specific subdivision of this Agreement. (g) Approvals. Unless otherwise spec ifically stated in this Agreem ent, wherever a Party hereto has a right of approval or consent, suc h approval or consent shall not be unreasonably withheld, conditioned or delayed. Unless otherwis e specifically stated in this Agreement, wherever a Party has a right of approval or consent, and such approval or consent is not given within the time frames provided, such matter subject to approval or consent shall not be deemed approved.
10.5 Successors and Assigns
This Agreement is binding upon and will inure to the benefit of the successors and assigns of the Parties, subject to the limitati ons on assignment set forth in Article 8. Where the term “Edgemoor,” or “City” is used in this Agreement, it means and includes their respective successors and permitted assigns.
10.6 No Third Party Beneficiaries
This Agreement is made and entered into for the sole protection and benefit of the Parties and their successors and permitted assigns, and, without limitation, this Agreement is not intended to create a public dedication of all or any portion of the Site or any surrounding property. No other Person shall have or acquire any right or action based upon any provisions of this Agreement.
10.7 Real Estate Commissions
Each of the Parties represents that it engaged no broker, agent or finder in connection with this transaction. In the event any broker, agent or finder makes a claim, the Party through whom such claim is made shall be solely responsible for any Losses arising out of such claim.
10.8 California Public Records Act
(a) The California Public Records Act (“ CPRA”), Government Code §§ 163
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7920.000, et. seq., provides that a ll records held by governmen t agencies are accessible to the public unless expressly made exempt from disclosure. The CPRA defines public records as any writing containing information relating to the conduct of the p ublic’s business prepared, owned, used, or retained by any state or local agency regardless of ph ysical form or characteristics. The CPRA also provides that public records shall be disclosed upon request and that any citizen has a right to inspect any public record, unless the document is exempted from disclosure. (b) It is the responsibility of Edge moor to clearly identify any an d all information submitted to the City pursuant to this Agreement th at it considers to be confidential and/or proprietary. To the extent that the City agrees with that designation, such information will be held in confidence whenever possible. All other information will be considered public. (c) The City cannot guarantee that any information submitted in the execution of this Agreement will be confidential. If the City receives a request for any record submitted pursuant to this Agreement, it will not assert any privileges that may exist on behalf of Edgemoor.
In the event that a demand for disclosure of a record or inform ation designated as “confidential and/or proprietary” by Edgemoor is made, the City as a courtesy will notify Edgemoor in writing of such demand. Edgemoor may then pursue, at its sole cost and expense, all appropriate legal action necessary to maintain the confidentiality of such inform ation. It would be the sole responsibility of Edgemoor to as sert any applicable privileges or reasons why the record or information should not be produced, and to obtain a court order prohibiting disclosure. Edgemoor understands that the City is not responsible under any circumst ances for any damage caused by disclosure of any record or information. The City assumes no responsibility for disclosure or use of unmarked data for any purpose.
(d) In the event the City is required to defend an action on a Public Records Act request for any of the contents of a record or information marked “confidential”, “proprietary”, or “trade secret”, Edgemoor agrees, upon submission of its written statement of confidential qualifications for City's consider ation, to defend and indemnif y the City from all costs and expenses, including attorney’s fees, in any action or liability arising under the Public Records Act.
10.9 Entire Agreement
This Agreement (including all of the Attachments) constitutes t he entire agreement among the Parties with respect to the subject matter of this Agreement an d supersedes all negotiations or previous agreements among the Parties with respect to all or any part of the terms and conditions mentioned in or incidental to th is Agreement. No parol evidenc e of any prior draft of this Agreement, or of any other agreement shall be permitted to cont radict or vary the terms of this Agreement.
10.10 Amendment
Subject to Article 9 hereof, neither this Agreement nor any of its terms may be terminated, amended or modified except by a written instrument executed by the Parties. No person has the authority to, on behalf of any Party, verbally agree to terminate or modify this Agreement. 164
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10.11 Governing Law
This Agreement shall be construed in accordance with the laws o f the State of California and the laws of the State of California shall govern any claim, controversy, dispute or disagreement arising from or relating to this Agreement (“Dispute”).
10.12 Extensions by the City or Edgemoor
(a) In addition to any Extension granted for a Change Event, upon t he request of Edgemoor for any other reason, the City may, by written inst rument, extend the time for Edgemoor’s performance of any term, covenant or condition of th is Agreement or permit the curing of any default upon such terms and conditions as it dete rmines appropriate, including, but not limited to, the time within which Edgemoor shall agree to such terms or conditions, provided, however, any such extension or permissive curing of any particu lar default will not operate to release any of Edgemoor’s obligations nor constitute a waiver of the City’s rights with respect to any other term, covenant or condition of this Agreement or any other default in, or breach of, this Agreement or otherwise affect the time of the essence provisions with respect to the extended date or the other dates for performance under this Agreement. (b) Upon the request of the City, Edgemoor may, by written instrument, extend the time for the City performance of any term, covenant or condition of this Agreement or permit the curing of any default upon such terms and conditions as it determines appropriate, including, but not limited to, the time within which the City shall agree to such terms or conditions, provided, however, any such extension or permissive curing of any particu lar default will not operate to release any of the City’s obligations nor constitute a waiver of Edgemoor’s rights with respect to any other term, covenant or condition of this Agreement or any other default in, or breach of, this Agreement or otherwise effect the time of the essence provisions with respect to the extended date or the other dates for performance under this Agreement.
10.13 Dispute Resolution
(a) Process.
If a Dispute arises from, or relates to, this Agreement or the breach thereof then the Parties agree to exclusively resolve such Dispute in accordance with this Section 10.13. (b) Initial Dispute Meeting.
(i) Upon the written demand of any Party (“ Dispute Notice ”), the Parties shall meet to make a good faith effort to resolve any Dispute within thirty (30) days of the Dispute Notice. The Dispute Notice shall specify in reasonable detail, the nature and the material facts underlying the Dispute. Sen ior representatives of each P arty shall meet (“ Initial Dispute Meeting”) virtually or in person (as agreed between the Parties) no la ter than six (6) Business Days after the Dispute Notice is provided to all Parties. All Disputes must first attempt to be resolved through an Initial Dispute Meeting prior to either Party initiating arbitration under Section
10.13(c) or the expedited dispute resolution procedures under Section 10.13(d), as applicable. (ii) As part of the Initial Dispute Meeting resoluti on process, eith er 165
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Party may submit the Dispute to non-binding mediation before a mediator agreeable to the Parties within ten (10) days of commencement of the Initial Dispute Mee ting. The cost of the mediator shall be shared by the Parties. It shall be a material obligation of each Party to reasonably cooperate in good faith with the mediator’s efforts to resolve such Dispu te. The mediator shall establish a schedule and procedure for mediation of such Dispute in accordance with the American Arbitration Association’s Construction Rule s and Mediation Procedures (“ AAA Rules”) in force as of the Effective Date. All mediations shall last not more than thirty (30) days from the appointment of the mediator.
(c) Arbitration Procedures. Except Disputes to be resolved under the expedited dispute resolutions procedures in Section 10.13(d), any Dispute remaining unresolved at the later of the expiration of thirty (30) days from the Dispute Notice o r appointment of a mediator under Section 10.13(b) shall be resolved by arbitration through a three-member panel in accordance with the AAA Rules. Within 30 days after the commencement of arbitration, each Party shall select one person to act as arbitrator and the two selected shall select a third arbitrator within ten days of their appointment. If the arbitrators selected by the parties are una ble or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the Ameri can Arbitration Association. The arbitrators shall be reputable construction industry-recognized independent experts having a background and skills in design, engineering, construction and/or law related to projects similar to this Project (each, a “Construction Expert”). Time is of the essence for any arbitration under this Section and arbitration hearings shall take place within 90 day s of filing and awards rendered within 120 days. Judgment on the award rendered by the Construc tion Experts may be entered in any court having jurisdiction thereof.
(d) Expedited Dispute Resolution.
(i) Notwithstanding Section 10.13(c), any Dispute arising out of, o r relating to, the Guaranteed Maximum Price, Disbursement, Approv ed Design Documents, Final Construction Documents, Change Events, Change Orders, Approval Failure Notice, rejection of the Construction Work, Punch List Items, Substantial Completion, Final Completion or any other matter arising during design or construction of the Project related to a Target Completion Date or Maximum Completion Date (each, a “ Expedited Dispute Matter ”) shall be subject to the expedited dispute resolution procedure in this Section 10.13(d). Any dispute involving termination shall not be an Expedited Dispute Matter subject to this Sectio n 10.13(d). No Expedited Dispute Matter will be subject to med iation under Section 10.13(b)(ii) unless otherwise expressly agreed between the Parties in writing.
(ii) If the Parties fail to resolve a n Expedited Dispute Matter unde r Section 10.13(b), the Expedited Dispute Matter shall be finally resolved in accordance with this Section 10.13(d) and within ten (10) days after any such failure shall:
(A) jointly appoint a single Construction Expert to resolve an Expedited Dispute Matter estimated to be $1,000,000 or less; or (B) appoint a three-member panel in accordance with the AAA Rules and Section 10.13(c) to resolve all other Expedited Dispute Matters in excess of $1,000,000, 166
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and in each case, if the Parties have not appointed Constructio n Expert(s) within such timeframe or if any Construction Expert(s) becomes unwilling or unable to continue as such, either Party may make a request to the American Arbitration Association to appoi nt the Construction Expert(s) in accordance with its AAA Rules.
(iii) The Construction Expert(s) will be required to conduct a review of the unresolved Expedited Dispute Matter in accordance with the AAA Rules. The Construction Expert(s) are required to deliv er its reasoned opinion no later than thirty (30) days following the appointment of the last Construction Expert to be appointed (if applicable). Judgment on the award rendered by the Construction Expert(s) may be entered in any court having jurisdiction thereof. (e) Arbitration Rules Generally
For any arbitration under Sections 10.13(c) or 10.13(d), the Parties agree as follows:
(i) before commencing their review of a Dispute under this Section
10.13, each Construction Expert shall be required to confirm th eir independence and the absence of any conflicts in reviewing and determining the result of the Dispute; (ii) each Party shall have reasonable and equal opportunities to pre sent evidence and arguments to the Construction Experts with respect to its position in the Dispute, and each Party shall respond promptly to any requests from the Cons truction Experts for additional information to support their review;
(iii) the place of arbitration shall be Orange County, California; (iv) the arbitration shall be governed by the laws of the State of California;
(v) the arbitrators will have no authority to award punitive or oth er damages not measured by the prevailing party's actual damages, except as may be required by statute;
(vi) arbitrators shall agree to the required time limits prior to ac cepting appointment;
(vii) the award of the arbitrators shall be accompanied by a reasoned and detailed opinion;
(viii) all opinions rendered will be final and binding and not subject to appeal; and
(ix) except as may be required by law, neither a party nor an arbit rator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties.
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Notwithstanding the requirement that all Disputes be resolved t hrough the alternative dispute resolution procedures in Sec tions 10.13(a) through 10.13(e) (in clusive) above, the Parties agree that such requirement does not preclude the Parties from seeking temporary injunctive relief where necessary to protect their rights or interests under this Agree ment which cannot otherwise be adequately preserved under the above provisions or to enforce a ny award rendered by an arbitral panel appointed under this Agreement. Any such actions may be sought in accordance with applicable Law and shall be br ought in the Superior Court of Or ange County and the Parties consent that any service of process in such action or proceeding may be made by personal service or by certified or registered mail directed to the Parties at the address set forth in Section 10.1 for the delivery of notices.
10.14 Further Assurances
The Parties agree to execute a nd acknowledge such other and fur ther documents as may be necessary or reasonably required to express the intent of the P arties or otherwise effectuate the terms of this Agreement. Without limiting the foregoing, if an d t o t h e e x t e n t t h a t a n y o f t h e Attachments hereto are not final and complete as of the Effecti ve Date, the Parties agree to work together in good faith to finalize and complete such Attachments as soon as possible, subject in all events to the approval of such final and complete Attachments by all Parties hereto, at which time the final, complete, and approved Attachments shall be attached to this Agreement and made a part hereof.
10.15 Attorneys’ Fees and Costs
In all Disputes arising from or related to this Agreement, each Party shall bear their own Attorneys’ Fees and Costs and other dispute resolution costs.
10.16 Relationship of Parties
The subject of this Agreement is a private development with no Party acting as the Agent of the other Parties in any respect. None of the provisions in this A greement shall be deemed to render any Party a partner in another Party’s business, or joint venturer or member in any joint enterprise with another Party.
10.17 Severability
If any provision of this Agreement, or its application to any Person or circumstance, is held invalid by any court, the invalidity or inapplicability of such provision shall not affect any other provision of this Agreement or the applica tion of such provision to any o ther Person or circumstance, and the remaining portions of this Agreement shall continue in full force and effect, unless enforcement of this Agreement as so modified by and in response to such inv alidation would be grossly inequitable under all of the circumstances, or would frustrate the fundamental purposes of this Agreement.
10.18 Section 179D
The City and Edgemoor agree that Edgemoor will be designated as the Party primarily responsible for designing the Project, within the meaning of Internal Reven ue Code Section 179D, and to the 168
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extent it relates to the Project, the Parties agree to issue and execute at Financial Close the “179D Letter Agreement ” substantially in the form attached hereto as Attachment 10.18 , whereby Edgemoor shall be entitled to claim any effective tax savings t hat result from the tax deductions available under Section 179D, if any; provided that the City receives an opinion from qualified tax counsel, or is otherwise reasona bly satisfied as to the content of the 179D Letter Agreement and that the execution of the 179D Letter Agreement would not render the Bond Financing taxable.
10.19 Acts of Agents
Edgemoor has appropriately subcontracted certain of its design and construction obligations to the Design Builder on a back-to-back basis with this Project Agreem ent. Whether or not expressly provided in this Agreement and notwithstanding Edgemoor subcont racting obligations to the Design Builder, the acts or omissions of a Party shall be deeme d to include the acts or omissions of such Party’s respective authorized agents, employees, contractors and subcontractors (including the Design Builder) to the extent such parties are acting withi n the scope of their employment or agency, as the case may be.
10.20 LEED
The Project shall be designed and constructed to enable the Cit y to achieve a rating of, at a minimum, LEED Silver.
10.21 Additional Scope
If offered by the City and permitted by applicable Law and City procurement guidelines, as an additional service, not part of the Project’s base scope, the City may request that Edgemoor create a price and /or schedule for new developments. In which case t his agreement would serve as a “Master Project Agreement” to which specific developments could be added via a Statement of Work.
10.22 Monthly Reporting
No later than the fifth (5th) Business Day of each month, comme ncing the month following the notice to proceed, Edgemoor will provide to City a report (the “Monthly Report”). The Monthly Report shall, with respect to the month immediately prior to th e delivery of the Monthly Report, include, at a minimum: (i) executi ve summary of the information contained in such Monthly Report; (ii) status of performance of Edgemoor’s Work, includin g with respect to all milestones and submittals; (iii) project safety statistics; (iv) status of delivery of equipment and materials that are part of Edgemoor’s Work; (v) updated project schedule; (vi) photographs documenting progress of the work.
10.23 Counterparts
This Project Agreement may be executed in counterparts, which together shall constitute a single instrument. Further, any copy, facsimile, or electronic signature (such as a pdf) of any signatory shall be considered to have the same binding effect as an original signature.
10.24 Situs of Sales
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Edgemoor shall require Design Builder and its subcontractors to use commercially reasonable efforts in the purchase of materials subject to sales tax, so t hat such materials acquired for the Project by Design Builder and its subcontractors have the City as situs for sales tax.
10.25 Local Enterprises
Edgemoor shall exercise good faith efforts to engage local enterprises to perform some of the work hereunder, provided this clause shall not prevent Edgemoor from engaging an enterprise with whom Edgemoor has a preferred supplier or strategic relationship.
10.26 Cooperation
(a) The Parties will cooperate with each other in good faith to ens ure proper and efficient execution of the Project. In connection therewit h, to the extent that any documents and materials require review and approval by one or more of the Parties hereunder, such cooperation shall include good faith efforts by the Parties to respond to one another as expeditiously as possible with regard to requests for reviews a nd approvals required hereby and for requests for information relating thereto. With regard to m aterials or documents requiring the approval of one or more Parties, if such materials or documents are not approved as initially submitted, then the Parties shall engage in such communications as necessary under the circumstances to resolve the issues resulting in such disapprov al so as not to impede or delay the ability of Edgemoor to obtain any permits or approvals required by Edgemoor for the Project. (b) A spirit of good faith and a mutual desire to fulfill the oblig ations of this Agreement and for the success of the Project shall govern the Parties’ relationship. All comments provided by any Party on documents or materials for which appro val is required shall be detailed and sufficient in order to enable the other Party to address such comments and to move the process forward in a timely manner.
(c) Unless expressly provided elsewhere in this Agreement, includin g Section 5.5 through Section 5.16 (inclusive) and the Schedule of Submittals:
(i) With respect to any documents and materials requiring review an d approval by the City hereunder (which will be identified in the Schedule of Submittals), Edgemoor shall request the City’s review and approval of such documents and materials in writing (such request, together with such documents and materials, the “ Approval Request”) and, unless the parties otherwise agree in this Agreement or the Schedule of Su bmittals, the City shall have [#insert] minimum time period for [#insert] 1 types of submittals (the “ City Review Period”) to review and approve or disapprove the Approval Request (which ap proval or disapproval must be in writing). Should the City not approve the Approval Request b ecause it failed to comply with the terms of this Agreement, the City’s written notice of disapproval to Edgemoor (the “Notice of Disapproval”) shall set forth the detailed reasons for such disapproval. (ii) If the City issues a Notice of Disapproval in response to an Approval Request from Edgemoor during the City Review Period, the Partie s shall confer and mutually agree upon any modifications to Approval Request within five (5 ) days following the City’s
1 NTD – Parties to advise.
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issuance of such Notice of Disapproval. In the event that Edgemoor submits an Approval Request to the City and the City fails to respond to such Approval Request within the City Review Period, Edgemoor may thereafter perform its obligations under this Agre ement and such Approval Request will be deemed approved, s ubject to the City’s right to subsequently pursue available remedies with respect to any non-conformance with the requirements under this Agreement.
10.27 Supplier Diversity
Edgemoor shall work with the Design Builder to exercise good faith efforts to engage minority- owned, women-owned and other small disadvantaged business enterprises, as well as local businesses to perform some of Edgemoor’s Work hereunder; provided, however, this clause shall not prevent Edgemoor from engaging an enterprise with whom Edgemoor has a preferred supplier or strategic relationship.
10.28 IRC Section 48(a)(10)
In connection with the portion of the Work that is relevant to receiving IRC tax-credits, Edgemoor and the Design Builder will comply with the prevailing wage restrictions of IRC Section 48(a)(10) and the qualified apprenticeship restrictions of IRC Section 48(a)(11) (including keeping records and providing sufficient records to the City). Edgemoor and the Design Builder acknowledge that the City will be filling to obtain the investment tax credit under the Inflation Reduction Act (“IRC”), Section 48 and other available credits and Edgemoor and the Design Builder will cooperate with the City and not take any action to jeopardize the City obtaining such credits.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 Representations and Warranties of Edgemoor
Edgemoor represents and warrants as follows, as of the Effective Date:
(a) Valid Existence; Good Standing. Edgemoor is a limited liabilit y company duly organized and validly existing under the laws of the State of Maryland. Edgemoor has all requisite power and authority to own its property and conduct its business as presently conducted.
Edgemoor has made all required filings and is in good standing in Maryland and qualified and permitted to do business in the State of California;
(b) Authority. Edgemoor has all requi site power and authority to e xecute and deliver this Agreement and the agreements contemplated by this Agreement and to carry out and perform all of the terms and covenants of this Agreement and the agreements contemplated by this Agreement;
(c) No Limitation on Ability to Perform. Neither Edgemoor’s articl es of organization or operating agreement, nor the organization docum ents of any of Edgemoor’s members, nor any other agreement or Laws in any way prohibits, limits or otherwise affects the right or power of Edgemoor to enter into and perform all of the terms and covenants of this 171
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Agreement. Neither Edgemoor nor any of its members are party t o or bound by any contract, agreement, indenture, trust agreem ent, note, obligation or othe r instrument which could prohibit or limit the same. Except for the customary licenses and the P ermits contemplated hereby, no consent, authorization or approv al of, or other action by, and no notice to or filing with, any governmental authority, regulatory body or any other Person is required for the due execution, delivery and performance by Edgemoor of this Agreement or any o f the terms and covenants contained in this Agreement. There are no pending or threatene d suits or proceedings or undischarged judgments affecting Edgemoor or any of its members before any court, governmental agency, or arbitrator which might materially adversely effects the enforceability of this Agreement or the business, operations, assets or condition of Edgemoor; (d) Valid Execution. The execution and delivery of this Agreement and the agreements contemplated hereby by Edgemoor have been duly and v alidly authorized by all necessary action. This Agreement will be a legal, valid and bi nding obligation of Edgemoor, enforceable against Edgemoor in accordance with its terms; (e) Defaults. The execution, deliver y and performance of this Agre ement (i) do not and will not violate or result in a violation of, contra vene or conflict with, or constitute a default under (A) any agreement, document or instrument to whic h Edgemoor is a party or by which Edgemoor’s assets may be bound or affected, (B) any Laws, or (C) the limited liability company agreement of Edgemoor, and (ii) do not and will not result in the creation or imposition of any lien or other encumbrance upon the assets of Edgemoor; (f) Suits, Proceedings or Judgements. To Edgemoor’s actual knowledge, there are no pending or threatened suits or proceedings or undischarged judgments affecting Edgemoor before any court, governmental a gency or arbitrator which might materially adversely affect the enforceability of this Agreement;
(g) Skill and Capacity. Edgemoor has the requisite skill and capac ity to perform all obligations hereunder, and is not debarred or otherwise forbidden from performing its obligations hereunder; and
(h) Business Licenses. Edgemoor has all obtained the California Bu siness License and City of Garden Grove Business License as required t o perform Edgemoor’s Work under this Agreement.
11.2 Representations and Warranties of the City
The City represents and warrants, as follows, as of the Effective Date:
(a) Authority. The City is duly orga nized and validly existing und er the laws of the State of California and has and shall exercise all requisite power to execute and deliver and perform its obligations under this Agreement and the agreements contemplated by this Agreement and to carry out and perform all of the terms and covenants of this Agreement and the agreements contemplated by this Agreement;
(b) Requisite Power. The City has all requisite power to execute an d deliver and perform its obligations under this Agreement;;
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(c) Defaults. The execution, delivery and performance by the City of this Agreement do not and will not violate or result in a violation of, contravene or conflict with, or constitute a default under (A) any agreement, document or instrument to which the City is a party or by which the City’s assets may be bound or affected, (B) any Laws or (C) the bylaws of the City. Except as expressly stated in this Project Agreement, and except for the customary licenses and the Permits contemplated her eby, no consent, authorization or approval of, or action by, and no notices to or filing with any governmental authority, regula tory body or any other Person is required for the due execution, delivery and performance by the City of this Agreement or any of the terms and covenants contained in this Agreement. To its ac tual knowledge, there are no pending or threatened suits or pr oceedings or undischarged judg ments affecting the City or the formation of the GGPFA before any court, governmental agency or arbitrator which might materially adversely affect the enforceability of this Agreement; and (d) Valid Execution. The execution and delivery of this Agreement and the agreements contemplated hereby by the City have been duly and v alidly authorized by all necessary action. This Agreement will be a legal, valid and bi nding obligation of the City, enforceable against the City in accordance with its terms. City has provided to Edgemoor a written resolution authorizing the execution of this Agreement and the agreements contemplated by this Agreement.
(e) No Conflicts. The execution, delivery and performance by the C ity of this Agreement will not, any material respect, violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award in effect and having applicability to the (i) City, or result in a breach of or constitute a default under any agreement, lease or commitment to which the City is a party or by which the City is bound. (f) Site Access. The City has all requisite power to grant Edgemoor sufficient access to the Site, and no liens or encumbrances exist on the S ite which might adversely impact Edgemoor’s performance in accordance with this Agreement.
11.3 Survival.
The Parties’ respective liabilities for any breach of the representations and warranties in this Article 11 shall survive the Term and any termination of this Agreement.
ARTICLE 12
DEFINITIONS.
The following terms used in this Agreement, shall have the mean ings ascribed to them in this Article 12:
“179D Letter Agreement” is defined in Section 10.18 and attached as Attachment 10.18. “AAA Rules” is defined in Section 10.13(b)(ii)
“Agents” means, when used with reference to any Party to this A greement or any other Person, the members, managers, officers, directors, commissione rs, and employees of such Party or other Person, and each of them.
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“Agreement” means this Project Agreement, as it may be amended in accordance with its terms.
“AIA Notice of Substantial Completion” means the AIA Document G704- 2017 certificate. “Approval Cure Period” is defined in Section 5.13(d).
“Approval Failure Notice” is defined in Section 5.13(d). “Approved Design Documents” is defined in Section 5.5(a). “Attorneys’ Fees and Costs” means any and all reasonable attorn eys’ fees (including the fees and costs of in-house counsel and legal staff), costs, expenses, and disbursements, including, but not limited to, expert witness fees and costs, travel time and associated costs, transcript preparation fees and costs, doc ument copying, exhibit preparati on, courier, postage, facsimile, long-distance and communications expenses, court costs and the costs and fees associated with any other legal, administrative, or alternative dispute resolut ion proceeding, fees and costs associated with execution upon any judgment or order, and costs on appeal. “Authorized Individuals” is defined in Section 5.13(a). “Bond Trustee” shall mean the trustee, appointed as such pursuant to the Bond Financing. “Business Day” or “Business Days” means any day other than a Sa turday, Sunday or California, City or federal legal holiday.
“Certificate of Final Completion” is the certificate in the form of Attachment 6.5 issued in accordance with Section 6.5.
“Certificate of Occupancy” is defined in Section 6.2.
“Certificate of Substantial Completion” shall mean the certific ate in the form of Attachment 6.2 issued in accordance with Section 6.2.
“Change Event” is defined in Section 5.21.
“Change Order” means a City Change Order or Edgemoor Change Order, as applicable. “Change Request Supporting Materials” is defined in Section 5.21(a). “City” is defined in the Preamble.
“City Assumed Regulatory Approvals” is defined in Section 4.3(c). “City Change Order” is defined in Section 5.21(a).
“City Claim” is defined in Section 4.4(a).
“City Event of Default” or “City Events of Default” is defined in Section 9.4. 174
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“City Furnished Equipment” is defined in Section 5.27.
“City Manager” means Lisa Kim or any other person notified by t he City in writing to Edgemoor replacing Lisa Kim.
“City Permitted Site Uses” means access to the City to allow fo r its ongoing use of and necessary access and egress to the existing PSF, Orange County Fire Authority (“OCFA”) and portions of the Civic Center Park not impacted by the Work. “Civic Center Park” is defined in Recital B.
“Claim” is defined in Section 4.4(a).
“Construction” means all new ex cavation, construction, replacem ent, rehabilitation, and demolition occurring on the Site pursuant to this Agreement. “Construction Documents” means the Design Development Documents and all other shop drawings, working drawings, fabrication plans, material and hardware descriptions, specifications, construction quality control reports, construction quality assurance reports and samples necessary or desirable for the Construction Work in accordance with this Agreement, which in each case, are required or necessary under appli cable building codes and Laws to be submitted with an application for the required Permits for the Project (or a port ion of the Project) to construct all or a portion of the Improvements.
“Construction Expert” is defined in Section 10.13(c).
“Defect’s Warranty Period” is defined in Section 5.22.
“Delay Credit” is defined in Section 9.3(d).
“Design/Build Agreement” or “DBA” is defined in Recital F. “Design Builder” means, Clark Construction Group, LLC, a Maryla nd limited liability company.
“Design Development Documents” means the design development documents in sufficient detail and completeness to show that the Improvements and the Construction thereof shall comply with the Project Requirements, and which shall include, without limitation:
(a) Site plan(s) at appropriate scale showing the buildings, street s, walks, and other open spaces. All land uses shall be designated. All Sit e development details and bounding streets, points of vehicular and pedestrian access shall be shown; (b) All building plans and elevations at appropriate scale; (c) Building sections showing typical cross sections at appropriate scale; (d) Floor plans;
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(e) Outline specifications for materials, finishes and methods of construction; (f) Interior and exterior signage plans;
(g) Site and exterior and interior lighting plans;
(h) Material and color samples; and
(i) Roof plans showing all mechanical and other equipment. “Differing Site Conditions” mean s surface, subsurface, latent p hysical, chemical or any other physical conditions at, below or adjacent to the Site whi ch (a) differs materially in concentration, identity or loca tion from those indicated in the Existing Site Reports listed in Attachment 12-2, or (b) are not reasonably capable of being identified by an appropriately qualified and experienced contractor, engineer or qualified professional working in that field exercising due care and skill by visual inspections through access made available to Edgemoor prior to the Setting Date for inspection and investig ation of the Site, or (c) are o f an unusual nature, which differ materially from those ordinarily encountered at or around the S ite and generally recognized as inhering in work of the character provided in this Agreement. “Disabled Access Laws” means all Laws related to access for per sons with disabilities including, without limitation, the Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq. “Disbursement” is defined in Section 2.7.
“Dispute” is defined in Section 10.11.
“Dispute Notice” is defined in Section 10.13.
“Dispute Resolution Procedures” means the procedures described in Section 10.13 to resolve a dispute.
“Edgemoor” is defined in the Preamable.
“Edgemoor Affiliate” shall mean any entity wholly owned or cont rolled by Edgemoor Infrastructure & Real Estate, LLC.
“Edgemoor Assumed Hazardous Materials Obligations” is defined in Section 4.2(c). “Edgemoor Assumed Regulatory Approvals” is defined in Section 4.3(c). “Edgemoor Change Order” is defined in Section 5.21(b).
“Edgemoor Change Request” is defined in Section 5.21(b). “Edgemoor Claim” is defined in Section 4.4(b).
“Edgemoor Event of Default” or “Edgemoor Events of Default” is defined in Section 9.2. 176
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“Edgemoor Responsible Party” shall mean Edgemoor, Design Builde r, Edgemoor’s employees and Agents, and any other Persons who are involved in the Project under contract with directly or indirectly (including all subcontractors or suppliers at any-tier thereto) Edgemoor. “Edgemoor’s Change Fees” is defined in Section 5.21(a)(iv). “Edgemoor Project Relief” is defined in Section 5.21(x). “Edgemoor’s Work” or “Work” is defined in Recital F.
“Effective Date” is the date set out in the first paragraph of this Agreement, being the date both Parties have approved and signed this Agreement.
“Effective Date Design” is defined in Section 5.5.
“ENA” is defined in Recital D.
“Event of Default” means a Edgemoor Event of Default or a City Event of Default, as applicable.
“Existing Site Reports” is defined in Section 4.2(e).
“Expedited Dispute Matter” is defined in Section 10.13(d)(i). “Extension” means an extension granted to the Master Project Sc hedule due to a Change Event or as otherwise permitted under this Agreement.
“Extra Work Request” is defined in Section 5.21(a).
“Final Completion” is defined in Section 6.3.
“Final Construction Documents” m eans the final approved Constru ction Documents as approved by the City in accordance with Sections 5.5 and 5.9. “Financial Close” means the issuance of bonds by the GGPFA as described in Recital E. “Financial Close Target Date” is defined in Section 3.3. “Financial Closing Date” is the date of Financial Close identified in Recital E. “Force Majeure Event” means acts of a public enemy; fires; floods; explosions; epidemics; quarantine restrictions; blockade s; freight embargoes; strikes; boycotts; labor disputes; demonstrations; earthquakes; tidal waves; hurricanes; landslides; tornados; pandemics; epidemics; shortage of, or inability to obt ain materials or reasonably acc eptable substitute materials; acts of terror or terrorism; unreasonable delays in issuing necessary P ermits or approvals or conducting inspections not caused by Edgemoor; the inability to obtain eas ements, licenses, dedications, approvals or title required for utilities not caused by Edgemoo r; power outages; war and related causes; nuclear perils; explosion or nuclear, radioactive, chemical or biological contamination not caused by Edgemoor; any adverse or inclement weather conditions , including thunderstorms, 177
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lighting, tornadoes and other windstorms; or other actions outs ide of the control of Edgemoor, including acts of god.
“Furniture, Fixtures and Equipment or FF&E” is defined in Section 5.27. “General Conditions” means the conditions listed in Attachment 5.2(c). “GGPFA” is the Garden Grove Public Financing Authority. “GMP Change Order” is defined in Section 2.3.
“Guaranteed Maximum Price” or “GMP” is defined in Section 2.3, with the binding GMP being the amount determined pursuant to the GMP Change Order or any other Change Order. “Hazardous Material” means any (a) hazardous or toxic substance , waste, pollutant, contaminant or other material whatsoever that is listed, regula ted, or for which standards of conduct are provided under any E nvironmental Law as hazardous o r t o x i c ; ( b ) p e t r o l e u m hydrocarbons excluding de minimis amounts and excluding petrole um hydrocarbon products contained within regularly operated motor vehicles; (c) hazardo us building materials including asbestos or asbestos-containing materials, lead or PCBs in stru ctures and/or other improvements on or in the Site (other than mineral asbestos naturally occurr ing in the ground); and (d) per- and polyfluoroalkyl substances.
“Hazardous Materials Laws” means any applicable federal, state or local Laws relating to Hazardous Material (including, wi thout limitation, its handling , transportation or Release) or to human health and safety, industrial hygiene and the use of or exposure to Hazardous Materials. “Improvements” means and the phys ical Construction on the Site and all buildings, structures, fixtures and other improvements required by the Construction Documents to be erected, built, placed, installed or constructed by Edgemoor upon or within the Site on or after the Effective Date pursuant to this Agreement to construct the PSF and the Civic Center Park. “Indemnified Parties” means the City, Edgemoor, as the case may be, and, as the case may be, their respective boards, departments, affiliates, members, selected officials, partners, officers, directors, agencies, managers and other subdivisions, including , without limitation, all of the Agents and each of them.
“Indemnify” means defend, indemnify, and hold harmless. “Initial Dispute Meeting” is defined in Section 10.13(b). “Laws” shall mean all applicable laws, ordinances, rules, regul ations, Permits and orders.
The phrase “Law” shall be construed to mean the same as the above in the singular as well as the plural.
“Licensed Professional’s Certificate” is defined in Section 6.2. “Loss” or “Losses” means any and all claims, demands, losses, l iabilities, damages 178
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(including foreseeable and unforeseeable damages), liens, oblig ations (except for obligations in the ordinary course pursuant to Permits), interest, injuries, p enalties, fines, lawsuits and other proceedings, judgments and awards and costs and expenses (inclu ding, without limitation, Attorneys’ Fees and Costs, and consultants’ fees and costs) of whatever kind or nature, known or unknown, contingent or otherwise.
“Manufacturer Warranties” is defined in Section 5.22.
“Master Project Schedule” means the initial schedule of perform ance agreed between the Parties and attached as Attachment 5.15, subject to updates, ex tensions and adjustments as provided in this Agreement, including without limitation Article 2 and Sections 5.15 and 5.21. “Material Adverse Effect” means any adverse impact that is more than immaterial, deminimus or negligeable on the Project or any Edgemoor Respons ible Party in connection with the performance of the Work or in connection with the Project. “Material Damage Event” is defined in Section 4.1(c)(i). “Maximum Completion Date” means, as applicable, those certain M aximum Completion Dates for either the PSF and the Civic Center Park as set forth on the Master Project Schedule, which in each case are 180 days from the applicable Target Completion Dates, in each case, which may be modified for an Extension.
“Monthly Report” is defined in Section 10.21.
“Notice to Proceed” is defined in Section 2.3.
“OCFA” means the Orange County Fire Authority.
“Outside Financial Closing Date” is defined in Section 3.3. “Party” or “Parties” means the City and Edgemoor.
“Permits” means all permit(s), licenses and governmental approvals required to be obtained under applicable Law for the use or construction of the Project , including Exhibit A from Conditional Use Permit CUP-250-2023 and the Civic Center Revita lization Project, Initial Study/Mitigated Negative Declaration, each approved by the Planning Commission on December, 14, 2023.
“Person” means any individual, partnership, corporation (including, but not limited to, any business trust), limited liability company, joint stock company , trust, unincorporated association, joint venture or any other entity or association, the United St ates, or a Federal, State or political subdivision thereof.
“PLA” is defined in Section 5.23.
“Prime Rate” means the WSJ Prime Rate publicly announced from t ime to time by Wall Street Journal, and if such rate in its present form becomes unavailable, such similar reference rate 179
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as may be agreed by the parties, acting reasonably.
“Project” means the Construction of the Improvements in accorda nce with the Project Requirements, including the Design Development Documents and Final Construction Documents. “Project Agreement” is defined in the Preamble.
“Project Fund” means all amounts financed for the Project by GGPFA. “Project Requirements” is defined in Section 5.2(c), as may be updated by the GMP Change Order or any other Change Order.
“Proposed Recovery Schedule” is defined in Section 5.15(c). “PSF” is defined in Recital B.
“Punch List Items” is defined in Section 6.3.
“Recovery Schedule” is defined in Section 5.15(c).
“Regulatory Approval” means any authorization, approval or Perm it required to develop the Project by any governmental a gency having jurisdiction over the Site or the Improvements, including the [Orange County Public Works Division]. The term “Regulatory Approval” shall not include any authorization, approva l or Permit required for the City’s use and occupancy of the Project, including without limitation any approvals required by the FDA, and any other applicable Federal, State, or local agencies.
“Release” when used with respect to Hazardous Material means an y spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, e scaping, leaching, dumping, or disposing into the indoor or outdoor environment.
“Required Element” is defined in Section 5.11(a).
“Required Warranties” are set forth in Attachment 5.22. “Responsible Party” is defined in Section 4.4(c).
“Requisition” is defined in Section 2.7(a).
“RFQ” is defined in Recital B.
“Schedule of Values” is defined in Section 2.6.
“Schedule of Submittals” is the version of the schedule of submittals agreed by the Parties as part of the GMP Change Order.
“Setting Date” means (i) prior to the GMP Change Order executio n, March 12, 2024 and (ii) thereafter, the date of submission of the GMP Change Order by Edgeomor for approval by the City.
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“Site” is defined in Recital A.
“Site Map” is defined in Section 1.3.
“Specialties” is defined in Section 5.27(e).
“Standard of Care” means the level of skill, knowledge, care and diligence that a reasonably careful Person (including architects and engineers) would use under similar circumstances. “Substantial Completion” or “Substantially Completed” is defined in Section 6.2. “Target Completion Date(s)” means, as applicable, those certain Target Completion Dates for the PSF and the Civic Center Park as set forth on the Maste r Project Schedule, in each case, which may be modified by an Extension or otherwise in accordance with this Agreement. “Term” is defined in Section 1.4.
“Total Available Funds” is defined in Recital E.
“Transfer” is defined in Section 8.1.
“Work Area” means the portion of the Site on which Edgemoor is obligated to perform, or is performing, Construction as identified in Attachment A-2. “Work” is defined in Recital F.
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Signatures on following page.
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IN WITNESS WHEREOF the Parties have caused this Agreement to be executed by their duly appointed representatives as of the date first above written.
City:
CITY OF GARDEN GROVE,
a municipal corporation
By:
City Manager
APPROVED AS TO FORM:
Stradling Yocca Carlson & Rauth PC
Special Counsel to City
Woodruff & Smart
City Attorney
By Omar Sandoval
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Edgemoor:
EDGEMOOR GARDEN GROVE CIVIC PARTNERS LLC,
a Maryland limited liability company
By:
Brian Dugan
Authorized Representative
By:
Frank J. Baltz
Authorized Representative
183
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Amir El-Farra
Dept:
City Manager Dept: Police
Date: 3/26/2024
Subject: Second Reading of Ordinance No. 2953
Entitled: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GARDEN GROVE APPROVING AN AMENDMENT TO ATTACHMENT 706.5 OF THE GARDEN
GROVE POLICE DEPARTMENT MILITARY EQUPIMENT USE POLICY PURSUANT TO GOVERNMENT CODE 7071. (Action Item)
Attached for second reading is Ordinance No. 2953 recommended for adoption.
ATTACHMENT(S):
1. Ordinance No. 2953
184
ORDINANCE NO. 2953
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GARDEN
GROVE APPROVING AN AMENDMENT TO ATTACHMENT 706.5 OF THE
GARDEN GROVE POLICE DEPARTMENT MILITARY EQUIPMENT USE
POLICY PURSUANT TO GOVERNMENT CODE 7071
City Attorney Summary
This Ordinance approves an amendment to Attachment
706.5 of the Garden Grove Police Department
Military Equipment Use Policy, which replaces the
Police Department’s Sig Sauer MCX rifles with
Geissele Super Duty AR -15 rifles for use by the
Department’s SWAT team.
WHEREAS, the mission of the Garden Grove Police Department (Department) is to provide the highest quality police services to the communities it serves; and
WHEREAS, the Department values transparency and public input, and welcomes open dialogue about its practices and operations; and
WHEREAS, the preservation and sustainability of public safety, civil rights, and officer safety is paramount; and
WHEREAS, the Department responds to a wide variety of critical incidents, instances of civil unrest, and life and death situations, and operates in numerous unpredictable, dynamic environments; and
WHEREAS, a variety of equipment options is needed for safe and effective resolution of those situations; and
WHEREAS, each situation is evaluated by incident commanders or supervisors who, based on circumstances and Department directives, determine which equipment should be used; and
WHEREAS, the Department’s diverse catalogue of military equipment, as defined in state law, and associated training gives police officers the confidence and capability to deescalate volatile situations, enhance the safety of the public and officers, and bring critical incidents to a safe resolution; and
WHEREAS, from time to time, the Department may be asked to assist or need to be assisted by other law enforcement agencies, which may include use of military equipment, as defined in state law; and
WHEREAS, partnerships with other law enforcement agencies are an integral part of maintaining the continuity of public safety within the region; and 185
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1823770.1
WHEREAS, Assembly Bill 481 (AB 481) became effective on January 1, 2022; and
WHEREAS, AB 481 defines military equipment in Government Code section 7070(c) to include a wide range of equipment as described in the Department’s Military Equipment Policy 706; and
WHEREAS, AB 481 requires the Department to obtain the approval of the City Council by an ordinance adopting its Policy 706 prior to requesting military equipment from the federal government, seeking funds for military equipment, including grants and donations, acquiring military equipment, collaborating with another law enforcement agency in the use of military equipment in Garden Grove, using any new or existing mi litary equipment in a manner not previously approved by the City Council, or entering into an agreement for funding, receipt, acquisition, use of, or collaboration in the use of military equipment; and
WHEREAS, to promote public safety, civil rights, and officer safety, the Department desires to continue using, seeking funding for, acquiring, and collaborating, when necessary, with other law enforcement agencies, in the use of the military equipment described in its Policy 706; and
WHEREAS, on November 14 , 2023, the Council adopted Ordinance No. 2944 approving the Department’s Military Use Policy Policy 706; and
WHEREAS, the Department has requested an amendment to Attachment 706.5 (Military Equipment Inventory) of Policy 706 to replace its Sig Sauer MCX rifles with Geissele Super Duty AR -15 rifles for use by the Department’s SWAT team; and
WHEREAS, the Council has examined the Department’s Policy 706 and finds that the Police Department has submitted all information described in Government Code section 7070(d) and 7072(a), enabling the City Council to make the findings in this ordinance; and
WHEREAS, pursuant to Government Code section 7071(d), the City Council finds that the military equipment described in Policy 706 and military equipment inventory is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety; and
WHEREAS, pursuant to Government Code section 7071(d), the City Council further finds that Policy 706 will safeguard the public’s welfare, safety, civil rights, and civil liberties; and
WHEREAS, pursuant to Government Code section 7071(d), the City Council further finds that continued use of existing and revised military equipment and purchase of military equipment described in Policy 706 is reasonably cost effective compared to available alternatives that can achieve the same objective 186
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1823770.1
of officer and civilian safety; and
WHEREAS, pursuant to Government Code section 7071(d), the City Council further finds that the Department will ensure use of existing military equipment described in Policy 706 will comply with the policy in the future; and
WHEREAS, the Department’s Policy 706 including Attachment 706.5 has been published on the Garden Grove Police Department’s internet website since February 8, 2024.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GARDEN GROVE HEREBY ORDAINS AS FOLLOWS:
SECTION 1: The foregoing recitals are hereby incorporated in full and adopted as the City Council’s findings pertaining to the Garden Grove Police Department’s Military Equipment Use Policy.
SECTION 2: Based on the above recitals and findings, and the information provided to the City Council at the public meeting, the City Council determines that Policy No. 706 of the Garden Grove Police Department and revised Attachment 706.5 complies with standards for approval under Government Code section 7071:
1. The identified military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.
2. Policy No. 706 will safeguard the public’s welfare, safety, civil rights, and civil liberties.
3. The purchase and use of the identified military equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety.
4. All military equipment use prior to the adoption of Policy No. 706 complied with applicable Department policy in effect at that time, and adoption of Policy No. 706 and revised Attachment 706.5 will ensure future compliance.
SECTION 3: Garden Grove Police Department Policy No. 706 and revised Attachment 706.5 pertaining to Military Equipment, establishing the Department’s Military Equipment Use Policy is hereby approved and adopted.
SECTION 4 : The City Council approves seeking funds for military equipment described in Policy No. 706 and revised Attachment 706.5, including grants and donations, acquiring military equipment described in Policy No. 706, collaborating as needed with another law enforcement agency in the deployment 187
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1823770.1
or use of military equipment in Garden Grove or Orange County, using existing military equipment as described in Policy No. 706, and soliciting or entering into an agreement for funds, acquisition, use of, or collaboration for use of military equipment described in Policy No. 706.
SECTION 5: That this approval is not intended to and shall not supersede existing procedures to seek approval for the appropriation and expenditure of specific funds through the bi-annual budget process, or existing processes for the approval and execution of contracts, donations, and grants.
SECTION 6: That the City Council s hall review this Ordinance annually and vote whether to renew the Ordinance, consistent with the requirements of state law.
SECTION 7 : If any section, subsection, subdivision, sentence, clause, phrase, word, or portion of this Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance.
The City Council hereby declares that it would have adopted this Ordina nce and each section, subsection, subdivision, sentence, clause, phrase, word, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, words or portions thereof be declared invalid or unconstitutional.
SECTION 8 : The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same, or the summary thereof, to be published and posted pursuant to the provisions of law and this Ordinance shall take effect thirty (30) days after adoption.
The foregoing Ordinance was passed by the City Council of the City of Garden Grove on the ___ day of ____________.
ATTEST:
MAYOR
_______________________________
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS:
CITY OF GARDEN GROVE )
I, TERESA POMEROY, City Clerk of the City of Garden Grove, do hereby certify that the foregoing Ordinance was introduced for first reading and passed to second reading on March 12, 2024, with a vote as follows:
AYES: COUNCIL MEMBERS: (7) BRIETIGAM, O’NEILL, DOVINH, KLOPFENSTEIN,
NGUYEN-PENALOZA, TRAN, JONES
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Garden Gove City Council
Ordinance No. 2953
1823770.1
NOES: COUNCIL MEMBERS: (0) NONE
ABSENT: COUNCIL MEMBERS: (0) NONE
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