City Council/Public Finance and Economic Development Authority/Parking Authority
January 16, 2024

CITY OF MERCED

ADMINISTRATIVE REPORT
Merced Civic Center
678 W. 18th Street
Merced, CA 95340
File #: 24-031 Meeting Date: 1/3/2024
Planning Commission Staff Report
Report Prepared by:

Jonnie Lan, AICP, Principal Planner, Development Services Department SUBJECT: Consideration and Recommendation regarding a Pre-Annexation and Development Agreement by and Between the City of Merced and Virginia Smith Trust (VST) Relating to Annexation and Pre-zoning Application #23-03, General Plan Amendment #23-04, the adoption of the VST Specific Plan, the Establishment of Planned Development (P-D) #80 , and with the City of Merced acting as the Responsible Agency, consideration and recommendation regarding the Final Focused Subsequent Environmental Impact Report (FSEIR), State Clearinghouse No. (SCH) #2001021056; (2) The Findings Required By CEQA Guidelines Section 15091; (3) The Proposed Mitigation Monitoring And Reporting Program; and, (4) the Statement of Overriding Considerations Pursuant to the California Environmental Quality Act (CEQA) for the Pre- Annexation And Development Agreement described above. The Pre-Annexation Development Agreement and FSEIR are related to approximately 654 acres of land located at 4600 Lake Road, generally bounded by the University of California, Merced, Campus to the north, agriculturally zoned land in Merced County to the south, agriculturally zoned land in Merced County to the east, and Lake and Cardella Roads to the west **PUBLIC HEARING** ACTION
PLANNING COMMISSION:

Recommendation to City Council
1) Environmental Review #23-44 (Acting as a Responsible Agency):
(a) the Final FSEIR, State Clearinghouse No. SCH #2001021056 (b) the Findings Required by CEQA Guidelines Section 15091 (c) The Proposed Mitigation Monitoring and Reporting Program (d) Statement of Overriding Considerations
2) Pre-Annexation Development Agreement by and between the City of Merced and Virginia Smith Trust (VST)
CITY COUNCIL:

Approve/Disapprove/Modify
1) Environmental Review #23-44 (Acting as a Responsible Agency):

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(a) the Final FSEIR, State Clearinghouse No. Sch# 2001021056 (b) the Findings Required by CEQA Guidelines Section 15091 (c) The Proposed Mitigation Monitoring and Reporting Program (d) Statement of Overriding Considerations
2) Pre-Annexation Development Agreement by and between the City of Merced and Virginia Smith Trust (VST)

SUMMARY
The Planning Commission is being asked to make a recommendation regarding the adoption of the Pre-Annexation Development Agreement for Annexation and Pre-zoning Application #23-03, General Plan Amendment #23-04, Establishment of Planned Development (P-D) #80, adoption of the Virginia Smith Trust Specific Plan and Environmental Review #23-44 which adopts the FSEIR including the Findings required by CEQA Section 15091, the Mitigation and Monitoring Program, and a Statement of Overriding Considerations.

RECOMMENDATION
Planning staff recommends that the Planning Commission recommend approval to the City Council of Environmental Review #23-44 and the Pre-Annexation Development Agreement for Annexation and Pre-zoning Application #23-03, General Plan Amendment #23-04, Adoption of the VST Specific Plan, and the Establishment of Planned Development (P-D) #80 (including the adoption of the Draft Resolution at Attachment A), subject to the conditions in Exhibit A and findings/considerations in Exhibit B, and the Mitigation Measures in Exhibit C, of the Draft Resolution at Attachment A.

DISCUSSION
The Planning Commission held a public hearing on December 20, 2023, to consider the above entitlements for the VST project at 4600 Lake Road (Attachment B). At this meeting, the Planning Commission recommended approval of the annexation and other entitlements (refer to Planning Commission Resolution #4127 at Attachment D). Per Merced Municipal Code Section 20.86.030, a Development Agreement is required for this project. This code section also requires the Planning Commission to consider the agreement at a public hearing and make a recommendation to the City Council regarding the agreement. Because the Development Agreement was not included in the public notice for the December 20,2023, Planning Commission meeting, the Planning Commission could not take action on it at that meeting. Therefore, the Planning Commission is being asked to consider the Pre-Annexation Development Agreement separately.

The Pre-Annexation Development Agreement at Attachment C includes items such as a description of the project, project development parameters, applicable city, state and federal laws, uniform codes and standard specifications, the financial commitments of the city and VST, VST project facility and infrastructure obligations, permits and approvals and the mitigation monitoring and reporting program. The developer has reviewed and agrees to the terms of the agreement.

The other entitlements related to this project are scheduled to be heard at the January 16, 2024, City Council meeting. However, for the Council to consider and approve these entitlements, they must CITY OF MERCED Printed on 12/29/2023Page 2 of 3
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also consider and approve the accompanying Development Agreement. If recommended for approval, the Development Agreement will then be added to the list of entitlements being considered for this site on January 16, 2024.

Staff requests that the Commission hold the Public Hearing and make a recommendation to the City Council regarding the Pre-Annexation Development Agreement and Environmental Review. The City Council would then consider the Development Agreement along with the environmental review and other entitlements on January 16, 2024.

ATTACHMENTS
A. VST Location Map
B. Approved Planning Commission Resolution #4127
C. Final Draft Development Agreement
D. Development Agreement Exhibits
E. Planning Commission Development Agreement Resolution #4128 F. FSEIR
G. Presentation
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3 Attachment A
4 CITY OF MERCED
Planning Commission
Re
solution #4127
WHER
EAS, the Merced City Planning Commission at its regular meeting of December 20, 2023, held a public hearing and considered Pending Annexation and Pre -zoning Application #23- 03, General Plan Amendment #23 -04, Adoption of the Virginia Smith Trust Specific Plan, and the Establishment of Planned Development (P- D) #80, initiated by the Virginia Smith Trust, property owners. This application involves the annexation of approximately 654 acres of land to the City of Merced , the Prezoning of the property as Planned Development (P-D) #80, an amendment to the text of the General Plan, the adoption of the VST Specific Plan, and the establishment of Planned Development (P-D) #80. The property site is generally located at the northeast corner of Cardella and Lake Roads with an address of 4600 Lake Road, and is more particularly described as those portions of Section 2 and Section 3 , Township 7 South, Range 14 East, Mount Diablo Base and Meridian in the County of Merced, State of California also known as Assessor’s Parcel Numbers 060-010-004 and 060-020-048; and,
WHEREAS, the Merced City Planning Commission concurs with Findings/Considerations A through I of Staff Report #23-1114 (Exhibit B); and, WHER
EAS, after reviewing the City’s Draft Environmental Determination, and fully discussing all the issues, the Merced City Planning Commission does resolve to hereby recommend to City Council adoption of the Focus Subsequent Environmental Impact Report SCH No. 2001021056 (certified 10/17/2023) and Mitigation Monitoring Progra m (Exhibit C), and approval of Pending Annexation and Pre-zoning Applications #23-03 and General Plan Amendment #23-04 and Establishment of Planned Development (P-D) #80 and Adoption of the Virginia Smith Trust Specific Plan, subject to the Conditions set forth in Exhibit A attached hereto.

Attachment B
5 PLANNING COMMISSION RESOLUTION # 4127

December 20, 2023

Upon motion by Commissioner Gonzalez, seconded by Commissioner Delgadillo, and carried by the following vote:

AYES: Commissioner Gonzalez, Ochoa, Delgadillo, and Camper NOES: None
ABSENT: Commissioner Thao, Smith, and Chairperson Harris ABSTAIN: None

6 7

EXHIBIT A
OF PLANNING COMMISSION RESOLUTION #4127

Findings
Planning Commission Resolution #4127
Pending Annexation and Pre-zoning Application #23-03, General Plan Amendment #23-04, Establishment of Planned Development (P-D) #80, Adoption of VST Specific Plan and Environmental Review #23-44

1. All new construction within the annexation area shall comply with all standard Municipal Code and Subdivision Map Act requirements as applied by the City Engineering , Building , Planning and Fire Departments.

2. All other applicable codes, ordinances, policies, etc. adopted by the State of California or City of Merced shall apply.

3. Approval of Annexation and Pre-zoning Application #23-03, General Plan Amendment #23-04, the Establishment of Planned Development (P-D) #80, VST Specific Plan, and the adoption of Environmental Review #23- 44 is subject to the applicant's entering in to a written (legislative action) agreement that they agree to all the conditions and shall pay all City and school district fees, taxes, public facilities fees, in lieu fees and/or assessments, in effect on the date of any subsequent subdivision and/or permit approval, any increase in those fees, taxes, or assessments, and any new fees, taxes, or assessments, which are in effect at the time the building permits are issued, which may include public facilities impact fees, a regional traffic impact fee, law, etc.

Payment shall be made for each phase at the time of building permit issuance for such phase unless an Ordinance or other requirement of the City requires payment of such fees, taxes, and or assessments at an earlier or subsequent time. Said agreement to be approved by the City Council prior to the adoption of the ordinance, resolution, or minute action.

4. The developer/applicant shall indemnify, protect, defend (with counsel selected by the City), and hold harmless the City, and any agency or instrume ntality thereof, and any officers, officials, employees, or agents thereof, from any and all claims, actions, suits, proceedings, or judgments against the City, or any agency or instrumentality thereof, and any officers, officials, employees, or agents thereof to attack, set aside, void, or annul, an approval of the City, or any agency or instrumentality thereof, advisory agency, appeal board, or legislative body, including actions approved by the 8 EXHIBIT A
OF PLANNING COMMISSION RESOLUTION #4127

voters of the City, concerning the project and the approvals granted herein. Furthermore, developer/applicant shall indemnify, protect, defend (with counsel selected by the City), and hold harmless the City, or any agency or instrumentality thereof, against any and all claims, actions, suits, proceedings, or judgm ents against any governmental entity in which developer/applicant’s project is subject to that other governmental entity’s approval and a condition of such approval is that the City indemnify and defend such governmental entity. City shall promptly notify the developer/applicant of any claim, action, or proceeding. City shall further cooperate fully in the defense of the action. Should the City fail to either promptly notify or cooperate fully, the developer/applicant shall not thereafter be responsible to indemnify, defend, protect, or hold harmless the City, any agency or instrumentality thereof, or any of its officers, officials, employees, or agents.

5. The developer/applicant shall construct and operate all future projects within the annexation area in strict compliance with the approvals granted herein, City standards, laws, and ordinances, and in compliance with all State and Federal laws, regulations, and standards. In the event of a conflict between City laws and standards and a State or Federal law, regulation, or standard, the stricter or higher standard shall control.

The following conditions apply to new construction within the annexation area:

6. Community Facilities District (CFD) formation is required for annual operating costs for police and fire services as well as storm drainage, public landscaping, public landscaping within State rights- of-way, street trees, street lights, parks and open space. CFD procedures shall be initiated before final map or first building permit approval.

Developer/Owner shall submit a request agreeing to such a procedure, waiving right to protest and post deposit as determined by the City Engineer or designee to be sufficient to cover procedure costs and maintenance costs expected prior to first assessments being received.

The following conditions apply to the future development at the property located at 4600 Lake Road:

7. All development shall be subject to the Mitigation Measures outlined in the Mitigation Monitoring and Reporting Program for The 9 EXHIBIT A
OF PLANNING COMMISSION RESOLUTION #4127

University Community Plan update and VST Specific Plan Project under Environmental Review #23-44.

8. All development within the VST Specific Plan area shall comply with all requirements of the VST Specific plan.

9. Site Plan Review is required prior to construction of commercial, mixed use, office, or multi-family uses. At the time of project evaluation, if the Site Plan Review Committee deems that an increase in traffic or decrease in parking will create negative impacts, if necessary, the Committee may require additional documentation or studies to provide additional analysis to mitigate any issues.

10. Prior to the issuance of a building permit, the developer shall work with the Merced County Transit Authority (aka: The Bus) to determine if a bus stop is needed at this location. If a bus stop is required, the stop shall be in an area to allow the bus to mo ve completely out of the travel lanes. The location of all bus stops shall be subject to approval by the City Engineer or designee.

11. The hours of construction activities that generate noise, when adjacent to housing and other “sensitive” uses shall be limited to the hours of 7:00 a.m. to 6:00 p.m.

12. At the time of construction, all required public improvements shall be installed along the property frontage. This includes, but is not limited to, sidewalk, curb, gutter, streetlights, and street trees.

13. The development shall contribute its fair share toward road improvements as described in the Mitigation Monitoring program.

14. All construction shall comply with construction standards in accordance with the requirement for the City’s Storm Water Quality permit and storm sewer system standards.

15. All new utilities serving the site shall be installed underground.

16. All City sewer, water, and storm drain lines serving the site shall be extended across the full frontage of the property unless it is determined by the Public Works Director that these lines are not likely to be extended to serve any other property (consistent with the Merced Municipal Code).

17. All storm water shall be contained onsite and metered out to the City’s storm water system in accordance with City Standards.
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18. A minimum turning radius as required by the Fire Department for fire apparatus access must be provided throughout the project or as required.

19. The future commercial development shall provide pedestrian and bicycle access throughout per the VST Specific Plan . Safe connectivity throughout the site shall be provided by pedestrian pathways. Bicycle parking shall be provided as required by the City’s Zoning Ordinance.

20. The developer shall use proper dust control procedures during site development in accordance with San Joaquin Valley Air Pollution Control District rules.

21. All landscaping shall comply with City Standards, the City’s Zoning Ordinance Section – Landscaping, and the Merced Municipal Code, in addition to all state -mandated conservation and drought restrictions. This shall include the use of xeriscape landscaping as appropriate.

22. Irrigation for all onsite landscaping shall be provided by a lo w- volume system in accordance with the State’s Emergency Regulation for Statewide Urban Water Conservation or any other state or city- mandated water regulations dealing with current drought conditions.

23. All landscaping in the public right-of-way shall comply with the most recently adopted water regulations by the State and City addressing water conservation measures.

24. All mechanical equipment shall be screened from public view.

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OF PLANNING COMMISSION RESOLUTION #4127

Findings and Considerations
Planning Commission Resolution #4127
Pending Annexation and Pre-zoning Application #23-03, General Plan Amendment #23-04, Establishment of Planned Development (P-D) #80, and Adoption of the VST Specific Plan

FINDINGS/CONSIDERATIONS:

Changes to the text of the General Plan
A) Amend Policy UE-1.4b as follows (note underlined text is new text and strikethrough text is deleted text):

The City accepts the University Community Plan adopted by Merced County on December 21, 2004, October 17, 2023, as a general conceptual framework for the planning of the University Community.

The City also accepts the VST Specific Plan adopted by Merced County on October 17, 2023, as the design framework and program for the VST Property, including the development standards, land use diagram, circulation diagram, development plan, lot sizes and standards, and recreation, open space and park standards. These documents and plans were developed through a collaborative effort with UC Merced, the City, and the County, in conform ance with the City’s policies for the area , including annexation to the City.
• That existing plan can be used as foundation work for further planning for the area, with the City as lead agency in the planning progress. • If a special planning process or framework is used for the development of the University Community, the costs of that planning process shall be borne by the applicants and developers, not by Merced residents.

The City should revise all of its various plann ing documents to accommodate the incorporation of the University Community into the City of Merced. These include not only the General Plan, but also plans for wastewater treatment, water, storm drainage, parks, fire protection, and other services.

Amend Figure 3.9 of Chapter 3 – Land Use to accurately reflect the modified boundaries of the University Community Plan
Figure 3.9 of the General Plan at Attachment D would be modified to match the boundary of the adopted University Community Plan as shown at Attachment E.
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Add Policy L-3.8 as follows:

L-3.8 Implement the 2023 UCP and VST Specific Plan as adopted by the County of Merced.

Amend Section 3.73 University Community Plan by adding the following to the end of this section after “2009 Revisions” on page 3-71:

After the 2009 amendments the University Community Plan was further amended. The amendments included substantial revisions to the UCP policies text to reflect the current regulatory conditions, annexation the City of Merced as the preferred form of development, reduction of the planning area from 2,133 acres to 1,841 acres to include only those areas outside of the boundaries of the LRDP(and subject to local land use regulations), modification of the land use program to reduce the number for dwelling units from 11,616 to 9,680), a reduction of the amount of commercial development from 2,022,900 square feet to 1,246,150 square feet, and a modification of the circulation diagram. The modification of the circulation diagram included changes to the alignment of Campus Parkway. A revised land use diagram was also adopted and is included in Appendix 3.10.1. A Specific Plan was developed for the Virginia Smith Trust (VST) property concurrent with the update of the UCP.

Delete illustrations and figures for the UCP in Appendix 3.10.1 on pages 3-86 through 3-89 (Attachment F) and replace with Figures 3 and 4 of the VST Specific Plan (Attachment G).

General Plan Compliance and Policies Related to This Application B) The proposed annexation complies with the General Plan designation of University Community Plan (UCP) for the site. General Plan Policy UE-

1.3 and Implementing Action 1.3.g requires that annexation requests be evaluated against certain criteria. Below is an evaluation of the proposed annexation against those criteria:

Criteria 1
Is the area contiguous to the Current City Limits and within the City’s Specific Urban Development Plan (SUDP)/Sphere of Influence (SOI)? Do the annexed lands form a logical and efficient City limit and include older areas where appropriate to minimize the formation of unincorporated peninsulas?
Evaluation
After the UC Merced annexation is completed, and at the time the 13 EXHIBIT B
OF PLANNING COMMISSION RESOLUTION #4127

application for annexation is submitted to LAFCO, this site will be contiguous to the existing City Limits to the north (see map at Attachment A). After the annexation of the University of California, Merced, campus, the annexation of the proposed project site would logically begin the physical connection of what will become a University Village to the south of the UC Merced Campus.

Criteria 2
Is the proposed development consistent with the land use classification on the General Plan Land Use Diagram (Figure 3.1)?
Evaluation
The proposed project site land use designations are consistent with the land use classification of the University Community Plan and with the proposed changes to the General Plan text and diagrams as described in Finding A above. The VST Specific Plan is a subset of the larger University Community Plan that provides support for the University campus, students, employees, and faculty by creating a university village to house, recreate and entertain those associated with the UC. This project will implement that objective of the plan.

Criteria 3
Can the proposed development be served by the City water, sewer, storm drainage, fire and police protection, parks, and street systems to meet acceptable standards and service levels without requiring improvements and additional costs to the City beyond which the developer will consent to provide or mitigate?
Evaluation
The University is being served by the City of Merced through a service agreement. Once the UC annexes followed by the VST annexation, those services can be extended without burden to the City’s financial health.

All new development within the annexation area would be required to annex into the City’s Community Facilities District (CFD) for services which would cover the costs of Police and Fire protection. Public Facilities Impact Fees would also be paid that would help fund future police and fire stations, parks, and street improvements. Requirements to annex to the CFD and pay the PFFP impact fees are listed as conditions of approval in the Planning Commission Resolution at Attachment A.

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Criteria 4
Will this annexation result in the premature conversion of prime agricultural land as defined in the Important Farmland Map of the State Mapping and Monitoring Program? If so, are there alternative locations where this development could take place without converting prime soils? Evaluation
Though parts of the annexation area are listed as Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), on the maps prepared pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, the proposed development is planned to provide higher density, which will minimize the encroachment overall into local prime farmlands. Converting these lands to support the UC will help minimize vehicle trips and provide opportunities for healthy activity with plans for open space and parks. The conversion of farmland was evaluated as part of the FSEIR at Attachment I
Criteria 5
Will a non -agricultural use cre ate conflict with adjacent or nearby agricultural uses? If so, how can these conflicts be mitigated? Evaluation
The proposed development would not create barriers to the use of nearby agricultural lands.

Criteria 6
Does the annexation area help the City reach one of the following goals? Does annexation of the area bring the City closer to annexation of the UC Merced campus and University Community?
Does the area contain significant amounts of job -generating land uses, such as industrial, commercial, office, and business/research and development parks?
Does the project provide key infrastructure facilities or other desirable amenities such as the extension of major roads, utility trunk lines, parks, and recreational facilities, etc.?

15 EXHIBIT B
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Evaluation
The proposed annexation area is within the University Community Plan.

This annexation will not be possible until the UC Merced campus is annexed. Although this annexation does not bring the City closer to annexing the UC Campus it does start the process of annexation of the University Community Plan.

The land uses proposed in this project area will contain land uses that support the University such as residential, commercial, office, and mixed use. Due to that, there will be many opportunities for economic growth and job generation. The project provides key infrastructure facilities or other desirable amenities such as the extension of major roads, utility trunk lines, parks, and recreational facilities. The VST Specific Plan provides linkages between the University Campus and this property to create opportunities for residents and staff to traverse between the school and the uses to the south eventually built on the VST site . The design also provides continued connections for roadways and utilities.

Community Benefits
C) The VST annexation is the first step in the development of this area.

Once the area begins development, there will be significant community benefits as a result of this development. These benefits include affordable housing, providing incentives to workers on the UC Campus, providing features that reduce environmental impacts, and providing ongoing funding for services and programs that further the Merced County Office of Education’s (MCOE) mission. The document provided at Attachment H provides more details on these benefits.

Zoning Code Compliance for the Planned Development Establishment D) Per Merced Municipal Code Section 20.20.20 (J) Planned Development (P-D) Zoning Districts, approval of an application for Planned Development Establishment or Revision with accompanying Preliminary Site Utilization Plan only if the following findings can be made:

1. The proposed development is consistent with the goals, policies, and actions of the General Plan and any applicable specific plan and community plan.
16 EXHIBIT B
OF PLANNING COMMISSION RESOLUTION #4127

The proposed Planned Development Establishment would be consistent with the General Plan if General Plan Amendment #23-04 is approved.

2. The site for the proposed development is adequate in size and sha pe to accommodate proposed land uses.

The subject site is located at the northeast corner of Cardella and Lake Roads (Attachment B). The project proposes 654 acres of mixed-use development, including 4,000 dwelling units, approximately 800,000 square feet of commercial/office space, 76 acres of parks and 25 acres of open space and trails. The site for the proposed development is adequate in size and shape to accommodate the proposed land uses.

3. The site for the proposed development has adequate access considering the limitations of existing and planned streets and highways.

The proposal would have adequate access to existing and planned streets and highways.

4. Adequate public services exist or will be provided to serve the proposed development.

City utilities such was water and sewer main lines as well as storm drain lines would be extended to the project site with approval of the proposed annexation. These lines would be adequate to serve the project.

5. The proposed development will not have a substantial adverse effect on surrounding property, will be compatible with the existing and planned land use character of the surrounding area, and will enhance the desirability of the area and have a beneficial effect.

There may be some temporary impacts such as vibration, noise, and dust during construction, but the proposed development would not have a substantial adverse effect on surrounding property, will be compatible with the existing and planned land use character of the surrounding area, and will enhance the desirability of the area and have a beneficial effect.

6. The proposed development carries out the intent of the Planned Development zoning district by providing a more efficient use of the land and an excellence of site design greater tha n that which could be achieved through the application of established zoning standards. 17 EXHIBIT B
OF PLANNING COMMISSION RESOLUTION #4127

The proposed development provides efficient use of land. By creating the VST Specific Plan, the project proponents provided the vision and standards for optimizing th e property , creating a sense of place , creating the foundation for mixed use and pedestrian scaled development and ultimately providing the village support needed for the existing university students and staff.

7. Each individual unit of the proposed de velopment, in each phase as well as the total development, can exist as an independent unit capable of creating a good environment in the locality and being in any stage as desirable and stable as the total development.

The proposed development consists of a mixture of uses that mirror a similarity of design to the UC campus. Anything that is developed on this property, to the plan standards, can exist by itself and still benefit the community, especially the UC campus. Once anything is developed it could remain independent capable of creating a good environment in the locality and being in any stage as desirable and stable as the total development.

8. Any deviation from the standard ordinance requirements is warranted by the design and additional amenities incorporated in the development plan, which offer certain unusual redeeming features to compensate for any deviations that may be permitted.

As shown in VST Specific Plan at Attachment C of Planning Commission Staff Report #23-1114, the proposal includes walking and bike trails connecting the future development with the UC campus. There are also development standards that will create architectural interest not required in standard zoning. A mixed-use development, planned as part of the land use vision, will provide the extension of visual interest and optimal pedestrian and bike friendly environment as currently experienced on the campus to the north.

9. The principles incorporated in the proposed development plan indicate certain unique or unu sual features, which could not otherwise be achieved under the other zoning district.

The proposed use would allow development of the entire parcel, in a way that is directly linked and supportive to the University of California, Merced campus. The design provides physical pedestrian and bicycle linkages that will promote healthy transportation options and get people out of their car. The mixed-use design and variety of 18 EXHIBIT B
OF PLANNING COMMISSION RESOLUTION #4127

housing types proposed throughout the development will provide direct support to the UC students, employees and faculty and create a village as is in the original plans for the site.

Specific Plan
E) The proposal includes a specific plan as shown at Attachment C. The VST Specific Plan is a n update of the University Community Plan previously adopted by the County of Merced. The original plan had a vision which supported the University of California campus with a village-like development of mixed -use, walking and bike trails and a variety of housing styles. The VST Specific Plan contains similar requirements. The goal is to support the University campus in the same way as originally planned.

The standards of the Specific Plan will be incorporated into the standards for Planned Development (P -D) #80. The “Regulatory and Design Framework” section of the VST Specific Plan defines the standards for development within the specific plan area. All projects within the area will be measured against these standards to ensure compliance with the Specific Plan. In order to ensure this compliance, Condition # 8 was added which requires Site Plan Review for all commercial, mixed -use, multi-family, or office uses within the plan area. Single -family development would also be required to comply with all requirements for setbacks and design standards as outlined in the specific plan but would not be subject to Site Plan Review.

Traffic/Circulation
F) An environmental study was conducted that assessed the projected traffic counts and traffic impacts to the area based on the proposed land uses.

This traffic study can be found within Attachment D. The development shall contribute its fair share toward road improvements as described within the Mitigation Monitoring Program in Resolution #4127 Exhibit C.

Parking
G) The annexation does not directly produce a need for parking. However, the subsequent development would require parking to serve the future uses on the site. Parking requirements would be evaluated at the Site 19 EXHIBIT B
OF PLANNING COMMISSION RESOLUTION #4127

Plan Review and/or Building Permit phase of development. It could also be reviewed as each project within the plan area is specifically entitled.

Land Use
H) The subject site is located at the northeast corner of Cardella and Lake Roads (Attachment B). The project proposes 654 acres of mixed- use development, including 4,000 dwelling units, approximately 800,000 square feet of commercial/office space, 76 acres of parks and 25 acres of open space and trails. The land use map for this development is shown as Attachment B or within the Specific Plan (Attachment C).

Site Plan
I) As described in Finding E above, a condition has been added to require a Site Plan Review Permit for all commercial, mixed- use, office, and multi-family development within the plan area. Each development shall be evaluated to ensure compliance with the requirements of the VST Specific Plan. At the time of project evaluation, if the Site Plan Review Committee deems that an increase in traffic or decrease in parking will create negative impacts, the Committee may require additional documentation or studies to provide additional analysis to mitigate any issues.

Neighborhood Impact/Interface
J) The proposed project does not include any uses that would be detrimental to the public health, safety, and welfare of the immediate area or the city as a whole. Implementation of the conditions of approval and adherence to all applicable Building Codes, Fire Codes, and City Standards would prevent the project from having any detrimental effect on the health, safety, and welfare of the neighboring properties as well as the City as a whole. There may be some temporary impacts such as vibration, noise, and dust during construction, but the proposed development would not have a substantial adverse effect on surrounding property long term, will be compatible with the existing and planned land use character of the surrounding area, and will enhance the desirability of the area and have a beneficial effect.

20 EXHIBIT B
OF PLANNING COMMISSION RESOLUTION #4127

Pre-Annexation Development Agreement
K) Section 20.86.150 of the Zoning Ordinance requires a property owner to enter into a Pre -Annexation Development Agreement prior to annexation. This agreement shall not become operative unless annexation proceedings are completed by the Local Agency Formation commission (LAFCO). T here is no requirement for staff to bring it to the Planning Commission. However, a Draft Pre- Annexation Development Agreement will be provided to, reviewed by, and approved by the City Council prior to their decision. The Pre -annexation Development Agreement is only with the owner of the vacant land and binds the owner and their successors to certain conditions and requirements related to the development of the land.

Environmental Clearance
L) Planning staff has conducted an environmental review of the project in accordance with the requirements of the California Environmental Quality Act (CEQA). A Focus Subsequent Environmental Impact Report SCH No. 2001021056 (certified 10/17/2023) was prepared, and a Statement of Overriding Consideration with a Mitigation Monitoring Program is being recommended. This environmental document is provided at Attachment I.

21 MITIGATION MONITORING AND REPORTING PROGRAM

FOR THE
University Community Plan Update
and VST Specific Plan Project
State Clearinghouse No. 2001021056

County of Merced
Planning Department
2222 M Street, 2nd Floor
Merced, California 95340
Contact:

Tiffany Ho
Merced County Planning Department
July 28, 2023

EXHIBIT C
OF PLANNING COMMISSION RESOLUTION #4127
22 2

TABLE OF CONTENTS
Section Page
List of Abbreviations .......................................................................................................................3

1. Mitigation Monitoring and Reporting Program ..............................................................5

1.1. Purpose of Mitigation Monitoring and Reporting Program ..........................................5

1.2. 2001/2004 UCP EIR and relationship to the UCP Update and VST Specific Plan MMRP ..............................................................................................................................................5

1.3. Roles and Responsibilities..................................................................................................6

1.4. Mitigation Monitoring and Reporting Program Table ....................................................6

23 3

List of Abbreviations
AAQA Ambient Air Quality Analysis
BESD Banta Elementary School District
BMP best management practice
CALGreen State Building Energy Efficiency Standards
CAPCOA California Air Pollution Control Officers Association CARB California Air Resources Board
CDFW California Department of Fish and Wildlife
CEC California Energy Commission
CEQA California Environmental Quality Act
CESA California Endangered Species Act
CFR Code of Federal Regulations
City City of Merced
CNEL community noise equivalent level
County County of Merced
dBA A-weighted decibel
ESA federal Endangered Species Act
ghg greenhouse gas
lb/day pounds per day
Ldn day-night average noise level
Leq energy-equivalent noise level
MMRP mitigation monitoring and reporting program
MSDS Material Safety Data Sheets
MTCO2e metric tons of carbon dioxide equivalent
NAHC Native American Heritage Center
NMFS National Marine Fisheries Service
NPDES National Pollutant Discharge Eliminate System
24 4

PCC Public Contract Code
PRC Public Resources Code
RWQCB regional water quality control board
SJVAPCD San Joaquin Valley Air Pollution Control District SWPPP storm water pollution prevention plan
USACE U.S. Army Corps of Engineers
USFWS U.S. Fish and Wildlife Service
Valley CAN Valley Clean Air Now
VELB valley elderberry longhorn beetle
VERA Voluntary Emission Reduction Agreement
ZNE zero net energy

25 5

1. Mitigation Monitoring and Reporting Program
In accordance with the California Environmental Quality Act (CEQA) (Public Resources Code [PRC] Section 21000 et seq.), the County of Merced (County) prepared a Focused Subsequent Environmental Impact Report (SEIR) for the UCP Update and VST Specific Plan Project (the Project). The Project is located in unincorporated Merced County, northeast of the City of Merced, south of UC Merced, and within the City’s sphere of influence (SOI). The proposed UCP Update area encompasses 1,841 acres and includes two properties; the Hunt and VST properties. The VST Property consists of 654 acres immediately south of the UC Merced Campus and is bounded generally by Lake Road on the west, UC Merced to the north, Cardella Road on the south and the Orchard Drive alignment on the east. The Hunt property is referred to as UCP South in the Adopted UCP, and includes approximately 1,187 acres of land south of UC Merced and is bounded by Lake Road on the west, Cardella Road to the north, Fairfield Canal to the east and Yosemite Road to the south. The Project includes modifications to the University Community Plan as part of the UCP Update and a Specific Plan for the 654-acre VST Property.

The SEIR evaluates the program-level impacts of the proposed changes to the Adopted UCP, and the project specific impacts associated with the VST Specific Plan. The SEIR (State Clearinghouse No. 2001021056) identified significant impacts and mitigation measures that would reduce the identified impacts to less- than-significant levels, where feasible , and concluded that some environmental impacts would be significant and unavoidable. CEQA (PRC Section 21081.6) and the State CEQA Guidelines (Sections 15091[d] and 15097) require public agencies to “adopt a reporting or monitoring program for the changes made to the project or conditions of project approval, adopted in order to mitigate or avoid significant effects on the environment.” This mitigation monitoring and reporting program (MMRP) has been prepared for the Project because the SEIR identifies significant adverse impacts related to project implementation, and mitigation measures have been identified to reduce or eliminate most of those impacts. Adoption of this MMRP would occur in conjunction with approval of the Project.

1.1. Purpose of Mitigation Monitoring and Reporting Program This MMRP has been prepared to ensure that all required mitigation measures are implemented and completed in a satisfactory manner before and during project construction and operation, as applicable.

The MMRP table provided below has been prepared to assist the responsible parties in implementing the mitigation measures applicable to the Project. The table identifies the impact; the individual mitigation measures; the specific actions required before, during, and after construction; the implementing party; and mitigation timing. The table also includes a column to confirm implementation of the mitigation measures after project approval. The numbering of mitigation measures follows the numbering sequence found in the project SEIR. Mitigation measures that are referenced more than once in the SEIR are not duplicated multiple times in the MMRP table.

1.2. 2001/2004 UCP EIR and relationship to the UCP Update and VST Specific Plan MMRP
In 2004, the County adopted the UCP, which covered a 2,133-acre area that included most of the VST property, just south of the UC Merced campus (Adopted UCP). A program EIR was certified with adoption of the UCP in 2001 and a supplemental EIR, which focused on hydrology and water quality, was certified on December 21, 2004 via Resolution No. 2004-238 (referred to collectively herein as the 2001/2004 UCP EIR; State Clearinghouse No. 2001021056). The 2001/2004 UCP EIR was identified as the appropriate document to base the subsequent CEQA analyses upon because it describes the potential environmental impacts of the planning documents that would be amended by the VST Specific Plan and was certified by the County.

The County adopted an MMRP as part of the 2001/2004 UCP EIR approvals and those mitigation measures are incorporated herein by this reference. This MMRP is focused specifically on the UCP Update and VST Specific Plan 26 6

Project. Where mitigation measures applicable to the Project remain the same as those adopted in the 2001/2004 UCP EIR, the title, “Adopted Mitigation Measure,” is used as the mitigation measure was “adopted” as part of the 2001/2004 UCP EIR; where mitigation measures would be modified or eliminated from those identified in the 2001/2004 UCP EIR, the title, “Modified Mitigation Measure,” is used; and where new mitigation measures were developed for the modified Phase 2 Project, the title, “New Mitigation Measure,” is used.

This MMRP only applies to activities associated with implementation of the UCP Update and VST Specific Plan Project applicable to the portions of the Project detailed in each measure. In addition, if the UCP Update and VST Specific Plan Project does not proceed, and the Project as approved through the 2001/2004 UCP EIR is implemented across the UCP area, the 2001/2004 UCP EIR mitigation measures would be applied to those activities.

1.3. Roles and Responsibilities
The County is responsible for overall administration of the MMRP and for verifying that the applicant, builder, construction contractor, or other designated party has completed the necessary actions for each measure. The party responsible for implementing each item will identify the staff members responsible for coordinating with the County on the MMRP.

1.4. Mitigation Monitoring and Reporting Program Table
Table 1, which identifies the mitigation measures applicable to the UCP Update and VST Specific Plan Project, includes the table columns identified and described below:
 Impact: This column presents all the impacts disclosed in the SEIR for which mitigation was identified.  Mitigation Measure: This column presents all the mitigation measures identified in the UCP Update and VST Specific Plan Project SEIR, each of which has been adopted and incorporated into the project.  Action(s): For every mitigation measure, one or more actions are described. The actions delineate the means by which the mitigation measures will be implemented and, in some instances, the criteria for determining whether a measure has been successfully implemented. Where mitigation measures are particularly detailed, the action may refer back to the measure.
 Implementing Party: This column identifies the entity responsible for undertaking the required action.  Timing: Implementation of the action must occur before or during some part of project approval, project design, or project construction or on an ongoing basis. This column identifies the timing for implementation of each mitigation measure.
 Completion of Implementation: The County is responsible for ensuring that mitigation measures are successfully implemented with respect to work implemented within the County’s jurisdiction. The “Completion of Implementation” column is to be used by the County to indicate when implementation of a mitigation measure has been completed. The County, at its discretion, may delegate implementation responsibility or portions thereof to qualified consultants or contractors. Upon annexation, the County’s responsibility to ensure that the mitigation measures are successfully implemented will be transferred to the City of Merced. The “Completion of Implementation” column is to be used by the City to indicate when implementation of a mitigation measure has been completed.
27 7

Table 1 UCP Update and VST Specific Plan Mitigation Monitoring and Reporting Program Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
Air Quality
Impact 3.1.1:

Generation of
Short-Term,
Construction-
Related Emissions
of ROG, NOX,
PM10, and PM2.5
Adopted Mitigation Measure 4.3 -1 Compliance with the following SJVAPCD mitigation measure listed in Table 6 -3 of the GAAMAQD would further reduce dust created during construction activities:
 Limit traffic speeds on unpaved roads to 15 mph.

Adopted Mitigation Measure 4.3 -2 Construction contracts shall include the following specifications:
 Minimize idling time to a maximum of ten minutes when construction equipment is not in use;
 Employ construction activity management techniques such as extending the construction period outside the ozone season of May through October, reducing the number of hours of
construction and scheduling activities during off peak hours;  Tuning engines to manufacturer’s specifications;
 When feasible, schedule equipment usage to avoid
simultaneous use of equipment.

New Mitigation Measure 3.1-1a: Utilize the cleanest available off - road construction equipment, including the latest Tier diesel or electric equipment (e.g. scrapers, graders, trenchers, tractors, loaders, backhoes, etc.) (UCP South only)
All construction specifications shall require use off-road construction equipment that meet EPA’s Tier 4 emission standards as defined in 40 CFR 1039 and comply with the appropriate test procedures and provisions as contained in 40 CFR Parts 1065 and 1068. Tier 3 models can be used if a Tier 4 version of the equipment type is not yet produced by manufacturers. This measure can also be achieved by using battery-electric off-road equipment as it becomes available. Implementation of this measure shall be requi red in the Prepare an AAQA for all
construction and operational
emissions that exceed 100 lb/
day.

Project applicant,
construction
contractor,

SJVAPCD
During
preparation of
the EIR for UCP
South

Confirm that construction
equipment measures are
implemented
County of
Merced
Before grading

1 The County’s obligation to implement or confirm that implementation has been satisfied will transfer to the City of Merced up on annexation. 28 8

Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
contract the project applicant establishes with its construction contractors. The applicant shall demonstrate its plan to fulfill the requirements of this measure in a report or in project improvement plan details submitted to the discretionary land use authority (City of Merced or Merced County) prior to the use of any off-road, diesel-powered construction equipment.

New Mitigation Measure 3.1-1b: Preparation of an Ambient Air Quality Analysis (UCP South only)
SJVACPD recommends that construction and operational emissions that exceed 100 lb/day prepare an AAQA to assess whether a project would violate an AAQS. Prior to the approval of a Final Map, the project applicant shall prepare a project-level analysis of emissions for development in the UCP area that is subject to SJVAPCD oversight to confirm whether the particular land use development would result in emissions that exceed this 100 lb/day screening criterion. In cases where a project’s construction activity would generate emissions above this screening criterion (i.e., 100 lb/day) s, the project applicant shall prepare an AAQA. If, following the preparation of an AAQA, emissions are found to contribute to an exceedance of an AAQS, the project applicant shall either implement additional emission reduction measures as part of the project or, once all feasible on-site reduction measures have been exhausted, engage in regional programs that serve to reduce air pollution in the San Joaquin Valley. An example of a potential program includes the Valley Clean Air Now (Valley CAN)
organization, which improves public health through investments in vehicle repair and replacement programs. Emissions reduction programs must demonstrate a quantifiable reduction and must be located within the SJVAB so air pollution reductions are realized in the basin. Alternatively, if regional air pollution reduction programs are unavailable, the project applicant may enter into a Voluntary Emission Reduction Agreement (VERA) with SJVAPCD to reduce emissions to below 100 lb/day for any pollutant that exceeds the screening criteria. If conditions warrant participation in a VERA, the VERA shall demonstrate a pound-for-pound reduction in emissions 29 9

Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
that exceed 100 lb/day through a process that funds and implements emissions reduction projects within the SJVAB. The types of emission reduction projects that could be funded include electrification of stationary internal combustion engines (such as well pumps), replacing old heavy-duty trucks with cleaner, more efficient heavy-duty trucks, and replacement of old farm tractors. If a VERA is found to be required to meet thresholds, and the applicant elects to enter into one, the project applicant shall enga ge in a discussion with SJVAPCD prior to the adoption of the VERA to ensure that feasible mitigation has been identified to reduce emissions to a less-than-significant level.

Impact 3.1-2:

Long-Term,
Operational
(Regional)
Emissions of
Criteria Air
Pollutants and
Precursors
Adopted Mitigation Measure 4.3 -4
(a) Outdoor electrical outlets shall be installed in the front and backyards of all housing units.
(b) Use solar or low emission water heaters.
(c) Orient buildings to take advantage of solar heating and natural cooling and use passive solar design.
(d) Increase wall and attic insulation.

New Mitigation Measure 3.1-2a: Implement On-Site Project Design Features to Reduce Emissions of Criteria Air Pollutants (UCP South) Prior to the issuance of any development permits, the project applicant shall Implement the following measures to reduce the project’s emissions:
 Use low-VOC (50–100 grams per liter) paint for external residential applications on all construction drawings for review and approval by staff of the discretionary land use authority (City of Merced or Merced County).
 Incorporate traffic calming measures including marked crosswalks, count-down signal timers, curb extensions, speed tables, raised crosswalks, raised intersections, median islands, tight corner radii, roundabouts, and on-street parking
Implement construction design
features to minimize impacts.

Project applicant,
construction
contractor
Before building
permit issuance

Preparation of air quality
assessment to determine
whether any SJVAPCD annual
mass emissions thresholds are
exceeded.

Project applicant,

SJVAPCD
Before building
permit issuance

30 10

Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
throughout the site plan. Specific calming measures and locations shall be identified by a qualified transportation specialist.
 Electric water heaters in all residences (no gas storage tank heaters).
 Electric heating, ventilation, and air conditioning (HVAC) units in residences (no gas units).
 Meet Tier 2 electric vehicle charging standards of the most recent version of Part 11 of the Title 24 California Building Code (CalGreen Code) for all land use types.
 Restrict idling times for heavy heavy duty trucks accessing the project site to 3 minutes or less through the signage indicating that idling must be limited to this duration.
 Plant vegetation throughout the project site near areas of high pollution generation (e.g., heavily traveled roadways, sites of truck idling) to reduce the dispersion of air pollutants.  Apply for grant funding through SJVAPCD’s Bikeway Incentive Program, which offers funding for Class I, Class II, and Class III bicycle paths for projects within the SJVAB.

Mitigation Measure 3.1-2b: Engage in Regional Programs to Offset Project Emissions of ROG, NOX, CO, and PM10 (UCP South and VST Specific Plan)
UCP South
Once the on-site reduction measures listed above under Mitigation Measure 3.1-2a have been incorporated, an air quality assessment shall be prepared to determine whether any SJVAPCD annual mass emissions thresholds are exceeded. If no thresholds are exceeded, no further action is necessary. If one or more thresholds are exceeded, prior to the issuance of grading permits for the first phase of development, the project applicant shall enter into a VERA through coordination with SJVAPCD to reduce emissions to meet SJVAPCD’s annual mass emissions thresholds for any pollutant that exceeds their respective threshold. The project applicant shall engage in a discussion with SJVAPCD prior to the adoption of the 31 11

Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
VERA to ensure that feasible mitigation has been identified to reduce emissions to a less-than-significant level consistent with the direction given in SJVAPCD’s GAMAQI. As allowed by SJVAPCD, the project applicant shall be provided the opportunity to perf orm an additional quantification of the project’s operational emissions following the implementation of the proposed measures listed above under Mitigation Measure 3.1-2a to estimate the TPY needed to reduce emissions to meet SJVAPCD’s annual thresholds of significance.

VST Specific Plan
A project-level evaluation of potential emissions has been performed for the VST Specific Plan. Based on SJVAPCD’s guidance, various project design features have been incorporated into the design of the VST Specific Plan to reduce emissions, such as transportation management strategies and the elimination of onsite natural gas infrastructure for residential land uses. Based on t his data (see Table 3.1-13), the applicant shall enter into a VERA with SJVAPCD to fully compensate for ROG, NO
X, and CO emissions that
exceed SJVAPCD’s CEQA annual mass emissions thresholds of significance.

Biological
Resources
Impact 3.2-1:

Result in
Disturbance to or
Loss of Special-
Status Plant
Species
Adopted Mitigation Measure 4.4-2: The County shall ensure that at least 551 acres of upland annual grassland is preserved in conjunction with and to support at least 61.2 acres of vernal pool fairy shrimp habitat (for a total of 612 acres).

Adopted Mitigation Measure 4.4-6: Seed collection from the shining navarretia located within the UCP area shall be conducted prior to the loss of the populations in the UCP area. Seed collection shall be conducted by a qualified botanist or restoration biologist. Collected seeds shall be d
ispersed within suitable habitat (i.e., seasonally moist Preservation of upland annual
grassland.

Project applicant,
County of
Merced
Before
construction
This has been completed for VST.

Collection of shining navarretia
seeds within UCP area.

Project applicant,
construction
contractor
Before
construction

Pre-construction surveys of
special-status species.

Project applicant,
construction
contractor
Before
construction

32 12

Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
clay flats in grassland). Seeds shall be dispersed only within suitable habitats where shining navarretia does not currently occur to avoid impacts on the genetic composition of existing populations.

Seed from shining navarretia shall be dispersed in suitable habitat within the annual grassland preserved in conjunction with loss of vernal pool habitat (Impact 4.4.1) and/or Swainson’s hawk habitat (Impact 4.4.4) if feasible. However, if mitigation lands to serve both purposes cannot be found, the applicant will be responsible for negotiating a conservation easement with a land owner in the vicinity such that a minimum of seven populations of shining navarretia receive long-term protection.

Mitigation Measure 3.2-1: Implement Avoidance Measure and Mitigation for Special-Status Plant Species Not Covered by the Existing CDFW Incidental Take Permit or USFWS Biological Opinion  During implementation of preconstruction surveys required under the CDFW ITP and USFWS Biological Opinion
Conservation Measures, a qualified botanist will target additional special-status plant species not covered by these permits.

Surveys will follow survey methods from CDFW’s Protocols for Surveying and Evaluating Impacts on Special -Status Native Plant Populations and Natural Communities (CDFW 2018) and will be conducted during the blooming period for these species (Table MM 3.2-1).
 If special-status plant species are not found, the botanist will document the findings in a report to the discretionary land use authority (City of Merced or Merced County), and no further mitigation will be required.

If special-status plant species are found, the area occupied by special-status plants will be avoided completely, if feasible (i.e., project objectives can still be met). This may include establishing a no-disturbance buffer around the occupied habitat and
demarcation of this buffer by a qualified biologist or botanist using flagging or high-visibility construction fencing. The size of the buffer Establishment of buffer area if
any special-status species are
found.

Project applicant,
construction
contractor
Before
construction

33 13

Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
will be determined by the qualified biologist or botanist and will be large enough to avoid direct or indirect impacts on the plant.  If special-status plans are found during special-status plant surveys and cannot be avoided, the project applicant shall, in consultation with CDFW or USFWS as appropriate depending on species status, develop and implement a site -specific mitigation strategy to achieve no net loss of occupied habitat or individuals.

It is likely that existing mitigation efforts for state and fed erally listed plant species required under the ITP and USFWS Biological Opinion would be sufficient to reduce impacts on non -listed special-status plant species to a less-than-significant level.

Mitigation measures shall include, at a minimum, preserving and enhancing existing populations, establishing populations through seed collection or transplantation from the site that is to be affected, and/or restoring or creating habitat in sufficient quantities to achieve no net loss of occupied habitat or individuals. Purchase of credits from an agency -mitigation bank that contains the affected species may also be used to offset loss of occupied habitat. Potential mitigation sites could include suitable locations within or outside of the UCP area or VST Specific Plan area. Habitat and individual plants lost shall be mitigated at a minimum 1:1 ratio, considering acreage as well as function and value. Success criteria for preserved and
compensatory populations will include:
 The extent of occupied area and plant density (number of plants per unit area) in compensatory populations will be equal to or greater than the affected occupied habitat.  Compensatory and preserved populations will be self - producing. Populations will be considered self -producing when:
 plants reestablish annually for a minimum of five years with no human intervention such as supplemental seeding; and
34 14

Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
 reestablished and preserved habitats contain an occupied area and flower density comparable to existing occupied habitat areas in similar habitat types in the project vicinity.

If offsite mitigation includes dedication of conservation easements, purchase of mitigation credits, or other offsite conservation measures, the details of these measures will be included in the mitigation plan, including information on responsible parties for long-term management, conservation easement holders, long -term management requirements, success criteria such as those listed above and other details, as appropriate to target the preservation of long-term viable populations.

Impact 3.2-2:

Result in
Disturbance to or
Loss of Special-
Status Wildlife
Species and
Habitat
Adopted Mitigation Measure 4.4-2: The County shall ensure that at least 551 acres of upland annual grassland is preserved in conjunction with and to support at least 61.2 acres of vernal pool fairy shrimp habitat (for a total of 612 acres).

Adopted Mitigation Measure 4.4-4(a): The County shall ensure that Swainson’s hawk foraging habitat is preserved offsite in sufficient quality and quantity, as determined through consultation with the CDFW, to mitigate for the loss resulting from the proposed UCP.

The preservation of annual grasslands (through Policy PA 2.3) that are suitable as foraging habitat for Swainson’s hawk shall be located within 10 miles of a current or historic Swainson’s hawk nest site (consistent with CDFG guidance).

Adopted Mitigation Measure 4.4-4(b): The County shall require pre- construction surveys to identify active raptor nests prior to the onset of construction activities within 1,000 feet of any ground disturbing activities (i.e., construction site). The pre-construction surveys will be conducted in accordance with USFWS and/or CDFW guidelines. If Preservation of upland annual
grassland.

Project applicant,
County of
Merced
Before
construction
This has been completed for VST.

Preservation of offsite foraging
habitat for Swainson’s hawk
Project applicant,
construction
contractor, CDFW
Before
construction

Pre-construction surveys to
identify active raptor nests.

Consultation with CDFW and
USFWS if any are located
Project applicant,
construction
contractor
Before
construction

Pre-construction surveys to
identify San Joaquin kit fox. If
any are located, implementation
of June 1999 Standardized
Recommendations for
Protection of the San Joaquin Kit
Fox Prior to or During Ground
Disturbance
Project applicant,
construction
contractor
Before
construction

35 15

no active raptor nests are identified within 1,000 feet of the construction site, no further mitigation would be necessary.

If active nests are found within 1,000 feet of the construction site, the CDFW shall be consulted to determine appropriate mitigation measures to minimize the effect. At a minimum, construction shall be delayed within an appropriate buffer zone, as determi ned by consultation with CDFW, until the young have fledged.

Adopted Mitigation Measure 4.4-5: Project applicants shall conduct surveys for dens/burrows that could be occupied by vagrant San Joaquin kit fox prior to any ground-disturbing activities within the UCP area. The surveys shall be conducted within two weeks or less of any ground-disturbing activities. If dens/burrows meeting the criteria suitable for use by San Joaquin kit fox are found, the dens/burrows shall be cleared using the methodologies that are consistent with those described in the June 1999 Standa rdized Recommendations for Protection of the San Joaquin Kit Fox Prior to or During Ground Disturbance.

New Mitigation Measure 3.2-2a: Conduct Preconstruction Surveys for Western Spadefoot, Implement Avoidance Measures, and Relocate Individuals
 Within 7 days before commencement of project activities that would result in ground disturbance, vegetation removal, or use of vehicles, a qualified biologist familiar with the life history of western spadefoot and experienced in performing surveys for western spadefoot will conduct a focused preconstruction survey of habitat suitable for the species within the UCP area. The qualified biologist will inspect the project site in the UCP area for adult western spadefoot toads, eggs and tadpoles within aquatic breeding habitat, as well as suitable burrow habitat.
 If western spadefoot adults, tadpoles, or eggs are not detected during the focused survey, the qualified biologist will submit a report summarizing the results of the survey to the discretionary land use authority (City of Merced or Merced County), and further mitigation will not be required.
 If western spadefoot adults, tadpoles, or eggs are detected, a qualified biologist with an appropriate CDFW Scientific Collecting Pre-construction surveys to
identify presence of Western
spadefoot. Implementation of
mitigation with CDFW permit if
any are located.

Project applicant,
construction
contractor, CDFW

Before
construction

36 16

Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
Permit that allows handling of amphibians will relocate individual adults, tadpoles, or eggs to nearby suitable habitat with prior approval of CDFW. The qualified biologist will also be present during initial ground disturbance activities and will inspect the project site in the UCP area before initiation of project activities.

If additional western spadefoot are detected, the qualified biologist will relocate individuals into suitable habitat for western spadefoot (i.e., vernal pool grasslands) that will b e preserved in perpetuity.

New Mitigation Measure 3.2-2b: Conduct Preconstruction Surveys for Western Pond Turtle, Implement Avoidance Measures, and Relocate Individuals
 Within 48 hours before commencement of project activities that would result in ground disturbance, vegetation removal, or use of vehicles, a qualified biologist familiar with the life history of western pond turtle and experienced in performing surveys for western pond turtle will conduct a focused survey of habitat suitable for the species within the UCP area . If aquatic habitat potentially suitable for the species is present within a project site in the UCP area (e.g., streams, ponds, drainages), upland h abitat within approximately 1,600 feet of this aquatic habitat will also be surveyed. The qualified biologist will inspect the project site for western pond turtles as well as suitable burrow habitat.  If western pond turtles are not detected during the focused survey, the qualified biologist will submit a report summarizing the results of the survey to the discretionary land use authority (City of Merced or Merced County), and further mitigation will not be required.
 If western pond turtles are detected, a no -disturbance buffer of at least 100 feet will be established around any identified nest sites or overwintering sites. A qualified biologist with an appropriate CDFW Scientific Collecting Permit that allows Pre-construction surveys to
identify presence of Western
pond turtle. Implementation of
avoidance measures and
relocation.

Project applicant,
construction
contractor
Before
construction
37 17

handling of reptiles will be present during initial ground disturbance activities and will inspect the project site before initiation of project activities. If western pond turtles are detected, the qualified biologist will move the turtles downstream and out of harm’s way.

New Mitigation Measure 3.2-2c: Conduct Focused American Badger Survey and Establish Protective Buffers
 Within 30 days before commencement of project activities that would result in ground disturbance, vegetation removal, or use of vehicles, a qualified wildlife biologist with familiarity with American badger and experience using survey methods for the species will conduct focused surveys of habitat suitable for the species within the UCP area to identify any American badger dens.
 If occupied dens are not found, the qualified biologist will submit a report summarizing the results of the survey to the discretionary land use authority (City of Merced or Merced County), and further mitigation will not be required.
 If occupied dens are found, impacts on active badger dens will be avoided by establishing exclusion zones around all active badger dens, the size of which will be determined by the qualified biologist. No project activities (e.g., vegetation removal, ground disturbance, staging) will occur within the exclusion zone until denning activities are complete or the den is abandoned, as confirmed by a qualified biologist. The qualified biologist will monitor each den once per week to track the status of the den and to determine when it is no longer occupied. When it is no longer occupied, project activities within the exclusion zone may occur.

New Mitigation Measure 3.2-2d: Conduct Focused Surveys for Crotch Bumble Bee and Implement Avoidance Measures If Listed under CESA
Prior to implementation of project activities that could result in loss of crotch bumble bees (e.g., ground disturbance, vegetation removal), the following measures will be implemented.
 The project applicant will retain a qualified biologist familiar with bumble bees in California, with experience using survey methods Pre-construction surveys to
identify presence of American
Badger. Establishment of
protective buffers.

Project applicant,
construction
contractor
Before
construction
38 18

Impact Mitigation Measure Action(s) Implementing
Party1 Timing Completion of Implementation
for bumble bees, and with approval from CDFW to conduct focused surveys of suitable habitat within the project site in the UCP area. Because a survey protocol for this species has not been established, survey methods will be developed and
approved in consultation with CDFW, and will generally include but not be limited to the following elements (included in survey protocols for other bumble bee species in the United States [USFWS 2018]):
 Surveys will be conducted during the active flight season (typically March through September).
 Surveys will be conducted by walking transects through suitable habitat, or by surveying a minimum of one person - hour per 3 acres of suitable habitat without transects.  Bumble bees within the project site will be identified through passive, non-lethal methods (e.g., visual surveys using binoculars, photographic documentation), as approved by CDFW.
 If crotch bumble bees are detected during focused
surveys, the survey results will be submitted to the
discretionary land use authority (City of Merced or Merced County) and CDFW. The project applicant will consult with CDFW to determine whether there are additional
avoidance measures available that would reduce the
likelihood of injury or mortality of crotch bumble bee . The project applicant will consult with CDFW to determine
whether authorization for take of crotch bumble bees
would be required by obtaining an incidental take permit pursuant to California Fish and Game Code Section 2081. If required, the project applicant will implement measures required under the permit which may include
compensatory mitigation to fully mitigate impacts on
crotch bumble bee.

Pre-construction surveys to
identify presence of Crotch
Bumble Bee. Establishment of
avoidance measures
Project applicant,
construction
contractor.

CDFW
Before
construction
Pre-construction surveys to
identify presence of bats.

Establishment of avoidance
measures
Project applicant,
construction
contractor.

County of
Merced
Before
construction
39 19

Impact Mitigation Measure Action(s) Implementing
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 If no crotch bumble bees are detected during focused
surveys, the survey results will be submitted to the
discretionary land use authority (City of Merced or Merced County). The project applicant will consult with CDFW to determine whether the negative survey results are
sufficient to conclude that crotch bumble bees (including underground overwintering and nesting colonies) are
absent from the project site, and that authorization for take of crotch bumble bees would not be required. If
CDFW concurs, then further mitigation would not be
required.

New Mitigation Measure 3.2-2e: Conduct Focused Bat Surveys and Implement Avoidance Measures
Within 30 days before commencement of project activities, a qualified biologist familiar with bats and bat ecology and experienced in conducting bat surveys will conduct surveys for bat roosts in suitable habitat (e.g., trees, crevices, cavities, exfoliati ng bark, bridges, unoccupied buildings) within and adjacent to the UCP area.
 Surveys will consist of a daytime pedestrian survey looking for evidence of bat use (e.g., guano) and/or an evening emergence survey to note the presence or absence of bats within potential roosts.
 If no evidence of bat roosts is found, the qualified biologist will submit a report summarizing the results of the survey to the discretionary land use authority (City of Merced or Merced County), and no further study will be required.
 If evidence of bat roosts is observed, the species and number of bats using the roost will be determined. Bat detectors shall be used if deemed necessary to supplement survey efforts by the qualified biologist.
 If an active western red bat maternity roost is detected, a qualified biologist shall determine an appropriate avoidance buffer to be maintained from April 1 until young are capable of Pre-construction surveys to
identify presence of burrowing
owl. Establishment of avoidance
measures and compensation for
affected areas
Project applicant,
construction
contractor.

CDFW
Before
construction
If pile driving must occur within
55 feet of existing structures, use
vibratory pile driving or augered
piles.

Project applicant,
construction
contractor
During
construction

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Impact Mitigation Measure Action(s) Implementing
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flight (typically through August). Project activities will not occur within this buffer until after the roosts are unoccupied.  If roosts of western red bat are determined to be present and must be removed, the bats will be excluded from the roosting site before the tree, building, or other roost structure is removed.

A program addressing compensation, exclusion methods, and roost removal procedures will be developed in consultation with CDFW before implementation. Exclusion methods may include use of one-way doors at roost entrances (bats may leave but not reenter) or sealing roost entrances when the site can be confirmed to contain no bats. Exclusion efforts may be restricted during periods of sensitive activity (e.g., during hibernation or while females in maternity colonies are nursing young). The loss of each roost (if any) will be replaced in consultation with CDFW and may require construction and installation of bat boxes suitable to the bat species and colony size excluded from the original roosting site. If determined necessary during
consultation with CDFW, replacement roosts will be implemented before bats are excluded from the original roost sites. Once the replacement roosts are constructed and it is confirmed that bats are not present in the original roost site by a qualified biologist, the roost tree, building, or roost other structure may be removed.

New Mitigation Measure 3.2-2f: Conduct Protocol-Level Surveys for Burrowing Owl, Implement Avoidance Measures, and Compensate for Loss of Occupied Burrows
This mitigation measure would remove the requirements of Adopted Mitigation Measure 4.4-4(b) and implement the following protocol-level survey requirements.

A qualified biologist will conduct focused breeding and nonbreeding season surveys for burrowing owls in areas of habitat suitable for the species identified during the reconnaissance-level survey (e.g., grassland, agricultural land) on and within 1,640 feet (500 meters) of the UCP area. Surveys will be conducted before the start of project 41 21

Impact Mitigation Measure Action(s) Implementing
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activities and in accordance with Appendix D of the CDFW Staff Report on Burrowing Owl Mitigation (CDFW 2012; CDFW Staff Report).  If no occupied burrows are found, the qualified biologist will submit a report documenting the survey methods and results to the discretionary land use authority (City of Merced or Merced County), and no further mitigation will be required.
 If an active burrow is found within 1,640 feet of pending construction activities that would occur during the nonbreeding season (September 1 through January 31), a minimum protection buffer of 164 feet (50 meters) shall be established and maintained around the occupied burrow throughout construction. The protection buffer may be adjusted if, in consultation with CDFW, a qualified biologist determines that an alternative buffer will not disturb burrowing owl use of the burrow because of particular site features or other buffering measures. If occupied burrows are present that cannot be avoided or adequately protected with a no- disturbance buffer, a burrowing owl exclusion plan will be developed, as described in Appendix E of the CDFW Staff Report.

Burrowing owls will not be excluded from occupied burrows until the project burrowing owl exclusion plan is approved by CDFW.

The exclusion plan will include a compensatory habitat mitigation plan (see below).
 If an active burrow is found during the breeding season (February 1 through August 31), occupied burrows will not be disturbed and will be provided with a protective buffer at a minimum of 164 feet unless a qualified biologist verifies through noninvasive means that either: (1) the birds have not begun egg laying, or (2) juveniles from the occupied burrows are foraging independently and are capable of independent survival. The size of the buffer may be adjusted depending on the time of year and level of disturbance as outlined in the CDFW Staff Report. The size of the buffer may be reduced if a broad-scale, long-term, monitoring program acceptable to CDFW is implemented so that burrowing owls are not adversely affected. Once the fledglings are capable of independent survival, 42 22

Impact Mitigation Measure Action(s) Implementing
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the owls can be evicted, and the burrow can be destroyed per the terms of a CDFW-approved burrowing owl exclusion plan
developed in accordance with Appendix E of CDFW Staff Report.  If burrowing owls are evicted from burrows and the burrows are destroyed by implementation of project activities, the project applicant will mitigate the loss of occupied habitat in accordance with guidance provided in the CDFW Staff Report, which states that permanent impacts on nesting, occupied and satellite burrows, and burrowing owl habitat (i.e., grassland habitat with suitable burrows) will be mitigated such that habitat acreage and number of burrows are replaced through permanent
conservation of comparable or better habitat with similar vegetation communities and burrowing mammals (e.g., ground squirrels) present to provide for nesting, foraging, wintering, and dispersal. The project applicant will retain a qualified biologist to develop a burrowing owl mitigation and management plan that incorporates the following goals and standards:
 Mitigation lands will be selected based on comparison of the habitat lost to the compensatory habitat, including type and structure of habitat, disturbance levels, potential for conflicts with humans, pets, and other wildlife, density of burrowing owls, and relative importance of the habitat to the species throughout its range.
 If feasible, mitigation lands will be provided adjacent or proximate to the project site so that displaced owls can relocate with reduced risk of injury or mortality. Feasibility of providing mitigation adjacent or proximate to the project site depends on availability of sufficient habitat to support displaced owls that may be preserved in perpetuity.
 If habitat suitable for burrowing owl is not available for conservation adjacent or proximate to the project site, mitigation lands can be secured offsite and will aim to consolidate and enlarge conservation areas outside of
planned development areas and within foraging distance of 43 23

Impact Mitigation Measure Action(s) Implementing
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other conservation lands. Mitigation may also be
accomplished through purchase of mitigation credits at a CDFW-approved mitigation bank, if available. Alternative mitigation sites and acreages may also be determined in consultation with CDFW.

If burrowing owl habitat mitigation is completed through permittee- responsible conservation lands, the mitigation plan will include mitigation objectives, site selection factors, site management roles and responsibilities, vegetation management goals, fina ncial assurances and funding mechanisms, performance standards and success criteria, monitoring and reporting protocols, and adaptive management measures. Success will be based on the number of adult burrowing owls and pairs using the site and if the numbe rs are
maintained over time. Measures of success, as suggested in the CDFW Staff Report, will include site tenacity, number of adult owls present and reproducing, colonization by burrowing owls from elsewhere, changes in distribution, and trends in stresso rs.

Greenhouse Gas
Emissions and
Climate Change

Impact 3.4-1:

Conflict with an
Applicable Plan,
Policy or
Regulation
Adopted for the
Purpose of
Reducing the
Emissions of
Greenhouse Gases
New Mitigation Measure 3.4-1: Implement the Bay Area Air Quality Management District’s On-Site Project Design Features to Demonstrate the Project’s Fair Share in Meeting the State’s Long - Term GHG Reduction Targets (UCP South only)
The following mitigation measure shall be applied to the UCP South portion of the project site. Prior to the issuance of building permits, the project applicant shall include the following elements in all construction drawings.
 Eliminate all on-site natural gas infrastructure for all land uses.  Adherence to the most recent Tier 2 requirements of Part 11 of the Title 24 California Buildings Code’s (CALGreen Code’s) electric vehicle (EV) charging standards.

Adherence to applicable state
guidelines and standards with
respect to GHG reduction
strategies.

Project applicant Before building
permits are
issued and/or
before approval
of improvement
plans

44 24

Impact Mitigation Measure Action(s) Implementing
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 Demonstrate consistency with OPR’s SB 743 regional VMT standards (i.e., residential projects meeting a 15 percent below the existing VMT per capita, office projects meeting a 15 percent below the existing VMT per employee, and r etail projects attaining a no net increase in existing VMT)
 If the aforementioned project design features cannot be incorporated into the project’s design, the applicant shall include other relevant project design characteristics such that any additional emissions generated from natural gas, insufficient EV charging, or excessive VMT can be fully offset. Examples of measures that could be applied to individual projects in UCP South include, but are not limited to, the following:
 Implementation of a solid waste diversion program.
 Exceedance of the most recent version of Part 6 of the Title 24 California Building Code (California Energy Code).
 Use of low-flow appliances.
 Use of energy star appliances.

Implementation of ZNE buildings.

Impact 3.4-3:

Conflict with or
Obstruct a State
or Local Plan for
Renewable Energy
or Energy
Efficiency
New Mitigation Measure 3.4-3: Implement On-Site Project Design Features that that Address Building Carbonization and Energy Efficiency (UCP South)
Implement the project design features in Mitigation Measure 3.4 -1 that address building carbonization and energy efficiency.

Implementation of design
features during building
construction
Project applicant Before building
permit is issued

Hydrology and
Water Quality
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Impact Mitigation Measure Action(s) Implementing
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Impact 3.5-3:

Substantially Alter
the Existing
Drainage Pattern of
Project Area
Mitigation Measure 3.5-3: Implement Altered Channel Cross Section Subject to MID Approval (VST Specific Plan Only)
Prior to initiation of infrastructure improvements for Phase 2 of the VST Specific Plan, the project applicant or subsequent developer shall submit evidence to the discretionary land use authority (City of Merced or Merced County) that:
 the proposed modification of the Fairfield Canal is designed such that no change would occur in the hydraulic flow rates and velocities of the canal, and
 necessary permits have been obtained from MID.
 Specific features that can be incorporated into the design to effectively control flowrate and velocity include (but are not limited to) adjusting the channel cross section, use of construction material that has higher roughness coefficient (i.e., river rock, rip rap, gabions), incorporating roughness baffles, and energy dissipaters at the downstream end of the canal.

Implementation of altered
channel cross section of Fairfield
Canal
Project applicant
with oversight
from MID,
subject to
approval from
City of Merced or
Merced County
Before
infrastructure
improvements

Impact 3.5-5:

Cumulative
Impacts to Water
Quality
No new mitigation is required for this impact.

In light of changes to the cumulative condition and current regulations, Adopted Mitigation Measure 4.8 -12 is no longer applicable or required to address the cumulative impacts of the UCP Update. The mitigation requirement would be removed as follows:

Adopted Mitigation Measure 4.8-12 The County shall develop Best Management Practices and prepare a Stormwater Pollution Prevention Plan and a stormwater monitoring program consistent with National Pollution Discharge System Phase 2 Permit Criteria.

None N/A N/A
Impact 3.5-6:

Cumulative
Impacts to
No new mitigation is required for this impact.

In light of changes to the cumulative condition and current regulations, Adopted Mitigation Measures 4.8 -15 and 4.8-16 are no None N/A N/A
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Impact Mitigation Measure Action(s) Implementing
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Hydrology and
Flooding
longer applicable or required to address the cumulative impacts of the UCP Update. The mitigation requirement would be removed as follows:

Adopted Mitigation Measure 4.8 -15: The County shall work with the Merced County Flood Control District, MID, and the City of Merced to update the Merced County Critical Area Flooding and Drainage Plan to identify a stategy for managing storm drainage runoff associated with future development within the Merced area. The plan update shall include at a minimum: existing hydrologic and hydraulic conditions, identification of base flood elevations that meet FEMA 44 CFR part 60 requirements, if such data have not been developed, and a process to evaluate the one- foot cumulative increase criteria; estimates of future peak flows and volumes based on anticipated land uses; performance standards for new development that address both peak flows and volumes while downstream conditions are not worsened; strategies to coordinate the development of local storm drainage and flood protection improvements with Merced County Streams Group projects; and mechanisms to update or revise the plan as needed as new information becomes available.

Adopted Mitigation Measure 4.8-16: MID and the County shall coordinate to ensure that additional stormwater drainage systems do not add flows into the Fairfield Canal that would exceed the canal’s capacity restrictions, potentially creating levee failure or overtopping conditions downstream of the UCP area.

Noise and
Vibration
Impact 3.6-1:

Short-Term
Construction-
Adopted Mitigation Measure 4.10-4: Construction contractors shall comply with the following or an equivalent noise control program:

Construction equipment must
comply with noise control
program
Project applicant,
construction
contractor
Before ground
disturbance

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Impact Mitigation Measure Action(s) Implementing
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Generated Noise
Levels

 All noise-producing project equipment and vehicles using internal combustion engines shall be equipped with exhaust mufflers and air-inlet silencers where appropriate, in good operating condition that meet or exceed original factory specification.
 Mobile or fixed "package" equipment (e.g. , arc-welders, air compressors) shall be equipped with shrouds and noise control features that are readily available for that type of equipment.  All mobile or fixed noise producing equipment used on the project, that is regulated for noise output by local, state or federal agency, shall comply with such regulation while engaged in project-related activities.
 Electrically powered equipment shall be used instead of pneumatic or internal combustion powered equipment, where practicable.
 Material stockpiles and mobile equipment staging, parking and maintenance areas shall be located as far as practicable from noise-sensitive receptors.
 The use of noise-producing signals, including horns, whistles, alarms, and bells shall be for safety warning purposes only. No project-related public address loudspeaker, two-way radio, or music system shall be audible at any adjacent noise -sensitive receptor except for emergency use.

The erection of temporary noise barriers will be considered where project activity is unavoidably close to noise -sensitive receptors.

New Mitigation Measure 3.6-1: Revise Policy N 2.6 for Managing Noise from Construction Activities of the Adopted UCP
Revise Policy N 2.6 of the Adopted UCP as follows:

Policy N 2.6
Manage noise from construction activities by:
 Limiting the hours of construction activities that generate noise, when adjacent to housing and other “sensitive” uses. Typically, Construction is limited to the hours of 7:00 a.m. to 6:00 p.m.

Implementation of noise control
features on certain equipment
Project applicant,
construction
contractor
Before ground
disturbance

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Impact Mitigation Measure Action(s) Implementing
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10:00 p.m., weekdays and Saturday, and prohibited on Saturdays, Sundays, and legal holidays, except for emergency work.  Requiring that all construction vehicles or equipment, fixed or stationary, be equipped with properly operating and maintained mufflers.
 All construction equipment shall be properly maintained and equipped with noise-reduction intake and exhaust mufflers and engine shrouds, in accordance with manufacturers’
recommendations. Equipment engine shrouds shall be closed during equipment operation.
 Requiring that construction vehicle staging areas be located as far as practical from existing residential uses
 Requiring that construction vehicle trips be routed as far as practical from existing residential uses
 Construction equipment with back-up alarms shall be equipped with either audible self-adjusting backup alarms or alarms that only sound when an object is detected. Self -adjusting backup alarms shall automatically adjust to 5 dB over the surrounding background levels. All non-self-adjusting backup alarms shall be set to the lowest setting required to be audible above the surrounding noise levels.
 Locate any trailers and materials used during construction capable of breaking the line of sight between the noise -sensitive receptors and construction-noise generating equipment such that they would serve as noise barriers in order to protect noise - sensitive receptors from noise generated by off -site construction activity.
 For construction occurring within 600 feet of an existing noise sensitive receptor, install temporary noise curtains as close as possible to the noise-generating activity such that the curtains obstruct the direct line of sight between the noise -generating construction activity and the nearby sensitive receptors.

Temporary noise curtains shall consist of durable, flexible composite material featuring a noise barrier layer bounded to 49 29

Impact Mitigation Measure Action(s) Implementing
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sound-absorptive material on one side. The noise barrier layer shall consist of rugged, impervious, material with a surface weight of at least one pound per square foot.
 Noise-reducing enclosures and techniques shall be used around stationary noise-generating equipment (e.g., concrete mixers, generators, compressors).
 Operate heavy-duty construction equipment at the lowest operating power possible.

Electrically powered equipment shall be used instead of pneumatic or internal combustion powered equipment, where practicable.

Impact 3.6-2:

Long-Term,
Operational Noise
(Stationary and
Area Sources)
Mitigation Measure 3.6-2: Amend the UCP to Include Provisions for Operational Stationary Source Noise Generating Activities The County of Merced shall revise the following policies in the UCP Update as follows:
 Policy N 1.1 Design and construct new noise-generating land uses in a manner that does not cause excessive exterior or interior noise for noise-sensitive land uses on any location of nearby residential properties. The exterior noise standard for noise-sensitive land uses is of 65 60 dBA Ldn and the interior noise standard for residential structures and other noise-sensitive land uses is 45 dB Ldn; provided, however, that residential uses within and immediate adjacent to the Town Center shall be considered commercial mixed uses for the purposes of determining noise compatibility.

Additionally, exterior stationary source noise standards for noise- sensitive land uses are 55 dB Leq between the hours of 7:00 a.m. and 10:00p.m. and 45 dB Leq and 50 Lmax between the hours of 10:00 p.m. and 7:00 a.m. shall not be exceeded by stationary noise generating land uses at any existing or planned residential land use. Noise reduction features shall be included in the design of any land use that has noise sources affecting residential land uses.

These noise reduction features shall include structure design and layout, site planning, and other measures; block walls and barriers Design of new land uses to
prevent excessive noise near
noise-sensitive receptors
Project applicant,
County of
Merced
Prior to Project
approval

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Impact Mitigation Measure Action(s) Implementing
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(including berms) shall only be used where such measures are deemed infeasible or ineffective.

Policy N X.X Loading docks shall be located and designed such that noise generated by activity at the loading dock would not exceed the City’s stationary noise source criteria (i.e., exterior noise levels of 55 dB Leq between the hours of 7:00 a.m. and 10:00p.m. and 45 dB Leq and 50 Lmax between the hours of 10:00 p.m. and 7:00 a.m) at any existing noise sensitive receptor. As part of the design-build process for uses that include loading docks, a specialized noise study will be completed to evaluate the specific design and ensure compliance with City of Merced noise standards. Reduction of loading dock noise can be achieved by locating loading docks as far away as possible from noise sensitive land uses, constructing noise barriers between loading docks and noise-sensitive land uses, or using buildings and topographic features to provide acoustic shielding for noise-sensitive land uses. Final design, location, and orientation shall be dictated by findings in the noise study.

Impact 3.6-3:

Long-Term,
Operational Noise
(Traffic)
Adopted Mitigation Measure 4.10 -3(a): The County shall construct barriers and/or retrofit affected homes with noise attenuation measures (e.g., sound-rated windows) necessary to achieve a 45 Ldn interior noise level.

Adopted Mitigation Measure 4.10 -3(b): For development within the UCP area, noise considerations should be taken into account during initial site planning, in order to maximize shielding by the planned structures or other on-site features.

During planning, applicant shall
design development with noise
considerations in mind.

Project applicant Prior to Project
approval

Impact 3.6-4:

Generate
Excessive
Groundborne
Vibration or
Groundborne
Noise Levels
Adopted Mitigation Measure 4.10 -5: Limit groundborne vibration due to construction activities to 0.2 in/sec velocity (limit of potential for damage to structures) in the vertical direction at sensitive receptors. For construction adjacent to highly sensitive uses, apply additional measures as feasible, including advance notice to occupants of sensitive facilities to ensure precautions are taken in those facilities to protect ongoing activities from the effects of vibration.

Implementation of vibration
reduction measures,

Project applicant,
construction
contractor.

During
construction.

51 31

Impact Mitigation Measure Action(s) Implementing
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New Mitigation Measure 3.6-4: Amend the UCP to Include
Provisions for Potential Vibration -Inducing Activities The County of Merced shall include the following policy in the UCP Update:
 Policy N.X: Construction Vibration. All potential vibration- inducing activities shall comply with the following measures, setback distances, precautions, monitoring programs, and alternative methods to traditional construction activities:
 Ground vibration-producing activities, such as pile driving and blasting, shall be limited to the daytime hours between 7:00 a.m. to 6:00 p.m. on weekdays and shall not occur on
weekends and holidays consistent with County of Merced
Municipal Code Section 10.60.040.
 If pile driving is used and would occur within 630 feet of existing residential receptors, pile holes shall be predrilled to the maximum feasible depth to reduce the number of blows required to seat a pile.
 All construction equipment on construction sites shall be operated as far away from vibration-sensitive sites as
reasonably possible.
 Earthmoving and ground-impacting operations shall be phased so as not to occur simultaneously in areas close to sensitive receptors, to the extent feasible. The total vibration level produced could be significantly less when each vibration source is operated at separate times.
 Minimum setback requirements for different types of ground vibration producing activities (e.g., pile driving and blasting) for the purpose of preventing negative human response shall be established based on the specific nature of the vibration producing activity (e.g., type and duration of pile driving), local soil conditions, and the type of sensitive receptor.

Established setback requirements (i.e., 630 feet) can be breached only if a project-specific, site-specific, technically adequate ground vibration study indicates that the buildings 52 32

Impact Mitigation Measure Action(s) Implementing
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would not be exposed to ground vibration levels in excess of 70 VdB, and ground vibration measurements performed
during the construction activity confirm that the buildings are not being exposed to levels in excess of 70 VdB.
 All vibration-inducing activity within the distance parameters described above shall be monitored and documented for
ground vibration noise and vibration noise levels at the nearest sensitive land use and associated recorded data submitted to the County of Merced so as not to exceed 70 Vdb.

Alternatives to traditional pile driving (e.g., sonic pile driving, jetting, cast-in-place or auger cast piles, nondisplacement piles, pile cushioning, torque or hydraulic piles) shall be considered and implemented where feasible to reduce vibration levels.
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Impact Mitigation Measure Action(s) Implementing
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Impact 3.6-5:

Cumulative Noise
Impacts
Adopted Mitigation Measure 4.10 -3(a): The County shall construct barriers and/or retrofit affected homes with noise attenuation measures (e.g., sound-rated windows) necessary to achieve a 45 Ldn interior noise level.

Adopted Mitigation Measure 4.10 -3(b): For development within the UCP area, noise considerations should be taken into account during initial site planning, in order to maximize shielding by the planned structures or other on-site features.

Adopted Mitigation Measure 4.10 -4: Construction contractors shall comply with the following or an equivalent noise control program:
 All noise-producing project equipment and vehicles using internal combustion engines shall be equipped with exhaust mufflers and air-inlet silencers, where appropriate, in good operating condition that meet or exceed original factory specification.
 Mobile or fixed "package" equipment (e.g., arc -welders, air compressors) shall be equipped with shrouds and noise control features that are readily available for that type of equipment.  All mobile or fixed noise-producing equipment used on the project, that is regulated for output by local, state or federal County to retrofit affected
homes.

County of
Merced
Before
construction.

54 34

Impact Mitigation Measure Action(s) Implementing
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agency, shall comply with such regulation while engaged with project-related activities.
 Electrically powered equipment shall be used instead of pneumatic or internal combustion powered equipment, where practicable.
 Material stockpiles and mobile equipment staging, parking and maintenance areas shall be located as far as practicable from noise- sensitive receptors.
 The use of noise-producing signals, including horns, whistles, alarms, and bells, shall be for safety warning purposes only. No project-related public address loudspeaker, two-way radio, or music system shall be audible at any adjacent noise -sensitive receptor except for emergency use.
 The erection of temporary noise barriers will be considered where project activity is unavoidably close to noise -sensitive receptors.

Adopted Mitigation Measure 4.10 -5: Limit groundborne vibration due to construction activities to 0.2 in/sec velocity (limit of potential for damage to structures) in the vertical direction at sensitive receptors. For construction adjacent to highly sensitive uses, apply additional measures as feasible, including advance notice to occupants of sensitive facilities to ensure precautions are taken in those facilities to protect ongoing activities from the effects of vibration.

Implementation of noise
attenuation measures.

Project applicant,
construction
contractor
During
construction
Transportation
55 35

Impact Mitigation Measure Action(s) Implementing
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Impact 3.7-1:

Conflict with a
Program, Plan,
Ordinance, or
Policy Addressing
the Circulation
System, Including
Transit, Roadway,
Bicycle and
Pedestrian
Facilities
Adopted Mitigation Measure 4.14 -4: Merced County will, and the City of Merced should, ensure adequate maintenance of the existing path along Lake Road and other regional bicycle and pedestrian facilities that provide access to the proposed UCP.

Maintain of existing path and
other bike and pedestrian
facilities providing access to
UCP.

Merced County
and City of
Merced
During Project
operation

Impact 3.7-3:

Substantially
Increase Hazards
Due to a Geometric
Design Feature
(e.g., Sharp Curves
or Dangerous
Intersections) or
Incompatible Uses
(e.g., Farm
Equipment)
Adopted Mitigation Measure 4.14-4: Merced County will, and the City of Merced should, ensure adequate maintenance of the existing path along Lake Road and other regional bicycle and pedestrian facilities that provide access to the proposed UCP.

Maintain of existing path and
other bike and pedestrian
facilities providing access to
UCP.

Merced County
and City of
Merced
During Project
operation

56 36

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Impact 3.7-5:

Cumulative
Transportation
Impacts
Adopted Mitigation Measure 4.14 -7(a): UCP development shall contribute its fair share toward the following Tier road improvements which are shown in Figure 4.14 -3 [in the 2001/2004 UCP EIR]:
 Highway 59, widen to 4 lanes, Yosemite Avenue to Bellevue Road  Highway 59, new segment between Highway 99 and 140
 Yosemite Avenue, extend from R Street to Highway 59
 Yosemite Avenue, widen to 4 lanes, Campus Parkway to G Street  Bellevue Road, widen to 6 lanes, Highway 59 to Campus Parkway  R Street, extend from Yosemite Avenue to Bellevue Road  Parsons Avenue/Gardner Avenue, extend and widen to 4 lanes, Childs Avenue to Bellevue Road
 Highway 59, new alignment along Mission Avenue
 Mission Avenue, widen to 4 lanes, Highway 99 to Highway 59  Childs Avenue, widen to 4 lanes, Campus Parkway to Highway 59 Adopted Mitigation Measure 4.14 -7(b): For development through year 2025, UCP development shall only contribute its fair share toward the following Tier road improvements, which are shown on Figure 4.14-4:
 Yosemite Avenue, extend from R Street to Highway 59
 Yosemite Avenue, widen to 4 lanes, Campus Parkway to G Street  R Street, extend from Yosemite Avenue to Belleview Avenue  Parsons Avenue/Gardner Avenue, extend and widen to 4 lanes, Childs Avenue to Bellevue Road
Contribution of fair share road
improvements
Project applicant Before
construction

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 Bellevue Road, widen to 4 lanes, Highway 59 to Campus Parkway Adopted Mitigation Measure 4.14 -7(c): For development through Year 2015, the County shall analyze the expected future operations of the Lake/Yosemite intersection at the following milestone points:
(1) determination of conceptual alignment for Campus Parkway, (2) preparation of the Geometric Approval Drawings for Campus Parkway, and (3) each October, beginning in the opening year of the UC Merced Campus. If any of these analyses determine that the Lake/Yosemite intersection will operate at unacceptable LOS, the proposed UCP shall contribute its fair share toward the cost of any improvements deemed necessary at the intersection. Monitoring of the Lake/Yosemite intersection shall end upon completion of the Campus Park extension from Yosemite Avenue to Bellevie w Road.

Adopted Mitigation Measure 4.14 -7(d): The County shall work with the City of Merced, Caltrans and MCAG to establish rights -of-way and access management requirements along the routes identified above.

Adopted Mitigation Measure 4.14 -8(a): Implement Mitigation Measure 4.14-7(a). In addition, UCP development shall contribute its fair share toward intersection improvement alson G Street between Highway 99 and Childs Avenue.

Adopted Mitigation Measure 4.14 -8(b): Implement Mitigation Measure 4.14-7(d).

Establishing proper rights of way
and access for identified routes.

County of
Merced, City of
Merced
Before
construction

58 202
26291.1

RECORDING FEES EXEMPT PURSUANT TO
GOVERNMENT CODE § 27383.

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

THE CITY OF MERCED

PRE-ANNEXATION AND DEVELOPMENT AGREEMENT

BY AND BETWEEN

THE CITY OF MERCED
AND

VIRGINIA SMITH TRUST

RELATING TO

THE VST SPECIFIC PLAN
(The “DEVELOPMENT AGREEMENT”)
As Adopted by the Merced City Council
on __________ by Ordinance No. ________
Attachment C
59 20226291.1 i

TABLE OF CONTENTS [to be updated]
RECITALS AND DEFINITIONS ............................................................................................... 1 AGREEMENT 5
ARTICLE 1. GENERALLY ........................................................................................................ 5 Section 1.01. Definition of “VST” ..................................................................... 5 Section 1.02. Effective Date .............................................................................. 5 Section 1.03. Term ............................................................................................. 6 Section 1.04. Execution and Recordation of Agreement ................................... 7 ARTICLE 2. DESCRIPTION OF THE PROJECT .................................................................. 7 Section 2.01. In General..................................................................................... 7 Section 2.02. Project Approvals ......................................................................... 7 Section 2.03. Subsequent Approvals .................................................................. 8 Section 2.04. Subsequent Approval Documents ................................................ 8 Section 2.05. Approvals ..................................................................................... 8 ARTICLE 3. DEVELOPMENT OF PROJECT IN GENERAL ............................................. 8 Section 3.01. Consideration to VST .................................................................. 8 Section 3.02. Consideration to City ................................................................... 8 Section 3.03. Rights of VST Generally .............................................................. 8 Section 3.04. Rights of City Generally .............................................................. 9 Section 3.05. Project Parameters ..................................................................... 10 Section 3.06. Pre-Annexation Obligations and Commitments ........................ 10 ARTICLE 4. APPLICABLE LAW ........................................................................................... 11 Section 4.01. In General....................................................................................11 Section 4.02. Application of Other City Laws ................................................. 12 Section 4.03. Uniform Codes and Standard Specifications ............................. 12 Section 4.04. State and Federal Law ................................................................ 13 ARTICLE 5. FINANCIAL COMMITMENTS OF, CITY AND VST ................................... 13 Section 5.01. In General................................................................................... 13 Section 5.02. Basic Purposes ........................................................................... 14 Section 5.03. Establishment of Financing Mechanisms .................................. 15 Section 5.04. Imposition of and Increases in Fees, Taxes, Assessments and Other Charges ...................................................................... 16 ARTICLE 6. DEVELOPER OBLIGATIONS REGARDING PROJECT FACILITIES AND INFRASTRUCTURE............................................................................. 22 Section 6.01. Backbone Infrastructure Phasing Plan ....................................... 22 Section 6.02. Construction and Dedication of Project Facilities and Infrastructure .............................................................................. 23

Section 6.03. Dedications ................................................................................ 23 60 20226291.1 ii

ARTICLE 7. OTHER COMMITMENTS OF CITY AND VST ............................................ 24 Section 7.01. Mutual Cooperation for Other Governmental Permits .............. 24 Section 7.02. Timing of Development ............................................................. 24 Section 7.03. Dedication of Park Lands........................................................... 25 Section 7.04. Dedication of Open Space ......................................................... 25 Section 7.05. Schools ....................................................................................... 25 Section 7.06. Affordable Housing and Workforce Housing and Related Programs .................................................................................... 25 Section 7.07. Energy ........................................................................................ 26 Section 7.08. Water .......................................................................................... 26 Section 7.09. Storm Drain Facilities ................................................................ 27 Section 7.10. Fire Station and Police Substation ............................................. 27 Section 7.11. Traffic and Circulation Improvements ....................................... 27 Section 7.12. Bicycle and Multimodal Transportation Improvements ............ 29 Section 7.13. Sewer.......................................................................................... 29 Section 7.14. Miscellaneous ............................................................................ 30 ARTICLE 8. CONSIDERATION OF PERMITS AND APPROVALS ................................ 32 Section 8.01. In General................................................................................... 32 Section 8.02. General Plan Amendments ......................................................... 32 Section 8.03. CEQA Compliance..................................................................... 32 Section 8.04. Life of Approvals ....................................................................... 32 Section 8.05. Vesting Maps .............................................................................. 32 Section 8.06. Need for Flexibility .................................................................... 33 ARTICLE 9. AMENDMENTS .................................................................................................. 33 Section 9.01. Amendments of Agreement ....................................................... 33 ARTICLE 10. MITIGATION MONITORING AND REPORTING PROGRAM EVALUATION; DEVELOPMENT AGREEMENT REVIEW .................. 34 Section 10.01. Mitigation Monitoring and Reporting Program Evaluation ....... 34 Section 10.02. Development Agreement Review .............................................. 34 ARTICLE 11. DEFAULT, REMEDIES, TERMINATION OF DEVELOPMENT AGREEMENT ................................................................................................. 35 Section 11.01. Defaults ...................................................................................... 35 Section 11.02. Remedies of Non-Defaulting Party ............................................ 35 Section 11.03. Termination Due to Default ....................................................... 36 ARTICLE 12. INTENTIONALLY OMITTED ....................................................................... 37 ARTICLE 13. ASSIGNMENT, TRANSFER AND NOTICE ................................................ 37 Section 13.01. Assignment of Interests, Rights and Obligations ....................... 37 Section 13.02. Transfers In General ................................................................... 38 Section 13.03. Non-Assuming Transferees ........................................................ 39 61 20226291.1 iii

ARTICLE 14. MORTGAGEE PROTECTION ...................................................................... 39 Section 14.01. In General................................................................................... 39 Section 14.02. Impairment of Mortgage or Deed of Trust ................................. 39 Section 14.03. Notice of Default to Mortgagee ................................................. 39 Section 14.04. Right of Mortgagee to Cure ....................................................... 40 Section 14.05. Liability for Past Defaults or Obligations .................................. 40 ARTICLE 15. GENERAL PROVISIONS ................................................................................ 40 Section 15.01. Incorporation of Recitals and Exhibits ...................................... 40 Section 15.02. Project is a Private Undertaking ................................................ 40 Section 15.03. Cooperation in the Event of Legal Challenge ............................ 40 Section 15.04. Defense and Indemnity .............................................................. 41 Section 15.05. Governing Law; Attorneys’ Fees ............................................... 41 Section 15.06. Force Majeure ............................................................................ 41 Section 15.07. Waiver ........................................................................................ 42 Section 15.08. Notices ....................................................................................... 42 Section 15.09. No Joint Venture or Partnership ................................................. 43 Section 15.10. Severability ................................................................................ 43 Section 15.11. Estoppel Certificate .................................................................... 43 Section 15.12. Further Assurances ..................................................................... 44 Section 15.13. Construction ............................................................................... 44 Section 15.14. Other Miscellaneous Terms ....................................................... 44 Section 15.15. Counterpart Execution ............................................................... 44 Section 15.16. Time ........................................................................................... 44 Section 15.17. Good Faith/Fair Dealing ............................................................ 44

62 20226291.1

PRE-ANNEXATION AND DEVELOPMENT AGREEMENT

BY AND BETWEEN THE CITY OF MERCED AND

VIRGINIA SMITH TRUST RELATING TO THE VST DEVELOPMENT PLAN THIS PRE-ANNEXATION AND DEVELOPMENT AGREEMENT is entered into this ___ day of ________, 2023 (“Execution Date”), by and between the CITY OF MERCED, a municipal corporation and charter city (“City”) and VIRGINIA SMITH TRUST, a trust established by the Testamentary Trust under the Will of Virginia Smith, deceased, and administered by the Merced County Office of Education Board of Trustees as Trustee (“VST” or “Developer”), hereinafter referred to as the “Development Agreement.” For purposes of this Development Agreement, the City and VST are individually referred to as a “Party” and collectively as the “Parties.”

RECITALS AND DEFINITIONS
A. The “Project,” as referenced in this Development Agreement, consists of the development of housing, neighborhood commercial buildings, parks, agricultural and open space uses, and various public infrastructure facilities on unincorporated land located within the County of Merced (“County”) University Community Plan North subarea of the University Community Plan area within the City’s Sphere of Influence and east of Lake Road, as more particularly described and defined in Section 2.01 below.

B. The “Property,” as referenced in this Development Agreement, consists of approximately 654 gross acres of land, identified as Assessor’s Parcel Numbers (APN) 60-010- 004 and 60-020-048. The Property is more fully shown on Exhibit A attached hereto and incorporated herein by this reference. Exhibit B attached hereto sets forth the legal description for the Property. VST represents and warrants to City that as of the Execution Date, VST has a legal or equitable interest in the Property.

C. Upon the effective date of the City ordinance approving this Development Agreement, this Development Agreement becomes effective, as defined in Section 1.02 below, as to the Property and the City will record it against the Property.

D. The County adopted the University Community Plan (“UCP”) in 2001. The Property is part of the University Community Plan area (the “UCP Area”). On December 9, 2014, City adopted an update to the Land Use and Circulation Elements of the City’s General Plan that included the UCP Area. The City’s General Plan designates the Property for a variety of land uses including residential, neighborhood commercial, open space, and agricultural, and provides for the development of these uses so as to benefit the City and its residents.

E. City, County and VST have engaged in a cooperative and successful relationship to establish the UCP and the UCP North subarea in particular pursuant to the Memorandum of Understanding Between the County of Merced and the City of Merced Relating to the Referral and Review Pursuant to Government Code Section 65919 of Potential Entitlement Applications by the Virginia Smith Trust entered into June 8, 2021, attached hereto and incorporated herein as Exhibit C (the “County/City Memorandum of Understanding”). . The City of Merced has adopted the Merced County UCP as a general guide for the development of the UCP area, which area is within the City’s Sphere of Influence, its Specific Urban Development Plan (SUDP) 63 20226291.1 2

boundary, and within a priority annexation area. The Merced County Board of Supervisors approved a modification of the UCP and adopted a Specific Plan (“VST Specific Plan”) that conforms with the policies of the UCP and the County General Plan, as amended, on October 17, 2023. On October 17, 2023, the County certified the Final Subsequent Environmental Impact Report and adopted the associated Mitigation Monitoring and Reporting Plan (including all mitigation measures therein) for the project based on the 2004 UCP Final EIR (SCH:
2001021056) (the “Final SEIR”), adopted amendments to the County General Plan and UCP, adoption of the VST Specific Plan and rezoning, and the Development Agreement by and between the County of Merced and Virginia Smith Trust Relating to the VST Specific Plan (the “County Development Agreement”). The Parties have worked cooperatively with the County to implement the following entitlements and approvals::
(1) The Final SEIR and Mitigation Monitoring and Reporting Program which were certified and adoped, respectively, by Resolution No. ___, on DATE. (2) Amendments to the City’s General Plan, including amendment of Urban Expansion Policy 1.4b referring the to the amended UCP, and various technical amendments to City General Plan to conform to the amended UCP and VST Specific Plan, as adopted by Resolution No. ____, adopted DATE. (3) P re -zoning of the Property as shown in the VST Specific Plan, adopted by Ordinance No. ___, adopted DATE.
(4) The Specific Plan and Development Plan approved by Resolution No. ___, on DATE.
(5) Annexation of the Property to the City of Merced, _____. (6) Ordinance No. ____ dated _____________, 2024 adopting this Development Agreement (“the Adopting Ordinance”).
(7) The conditions of approval of each of the foregoing.

These approvals described in this Recital E, together with the Final Subsequent Environmental Impact Report and related Findings, Statement of Overriding Considerations and Mitigation Monitoring and Reporting Plan described in Recital F below, are referred to herein, collectively, as the “Approvals” or “Project Approvals.”
F. Before approving the Project Approvals described in Recital E above, the Merced City Council: (i) reviewed and considered the significant environmental impacts of the Project and several alternatives to the Project, as described in that certain Final Subsequent Environmental Impact Report for the Project (the “Final SEIR”); reviewed the recommendations of the City of Merced Planning Commisison on the General Plan Amendment, Annexation and Development; and, (iii) adopted Resolution No. __-____ on ___________, 2023 relying on the Final SEIR certified by the Merced County Board of Supervisors, making Findings Concerning Mitigation Measures and Alternatives (the “Findings”), adopting a Statement of Overriding Considerations, and adopting a Mitigation Monitoring and Reporting 64 20226291.1 3

Plan (the “MMRP”), all in accordance with the provisions of the California Environmental Quality Act, California Public Resources Code Section 21000, et seq. (“CEQA”).

G. One of the principal purposes of this Development Agreement and the executed Development Agreement with Merced County is to further the cooperative relationship between the County, City and VST for the benefit of all residents of the County and City during the implementation of the Project. The City and VST are Parties to this Development Agreement to ensure the requirements of the Development Agreement Statute (California Government Code Section 65864, et. seq.) are satisfied. As more fully set forth below, this Development Agreement contains both covenants of a personal nature and covenants and/or servitudes that run with title to the Property.

H. This Development Agreement is intended to achieve the following purposes:
(1) that the City shall be kept and/or made “whole” by VST as to the fiscal impacts associated with the planning, development, maintenance and operation of the Property including, among other things, the costs to the City of providing the Project with public services and facilities (or interim public services and facilities if development occurs before annexation), the payment of City’s costs associated with the implementation of this Development Agreement, the Project Approvals, all other planning and environmental efforts described and envisioned by this Development Agreement, the Subsequent Approvals (as defined in Section 2.03 below) and the Project, and the mitigation of the Project’s environmental impacts; (2) that once this Development Agreement has taken legal effect, VST shall have a full and vested right, throughout the term of this Development Agreement, to the Rights and Obligations as to the Property;
(3) that this Development Agreement is intended to reduce the uncertainty in planning and implementation for and, and to secure the orderly development of, the Project, ensure a desirable and functional community environment, provide effective and efficient development of public facilities, infrastructure and services appropriate for the development of the Project, ensure maximum effective utilization of resources within the County and City, and provide other significant benefits to the City and its residents;
(4) to secure Project features and Project Approval conditions above and beyond those that may be imposed by the City under applicable zoning and development regulations and the Final SEIR;
(5) to provide Developer with a reliable and definitive form of reimbursement for offsite and onsite infrastructure beyond its fair share as defined in the VST Specific Plan;
(6) that this Development Agreement is intended to be consistent with and to implement the City’s General Plan, and more particularly achieve the Urban Growth Policies as set forth in Policy 1.4 of the Urban Growth and Expansion Element of the City’s General Plan;
65 20226291.1 4

(7) that the development of the Project will enable the City to provide opportunities to house and provide services to UC Merced students and staff that are currently located outside the community or more distant from the university, and to locate existing staff and students closer to the university in order to complete a vibrant university community adjacent to the campus;
(8) that the Project will enable the County and the City and the region to substantially reduce regional vehicle miles travelled (Specific Plan, pp. 20, 36; Draft SEIR, pp. 2-25, 4-5), greenhouse gas emissions (Specific Plan, p. 84; Draft SEIR, p. 3.4-21), and to capture sales taxes that are being leaked to other communities because of the jobs-housing imbalance associated with university staff and students located outside of the City (Specific Plan, p. 124);
(9) that the development of the Project would result in the capture of an estimated 1,000 households that commute to jobs in Merced and UC Merced in particular, resulting in the reduction of Countywide vehicle miles traveled for those trips by approximately 9.2 million miles per year (Specific Plan, p. 36; Draft SEIR, pp.

3.7-18—19);
(10) that the Project will provide housing opportunities at densities that the State Department of Housing Community Development considers suitable for lower and moderate-income households in the City and County, consisting of 1,500 units, and including approximately 400 to 500 units that will be deed-restricted affordable units as described in the VST Specific Plan (Specific Plan, pp. 19, 39); (11) that the development of the Project will generate and estimated $18.4 million of tax revenue for use by the County, City, public school districts, as well as other special districts, that all provide essential public services to County and City residents (Specific Plan, p. 124, append. N; Draft SEIR, pp. 1-20—23); (12) that the development of the Project will maximize the value of the endowment within the land use regulations contained in the UCP and VST Specific Plan so that the benefits to eligible students are maximized and the Project will generate an endowment that will generate approximately $8-10 million annually in scholarships and grants, which will be used for college scholarships to eligible Merced County students (Specific Plan, pp. 13; Draft SEIR, pp. ES-3, 2-4, 2-11); (13) that the Project’s Conditions, Covenants and Restrictions (CCRs) to be adopted by VST will include a Community Benefits assessment on property sales which will generate between $350,000 and $500,000 annually to fund Merced County Office of Education Foundation programs, including early childhood development, education and enrichment, and to fund vocational education programs and scholarships that will greatly benefit County and City residents (Specific Plan, p. 141); and
66 20226291.1 5

(14) that the value of the City’s obligations to the Developer pursuant to this Development Agreement are anticipated to be less than the benefits provided to the community as a whole and to the City in particular (Specific Plan, p. 124); (15) Development Agreement complies with requirements of City Council Resolution 2005-101.

The Rights and Obligations of the Parties to this Development Agreement shall be construed and interpreted so as to give full effect to each and all of these purposes.

I. As used in this Development Agreement, “Rights” shall mean all of the vested and other rights and benefits of the Development Agreement, and the term “Obligations” shall mean all of the duties, obligations, responsibilities and other burdens of the Development Agreement.

J. It is intended by the Parties that the provision of Government Code Section 65865.3 shall operate such that following the anticipated annexation, the County and City shall have the rights and obligations set forth in Articles ____, below. In light of this anticipated change, the term, “Approving Authority” shall refer to the County during the period of time before annexation and to the City after annexation. Until such time as annexation occurs, the City has the authority to enter into this Development Agreement because the Property is located within the City’s Sphere of Influence. This Development Agreement is intended to supplement the County Development Agreement and further define the City’s rights and obligations with respect to the Property.

K. As used in this Development Agreement, the terms, phrases and words shall have the meanings and be interpreted as set forth in this Development Agreement (the meaning given the term in the singular shall include the term in the plural and vice versa) unless the context clearly indicates the Parties intended another meaning. To the extent that any capitalized terms contained in this Development Agreement are not defined within it, then such terms shall have the meaning ascribed to them in the Applicable Laws, other applicable law or, if no meaning is given a term in any of those sources, the common understanding of the term shall control.

AGREEMENT
NOW, THEREFORE, in consideration of the promises, covenants and provisions set forth in this Development Agreement, the Parties hereby agree as follows:

ARTICLE 1. GENERALLY
Section 1.01. Definition of “VST” . As used herein, “VST” means Virginia Smith Trust, as that business entity existed on the Effective Date and any permitted successor, assign, or transferee of Virginia Smith Trust.

Section 1.02. E ffective Date. This Development Agreement is entered into by and between the City and VST and takes legal effect on ______, 2024, the date that City’s adoption of Ordinance No. __-___ approving the Development Agreement takes legal effect (“Effective 67 20226291.1 6

Date”). The terms and conditions of this Development Agreement shall be for the benefit of or a burden upon the Property, shall run with title to the Property, and shall be binding upon VST and its permitted successors, assigns and transferees during their respective ownerships of any portion of the Property.

Section 1.03. Term.

Section 1.03.1. In General.
(a) The term of this Development Agreement shall commence upon the Effective Date and shall continue until, and terminate upon, the earliest of the following dates (“Termination Date”):
(1) 12:01 a.m. on the Thirtieth (30th) year anniversary of the Effective Date, __________, 2044, unless VST requests, and the Approving Authority approves an extension of the Term for an additional 10-year period, in which case the Termination Date shall be 12:01 on the anniversary of the Effective Date, 2053. Such request for extension shall be submitted, in writing, to the Approving Authority at least 180 days, but no earlier than 365 days, before the 2044 Termination Date. The Approving Authority may deny the request if VST is not in compliance with all of its Obligations under this Development Agreement.
(2) This Development Agreement shall be terminated with respect to the property included in a recorded final subdivision map creating residential lots on any portion of the Property, provided that no further on-site or off-site infrastructure is required and no conditions remain to be satisfied before building permits can be issued for the development of lots depicted on that map. No further instrument or document shall be required for such termination provided that concurrently with or following recordation of such a subdivision map as to any portion of the Property, VST may request in writing of the City Development Services Director following Annexation, as may be appropriate, shall not
unreasonably withhold a certificate of termination of this Agreement, in recordable form, solely as to the property included in such a final recorded map which meets the foregoing
requirements. Upon the recordation of such a certificate, this Development Agreement shall terminate as to the land covered by such final map. If VST does not request or the City Development Services Director does not issue such a certificate, this Development Agreement shall continue to apply to any lot depicted on such a subdivision map until this Development Agreement otherwise expires or terminates according to its terms. 68 20226291.1 7

(b) This Development Agreement shall be of no further force, effect or operation upon the Termination Date. Subject to the provisions of Section 8.04 below, in no event shall the expiration or termination of this Development Agreement result in expiration or termination of any Approval without further action by City.

Section 1.04. Execution and Recordation of Agreement.

Section 1.04.1. Execution and Recordation. VST and City shall execute this Development Agreement in conformance with Section 15.15 of this Agreement, within five (5) business days of date of adoption of the Adopting Ordinance referenced in Recital E above. Within 10 days of execution, City shall record this agreement with the Merced County Recorder..

Section 1.04.2. R ecordation. City shall deliver this Agreement to the County Recorder for recordation within 10 days following its execution.

ARTICLE 2. DESCRIPTION OF THE PROJECT
Section 2.01. In General. As used herein, “Project” means the development of the Property as described in the “Project Approvals” (defined in Section 2.02 below), including all on-site and off-site “Project Facilities and Infrastructure” (defined in Section 5.02.1 below) contemplated as part of the development of the Specific Plan and in accordance with the Phases identified in the VST Specific Plan and described in Exhibit H, attached hereto and incorporated herein by this reference. As set forth on pages 23 through 31 of the VST Specific Plan, the VST Specific Plan plans for the development of 425 acres of residential land uses, 113 acres of open space and parks, 20 acres for a K-8 elementary school, 44 acres for commercial development, and 79 acres for roads and other improvements with approximately 3,900 residential units (4,400 total units including anticipated density bonus units) and 862,000 square feet of commercial buildings. The 862,000 square feet of commercial development consists of 585,500 square feet of Village Mixed Use, 104,500 square feet of Neighborhood Commercial/Retail uses, and 175,000 square feet of Community Commercial retail uses. Low-, medium-, medium-high, and high-density residential development projects would be constructed along planned collector and residential roadways. A community recreation center would be provided, as well as a charter school, along with 39 mini-parks and pocket parks, two community parks (one for each development phase), and a 36-acre regional sports park.

Section 2.02. P
roject Approvals. As used herein, “Project Approvals” include, but are not limited to: (i) those provisions of the City General Plan that relate to or affect the Property, as the City General Plan existed on the Effective Date and as it may be amended from time to time consistently with this Development Agreement (the “General Plan”), (ii) those provisions of the Development Plan (including the Design Guidelines) that relate to or affect the Property, as incorporated into and specified in the Specific Plan, existing on the Effective Date and as it may be amended from time to time consistently with this Development Agreement (the “Development Plan”), (iii) the zoning of the Property, existing on the Effective Date and as it may be amended from time to time consistently with this Development Agreement thereafter (the “Zoning”) and (iv) the other entitlements listed in Recital E above; provided that “Project Approvals” shall not mean or include amendments to the General Plan, UCP, or Zoning of the 69 20226291.1 8

Property that conflict with the Project Approvals as they existed on the Effective Date unless VST consents in writing to such conflicting amendments.

Section 2.03. Subsequent Approvals. As used herein, “Subsequent Approvals” mean those permits and approvals (other than the Project Approvals and amendments thereto) necessary or desirable for the development of the Project including, without limitation, those identified in Section 2.04 below.

Section 2.04. S
ubsequent Approval Documents. The “Subsequent Approvals” defined in Section 2.03 above include, but are not limited to the approvals identified in the Specific Plan chapter entitled, “Plan Administration” and include: (i) subdivision maps, parcel maps, and related or similar approvals issued under the California Subdivision Map Act, (ii) architectural review, (iii) building permits, (iv) any other discretionary or ministerial permits or approvals of County necessary or appropriate for build-out of the Project and Property, and (v) any amendments to any of the foregoing necessary or appropriate for the development of the Project.

Section 2.05. A
pprovals. Project Approvals, amendments to Project Approvals, and Subsequent Approvals are sometimes referred to in this Development Agreement collectively as the “Approvals” and each individually as an “Approval.” ARTICLE 3. DEVELOPMENT OF PROJECT IN GENERAL
Section 3.01. Consideration to VST. The Parties acknowledge and agree that City’s agreement to perform and abide by their respective covenants and Obligations set forth herein is material consideration for VST’s agreement to perform and abide by the covenants and Obligations of VST set forth herein.

Section 3.02. C onsideration to City. The Parties acknowledge and agree that VST’s agreement to perform and abide by the covenants and Obligations of VST set forth herein is material consideration for City’s agreement to perform and abide by the covenants and Obligations of City set forth herein.

Section 3.03. R ights of VST Generally. VST shall have a fully vested right to develop the Project and to use the Property in a manner consistent with this Development Agreement and Applicable Law.

Section 3.03.1. V ested Rights to Develop Project. During the Term of this Development Agreement, the Developer shall have a vested right to develop the Property to the full extent permitted by the Project Approvals and this Development Agreement.

Except as provided within this Development Agreement, the Project Approvals shall exclusively control the development of the Property, including the uses of the Property, the density or intensity of use, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes and the design, improvement and construction standards and specifications applicable to the Project. The maximum number of residential units authorized to be constructed hereunder and the approximate acreage of commercial development, without regard to any density bonus or incentive or concession pursuant to Government Code Sections 65915-65918 or other similar legislation or regulation, is approximately 4,400 total units after application of 70 20226291.1 9

anticipated density bonuses and approximately 862,000 square feet of commercial/mixed use development as described in the Specific Plan, with 2,900 dwelling units in Phase 1 and 1,500 dwelling units in Phase 2 . In furtherance of the foregoing, the Developer retains the right to apportion the uses, intensities and densities, between itself and any other owners of the Property, upon the sale, transfer or assignment of any portion of the Property, so long as such apportionment is consistent with the Project Approvals and this Development Agreement. The Project shall be developed in sequential phases as described in the Specific Plan and in accordance with Exhibit H as further referenced below in Section 6.01.2 of this Development Agreement.

Section 3.03.2. V ested Rights to Project Approvals. Subject to the City’s exercise of its police power authority and discretion, the Developer shall have a vested right to develop the Property consistent with the Project Approvals, including, but not limited to the vested right to (i) receive from the City all future development approvals for the Property that are consistent with and implement the Project Approvals and this Development Agreement; (ii) not to have such approvals be conditioned or delayed for reasons which are inconsistent with the Project Approvals or this Development Agreement unless there is a immediate public health and safety reason affecting the ability to proceed with the Project Approvals; and (iii) to develop the Property in a manner consistent with such approvals in accordance with the Project Approvals and this Development Agreement. All future development approvals for the Property, including without limitation general plan amendments, zoning changes, or parcel maps or tract maps, shall upon approval of the City be vested in the same manner as provided in this Development Agreement as for the Project Approvals.

Section 3.03.3. C
ity Obligations Prior to Annexation. Prior to and upon
Annexation, City shall abide by its Obligations as to Project Facilities and Infrastructure (as defined in Section 5.02 of this Agreement) that are located within and subject to City jurisdiction. Upon Annexation, the terms of this Development Agreement shall be operative in accordance with Government Code Section 65865.3 and City shall assume all Obligations of the County in accordance with this Development Agreement.

Notwithstanding the foregoing, City and VST understand that County shall retain its Rights and Obligations with respect to the Project Facilities and Infrastructure (as defined in Section 5.02 of this Agreement) that are located within and exclusively subject to County jurisdiction, including but not limited to County obligations concerning Campus Parkway.

Section 3.04. Right
s of City Generally. City shall have a right to regulate development of the Project and use of the Property in a manner consistent with this Development Agreement, the VST Specific Plan and Applicable Law. City assumes County’s rights and obligations under the County Development Agreement, except for County’s commitment to complete certain specified segments of Campus Parkway set forth in Section 7.10 of the County Development Agreement and Section 7.10 of this Development Agreement, upon annexation to the City of Merced pursuant to Section 3.07 of this Development Agreement. In the event of a conflict between this Development Agreement and the County Development Agreement, VST’s vested rights set forth in Articles 1, 2, 3, 4 and 8 of the County Development Agreement shall control.

The City’s rights and obligations set forth in Articles 5, 6 and 7 of this Agreement shall control 71 20226291.1 10

over conflicting provisions in the County Development Agreement; provided however, that the County’s rights and obligations set forth in Section 7.11 of the County Development Agreement shall control over conflicting provisions in this Development Agreement. All other rights and obligations set forth in Articles 9, 10, 11, 13, 14 and 15 of this Development Agreement shall take effect upon Annexation.

Section 3.05. Project Parameters. The permitted uses of the Property, the density and intensity of use of the Property, the maximum height and size of buildings included in the Project, and provisions for the reservation and dedication of land (collectively, the “Project Parameters”) shall be as set forth herein and in the Project Approvals.

Section 3.06. P
re-Annexation Obligations and Commitments.

Section 3.06.1. Commitment to Initiate Annexation Proceedings. Prior to the Effective Date of this Development Agreement, the City and Developer initiated proceedings under the Cortese-Knox-Hertzberg Act (California Government Codes Sections 56000, et seq.), including Section 56748 relating to annexation of eligible properties adjacent to UC Merced for the annexation of the Property (the “Annexation”).

City and Developer agree to take such subsequent actions as may be reasonably required to complete the Annexation of the Property under such conditions as are imposed by the Merced County Local Agency Formation Commission (“LAFCO”) and reasonably acceptable to Developer and the City. The City and Developer acknowledge that it is their mutual intent to accomplish the annexation of the Property as soon as possible. The City and Developer shall determine the timing of such annexation to coincide with the Developer’s development of the Property, the annexation of UC Merced and in a manner that is mutually acceptable to both Developer and the City. Absent amendment of this Agreement, the City and Developer shall work in good faith to process approvals Annexation of all the Property shall be completed within one (1) year of the Effective Date, subject to the City Council’s and LAFCO’s discretion. If Annexation does not take effect within one (1) year of the Effective Date, then VST and City agree to work in good faith to negotiate an Out of Boundary Service Agreement for the use of City utilities and services, and the establishment of the Financing Mechanisms described herein in accordance with the City General Plan, subject to the City Council’s discretion and any applicable LAFCO approvals. Notwithstanding the foregoing, in the event that the Parties agree to an Out of Boundary Service Agreement for utilities and services other than the provision of sewer and water, then the City agrees to initiate negotiations for an amendment to the County/City Tax Sharing Agreement. In such event, the County would adopt applicable Financing Mechanisms in accordance with the terms of the County Development Agreement.

Section 3.06.2. E
ffectiveness of Project Approvals. The parties acknowledge and agree that the Project Approvals are material to the City’s agreement to annex the Property to the City and that the City is relying on the Project Approvals being implemented through to construction as a condition to agreeing to the Annexation. As a condition precedent to completion of Annexation, the Parties agree that they shall not take any action to modify or overturn the Project Approvals, or impede their 72 20226291.1 11

implementation, nor take any other action inconsistent with the Project Approvals and the effectiveness of this Agreement as a development agreement.

Section 3.06.3. Developer’s Obligation to Prepare Annexation Application.

Developer shall prepare the Annexation Application in accordance with LAFCO’s rules and procedures including the following information: (i) a statement of the nature of each proposal; (ii) maps and legal description of proposed boundary change; (iii) any data and information requested by LAFCO; (iv) environmental documents; (v) necessary fees. As part of the VST Specific Plan to support the Annexation Application, VST has prepared a plan for extending City public services into the territory to be annexed, consistent with Government Code Section 56653(b), that includes: (i) enumeration and description of the services currently provided or to be extended to the affected territory; (ii) level and range of those services; (iii) an indication of when those services can feasibly be extended to the affected territory, (iv) if new services are proposed; (v) identification of improvements or upgrading of structures, roads, sewer or water facilities, or other conditions the City would impose or require within the affected territory if the change of organization or reorganization is completed; and (vi) information with respect to how those services will be financed. The Parties agree that the plan for public services is adequate for the purposes of the LAFCo Annextion Application.

Section 3.06.4. C
ity’s Duty to Cooperate. In reliance upon the representations and covenants herein, the Parties agree to support the Annexation of the Property to the City, including to cooperate in: (i) providing for the orderly transfer of jurisdiction over the Project from the County to the City to avoid duplication of effort and any delay in processing occasioned by the Annexation; and (ii) completing the Annexation, subdivision and development as contemplated by this Development Agreement. City shall cooperate and assist in the processing of the Annexation before LAFCO by timely taking the following actions:
(i) Providing all information reasonably required or requested by LAFCO with respect to the Annexation including, without limitation, a Plan of Services providing information to LAFCO with respect to the provision of municipal services to the Property by the City; and
(ii) Providing a written statement of support for the Annexation to LAFCO prior to the LAFCO public hearing.

ARTICLE 4. APPLICABLE LAW
Section 4.01. In General.

Section 4.01.1. Applicable Law Defined. Except as the Parties may otherwise agree, the rules, regulations and official policies applicable to the Project and the Property during the Term of this Development Agreement shall be those set forth in this Development Agreement and, except as otherwise set forth herein, the rules, regulations and official policies of City (including the plans, municipal codes, ordinances, resolutions 73 20226291.1 12

and other local laws, regulations, capital facilities fees and policies of City) in force and effect on the Effective Date (collectively, “Applicable Law”).

Section 4.01.2. Approvals as Applicable Law. Applicable Law shall include, without limitation, Approvals as they may be issued from time to time consistently with this Agreement.

Section 4.02. A pplication of Other City Laws.

Section 4.02.1. No Conflicting City Laws.
(a) Upon Annexation, City may apply to the Project and the Property any rule, regulation or official policy of City (including any plan, municipal code, ordinance, resolution or other local law, regulation, capital facility fee or policy of City) (each a “City Law”) that does not conflict with Applicable Law or this Development Agreement. City shall not, however, without the written consent of VST apply to the Project or the Property (whether by initiative, referendum, imposition of mitigation measures under CEQA or otherwise) any City Law that is in conflict with Applicable Law or this Development Agreement. Notwithstanding the foregoing, City Laws and regulations shall apply unless this Development Agreement provides that another Law or regulation shall apply to the Project in accordance with the County/City Memorandum of Understanding and Applicable UCP policies. (b) If City attempts to apply to the Project a City Law which Developer believes conflicts with Applicable Law or this Development Agreement, VST shall give City written notice describing the legal and factual basis for VST’s position. The City and VST shall meet and confer within 30 days of City’s receipt of such written notice to seek to resolve any disagreement. If no mutually acceptable solution can be reached, either Party may take such action as may be permitted under Article 11 below. (c) Notwithstanding the foregoing, the City and VST acknowledge and agree that upon Annexation, no new conditions would be permitted to be imposed on the Project through future City staff discretionary reviews.

Section 4.03. Uniform Codes and Standard Specifications.

Section 4.03.1. Uniform Codes. Nothing herein shall prevent City from applying to the Project standards contained in uniform building, construction, fire or other uniform codes, as the same may be adopted or amended from time to time by City, provided that the provisions of any such uniform code shall:
(1) Apply to the Project only to the extent that such code is in effect on a City-wide basis; and
(2) With respect to those portions of any such uniform code that have been adopted by City without amendment, be interpreted and applied consistently with the generally prevailing interpretation and application of such code in California.
74 20226291.1 13

Section 4.03.2. City Application of City Standards. In accordance with the terms of the County/City Memorandum of Understanding and this Development Agreement, the City shall apply to the Project the City’s standards and specifications for public improvements (e.g., streets, storm drainage, parking lots, and driveway widths) adopted or amended from time to time by the City, provided that such standards and specifications shall apply to the Project and the Property only to the extent that they are in effect on a City-wide basis, provided that such City standards and specifications are consistent with the standards and requirements in the Specific Plan, and provided that City may lawfully do so. City agrees to impose the Specific Plan design standards as in conformance with the City General Plan and the City’s Improvement Standards. City agrees to impose the road sections and design standards applicable to City streets as set forth in the Specific Plan.

Section 4.03.3. D
evelopment Standards in Excess of Adopted City Building Code. The VST Specific Plan contains requirements that exceed certain standards in the City’s adopted buillding codes. Upon Annexation, City agrees to enforce the standards in the Specific Plan relating to energy conservation, onsite energy production, use of electricity only for residential buildings, if deemed necessary for the effective implementation of the Project design features and the Project Mitigation Measures, and to the extent allowed as a matter of law.

Section 4.03.4. C
ity Building Permits. Upon Annexation, City shall require all building permits to comply with the UCP Update, Specific Plan, Final SEIR, design regulations, and other building design requirements adopted with the Project Approvals, including as to all public buildings constructed on the Property. City shall expedite the processing of Project building plans, and engineering improvement plans.

Section 4.04. S
tate and Federal Law.

Section 4.04.1. Change in City Law. Nothing herein shall prevent City from applying to the Project or the Property any change in City Law required by: (i) state or federal law; or (ii) any governmental agency that, due to the operation of state law (and not the act of City through a memorandum of understanding, joint exercise of powers or other agreement entered into after the Effective Date), has binding legal authority on City.

Section 4.04.2. C ompliance with Applicable Laws. If the application of such changes prevents or precludes performance of one or more provisions of this Development Agreement, City and VST shall take any and all such actions as may be necessary or appropriate to ensure the provisions of this Development Agreement shall be implemented to the maximum extent practicable.

ARTICLE 5. FINANCIAL COMMITMENTS OF, CITY AND VST
Section 5.01. In General.

This Article 5 establishes a framework for the imposition and allocation to the extent permitted by law of fees, taxes, assessments and other revenues to be generated and/or paid by 75 20226291.1 14

the Project and/or the Property. The provisions of this Article 5 are intended to prevent the Project from resulting in negative fiscal impacts on the City as determined by the fiscal impact analysis prepared for the Project; to facilitate the construction, operation and maintenance of infrastructure and facilities to avoid or limit the physical impacts of development; and to assist in the development of the Project so as to provide long-term fiscal and other benefits to City, including increased employment opportunities, an increased tax base and revenues to City, and an enhanced quality of life for the City’s residents.

Section 5.02. Basic Purposes.

Section 5.02.1. General.
(a) This Article 5 is intended to serve three basic purposes: first, that there shall be no cost to City for the construction of the fair share allocation of public facilities and infrastructure needed to serve the Project or the Property or for the provision of municipal services to the Project or the Property as discussed in the Specific Plan (“fair share”), including the operation and maintenance of facilities and infrastructure to serve the Project (collectively, the “Project Facilities and Infrastructure”); second, that the Project shall establish financing mechanisms for the cost of public services and the maintenance of public facilities (collectively, the “Financing Mechanisms”); and, third, that the City shall establish reliable and predictable mechanisms for the reimbursement of Developer’s costs of construction of infrastructure that exceeds its fair share contribution, the reimbursement of Developer’s cost of construction of infrastructure that is financed by City Public Facilities Impact Fees, Sewer System Facilities Charges, Water Capital Facility Charges, or Specific Plan impact fees, including but not limited to the reimbursement of Developer’s costs through direct payments, building permit fee credits or other third party payment of applicable impact fees, in accordance with the Specific Plan.
(b) The cost of providing Project Facilities and Infrastructure to the Project or the Property shall be consistent with the following principles: Except as otherwise specifically permitted by this Development Agreement and not in limitation of any other provisions hereof, (i) there shall be a reasonable relationship between any municipal cost required to be borne by the Project and the type of development within the Project to which such cost is attributable; (ii) there shall be a reasonable relationship between the need to incur any such municipal cost and the type of development within the Project to which such cost is attributable; (iii) no municipal cost required to be borne by the Project shall exceed the estimated reasonable cost of providing the service or facility to which such municipal cost relates; (iv) any municipal cost borne by the Project for Project Facilities and Infrastructure in excess of the Project’s “fair share” cost, City from impact fee program reserves funded by impact fees paid by other properties that benefit from said improvements; and (v) with respect to any fee Developer is required to pay in order to finance Project Facilities and Infrastructure, there shall be a reasonable relationship between the amount of the fee and the cost of the Project Facilities and Infrastructure funded by such fee.
(c) As used herein, the term “Project Facilities and Infrastructure” shall include public facilities and infrastructure only to the extent they serve the Project, and shall not include public facilities or infrastructure to the extent such facilities or infrastructure 76 20226291.1 15

serve projects or areas other than the Project or the Property, unless the public facilities and infrastructure serving the Project or Property are required to be oversized to serve other projects or areas in accordance with the provisions of Section 6.02.2 below.

Section 5.02.2. Financing of Infrastructure; Operation and Maintenance. Prior to or concurrent with the recordation of the first final vesting tentative subdivision map(s), City shall establish and form Financing Mechanisms to finance Project Facilities and Infrastructure and Project-related services or the operation and maintenance portion of the Project Facilities and Infrastructure, such as a Mello-Roos District (“CFD”), Landscaping and Lighting Districts, or other Maintenance Assessment Districts, in accordance with the following principles:
(a) A community facilities district (“CFD”) shall cover the cost of maintaining and operating all parks (but not the Community Recreation Center), trails, open space, parkway strips, street trees, street lights, park facilities, storm drainage facilities, bioswale, medians and roundabouts. The City shall establish a special CFD for the Project site. (Specific Plan, p. 120.)
(b) Any costs associated with such mechanism shall be borne by the Project, which may be reimbursed by the financing mechanism. (c) Reserved.
(d) A Master Homeowner’s Association, established under the Davis- Sterling Act of 2014 (Cal. Code Regs. § 2792.32(a).) shall be used for the operation and maintenance of the Community Recreation Center and any private common area appurtenant to the entire Specific Plan area. Other Homeowners Associations or Property Owners Associations shall be formed for the maintenance of any private common area attributable to an individual component of the Project.
(e) The City’s Sewer and Water funds, and the Project sewer and water rates shall be used for the operation, maintenance and replacement of all water and sewer facilties, including the water well, water transmission lines, water distribution lines, service laterals (to the property line), sewer pump station, sewer collection lines, sewer force main, pressure sustaining valves, etc.

Section 5.03. Establishment of Financing Mechanisms.

Section 5.03.1. Procedures for Establishment. The establishment of any mechanism to finance the operation or maintenance of Project Facilities and Infrastructure (each a “Financing Mechanism”) shall be initiated upon VST’s written request to the City’s Finance Director. Such request shall outline the purposes for which the Financing Mechanism is to be established and the general terms and conditions upon which the establishment of the Financing Mechanism will be based. City’s consideration of VST’s request shall be consistent with the criteria set forth in Section 5.02 above. If VST requests the City form a Mello-Roos Community Facilities District to finance the operation or maintenance of Project Facilities and Infrastructure, City shall use its best efforts to cause such district to be formed and special taxes to be levied to the extent 77 20226291.1 16

permitted by Applicable Law, provided that all formation costs shall be borne by Developer.

Section 5.03.2. Nature of City Participation. City’s participation in the formation of any Financing Mechanism approved by City (and its operation thereafter) and in the issuance of any Project Debt approved by the City shall include all of the usual and customary public agency functions associated with such tasks including, without limitation, the formation and administration of special districts; the issuance of Project Debt; the monitoring and collection of fees, taxes, assessments and charges such as utility charges; the creation and administration of enterprise funds; the enforcement of debt obligations and other functions or duties authorized or mandated by Applicable Law.

Section 5.04. I
mposition of and Increases in Fees, Taxes, Assessments and Other Charges.

Section 5.04.1. Taxes and Assessments. During the Term of this Development Agreement, VST shall be bound to and shall not protest, challenge or cause to be protested or challenged, any City tax in effect on the Effective Date. (a) City may apply to the Project or the Property any tax not in effect on the Effective Date only if such tax is:
(1) A tax, assessment or fee levied on developed property only (and not on properties for which no final map has been recorded) in connection with the establishment or implementation of a Financing Mechanism in accordance with the provisions of Sections 5.02 or 5.03, above;
(2) A tax, assessment or fee to which VST agrees; or
(3) A tax, assessment or fee levied on a City-wide basis that does not have a disproportionate impact on the Project (e.g., taxes levied to support general obligation bonds, business license taxes). (b) City may increase any tax applicable to the Project or the Property (whether in force and effect as of the Effective Date or not in force and effect as of the Effective Date but imposed against the Project in accordance with this subsection (b)); provided, however, that any taxes or assessments levied or imposed by or through any Financing Mechanism shall be imposed only to the extent necessary to ensure the adequate operation, maintenance, depreciation and replacement of Project Facilities and Infrastructure. (c) No assessment shall be imposed on the Project or the Property other than through a Financing Mechanism as set forth in Section 5.03. (d) No new debt shall be issued that affects the Project or the Property without VST’s approval, unless the approvals otherwise conform with the requirements of Articles XIII C and D of the California Constitution and any requisite voter approval is achieved, in which case the City may issue debt even if VST votes against the matter. 78 20226291.1 17

Section 5.04.2. Processing and Plan Check Fees. Developer shall pay those planning, engineering, building permit, inspection and plan check fees and charges, but excluding sewer and water impact fees governed by Section 5.04.2(c) required by City for processing applications and requests for Subsequent Approvals under the applicable regulations in effect at the time such applications and requests are submitted to City.

Except as otherwise specifically stated below, any financial obligation imposed against or applied to the Project shall be consistent with the provisions of controlling California law, including California Government Code Section 66000, et seq., California Constitution, Article XIII A and its implementing statutes. VST shall pay City reasonable staff and consultant time and other reasonable costs (including reasonable consultant costs) associated with City’s approval and implementation of this Development Agreement and the Project. Notwithstanding the foregoing, Developer shall pay the costs of submitting planning, engineering and design plans to an outside contractor for expedited review, if City makes this option available.

Section 5.04.3. P
roject Development/Construction Fees. Fees, taxes,
assessments and other charges in effect upon the adoption of the Development Agreement related to development and construction of the Project shall be imposed on the Project.

Section 5.04.4. C
ity Development Impact Fees. Consistent with the terms of the Development Agreement, City shall have the right to impose only such development fees (“Development Fees”) as have been adopted by the City as of the Effective Date, as set forth in Exhibit D attached hereto and incorporated herein by this reference. Such Development Fees shall include VST Specific Plan impact fees for parks and traffic impacts as identified on Exhibit E attached hereto and incorporated herein by this reference. The Development Fees shall be paid at the time and in the manner set forth in Exhibit E which outlines the “Timing of Payment of Impact Fees; Adjustments” attached hereto and incorporated herein by this reference. This Section 5.04.04 shall not prohibit City from imposing on Developer any fee or obligation that is imposed by a regional agency or the State of California in accordance with state or federal obligations and required to be implemented by City.

Section 5.04.5. A
mendment of Development Fees. Prior to the recording of the first final map for the project, City shall amend its Development Fees to implement the special parks and traffic fees for the VST project in accordance with the Specific Plan. If City amends any existing Development Impact Fee (“DIF”) program to include additional projects or costs for the benefit of the Project (either new projects or increased costs for projects included in the analysis supporting existing fees) for improvements necessary to satisfy Project requirements, Developer will be required to pay the amended fees. In such event,credits applied towards Project Facilities and Infrastructure costs advanced by Developer shall made by direct payments to developer under a reimbursement agreement, or, at developers option, to building permits are issued or fees are otherwise due and shall arise only from Developer-funded construction of infrastructure or community facilities included in the project list on which a particular fee was based. Credits applied when building permits are issued or fees are otherwise due 79 20226291.1 18

pursuant to this section shall be adjusted for inflation consistently with such adjustments of the fees against which credits are allowed.

Section 5.04.6. Fee Credits and Reimbursements. City acknowledges that Developer may dedicate property and install infrastructure improvements beyond its “fair share” cost, and/or install improvements that are funded from the City’s PFFP and the Specific Plan impact fees. The City agrees to grant fee credits and reimbursements, funded by Development Impact Fees, Sewer System Facilities Charges, Water Capital Facility Charges, or Specific Plan impact fees or other sources paid by Developer and other developers, including, but not limited to traffic impact fees, park fees, fire fees, police fees, and sewer and water Facility fees. If and to the extent that the Developer constructs or installs any infrastructure and/or facilities that have a capacity or size in excess of the Project Infrastructure and Facilities required to serve the Project or mitigate its impacts, or installs Project Infrastructure and Facilities that are funded with PFFP fees or Specific Plan fees and one or more undeveloped properties will be benefitted by such infrastructure and facilities as provided by City Municiple Code Section 15.08.130, the City shall enter into a reimbursement agreement with the Developer, in a form mutually acceptable to City and Developer, which provides for the reimbursement of all excess costs and expenses incurred by the Developer in constructing such improvements in accordance with Government Code Section 66485, et seq. and in accordance with Section 5.05.3 below.

Section 5.04.7. Pu
blic Facility Financing Plan Fees. Upon annexation, the Project shall be subject to City Public Facility Financing Plan (PFFP) fees for fire, police, public works and information technology adopted as of the Effective Date of this Development Agreement to the extent provided in the Specific Plan as set forth in Exhibit D. City agrees to amend the PFFP for the Project to provide for traffic and park fees consistent with the Specific Plan.

Section 5.04.8. Wat er and Sewer Rates. The City’s rates for monthly retail utility service (e.g., water and sewer) may be applied to the Project and increased from time to time during the term of this Development Agreement; provided, however, that any such increase shall be imposed on the Project only to the extent permitted by law.

Section 5.04.9. Wat er and Sewer Facility Fees. VST shall pay Sewer Facility Fees in accordance with Chapter 15.16 of the City of Merced Municipal Code (the “Municipal Code”) in effect as of the effective date of issuance of building permits. Such Sewer Facility Fees shall include the treatment plant component fees identified in Section 15.16.040 (the “Treatment Plant Component Fees”) and sewer collection system fees component in Section 15.16.070 applicable to properties north of Bear Creek and outside of the North Merced Sewer Assessment District (the “Sewer Collection System Fees”). VST shall also pay the applicable Water System Capital Facilities Fees set forth in City of Merced Municipal Code Section 15.36.160 (the “Water System Capital Facilities Fees”). City and VST agree that current Sewer Collection System fees applicable to VST are adequate to fund VST’s share of the existing sewer collection 80 20226291.1 19

system, and its share of the interim and long-term improvements in the Sewer Master Plan. Other Commitments of, City and VST Related to Financing.

Section 5.04.10. Arrangements with Other Governmental Agencies. City and VST acknowledge and agree that City may from time to time enter into joint exercise of power agreements, memoranda of understanding or other agreements with other governmental agencies consistent with and to further the purposes of this Development Agreement.

Section 5.04.11. O
ther Funding Sources.
(a) City and VST agree that either party may pursue outside sources of funding for the construction, operation and maintenance of Project Facilities and Infrastructure including, in particular, facilities and infrastructure which serve the region, and that both parties will cooperate in furtherance of pursuing such outside sources of funding. (b) Any obligation of VST under this Development Agreement to fund or otherwise bear the costs of the construction of improvements, the provision of services or any other item, whether or not the sole obligation of VST, may be satisfied through the use of funds provided by, from or through any third-party (including other governmental) sources.

Section 5.04.12. Reimbursement.
(a) In accordance with the PFFP fees, DIF fees, Sewer Collection System Fees, Water System Capital Facilities Fees, and other fees established by in the Municipal Code, City shall reimburse the actual hard and soft costs associated with VST’s funding or construction of that portion of any oversized, accelerated improvements, or improvements financed with utility fees or PFFP fees, or facilities that is attributable to a project or area other than the Project or Property in the manner required by this section. For purposes of this Section 5.05.3, City shall reimburse VST the full cost of:
i. the land and improvements for the sewer lift station and pump station on Lot 19, and the force main from Cardella Road to Bellevue Road;
ii. the oversizing cost for the 16-inch, 12-inch and 10-ince looped transmission lines from the water well on Lot 35 to Lake Road; iii. for the oversizing cost of the 16-inch transmission line in Lake Road and the tie-in to Bellevue Road;
iv. the pressure sustaining valve;
v. Cost of land and improvements for the proposed fire station, well site, police station site, park land, and the Campus Parkway right of way as provided in Specific Plan;
81 20226291.1 20

vi. Cost of parks, park facilities, linear parks and open space funded from the Specific Plan Park Fee;
vii. The cost of any facilities that are used by subsequent applicants and developers benefitted by such infrastructure and facilities as provided by City Municiple Code Section 15.08.130.
(b) City shall enter into future Public Facilities Reimbursement Agreements in accordance with City Administrative Resolution A-3 for the reimbursements from City utility funds, the Public Facility Financing Plan fee program, and the Specific Plan impact fees.
i. Hard and soft costs eligible for reimbursement shall include the following, without limitation: reasonable direct costs of construction and materials, soft costs including payment and performance bonds, architecture and engineering fees, and professional fees. Such reimbursement shall be based on a fair share allocation of costs determined by calculating the pro rata share of the capacity in such improvements that is attributable to other projects or properties as reflected in the allocation percentages in Exhibit ___, which reimbursement shall be provided timely in accordance with applicable law, following City’s collection of funds from the sources identified in subsection 5.05.3(b)(1)–(4) below. VST and City acknowledge that the amounts specified in Exhibit ___ for each improvement are estimates only and that total reimbursable costs shall be based on VST’s actual costs as set forth in this Section 5.05.3.

1. City shall reimburse VST for VST’s construction of the Public Facilities and Infrastructure by allocating:100% of the Citywide PFFP impact fees, Specific Plan fees, Water fees and sewer fees generated by the Project and within the Specific Plan area and such costs may be subject to
prevailing wage in accordance with applicable law.

2. 100% of the reserves for Specific Plan Park Fees.

3. The Specific Plan Traffic Fee as specified in Financing, Services and Governance Chapter of the Specific Plan, and more particularly Table 10 of the Specific Plan.

4. Existing and future reserves in the Citywide PFFP
Development Impact Fees specified from the Citywide
Public Facility impact fees.

5. Development Impact Fees paid to the City on behalf of other developments that benefit from the Public Faculties and Infrastructure installed by VST, and which funds are 82 20226291.1 21

not committed to repayment obligations under prior
Reimbursement Agreements.

6. Development Impact Fees paid to City from developers who contribute to the impact associated with the
improvements installed by VST; and

7. Taxes or assessments in a Community Facilities District, if such fees are established for the construction of Public Facilities.

8. For purposes of a separate reimbursement agreement,
backbone infrastructure constructed by VST that is larger than the minimum size or standard as identified in the
Standard Specifications and Engineering Design Standards may be considered to be oversized and shall be subject to prior review and approval by the City prior to being
included in a separate reimbursement agreement.
(c) Under no circumstances shall the City be obligated to reimburse VST from resources other than the Public Facility Impact Fees, Specific Plan fees, water fees, sewer system collection fees, or proceeds from the CFD, nor from funds it does not yet possess, or from funds which may not be lawfully used for that purpose. (d) Failure or error by the City to collect funds from the sources identified in subsection 5.05.3(f) below shall not relieve the City from any obligation to reimburse VST. The City shall reimburse VST pursuant to the terms of this Agreement with respect to all such funds actually collected by the City. Failure by the City to reimburse VST after the City collects such funds shall entitle VST to exercise its remedies in accordance with Article 12.
(e) For any improvement subject to reimbursement under this section, VST shall provide City with evidence of the actual hard and soft costs of each of the improvements in the form of receipted bills, canceled checks, and contracts. Approval of reimbursement may occur in phases as projects are accepted by City. Regardless of VST’s claimed costs incurred in constructing the reimbursable improvements, City has the authority, through its Finance Director or designee, in the exercise of his or her reasonable discretion, to determine the amount subject to possible reimbursement for each improvement. (f) In the event any owner or developer pays all or a portion of the fees or assessments identified in subsection 5.05.3(b)(1)–(4) above under protest, the City shall not be required to make reimbursements under this Development Agreement until the limitation period for instituting court action to seek a refund of such funds paid under protest has passed, and no court action (“Action”) has been instituted. If an Action is instituted seeking refund of funds paid under protest, or to prevent the City from collecting such funds, or challenging any provision of this Development Agreement, the City shall not pay over such funds to VST until the Action has been finalized and the authority of the City to collect such funds and reimburse 83 20226291.1 22

the Developer has been sustained. The City shall promptly notify VST in writing of the Action.

The City shall reasonably support Developer’s efforts to participate as a party to the Action, to defend the Action or settle the Action. Furthermore, the City shall have the right to tender defense of the Action to VST. If, within 15 days of the City’s mailing a notice in compliance with Section 15.08 below requesting that VST defend the Action, should VST thereafter fail to undertake the defense of the Action at VST’s sole cost and expense, the City may stipulate to return of the funds collected under protest, to cease collecting such funds, or enter into any other settlement of the Action acceptable to the City, and VST shall lose any right to reimbursement under this Development Agreement of the amount contested in the Action. VST shall further reimburse the City for its costs and attorneys’ fees incurred in defense of the Action, including reasonable payment for legal services performed by the City’s City Attorney, and for any liability the City incurred in the Action. In addition, if the City fails to impose a requirement upon development projects to pay their respective prorated share of the improvements specified in Exhibit F or fails to collect such funds, VST may exercise all of its legal rights to attempt to collect such funds from the owners or developers of the benefitted properties, which legal rights shall not be interpreted to include an action against the City. In the event VST attempts to collect such funds from such owners or developers, the City shall assign to VST all of its rights to collect such funds under this Development Agreement.
(g) The City reserves the right to offset any funds it collects from the sources identified in this Section 5.03.3 against any unpaid fees, debts or obligations of VST owed to the City. The City shall provide VST with notice, in accordance with Section 15.08 and Article 12, of its intent to offset any collected funds against unpaid fees, debts or obligations described in the notice, and provide VST with a reasonable opportunity to cure such unpaid fees, debts, or obligations.
(h) VST’s rights to reimbursement under this Section 5.05.3 shall survive termination of this Development Agreement for a period of 15 years from the date of termination or until Developer has been fully reimbursed, whichever occurs first.

ARTICLE 6. DEVELOPER OBLIGATIONS REGARDING PROJECT FACILITIES

AND INFRASTRUCTURE
Section 6.01. Backbone Infrastructure Phasing Plan. The Project Backbone Infrastructure is planned to be designed and constructed in six (6) phases in accordance with the discussion of infrastructure phasing set forth in the Specific Plan. Phasing of “Backbone” and “Offsite” Infrastructure, construction and dedication of Project Facilities and Infrastructure, and dedications shall be consistent with the Project Approvals.

Section 6.01.1. D evelopment Plan Phasing Plan. The improvements described in the VST Specific Plan Infrastructure Plan and Exhibit G attached hereto and incorporated herein constitute the “Project Backbone and Offsite Infrastructure.” The Parties acknowledge that further analysis may result in a more cost-effective approach to the provision of such infrastructure to adequately serve development within the Plan Area, and that they may be revised accordingly by agreement of the Parties. 84 20226291.1 23

Section 6.01.2. Phasing Plan. The VST Specific Plan Phasing Plan is discussed in the Specific Plan on pages 37 through 40 (the “Phasing Plan”) and attached to this Agreement and incorporated herein as Exhibit H.

Section 6.01.3. Phasing Plan Amendments. The Phasing Plan may be amended by agreement of the Parties to take advantage of new technologies, to respond to changes in the underlying land use assumptions, actual absorption and sale of various residential and commercial building types, or for such other reasons as the Parties may agree.

Amendments to the Phasing Plan may be considered a “Minor Amendment” of the Specific Plan if they meet the criteria set forth in the Plan Administration Chapter of the Specific Plan. If the Phasing Plan is amended there shall be concurrent agreement with the County and Developer on the phasing of the Backbone and Offsite infrastructure.

Section 6.02. C onstruction and Dedication of Project Facilities and Infrastructure.

Section 6.02.1. Construction and Funding of Project Facilities and Infrastructure by VST. The City may, in any manner consistent with the terms and provisions of this Development Agreement, require VST to construct or fund the construction of any Project Facilities and Infrastructure when needed to satisfy the Backbone Infrastructure Phasing Plan, as set forth in Exhibit I attached hereto and incorporated herein.

Section 6.02.2. O versizing of Project Facilities and Infrastructure. (a) In addition to requiring VST to construct or fund the construction of Project Facilities and Infrastructure, City may require any Project Facilities and Infrastructure constructed or funded by VST under Section 6.01 above to be oversized to serve projects or areas other than the Project or the Property; provided that:
(i) City shall establish a Financing Mechanism to provide additional funding to VST to finance such oversizing; and
(ii) City shall timely reimburse the costs associated with VST’s funding or construction of that portion of any such oversized improvements that is attributable to projects or areas other than the Project or the Property, pursuant to section 5.05.3 of this Development Agreement.

Section 6.03. Dedications.

Section 6.03.1. VST Dedication. To the extent rights-of-way or other interests in real property owned by VST within the Property are needed for the construction, operation or maintenance of Project Facilities and Infrastructure, VST shall dedicate or otherwise convey such rights-of-way or other interest in real property to City, or as necessary to County in accordance with the County Development Agreement as part of each Final Map which includes such areas to be dedicated. Such rights-of-way shall be dedicated or otherwise conveyed in the widths set forth in the VST Specific Plan. 85 20226291.1 24

Section 6.03.2. Free from Liens and Hazardous Materials. Any public improvements constructed by VST and conveyed to City, and any right-of-way or other real property conveyed to City shall be dedicated or otherwise conveyed (i) free and clear of any liens unacceptable to the City and (ii) except as otherwise agreed to by City, in a condition free of any hazardous materials. Nothing herein shall prevent City’s right to pursue a claim against third parties under applicable law.

ARTICLE 7. OTHER COMMITMENTS OF CITY AND VST
Section 7.01. Mutual Cooperation for Other Governmental Permits. City and VST, as appropriate, shall each be responsible to apply to other governmental or quasi-governmental agencies for necessary permits and approvals for development and use of the Property (e.g., agencies having jurisdiction over water supply; wastewater treatment, reuse and disposal; access to the Property; wetlands-related and other biological issues). City and VST each shall take any and all actions as may be necessary or appropriate to process successfully such permits and approvals, provided such permits and approvals are consistent with the VST Specific Plan and agreed by the City and VST to be reasonably necessary or desirable for the construction, maintenance or operation of the Project.

Section 7.02. T
iming of Development.

Section 7.02.1. Timing Requirements.
(a) VST shall comply with the terms and conditions of the Project Approvals and this Development Agreement. The Parties acknowledge that the rate at which phases of the Project develop depends upon numerous factors and market conditions that are not entirely within VST’s or the City’s control such as market demand, interest rates, absorption rates, completion schedules, availability of labor, and other factors. The Parties wish to avoid the result of Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (1984), where the failure of the parties therein to consider and expressly provide for the timing of development resulted in the court’s determination that a later-adopted initiative restricting the timing of development prevailed over the parties’ agreement. Accordingly, the Parties acknowledge that VST shall have the right to develop the Project at such time VST deems appropriate in the exercise of its subjective business judgment except as provided in this section below and the City shall not attempt to limit or restrict the timing of development of the Project except in accordance with the terms of this Development Agreement.
(b) VST shall complete the Backbone and Offsite Infrastructure for the Project and in the sequence depicted in Exhibit I, including the installation of those certain improvements required under either the VST Specific Plan or Final SEIR. Notwithstanding the foregoing, VST may proceed with the development of any portion of the Project, or make any financial commitment associated with any such development when, in VST’s sole and absolute discretion, VST determines that it is in VST’s best financial or other interest to do so. The foregoing sentence shall not, however, limit any obligation of VST under this Development Agreement with respect to any development activities that VST chooses to undertake hereunder. 86 20226291.1 25

(c) VST shall pursue buildout of the Project in conformance with the Specific Plan Phasing Plan. The Parties acknowledge that, except as expressly required by Section 1.03.1(a)(2), the actual timing of buildout will vary from year to year due to a variety of factors such as market demand, economic conditions, etc.

Section 7.03. Dedication of Park Lands. VST shall dedicate and develop parkland in excess of that ordinarily required by the City. VST shall provide at least 97.8 acres of public parks (the “Public Parks”) as part of the Project, or at a rate of at least 6 acres per 1,000 persons.

Developer shall construct two community parks, 39 pocket parks and miniparks, a Community Recreation Center, and a Regional Sports Park as part of the Public Parks described on page 5 of the Specific Plan. The Public Parks shall be developed in a manner consistent with the VST Specific Plan, and shall be reviewed and approved by the City Manager or Development Services Director. Notwithstanding the foregoing, City shall compensate VST for certain land dedications and in the amounts specified in the Specific Plan. City shall reimburse VST for the dedication of Park Land required as part of VST’s construction of certain community and neighborhood park facilities in accordance with the amounts specified in Table 12 of the Specific Plan.

Section 7.04. D
edication of Open Space. To meet the open space objectives of the UCP Update and VST Specific Plan, VST shall dedicate 15.5 acres of linear parks and trails in accordance with the Specific Plan as set forth on page 5.

Section 7.05. S chools. The Merced County Office of Education (“MCOE”) has acquired a 15-acre site for a K-8 public school designed to accommodate up to 950 students.

MCOE has reserved the school site for MCOE to determine an eligible school district to use the school site. The K-8 school site is located in Phase 1E of the VST Project and shall be conveyed to a school district in adequate time to accommodate an initial enrollment of at least 600 students. MCOE has also reserved a 5-acre site at the southwest corner of Center Street and Meyers Gate Road for a Merced Scholars Charter School that will be operated by MCOE as a university preparatory school for up to 300 students as further described on page 29 of the Specific Plan. No additional school facilities shall be required for the Project. Developers shall pay all school district school mitigation fees as mitigation for school impacts.

Section 7.06. A
ffordable Housing and Workforce Housing and Related Programs.

VST shall provide affordable housing for the Project in accordance with the Affordable Housing Plan attached hereto and incorporated herein as Exhibit K. VST shall also provide workforce housing and shall implement the local preference “UC Workers First” program, and owner occupancy restrictions as described in Exhibit K, to the extent allowed by law. For purposes of this Section 7.06, City finds the Affordable Housing Plan complies with and exceeds the City’s RHNA Housing Production Plan and requirements set forth in City Council Resolution No. 2023-83. In order to achieve the objectives of the Affordable Housing Plan in Exhibit K the City agrees to process density bonus applications in conformance with State Density Bonus Law and City Municipal Code Chapter 20.56. In particular, the parties agree one option to achieving the affordable housing plan described in Exhibit K would be the dedication of 10.7 acres of land for 300 R-4 units for Extremely Low, Very Low and Low Income households qualifies the 1,489- unit R-4 portion of the project for a 25 percent density bonus under Merced Municipal Code Section 20.56.030. This density bonus shall be assigned to the remaining 42.4-acre R-4 portion 87 20226291.1 26

of the development. This density bonus shall be in addition to project-specific density bonuses, up to an overall maximum of 35 percent for the R-4 development. Project-specific density bonsus are proposed for the Mixed Use Village Center, with 25 Very Low Income units proposed for a 50% density bonus, and 50% density bonus on the 10.7 acres of land dedicated for the 300 Extremely Low, Very Low and Low Income units. Another option, as described in Exhibit K, is to provide for on-site affordable housing and to pay in-lieu fees under the City’s Affordable Housing In Lieu Fee program pursuant to the City’s November 20, 2023 Regional Housing Needs Allocation Unit Production Policy. Developer reserves the right to use either alternative, or another alternative acceptable to City and Developer to meet its affordable housing obligations established by adopted City policies and regulations.

Section 7.07. E
nergy.

Section 7.07.1. Energy Conservation and Climate Action Plan. VST shall comply with the City’s Energy Conservation Goals and its Climate Action Plan by implementing energy conservation measures set forth in the Specific Plan that are significantly above City standards and norms by providing for solar PV energy generation for 100 percent of onsite electrical demand as described in Section 13 of the Development Plan and evaluated on page 2-25 and 3.8-19 of the Draft SEIR. The Project shall also include energy efficiency standards in excess of the current Building Code as set forth on page 3.1-11 of the Draft SEIR.

Section 7.07.2. S
ustainability Features. Developer shall provide sustainability features including: (i) housing that meets the 2020 net zero building and energy codes, (ii) implementing any future city-wide policy regarding zero carbon emissions, (iii) solar electric panels, (iv) integrated power outlets for electric vehicles and electric bicycles, and (v) no natural gas will be provided to residential neighborhoods, and (v) work-at- home options with high-speed internet connectivity as described in Section 13 of the Development Plan and pages 2-25 and 3.1-20 of the Draft SEIR.

Section 7.08. Wat
er.

Section 7.08.1. SGMA. VST shall comply with the California Water Code and the regulations imposed by the City before or after the Effective Date in its capacity as the Groundwater Sustainability Agency pursuant to the Sustainable Groundwater Management Act (“SGMA”). The VST project shall include water conservation features as described in Section 13.3 of the Specific Plan and on page 3.1-19 of the Draft SEIR to achieve a residential water consumption rate of 100 gallons per day per person or less.

Section 7.08.2. Wat
er System. VST shall install water system improvements
necessary to serve the Project as shown in Exhibit L. The City shall install the water well on Lot 8 (“Water Well”) in accordance with Section 7.08.03 as set forth on page 37 of the VST Specific Plan.

Section 7.08.3. Wel l Site Dedication. VST shall offer to dedicate to the City a well site for future municipal use in conformance with the Water Master Plan. Such well shall be on a 0.20-acre Lot 35 as shown on the VST Project large parcel subdivision map. 88 20226291.1 27

VST shall convey the well site to the City in Phase 1 with adequate time for the City to commence construction on the Water Well no later than January 1, 2025. Prior to conveyaance of the well site property to the City, City shall pay VST the amount of Thirty Thousand Dollars ($30,000) for VST’s costs of conveying to City the improved well site based on $140,000 per improved acre which amount was determined in the City PFFP.

Section 7.08.4. Reservation of Water Rights. Except as provided in Section 7.08.03, VST reserves all groundwater rights necessary to irrigate agricultural or open space land with ground or well water, to the extent that such reservation and action does not violate Applicable Law and so long as such water meets or exceeds all applicable water quality standards. VST shall have the option, but shall not be required, to connect to the City’s water system to irrigate agricultural/open space land with reclaimed water.

Section 7.08.5. R
eservation of Water Supply. In exchange for VST’s provision of the Water System Improvements set forth in this Section 7.08, City shall reserve sufficient water capacity and adequate surface water resources to support the buildout of the Project at the current projected water use level associated with the Specific Plan as set forth in the Final SEIR and Water Supply Assessment. In furtherance of this commitment, City shall reserve capacity for the Project equal to 1.25 mgd, plus peak period needs and any necessary fire flow for project land uses.

Section 7.09. S
torm Drain Facilities. Before recordation of the first Final Subdivision Map, parcel map, or issuance of abuilding permit for a use that does not require a map, VST shall cause to be provided storm drain facilities adequate to accommodate the storm water runoff from the area subject to the Final Subdivision Map or building permit, compliance with County’s Drainage Manual, and compliance with University Community Plan’s stormwater management and infrastructure policies.

Section 7.10. Fir
e Station and Police Substation. VST shall dedicate 0.71-acre Lot 8 of the large lot conveyance map for a Fire Station and a Police Substation located in Phase 1A and east of Campus Parkway on Virginia Smith Parkway as part of Phase 1. VST shall provide public utilities to the site, including road frontages and utility stubs. (Specific Plan, p. 37.) The City is responsible to construct all onsite facilities City shall reimburse VST the amount of One Hundred Thousand Dollars ($100,000) for the cost of the land and improvements in a one time payment due upon substantial completion, in accordance with the One Hundred and Forty Thousand Dollars ($140,000) per acre in PFFP Fire Facility Costs allocated to land and site improvements shown in Table 10 of the 2021 EPS City of Merced Public Facilities Financing Plan and Impact Fee Update.

Section 7.11. T
raffic and Circulation Improvements. VST shall construct or fund the traffic and circulation improvements as identified in the Final SEIR, the VST Specific Plan and Development Plan, subject to approval by the City Engineer unless such improvement is subject to another agency’s approval authority. City and VST acknowledge that these improvements are necessary to mitigate project impacts, improve access to and from the Project, relieve existing or 89 20226291.1 28

future traffic deficiencies, and bring such intersections into compliance with the City General Plan policies in advance of impacts associated with the Project.

Section 7.11.1. Campus Parkway Improvements. VST shall, at its own expense and without reimbursement from City (except as provided in the Specific Plan and Table 10 thereof) construct Segment 4, which is the onsite portion of Campus Parkway from the northern VST property line (Meyers Gate Road) to the southern VST property line (Cardella), as illustrated in Exhibit M attached hereto and incorporated herein by reference. City expressly concurs with and approves the roadway alignment, profile and design for the VST portion of Campus Parkway shown in Exhibit M. VST shall construct “Phase 1” of the onsite portion of Campus Parkwayon the VST property in conjunction with the development of Phase 1A of the Specific Plan as illustrated on Exhibit M, which shall include the full road and improvement section in Phase 1A, the three roundabouts (subject to County acquisition of right of way from UC and Hunt), and the median and No. 1 through lanes on Phase 1B. All other improvements to Campus Parkway, including the County’s obligation to acquire any necessary right-of-way for any improvements to be constructed by VST, and the County’s obligation to construct the remaining portions of Campus Parkway shall be governed by the County Development Agreement.

Section 7.11.2. S
atisfaction of Bellevue Road Fair Share Obligations. Under the terms of the City Transportation Improvement Agreement, UC Merced, on behalf of itself and the University Community properties, is to advance 83 percent of the costs of the expansion of Bellevue Road from two to four lanes. UC Merced is entitled to reimbursement for the 17 percent of the total costs in excess of the amounts to be advanced from property owners along Bellevue Road that later develop their properties, and to reimbursement of a portion of the 83 percent advanced on behalf of the University Community Properties if these properties subsequently are developed and annexed to the City. VST’s property is included in the definition of University Properties. The VST Traffic Study in Appendix F of the Specific Plan determined that VST’s share of the 26,400 additional traffic on Bellevue at buildout is 3,862 daily trips, or 14.6%. The traffic impact fee for VST includes this allocation, and City shall reimburse UC Merced for VST’s share of Bellevue Road from traffic fees collected from the VST project, in accordance with Table 10 of the Specific Plan.

The cost of widening Bellevue Road from two lanes to four lanes from G Street to Lake Road/Campus Parkway is estimated to be $11.14 million using the costs and methodology in the City of Merced 2022 Public Facilities Financing Plan and Impact Fee Study ($1,052.86 per lineal foot for two miles), VST’s fair share of widening Bellevue Road is therefore $1,626,542. The Specific Plan traffic fee includes an allocation of $1,626,542 to reimburse UC for advancing funds to the City for the improvement of Bellevue Road from two lanes to four lanes. The City concludes that adoption of the Specific Plan Traffic Fee satisfies the requirement for VST to pay its fair share of Bellevue Road, and, further, satisfies the City’s obligations to adopt a reimbursement mechanism for UC prior to annexation. The parties acknowledge that the above- mentioned costs are subject to inflation and the actual cost of construction. 90 20226291.1 29

Section 7.12. Bicycle and Multimodal Transportation Improvements. VST shall construct or fund the bicycle and multimodal transportation improvements as established in the Final SEIR and Development Plan as further described in Exhibit N attached hereto and incorporated herein. City and VST acknowledge that these improvements are necessary to mitigate project impacts, improve access to and from the Project, encourage multimodal transportation, relieve existing or future traffic deficiencies, and bring such intersections into compliance with the General Plan in advance of impacts associated with the Project.

Section 7.13. S
ewer. The Parties agree that City sewer treatment capacity and sewage collection capacity shall be made available to the Project both prior to and upon Annexation. In order to ensure adequate sewage treatment and sewage collection capacity for the Project, and to ensure that the Project’s use of such capacity does not limit the ability of City to serve properties that are already entitled to wastewater treatment and sewage collection capacity by virtue of their inclusion in the North Merced Sewer Assessment District and/or by virtue of an approved tentative subdivision map for the development, VST shall provide the following improvements set forth in the VST Specific Plan and SEIR:

Section 7.13.1. B
ellevue Trunk Line and Sewer Collection System Capacity.

The City has reserved capacity for UC Merced, and City shall allocate 750,000 gallons per day to VST that is currently reserved for UC Merced. VST shall acquire such capacity through payment of Sewer Facility Charges prior to issuance of building permits. The capacity reservation reflects all of the flows anticipated from the development of 2,800 dwelling units , 35.5 acres of commercial development, and construction of a 900-student elementary school in Phase 1, and twenty-five percent of the anticipated flows from development of 1,400 dwelling units and 3.6 acres Phase 2 using the sewer flow factors from Sewer Master Plan. Additional sewer allocations shall be made if necessary as provided in 7.13.2 herein.

Section 7.13.2. I
nterim Sewer System Improvements. City is undertaking
certain “interim” maintenance and capacity enhancing improvements, including modification to the Bellevue Ranch pump station and R Street force main, replacement of the 48" West Street sewer interceptor with a 60" sewer starting at V Street and West Ave, and construction of a new 48-inch parallel sewer and creek crossing starting at Bear Creek Court and ending at V Street and West Avenue and terminating at the City Wastewater Treatment Plant. These improvements have been determined to provide additional sewer system capacity of 34,600 equivalent dwelling units (EDU), including 9,000 EDUs for “Pre-Annexation Areas”, including VST. The City included these improvements in the City’s adopted 2023/24 Capital Improvement Program and they are expected to be completed by 2025. The City determined that these improvements will provide adequate sewer capacity for the Project, nd the committed projects in North Merced. Upon the start of Phase 1E of the project and prior to commencing construction of Phase 2 of the VST Project, VST shall evaluate the capacity of the sewer collection and construct, if the City has not constructed by that date, a 30" supplemental bypass sewer trunk line within the V Street right of way between 16th Street and 6th Street, as shown in Exhibit O (“Bypass Sewer Trunk Line”) attached hereto and incorporated herein in this Development Agreement. VST shall construct the Bypass Sewer Trunk Line no later than upon the commencement of Phase 2 Project. 91 20226291.1 30

The Project in-tract sewer system included in the VST Project tentative subdivision map shall be designed to provide gravity flow to Cardella and Lake Road, and eventual connection to the planned Cardella Road trunk line as shown in the VST Specific Plan Sewer Master Plan. Prior to construction of the extension of the Cardella Road Trunk line as provided in the Sewer Master Plan (by others), effluent from the Project shall be conveyed by force main from the Project site to the Bellevue Avenue Trunk Line.

Section 7.13.3. Reservation of Capacity. City shall reserve sewer collection system and treatment plant capacity in conformance with 7.13.1. Such sewer capacity shall be made available prior to recordation of each phased Final Map covering the respective Project sub-phase.

City shall also reserve adequate capacity for the remainder of Phase 2 of the VST Specific Plan subject only to an updated sewer study prepared concurrent with the Phase 2 tentative subdivision map demonstrating that adequate sewer capacity will be available for Phase 2 of the Project, and subject to the improvements specified in Section

7.13.2. Section 7.13.4. No Capacity Restrictions. The Parties acknowledge that the peak flow pattern of residential sewer flows is the constraing factor in the sewer collection system. The City agrees that there shall be no restrictions on the use of available sewer capacity for non-residential or mixed use commercial development in Phases 1 and 2 of the Project.

Section 7.14. M iscellaneous.

Section 7.14.1. Master HOA and Covenants, Conditions, and Restrictions (CC&Rs). Developer shall form a Master Homeowners Association (the Master HOA) for the purpose of design review, financing and operating the clubhouse, and as a governance entity to interface with the City. Special HOA subcommittees shall be formed for design review, parks maintenance and operation, and recreation programs at the community recreation center. The Master HOA shall own and operate the clubhouse (but not the adjacent City park) for the benefit of project residents. County agrees that the sole responsibility of the Master HOA will be for the maintenance and operation of the clubhouse; provided, however, that the Master HOA shall have the right but not the obligation to perform parks and landscaping maintenance in the event that the CFD is dissolved by the district voters, or if the district voters are dissatisfied with the maintenance of the facilities. City shall consult with the Master HOA each year regarding the adequacy of such maintenance and operation.

Prior to City approval of a Final Map or issuance of a building permit for a land use that does not require a final map, the CC&R disclosure statement shall be provided to the City for review and approval.

Section 7.14.2. Ownership and Maintenance of Public Improvements and Facilities. The City and Developer agree that there shall be no reliance on the HOA to 92 20226291.1 31

maintain public facilities, except where there is private Common Area that cannot be maintained by a Mello Roos District, Landscaping and Lighting Act Assessment District, or other mechanism. Notwithstanding the foregoing, unless otherwise mutually agreed, the City shall own and maintain, or cause to be maintained, the following public improvements:
(a) Potable water system and water tank within public properties or public easements;
(b) Sanitary sewer system within public properties or public easements;
(c) Recycled water system within public properties or public easements, if such system exists;
(d) Storm drain system, including continuous deflective separation (CDS) vaults or other BMP facilities, within public properties or public easements; (e) Public roadways;
(f) Public parks; and,
(g) Public access, landscape, and utility easements.

Section 7.14.3. Public Utilities Easements. All land subject to public utilities easements (PUEs); public water, sewer, or storm drain easements; and public access easements shall be open and accessible to the City at all times.

Section 7.14.4. D
esign Review of Major Surface Facilities. Design Review shall be completed for all major surface public facilities for which it is required before construction.

Section 7.14.5. D
esign and Construction Standards for Sewer and Water
Facilities. All Project Infrastructure and Facilities such as sewer, water and recycled water facilities shall conform to the City of Merced Design and Construction Standards in effect for the Project as they exist on the date of approval of the VTM. The submittal shall include all pertinent engineering analysis and design calculations. The plans shall be subject to the City Director of Public Works’ review and approval.

Section 7.14.6. E
stablishment of Community Educational Enhancement Fee.

Prior to the recordation of the first Parcel Map or first Final Map, City agrees to cooperate with County and VST, as and if necessary, to establish and adopt through master conditions, covenants and restrictions for all Specific Plan properties and levy a Community Educational Enhancement Fee on property sales and resales (including residential and commercial property) in the VST Plan Area equal to 0.375% of the sales price, or an equivalent fixed fee per unit (the “Community Educational Enhancement Fee”), subject to the City Council’s discretion. The Community Educational Enhancement Fee shall be payable to the Merced County Office of Education Foundation 93 20226291.1 32

for the provision of childhood education and enrichment, scholarships for Merced College, vocational certificate programs, employee training programs, and other activities that may not be eligible under the VST or CST scholarship programs, and shall provide funding for MCOE Foundation’s STEM program, MCOE Foundation’s Camp Green Meadows program, performing arts program, and funding for the MCOE “University” charter schools that are planned for the VST site.

ARTICLE 8. CONSIDERATION OF PERMITS AND APPROVALS
Section 8.01. In General.

Section 8.01.1. Review and Action Generally. Upon VST’s submission of any complete application for an Approval together with any fees permitted under Article 5 and required by the City in accordance with Applicable Law, City shall use its best efforts to commence and complete promptly and diligently all steps necessary to act on the application. VST promptly shall provide to City all information reasonably requested by City for its consideration of any such application.

Section 8.01.2. A
pplicable Law. Except as otherwise specifically provided in this Article 8, all applications for Approvals submitted by VST shall be considered by City in accordance with Applicable Law. To the extent an approval would amend Applicable Law as set forth in Section 4.01.1, the aspect of Applicable Law to be amended by the approval shall not apply to the City’s consideration of the application.

Section 8.02. G eneral Plan Amendments. The parties anticipate that VST may request amendments to the General Plan to respond to changing circumstances and conditions. In accordance with Policy 1.4b of the Urban Boundaries Element of the General Plan, City shall revise all of its various planning documents to accommodate the incorporation of the amended University Community into the City of Merced. These include not only the General Plan, but also plans for wastewater treatment, water, storm drainage, parks, fire protection, and other services.

Section 8.03. C
EQA Compliance. When conducting an environmental review of any application for an Approval, City shall review the MMRP to determine if any mitigation measure contained in the MMRP as to the portion of the Property subject to this Development Agreement should be incorporated into the design of, or added as a condition of approval to the tentative map.

Section 8.04. L
ife of Approvals. Any Approval issued by City, including vesting tentative subdivision or parcel maps as defined in Section 8.05 below, shall continue in effect without expiration until the later of: (i) the expiration or earlier termination of this Development Agreement or (ii) the date upon which such Approval would otherwise expire under the laws of the State of California.

Section 8.05. V esting Maps. The ordinances, standards and policies applicable to any vesting tentative map, vesting parcel map, vesting subdivision map or any other type of vesting map (“Vesting Map”) under California Government Code section 66474.2, and the ordinances, policies and standards vested under any Vesting Map pursuant to California Government Code 94 20226291.1 33

Section 66498.1(b) shall be those established as Applicable Law under this Agreement. If this Development Agreement terminates before the expiration of any Vesting Map or the vested rights provided thereby, such termination of this Development Agreement shall not affect VST’s right to proceed with development under such Vesting Map in accordance with the ordinances, policies and standards so vested under the Vesting Map. Notwithstanding the foregoing, no Vesting Map shall extend Applicable Law beyond the Term of this Development Agreement (and the rules, regulations and official policies of the County applicable to that portion of the Property covered by such Vesting Map shall become those in effect as of the expiration of such term) except as otherwise agreed by City and VST; provided, however, that City and VST may agree to an extension of the Term of this Development Agreement with respect to the area covered by any such Vesting Map.

Section 8.06. Need for Flexibility. The provisions of this Development Agreement require a close degree of cooperation between the City and VST. Implementation of the Project may require minor modifications of the details of the Development Plan and affect the performance of the Parties to this Development Agreement. The anticipated refinements of the Project and the development of the Property may require that appropriate clarifications and refinements are made to this Development Agreement and the Project Approvals with respect to the details of the performance of the City and the Developer. The City Manager, or designee, may make refinements to the Specific Plan and development plan in conformance with the amendment provisions contained in the Specific Plan.

ARTICLE 9. AMENDMENTS
Section 9.01. Amendments of Agreement.

Section 9.01.1. General. This Development Agreement may be amended from time to time only upon the mutual written consent of City and Developer and in compliance with, as applicable, Section 20.86.140 of the Municipal Code; provided, however, that in connection with the transfer of any portion of Developer’s Rights and/or Obligations under this Development Agreement to another person, entity, or organization pursuant to the provisions of Article 11 below, Developer, such transferee, and City may agree that the signature of such transferee may be required to amend this Development Agreement insofar as such amendment would materially alter the Rights and/or Obligations of such transferee hereunder. In no event shall the signature or consent of any “Non-Assuming Transferee” (as defined in Section 11.03 below) be required to amend this Agreement.

Section 9.01.2. F
uture Approvals Do Not Require Amendments to Agreement.

Except as the Parties may otherwise agree, no amendment of this Development Agreement shall be required in connection with the issuance of any Approval or an amendment to the MMRP. Any Approval issued after the Effective Date as to a portion of the Property shall be incorporated automatically into this Development Agreement and vested hereby. City shall not, however, amend or issue any Approval unless VST requests such an amendment or issuance from City unless otherwise permitted by this Development Agreement.
95 20226291.1 34

ARTICLE 10. MITIGATION MONITORING AND REPORTING PROGRAM EVALUATION; DEVELOPMENT AGREEMENT REVIEW
Section 10.01. Mitigation Monitoring and Reporting Program Evaluation.

Section 10.01.1. In General. During its Annual Review, City shall evaluate (the “MMRP Evaluation”) whether the mitigation measures adopted by City in connection with its approval of the Project Approvals are being implemented as set forth in the MMRP.

Section 10.01.2. M MRP Implementation. As set forth in the MMRP, City shall consider in connection with any application for an Approval the extent to which mitigation measures described in the MMRP should be incorporated into the design of the project under consideration or set forth in conditions to the City’s approval of the application. During an MMRP Evaluation, the City shall evaluate its overall success over the prior year in implementing such mitigation measures, as set forth above.

Section 10.01.3. E
nforcement. VST shall be responsible only for those
mitigation measures the City requires to be incorporated into the design of the Project, including those that are attached as conditions to any Approval. Failure to comply with any such design requirement or any condition of approval shall be enforced in any manner authorized by Applicable Law.

Section 10.02. D
evelopment Agreement Review.

Section 10.02.1. In General. The City Manager, Development Services Director or a designeewill be responsible for conducting the Development Agreement Review.

The Development Agreement Review shall be conducted concurrently with MMRP Evaluation, pursuant to Article 9 above and this Section 10.02. In connection with the Development Agreement Review, VST shall provide information as reasonably requested by City.

Section 10.02.2. D
irector’s Findings of Compliance. If the Director of
Development Services finds good faith compliance by VST with this Agreement, the City Manager shall issue a “Finding of Development Agreement Compliance,” which shall be in recordable form and may be recorded by VST or any “Mortgagee” (as defined in Section 13.01 below). Issuance of a Finding of Development Agreement Compliance shall finally determine the Development Agreement Review for the applicable period.

Section 10.02.3. F inding of Development Agreement Noncompliance. If the City Manager finds that VST and/or a Transferee has not complied in good faith with this Agreement, the City Manager shall proceed as specified in Section 20.86.130(E) of the Municipal Code.
96 20226291.1 35

ARTICLE 11. DEFAULT, REMEDIES, TERMINATION OF DEVELOPMENT

AGREEMENT
Section 11.01. Defaults.

Section 11.01.1. Notice and Cure. Any failure by a Party to perform any term or provision of this Agreement, which failure continues uncured for 60 days following written notice of such failure from the other Party (unless such period is extended by written mutual consent), shall constitute a default under this Agreement. Any such notice shall specify the nature of the alleged failure and, where appropriate, how such alleged failure may be cured. If the nature of the alleged failure is such that it cannot reasonably be cured within 60 days, then commencement of the cure within that time, and diligent prosecution to completion of the cure thereafter, shall be timely. If the alleged failure is cured, then no default shall exist and the noticing Party shall take no further action and acknowledge the cure in writing to the other Party. If the alleged failure is not cured, then a default shall exist under this Development Agreement and the noticing Party may exercise any of the remedies available under Sections 11.02 through 11.04 below.

No failure or delay in giving notice of default shall constitute a waiver of default; provided, however, that the provision of notice and opportunity to cure is a prerequisite to the enforcement or correction of any default.

Section 11.01.2. Actions during Cure Period. During any cure period specified under Section 11.01.1 and before delivery of a notice of failure or default, the Party charged shall not be considered in default of this Development Agreement. If there is a dispute as to the existence of a default, the Parties shall otherwise continue to perform their obligations hereunder, to the maximum extent practicable in light of the disputed matter, pending its resolution or formal termination of the Development Agreement.

City shall continue to process in good faith applications for Approvals during any cure period, but need not approve any such application if it relates to a development project as to which there is an alleged default hereunder.

Section 11.02. Remedies of Non-Defaulting Party.

Section 11.02.1. In General. If any Party is in default under the terms of this Agreement, the non-defaulting Party may elect, in its sole and absolute discretion, to pursue any of the following courses of action: (i) waive such default; (ii) in City’s case, pursue administrative remedies as provided in Section 11.02.3 below, (iii) pursue judicial remedies as provided for in Section 11.02.4 below; and / or (iii) terminate this Development Agreement as and to the extent permitted by Section 11.03.4, below and consistently with Section 20.86of the Municipal Code. In no event shall City modify this Development Agreement as a result of a default by a defaulting Party except in accordance with the provisions of Section 9.01 above.

Section 11.02.2. S
everability of Default. City acknowledges that the
development of the Project may be carried out by more than one person, entity or organization under this Development Agreement (e.g., portions of VST’s interest in the 97 20226291.1 36

Property and this Development Agreement may be transferred to another person, entity or organization, a “Transferee” under Article 13 below). Accordingly, (i) if City determines to terminate or exercise any other remedy under this Development Agreement due to a default by VST or any Transferee (hereinafter “Defaulting Developer”), such termination or other remedy shall apply only with respect to the Rights and Obligations of such Defaulting Developer, (ii) City shall, to the extent possible, refrain from seeking any termination of this Development Agreement or other remedy if such remedy would affect materially the ability of a non-defaulting Developer and / or a Transferee (hereinafter “Non-Defaulting Developer”) to realize the Rights provided hereunder, and (iii) any termination of this Development Agreement as to any Defaulting Developer shall be deemed to terminate only those Rights and Obligations arising hereunder between City and such Defaulting Developer. The Parties acknowledge and agree that, in accordance with Article 13 below, more than one Transferee may be responsible for certain actions required or forbidden by this Agreement, and that more than one Transferee therefore may be in default with respect thereto. The Parties further acknowledge and agree that, notwithstanding the provisions of (ii) in this Section above, in certain instances it may not be possible for City to exercise remedies against the Defaulting Developer of one portion of the Project without affecting in some way a Non- Defaulting Developer of the same or of some other portion of the Project.

Section 11.02.3. Administrative Remedies. Except as otherwise specifically stated in this Development Agreement, City may exercise any and all administrative remedies to the extent necessary or appropriate to secure compliance with this Agreement. Such administrative remedies may include, among others, withholding building permits, certificates of occupancy or other Approvals relating to that portion of the Project in default of this Agreement.

Section 11.02.4. J
udicial Remedies. Except as otherwise specifically stated in this Agreement, either Party may, in addition to any other rights or remedies, institute legal action to cure, correct, or remedy any default, enforce any covenant or agreement herein, enjoin any threatened or attempted violation hereof, enforce by specific performance the Obligations and Rights of the Parties hereto or obtain any other remedy consistent with this Agreement; provided, however, that in no event shall any person be entitled hereunder to monetary damages for any cause, including breach of contract by a Party to this Agreement provided, however, that City may enforce payment obligations under Applicable Law, including this Agreement. Nothing in this section shall be deemed to limit either Party’s rights under the Government Claims Act, Government Code Section 810, et seq. For purposes of instituting a legal action under this Agreement, any City Council determination under this Development Agreement shall be deemed final agency action unless expressly stated otherwise.

Section 11.03. T
ermination Due to Default.

Section 11.03.1. In General. Either Party may terminate this Development Agreement pursuant to Section 11.04.2 below in the event of a default by the other Party, provided: (i) such default is prejudicial to the interests of the non-defaulting Party and is neither minor nor technical and (ii) in the case of any termination by City, City first shall 98 20226291.1 37

have exercised any and all administrative or other remedies short of filing suit available to secure VST’s compliance with this Agreement. Notwithstanding (ii) of this Section above, City shall not be required, as a prerequisite to initiating the termination of this Agreement, to exercise its administrative and other non-judicial remedies for more than 180 days or, if the Parties are making reasonable progress towards resolution of the matter claimed to be a default hereunder, such longer period to which the Parties may agree. Termination of this Development Agreement by VST or a Transferee as to any portion or portions of the Property shall not affect the Rights or Obligations of VST or any other Transferee as to any other portion or portions of the Property.

Section 11.03.2. Procedures for Termination. Before any proposed termination of this Development Agreement pursuant to this Section 11.04, and following the 180- day period specified in Section 11.04.1 above to the extent applicable, a non-defaulting Party intending to seek termination of this Development Agreement shall deliver to the defaulting Party (or Parties) a written “Preliminary Notice of Intent to Terminate” this Agreement, and all Parties shall meet and confer in good faith effort to agree upon an alternative to termination that will afford the non-defaulting Party the benefit of its bargain in this Agreement. If those discussions are not successful in resolving the dispute, the non-defaulting Party desiring to terminate this Development Agreement shall deliver to the defaulting Party a written “Final Notice of Intent to Terminate” this Agreement.

Section 11.03.3. N
otice of Intent. Within 60 days after the City delivers a Final Notice of Intent to Terminate to a defaulting Party, the City Council shall review the matter as set forth in California Government Code Sections 65865, 65867, and 65868.

Termination shall be effective 30 days after such City Council review, unless the default is sooner resolved to the mutual satisfaction of the Parties.

Section 11.03.4. T
ermination. Within 60 days after VST delivers a Final Notice of Intent to Terminate to City, the City shall consider whether City should take any further curative action. Termination shall be effective 30 days following such Board of Supervisors consideration (or 90 days following delivery by VST of a Final Notice of Intent to Terminate if the Board of Supervisors fails to complete its consideration by that date), unless the default is sooner resolved to the mutual satisfaction of the Parties.

ARTICLE 12. INTENTIONALLY OMITTED
ARTICLE 13. ASSIGNMENT, TRANSFER AND NOTICE
Section 13.01. Assignment of Interests, Rights and Obligations. VST may transfer or assign (“Transfer”) all or any portion of its Rights and Obligations under this Development Agreement as to any portion of the Property (the “Transferred Property”) to any person acquiring an interest in such Transferred Property, including, without limitation, purchasers or ground lessees of lots, parcels or facilities on such portion of the Property (a “Transferee”). Any such Transfer shall relieve the transferring party (a “Transferor”) of any and all Rights and Obligations under this Development Agreement insofar as they pertain to the Transferred Property, as provided in this Article 13.
99 20226291.1 38

Section 13.02. Transfers In General.

Section 13.02.1. In General. In connection with any Transfer of all or any portion of the Project or the Property, other than a transfer or assignment to a “Non- Assuming Transferee” as described in Section 13.03 below, or a “Mortgagee” as defined in Section 14.01 below, the Transferor and the Transferee may enter into a written agreement regarding their respective Rights and Obligations in and under this Development Agreement (a “Transfer Agreement”). Any such Transfer Agreement may contain provisions: (i) releasing the Transferor from any Rights and Obligations under this Development Agreement that relate to the Transferred Property, provided the Transferee expressly assumes all such Rights and Obligations, (ii) transferring to the Transferee rights to improve the portion of the Property transferred and any other Rights and Obligations of the Transferor arising under this Agreement, and (iii) addressing any other matter deemed necessary or appropriate in connection with the Transfer.

Section 13.02.2. C
ity Review of Release Provisions. A Transferor shall have the right, but not the obligation, to seek City’s consent to those provisions of any Transfer Agreement purporting to release such Transferor from any Rights and Obligations arising under this Development Agreement (the “Release Provisions”). If a Transferor fails to seek City’s consent or City does not consent to any such Release Provisions, then such Transferor may nevertheless transfer to the Transferee any and all Rights and Obligations of such Transferor arising under this Development Agreement (as described in Sections 13.02.1(i) and (ii) above) but, with respect to City, shall not be released from those Rights and Obligations described in the Release Provisions to which City has not consented. If City consents to any Release Provisions, then: (i) the Transferor shall be free from any and all Rights and Obligations accruing on or after the date of any Transfer with respect to those Rights and Obligations described in such Release Provisions and (ii) no default hereunder by Transferee with respect to any Rights and Obligations from which the Transferor has been released shall be attributed to the Transferor, nor may such Transferor’s rights hereunder be canceled or diminished in any way by any such default.

City may consent, or conditionally consent, to all, none, or some of the Release Provisions.

Section 13.02.3. Cit
y Consent to Release. City shall review and consider
promptly, reasonably and in good faith any request by a Transferor for City’s consent to any Release Provisions. City’s consent to any such Release Provisions may be withheld only if: (i) reliable evidence supports a conclusion that the Transferee will be unable to perform the Rights and Obligations proposed to be assumed by the Transferee pursuant to the Transfer Agreement, (ii) the Rights and Obligations are not reasonably allocable among particular portions of the Project and Property, such as the Transferred Property, (iii) the Transferor or Transferee fails to provide acceptable security, as and if reasonably requested by City, to ensure the performance of the Rights and Obligations proposed to be assumed by the Transferee pursuant to the Transfer Agreement, or (iv) the Transferor or Transferee fail to provide information reasonably requested by the City to assist it in making the determinations described in this paragraph. In no event shall City unreasonably withhold consent to any Release Provisions. City shall respond within 30 days to any request by a Transferor for consent to any Release Provisions. 100

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Section 13.02.4. City Refusal to Release. Subject to the provisions of subsection (b) above, because and to the extent certain obligations arising under this Development Agreement may not reasonably be allocable among portions of the Project, City may refuse to release the Transferor of one portion of the Project from such Rights and Obligations under this Development Agreement even though the Rights and Obligations are being or have been assumed by the Transferee of some other portion of the Project.

Section 13.03. Non-Assuming Transferees. Except as otherwise required by a Transferor, the Obligations of a Transferor shall not apply to any purchaser of any property that has been established as a single legal parcel for nonresidential use that does not require any further on-site or off-site infrastructure. The Transferee in such a transaction and the successors and assigns of such a Transferee (“Non-Assuming Transferees”) shall be deemed to have no Obligations under this Agreement, but shall continue to benefit from the Rights provided by this Development Agreement for the duration of its term. Nothing in this section shall exempt any Transferred Property transferred to a Non
-A
ssuming Transferee from payment of applicable fees,
taxes and assessments or compliance with applicable conditions of an Approval or with Applicable Law.

ARTICLE 14. MORTGAGEE PROTECTION
Section 14.01. In General. The provisions of this Development Agreement shall not limit VST’s right to encumber the Property or any portion thereof, or any improvement thereon by any mortgage, deed of trust or other device securing financing with respect to such portion.

City acknowledges that lenders providing such financing and other “Mortgagees” (defined below) may require certain interpretations and modifications of this Development Agreement and agrees upon request, from time to time, to meet with VST and representatives of such lenders to negotiate in good faith any such request for an interpretation or modification. City shall not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modification is consistent with the intent and purposes of this Agreement. Any person holding a mortgage, deed of trust or other security instrument on all or any portion of the Property made in good faith and for value (each, a “Mortgagee”), shall be entitled to the rights and privileges of this Article 14.

Section 14.02. I
mpairment of Mortgage or Deed of Trust. Except as otherwise specifically stated in the terms of any security instrument held by a Mortgagee, no default under this Development Agreement shall defeat, render invalid, diminish, or impair the lien of any mortgage or deed of trust on the Property made, or other interest in the Property acquired, by any Mortgagee in good faith and for value.

Section 14.03. N
otice of Default to Mortgagee. If a Mortgagee has submitted a written request to City as specified herein for notice, City shall use its best efforts to provide to such Mortgagee written notification of any failure or default by VST in the performance of VST’s obligations under this Agreement, which notification shall be provided to such Mortgagee when such notification is delivered to VST.
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Section 14.04. Right of Mortgagee to Cure. Any Mortgagee shall have the right, but not the obligation, to cure any failure or default by VST during the cure period allowed VST under this Agreement, plus an additional 90 days if, to cure such failure or default, the Mortgagee must obtain possession of the property as by seeking appointment of a receiver or other legal process.

Any Mortgagee that undertakes to cure any such failure or default shall provide written notice to City of that fact; provided that no initiation of any such efforts by a Mortgagee shall obligate such Mortgagee to complete or succeed in any such curative efforts.

Section 14.05. L
iability for Past Defaults or Obligations. Subject to the foregoing, any Mortgagee, including the successful bidder at a foreclosure sale, who comes into possession of the Project or the Property or any part thereof, shall take such property subject to the Rights and Obligations of this Development Agreement and in no event shall any such property be released from any Obligations. Nothing in this Article 14 shall prevent City from exercising any remedy it may have for a default under this Agreement; provided, however, that in no event shall such Mortgagee be liable personally for any defaults or monetary obligations of VST arising before such Mortgagee acquires or possesses such property.

ARTICLE 15. GENERAL PROVISIONS
Section 15.01. Incorporation of Recitals and Exhibits. The Recitals set forth above and the Exhibits A - ____ attached hereto are incorporated herein as though set forth in full.

Section 15.02. P roject is a Private Undertaking. The development VST proposes to undertake is a private development, and VST shall exercise full dominion and control over the Project subject only to VST’s limitations and Obligations contained in this Agreement.

Section 15.03. C ooperation in the Event of Legal Challenge.

Section 15.03.1. In General. If any person not party to this Development Agreement institutes any administrative, legal or equitable action or other proceeding challenging the validity of any provision of this Agreement, any Approval or the sufficiency of any review of this Development Agreement or any Approval under CEQA (each a “Third-Party Challenge”), the Parties promptly shall meet and confer as to the most appropriate response to such Third-Party Challenge; provided, however, that any such response shall be consistent with Sections 15.03.2 and 15.03.3 below.

Section 15.03.2. T
ender to and Conduct of Defense by VST. VST shall
indemnify City against any and all fees and costs arising out of the defense of such Third- Party Challenge and VST shall cooperate with City in the defense and / or settlement of such Third-Party Challenge and may take any and all actions it deems necessary and appropriate in its sole discretion in connection therewith; provided, however, that VST shall seek and secure City’s consent to any settlement of such Third-Party Challenge, which consent shall not unreasonably be withheld or delayed.

Section 15.03.3. D efense by City. If VST should fail to accept City’s tender of defense as set forth in Section 15.03.2, City shall defend such Third-Party Challenge and control the defense and/or settlement of such Third-Party Challenge as City decides (in its sole discretion), and City may take any and all actions it deems necessary and 102

20226291.1 41

appropriate (in its sole discretion) in connection therewith; provided, however, that City shall seek and secure VST’s consent to any settlement of such Third-Party Challenge, which consent shall not unreasonably be withheld or delayed. VST shall indemnify City against any and all fees and costs arising out of the City’s defense of such Third-Party Challenge. Notwithstanding the foregoing, if VST determines for any reason that it no longer intends to develop the Project, then it may deliver notice of such determination to City and shall not be liable for any defense costs incurred by City more than 90 days following the delivery of such notice.

Section 15.04. Defense and Indemnity. VST shall defend and indemnify City from and against any and all damages, claims, costs and liabilities arising out of the personal injury or death of any person, or damage to the property of any person, to the extent such damages, claims, costs or liabilities result from the construction of the Project by VST or by VST’s contractors, subcontractors, agents or employees, except as caused by the negligence or willful misconduct of City, its officers, employees, contractors, consultants or agents. Nothing in this Section 15.04 shall be construed to mean that VST shall defend or indemnify City from or against any damages, claims, costs or liabilities arising from, or alleged to arise from, activities associated with the maintenance or repair by City or any other public agency of improvements that have been offered for dedication and accepted by City or such other public agency. City and VST may from time to time enter into subdivision improvement agreements, as authorized by the Subdivision Map Act, which agreements may include defense and indemnity provisions different from those contained in this Section 15.04. If any conflict appears between such provisions in any such subdivision improvement agreement and the provisions set forth above, the provisions of such subdivision improvement agreement shall prevail.

Section 15.05. G
overning Law; Attorneys’ Fees. This Development Agreement shall be construed and enforced in accordance with the laws of the State of California. Venue for any dispute arising under this Agreement lies in the County of Merced and VST hereby consents to personal jurisdiction there for that purpose. The Parties will cooperate to facilitate venue for any Third-Party Challenge set forth in Section 15.03 above in Merced County. The terms and provisions of this Section 15.05 shall survive any termination of this Agreement.

Section 15.06. F
orce Majeure. Performance by any Party of its Obligations hereunder shall be excused during any period of “Permitted Delay” as hereinafter defined. For purposes hereof, Permitted Delay shall include delay beyond the reasonable control of the Party claiming the delay (and despite the good faith efforts of such Party) including, but not limited to: (i) acts of God, (ii) pandemics, civil commotion and acts of terrorism, (iii) riots, (iv) strikes, picketing or other labor disputes, (v) shortages of materials or supplies, (vi) damage to work in progress by reason of fire, floods, earthquake or other casualties, (vii) failure, delay or inability of the other Parties to act, (viii) as to VST only, the failure, delay or inability of City to provide adequate levels of public services, facilities or infrastructure to the Property, (ix) as to City only, with respect to completion of the Annual Review or processing applications for Approvals, the failure, delay or inability of VST to provide adequate information or substantiation as reasonably required to complete the Annual Review or process applications for Approvals; (x) delay caused by restrictions imposed or mandated by governmental entities other than the City; (xi) enactment of conflicting state or federal laws or regulations, (xii) judicial decisions or similar legal incapacity to perform, and (xiii) litigation brought by a third party attacking the validity of this 103

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Agreement. Any Party claiming a Permitted Delay shall notify the other Party (or Parties) in writing of such delay within 30 days after the commencement of the delay, which notice (“Permitted Delay Notice”) shall include the estimated length of the Permitted Delay. A Permitted Delay shall be deemed to occur for the time set forth in the Permitted Delay Notice unless a Party receiving the Permitted Delay Notice objects in writing within 10 days after receiving the Permitted Delay Notice. Upon such an objection, the Parties shall meet and confer within 30 days after the date of the objection in a good faith effort to resolve their disagreement as to the existence and length of the Permitted Delay. If no mutually acceptable solution can be reached, any Party may take action as may be permitted under Article 12 above.

Section 15.07. Waiver.

Section 15.07.1. Legal Rights. VST acknowledges and agrees that the terms and provisions of this Development Agreement specifically permit City in some instances to impose requirements upon the Project that City would not otherwise be able to impose due to a lack of nexus, rough proportionality or reasonable relationship between the Project and such requirement or other reasons. To the extent any such requirement is imposed by City upon the Project consistently with the terms and provisions of this Agreement, VST waives any right to challenge judicially the imposition of such requirement by City. Except as otherwise provided in this Section 15.07.1, City shall comply with Applicable Law.

Section 15.07.2. O
ther Rights. While Section 15.07.1 prohibits VST from
challenging judicially certain City requirements imposed consistently with this Agreement, nothing in this Development Agreement shall be deemed to abrogate or limit, nor be deemed to be a waiver by VST of, any right of VST (whether arising under the United States Constitution, the California Constitution or otherwise) to request City to refrain from imposing upon VST, the Project or the Property any requirement that this Development Agreement permits City so to impose or otherwise petition City with respect to any matter related to the Project or the Property.

Section 15.08. N
otices. Any notice or communication required hereunder between the Parties must be in writing, and may be given either personally, by facsimile (with original forwarded promptly by regular U.S. Mail) or by Federal Express or other similar courier promising overnight delivery. If personally delivered, a notice or communication shall be deemed to be given and received when delivered to the Party to whom addressed. If given by facsimile transmission, a notice or communication shall be deemed to be given and received upon receipt of the entire document by the receiving Party’s facsimile machine. Notices transmitted by facsimile after 5:00 p.m. on a business day or on a Saturday, Sunday or holiday shall be deemed to have been given and received on the next business day. If given by Federal Express or similar courier, a notice or communication shall be deemed to be given and received when delivered as shown on a receipt issued by the courier. Such notices or communications shall be given to the Parties at their addresses set forth below:
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If to City, to: ___________________
___________________
___________________
___________________
With a courtesy copy to: ___________________
___________________
___________________
___________________
If to VST, to: ___________________
___________________
___________________
___________________
With a courtesy copy to: ___________________
___________________
___________________
___________________
Any Party may at any time, change its address or facsimile number for notice by giving 10 days’ written notice to the others.

Section 15.09. No Joint Venture or Partnership. Nothing in this Development Agreement or in any document executed in connection with it shall be construed as creating a joint venture, partnership or any agency relationship between City and VST. City shall not be responsible for public improvements unless and until they are accepted by City in the manner required by law.

Section 15.10. S
everability. If any provision of this Development Agreement is held invalid, void or unenforceable but the remainder of this Development Agreement can be enforced without failure of material consideration to any Party, then this Development Agreement shall not be affected and shall remain in full force and effect, unless amended by mutual consent of the Parties.

Section 15.11. E
stoppel Certificate. Any Party and any Mortgagee may, at any time, and from time to time, deliver written notice to the other Party or Parties requesting such Party or Parties to certify in writing that, to the knowledge of the certifying Party: (i) this Development Agreement is in full force and effect and a binding obligation of the Parties, (ii) this Development Agreement has not been amended or modified either orally or in writing, and if so amended, identifying the amendments, and (iii) as of the date of the last Annual Review, the requesting Party (or any Party specified by a Mortgagee) is not in default in the performance of its obligations under this Agreement, or if in default, to describe therein the nature and amount of any such defaults. A Party receiving a request hereunder shall execute and return such certificate or give a written, detailed response explaining why it will not do so within 30 days of receipt of a request. Each Party acknowledges that such a certificate may be relied upon by third parties acting in good faith. A certificate provided by City establishing the status of this Development 105

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Agreement shall be in recordable form and may be recorded at the expense of the recording Party.

Section 15.12. Further Assurances. Each Party shall execute and deliver to the other Party or Parties all such other further instruments and documents and take all such further actions as may be reasonably necessary to carry out this Development Agreement and the Approvals and to provide and secure to the other Party or Parties the full and complete enjoyment of their Rights hereunder.

Section 15.13. C
onstruction.

Section 15.13.1. All Parties have been represented by counsel in the preparation of this Development Agreement and no presumption or rule that ambiguity shall be construed against a drafting party shall apply to its interpretation or enforcement.

Captions on sections and subsections are provided for convenience only and shall not be deemed to limit, amend or affect the meaning of the provision to which they pertain. If any conflict appears between this Development Agreement and the rules, regulations or official policies of City, the provisions of this Development Agreement shall prevail and be deemed to have amended any such conflicting rules, regulation or official policy as of the Effective Date.

Section 15.13.2. The Parties intend this Agreement to be consistent with the requirements of Chapter 20.86 of the Municipal Code and it shall be construed consistently with that intent. Should any conflict arise between this Agreement and that Chapter 20.86 as it exists on the Effective Date, that Chapter 20.86 shall control.

Section 15.14. Other Miscellaneous Terms. In construing this Agreement, the singular includes the plural; the masculine gender includes the feminine and the neuter; “shall” is mandatory; “may” is permissive.

Section 15.15. C
ounterpart Execution. This Development Agreement may be executed in any number of counterparts and shall be deemed duly executed when each of the Parties has executed such a counterpart.

Section 15.16. T
ime. Time is of the essence of each and every provision of this Agreement.

Section 15.17. Go od Faith/Fair Dealing. The Parties agree that a covenant of good faith and fair dealing shall apply to all actions of the Parties. As used herein, this covenant shall mean that the Parties shall act reasonably, and no Party shall do anything which shall have the effect of destroying or injuring the rights of any other Party to receive the benefit of its bargain in this Agreement. Nothing in this Section 15.17 shall detract from the principle of Section 12.02.4 that neither Party shall be entitled to damages for breach of this Agreement. 106

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IN WITNESS WHEREOF , the Parties have executed this Development Agreement as of the Execution Date above.

CITY:

CITY OF MERCED, a municipal corporation
By:
_______________, Mayor
APPROVED AS TO FORM:

By:
_______________, City Attorney
VST:
[VST signature block]

107

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EXHIBITS [to be updated]
A Property Exhibit
B Legal Description
C County/City Memorandum of Understanding
D City PFFP Impact Fees Applicable to the Project
E Specific Plan Impact Fees Applicable to the Project
F Timing of Payment of Impact Fees; Adjustments
G Project Backbone and Offsite Infrastructure
H Phasing Plan
I Public Infrastructure by Phase
J Campus Parkway Connection Right of Way and Improvements K Affordable Housing Plan
L Water System Master Plan
M Onsite Campus Parkway to be Constructed by VST
N Bicycle and Multimodal Transportation Improvements
O V Street Bypass Sewer Trunk Line
108
Exhibit A
Property
Attachment D
DA Exhibits
109
110
111
112
113
114
Exhibit B

PROPERTY DESCRIPTION

That portion of Sections 2 and 3, Township 7 South, Range 14 East, Mount Diablo Base and Meridian, in the County of Merced, State of California, described as follows:

Beginning at a point on the South line of said Section 3 which lies S. 89 deg. 54’ 21” E. 50.02 feet from the Southwest corner of said Section 3, said point being at the Southeast corner of that parcel granted to Merced County by Deed recorded in Volume 2288 of Official Records of Merced County, at Page 783; thence N. 01 deg. 45’ 25” E. 2620.39 feet, along the East line of said parcel granted to Merced County, being parallel with the West line of said Section 3; thence S. 89 deg. 09’ 04” E. 4984.81 feet; thence N. 00 deg. 50’ 56” E. 129.31 feet; thence S. 89 deg. 56’ 10” E. 1764.31 feet; thence N. 61 deg. 18’ 48” E. 206.92 feet; thence S. 89 deg. 09’ 04” E. 3593.12 feet to the East line of said Section 2; thence S. 01 deg. 23’ 48” W. 2903.17 feet, along said East line, to the Southeast corner of said Section 2; thence N. 88 deg. 06’ 02” W. 5277.95 feet, along the South line of said Section 2 to the Southwest corner of said Section 2; thence N. 89 deg. 54’ 21” W. 5259.27 feet, along the South line of said Section 3, to the point of beginning.

Also being shown as “Adjusted Parcel 2” by Certificate of Compliance No. 16009 for Property Line Adjustment No. 16014 recorded October 19, 2016 as Series No. 2016035817 of Official Records, Merced County.

Assessor’s Parcel No.: 060-010-004-000; 060-020-048-000

115
Exhibit C
City Public Facility Financing Plan Fee
Applicable to Project
116
117
Land Use Type Unit Fire Police Public
Works IT Total
Residential
R-1 Low (12,500) Dwelling Unit 1,658$ 1,263$ 190$ 147$ 3,258$ R-1 Low-Medium (7000) Dwelling Unit 1,658$ 1,263$ 190$ 147$ 3,258$ R-1 Medium Dwelling Unit 1,658$ 1,263$ 190$ 147$ 3,258$ R-1 Medium Cluster Dwelling Unit 1,658$ 1,263$ 190$ 147$ 3,258$ R-2 (Cluster) Dwelling Unit 1,658$ 1,263$ 190$ 147$ 3,258$ R-3 Medium High Dwelling Unit 1,316$ 1,003$ 151$ 117$ 2,587$ R-4 High Dwelling Unit 1,316$ 1,003$ 151$ 117$ 2,587$ Town Center Mixed Use Dwelling Unit 1,316$ 1,003$ 151$ 117$ 2,587$ Commercial
Retail Mixed SF 1.30$ 0.99$ 0.15$ 0.12$ 2.56$ Office SF 1.48$ 1.13$ 0.17$ 0.13$ 2.91$ NC/Retail SF 1.30$ 0.99$ 0.15$ 0.12$ 2.56$ Community Commercial SF 1.30$ 0.99$ 0.15$ 0.12$ 2.56$ Elementary School Students
Parks Acres
City Impact Fees
118
Exhibit D
Specific Plan Fees
Applicable to Project
119
120
Land Use Type Unit Traffic Parks
Residential
R-1 Low (12,500) Dwelling Unit 1,251$ 8,489$
R-1 Low-Medium (7000) Dwelling Unit 1,251$ 8,489$ R-1 Medium Dwelling Unit 1,251$ 8,489$
R-1 Medium Cluster Dwelling Unit 1,251$ 8,489$
R-2 (Cluster) Dwelling Unit 1,251$ 8,489$
R-3 Medium High Dwelling Unit 1,251$ 5,306$
R-4 High Dwelling Unit 695$ 5,306$
Town Center Mixed Use Dwelling Unit 580$ 3,979$ Commercial
Retail Mixed SF 3.86$ 1.40$
Office SF 1.64$ 1.40$
NC/Retail SF 3.86$ 1.40$
Community Commercial SF 3.86$ 1.40$
Elementary School Students 319$ -$
Parks Acres 526$ -$
Specific Plan Impact
Fees
121
Exhibit E
Timing and Payment of Impact Fees; Adjustments
122
123
Timing and Payment of Impact Fees

1. City PFFP Impact Fees and Specific Plan Impact Fees shall be paid in time, manner and with the adjustments described in City of Merced Administrative Policies and Procedures regarding “Public Facilities Impact Fees and Administrative Policy” A-32 dated December 19, 2022 and included herein.

2. Credits and adjustments to City PFFP Impact Fees and Specific Plan Impact Fees for affordable housing units and projects shall be in conformance with the “Affordable Housing Project Impact Fee Schedule of Adjustments” included herein.
124
125
ATTACHMENT 2--Page 1
126
ATTACHMENT 2--Page 2
127
ATTACHMENT 2--Page 3
128
ATTACHMENT 2--Page 4
129
ATTACHMENT 2--Page 5
130
ATTACHMENT 2--Page 6
131
ATTACHMENT 2--Page 7
132
ATTACHMENT 2--Page 8
133
ATTACHMENT 2--Page 9
134
ATTACHMENT 2--Page 10
135
ATTACHMENT 2--Page 11
136
ATTACHMENT 2--Page 12
137
ATTACHMENT 2--Page 13
138
ATTACHMENT 2--Page 14
139
ATTACHMENT 2--Page 15
140
ATTACHMENT 2--Page 16
141
ATTACHMENT 2--Page 17
142
ATTACHMENT 2--Page 18
143
ATTACHMENT 2--Page 19
144
ATTACHMENT 2--Page 20
145
ATTACHMENT 2--Page 21
146
ATTACHMENT 2--Page 22
147
ATTACHMENT 2--Page 23
148
ATTACHMENT 2--Page 24
149
ATTACHMENT 2--Page 25
150
ATTACHMENT 2--Page 26
151
ATTACHMENT 2--Page 27
152
ATTACHMENT 2--Page 28
153
ATTACHMENT 2--Page 29
154
ATTACHMENT 2--Page 30
155
ATTACHMENT 2--Page 31
156
ATTACHMENT 2--Page 32
157
ATTACHMENT 2--Page 33
158
ATTACHMENT 2--Page 34
159
ATTACHMENT 2--Page 35
160
161
Income Category % of AMI (% fee reduction)
Acutely Low 0-15 100%
Extremely Low 15-30 90%
Very Low 30-50 80%
Low 50-80 60%
Moderate 80-120 40%
Above Moderate over 120 0%
Community Bldg/Office* 100
Acutely low income: 0-15% of AMI
Extremely low income:  15-30% of AMI
Very low income:  30% to 50% of AMI
Lower income:  50% to 80% of AMI; the term may also be used to mean 0% to 80% of AMI Moderate income:  80% to 120% of AMI
Affordable Housing Project Impact Fee Schedule of Adjustments *The Community Bldg/Office serves the tenants of the apartment complex. Therefore there are no additional impacts. A 100% reduction in impact fees is given for the Community Bldg/Office 162
163
Exhibit F

164
Exhibit G
Project Backbone and Offsite Infrastructure

165
166
Project Backbone and Offsite Infrastructure

Circulation Improvements 1A 1B 1C 1D 1E
Lake Road from Cardella to Virginia Smith X
Lake Road (Virginia Smith to Meyers Gate) X
Campus Parkway (Virginia Smith to Cardella) X
University Avenue (Meyers Gate - Campus Parkway X
Campus Parkway (Meyers Gate to Virginia Smith) X
Campus Parkway (Virginia Smith to Cardella Road) X
Meyers Gate Road (Lake Road to Golden Bobcat) X
Meyers Gate Road (Golden Bobcat to Kibby Road) X
Golden Bobcat Ave (Meyers Gate Road to Virginia Smith) X Golden Bobcat Ave (Virginia Smith to Cardella Road) X
Virginia Smith Parkway (Lake Road - Golden Bobcat Avenue) X Virginia Smith Parkway (Golden Bobcat Avenue - Kibby Road ) X Virginia Smith Parkway ( Kibby Road - Canal ) X
Main Street (Meyers Gate to Virginia Smith) X
Main Street (Virginia Smith - Cardella Road) X
Kibby Road (Meyers Gate Road to Virginia Smith) X
Kibby Road (Virginia Smith to Cardella Road) X
Cardella (Lake Road to Golden Bobcat) X
Cardella (Golden Bobcat to Kibby Road) X
Cardella (Kibby Road to Canal) X
Road A from Virginia Smith to Cardella Road X
Sewer Improvements
Lift Station and forcemain to existing SS @ Bellevue RD X Gravity Sewer in Cardella from Lift Station to Golden Bobcat X Gravity in Virginia Smith Parkway to Golden Bobcat X
Gravity Sewer in Meyers Gate Between Lake Road and Golden Bobcat X Gravity Sewer in University Avenue X
Gravity Sewer In Campus Parkway from Meyers Gate to Virginia Smith Parkway. X Gravity Sewer in Golden Bobcat from Meyers Gate to Virginia Smith Parkway X Gravity Sewer in Meyers Gate and Virginia Smith between Golden Bobcat and Kibby Road X Gravity Sewer in Main Street from Meyers Gate to Virginia Smith X Gravity Sewer in Cardella Road from Golden Bobcat to Road A X Gravity in Main Street and Kibby Road from Virginia Smith to Cardella X Gravity in Virginia Smith Parkway and Cardella from Kibby road to Phase 1 east boundary X Gravity Sewer in Road A from Virginia Smith Parkway to Cardella Road. X Water Improvements
Water main in Lake Road from Bellevue to Cardella Road X Water main in Virginia Smith Parkway and Cardella from Lake Road to Golden Bobcat X Water main in Campus parkway and Golden Bobcat from Virginia Smith Parkway to Cardella. X Install Water Well on East side of Golden Bobcat Ave. X Water main in Campus parkway and Golden Bobcat from Meyers Gate Road and Virginia Smith X Water main in Meyers Gate from Lake Road to Golden Bobcat X Water main in Meyers Gate Road and Virginia Smith Parkway from Golden Bobcat to Kibby Road X Water main in Main Street and Kibby Road from Meyers Gate Road to Virginia Smith Parkway X Water main in Main Street and Kibby Road from Virginia Smith Parkway to Cardella Road X Water main in Cardella Road from Golden Bobcat Road to Kibby Road X Water main in Virginia Smith Parkway and Cardella Road from Kibby Road to Phase 1 eastern boundary X Water main in Road A from Virginia Smith and Cardella Road X Storm Drainage Improvements
Storm Drain infrastructure in Virginia Smith Parkway X
Storm Drain Basins along Virginia Smith Parkway between Lake Road and Golden Bobcat X Storm Drain Basins along Campus Parkway and Creek between Virginia Smith Parkway and Cardella X Storm Drain infrastructure in Campus Parkway, University and Golden Bobcat between Meyers Gate Road and Virginia Smith Parkway X
Storm Drain Basins along University Avenue and Campus Parkway X Storm Drain infrastructure along Main Street and Kibby Road between Meyers Gate Road and Virginia Smith Parkway X
Storm Drain Basins along Virginia Smith and Kibby Road between Golden Bobcat Ave and Kibby X Storm Drain infrastructure along Cardella Road between Kibby Road and Golden Bobcat X Storm Drain Basins along Cardella between Kibby Road and Golden Bobcat X Storm Drain infrastructure along Virginia Smith and Cardella Road between Kibby Road and Phase 1 eastern edge (including bypass line) X
Storm Drain Basins along Cardella and adjacent to the canal (including outlets to canal) X Phase of Development
167
Exhibit H
Phasing Plan

168

169
170

MEYERS GATE ROAD
N. LAKE ROAD

VIRGINIA SMITH PARKWAY

CAMPUS PARKWAY

CAMPUS PARKWAY

UNIVERSITY AVE

CARDELLA ROAD

MEYERS GATE ROAD

GOLDEN BOBCAT AVE

GOLDEN BOBCAT AVE

CENTER STREETCENTER STREET

KIBBY ROAD

KIBBY ROAD

VIRGINIA SMITH PARKWAY

CARDELLA ROAD
ROAD A
N. LAKE ROAD

CARDELLA ROAD
PHASE 1B
PHASE 1A
PHASE 1C
PHASE 1E
PHASE 1D
N:\1800\1894-02-CU20-VST-Land Plan and Vesting Tentative Map\Engineering\TTM\Sheet-Files\C38_Conformance Map.dwg, C38, Aug 29, 2022 5:15pm, kcarbajal August 29, 2022

VIRGINIA SMITH LAND TRUST
CONFORMANCE MAP C38

CIRCULATION
SEWER

STORM DRAIN
WATER
0 feet500
1"=250'
250 750
171
Exhibit I
Public Infrastructure by Phase

172

173

MEYERS GATE ROAD
N. LAKE ROAD

VIRGINIA SMITH PARKWAY

CAMPUS PARKWAY

CAMPUS PARKWAY

UNIVERSITY AVE

CARDELLA ROAD

MEYERS GATE ROAD

GOLDEN BOBCAT AVE

GOLDEN BOBCAT AVE

CENTER STREETCENTER STREET

KIBBY ROAD

KIBBY ROAD

VIRGINIA SMITH PARKWAY

CARDELLA ROAD
ROAD A
N. LAKE ROAD

CARDELLA ROAD
PHASE 1B
PHASE 1A
PHASE 1C
PHASE 1E
PHASE 1D
N:\1800\1894-02-CU20-VST-Land Plan and Vesting Tentative Map\Engineering\TTM\Sheet-Files\C38_Conformance Map.dwg, C38, Aug 29, 2022 5:15pm, kcarbajal August 29, 2022

VIRGINIA SMITH LAND TRUST
CONFORMANCE MAP C38

CIRCULATION
SEWER

STORM DRAIN
WATER
0 feet500
1"=250'
250 750
174
Exhibit J
Campus Parkway Connection Rights of Way and Improvements

175

176
A
C36
B C36
C C36
D C36
E
C36
K & L
C36
P
C37
Q C37
207.9
FS
200.7
FS
195.3
FS 211.5
FS
193.6
FS
194.0
FS
196.3
FS
197.9
FS
196.8
FS
195.3
FS
193.6
FS
205.8
FS
212.8
FS
212.4
FG
207.3
FS
208.9
FS
209.8
FS
195.1
FG
203.4
FS
208.4 TC
207.9 FL
208.0 TC
207.5 FL
201.1 TC
200.6 FL 199.8 TC
199.3 FL
199.1 TC
198.6 FL
195.1 TC
194.6 FL
194.9 TC
194.4 FL
210.7 TC
210.2 FL
211.2 TC
210.7 FL
192.7 TC
192.2 FL
193.2 TC
192.7 FL
196.4 TC
195.9 FL
196.2 TC
195.7 FL
195.1 TC
194.6 FL
194.6 TC
194.1 FL
195.1 TC
194.6 FL
192.0 TC
191.5 FL
191.6 TC
191.1 FL
192.5 TC
192.0 FL
192.0 TC
191.5 FL
194.2 TC
193.7 FL
197.4 TC
196.9 FL
199.4 TC
198.9 FL
206.5 TC
206.0 FL
205.6 TC
205.1 FL
204.6 TC
204.1 FL
212.8 TC
212.3 FL
211.9 TC
211.4 FL
206.6 TC
206.1 FL
207.1 TC
206.6 FL
208.2 TC
207.7 FL
208.7 TC
208.2 FL
209.1 TC
208.6 FL
209.6 TC
209.1 FL
201.6
FS
216.1
FG
205.1
FG
205.1
FG
194.9
FG
203.4
FG
192.6
FG
213.1
FG
216.9
FG
209.3
FG194.3
FG 209.5
FG
195.6
FG
191.0
FG
194.4
FG
191.8
FG
211.3
FG
200.5
FG
202.5
FS
214.5
FG
210.5
FG
208.5
FS
207.3
FG
196.8
FG
192.9
FG
211.1
FG 211.7
FG
204.9
FG

1.4%

1.3%

1.1%

1.1%

3.7%

2.2%

2.3%

1.5%

2.0%

1.5%

1.2%

1.0%

1.3%

1.7%

1.3%

2.2%

1.9%

1.3%

1.5%

2.4%

2.0%

1.9%

1.8%

2.4%

1.1%

2.1%

1.8%

2.1%

2.3%

2.1%

1.7%

1.6%

3.5%

1.6%

1.6%

1.8%

2.8 4.1%
199
197
195
192
214 212
211
202
200
198
196
199
215
213
211
195.2
FG
191.2
FG 191.6
FG
192.2
FG
192.5
FG
195.4 TC
194.9 FL
195.5 TC
195.0 FL
193.9 TC
193.4 FL
193.3 TC
192.8 FL
193.0 TC
192.5 FL
204.9
FG
SDMH(77)
RIM=217.27
SDMH(30)
RIM=215.84
SDMH(34)
RIM=214.40
SDMH(31)
RIM=214.55
SDMH(35)
RIM=210.93
SDMH(86)
RIM=210.09
SDMH(28)
RIM=209.00
SDMH(82)
RIM=208.57
SD INLET(59)
SDMH(27)
RIM=209.37
SDMH(26)
RIM=208.79
SDMH(5)
RIM=208.19
SDMH(29)
RIM=207.03
SD INLET(61)
SDMH(32)
RIM=206.51
SDMH(87)
RIM=205.10
SDMH(33)
RIM=204.74
SDMH(6)
RIM=205.25
SD OUTLET(62)
SDMH(23)
RIM=204.11
SD OUTLET(95)
SD OUTLET(63)
SDMH(132)
RIM=203.17
SDMH(11)
RIM=200.60
SD OUTLET(8)
SDMH(14)
RIM=201.36
SDMH(24)
RIM=201.20
SD INLET(95)
TG=200.11
SDMH(25)
RIM=198.72
SDMH(1)
RIM=197.81
SD OUTLET(57)
SDMH(13)
RIM=197.35
SD OUTLET(60)
SDMH(2)
RIM=195.68
SD INLET(21)
SDMH(3)
RIM=194.97
SD OUTLET(1)
SD OUTLET(11)SDMH(41)
RIM=192.29
SD OUTLET(3)
SD OUTLET(7)
SD OUTLET(10)
SDMH(36)
RIM=192.98
SDMH(51)
RIM=194.27
SDMH(50)
RIM=193.36
SDMH(4)
RIM=193.47
SDMH(17)
RIM=194.22
SDMH(15)
RIM=190.60
SD INLET(15)
SDMH(8)
RIM=193.13
SD OUTLET(16)
SDMH(22)
RIM=191.03
SDMH(18)
RIM=192.94
SDMH(49)
RIM=192.15
SD INLET(4)
SDMH(48)
RIM=191.69
SDMH(21)
RIM=191.87
SD INLET(17)
SDMH(20)
RIM=191.91
SDMH(16)
RIM=191.76
SDMH(10)
RIM=191.10
SDMH(19)
RIM=191.25
SD OUTLET(22)
SD OUTLET(20)
SD INLET(13)
RIM=190.16
SD OUTLET(27)
SD OUTLET(2)
SD OUTLET(14)
SD OUTLET(18)
SD INLET(23)
SD OUTLET(5)
SD OUTLET(25)
SD OUTLET(24)

REALIGNED

COTTONWOOD CREEK
UNIVERSITY AVE.

GOLDEN BOBCAT AVE.

VIRGINIA SMITH PKY.

N. LAKE ROAD
CAMPUS PKY.

MEYERS GATE ROAD
195
200
205
195
195
200
205
195
200
195
200
205
210
205
210
215
220
225
220
215
215
210
210
210
210
220
220
LOT 1004
LOT 109
LOT 104
LOT 101LOT 100LOT 99LOT 98LOT 97LOT 96 LOT 103LOT 95 LOT 102LOT 94LOT 93LOT 92 LOT 41
LOT 39
LOT 40
LOT 43
LOT 42
LOT 59
LOT 36
LOT 37
LOT 38LOT 29
LOT 114LOT 108
LOT 129
LOT 390LOT 377
LOT 45LOT 453LOT 452
LOT 383LOT 382LOT 381LOT 380LOT 379
LOT 376LOT 375LOT 374LOT 373 LOT 393LOT 392LOT 391
LOT 389
LOT 388
LOT 105 LOT 106 LOT 107
LOT 113LOT 112LOT 111LOT 110
LOT 128LOT 127
LOT 121LOT 120
LOT 126LOT 125
LOT 123LOT 122
LOT 133
LOT 118LOT 117LOT 116LOT 115
LOT 119
LOT 132LOT 131LOT 130
LOT 124
LOT 135LOT 134
LOT 142
LOT 136
LOT 387LOT 386LOT 385
LOT 398LOT 397LOT 396 LOT 400LOT 399
LOT 378
LOT 372 LOT 394 LOT 39
LOT 40
LOT 402 LOT 403 LOT 404 LOT 405 LOT 406
LOT 40
LOT 174 LOT 175
LOT 176
LOT 44 LOT 46
LOT 48
LOT 54
LOT 52
LOT 50
LOT 57
LOT 56
LOT 63
LOT 66
LOT 69
LOT 65
LOT 62
LOT 60
LOT 68
LOT 72LOT 71
LOT 84 LOT 91LOT 83 LOT 90LOT 82 LOT 89LOT 81 LOT 88LOT 80 LOT 87LOT 86LOT 85 LOT 17 LOT 18 LOT 19 LOT 20 LOT 21 LOT 22
LOT 23 LOT 25 LOT 26 LOT 27 LOT 28LOT 24
LOT 30
LOT 32 LOT 33
LOT 8 LOT 13
LOT 16
LOT 410
LOT 412
LOT 408
LOT 409
LOT 141
LOT 137
LOT 384
LOT 255
LOT 177
LOT 368
LOT 450
LOT 451
LOT 3
LOT 4
LOT 7
LOT 34LOT 31 LOT 35
LOT 10
LOT 74
LOT 76
LOT 47
LOT 49
LOT 45
LOT 51
LOT 53
LOT 58
LOT 61
LOT 55
LOT 67
LOT 64
LOT 70
LOT 73
LOT 79
LOT 77
LOT 78
LOT 140
LOT 138 LOT 139
LOT 75
LOT 1
LOT 484
LOT 168
LOT 173
LOT 169 LOT 170 LOT 171 LOT 172
LOT 6
LOT 15
LOT 11
LOT 2
LOT 9
LOT 5
LOT 12 LOT 14

4.6%

EXISTING CULVERT
206.7 TC
206.2 FL
205.6 TC
205.1 FL
SDMH(9)
RIM=191.64
204.2
FS/HP

1.3%

2.8%
191.9
FS/LP

0.5%
195.5
FS/HP

0.6%

0.7%

1.1%
198.4
FS/GB

1.1% 0.3%

1.9%

3.1%
201.6
FS/GB

1.3%

0.8%
197.7
FS/GB
194.6
FS/LP

0.2%
196.7
FS/HP
195.1
FS/GB

0.5%
194.0
FS/GB

0.5%
192.6
FS/LP

0.5%
195.4
FS/GB 214.0
FS/HP
210.4
FS/GB

0.7% 1.7%

2.3%

0.8%
211.7
FS/HP

0.5% 0.5%

0.5%
SD INLET(10)
TG=201.16 SD INLET(12)
TG=200.82
SD INLET(11)
TG=200.99
SD INLET(16)
TG=190.27
SD INLET(14)
TG=190.26
SD INLET(73)
TG=191.13
SD INLET(74)
TG=191.18
SD INLET(18)
TG=191.34
SD INLET(19)
TG=194.16
SD INLET(20)
TG=194.15
SD INLET(48)
TG=191.68 SD INLET(47)
TG=191.01
SD INLET(130)
TG=193.41
SD INLET(132)
TG=193.46
SD INLET(71)
TG=199.57
SD INLET(72)
TG=199.56
SD INLET(65)
TG=207.86
SD INLET(63)
TG=207.86
SD INLET(66)
TG=205.32
SD INLET(67)
TG=205.31
SD INLET(91)
TG=207.73
SDMH(134)
RIM=193.52
SD INLET(69)
RIM=199.46
N:\1800\1894-02-CU20-VST-Land Plan and Vesting Tentative Map\Engineering\TTM\Sheet-Files\C14-C18_Grading.dwg, C14, Aug 29, 2022 5:11pm, kcarbajal August 29, 2022
0 feet200
1"=100'
100 300

VIRGINIA SMITH LAND TRUST
KEYMAP
PRELIMINARY GRADING PLAN C14

TRACT BOUNDARY
LEGEND

PROPOSED PROPERTY LINE

PROPOSED EASEMENT/SETBACK

PROPOSED RW
MATCHLINE - SEE SHEET C15
MATCHLINE - SEE SHEET C17

PROPOSED UNDERGROUND STORAGE
CHAMBERS. SEE STORMWATER SHEETS

FOR DMA'S AND RETAINED VOLUMES

PROPOSED BIO-RETENTION AREA

PROPOSED OUTLET WITH RIP-RAP

PROPOSED STORM DRAIN MANHOLE

PROPOSED INLET/ RISER
200.720
FSFS
193.619
FSFS
)SDMH(11)MH(11)SDMH(11)SDMH(11)SDMH(11)SDMH(11)SDMH(11)SDMH(11)SDMH(11)SDMH(11) 06 006
SDMSDMSDMSDMSDMSDMSDMSDMSDM20)20)20)20)20)20)20)20)20)20)20)20)20)20))))) CAMPUS PKY.CAMPUS PKY
111.3%.3%%%%13 %13 %
8%8%8%8%%%
2822.8%2.8%8%8%%%8%
191.919

FS/LPLP
000005 %050.5%05 %0.5%0.5%.5%.5%%%
00 00.60 6%6%%%000.60 6%6%06 %06 %0.6%

00...7%.7%
D INLET(132)ESD SD INLET(132)SD INLET(132)T(132)D
TG=193.46= 9
SDM
00 6060
MMMMMMMSDMDM2222222222222
%%%%%%%1%331313.1%313.1%3.1%311%
2002
Phase 1 of VST Campus
Parkway to be
constructed with
development Phase 1A
Offsite area to be
acquired by County
177
A
C36
M & N
C36
O
C37
D C36
Q C37
B C36
M & N
C36
SD
SD
SD
196.8
FS
195.3
FS
196.2 TC
195.7 FL
195.1 TC
194.6 FL
192.0 TC
191.5 FL
195.1
FS
191.3
FS
192.4
FS
189.1
FS
190.2
FS
188.6
FG
196.2
FG
207.2
FS
202.7
FG
201.2
FS
194.0
FS
190.6
FG 191.3
FG
191.5
FS
203.9
FS
200.1
FS
197.6
FS
203.5
FS
191.8
FS
204.5
FS
199.4
FS
201.9
FS
190.5 TC
190.0 FL
190.7 TC
190.2 FL
191.6 TC
191.1 FL
192.0 TC
191.5 FL
199.0 TC
198.5 FL
200.2 TC
199.7 FL
207.0 TC
206.5 FL
206.0 TC
205.5 FL
203.5 TC
203.0 FL
202.8 TC
202.3 FL
201.0 TC
200.5 FL
201.4 TC
200.9 FL
204.0 TC
203.5 FL
204.4 TC
203.9 FL
199.1 TC
198.6 FL
198.3 TC
197.8 FL
190.4
FG
201.5
FG
202.3
FG
191.5
FG
187.9
FS
195.5
FS
191.5
FG
195.5
FS
193.8
FG
203.9 TC
203.4 FL
204.0 TC
203.5 FL
199.5
FG
FG
199.5
FG

3.5%

1.1%

1.2%

2.0%

1.9%

2.2%

1.2%

3.3%

4.1%

3.6%

2.8%

2.5%

3.5%

3.1%

1.9%

1.3%

1.6%

1.8%

1.8%

2.4%

1.0%

2.8%

2.2%

1.4%

1.0%

1.1%

0.8%

0.8%

1.0%
211
201
200
201
202
203
204
193.0 TC
192.5 FL
189.7
FG
191.5
FG
188.3
FG
202.5
FG
202.7
FG
204.9
FG
200.8
FG
SDMH(86)
RIM=210.09
SD INLET(59)
SDMH(87)
RIM=205.10
SDMH(33)
RIM=204.74
SDMH(85)
RIM=206.04
SD OUTLET(62)SD OUTLET(63)
SDMH(133)
RIM=202.50
SDMH(70)
RIM=202.06
SDMH(71)
RIM=201.93
SDMH(65)
RIM=202.81
SDMH(72)
RIM=201.67
SDMH(59)
RIM=202.31
SDMH(84)
RIM=203.00
SDMH(64)
RIM=202.13
SDMH(67)
RIM=201.62
SD OUTLET(8)
SDMH(68)
RIM=201.53
SDMH(66)
RIM=201.45
SDMH(62)
RIM=200.42
SD OUTLET(51)
SDMH(63)
RIM=200.67
SDMH(56)
RIM=200.28
SD OUTLET(49)
SDMH(37)
RIM=199.52
SDMH(60)
RIM=199.92
SDMH(69)
RIM=199.89
SD INLET(53)
SDMH(38)
RIM=198.95
SD INLET(52)
SD INLET(55)
SD OUTLET(57)
SDMH(61)
RIM=197.96
SD OUTLET(60)
SDMH(42)
RIM=194.88
SDMH(39)
RIM=192.13
SD INLET(21)
SDMH(40)
RIM=190.56
SD INLET(28)
SD OUTLET(11)SDMH(41)
RIM=192.29
SD OUTLET(10)
SD OUTLET(47)
SD OUTLET(46)
SD OUTLET(45)
SDMH(76)
RIM=190.84
SDMH(52)
RIM=193.76
SDMH(53)
RIM=194.79
SDMH(49)
RIM=192.15
SDMH(48)
RIM=191.69
SDMH(55)
RIM=192.36
SDMH(44)
RIM=191.95
SD INLET(17)
SDMH(46)
RIM=191.82
SD OUTLET(29)
SD OUTLET(22)
SDMH(54)
RIM=190.98
SD OUTLET(27)
SDMH(47)
RIM=190.43
SD INLET(38)
SD OUTLET(18)
SDMH(58)
RIM=188.36
SDMH(43)
RIM=188.79
SD INLET(35)
SDMH(57)
RIM=188.51
SD INLET(30)
SDMH(45)
RIM=188.99
SD OUTLET(36)
SD OUTLET(56)
SD INLET(23)
SD OUTLET(31)
SD INLET(42)
SD OUTLET(39)
SD OUTLET(34)
SD OUTLET(43)
SD INLET(32)
SD INLET(40)
SD OUTLET(25)
SD OUTLET(33)
SD OUTLET(12)
SD OUTLET(37)
SD OUTLET(41)
SD OUTLET(44)

1.5%

REALIGNED

COTTONWOOD CREEK
E. CARDELLA ROAD
VIRGINIA SMITH PKY.

E. CARDELLA ROAD
CAMPUS PKY.

N. LAKE ROAD
GOLDEN BOBCAT AVE.
210
190
195
200
195
200
205
210
210
200
195
195
200
200
195
190
LOT 1004
LOT 215
LOT 186
LOT 196
LOT 197
LOT 187
LOT 339
LOT 358
LOT 229
LOT 216
LOT 259
LOT 159
LOT 348LOT 347LOT 346LOT 345LOT 344LOT 343LOT 342 LOT 349 LOT 354LOT 353LOT 352LOT 351 LOT 355 LOT 356
LOT 357
LOT 350
LOT 359 LOT 366LOT 365LOT 364LOT 363LOT 362LOT 361LOT 360 LOT 45LOT 453LOT 452
LOLOT 466LOT 465
LOT 474 LLOT 476LOT 475
LOT 458
LOT 308 LOT 309
LOT 303LOT 302LOT 301 LOT 306LOT 305LOT 304
LOT 310
LOT 307
LOT 313LOT 312LOT 311 LOT 314
LOT 322LOT 320LOT 319LOT 318LOT 317LOT 316LOT 315
LOT 331LOT 330LOT 329LOT 328LOT 327LOT 326LOT 325LOT 324 LOT 321
LOT 332
LOT 323
LOT 333 LOT 338LOT 337LOT 336LOT 335LOT 334
LOT 341LOT 340
LOT 263LOT 262LOT 261LOT 260 LOT 264 LOT 265 LOT 266 LOT 267 LOT 268 LOT 269 LOT 270 LOT 271 LOT 272 LOT 274 LOT 275 LOT 276 LOT 277 LOT 278 LOT 279 LOT 280 LOT 281 LOT 282 LOT 293 LOT 294 LOT 295 LOT 296 LOT 287LOT 286 LOT 291LOT 290LOT 289LOT 288LOT 284 LOT 285 LOT 292 LOT 297 LOT 300LOT 299LOT 298 LOT 369
LOT 213LOT 212LOT 211LOT 210LOT 209LOT 208 LOT 214
LOT 224LOT 223LOT 222LOT 221 LOT 228LOT 220 LOT 227LOT 219 LOT 226LOT 218 LOT 225LOT 217 LOT 235LOT 231 LOT 232 LOT 233 LOT 234 LOT 238LOT 236 LOT 237 LOT 239 LOT 240LOT 230 LOT 163
LOT 165
LOT 167
LOT 166
LOT 164
LOT 174 LOT 175
LOT 176
LOT 190LOT 189 LOT 195LOT 194LOT 193LOT 192LOT 191
LOT 180LOT 179LOT 178 LOT 185
LOT 188
LOT 184LOT 183LOT 182LOT 181
LOT 198 LOT 199 LOT 200 LOT 201 LOT 202 LOT 203 LOT 204 LOT 205 LOT 206
LOT 152
LOT 153
LOT 154
LOT 155
LOT 156
LOT 160
LOT 161
LOT 162
LOT 244LOT 243LOT 242LOT 241 LOT 245 LOT 246 LOT 247 LOT 248 LOT 249 LOT 250 LOT 251 LOT 252 LOT 145 LOT 144
LOT 146
LOT 147
LOT 148
LOT 149
LOT 158
LOT 150
LOT 151
LOT 256
LOT 257
LOT 253 LOT 371
LOT 367
LOT 487
LOT 255
LOT 177
LOT 368
LOT 258
LOT 273
LOT 483LOT 482
LOT 472
LOT 450
LOT 462
LOT 459 LO
LOT 451
LOT 143
LOT 157
LOT 254
LOT 473
LOT 457
LOT 463 LOT 464
LOT 456LOT 455
LOT 484
LOT 168
LOT 173
LOT 169 LOT 170 LOT 171 LOT 172
LOT 207
LOT 370
LOT 283

LOCATION OF NEW
36" CULVERT PIPE

0.3%

0.3% 0.3%

1.9%
191.1
FS/LP

1.2%
204.2
FS/GB
202.7
FS/LP
203.0
FS/HP
200.5
FS/GB

4.0%
193.1
FS/GB

2.1%

0.5%
207.5
FS/GB

0.3%
192.7
FS/GB
206.1
FS/GB

2.2%

0.6%
207.7
FS/HP
196.0
FS/GB

0.8% 0.8% 0.7%
196.7
FS/HP

0.5% 0.5%

0.5% 0.5%
SD INLET(20)
TG=194.15
SD INLET(22)
TG=192.47
SD INLET(24)
TG=192.46
SD INLET(27)
TG=190.40
SD INLET(29)
TG=190.40
SD INLET(34)
TG=191.23
SD INLET(44)
TG=187.68
SDMH(150)
RIM=187.66
SD INLET(45)
TG=188.50
SD INLET(46)
TG=188.50
SD INLET(51)
TG=191.33
SD INLET(49)
TG=198.05
SD INLET(50)
TG=198.08
SD INLET(54)
TG=200.35
SD INLET(56)
TG=201.27
SD INLET(75)
TG=198.88
SD INLET(60)
TG=199.61
SD INLET(57)
TG=199.61
SD INLET(33)
TG=201.65
SD INLET(31)
TG=201.89
SD INLET(25)
TG=203.30
SDMH(149)
RIM=190.29
SDMH(135)
RIM=188.41
SDMH(136)
RIM=199.12SDMH(137)
RIM=199.00
SDMH(138)
RIM=197.99
SDMH
RIM=2
N:\1800\1894-02-CU20-VST-Land Plan and Vesting Tentative Map\Engineering\TTM\Sheet-Files\C14-C18_Grading.dwg, C15, Aug 29, 2022 5:12pm, kcarbajal August 29, 2022
0 feet200
1"=100'
100 300

VIRGINIA SMITH LAND TRUST
KEYMAP
C15PRELIMINARY GRADING PLAN
MATCHLINE - SEE SHEET C14
MATCHLINE - SEE SHEET C16

TRACT BOUNDARY
LEGEND

PROPOSED PROPERTY LINE

PROPOSED EASEMENT/SETBACK

PROPOSED RW

PROPOSED BIO-RETENTION AREA

PROPOSED OUTLET WITH RIP-RAP

PROPOSED STORM DRAIN MANHOLE

PROPOSED INLET/ RISER

PROPOSED UNDERGROUND STORAGE
CHAMBERS. SEE STORMWATER SHEETS

FOR DMA'S AND RETAINED VOLUMES
CAMPUS PKY.CAM

11...9.999%%%%%% 1.2%.2%%%%%%12 %12 %% 4.04 0%0%40 %40 %4 222.2.1%.1%%%21 %21 %1%

0.5%
2 1 2%%%%%
Y
207.220
FS
1919
202
F
9999%%%%%%
2020
FS
FS
404 0%0%4
05 %05 %
1 9999%%%%%% 404 0%0%4
1 2020
F
L
00 S
2 FS
9 0.5%
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22 1%1%%
...9.999%%%%%% % 404 0%0%%%422111...9.999%%%%%% 2%%%%% 404 0%0%4 %%%

0.5%05 %05 %

U CAMPUS PKYPUS PKY
1 PP

CAMPUS PKYM
.

PP

Y CAMPUS PKYM CAMPUS PKYM
Phase 2 of VST Campus
Parkway to be
Constructed with
development Phase 1B
Phase 1 of VST
Campus Parkway to
be constructed
development Phase
1A
Offsite area to be
acquired by
County
178
Exhibit K
Affordable Housing Plan
179
Virginia Smith Trust Property
Affordable Housing Plan
In the larger scheme, the housing stock in Merced is adequate and affordable. Prices are still some- what depressed from over-supply and the effects of the Great Recession. Apartments provide an affordable alternative to home ownership. However, it is still believed that programs should be provided to create workforce housing, increase the supply of housing available to UC employees and students, and provide preferences and incentives for individuals who work on campus at UC Merced.

There should also be owner-occupancy restrictions in the single-family detached units to eliminate or substantially reduce the potential for converting single family neighborhoods to tracts of investor- owned rental for students (Isla Vista), and a special Workforce Housing Incentive Program should be established (basically a first time homebuyers program) which will provide deed-restricted units for workforce housing eligible households (households earning 121-160% of the Area Median income). This workforce housing program seeks to target the Project to all UC employees, reduce the influence of investors in the limitation of housing choice and availability, provide a down payment assistance program for Workforce In- come families, and provide a certain number of units that will be deed- restricted. Finally, VST and its builders will team up with affordable housing providers to provide lots for “sweat equity” self-help housing. There are two options for the VST Affordable Housing Program involving solely onsite construction and a “hybrid” that includes in lieu fees and onsite production of units. The common elements of the program are as follows:

1. Local Preference (“UC Workers First”). The UC and University Community Plan areas have been planned as an integrated unit for the last 25 years. The hope has always been that the UCP proper- ties, including VST, would provide the residential and commercial support for UC’s students and staff. It is known that many of the UC’s staff live outside of the community and students are being accommodated inside the City at other locations. These commute trips result in an estimated 17.7 million vehicle miles (VMT) traveled each year by students and staff using passenger cars to and from the university. If VST can capture 35 percent of the current students, and 50% of the current staff, all vehicle trips will be shortened, and there will be a significant shift to non-vehicle modes of transportation resulting in a VMT reduction of approximately 9 million miles per year.

Incentives will be established to provide priority for existing UC staff and students as follows:
a. Each development phase of VST is to maintain the interest list and shall separate and prioritize names of local employees based on interest in product type. b. When housing units are to become available, usually 270-360 days prior to certificate of occupancy (assuming a 180-day construction period), the builder shall notify those UC staff on the reservation list of the opportunity to purchase a residence starting with the “top of the list.”
180
Those individuals shall have approximately 60 days to get pre-qualified to purchase the residence and to provide the builder with proof that the individual is a UC employee (i.e. paycheck or bonafide offer of employment from a local employer.) c. If an individual fails to get pre-qualified or fails to provide the builder with proof of UC employment within the time periods above, then the builder may remove or put that name at the end of the interest list.
d. UC staff and employees shall be provided with an incentive package worth $2,000, including reductions off base price, option allowances, free bikes for transportation, allowance for closing costs, allowance for upgrades, or similar incentives at the discretion of the builder.

This incentive would apply to all UC staff regardless of income.

2. Owner-Occupancy Restrictions. Establishing a stable and desirable neighborhood for UC staff will require some segmentation and separation of the student rentals and the ownership units. Builders will agree to include restrictions in the purchase agreement and Covenants Conditions and Re- strictions (CC&Rs) for the R-1 single family detached units and at least 75% of the R-2 units to re- strict these units for owner-occupancy only for the first five years after sale. In the case of units with Accessory Dwelling Units (ADUs), the Principal Dwelling or the ADU will need to be occupied by the property owner. The final form of these agreements will be determined at the time of development of the first final map, and will provide for appropriate monitoring and enforcement.

3. Down Payment Assistance Program. The project would provide a matching down payment assistance (DPA) ranging from $2,500 to $5,000 as a “silent second” on the initial sale of 50 of the R- 1 and R-2 homes. These units would have to be occupied by a UC staff with incomes within the “Moderate Income Limit” for Merced County as determined by State Housing and Community Development Department (HCD). These units would be occupied by a household for a minimum of ten (10) years; if resold within this ten-year period, the units would need to be sold to another income qualifying Workforce Housing buyer and the 10-year deed restriction would reset to 10 more years with the new buyer of the home. The DPA loan would be re- paid upon sale of the unit or refinancing, and the proceeds would be placed in a revolving loan fund to assist future workforce, moderate, or lower income home buyers in the VST project. Unlike a reduction in price that would be captured by a future seller at the end of the affordability term, this assistance would continue throughout the life of the funds to assist buyers in the development. 181

4. Self Help Housing. VST would provide 25 to 50 improved R-2 lots for Self Help housing for Low and Very Low Income families. Floor plans, exterior elevations and finishes would be established by a master builder with the same basic specifications and finish qualities of market rate homes that are con- structed by a builder for the balance of the development. Sites will be provided in conformance with Table 2 of the Specific Plan. Under the “Onsite” option, 25 sites would be provided for Low Income families. Under the “Hybrid” option, 25 sites would be provided for Low Income families and 25 sites would be provided for Very Low Income families.

5. Multifamily Construction Program. Under the “Onsite” option, the project will provide improved sites that are adequate for up to 450 dwelling units, with sites for at least 350 units Phases 1A through 1E and 100 units in Phase 2. These sites will be provided to affordable housing providers and will be developed with a combination of market rate units, 150 deed-restricted Moderate Income units, 100 units for Extremely Low Income households, 100 units for Very Low Income House-holds, and 100 units for Low Income Households. In total this program will result in 450 units that will be enforceably restricted. In addition there would be 25 units for Very Low Income households in the Village Center Mixed Use area. Sites would be provided in conformance with Table 2 of the Specific Plan. Under the Hybrid option the project will provide improved sites that are adequate for up to 200 dwelling units, with sites for at least 100 units Phases 1A through 1E and 100 units in Phase 2. These sites will be provided to affordable housing providers and will be developed with a combination of market rate units, 50 deed-restricted Moderate Income units, 50 units for Very Low Income House-holds, and 100 units for Low Income Households.

6. Density Bonus Program. The level of affordable housing in the Project is made possible by usage of the State and local Density Bonus Program (Chapter 20.56 of the Merced Municipal Code). The Project would dedicate land for the Self Help Housing and the Multifamily Construction programs, including 2.96 acres for 25 R-2 units for Low Income Self Help units, and 10.7 acres of R-4 land for 300 units (20.17% of total R4 units) on multiple sites, including 100 Low Income units, 100 Very Low income units, and 100 Extremely Low Income units. These would be constructed on multiple sites per the schedule and buildout in Table 2 of the Specific Plan. The dedication of the R-4 land would result in a 25% Land Dedication Density Bonus to the R-4 area for the 20.1% of affordable units in the R-4 area that would yield 372 additional R-4 units. For the purposes of this density bonus, the “development” would be defined as the entire 53-acre, 1,489-unit R-4 area. The dedicated land would be adequate for 300 Extremely Low, Very Low Income units and Low Income units. The dedicated R-4 sites would be provided with a 50% density bonus on the affordable sites totaling 150 market rate or Moderate Income units. There would be a total of 522 bonus units, 35% of the total development (and within the City guidelines), with 372 of the bonus units used in the R-4 area outside of the dedicated land, and 150 units used on the dedicated R-4 land.

There would also be a density bonus for the Very Low Income units in the Town Center Mixed Use area. The 25 Very Low Income Units would be 23.1% of the total units and would yield a 50% density bonus, increasing the total number of Town Center Mixed Use units to 162 units.

182

7. In Lieu Fee Program. The City of Merced has developed an affordable housing that is intended to fund affordable housing projects throughout the community. The City has extensive experience with its HOME, CDBG and other housing programs in providing assistance to affordable housing providers in an efficient and effective manner. Recently, the City leveraged $11.7 million of City contributions for 264 Extremely Low, Very Low and Low Income units in the Devonwood and Bella Vista projects, resulting in a cost of approximately $44,500 per unit. Under the Hybrid approach described herein, each R-1 and R-2 unit would pay an affordable housing fee of $1.65 per square foot of conditioned floor area (living area, not including garage or outside storage area), up to a maximum of $3,800 per dwelling unit. This program is expected to raise $6.68 million and would produce 150 Extremely Low Income, Very Low Income and Low Income units.

183
Specific Plan Table 2

Development Per Phase Phase 1 Phase 2 Total
Land Use Type Phase
1A
Phase
1B
Phase
1C
Phase
1D
Phase
1E
Total
Phase 1

Residential (Units)
R-1 109 226 -- 141 186 662 615 1,277
R-2 36 — 64 24 131 255 225 480
R-3 — — 364 — — 364 140 504
R-4 696 — 456 — — 1,152 336 1,488
Mixed Use — — 108 — — 108 — 108
Total Residential (Units) 841 226 992 165 317 2,541 1,316 3,857 Commercial (SF)
Retail Mixed/Town Center) — — 275,000 32,500 — 307,500 — 307,500 Hotel/Office — — 275,000 — — 275,000 — 275,000
Neighborhood Commercial 50,000 — — — — 50,000 54,500 104,500 Community Commercial — — — 175,000 — 175,000 — 175,000
Total Commercial (SF) 50,000 — 550,000 207,500 — 807,500 54,500 862,000 Parks (Acres)
Linear Parks 1.23 4.16 1.40 4.50 11.29 8.47 19.76
Public Parks 2.14 3.48 7.30 15.50 28.42 34.79 63.21
School Parks 4.82 4.82 4.82
Private Parks 1.88 5.79 7.67 2.36 10.03
Total Parks (Acres) 5.25 7.64 5.79 8.70 24.82 52.20 45.62 97.82 Public Facilities (Acres)
Backbone Roads 10.58 6.52 12.92 6.17 6.17 42.36 27.46 69.82 Water 1.50 4.20 5.70 9.84 15.54
Other 7.50 7.5 7.5 15.0
Schools 4.40 14.89 19.29 19.29
Total Public Facilities (Acres) 19.58 10.72 17.32 6.17 21.06 74.85 44.80 119.65 Affordable Housing
Workforce Housing Program 25 25 25 75 75 150
Self Help Housing Program 13 12 25 25
Multifamily New Construction 100 125 225 100 325
Total Affordable Housing Units 125 13 175 37 325 175 500 (Units counts do not include permitted density
bonuses for qualified projects.)

184
185
Affordable Housing Options

Onsite Hybrid
R4 Land Dedication (Acres) 10.00 5.00 Onsite Produced Units
XLow 100
Vlow 100 50
Low 100 100
Moderate 150 50
Total 450 200
Self Help R-2 Land Dedication
Onsite Produced Units
XLow
Vlow 25
Low 25 25
Moderate
Total 25 50
Mixed Use Multifamily
Onsite Produced Units
XLow
Vlow 25 25
Low 25
Moderate
Total 25 50
Subtotal-Onsite Produced Units
XLow 100 -
Vlow 125 100
Low 125 150
Moderate 150 50
Total 500 300
Base 3,857 3,857
Density Bonus Units
R4 Market 297
R4 Project 150 75
Mixed Use Project 54 54
Total Units 4,358 3,986
Market Rate Units 3,858 3,686
Onsite Affordable Units 500 300 Subtotal Offsite Produced Units with Fee
XLow 50
Vlow 50
Low 50
Moderate
Total Onsite and Offsite Units -
XLow 100 50
Vlow 125 150
Low 125 200
Moderate 150 50
Total 500 450
Fees
R1/R2 In lieu fees 3,800$
R1/R2 In lieu fees (per SF) 1.65$
R3/R4/MU iin lieu fees
Total Estimated Fees Paid 6,676,600$ 186 187
Exhibit L
Water System Master Plan

188

189
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VIRGINIA SMITH TRUST
rrm design
group
PROPOSED 16"PVCWATER
PROPOSED 12' PVC WATER
PROPOSED 1 O" PVC WATER
PROPOSED 8" PVC WATER

PHASE I BACKBONE SYSTEM
FUTURE (PHASE II) 12" PVC WATER
FUTURE (PHASE 11) 10" PVC WATER
FUTURE (PHASE II) 8" PVC WATER
EXISTING 16" PVC WATER

PROPERTY LINE

RIGHT-OF-WAY LINE

PARCEL LOT LINE

LOT NUMBER
1000 1500feet

VIRGINIA SMITH
Wl WATER SUPPLY MASTER PLAN
A
190
191
Exhibit M
Onsite Campus Parkway to be Constructed by VST

192

193
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196
197
198
199
200
201
Exhibit N
Bicycle and Multimodal Transportation Improvements

202

203
0’ 300’150’75’ 450’
DECEMBER 2020
SCALE 1” = 150’
Virginia Smith Trust Land Plan and Vesting Tentative Map

BUS AND STREET NETWORK
Arterial Street

STREET LEGEND
Bus Stops
Collector Street
Local Street
Proposed Bus Stop Locations
University Avenue
Cottonwood Creek
Campus Parkway
Golden Bobcat Avenue
Main Street
Virginia Smith Parkway
Cardella Road
Campus Parkway
Golden Bobcat Avenue
Main Street
Meyers Gate Road
Lake Road
Lake Road
Kibby Road
Kibby Road
Fairfield canal
204
Fairfield canal
0’ 300’150’75’ 450’
DECEMBER 2020
SCALE 1” = 150’
Virginia Smith Trust Land Plan and Vesting Tentative Map

BIKE CIRCULATION LEGEND
Proposed Class I Bikeway
Proposed Class II Bikeway
Proposed Class III Bikeway
Class IV Bikeway
Proposed Bikeway (1 Way)
Proposed Bikeway (2 Way)

OVERALL CIRCULATION PLAN
Road A
University Avenue
Cottonwood Creek
Campus Parkway
Golden Bobcat Avenue
Main Street
Virginia Smith Parkway
Cardella Road
Campus Parkway
Golden Bobcat Avenue
Main Street
Meyers Gate Road
Lake Road
Lake Road
Kibby Road
Kibby Road
University Ave.

Section
Meyers Gate
Section
Local Rd. 60’
Section
Local Rd. 56’
Section
Lake Rd.

Section
Channel
Section
Main St. 4
Section
Main St. 4
Section
Main St. 5
Section
Main St. 3
Section
Main St. 1
Section
Kibby Rd.

Section
Campus ParkwaySection
Campus Parkway
Section
Virginia Smith
Section
Virginia Smith
Section
Cardella Rd.

Section
Cardella Rd.

Section
Main St. 2
Section
Golden Bocat Ave.

Section
Road A
Section
205
Exhibit O
V Street Bypass Sewer Trunk Line

206

207
HWY 99
11TH ST
9TH ST
13TH ST
10TH ST

MAIN ST
15TH ST
20TH ST
18TH ST
14TH ST
19TH ST
22ND ST
R ST
23RD ST
O ST
M ST
12TH ST
N ST2ND ST
K ST
21ST ST
W
ST
P ST
5TH ST
4TH ST
3RD ST
16TH ST
HW
Y 59
S ST

CHILDS AVE

GROGAN AVE

WARDROBE AVE
U ST
7TH ST
8TH ST
6TH ST
T ST

AUTO CENTER DR
25TH ST

MIMI LN
V ST

CONE AVE

LOPES AVE
M

ASSASSO
ST

EAGLE ST

SEVILLE DR

RIGGS AVE
Q ST
X ST

CARTMELL DR

MACREADY DR
1ST ST

CANAL ST

CONDOR DR

SANTA FE AVE

FLY-IN WAY

GRIFFIN ST
12TH PL

GEORGE DR

SYDNEY LN
24TH ST
EM
ORY W
AY

VIRGINIA ST

SYDNEY AVE

PATTY DR

ROGINA AVE

BROOKSIDE DR

FALCON WAY

JOYCE AVE

HOFFMAN AVE

HOME AVE

LYNMARIE DR

LESHER DR

MC GREGOR ST

SHADOW BROOK DR

JURGENSEN DR
21ST ST
R ST
S ST
Q ST
4TH ST
R ST
HWY 99
O ST
O ST
P ST
M ST
16TH ST

MASSASSO ST

CHILDS AVE
T ST
P ST
U ST
8TH ST
N ST
K ST
7TH ST
6TH ST
16TH ST
R ST

CANAL ST
O ST
7TH ST
U ST
6TH ST
P ST
S ST
M ST

CANAL ST
6TH ST
M ST
U ST
N ST
M ST
V ST

CHILDS AVE
T ST

CANAL ST
V ST
7TH ST
7TH ST
T ST
Q ST
M ST
N ST
T ST
Q ST
HW
Y 59
5TH ST
Q ST
R ST
Q ST
HWY 99
P ST
O ST
14TH ST
R ST
12TH ST
S ST
R ST
14TH ST
S ST
Q ST
O ST
M ST
N ST
P ST

CHILDS AVE
S ST
V ST
12TH ST
N ST
U ST
P ST
16TH ST
O ST
T ST
Q ST
W

EST AVE
7/17/2020 4:30:20 PM \\mkn01\Projects\Virginia Smith Trust\VST-2020-001-Infrastructure Analysis & Feasibility Study\300 Engineering\302 GIS\MapDocument\VST Wastewater Capital Improvement.mxd Legend
Existing Pipes with Surcharge Over 1 ft
Existing Pipes
Parallel Trunk Main Along 16th St & V St
Pipes Serving VST
Figure 1
Existing Surcharging
and Recommended
Capital Improvement
Virginia Smith Trust
Infrastructure Analysis and
Feasibility Study
0 1,200600
1 inch = 1,200 feet
O

BEAR CREEK
208

CITY OF MERCED
Planning Commission
Resolution #4128
WHEREAS, the Merced City Planning Commissio n at its regular meeting of January 3, 2024 , held a public hearing and considered the Pre-Annexation Development Agreement regarding Pending Annexation and Pre -zoning Application #23 -03, General Plan Amendment #23 -04, Adoption of the Virginia Smith Trust Specific Plan , and the Establishment of Planned Development (P -D) #80 , initiated by the Virginia Smith Trust , property owners. This application involves the annexation of approximately 654 acres of land to the City of Merced , the Prezoning of the property as Planned Development (P-D) #80 , an amendment to the text of the General Plan , the adoption of the VST Specific Plan, and the establishment of Planned Development (P-D) #80. The property site is generally located at the northeast corner of Cardella and Lake Roads with an address of 4600 Lake Road, and is more particularly described as those portions of Section 2 and Section 3 , Township 7 South, Range 14 East, Mount Diablo Base and Meridian in the County of Merced , State of California also known as Assessor’s Parcel Numbers 060-010-004 and 060-020-048; and,
WHEREAS, the Merced City Plan ning Commission concurs with Findings/Considerations A through E (Exhibit B); and,
WHEREAS, after reviewing the City’s Draft Environmental Determination , and fully discussing all the issues, the Merced City Planning Commission does resolve to hereby recommend to City Council, acting as a Responsible Agency, adoption of the Focus Subsequent Environmental Impact Report SCH No. 2001021056 (certified 10/17/2023), including the Findings required by CEQA Guidelines Section 15091, the Mitigation Monitoring Program (Exhibit C), and a Statement of Overriding Considerations, and approval of the Pre-Annexation Development Agreement regarding Pending Annexation and Prezoning Applications #23-03 and General Plan Amendment #23-04 and Establishment of Planned Development (P-D) #80 and Adoption of the Virginia Smith Trust Specific Plan, subject to the Conditions set forth in Exhibit A attached hereto.

Attachment E
209
PLANNING COMMISSION RESOLUTION # 4128