Valley and Swimming Swan, LLC. The YMCA of Silicon Valley does not have an Aquatics presence in South Santa Clara County and their closest pool is located at the South Valley Family YMCA in San Jose. After their site visit, the YMCA submitted a proposal, and then withdrew it from consideration. The Chief Operating Officer for the YMCA of Silicon Valley stated, with disappointment, that after they completed their financial analysis, “it became clear the programming and operations would not cover their direct and indirect expenses” and that as they were emerging from COVID, they were “financially unable to take on a subsidized program of this magnitude.” City Council awarded a two-year contract and subsequent one-year amendment to Swimming Swan, LLC to operate a summer aquatics program for the 2022, 2023, and 2024 seasons.
The consultant, Swimming Swan, LLC, was paid a management fee and provided reimbursement for the cost of insurance. Per the agreement, the annual Consumer Price Index (CPI) rate was applied to the management fee for the 2023 and 2024 seasons, and the consultant retained the revenue generated. Swimming Swan, LLC was unable to acquire a ten million dollar insurance policy in 2022 and therefore did not operate the CHS Aquatic Center waterslides that summer, but the pools were open for recreation and lap swim and swim lessons.
Consultant 2022 Season 2023 Season 2024 Season
Management Fee $175,000 $183,575 $188,348
Insurance $0 $64,580 $61,580
Total $175,000 $248,388 $249,928
A new RFP was issued in November 2024 for management of the CHS Aquatics Center Summer Aquatics Program. At the City Council meeting on March 17, 2025, Swimming Swan, LLC was awarded a one-year contract and City Council requested staff return with an analysis of the Aquatics Program.
ANALYSIS
CHS Aquatics Center Facility
Per the Cooperative Agreement, the City pays GUSD its equitable share of maintenance and repair costs for the CHS Aquatics Center, at an average rate of $76,600 per year over the past two years, which included the annual pool maintenance (average cost of $55,600), replacement of the chemical controller ($22,496) one year, and replacement of a pool heater ($19,431) the other year.
The waterslides require waxing and repairs by a consultant every four to six years, at an average cost of $50,000. Regular waxing is an essential part of pool slide maintenance. It helps to extend the lifespan of the slide, maintain its appearance, reduces the risk of rider skin abrasions/injuries, and ensures a smooth, fast, and safe
ride. Waxing is especially important for commercial waterslides that are exposed to constant sun and use. The waterslides are due for waxing this year.
In 2022, the City replastered the activity pool at a cost of $299,757. Per industry standards, the pool should be replastered every seven to ten years. Pools are replastered to rejuvenate their aesthetics, restore structural integrity, and address issues like stains, cracking, and wear and tear. Replastering provides a fresh, smooth surface, improving the pool's look and feel while also reinforcing its waterproof barrier and protecting against future damage.
The CHS Aquatics Center will be 20 years old in 2031. Facility maintenance for the CHS Aquatics Center is high, with waterslide repairs averaging $50,000 every four to six years. Replastering the pool is $300,000 every seven to ten years, and the City’s equitable annual maintenance cost and mechanical replacement fees averages $76,600 per year. Based on these costs and the aging facility, the City can anticipate spending at least one million dollars over the next ten years on the CHS Aquatics Center facility, not including the cost to run a program.
Summer Aquatics Program Operations
While the City operates on a fiscal year from July 1 through June 30, this analysis was performed on a calendar year basis to align with the summer season.
Prior to the construction of the CHS Aquatics Center, the Recreation Department offered a smaller Summer Aquatics Program. In 2011, the Recreation Department offered a seven-week program that included six weeks of swim lessons at Gilroy High School and two-hours of recreation swim on weekdays at Gilroy High School and South Valley Middle School. Swim lessons were $7.50 per class and recreation swim was $2 per day. There were 612 swim lesson participants, 533 recreation swim participants at South Valley Middle School, and 856 recreation swim participants at Gilroy High School. Recreation swim at South Valley Middle School was free for qualifying lowincome families. The program generated $45,480 in revenue and had $103,490 in expenses, netting a loss of $58,011.
The Summer Aquatics Program at CHS Aquatics Center has been run by City staff and by a consultant. The facility is open six days a week, including weekends, and offers swim lessons and recreation swim for the community. For the purposes of this analysis, the City-run program in 2018 and 2019 and the consultant-run program in 2023 and 2024 will be evaluated. The on-going facility expenses for CHS Aquatics Center are not factors in this operational comparison because those facility costs will be incurred regardless of who is running the program.
The City’s operational expenses included staff recruitment, staff wages and benefits, uniforms, swim lesson equipment, lifeguarding equipment, office supplies, certification training supplies, first aid supplies, Snack Shack inventory, staff development, custodial services, class registration support, activity guide publication, and professional memberships (Bay Area Public Pool Operator Association, American Red Cross Learn
to Swim Program). An average revenue of $140,978 was generated and an average expense of $476,270 was incurred. The City-run program averaged a net loss of $335,292. In 2025 dollars, the average net loss would be The consultant was responsible for certification classes, hiring and staffing the program, custodial services, additional equipment and supplies, website design and hosting fees, marketing, registration software, a customer payment platform, professional licenses and certifications, staff training, and payroll expenses. The City allowed the consultant to use equipment onsite from the 2019 season, but replacement and additional equipment was purchased by the consultant. The City received no revenue from the consultant and the City paid the consultant an average of $249,158 for the management fee and insurance. The consultant-run program averaged a net loss of $249,158.
CITY CONSULTANT
Calendar Year 2018 2019 2023 2024
City Revenue $129,524 $152,432 $0 $0
City Expense $469,411 $483,128 $248,388 $249,928
Net ($339,887) ($330,696) ($248,388) ($249,928)
In 2025 dollars, this would be an average net loss for the City-run program of $422,511 and an average net loss of the consultant-run program of $257,867. The average expenses were $342,164 greater with the City-run program. By 2025 standards, the City-run program experienced a $164,644 higher average net loss compared to the consultant-run program.
CITY CONSULTANT
Calendar Year
2018
in 2025 Dollars
($1.27 higher)
2019
in 2025 Dollars
($1.25 higher)
2023
in 2025 Dollars
($1.05 higher)
2024
in 2025 Dollars
($1.02 higher)
City Revenue $164,499 $190,540 $0 $0
City Expense $596,152 $603,910 $260,807 $254,927
Net
in 2025 Dollars ($431,653) ($413,370) ($260,807) ($254,927) The analysis showed the City and the consultant had similar program offerings each season including Lifeguarding and Water Safety Instructor certification classes, swim lessons, recreation swim, water aerobics, and pool parties at the CHS Aquatics Center.
The City had an average of 910 swim lesson participants and 11,575 recreation swim
users. The average fee per class for swim lessons was $13.13 and the average recreation swim fee was $6.50 on weekdays and $8.50 on weekends.
The consultant had an average of 1,576 swim lesson participants and 5,994 recreation swim users. The average fee per class for swim lessons was $13.75 and the average recreation swim fee was $9 on weekdays and $11 on weekends.
There is a disparity in the number of recreation swim users with the City versus the consultant. It is worth noting that the City-run program benefited from eight consistent seasons of operations, while the consultant was following a three-year hiatus (two years of complete shutdown due to COVID, followed by one year without waterslide usage) and has only begun to rebuild the program. Their success thus far is evident in the growth of the swim lesson program.
CITY CONSULTANT
Calendar Year 2018 2019 2023 2024
# Swim Lesson
Participants
938 882 1,192 1,883
Swim Lesson
Per Class Fee
$11.25 $15.00 $13.75 $13.75
# Recreation
Swim Users
12,990 10,159 5,107 6,880
Recreation
Swim Fee
(Weekdays /
Weekends)
$5 / $7 $8 / $10 $8 / $10 $10 / $12
Operation and Facility Cost Considerations
There are different levels of costs associated with a facility. Having waterslides adds considerable costs because of the maintenance required to safely operate the waterslides and meet Cal/OSHA inspection and permitting requirements. The City can anticipate that GUSD maintenance fees will continue at an average rate of $76,600 per year, in addition to waterslide maintenance every four to six years at an average cost of $50,000.
There is also a difference between having an aquatics program that includes swim lessons and recreation swim with waterslides and having a smaller stand-alone swim program. A stand-alone swim lesson program can break even or net a profit if all these conditions are met:
• The operational expenses are reasonable for the offered program(s); • The facility is conducive to having at least six classes at one time;
• The appropriate fee is charged (not subsidized); and
• Scholarships are funded through an external source.
Whether the Summer Aquatics Program is run by the City or a consultant, the CHS Aquatics Center will continue to operate at a loss for these reasons:
• High staffing costs due to:
o The 10/20 protection standard (lifeguard sees someone in distress within 10 seconds and is able to get to that person within 20 seconds) and blind spots caused by the AquaPlay structure, requiring the operator to have more staff physically present to survey the water;
o Two staff over the age of 16 are required for dispatching purposes only on the watersides (Cal/OSHA regulation); and
o Training requirements and daily inspections of the watersides (Cal/OSHA regulation).
• The zero-entry activity pool is not designed to be a teaching pool, so swim lesson capacity is limited.
• There isn't a membership model to offset the cost of operation. Daily user fees at $8/$10 per person will never achieve cost recovery. On the other hand, attendance at the pool will decrease significantly if admission is priced for cost recovery at $25+ per person.
• The competition pool has the potential to make a profit through pool rentals for swim meets. However, the competition pool is owned by GUSD and therefore these types of rentals are managed by GUSD. Even during the summer, GUSD often has a school's swimming or water polo team utilizing this pool, making it difficult to find available time for an outside user to rent it.
Using a consultant has proven to be more cost-effective for the City. The current agreement with the consultant expires on October 31, 2025. Staff recommends publishing an RFP for a summer aquatics operator at CHS Aquatics Center for the next three years, with two possible, one-year amendments. Staff is seeking feedback and guidance from City Council.
ALTERNATIVES
Following are some alternatives City Council might consider:
1. Return CHS Aquatics Center operations to the Recreation Division. This will require additional General Fund appropriations for operations in addition to adding a staff position with the specialized skills and certifications needed for training, program implementation, and oversight. Staff will prepare a budget for consideration if this is what City Council desires.
2. Prepare an RFP for a swim lesson only program with a 90% consultant and 10% City revenue share model. Under consideration would be the facility to host the program.
FISCAL IMPACT/FUNDING SOURCE
There are no fiscal impacts for this agenda item. The fiscal impact of any direction received will be analyzed and reported back to City Council when the item returns for consideration.
PUBLIC OUTREACH
None.
NEXT STEPS
Following City Council’s direction, staff will perform any necessary analysis requested or prepare a Request for Proposal (RFP) for operations of the CHS Aquatics Center and return to City Council at a future meeting.
Attachments:
1. CHS Aquatics Center Photos Exhibit
City of Gilroy
STAFF REPORT
Agenda Item Title: Acceptance of a One-Year Agreement with Santa Clara County Communications for Emergency Medical Dispatching Meeting Date: June 16, 2025
From: Jimmy Forbis, City Administrator
Department: Fire
Submitted by: Rob Fleeup, Fire Chief
Prepared by: Jennifer Fortino, Management Analyst
STRATEGIC PLAN GOALS: Maintain and Improve City Infrastructure
RECOMMENDATION
Approve a one-year agreement with the County of Santa Clara Communications Department (County Comm) for Emergency Medical Dispatch (EMD) services, in the amount of $100,878, and authorize the City Administrator to execute the contract and associated documents.
EXECUTIVE SUMMARY
EMD is a systematic program for processing medical emergency calls. Specially trained dispatchers use EMD guide cards to determine the nature and priority of the call, dispatch the appropriate Emergency Medical Services (EMS) resources, and instruct the caller to assist the patient until an EMS unit arrives. EMD dispatchers are required to be certified in advanced medical dispatching, as they provide a higher level of medical care to callers experiencing medical emergencies.
BACKGROUND
The Gilroy Communications Department does not currently provide EMD services. The City’s dispatchers receive 911 calls and then transfer the call to a County Communications EMD-accredited dispatcher for medical emergency triage. The current in-house dispatch capabilities also do not include infrastructure that is compliant with national standards.
In 2002, Gilroy Fire implemented the Firefighter/Paramedic program to enhance patient outcomes and improve emergency response efficiency. Implementing the paramedic program resulted in a need to change the City’s current 911 dispatch practices.
Following a review of the EMS system, the Department concluded that EMD was a critical but missing component of the EMS delivery system within Gilroy.
While the Gilroy Fire and Police departments agreed at that time that the provision of EMD by the Gilroy Communications Center would have been the optimal solution, the Police Department's implementation of its new computer-aided dispatch (CAD) system committed staffing resources that would be needed to implement EMD. In 2003, the Department opted for an interim solution by contracting with County Communications for EMD services. At the time, Gilroy Communications intended to provide EMD services using City personnel at a future date.
Until recently, the annual cost of the EMD agreement with County Communications has proved to be a good economic choice for the City. Therefore, the City has renewed its annual agreement with County Communications each year through FY25. The initial cost of the EMD services in the 2003 agreement was $24,596. The cost of EMD services has increased annually based on the City’s annual call volume, with the current FY25 agreement cost of $91,912. This reflects an increase of 273% between 2003 and 2025.
In March 2025, the City received notification that County Communications had changed its EMD billing methodology, and the cost of the service would significantly increase, effective in the upcoming FY26 agreement. The initial proposed FY26 cost for EMD was $307,251, reflecting a 234% increase between FY25 and FY26. Due to the feedback County Communications received from several of the agencies that contract with them for EMD services, County Communications agreed to a two-year phased-in approach to the increased cost of the services.
The updated County Communications phased-in two-year costs for FY26 are $100,878 and $170,148 for FY27. County Communications will implement the full cost of the updated billing methodology beginning with the FY28 agreement. Based on the significant increase in cost for EMD services, the City has begun researching the cost of implementing EMD services in-house. In the meantime, the Fire Department would like to continue its contract with County Communications for an additional one-year term to maintain the current EMD services provided to Gilroy residents.
ANALYSIS
Providing EMD services involves additional costs compared to standard 911 dispatching. Dispatchers are required to take additional courses to become and maintain their EMD accreditation. These costs are generally incurred by the agencies for which EMD dispatchers work. EMD-accredited dispatchers also commonly receive higher pay for this additional level of training. There is also an initial cost for purchasing
the necessary infrastructure needed to provide EMD services.
The Fire and Police Departments will research the following factors involved in implementing EMD operations:
1. Cost of sending the current Gilroy Dispatchers through the EMD-accreditation process.
2. Ongoing recertification costs.
3. Cost to purchase the infrastructure needed to implement EMD operations.
4. The additional salary costs to pay dispatchers who complete the accreditation process.
5. Determine whether additional dispatchers must be hired after implementing EMD operations.
ALTERNATIVES
1. Maintain Status Quo – Continue contracting with County Communications to maintain EMD dispatch operations and not consider bringing EMD operations inhouse.
2. Discontinue providing EMD dispatch operations to Gilroy residents. This option is not recommended as it lessens the level of emergency medical intervention Gilroy residents receive when they call 911.
FISCAL IMPACT/FUNDING SOURCE
The one-year FY26 cost for County Communications EMD services is $100,878 and would be funded in the Fire Department budget. The adopted FY26 budget includes adequate appropriations to accommodate this expenditure.
PUBLIC OUTREACH
This item was included on the publicly posted agenda for this meeting.
NEXT STEPS
If Council approves the one-year agreement with the Santa Clara County Communications Department, the City Administrator will finalize and execute the agreement documents, and County Communications will continue to provide EMD services to the City of Gilroy.
Attachments:
1. SCC and City of Gilroy 3rd Amendment FINAL 04.08.25 (002)
Third Amendment to Agreement between
County of Santa Clara and City of Gilroy Page 1 of 2
THIRD AMENDMENT TO THE AGREEMENT BETWEEN
THE COUNTY OF SANTA CLARA AND THE CITY OF GILROY
FOR EMERGENCY MEDICAL DISPATCH AND TECHNICAL SERVICES
This is the Third Amendment to the Agreement (“Agreement”) by and between the County of Santa Clara (“COUNTY”) and the City of Gilroy (“CITY”) originally entered into on July 1, 2021, for the provision of Emergency Medical Dispatch and technical services to the CITY.
This Agreement is hereby amended as follows, effective July 1, 2025:
1. Article 3.1(a) regarding the Term of Agreement, is revised to read:
(a) This Agreement is effective for five (5) years, from July 1, 2021, until June 30, 2026, unless terminated earlier in accordance with Section 3.2.
2. Article 3.1(b) regarding the Term of Agreement is hereby deleted in its entirety.
3. Article 6.15 regarding the Levine Act Compliance, is revised to read:
CITY will comply and will ensure that its agents (as that term is defined under 2 Cal. Code Regs. § 18438.3(a)) and its subcontractors (“Subcontractors”) comply, with California Government Code section 84308 (“Levine Act”) and the applicable regulations of the Fair Political Practices Commission concerning campaign disclosure (2 California Code of Regulations sections 18438.1 – 18438.8), which (1) require a party to a proceeding involving a contract to disclose on the record of the proceeding any contribution, as defined by Government Code section 84308(a)(6), of more than $500 that the party or their agent has made within the prior 12 months, and (2) prohibit a party to a proceeding involving a contract from making a contribution, as defined by Government Code section 84308(a)(6), of more than $500 to any County officer during the proceeding and for 12 months following the final decision in the proceeding. CITY agrees to submit disclosures required to be made under the Levine Act at the Office of the Clerk of the Board of Supervisors website at http://www.sccgov.org/levineact, and CITY shall require Subcontractors to do the same.
If this Agreement is to be considered or voted upon by the County’s Board of Supervisors, CITY shall complete the Levine Act Contractor Form: Identification of Subcontractors and Agents, and if applicable, shall ensure that any Subcontractor completes the Levine Act Subcontractor Form: Identification of Agents, and CITY must submit all such forms to the County as a prerequisite to execution of the Agreement.
4. Replace Exhibit C, EMD Compensation for Services, with revised Exhibit C-1, attached hereto and incorporated herein by this reference.
All other provisions of the Agreement remain in full force and effect. In the event of a conflict between the original Agreement, the First Amendment, or Second Amendment, and this Third Amendment, this Third Amendment controls. The Agreement as amended constitutes the entire agreement of the parties concerning the subject matter herein and supersedes all prior oral and written agreements, representations and understandings concerning such subject matter.
Docusign Envelope ID: 8250EA23-3DAB-4085-B12C-C69CD238A2B4
Third Amendment to Agreement between
County of Santa Clara and City of Gilroy Page 2 of 2
IN WITNESS WHEREOF, the COUNTY and the CITY have caused this Amendment to the Agreement to be executed by their duly authorized representatives effective July 1, 2025.
SIGNATURES:
COUNTY OF SANTA CLARA CITY OF GILROY
________________________ ________ ________________________ ________ OTTO LEE, PRESIDENT Date JIMMY FORBIS Date
Board of Supervisors City Administrator
Signed and certified that a copy of this ATTEST:
document has been delivered by electronic
or other means to the President, Board of
Supervisors.
________________________
ATTEST: BRYCE ATKINS
Acting City Clerk
________________________
CURTIS BOONE
Acting Clerk of the Board of
Supervisors
APPROVED AS TO FORM AND LEGALITY: APPROVED AS TO FORM:
________________________ ________________________
STEPHANIE M. JACKSON ANDY FABER
Deputy County Counsel City Attorney
Exhibit to this Amendment:
Exhibit C-1 – EMD Compensation for Service
Docusign Envelope ID: 8250EA23-3DAB-4085-B12C-C69CD238A2B4
Exhibit C-1 - Third Amendment to Agreement between
County of Santa Clara and City of Gilroy Page 1 of 2
EXHIBIT C-1
EMD COMPENSATION FOR SERVICES
Emergency Medical Dispatching (EMD) Cost and Billing Methodology
1. The total COUNTY costs for providing dispatching services are allocated to four service areas (law enforcement, medical, fire and local government), based on the most recent threeyear average number of events. In the month of March, the annual cost for the upcoming fiscal year (FY) will be estimated using the process described in this cost methodology.
2. Following is the computation for estimated costs for dispatching services to be provided by COUNTY to the CITY in FY 2025-2026:
a. COUNTY will classify costs as follows:
i. Direct Costs: salaries, benefits, and supplies related to Dispatch line staff. ii. Operations Indirect Costs: costs associated with Dispatch management staff. iii. Department Indirect Costs: costs associated with executive management and administrative support staff.
iv. County Indirect Costs: costs associated with County Administration. b. COUNTY allocates salaries and benefits, other operating expenses, and indirect County overhead as follows:
c. COUNTY allocates all costs to four service areas based on the number of events, averaged over the most recent three fiscal years, for services provided in each service area.
Service Area # of Events % of Total Support Total Cost
Law Enforcement 146,730 40.7% $ 16,550,943
Medical 177,607 49.2% $ 20,003,943
Fire 28,605 7.9% $ 3,190,137
Local Government 7,705 2.1% $ 878,654
Total Dispatch 360,647 100.0% $ 40,623,677
i. Salaries & Benefits
Direct $ 20,499,280
Operations Indirect $ 2,769,076
Department Indirect $ 2,483,270
ii. Other Operating Expenses (Supplies, county radio infrastructure maintenance, etc.) Direct $ 7,757,229
Operations Indirect $ 718,757
Department Indirect $ 904,350
Indirect County Overhead $ 5,491,713
iii. Total Dispatch Cost $ 40,623,677
Docusign Envelope ID: 8250EA23-3DAB-4085-B12C-C69CD238A2B4
Exhibit C-1 - Third Amendment to Agreement between
County of Santa Clara and City of Gilroy Page 2 of 2
d. COUNTY allocates EMD medical costs to agencies/departments based on the number of events, averaged over the most recent three fiscal years (FY2022-FY2024) for services provided. Remove County Overhead and General Admin for cities covered by Government Code 51350.
Medical Agency
# of
Events
% of Medical
Support
Operating
Cost
County
Overhead
Total Medical
Area Cost
Gilroy EMD 3,491 2.0% $340,039
$53,116 $ 393,155
Cost Adjustment/
Reduction
(32,788) ($53,116) ($85,904)
Gilroy Cost $307,251 $307,251
Contract
reduction
(206,373)
Gilroy
Adjusted Cost
$100,878
All Other
Agencies 174,116 98.0% $16,961,334 $2,649,454 $19,610,788 Total Medical 177,607 100.0% $17,301,373 $2,702,570 $20,003,943
e. FY 2025-2026 the CITY’s adjusted estimate is based on 5% of total medical cost based on the CITY’s average number of EMD events. A contract reduction is added to this Cost Compensation exhibit to reduce the actual cost. Beginning with fiscal year 2026-2027 the COUNTY will phase in cost increases in increments of 2.5% of medical cost for the following fiscal years of the agreement. For example:
CITY EMD Cost Percent
$ 100,878 5%
$ 170,148 7.5% FY 26-27 Estimate
During the fiscal year, COUNTY shall bill the CITY for EMD dispatching services quarterly based on the estimated cost. The COUNTY shall notify the CITY of any adjustment prior to billing the CITY’s final fourth quarterly installment. Billing questions may be directed by email to Accounts Payable at [email protected].
3. In the first quarter of the following fiscal year, actual costs will be computed using the methodology used for cost estimates and update using the previous year’s event count. Any difference in an increase or decrease cost adjustment will not exceed 5% above or below the previously billed amount.
Docusign Envelope ID: 8250EA23-3DAB-4085-B12C-C69CD238A2B4
City of Gilroy
STAFF REPORT
Agenda Item Title: Approval and Authorization to Purchase Real Property Located at 641 Old Gilroy Street (APN 841-100-10 and 841- 100-28)
Meeting Date: June 16, 2025
From: Jimmy Forbis, City Administrator
Department: Administration
Submitted by: Victoria Valencia, Economic Development Manager Prepared by: Victoria Valencia, Economic Development Manager STRATEGIC PLAN GOALS: Maintain and Improve City Infrastructure
RECOMMENDATION
1. Approve the purchase of real property located at 641 Old Gilroy Street (APN 841- 100-10 and 841-100-28), for a total of $3,250,000, associated transaction costs, for the purpose of expanding the City’s Corporation Yard and Utilities Department operational space.
2. Authorize the City Administrator to execute the purchase agreement and related documents.
3. Adopt a resolution amending Fiscal Year 2024-25 budget within the Water and Wastewater Funds for the acquisition of the property.
BACKGROUND
The City of Gilroy has identified a need for additional property to support the continued growth and organization of the Utilities Department. The subject property, located at 641 Old Gilroy Street, APN 841-100-10 and 841-100-28, is currently owned by The Jessup Family Trust. The City entered into preliminary discussions with the property owner regarding acquisition.
ANALYSIS
The City’s Corporation Yard, located at 613 Old Gilroy Street, houses essential operations for Public Works, Utilities, Fleet, and other City services. Over time, the City’s operational demands and service levels have grown, resulting in space constraints at the existing Corporation Yard. In particular, the Utilities Department requires additional space to support equipment storage, materials, staff, and operations necessary to maintain current services and prepare for future growth.
A property located immediately adjacent to the existing Corporation Yard — at 641 Old Gilroy Street — is now available for purchase. The property is uniquely situated to allow seamless expansion of the existing yard. No major site redesign, infrastructure improvements, or off-site travel would be required to integrate the two sites. The City can easily remove existing fences or barriers to create a unified, expanded facility. No other comparable parcels near the Corporation Yard are currently available, identified, or will be available in the near future.
Due to the exceptional locational advantage of this property — which is directly adjacent to the existing Corporation Yard — staff is recommending its purchase at the negotiated price of $3,250,000. Acquisition of this property aligns with the City’s long-term operational planning and will enable substantial efficiencies that would be difficult, if not impossible, to achieve with non-adjacent properties. If the City were to pursue expansion at an alternative location, it would likely face significantly higher long-term costs related to land acquisition, site development, infrastructure connectivity, and operational inefficiencies.
As part of the negotiated purchase terms, the seller will lease the property back from the City for up to six months following the close of escrow. The lease-back period provides the seller time to dispose of personal property and vacate the site in an orderly manner.
The City will take possession of the property on or after January 1, 2026. Following possession, staff will proceed with initial steps to integrate the property with the existing Corporation Yard, including removal of internal fencing and preparation of the site to support the Utilities Department and other operational needs.
Including the lease-back provision in the purchase terms ensures the City is able to secure this strategically valuable property while accommodating a reasonable transition period for the seller.
ALTERNATIVES
1. Decline to Approve the Purchase, which would forgo this unique opportunity; other expansion options may be more costly, less efficient, or infeasible.
2. Defer Action and direct staff to evaluate other alternatives.
FISCAL IMPACT/FUNDING SOURCE
The property will be paid for using the Water (705) and Wastewater Fund (700), with a 50/50 split as the property will be utilized by both operations. A related budget amendment resolution is included to appropriate $1,625,000 each from the Water and Wastewater Fund, for a total of $3,250,000 for this acquisition
NEXT STEPS
If Council approves the purchase, the City Administrator will finalize the purchase and sale agreement, complete outstanding due diligence, and coordinate escrow and title transfer.
Staff will move forward with a plan for removal of fencing/internal barriers and operational integration with existing Corporation Yard, and develop phased site planning for Utilities and other applicable department needs. Staff will return to Council as necessary for future funding and capital improvement planning.
Attachments:
1. Executed Letter of Intent 5-07-25
RESOLUTION NO. 2025-XX
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF GILROY AMENDING THE BUDGET FOR
THE CITY OF GILROY FOR 2024-2025 FISCAL
YEAR
WHEREAS, the City Administrator prepared and submitted to the City Council a budget for the City of Gilroy for Fiscal Years 2023-2024 and 2024-2025, and the City Council carefully examined, considered and adopted the same on June 5, 2023; and WHEREAS, City Staff has prepared and submitted to the City Council proposed amendments to the budget for Fiscal Year 2024-2025 (FY25) for the City of Gilroy in the staff report dated June 16, 2025, for the Authorization to Purchase Real Property Located at 641 Old Gilroy Street.
NOW, THEREFORE, BE IT RESOLVED THAT the expenditure appropriations for Fiscal Year 2024-2025 in Fund 700 – Wastewater (Sewer) Fund shall be increased by $1,625,000, and in Fund 705 – Water Fund shall be increased by $1,625,000.
PASSED AND ADOPTED this 16th day of June 2025 by the following roll call vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
APPROVED:
Greg Bozzo, Mayor
ATTEST:
_______________________
Bryce Atkins, Acting City Clerk
City of Gilroy
STAFF REPORT
Agenda Item Title: Gilroy Center for the Arts Proposed Mural Project and Donation Acceptance
Meeting Date: June 16, 2025
From: Jimmy Forbis, City Administrator
Department: Administration
Submitted by: Bryce Atkins, Assistant to the City Administrator Prepared by: Bryce Atkins, Assistant to the City Administrator STRATEGIC PLAN GOALS: Not Applicable
RECOMMENDATION
Council approve the proposed mural project and accept the mural donation.
BACKGROUND
The City has received a request from the Arts Alliance to add a mural to the back wall of the Gilroy Center for the Arts. Pursuant to the Public Art Policy the Arts and Culture Commission is to review and render a recommendation regarding the acceptability of the design at their meeting on June 10th. This staff report will be updated to include any recommendation issued by the Commission prior to the final agenda packet publication.
ANALYSIS
Attached to this staff report is the conceptual design proposed by the Arts Alliance.
They received a request from Eric B. Vasquez, self-identifying as an educator and visual artist. According to the request, he is planning to paint the mural, along with his students from the South County Annex. The mural he would like to paint would be on the back wall (facing the city parking lot) of the Gilroy Center for the Arts building. His proposal states that he has experience painting murals. The Gilroy Arts Alliance Board voted to approve the mural on the back wall. However, the facility is owned by the City and the Arts Alliance leases the building. The mural, if approved, will be painted at no cost to the City.
ALTERNATIVES
The City Council may accept or reject the donation of the mural on the Gilroy Center for the Arts back wall.
FISCAL IMPACT/FUNDING SOURCE
None. The proposal seeks to use outside funds for the project.
PUBLIC OUTREACH
This item will go to the Arts and Culture Commission on June 10th. This item is also included on the publicly posted agenda for this meeting.
NEXT STEPS
If approved, staff will coordinate the completion of the paperwork to accept the donation of the artwork.
Attachments:
1. Gilroy Art Center - Mural proposal 04.30.25
2. Arts and Culture Commission - Gilroy Center for the Arts Mural Request Recommendation
Arts and Culture
Commission
Council Correspondence
7351 Rosanna Street, Gilroy, California 95020-6197
Telephone: (408) 846-0202
http://www.cityofgilroy.org
Commission Chair
Melanie Reynisson
Commissioners
Ruben Dario Villa
Camille McCormack
Adeline Moreno
Steven Porter
Steven Taylor
Wendy Zamora
June 11, 2025
To: Gilroy City Council and City Administrator
Re: Gilroy Center for the Arts Mural Request Recommendation The Arts and Culture Commission (ACC) of the City of Gilroy voted (4-0 with three absent) to recommend approval of the mural design proposed on the back wall of the Gilroy Center for the Arts.
Sincerely,
Melanie Reynisson, Chair
Arts and Culture Commission
Docusign Envelope ID: C26581F3-779A-4F6B-8933-E1B0114C23B1
City of Gilroy
STAFF REPORT
Agenda Item Title: Public Art Plaque and Augmented Reality Art Project at the Downtown Paseo
Meeting Date: June 16, 2025
From: Jimmy Forbis, City Administrator
Department: Administration
Submitted by: Bryce Atkins, Assistant to the City Administrator Prepared by: Bryce Atkins, Assistant to the City Administrator STRATEGIC PLAN GOALS: Not Applicable
RECOMMENDATION
Council accept or reject the proposed public art plaque at the downtown paseo.
BACKGROUND
The City of Gilroy received a request from Art Builds Community, a public art consulting firm based in San Jose. Their team has been hired by the Santa Clara County Office of Women's Policy to manage the Womanhood Project. The Womanhood Project (Project) is a multi-year initiative that utilizes artwork created by local artists to celebrate the significant contributions women have made to Santa Clara County. For more information about the Project, their website is located here:
https://womanhoodproject.org/about/.
Over the last year and a half, Art Builds Community has collaborated with four artists and one artist team to select 20 different women whom they have determined made significant contributions to the County. One of the women being celebrated is Ascencion Solorsano, as depicted by artist Kathy Aoki. The artwork is an augmented reality piece that is experienced through a marker. Attached is a presentation from the requestor, including a draft copy of the proposed marker. Please note that these are draft versions, and the requestor has stated that a few areas need further attention. The image and text will remain the same.
ANALYSIS
The requestor was impressed with the historical signage in the paseo and would like to place the marker on a post to the left of the sign in the below picture of the paseo.
Attached to this staff report is additional presentation material about the proposed plaque, location, and image from the requestor.
A video of the augmented reality image will be played for the Council and the public at the meeting for consideration but is not able to be attached to the packet. The plaque is not being donated to the City, and is instead being asked to be hosted on the paseo property. The public artwork is part of a larger, county-wide initiative. The Arts and Culture Commission will be reviewing this proposal at its June 10, 2025 meeting. Once a recommendation is issued, this agenda report will be updated for the final agenda packet.
ALTERNATIVES
Council may choose to allow the public art plaque at the downtown paseo, reject its installation, or condition the installation.
FISCAL IMPACT/FUNDING SOURCE
None. The plaque and associated artwork were developed by the County's Project. The City, if Council allows the installation the Project, will not be required to maintain or remove the plaque if damaged or vandalized. There is no expectation of the City having any maintenance requirements for the plaque.
PUBLIC OUTREACH
This item will be heard at the public meeting of the Arts and Culture Commission on June 10, 2025, and was included on the publicly posted agenda for this meeting.
NEXT STEPS
Staff will implement Council's decision regarding the proposed public art plaque installation.
Attachments:
1. Gilroy Womanhood AR 2025 - Installation Deck (1)
2. WomanhoodAR2025-24x15_AscensionSolarsano (1)
3. Location Image
4. Arts and Culture Commission - Womanhood Project Recommendation
Make sure your ringer is
on & volume is up. You will find the audio text and related information.
Scan
Scan the QR code with your
smartphone or tablet to
download the Kinfolk App.
1. Open the app & select
the “Scan a marker”
on the top left.
2. Point your camera at the
illustration of the woman
in the sign in front of you.
3. The AR will automatically load & become
viewable on your device. Tap anywhere on
the animation to view more information.
4. Click the refresh button (top left) and
tap the “Scan” icon to scan the next
image marker as you explore other
points of Journey Through Womanhood.
5. Tip: Frame your camera around the
pink focus marks & get close enough
for the illustration to fill your screen.
Experience the Augmented Reality (AR) Animation
Journey through Womanhood is a series of immersive and
temporary public art monuments that explore the untold stories of women who have made significant contributions to the County of Santa Clara.
Kathy
ARTIST Aoki
2024
In Honor Of:
Ascension Solarsano
Medicine Woman who Helped to Preserve
the Mutsun Language
1855 – 1930 | Gilroy, CA
Learn more about this honored woman:
WomanhoodProject.Org
Scan the QR Code to
access content through
a screen reader
Arts and Culture
Commission
Council Correspondence
7351 Rosanna Street, Gilroy, California 95020-6197
Telephone: (408) 846-0202
http://www.cityofgilroy.org
Commission Chair
Melanie Reynisson
Commissioners
Ruben Dario Villa
Camille McCormack
Adeline Moreno
Steven Porter
Steven Taylor
Wendy Zamora
June 11, 2025
To: Gilroy City Council and City Administrator
Re: Womanhood Project Augmented Reality Plaque Recommendation The Arts and Culture Commission (ACC) of the City of Gilroy voted (4-0 with three absent) to recommend approval of the Womanhood Project’s plaque and augmented reality public art piece.
Additionally, the Commission recommends approval for its installation for the five-year project term in the Downtown Paseo next to the historical sign, as proposed by the Womanhood Project.
Sincerely,
Melanie Reynisson, Chair
Arts and Culture Commission
Docusign Envelope ID: C26581F3-779A-4F6B-8933-E1B0114C23B1
City of Gilroy
STAFF REPORT
Agenda Item Title: Approval of the Amendment to the Lease with Gilroy Gardens Family Theme Park Removing the Treehaven Fire Station
from the Premises
Meeting Date: June 16, 2025
From: Jimmy Forbis, City Administrator
Department: Administration
Submitted by: Jimmy Forbis, City Administrator
Prepared by: Jimmy Forbis, City Administrator
STRATEGIC PLAN GOALS: Not Applicable
RECOMMENDATION
Council approve the Amendment to the Lease with Gilroy Gardens Family Theme Park Removing the Treehaven Fire Station from the Premises.
BACKGROUND
The Gilroy Gardens Family Theme Park ("Gilroy Gardens") is currently leasing property owned by the City on a month-to-month holdover clause in the Single Tenant Lease Agreement (“Agreement”) for the theme park. The City has been in negotiations with Gilroy Gardens on a new lease agreement. In the interim, there is a need driven by the consolidation of the South Santa Clara County Fire District into the Santa Clara County Central Fire Protection District ("District") to amend the agreement to allow the City to lease the Treehaven Station ("Station") to the District directly. The property in the original lease included the Station.
ANALYSIS
The Amendment to the Lease with Gilroy Gardens Family Theme Park Removing the Treehaven Fire Station from the Premises ("Amendment") only removes the Station from the property within the leased area under the existing Agreement. All other terms of the Agreement, as amended previously, remain in effect and are not modified by this
Amendment. In the original lease, the property of the fire station was included in the property description as it sits on a larger parcel that is leased, and the use of the fire station was under a lease between the South Santa Clara County Fire District and Gilroy Gardens.
This change is a housekeeping measure to clarify site control, and is a proactive step prompted by the transition of fire service responsibility to the District. This change in fire service providers and the lease amendment does not impact Gilroy Gardens’ Park operations. There is a timing need to have the lease for the Station established by July 1, 2025, which requires this amendment to be adopted before then. The Gilroy Gardens Board is considering this Amendment at its June 17, 2025 meeting.
This amendment does not affect the continued negotiations underway for a long-term, ongoing lease relationship between the City and Gilroy Gardens.
ALTERNATIVES
Council may reject or modify the Amendment. This is not recommended as any changes or rejection would require more negotiation, delaying the City's ability to enter into a lease for the Station by the July 1, 2025 deadline.
FISCAL IMPACT/FUNDING SOURCE
None.
PUBLIC OUTREACH
This item was included on the publicly posted agenda for this meeting.
NEXT STEPS
If approved, staff will work to have the amendment executed and implement its provisions.
Attachments:
1. Amendment Removing The Treehaven Fire Station from the Premises
-1-
4922-7356-2187v2
MTOSCANO\04706263
AMENDMENT REMOVING THE TREEHAVEN FIRE STATION FROM THE PREMISES This AMENDMENT REMOVING THE TREEHAVEN FIRE STATION FROM THE PREMISES (“Amendment”) is made and entered into as of June __, 2025 (“Effective Date”), by and between THE CITY OF GILROY, a municipal corporation (“Landlord”), and GILROY GARDENS FAMILY THEME PARK, a Delaware nonprofit corporation (“Tenant”).
RECITALS
A. Landlord and Tenant are parties to that certain Single Tenant Lease, dated as of February 28, 2008 (as amended from time to time, the “Lease”), pursuant to which Landlord leases to Tenant, and Tenant leases from Landlord, certain premises containing Land and Improvements (as both are defined in the Lease) constructed thereon (“Premises”), all as more particularly described in the Lease. The Premises is commonly known as “Gilroy Gardens”.
B. Pursuant to the terms and conditions of that certain Eleventh Amendment to Single Tenant Lease Between Gilroy Gardens Family Theme Park And The City of Gilroy, dated as of February 28, 2022, the term of the Lease expired on February 28, 2023, and since such date the term of the Lease continued on a “month-to-month” basis.
C. Landlord and Tenant desire to amend the Lease to remove that certain fire station commonly known as the “Treehaven Fire Station” from the Premises, as hereinafter provided.
D. Capitalized terms used in this Amendment shall have the meaning ascribed to such terms in the Lease, unless otherwise defined in this Amendment.
NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto amend, modify and supplement the Lease as follows:
1. Removal of the Treehaven Fire Station from the Premises. Notwithstanding anything to the contrary contained in the Lease and/or Exhibit A attached to the Lease, Landlord and Tenant hereby agree that the portion of the Premises commonly known as the Treehaven Fire Station, located at 3050 Hecker Pass Road, shall no longer be considered a part of the Premises. Accordingly, Landlord and Tenant hereby agree and acknowledge that, from and after the Effective Date of this Amendment, (i) the Treehaven Fire Station (as depicted on Exhibit A attached hereto) is hereby removed from the Premises and (ii) all references to the “Premises” in the Lease shall be deemed to refer to the Premises, expressly excluding the portion of the Premises depicted on Exhibit A attached hereto. Landlord and Tenant hereby agree and acknowledge that any third party using the Treehaven Fire Station shall have access over any and all roads located on the Premises for the purposes of ingress and egress to and from the Treehaven Fire Station.
2. Certified Access Specialist Inspection. For purposes of California Civil Code Section 1938, Landlord hereby discloses to Tenant that, as of the Effective Date, to Landlord’s actual knowledge, the Premises have not undergone inspection by a Certified Access Specialist (“CASp”). Pursuant to California Civil Code Section 1938(e), Landlord hereby further discloses to Tenant the following: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of
-2-
4922-7356-2187v2
MTOSCANO\04706263
the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” Landlord and Tenant hereby agree and acknowledge that, if Tenant requests a CASp inspection, then Tenant shall pay (i) the fee for such inspection and (ii) notwithstanding anything to the contrary contained in the Lease and/or this Amendment, the cost of performing any repairs and/or other work necessary to address construction-related accessibility standards and/or other matters required and/or recommended as a result of such inspection.
3. Miscellaneous. Except as modified herein, the terms and provisions of the Lease shall remain unmodified and continue in full force and effect. The Recitals set forth above are true and correct and are incorporated by this reference into the body of this Amendment as though set forth in full herein. In the event of any conflict between the terms and provisions of this Amendment and the terms and provisions of the Lease, the terms and provisions of this Amendment shall prevail. This Amendment contains the entire agreement of the parties with respect to the subject matter hereof and may not be changed or terminated orally or by course of conduct. This Amendment shall be governed by the laws of the State of California. Time is of the essence of each and every provision of this Amendment. This Amendment will be binding upon and inure to the benefit of Landlord and Tenant and their respective successors and assigns, subject to the terms and conditions of the Lease relating to assignments, subleases and other transfers. This Amendment may be executed in counterparts, each of which shall be deemed an original and all of which together shall be deemed one and the same instrument. In order to expedite the transaction contemplated herein, .pdf signatures sent via e-mail may be used in place of original signatures on this Amendment. Landlord and Tenant intend to be bound by the signatures on the emailed document, are aware that the other party will rely on the e-mailed signatures, and hereby waive any defenses to the enforcement of the terms of this Amendment based on the form of signature.
IN WITNESS WHEREOF, this Amendment has been executed as of the day and year first above written.
“LANDLORD”: ATTEST:
THE CITY OF GILROY, By:
a municipal corporation Name:
Its: City Clerk
By:
Name:
Its:
“TENANT”: APPROVED AS TO FORM:
GILROY GARDENS FAMILY THEME PARK, By:
a Delaware nonprofit corporation Name:
Its: City Attorney
By:
Name:
Its:
-1-
4922-7356-2187v2
MTOSCANO\04706263
EXHIBIT A
THE TREEHAVEN FIRE STATION
4921-0021-9213v4
ALF\04706083
City of Gilroy
STAFF REPORT
Agenda Item Title: Project Processing Agreement, 315 Las Animas Ave. Project Meeting Date: June 16, 2025
From: Jimmy Forbis, City Administrator
Andy Faber, City Attorney
Department: Administration
Submitted by: Andrew Faber, City Attorney
Prepared by: Andrew Faber, City Attorney
STRATEGIC PLAN GOALS:
RECOMMENDATION
Council approve the Project Processing Agreement with Gandolfi Investments, LLC and 315 Las Animas LP regarding the project to develop property at 315 Las Animas Avenue and authorize the City Administrator to execute the Agreement.
EXECUTIVE SUMMARY
This Agreement concerns the processing of a “Builder’s Remedy” project (Project) at 315 Las Animas Avenue. The application was filed for a 501-unit multi-family project by Gandolfi Investments LLC (Gandolfi) on December 14, 2023. The Project (now 530 units, after the site plan was amended on May 27, 2025) will contain 20% housing affordable to lower-income households. Staff has been processing the Project and is currently performing CEQA analysis. The Applicant has proposed to provide certain benefits to the City in return for certain agreements on processing of the application.
The form of the Agreement has been heavily negotiated. It provides a Community Benefit to the City of $7,722 per unit, plus the development of a regional Master Plan at the Developer’s expense. And the litigation will be dismissed.
4921-0021-9213v4
ALF\04706083
ANALYSIS
This Agreement concerns the processing of a “Builder’s Remedy” project (Project) at 315 Las Animas Avenue. The application was filed for a 501-unit multi-family project by Gandolfi Investments LLC (Gandolfi) in December of 2023. The project (now 530 units, after the site plan was amended on May 27, 2025) will contain 20% housing affordable to lower-income households (monthly housing cost not exceeding 30% of 60% of Area Median Income). In July 2024 the Developer filed suit against the City claiming that the City improperly concluded that the application was incomplete (though shortly thereafter, the Staff concluded that application was complete). Staff has been processing the Project, and is currently performing CEQA analysis.
The Agreement was proposed by the Developer and is similar in form to one that was executed by the same Developer with the cities of Roseville and Morgan Hill (the Developer has recently broken ground on their project in Morgan Hill, which involves a 250-unit development on Tennant Boulevard). From the Developer’s standpoint, the Agreement provides for certain expedited processing (for example they can pay for an inspector to be dedicated to building inspections for their Project). In addition, The City will make them a loan of the Development Impact Fees, which will assist them in qualifying for a Welfare Property Tax Exemption related to the affordable units. The Note for this loan will bear interest at 5.5% and will be secured and guaranteed. And the Agreement clarifies which objective City standards will be applied to the Project (including all life-safety standards) and which will not, thus avoiding disputes over the applicability of standards to Builder’s Remedy projects.
In return, the City will benefit because the Agreement will facilitate the construction of a housing project with some 106 affordable units. The City will also receive a community benefit cash payment of over $4M, and the development of a Master Plan for the larger area. Finally, the pending lawsuit between the parties will be dismissed.
ALTERNATIVES
The Council could not approve the Agreement. In that case, the Community Benefits and the Master Planning would not be provided by the Developer, and the lawsuit will continue. In addition, the Developer would be denied the benefits of the Agreement, including the City’s participation in the Loan, which would assist the Developer in obtaining a property tax reduction and would facilitate development of the affordable units.
PUBLIC OUTREACH
This item is included on the publicly posted agenda for this meeting.
4921-0021-9213v4
ALF\04706083
NEXT STEPS
If approved, Staff will work to have the Agreement executed and implement its provisions.
Attachments:
1. Agreement
4932-8755-7428v7
ALF\04706268
PROJECT PROCESSING AGREEMENT
This Project Processing Agreement (“Agreement”) is made and entered into on __________, 2025, by and among 315 Las Animas LP (“Developer”), a California limited partnership, Gandolfi Investments, LLC (“Gandolfi”), a Delaware limited liability company and the City of Gilroy, a California municipal corporation and charter city (“City”). Developer and City are sometimes singularly or collectively referred to herein as a “Party” or the “Parties.”
RECITALS
A. On July 5, 2023, Gandolfi filed a preliminary application for a 504 unit multi-family housing project and associated amenities (“Project”) pursuant to SB 330 (the “Preliminary Application”) at the property located at 315 Las Animas Avenue in Gilroy, California (“Property”). The Project as proposed includes at least twenty percent (20%) of the total units dedicated as affordable to low-income households.
B. Gandolfi submitted the Project Preliminary Application pursuant to Government Code Section 65589.5(d)(5), the portion of the Housing Accountability Act referred to as the Builder’s Remedy.
C. The Property is currently vacant and zoned as “M-1, limited industrial” and designated as “EC” (employment center) in the General Plan Land Use Element Map and allows for multifamily housing projects to be developed at the Property pursuant to State Law. In addition, the Property is not zoned or used for agriculture purposes and does not contain any known development constraints, as provided in the Preliminary Application for the Project filed with the City by Gandolfi.
D. On December 12, 2023, Gandolfi filed its formal application pursuant to SB 330, reducing the unit count to 501 units, but maintaining at least twenty percent (20%) of the total units, or 101 total units, dedicated as affordable to very low- or low-income households, which application has since been amended to increase the unit count to 530 units, maintaining at least twenty percent (20%) of the total units, or 106 total units, dedicated as affordable to very low- or low-income households, but not increasing the total unit count or square footage of the Project by twenty percent (20%) or more from the preliminary application (as such application has been or may be amended, the “Formal Application”).
E. Developer and Gandolfi contend that the Builder’s Remedy contained in Gov. Code Section 65589.5(d)(5) applies to the Project. Representatives of the City have suggested that the Builder’s Remedy does not apply to the Project.
F. Developer represents that it is a single purpose limited partnership formed by the owners of Gandolfi for the purpose of holding and developing the Property and the Project and will be the assignee of Gandolfi’s rights in the Preliminary Application, the Formal Application, and hereunder.
4932-8755-7428v7
ALF\04706268
G. Gandolfi has filed litigation against the City, in the case Gandolfi Investments, LLC v. City of Gilroy, et.al., Santa Clara Superior Court case No. 24CV444165. As part of this Agreement, this litigation will be dismissed without prejudice.
H. The City agrees and acknowledges the Project provides certain economic, legal, social, technological and other benefits to the City of Gilroy including the provision of lowincome affordable housing and other community benefits as provided in this Agreement.
I. Nothing in this Agreement commits any future legislative action except as required by law.
Nothing in this Agreement lessens, eliminates, or discharges the obligation of the City to take future legislative action required by law, including but not limited to those legislative actions mandated by the Housing Accountability Act and the Builder’s Remedy, if any.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the covenants, promises, and provisions set forth herein, the Parties agree as follows:
SECTION 1: CITY’S COMMITMENTS AND OBLIGATIONS
1. Waiver of Builder’s Remedy: Subject to the terms of this Section, the City agrees that it will not dispute that the Builder’s Remedy applies to the Project (while specifically reserving such right with respect to any other project before the City). As such, the City shall process the Project as a Builder’s Remedy project, as proposed by Developer in the Formal Application (as amended in accordance with recital D) and acknowledges and agrees that, except as provided herein, neither the Zoning Ordinance nor the General Plan land use designation provide a basis for denying or delaying the approval and development of the Project.
2. Processing of Project: The City and Developer each hereby agree that it shall take reasonable steps to expedite processing of the Project and shall use reasonable, best effortsrequired on their respective parts to cause the Project to be heard by the relevant initial approval body no later than 120 days after the City receives from the Developer complete plans and responses to the City’s September 26, 2024 Inconsistency Analysis letter. The parties agree that if the City has not made a decision on the approval of the Project by the initial approval body on or before that last to occur of (i) December 31, 2025; or (ii) sixty (60) days after the date the City completes the applicable CEQA review for the Project, the City shall be deemed to have effectively denied the Project.
3. CEQA Review: The City and Gandolfi agree to attempt to reduce the time associated with completing environmental review for the Project. In particular, the City shall process an Addendum to the existing EIR related to the Property if the City as the CEQA Lead Agency concludes that substantial evidence supports the use of the Addendum.
4. Impact Fees: The City will provide an impact fee estimate for Developer for all applicable development impact fees (“Impact Fees”) and that fee analysis shall be attached as Exhibit A to this Agreement. The City agrees to provide a loan to Developer in the total amount
4932-8755-7428v7
ALF\04706268
of the Impact Fees, payable to the City. This loan shall be made on the date those Impact Fees become due to the City. The loan shall be evidenced by a promissory note from Developer (the “Note”), which shall bear interest at five and one half percent (5.5%) interest per annum and shall be repaid to City as a balloon payment in the full amount of the principal and interest on the date that is thirty-six (36) months after the issuance of the first building permit, with Developer having the right to extend for one additional year (the “Maturity Date”). The City shall also extend the Maturity Date if required by Developer’s construction lender to prevent the Maturity Date from occurring prior to the maturity of the construction loan. If the Project is built in phases, there shall be a separate Note for each phase of the Project and the maturity date of each such Note will occur three years after the date of issuance of the first building permit for such phase with Developer having the right to extend for one additional year. Each Note shall be secured by a deed of trust (the “Deed of Trust”) on the Property, which will subordinate to Developer’s construction financing for the Project. The Note(s) shall also be secured by a personal guarantee (the “Guarantee”) from Developer’s principal. In exchange for this personal guarantee, The City agrees to accept, in form and substance, whatever subordination terms the construction lender requires.
The City acknowledges that the interest rate provided for in the Note is a market rate of interest, and as a result, this loan does not give rise to any prevailing wage requirements. The City agrees that the loan contemplated herein is to assist Developer in Developer’s efforts to obtain a Welfare Exemption from real estate taxes for the Project in return for Developer’s agreement to provide the affordable housing contemplated in the Project. The City agrees to use all reasonable efforts to work with Developer (including, but not limited to, drafting the loan documents in an appropriate manner) to cause the Project to qualify for the Welfare Exemption.
5. Inspector. During the construction of the Project, Developer shall have the right, at Developer’s sole cost, to retain a private inspector or private inspection service dedicated to the Project, and the City shall accept the findings and conclusions of such Inspector as if made by their own City inspectors. In the alternative, at the election of the City, City shall assign to Developer a City inspector, paid by Developer, dedicated solely to the Project and available on-call for Developer’s inspection needs. The City also will allow the Developer to hire a third-party plan check service, at the sole cost of Developer, so that the Developer may expedite the review and approval of its plans. The City may review and approve the fitness of such inspector and plan checker prior to being engaged by Developer, but shall not unreasonably withhold approval.
6. Zoning Code, General Plan and other City Requirements. Developer shall not be required to comply with Zoning Code requirements, including its development standards (except safety-related standards), but will comply with the City’s objective design standards except to the extent they relate to (i) architectural standards other than safety- and crime preventionrelated standards; (ii) local amendments to the California Green Building Standards Code; (iii) undergrounding off-site power lines; (iv) on-site parking requirements; or (v) as otherwise agreed to by the City and Developer.
7. The City agrees that, to the best of City’s current knowledge, none of the findings in Government Code Section 65589.5 subsections (d)(1)-(4), as existing on the date of submittal of the Preliminary Application for the Project, are applicable to the Project.
SECTION 2: DEVELOPER’S COMMITMENTS AND OBLIGATIONS
4932-8755-7428v7
ALF\04706268
8. Developer Community Benefit Obligation: Upon the City’s approval of Project and following issuance of building permits for the Project, Developer will provide seven thousand seven hundred and twenty two dollars ($7,722) per unit developed to be used by the City in support of City priorities (“Community Benefit Obligation”). The Community Benefit Obligation will be added to the Note; it would then bear interest at the rate of five- and one-half percent (5.5%) per annum and be secured by the Deed of Trust and Guarantee. If the Project is completed in phases, then the Community Benefit Obligation will be allocated proportionately and each proportion will be incorporated into the relevant Note upon issuance of such Note. Once paid to the City on the Maturity Date, such funds may be used by the City to perform community benefit projects designated by City, at City’s sole discretion.
9. Affordable Units: Developer shall develop 20% of its Project units(106 total units according to the current amended application) to be affordable to lower-income households (meaning rents shall be limited to 30% of 60% of Area Median Income for Santa Clara County) or lower, and shall execute a regulatory agreement to ensure affordability of the designated affordable units at the Project site for fifty-five (55) years in return for the City’s agreement to provide the loan evidenced by the Note, Deed of Trust, and Guaranty described in Paragraph 4.
As used herein, Area Median Income shall mean the area median income as published from time to time by the California Department of Housing and Community Development (“HCD”), provided, however, if the area median income published by HCD is lower than the area median income published by the United States Department of Housing and Urban Development (“HUD”), then the area median income published by HUD shall control. Developer agrees that if it develops the Project in phases, each phase will include either (i) two 68-unit buildings, or (ii) one 68-unit building and one 39-unit building, and these buildings will contain a proportionate number of affordable units for such phase.
10. Location of Units: Developer has agreed to provide 20% of its Project units (106 according to the current amended application) to affordable (lower-income) housing units. These affordable units (“Affordable Units”) shall be located only in the mid-rise and community clubhouse buildings at the Property. Affordable units shall not be located in the townhouse buildings. The City shall not require that the affordable housing units be distributed throughout the Project. Notwithstanding the above, all tenants of affordable housing units shall be provided the same access to project amenities, recreational facilities, and common areas as occupants of market-rate units and all the affordable units shall be generally comparable in terms of size, quality, and finishes to any market rate units having the same number of bedrooms.
11. Master Plan: Upon the City’s approval of Project and following issuance of building permits for the Project, Developer shall, at Developer’s cost, generate a Master Plan for the future development of the Murray-Las Animas Corridor (also known as the “Murray-Las Animas Avenue Overlay Combining District”; see Exhibit B defining the geographic contours of the Murray-Las Animas Corridor). The City agrees to work cooperatively and in good faith with Developer and Developer’s consultants in preparing the Master Plan and shall take all reasonable steps to bring a mutually agreeable Master Plan to City Council for review and potential approval in a timely manner. Developer shall pay all City’s staff costs and appropriate fees associated with City staff’s work on this Master Plan. Provisions for community input and public hearings shall be required. The Parties agree to explore, in good faith, all available CEQA exemptions, tiering,
4932-8755-7428v7
ALF\04706268
and streamlining options to reduce the time associated with completing environmental review for the Master Plan. This Agreement does not obligate City to approve the Master Plan nor approve any particular land uses on the covered property; nor does it obligate Developer to obtain approval of the Master Plan. Approval and implementation of the Master Plan shall not obligate Developer to purchase and/or develop any parcels in the Master Plan Area and shall not obligate the City to take any parcels, via eminent domain, within the Master Plan Area for future development.
12. Intentionally Deleted.
13. Casualty: City acknowledges and agrees that City’s approval of the Project, as proposed in the Formal Application (as amended, shall constitute a vested right to develop and maintain the Project as proposed (including the plans) which consists of, among other things, 530 rental units. In the event of unforeseen casualty or change in law, Developer shall have the right, which the City shall not challenge, to rebuild or reconstruct the Project in a form and manner substantially similar to that approved by City at approval of Project,.
14. Post-Construction Cooperation: The Parties shall work in good faith to amend the zoning and general plan land use designation of the Property to be generally consistent with the Project as completed. With Developer’s consent, City shall initiate the application and consider the approval of a zoning map amendment and general plan amendment, provided that Developer pays all of City’s reasonable costs and fees in connection with such application(s).
SECTION 3: NOTICES
15. Notices: All notices must be in writing and be addressed to the affected Party at the addresses set forth below. Notices shall be: (a) delivered by in-person service to the addresses set forth below, in which case they will be deemed delivered on the date of delivery, as evidenced by the written report of the courier service, or (b) sent by certified mail, return receipt requested, in which case they will be deemed delivered five (5) business days after deposit in the United States mail. Any Party may change its address or the name and address of its attorneys by giving notice in compliance with this Agreement. Notice of a change will be effective only upon receipt. Notice given on behalf of a Party by any attorney purporting to represent a Party will constitute notice by the Party if the attorney is, in fact, authorized to represent the Party. All Notices shall also be provided to the other Party via e-mail, however, delivery via e-mail shall not constitute notice for purposes of this Section. The addresses of the Parties’ attorneys are:
If to CITY:
Mr. Jimmy Forbis
City Administrator
City of Gilroy
7351 Rosanna Street
Gilroy, CA 95020
Email: [email protected]
With a copy to:
4932-8755-7428v7
ALF\04706268
Mr. Andrew Faber
City Attorney
Berliner Cohen
10 Almaden Blvd., 11th floor
San Jose, CA 95113
Email: [email protected]
If to DEVELOPER or Gandolfi:
315 Las Animas LP
Attn: Scott Canel
445 Central Avenue, Suite 200
Highland Park, Illinois, 60035
Email: [email protected]
With a copy to:
William F. McGuinn
445 Central Ave., Suite 200
Highland Park, Illinois 60035
Email: [email protected]
SECTION 4: MISCELLANEOUS
16. No Admission of Liability. This Agreement is not an admission of liability or fault on the part of either Party.
17. Legal Fees and Costs. Each Party shall bear its own legal fees and costs resulting from the preparation, negotiation, and execution of this Agreement. If any action or proceeding arises from or relates to this Agreement, the prevailing party shall be entitled to recover its out-ofpocket costs, reasonable attorney’s fees, and costs of attorneys (including in-house counsel fees) and experts against the non-prevailing Party, in addition to all other relief to which that Party may be entitled.
18. Dismissal of Lawsuit. Upon approval of this Agreement, Gandolfi shall dismiss the pending litigation, without prejudice.
19. Indemnification of City. Developer and Gandolfi jointly and severally shall defend (with attorneys of the City’s choosing), indemnify and hold harmless the City and its Council, officers, agents, employes and representatives from and against all claims or suits of any nature from any third party challenging any actions taken by the City or Developer or Gandolfi in connection with the entering into of this Agreement. Given this indemnification, in the event that a third party challenges the validity of this Agreement or project, the City agrees to continuing processing the Project during the pendency of such third party challenge.
4932-8755-7428v7
ALF\04706268
20. Right to Cure. If any Party believes that another Party’s performance is in default of that Party’s obligations under this Agreement, the accusing Party shall provide written notice to the defaulting Party of the alleged default (“Default Notice”); offer to meet and confer in a good faith effort to resolve the issue; and provide the defaulting Party thirty (30) days to cure the alleged default commencing at the time of receipt of the Default Notice. A Default Notice shall specify in reasonable detail the nature of the alleged default and, where appropriate, the manner in which the alleged default satisfactorily may be cured. The provisions of this paragraph shall not apply to any claim or action brought by the City on the Note, the Deed of Trust, or the Guarantee, or any related documents or obligations of Developer and/or Gandolfi to repay the sums due to the City under those documents.
21. Remedies on Default. Upon the happening of any uncured default, the nondefaulting party may exercise those remedies available to it pursuant to law or equity, including without limitation an action to enforce specific performance. Developer shall be entitled to recover monetary damages from the City only in the event of a breach of Section 4 of this Agreement. In such a case, Developer’s monetary damages recovery shall be limited so as not to exceed the amount of the Impact Fees (and if the Project is developed in phases, only the amount of the Impact Fees applicable to the phase on which the City has defaulted). Developer will utilize recovered damages to pay impact fees owed on the project, if any. In the event of any breach by the City of Section 4 of this Agreement that remains uncured following any applicable notice and cure period, Developer shall have no further obligation to perform under this Agreement, including, without limitation, with respect to the Community Benefit Obligation and the Master Plan Development Obligation.
22. Entire Agreement; Amendments. This Agreement contains the entire agreement between the Parties and supersedes any prior written or oral agreements between them concerning the subject matters contained herein. No supplement, modification, or amendment to this Agreement shall be binding unless executed in writing by all Parties hereto.
23. Waiver. The waiver of any provision or term of this Agreement shall not be deemed a waiver of any other provision or term of this Agreement. The mere passage of time, or failure to act upon a default, shall not be deemed a waiver of any provision or term of this Agreement.
24. Execution. The Parties warrant that, in executing this Agreement, they do so with full knowledge of the rights and obligations that they may have and that they have received independent legal advice with respect to the matters contained in the Agreement.
25. Joint Negotiation. This Agreement is the product of joint negotiations between the Parties and shall not be construed against any of the Parties.
26. Interpretation. Specific provisions of this Agreement will take precedence over conflicting general provisions.
27. California Law. This Agreement will be construed in accordance with the laws of the State of California.
4932-8755-7428v7
ALF\04706268
28. Authority of Signatories. The individuals executing this Agreement represent and warrant that they have the authority to sign on behalf of the respective Party for which they have executed this Agreement.
29. Counterparts. This Agreement may be executed in counterparts. For purposes of this Agreement, an electronically transmitted signature shall be considered as the equivalent of a wet-ink signature and shall be fully binding.
30. Effective Date. This Agreement will be effective upon the date of execution of the Agreement by all Parties.
31. Materiality; Severability. The parties agree and stipulate that each and every recital contained in the preamble and every term and condition contained in this Agreement is material, and that each and every recital, term, and condition may be reasonably accomplished within the time limitations and in the manner set forth in this Agreement. Failure of any party to perform any one provision hereof shall be the basis for issuance of a Default Notice pursuant to Section 18. If any provision of this Agreement is determined to be invalid or unenforceable, the remainder shall be construed as valid and enforced so as to effectuate the intention of the Parties at the time this Agreement was entered into.
32. Assignment, Successors and Assigns. This Agreement may not be assigned or transferred without the written consent of the other Party (which shall not be unreasonably conditioned, withheld, or delayed); provided, however, Gandolfi and Developer shall have the right to collaterally assign this Agreement to any construction lender providing funding for the completion of the Project without the prior consent of the City. If properly assigned, this Agreement will bind and inure to the benefit of the agents, assigns, and successors-in-interest of each Party.
33. Time is of the Essence. Time is of the essence of each and every provision of this Agreement.
34. Disagreement. Upon any disagreement regarding the interpretation of a provision of this Agreement or the applicability of the Builder’s Remedy, the Parties agree to meet and confer regarding the disagreement and shall negotiate in good faith to seek resolution of the disagreement.
35. Additional Documents. The Parties agree to prepare and deliver such further documents and instruments, and shall take such other actions, as may be reasonably required or appropriate to evidence or carry out the intent and purposes of this Agreement.
36. No Third-Party Beneficiaries. This Agreement is not intended to, and shall not be interpreted by a court to, extend any benefits or to any persons or entities not a direct party hereto. No such third parties shall have standing to bring suit to interpret or enforce any provision of this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
4932-8755-7428v7
ALF\04706268
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date written below.
315 LAS ANIMAS LP, a California limited partnership
By: _________________________________
Scott Canel
Title: Manager
Date: _________________________________
GANDOLFI INVESTMENTS, LLC, a Delaware limited liability company By:__________________________________
Scott I. Canel, Member
Date:________________________________
CITY OF GILROY, a municipal corporation
By: _________________________________
Jimmy Forbis
Title: City Administrator
Date: ___________________________________
Approved as to Form
By: _________________________________
Andrew Faber
Title: City Attorney
4932-8755-7428v7
ALF\04706268
EXHIBIT A
IMPACT FEE ANALYSIS