ITEM 4. 8
CITY MANAGER' S REPORT
JUNE 9, 2025 CITY COUNCIL REGULAR MEETING
ITEM: APPROVE A PUBLIC INFRASTRUCTURE CREDIT AND
REIMBURSEMENT AGREEMENT WITH PHELANHAUGEN, LLC, AND LASALLE INCOME & GROWTH
FUND VII REIT, LLC RELATING TO THE LATHROP
GATEWAY BUSINESS PARK SPECIFIC PLAN AREA
AND AN ADJUSTMENT TO THE GASB 34 REPORTS
ASSOCIATED WITH THE PUBLIC IMPROVEMENTS
FOR PARCEL MAPS 19- 03 AND 21- 02
RECOMMENDATION: Adopt Resolution to Approve a Public Infrastructure Credit and Reimbursement Agreement with PhelanHaugen, LLC, and LaSalle Income & Growth Fund VII REIT, LLC Relating to the Lathrop Gateway Business
Park Specific Plan Area and an Adjustment to the
GASB 34 Reports Associated with the Public
Improvements for Parcel Maps 19- 03 and 21- 02
SUMMARY:
Phelan- Haugen, LLC and LaSalle Income & Growth Fund VII REIT, LLC ( collectively, Phelan) have completed public improvements that are eligible for credit or reimbursement for the Lathrop Gateway Business Park Specific Plan Area ( LGBPSP).
The Public Infrastructure Credit and Reimbursement Agreement ( Agreement) serves as a tool to provide a current statement of credits and reimbursements. The Agreement also details the mechanisms for applying credits and disbursing funds to Phelan as the project advances.
City Council accepted the public improvements associated with the Subdivision Improvements Agreements ( SIAs) for Parcel Maps ( PM) 19- 03 and 21- 02 and GASB 34 Reports were approved to represent the value of the improvements at that time.
After Council acceptance of improvements, the developer recognized additional costs associated with the improvements not included in the original GASB 34 Reports.
These costs include engineering, design, change orders, permitting, and other soft costs. To ensure the City' s asset records are accurate, staff request that City Council approve the adjusted GASB 34 Report values.
Staff recommends that City Council adopt a resolution to approve the Public Infrastructure Credit and Reimbursement Agreement with Phelan relating to the LGBPSP and approve the adjustments to the GASB 34 Reports associated with the public improvements for PM 19- 03 and 21- 02.
CITY MANAGER' SREPORT PAGE 2
JUNE 9, 2025 CITY COUNCIL REGULAR MEETING
APPROVE A PUBLIC INFRASTRUCTURE CREDIT AND REIMBURSEMENT
AGREEMENT WITH PHELAN- HAUGEN, LLC, AND LASALLE INCOME & GROWTH
FUND VII REIT, LLC RELATING TO THE LATHROP GATEWAY BUSINESS PARK SPECIFIC PLAN AREA AND AN ADJUSTMENT TO THE GASB 34 REPORTS ASSOCIATED WITH THE PUBLIC IMPROVEMENTS FOR PARCEL MAPS 19- 03 AND 21- 02
BACKGROUND:
On February 11, 2015, the City of Lathrop Planning Commission adopted Resolution No 15- 03 to approve the Vesting Tentative Parcel Map 13- 69 (VTM- 13- 69) for the Lathrop Gateway Business Park with Conditions of Approval for development consistent with the LGBPSP. On January 24, 2018, the City of Lathrop Planning Commission approved Time Extension No 18- 01 (TE- 18- 01) for VTM- 13- 69 by Resolution No 18- 01, which extended the life of the map to February 11, 2020.
On December 20, 2018, the City of Lathrop Planning Commission approved a Minor Specific Plan Amendment No 18- 71 (SPA -18- 71) and Site Plan Review No 18- 40 SPR- 18- 40) to construct ten ( 10) tilt -up buildings totaling approximately 3, 035,00 square feet of speculative industrial warehouse space, developed in three phases.
Public Works Condition of Approval No 27 for VTM- 13- 69 states that any facilities or roadways included in the Capital Facility Fee Study for LGBPSP that Phelan constructs may be included in a credit/ reimbursement agreement.
Pursuant to Lathrop Municipal Code Chapter 3. 22 "Credits and Reimbursements", a developer may be eligible for a fee credit or reimbursement as determined by the City Engineer. Phelan has completed improvements to roadways and intersections, stormwater facilities, sewer facilities, and other infrastructure required to support the LGBPSP.
The City imposes impact fees upon new development in the LGBPSP area that benefit from the infrastructure improvements constructed by Phelan. On October 14, 2019, City Council adopted the LGBPSP Capital Facility Fees Study. A schedule of LGBPSP impact fees is included as Exhibit B of Attachment B. The proposed Agreement will help ensure timely collection and payment of reimbursements to Phelan.
The developer has accumulated credits against the following impact fees: local transportation, sewer collection system, and storm drainage. These credits are eligible for credit allocation to Phelan for Phase 1 and 2 of the project which are included as Exhibit C of Attachment B. Remaining credits will be transferred to reimbursement to Phelan included as Exhibit D of Attachment C.
On July 11, 2022, and October 14, 2024, City Council accepted the public improvements associated PM 19- 03 and 21- 02, respectively. After acceptance, the developer recognized additional costs associated with the improvements that were not included in the original GASB 34 Report. These costs include engineering, design, change orders, permitting, and other soft costs. Staff is requesting Council approve the adjusted GASB 34 Report values, included as Attachment B, to ensure that the City' s asset records are accurate.
CITY MANAGER' S REPORT PAGE 3
JUNE 9, 2025 CITY COUNCIL REGULAR MEETING
APPROVE A PUBLIC INFRASTRUCTURE CREDIT AND REIMBURSEMENT
AGREEMENT WITH PHELAN- HAUGEN, LLC, AND LASALLE INCOME & GROWTH
FUND VII REIT, LLC RELATING TO THE LATHROP GATEWAY BUSINESS PARK SPECIFIC PLAN AREA AND AN ADJUSTMENT TO THE GASB 34 REPORTS ASSOCIATED WITH THE PUBLIC IMPROVEMENTS FOR PARCEL MAPS 19- 03 AND 21- 02
REASON FOR RECOMMENDATION:
Staff recommends that City Council approve the adjusted GASB 34 Reports to ensure the City' s asset records accurately reflect all eligible costs and approve the proposed Public Infrastructure Credit and Reimbursement Agreement with Phelan to provide a clear, current statement of credits and reimbursements and to establish the mechanisms for applying credits and disbursing reimbursements as the project advances.
FISCAL IMPACT:
There is no fiscal impact to the City. All staff time associated with preparing the Agreement has been paid by Phelan.
ATTACHMENTS:
A. Resolution to Approve a Public Infrastructure Credit and Reimbursement Agreement with Phelan- Haugen, LLC, and Lasalle Income & Growth Fund VII REIT, LLC Relating to the Lathrop Gateway Business Park Specific Plan Area and an Adjustment to the GASB 34 Reports Associated with the Public Improvements for Parcel Maps 19- 03 and 21- 02
B. Adjusted GASB 34 Report Amounts
C. Public Infrastructure Credit and Reimbursement Agreement with PhelanHaugen, LLC, and LaSalle Income & Growth Fund VII REIT, LLC Relating to the Lathrop Gateway Business Park Specific Plan Area
CITY MANAGER' S REPORT PAGE 4
JUNE 9, 2025 CITY COUNCIL REGULAR MEETING
APPROVE A PUBLIC INFRASTRUCTURE CREDIT AND REIMBURSEMENT
AGREEMENT WITH PHELAN- HAUGEN, LLC, AND LASALLE INCOME & GROWTH
FUND VII REIT, LLC RELATING TO THE LATHROP GATEWAY BUSINESS PARK SPECIFIC PLAN AREA AND AN ADJUSTMENT TO THE GASB 34 REPORTS ASSOCIATED WITH THE PUBLIC IMPROVEMENTS FOR PARCEL MAPS 19- 03 AND 21- 02
APPROVALS:
Bella 1 Nabizadah Date
Assistant Engineer
City Bradffaylor ngin
Cari Jam
Finance tai ector
Date
6/ y/ 20- iS
4,/ i/c. v2c
Date
4' •`i•ZoZ- S
Michael King Date
Assistant City Manager
Salvador Navarrete Date
City Attorney
lo• S• ZS
Stephen J. Salvatore Date
City Manager
RESOLUTION NO. 25-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP TO
APPROVE A PUBLIC INFRASTRUCTURE CREDIT AND REIMBURSEMENT
AGREEMENT WITH PHELAN- HAUGEN, LLC, AND LASALLE INCOME & GROWTH
FUND VII REIT, LLC RELATING TO THE LATHROP GATEWAY BUSINESS PARK SPECIFIC PLAN AREA AND AN ADJUSTMENT TO THE GASB 34 REPORTS ASSOCIATED WITH THE PUBLIC IMPROVEMENTS FOR PARCEL MAPS 19- 03 AND 21- 02
WHEREAS, on February 11, 2015, the City of Lathrop Planning Commission adopted Resolution No. 15- 03 to approve Vesting Tentative Parcel Map 13- 69 (VTM13- 69) for the Lathrop Gateway Business Park with Conditions of Approval for development consistent with the Lathrop Gateway Business Park Specific Plan Area LGBPSP); and
WHEREAS, on January 24, 2018, the City of Lathrop Planning Commission adopted Resolution No. 18- 01 to approve Time Extension No. 18- 01 (TE- 18- 01) for VTM- 13- 69, which extended the life of the map to February 11, 2020; and WHEREAS, on December 20, 2018, the City of Lathrop Planning Commission adopted Minor Specific Plan Amendment No. 18- 71 (SPA - 18- 71) and Site Plan Review No. 18- 40 (SPR- 18- 40) to construct ten tilt -up buildings totaling approximately 3, 035,00 square feet of speculative industrial warehouse space, developed in three phases; and
WHEREAS, Public Works Condition of Approval No. 27 for VTM- 13- 69 states that any facilities or roadways included in the Capital Facility Fee Study for the LGBPSP that Phelan- Haugen, LLC and LaSalle Income & Growth Fund VII REIT, LLC collectively, Phelan) constructs may be included in a credit/ reimbursement agreement; and
WHEREAS, pursuant to Lathrop Municipal Code Chapter 3. 22, "Credits and Reimbursements," a developer may be eligible for a fee credit or reimbursement as determined by the City Engineer, and Phelan has completed improvements to roadways, intersections, stormwater facilities, sewer facilities, and other infrastructure required to support the LGBPSP; and
WHEREAS, the City imposes impact fees upon new development in the LGBPSP area that benefit from the infrastructure improvements constructed by Phelan; on October 14, 2019, City Council adopted the LGBPSP Capital Facility Fees Study, and a schedule of LGBPSP impact fees is included as Exhibit B of Attachment B to the City Manager' sReport for this item; and
WHEREAS, Phelan has accumulated credits against the following impact fees:
local transportation, sewer collection system, and storm drainage; these credits are eligible for credit allocation to Phelan for Phases 1 and 2 of the project, as shown in Exhibit C of Attachment B to the City Manager' sReport for this item; and WHEREAS, remaining credits will be transferred to reimbursement to Phelan, as shown in Exhibit D of Attachment B to the City Manager' s Report for this item; and
WHEREAS, on July 11, 2022, and October 14, 2024, City Council accepted the public improvements associated with Parcel Maps 19- 03 and 21- 02, respectively; and WHEREAS, after acceptance, the developer recognized additional costs associated with the improvements that were not included in the original GASB 34 Report, including engineering, design, change orders, permitting, and other soft costs; Council is provided with this opportunity to approve the adjusted GASB 34 Report values, included as Attachment B to the City Manager' s Report that accompanied this Resolution, to ensure that the City' s asset records are accurate.
NOW, THEREFORE, BE IT RESOLVED, the City Council of the City of Lathrop does hereby approve the Public Infrastructure Credit and Reimbursement Agreement with Phelan- Haugen, LLC and LaSalle Income & Growth Fund VII REIT, LLC relating to the Lathrop Gateway Business Park Specific Plan Area and the adjusted GASB 34 Reports for the public improvements associated with Parcel Maps 19- 03 and 21- 02, as shown in Attachment B to the City Manager' s Report that accompanied this Resolution.
PASSED AND ADOPTED by the City Council of the City of Lathrop on this 9th day of June 2025 by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Paul Akinjo, Mayor
ATTEST:
Teresa Vargas, City Clerk Salvador Navarrete, City Attorney
ATTACHMENT
REVISED GASB 34 REPORTS FOR LATHROP
GATEWAY BUSINESS PARK SPECIFIC PLAN
Gateway Phase 1
Item Original Approved Amount Revised Amount
taking 115, 20. 0 . ..
Traffic Control 90, 000.
Grading 2,11, 084.0
Paving 3, 726, 640. 0 608, 156. 00
Curb N Gutter 580,16. 00
Striping and Signage 100, 50. 0
Fence and Gate 117, 215. 00
Storm Drain 759, 540. 0 495, 266. 00
Sewer 748, 145. 00 2, 970,92. 00
Sewer Pump Station 1,63, 490. 0
Basin 306, 895. 00
Water 474, 125. 00 662, 119. 00
Recycled Water 238, 170. 0
Traffic Signal 300, 00. 1,25, 092.0
Joint Trench 421, 894, 00
Electrical 343, 975. 00
Landscape 217, 325. 00
Administrative 549, 366. 00
Design Engineering 665, 831. 00
Total 8, 060, 980. 0 10, 930, 606. 00
Gateway Phase 2
Item Original Approved Amount Revised Amount
Staking 55, 000. 55, 000.
Traffic Control 150, 00. 150, 00.
Grading 1, 041, 209. 00 1, 041, 209. 00
Paving 1, 435, 34. 00 1, 435, 354. 00
Curb N Gutter 575, 185. 00 575, 185. 00
Striping and Signage 92, 000. 92, 000.
Fence and Gate 150, 625. 00 150, 625. 00
Storm Drain 812, 574. 00 812, 574. 00
Sewer 1, 076, 545. 00 1, 076, 545. 00
Water 830, 394. 00 830, 394. 00
Traffic Signal 498, 156. 00 498, 156. 00
Joint Trench 463, 643. 00 463, 643. 00
Electrical 30, 228. 00 30, 228. 00
Landscape 188, 070. 188, 070.
Administrative 425, 214. 00 425, 214. 00
Design Engineering 193, 500. 0 313, 894. 00
Total 8, 017, 697. 00 8, 138, 091.0
Attachment
L
PUBLIC INFRASTRUCTURE CREDIT AND REIMBURSEMENT
AGREEMENT WITH PHELAN- HAUGEN, LLC, AND LASALLE INCOME
GROWTH FUND VII REIT, LLC RELATING TO THE LATHROP
GATEWAY BUSINESS PARK SPECIFIC PLAN AREA
This Public Infrastructure Credit and Reimbursement Agreement Relating to the Lathrop Gateway Business Park Specific Plan Area (" Agreement") is made and entered into this _ day of 2025 (" Effective Date") by and between the City of Lathrop (" City"), a municipal corporation of the State of California (" City"), and Phelan- Haugen, LLC, a California limited liability company (" Phelan ") and LaSalle Income & Growth Fund VII REIT, LLC, a Delaware limited liability company (" LaSalle") (Phelan and LaSalle are collectively referred to as " Developer"). City and Developer may be collectively referred to herein as the " Parties" or individually as a " Party".
RECITALS
A. The " Project," as referenced in this Agreement, consists of the development of approximately 171 acres of industrial property located within the southern part of the City. The property comprising the Project site is more fully shown on Exhibit A attached hereto and incorporated herein by this reference.
B. Vesting Tentative Map 13- 69 ("VTM- 13- 69") was approved on February 1 1t', 2015 by Planning Commission Resolution No. 15- 03 which included Conditions of Approval for the Project. The Conditions of Approval for VTM- 13- 69 are applicable hereto and incorporate herein by reference.
C. The Specific Plan for the Project, as referenced in this Agreement as the " Lathrop Gateway Business Park Specific Plan" or " LGBPSP", applies to approximately 384 acres of land that has been designated for development as the Lathrop Gateway Business Park Specific Plan Area ( the " LGBPSP Area").
D. Within the LGBPSP Area, there are approximately 77 acres in public use of some kind, e.g. roads, public improvements, etc. Developer owns or controls approximately 175 acres within the LGBPSP Area and approximately 132 acres are owned by others.
E. City has been working with Developer and other interested parties to complete certain improvements benefiting the Project and the LGBPSP Area, including improvements to expand capacity of existing water system, sewer facilities, storm drainage and regional storm drainage outfall infrastructure, transportation improvements, and other related infrastructure, which will be eligible for reimbursement to Developer (" Future Facilities").
F. The City imposes certain fees upon new development, including, but not limited to development impact fees, capacity fees, capital facilities fees, cost reimbursement fees, and any other applicable fee or charge imposed on the development of any property within the LGBPSP Area collectively, "Impact Fees"). A schedule of LGBPSP Impact Fees applicable to any project in the LGBPSP Area is included herein as Exhibit B.
G. Developer has paid certain expenses for certain improvements, or made such improvements, and is entitled to a credit against Impact Fees (" Credit"), and has provided certain improvements up to the date of execution of the Assignment for which Developer is entitled to a reimbursement (" Reimbursement") from fees paid by or on behalf of such other properties within the 5343727v4 / 500458. 0018 1
LGBPSP Area. The purpose of this Agreement is to detail the mechanisms for the application of Credits and payment of Reimbursements to Developer for those items set forth in the Exhibits to this Agreement.
The existing Credits and Reimbursements are set forth in Exhibits C and Exhibit D hereof.
H. The Parties have agreed that all provisions of the Lathrop Municipal Code, including without limitation Chapter 3. 22 thereof, have been met and complied with by Developer as to the existing Credits and Reimbursements referenced in Recital G above. As such, those Credits shall be applied, and Reimbursements paid, exclusively in accordance with the terms hereof and the Assignment. Parties have agreed that all reimbursements will be split equally between Phelan and LaSalle.
I. The Parties acknowledge that they cannot alter the rights of third parties, including owners and developers of land in the LGBPSP Area, by this Agreement. Accordingly, nothing in this Agreement shall be interpreted to alter or impair such rights, to require the City to forego compliance with provisions of applicable law (" Applicable Law") that establish or protect those rights, or to pre -commit the City to any action as to which any third party is entitled to notice and hearing before such action is taken.
NOW, THEREFORE, for good and valuable consideration, City and Developer agree as follows:
AGREEMENT
1. Recitals. The recitals set forth above are true and correct and made a part of this Agreement.
2. City and Developer Obligations.
a) City Obligations:
i) To help ensure timely payment of Reimbursements to Developer as contemplated hereunder, City shall impose, to the extent permitted by Applicable Law, a condition of approval for any development in the LGBPSP Area that requires each owner whose property is benefitted by public improvements ( 1) be subject to Impact Fees and ( 2) be obligated to pay to the City the entirety of its respective Impact Fees prior to issuance any building permit for any building on said property (" Benefitted Property"). In connection therewith, the Benefitted Property Owner( s) shall be required, to the extent permitted by Applicable Law and as a condition of development approval, to participate in the establishment of any Impact Fee that would collect the proportionate share of the reimbursable costs from each Benefitted Property Owner. Notwithstanding, the City may extend and maintain its current fee deferral program, which defers some City impact fees to the certificate of occupancy, with respect to Impact Fees affecting property in the LGBPSP Area.
ii) To the extent permitted by Applicable Law, City shall collect all fees required by City ordinance and resolution before issuance of any building permit issued for any property in the LGBPSP Area.
iii) As required by Applicable Law, City shall reasonably cooperate with Developer to adopt or amend any Impact Fees and any other applicable fee or charge imposed on properties within the LGBPSP Area.
5343727v4 / 500458. 0018 2
iv) Upon Developer' srequest, but not more than twice annually, City shall provide Developer an accounting of all Impact Fees allocated by each Developer and/ or received by the City, if any, during the prior reporting period and prepare an update to one or more of the Exhibits to this Agreement.
b) Developer Obligations:
Developer shall timely comply with the requirements of this Agreement.
3. Fee Credits.
a) Amount. Consistent with the applicable terms and conditions of this Agreement, Developer has accumulated Credits against Impact Fees. The Credits shall or have been be applied against the payment by Developer of the appropriate Impact Fee in the amounts set forth in Exhibit C, subject to inflationary provisions provided by the City' slegislative documents establishing each Impact Fee. Notwithstanding any provision to the contrary, in no event shall the total amount of Credits applied under this Agreement exceed the aggregate Impact Fees collected by the City for the LGBPSP Area or the GASB 34 Reports provided by the Developer and approved by the City. b) Credits. City has issued credits for Phase 1 and Phase 2 of the Project prior to this Agreement as detailed in Exhibit C.
c) Accounting of Impact Fee( s) allocated by Developer. i) Upon request of Developer, City shall provide Developer a courtesy copy of each and every City Building Division permit invoice issued for land within the LGBPSP Area to allow Developer to confirm that City is collecting amounts consistent with this Agreement and adopted Impact Fees.
ii) In the event that Developer identifies any inaccuracies, Developer shall make the City aware of the issues and City shall use best commercial efforts to collect any sums erroneously under -charged or charged in error.
4. Reimbursement.
a) Impact Fees to Fund Reimbursement. The City has adopted the LGBPSP Capital Facility Fees, and may adopt additional fees and charges which shall be adopted and enforced in compliance with Applicable Law. City shall apply all Capital Facility Fee revenue received to payment of the applicable Reimbursement, as set forth in Exhibit D and the City' sreimbursements to Developer shall be evidenced substantially as indicated in that exhibit, within a reasonable time after payments made to the City. Notwithstanding Chapter 3. 22 of the Lathrop Municipal Code, many of the improvements for which reimbursement are due have been completed ( or bonded for) such that all payments received from owners or developers of Benefitted Properties will be reimbursed to Developer. As this is not true of all improvements, Exhibit D indicates the specific reimbursement terms for each such improvements. Notwithstanding any provision to the contrary, in no event shall the total amount of Reimbursements paid under this Agreement exceed the aggregate Impact Fees collected by the City for the LGBPSP Area or the GASB 34 Reports provided by the Developer and approved by the City.
5343727v4 / 500458. 0018 3
b) Scope and Timing of Reimbursement.
i) To the extent provided by the Agreement, Developer is entitled to Reimbursements in the amounts set forth in Exhibit D.
ii) Timing of Reimbursement to Developer shall occur within a reasonable time ( not to exceed thirty ( 30) days) after payments made to the City as provided in paragraph ( a) of this section above. City shall deliver such reimbursement to the address set forth in Section 11 below.
iii) City further agrees that no person or entity may be issued a credit in lieu of paying any of the Impact Fees covered by Exhibit B except as required by Applicable Law.
5. Future Improvements to be Credits or Reimbursements. a) The City may, from time to time, request that Developer construct or fund the construction of Future Facilities, for which Developer shall be entitled to additional Credits or Reimbursements. To the extent the Parties agree to the provision of Future Facilities by Developer, including the amount of the Credit or Reimbursement to be paid to Developer, and to the extent that City has established a funding
mechanism or identified sufficient funds to credit or reimburse Developer upon compliance with Applicable Law, including Chapter 3. 22 of the Lathrop Municipal Code with respect to those Future Facilities, such Future Facilities Credit and Reimbursement amounts shall be added to Exhibit C and Exhibit D as an amendment to this Agreement and shall be treated in the same manner as all other Credits and Reimbursements in accordance with Section 3 and Section 4 above. Notwithstanding any provision to the contrary, in no event shall the total amount of Credits or Reimbursements applied or paid under this Agreement, including those added for Future Facilities, exceed the aggregate Impact Fees collected by the City for the LGBPSP Area or the GASB 34 Reports provided by the Developer and approved by the City. b) The Parties agree that all provisions of the Lathrop Municipal Code, including without limitation Chapter 3. 22 thereof have been complied with for the credits and reimbursements outlined in Exhibits C and D. As such, those credits shall be applied by, and reimbursements paid to, Developer exclusively in accordance with the terms hereof.
6. Term of Agreement.
a) This Agreement shall commence on the Effective Date and shall terminate when Developer has received all Credits and Reimbursements provided for in this Agreement and under Applicable Law.
7. Indemnification. The Developer, by execution of this Agreement, specifically agrees to protect and assume the defense of, indemnify and hold harmless City and its elected representatives, officers, employees, agents and consultants ( the " Indemnitees"), from and against all liabilities, actions, lawsuits, damages, claims, losses, or expenses of every type and description, including attorneys' and consultants' fees and expenses, ( collectively, " Liabilities"), to which they may be subjected or put, by reason of or resulting from the design, construction, or installation of certain improvements , except to the extent the Liabilities arise from the sole negligence, or willful misconduct of City and/ or the Indemnitees. This indemnification shall extend to Liabilities occurring after this Agreement is terminated as well as while it is in force. Notwithstanding the foregoing, following the acceptance of the improvements by City, or if there is an applicable warranty, following the end of any applicable warranty period, the Developer shall not be obligated 5343727v4 / 500458. 0018 4
to indemnify the Indemnitees for Liabilities to the extent that such Liabilities arise from Indemnitees' active or passive negligence following acceptance of the improvements.
8. Governing Law. This Agreement shall be governed by the laws of the State of California.
9. Binding Effect. This Agreement is for the benefit of and shall be binding upon both Parties and their respective successors, heirs, executors, administrators, permitted assigns and successors in interest.
10. Assignment. Each and every provision ofthis Agreement shall be binding upon and shall inure to the benefit of the respective successors and assigns of the Parties hereto, in the same manner as if such Parties had been expressly named herein.
11. Notices. For purposes of this Agreement, " notice" means any notice, demand, request, or other communication to be provided under this Agreement. All notices shall be in writing and shall be sent to the below addresses or at such other addresses as either Party may later specify for that purpose. All notices required or permitted under this Agreement shall be personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by a nationally recognized overnight courier, such as FedEx or UPS, with charges prepaid for next business day delivery, addressed to the Parties as follows:
If to City: City of Lathrop
390 Towne Centre Drive
Lathrop, CA 95330
Attn: City Clerk
With a concurrent copy to: City of Lathrop
390 Towne Centre Drive
Lathrop, CA 95330
Attn: Salvador Navarrete, City Attorney
Email: savarrete@ci. lathrop. ca. us
Ifto Developer: Phelan- Haugen, LLC
450 Newport Center Drive #405
Newport Beach, CA 92660
Attn.: David Haugen
Email: dhaugen( a) phelandevco. com
With a courtesy copy to: LaSalle Income & Growth Fund VII REIT 333 W Wacker Drive
Suite 2300
Chicago, IL 60606
Attn.:
Email:
The date of any notice shall be the date ofreceipt, provided that rejection or other refusal to accept or the inability to deliver because of a change in address of which no notice was given shall be deemed to constitute receipt of the notice sent. Either Party may change its address for notice by giving notice to the other Party in accordance with this Section 11.
5343727v4 / 500458. 0018 5
12. Payments to Developer. A11 payments due to Developer hereunder shall be sent to the following address or at such other address ( or wiring instructions) as Developer shall from time to time specify in writing to City:
Phelan- Haugen, LLC
450 Newport Center Drive # 405
Newport Beach, CA 92660
Attn.: David Haugen
Email: dhaugen( iphelandevco. com
13. Amendments. Any modifications to this Agreement shall be in writing and signed by authorized representatives of both Parties.
14. Attorney' s
Fees and Venue. In the event of a dispute arising under this Agreement between the Parties, the prevailing Party shall be entitled to an award against the other Party of reasonable and actual attorney' s
fees and costs incurred in connection with the dispute. The venue for any litigation shall be in San Joaquin County, California.
15. Cumulative Rights; Waiver. The failure by either Party to exercise, or delay in exercising any rights under this Agreement, shall not be construed or deemed to be a waiver thereof, nor shall any single or partial exercise by either Party preclude any other or future exercise thereof or the exercise of any other right. Any waiver of any provision or any waiver of any breach of any provision of this Agreement must be in writing, and any waiver by either Party of any breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of that provision or of any breach of any other provision ofthis Agreement.
16. Severability. If any provision of this Agreement is deemed by a court of competent jurisdiction to be invalid, illegal or unenforceable, such provision shall be deemed to be severed or deleted from this Agreement and the balance of this Agreement shall remain in full force and effect notwithstanding such invalidity, illegality or unenforceability.
17. Headings. All headings herein are inserted only for convenience and ease of reference and are not considered in the construction or interpretation of any provision of this Agreement.
18. Signing Authority. The individuals signing this Agreement represent and agree that they have full and actual authority to bind their respective Parties to this Agreement.
19. Entire Agreement. This Agreement, constitutes the entire agreement between the Parties regarding its subject. The Agreement may be amended pursuant to Section 13.
20. No Third -Party Beneficiaries. There are no intended third -party beneficiaries of any right or obligation assumed by the Parties. In particular, and without limitation, no other purchaser of land from Developer shall have any right to enforce this Agreement.
21. Minor Modifications
The provisions of this Agreement require a close degree of cooperation between the Parties and Minor Changes" to this Agreement may be required from time to time. " Minor Changes" mean changes to this Agreement that are consistent with the LGBPSP which do not result in a change in use, an increase in density or intensity of use, significant new or increased environmental impacts that cannot be mitigated, or violations of any applicable health and safety regulations in effect on the Execution Date of the 5343727v4 / 500458. 0018 6
Agreement. Changes to the exhibits contained herein shall be delegated to appropriate City staff and not be considered " Minor Modifications."
Accordingly, the Parties may mutually agree they will cooperate in good faith to make " Minor Changes" to this Agreement to be evidenced by their approval and execution of an " Operating Memorandum" reflecting such Minor Changes. To the extent permitted by Applicable Law:
a) Neither the Minor Changes nor any Operating Memorandum shall require public notice or hearing.
b) The City Attorney and City Manager shall be authorized to determine whether proposed modifications and refinements are " Minor Changes" subject to this Section 21 or more significant changes requiring amendment of this Agreement.
c) The City Manager may execute any Operating Memorandum without City Council action.
22. Counterparts; Electronic Signatures. This Agreement may be signed in counterparts, each of which shall constitute an original and which collectively shall constitute one instrument. Signatures may be given by facsimile, emailed PDF, or other electronic means with the same force and effect as signed, wet originals.
23. Exhibits
Exhibit A: Depiction of Project Site
Exhibit B: LGBPSP Capital Facility Fees ( July 1, 2023) Exhibit C: Accounting of Credits
Exhibit D: Accounting of Reimbursements
Signatures to follow on next page]
5343727v4 / 500458. 0018 7
IN WITNESS WHEREOF, City and Developer have executed this Agreement as of the Effective Date.
CITY:
CITY OF LATHROP,
a California municipal corporation
By:
Stephen J. Salvatore
City Manager
ATTEST:
City Clerk of and for the City
of Lathrop, State of California
By:
Teresa Vargas, City Clerk
APPROVED AS TO FORM:
By:
Salvador Navarrete
City Attorney
5343727v4 / 500458. 018 8
DEVELOPER:
Phelan- Haugen, LLC,
a California limited liability company
By: Haugen Investments, LLC,
a California limited liability company
Its Managing Member
BY:
David M. Haugen
Manager
LaSalle Income & Growth Fund VII REIT, LLC.
a Delaware limited liability company
BY: LaSalle Income & Growth Fund VII, L. P.,
a Delaware limited partnership
BY: LaSalle Income & Growth Fund GP, LLC.,
a Delaware limited liability company
BY:
ITS:
BY:
ITS:
5343727v4 / 500458. 0018 9
EXHIBIT A
DEPICTION OF PROJECT SITE
5343727v4 / 500458. 0018 10
EXHIBIT B
LGBPSP CAPITAL FACILITY FEES (MARCH 24, 2025)
IX. CAPITAL FACILITY FEES
CITY OF LATHROP
Effective March 24, 2025
LATHROP GATEWAY BUSINESS PARK SPECIFIC PLAN ( LGBPSP)
Type of Development Units Municipal Service
Facilities
Service/ Retail Commercial 1. 000 sq. ft. S
Other Non -Residential 1, 000 sq. ft $
2, 941
1, 765
Units
Surface Water Water System Water System
Sewer/ Recycled
Supply Burin i3uy- In Well Improv.
Re 1Water Sysst
Water
tem Outfall
All New Development ( by
size of water meter)
518" $ 4, 567 $
1" Fire Service $ 4, 567 $
314" $ 6, 851 $
1" $ 11, 418 S
1 1/ 2" $ 22, 835 S
2" $ 36, 536 S
3" $ 68, 505 S
4" $ 114,75 S
6" $ 228, 350 S
8" $ 365,60 S
10" 662, 215 S
1, 543 $
1, 543 $
2, 316 $
3, 859 $
7,17 $
12, 347 $
23, 152 $
38, 587 $
77, 173 $
123, 477 $
223, 802 $
948 $
948 $
1, 422 $
2, 371 $
4, 741 $
7, 586 $
14, 224 $
23, 707 $
47,14 $
75. 864 $
137, 501 $
1, 357
1, 357
2, 035
3,92
6, 783
10, 853
20, 351
33. 918
67, 835
108, 536
196, 722
57 57
86 143
285
456
856
1, 427
2, 852
4, 564
8273
Units
Water Line
Water Loop
Units
Water Line Ag Mitigation
Non -Water Loop Eff 3/ 2412025
Shopping Center
Office Park
Industrial Park
Warehouse
All Development
Acre
Acre
Acre
Acre
Acre
7, 052 Liner Foot
7, 052 Liner Foot
7, 052 Liner Foot
7, 052 Liner Foot
191.4
191.4
191.4
191.4
3, 523
Units
Water System
Storage
Sewer Regional
Collection Storm Drainage Storm
System Drainage
Shopping Center
Office Park
Industrial Park
Warehouse
1. 000 sq. ft.
1, 000 sq. ft.
1, 000 sq. ft.
1, 000 sq. ft.
710 $
670 S
533 S
152 S
875 $
768 $
368 $
368 $
4. 605 $ 436
4, 040 $ 382
2, 498 $ 236
2. 498 $ 236
Units
Local County CFF
Transportation Eft 111124
Office Commercial
Retail Commercial
Industrial I Limited Industrial
Warehouse
1, 000 sq. ft.
1, 000 sq. ft.
t000 sq. ft.
1, 000 sq. ft.
20, 638 S B90
7, 245 S 600
1, 600 S 170
1, 600 S 170
5343727v4 / 500458. 0018 11
IX. CAPITAL FACILITY FEES
CITY OF LATHROP
Effective March 24, 2025
LATHROP GATEWAY BUSINESS PARK SPECIFIC PLAN ( LGBPSP)
Units
San Joaquin RTIF
5126124
Single Family 1, 000 sq ft.
Multi -Family 1, 000 sq. ft.
Industrial / Limited industrial 1, 000 sq. ft. $
Office Commercial 1, 000 sq. ft. $
Retail Commercial 1, 000 sq. ft. $
Warehouse 1, 000 sq. ft. $
1, 500
2,20
1, 760
750
Mossdale Tract
Per Gross Regional
Developable Levee Impact Fee
Eff 7/ 1/ 24
Levee Impact
Admin Fee
Eff 711/ 24
Single Family - Residential Acre
Multi -Family - Residential Acre
Commercial Acre
Industrial Acre
23, 333 $ 718
21, 835 $ 672
22, 077 $ 679
17, 293 $ 532
ADD 3% ADMINISTRATIVE FEE TO CUMULATIVE TOTAL OF ALL CFF FEES AND CREDITS
EXCLUDING THE SAN JOAQUIN RTIF AND LEVEE IMPACT
Based on ENR 20 -cities CCI or: Dec -24 13, 632
5343727v4 / 500458. 0018 12
EXHIBIT C
GATEWAY BUSINESS PARK SPECIFIC PLAN: CREDITS
As of: November 13, 2023
Gateway Business Park Specific Plan: Credits
Fee Type
Local
Transportation
Sewer Collection
System
Storm Drainage
Type/ Crated CFF (October 2019) CFF ( October 2019) CFF (October 2019) Credit? Yes Yes Yes
Total Credit Available 999, 41. 00 1, 984, 785. 00 5, 744, 896. 00 Credit Allocated to Phase
1 and Phase 2
999, 41. 00 569, 289. 74 3, 871, 786. 69
Total Remaining Credit
Transferred to
Reimbursment
0.0 1, 415,95. 26 1, 873, 109. 31
Source/ Authority
Goodwin CFF
3 Oct 2019
Goodwin CFF
23 Jan 2019
Goodwin CFF
23 Jan 2019
5343727v4 / 500458. 0018 13
EXHIBIT D
GATEWAY BUSINESS PARK SPECIFIC PLAN: REIMBURSEMENTS
As of: November 13, 2023
Gateway Business Park Specific Plan:
Reimbursements
Fee Type
Sewer Collection
System
Storm Drainage
Type/ Crated CFF ( October 2019) CFF ( October 2019)
Credit? No No
Total $ 1, 415,95. 26 1, 873, 109. 31
Source/ Authority
Goodwin CFF
23 Jan 2019
Goodwin CFF
23 Jan 2019
5343727v4 / 500458. 0018 14
PAGE LEFT
INTENTIONALLY
BLANK