Attachment B: Draft Development Agreement Ordinance, incl. Exhibit A - Draft Development Agreement

ATTACHMENT B
ORDINANCE NO. xxx-C.S.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PACIFICA APPROVING DEVELOPMENT AGREEMENT DA-4-24 TO APPROVE AND AUTHORIZE A

DEVELOPMENT AGREEMENT BETWEEN CRESPI BREAKWATER, LLC, AND THE

CITY OF PACIFICA TO PROVIDE CERTAIN PUBLIC AND PRIVATE BENEFITS IN CONJUNCTION WITH A DEVELOPMENT PROJECT AT 570 CRESPI DRIVE (APN 022-162-310) AND THE EASTERN 55 FEET OF 540 CRESPI DRIVE (APN 022-162- 420).
(FILE NO. 2016-004)
________________________________________________________________ WHEREAS, California Government Code section 65864 et seq. authorizes a city and a developer having a legal or equitable interest in real property to enter into a binding, long-term development agreement establishing certain development rights in the property; and
WHEREAS, the City Council of the City of Pacifica adopted Ordinance 837-C.S., establishing Article 50 of Chapter 4, Title 9, authorizing the execution of development agreements and setting forth the procedures for approving development agreements; and WHEREAS, Crespi Breakwater, LLC owns certain real property at 570 Crepsi Drive (APN 022-162-310) and the City of Pacifica (“City”) owns real property that includes the eastern 55 feet of 540 Crespi Drive (APN 022-162-420” ("Property"); and WHEREAS, Brendan Murphy (“Developer”) submitted an application for a mixeduse development project on the Property for construction of a 43,696 square-foot mixeduse development consisting of a two-story mixed-use building with three residential units and 3,165 square feet of commercial space, two three-story townhouse residential buildings containing sixteen units, for a total of 19 residential units including three Below Market Rate units; vesting tentative subdivision map for condominiums; parking exception to reduce the number of on-site spaces; tree removal; and a free-standing sign associated with a master sign program for commercial tenants (“Project”); and WHEREAS, on March 7, 2022, the Planning Commission held a duly noticed public hearing on the Project, at which time it considered all oral and documentary evidence presented, and incorporated all testimony and documents into the record by reference, and adopted Resolution No. 2022-006 by a vote of 6-0 with one abstention to adopt an Initial Study/Mitigated Negative Declaration, approve Site Development Permit PSD-811-16, Use Permit UP-76-16, Tentative Subdivision Map SUB-233-16, Sign Permit S-129-19, Parking Exception PE-183-19, and Heritage Tree Authorization to approve the Project, and to initiate and recommend City Council approval of General Plan Amendment GP-96-19, Rezoning RZ-194-16, Zoning Text Amendment TA-116-19, and Development Agreement DA-4-21; and
WHEREAS, a timely appeal of the Planning Commission's adoption of Resolution No. 2022-006 was filed on March 17, 2022 ("Appeal"); and WHEREAS, on October 19, 2022, the City Council remanded the matter back to the Planning Commission pending preparation of an Environmental Impact report (EIR) in accordance with the CEQA; and
WHEREAS, a Draft Environmental Impact Report (“Draft EIR”) was released for public and agency review on April 11, 2025, which assessed the potential environmental effects of implementation of the Project, identified means to eliminate or reduce potential adverse impacts, and evaluated a reasonable range of alternatives to the Project; and WHEREAS, a Partially Recirculated Draft Environmental Impact Report (“Partially Recirculated Draft EIR”) was released for public and agency review on August 1, 2025.

Based on the comments received regarding the Draft EIR, the Partially Recirculated Draft EIR recirculated Chapter 4.1, Biological Resources, of the Draft EIR, in order to comply with CEQA Guidelines Section 15088.5; and
WHEREAS, at a duly noticed public hearing on November 3, 2025, the Planning Commission adopted Resolution No. 2025-014 certifying the Final EIR and adopting Findings of Fact and a Statement of Overriding Considerations and the Mitigation, Monitoring, and Reporting Program for the Project (State Clearinghouse No. 2021120126); and
WHEREAS, at that same hearing, the Planning Commission also adopted Resolution No. 2025-015 recommending City Council approval of General Plan Amendment GP-96-19, Rezoning RZ-194-16, Zoning Text Amendment TA-116-19, and Development Agreement DA-4-21; and approving Site Development Permit PSD-811-16, Use Permit UP-076-16, Subdivision Permit SUB-233-16, Sign Permit S-129-19, Parking Exception PE-183-19, and Protected Tree Removal TP-13-25 (“Development Permits”) subject to the conditions of approval; and making Government Code section 65402 findings; and
WHEREAS, a member of the City Council called-up the decisions made by Planning Commission on November 12, 2025, during the 10-day statutory period, pursuant to Pacifica Municipal Code (PMC) Section 2-1.105; and WHEREAS, the City Council after giving all public notices required by Government Code sections 65090 and 65091 conducted a public hearing on December 2, 2025, and at that hearing considered all oral and written information, testimony, and comments received during the public review process, including information received at the public hearing, the oral report from City staff, the written report from City staff, the recommendation of the Planning Commission, materials, exhibits presented, and all other information that constitutes the record of proceedings on which the City Council has based its decision; and
WHEREAS, at that same duly noticed hearing on the Project, the City Council adopted Resolution No. 102-2025 certifying the Final EIR and adopting the CEQA Findings, a Statement of Overriding Considerations (SOC), and Mitigation and Monitoring Program (MMRP) for the Project. The Final EIR, Findings, SOC, and MMRP are herein incorporated into this Resolution by reference (State Clearinghouse No. 2021120126); and
WHEREAS, at that same hearing, the City Council adopted Resolution No. 103- 2025 approving the General Plan Amendment GP-96-19 to reclassify portions of the Project site to remain undeveloped as Conservation; and WHEREAS, at that same hearing, the City Council introduced Ordinance No. xxxC.S. approving Rezoning RZ-194-16 to rezone portions of the property to be developed as C-2 to allow residential uses and portions to remain undeveloped as Open Space, and Zoning Text Amendment TA-116-19 to allow horizontal mixed use as a conditional use in C-2; and
WHEREAS, at that same hearing, the City Council adopted Resolution No. 104- 2025 approving the Site Development Permit PSD-811-16, Use Permit UP-76-16, Parking Exception PE-183-19, Sign Permit S-129-19, Vesting Tentative Subdivision Map SUB233-16, and Tree Removal Permit TP-13-25, to allow the construction of a mixed-sue residential project consisting of 3,165 square feet of commercial and 19 residential condominiums at 570 Crespi Drive (APN 022-162-0310) and the eastern 55 feet of 540 Crespi Drive (APN 02—162-420); and
WHEREAS, the proposed development agreement would incorporate certain public benefits and developer benefits including, but not be limited to, affordable housing contribution in excess of the minimum requirements of the City’s below-market rate (BMR) inclusionary zoning requirements, a driveway lease and annual payments for the use of the Community Center driveway at 540 Crespi Drive, improvements to the Community Center property including construction of off-street parking spaces, a drop-off location at the front of the Community Center building, and wetlands interpretive signage at the rear of the project site; and
WHEREAS, City and Developer have reached mutual agreement on the terms of the Development Agreement to facilitate development of the Project subject to the conditions and requirements set forth therein, in the form attached hereto as Exhibit A (the "Development Agreement"); and
WHEREAS, the City Council, after the duly noticed public hearing on December 2, 2025, introduced this Ordinance.

NOW, THEREFORE, the City Council of the City of Pacifica does ordain as follows:

Section 1. Recitals. The City Council of the City of Pacifica does hereby find that the above-referenced recitals are true and correct and material to the adoption of this Ordinance.

Section 2. Compliance with CEQA. The City Council, adopted Resolution No. xx-2025 certifying the Final EIR and adopting the CEQA Findings, a Statement of Overriding Considerations (SOC), and Mitigation and Monitoring Program (MMRP) for the Project. The Final EIR, Findings, SOC, and MMRP are herein incorporated into this Resolution by reference (State Clearinghouse No. 2021120126). .

Section 3. General Plan Consistency. The City Council hereby finds that the provisions of the Development Agreement and the Project are consistent with the following General Plan policies:
• ES-G-2: Maintain Fiscal Sustainability Foster a fiscally healthy City government and enlarge the City’s revenue base as necessary to sustain and support the community;
• ES-I-7: Mixed Land Uses. Promote development of a broader mix of revenuegenerating land uses, including hotels, to increase the City’s fiscal benefits. • ES-I-11: Development Pays its Fair Share. Continue to require new development to pay its fair share of needed community improvements. • ES-I-18 Public Realm Improvements. Invest in streetscape and public space improvements to attract visitor-oriented development and improve Pacifica’s image and the quality of life for residents.
• ES-I-32: Investment in Infrastructure. Continue to invest in public infrastructure improvements, including landscaping, signage, lighting, undergrounding overhead utility lines, and roadways.
• CD-G-2: Distinct Activity Centers. Create primary activity centers, each distinguished through land use, built form, public realm enhancements, and • CD-I-1 Primary Activity Centers: Create primary activity centers at West Sharp Park, Rockaway Beach, and Linda Mar, and neighborhood centers in Pacific Manor and Park Pacifica (at and around the Park Mall site). • CD-I-4: Support Infill and Redevelopment. Support compatible residential infill on designated vacant lots as shown in Figure 4-3, and redevelopment of underutilized commercial properties, and continue to use the City’s Design Guidelines in evaluation of proposals that don’t meet all development standards in residential districts.
• HE-G-1. Maintain, Improve, and Develop Housing: Encourage the development and retention of housing in a variety of types for all income levels with priority given to low-income households and projects that foster sustainable urban development.
• HE-P-7 Expand affordable rental and homeownership housing choices in areas of opportunity and higher homeownership among resources and promote communities that are opportunities for disproportionately underrepresented in homeownership to foster intergenerational wealth.

Section 4. Development Agreement Findings. The City Council hereby makes the following findings based on the factors for consideration of a Development Agreement set forth in Pacifica Municipal Code 9-4.5007:
• Other pending applications and approved projects.

There are no relevant pending applications or approved projects that would have bearing on this Project.
• The traffic, parking, public service, visual, and other impacts of the proposed development project upon abutting properties and the community.

The Project consists of an infill mixed-use development with direct access to Crespi Drive and utilities within Crespi Drive. The proposed development will not result in any adverse impacts to public health, safety, or welfare as conditioned. In particular, the building mass will be broken up into three buildings as opposed to a single building as would be required under current zoning standards. A traffic impact analysis prepared for the project concluded that the project would not result in adverse impacts related to traffic or parking.
• Ability of the applicant to address public facility needs and financing obligations.

The proposed public benefits in the development agreement include improvements to the existing Community Center located immediately west of the project site at 540 Crespi Drive such as construction of additional off-street parking facilities and a vehicle drop-off at the front of the Community Center. These public improvements will enhance operations at the existing City facility for the benefit of project occupants and City residents generally. In addition, the new driveway would be shared with the proposed development and community center. The development agreement will also require installation of wetlands interpretive signage at the rear of the project site and enhance project occupant appreciation of the natural resources that exist on the broader project site. The development agreement also requires a $272,000 payment for an affordable housing contribution, which will support the City’s affordable housing development activities.
• The relationship of the project to the City's growth management program.

Pursuant to Government Code section 66300(b)(1)(D), the City is currently unable to require issuance of a growth management allocation for housing projects as required by PMC section 9-5.03. Therefore, consideration of this factor is not applicable.
• The provisions included, if any, for reservation, dedication, or improvement of land for public purposes or accessibility to the public.

The project will create 3,165 square feet of commercial floor area and create opportunities for new or expanded businesses within the City. The 19-unit project, including three BMR homeownership units, is among the largest residential projects approved by the City of Pacifica in the last 11 years. According to the City’s Annual Progress Report (APR) on implementation of the Housing Element, during the years 2015 through 2024, the largest projects approved by the City was a 24-unit condominium townhome project at 801 Fassler Avenue and a 70-unit workforce housing project at 930 Oddstad Blvd. The Project will be the third largest project approved by the City since 2015. New housing creates revenue for the City through sales and property taxes, and supports local businesses.

The project will also make a $272,000 contribution to the City’s affordable housing fund, in addition to providing the required three on-site Below Market Rate units, to support future affordable housing development activities by the City.

Therefore, the commercial component of the project will have a positive impact on the City’s economy, and the residential component of the project will have a significant positive impact on meeting the City’s housing needs generally and affordable housing needs specifically, as well as generating additional revenue. • Any other comparable, relevant factor or factors.

The project will result in an appropriate development of the site given its in-fill nature and access to existing City infrastructure. The project is located in a relatively walkable portion of Pacifica given the flat topography of the surrounding area, proximity to Cabrillo Elementary school, convenience shopping in the vicinity, a Safeway grocery store at Highway 1 and Linda Mar Boulevard, as well as nearby Coastal Trail and Linda Mar Beach recreational opportunities. The project, on the whole, inclusive of the provisions of the proposed development agreement, will be positive for the City of Pacifica and would not adversely affect public health, safety, or welfare.

Section 5. Planning Commission Recommendation. The City Council acknowledges the recommendation of the Planning Commission to approve the Development Agreement and has considered the Planning Commission's findings and recommendations in adopting the Development Agreement.

Section 6. Approval of Development Agreement. The City Council hereby approves the Development Agreement as set forth in Exhibit A to this Ordinance. The City Manager is authorized to execute and record the Development Agreement in the form attached hereto as Exhibit A, with minor technical revisions that may be approved by the City Manager in consultation with the City Attorney. The City Manager is further authorized to take all actions and execute documents necessary to implement the terms of the Development Agreement.

Section 7. Severability. If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared unconstitutional.

Section 8. Effective Date. This Ordinance shall become effective thirty (30) days following its passage and adoption.

Section 9. Publication. The City Clerk is hereby ordered and directed to certify to the passage of this Ordinance by the City Council of the City of Pacifica, California, and cause the same to be published once in the San Mateo Daily Journal, a newspaper of general circulation and is adjudicated to publish legal and public notices throughout San Mateo County, including the City of Pacifica, California. * * * * *
The foregoing ordinance was introduced on December 2, 2025, and passed and adopted at a regular meeting of the City Council of the City of Pacifica held on January 12, 2026, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSENT, Councilmembers:
______________________________
Christine Boles, Mayor
ATTEST:

APPROVED AS TO FORM:
____________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney Exhibit A – Draft Development Agreement
1 RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

City of Pacifica
City Clerk’s Office
540 Crespi Drive
Pacifica, CA 94044
Attn: City Clerk
Record Without Fee
Pursuant to Government Code
Section 27383
Space Above Reserved for Recorder’s Use Only

DEVELOPMENT AGREEMENT
(DA-4-21, File No. 2016-004)

BY AND BETWEEN

CITY OF PACIFICA
AND

CRESPI BREAKWATER, LLC
Effective Date:

TABLE OF CONTENTS
Page
-iARTICLE 1 DEFINITIONS.......................................................................................................... 2

1.1 Definitions.............................................................................................................. 2 ARTICLE 2 EFFECTIVE DATE AND TERM............................................................................ 5

2.1 Effective Date ........................................................................................................ 5

2.2 Initial Term of Agreement ..................................................................................... 5

2.3 City Representations and Warranties..................................................................... 6

2.4 Developer Representations and Warranties........................................................... 6 ARTICLE 3 DEVELOPMENT OF THE PROPERTY................................................................. 7

3.1 Vested Rights......................................................................................................... 7

3.2 Applicable Law...................................................................................................... 7

3.3 Development Timing ............................................................................................. 8

3.4 Regulation by Other Public Agencies.................................................................... 8

3.5 Life of Project Approvals....................................................................................... 9

3.6 Developer’s Right to Rebuild ................................................................................ 9

3.7 State and Federal Law............................................................................................ 9 ARTICLE 4 FEES ......................................................................................................................... 9

4.1 Impact Fees............................................................................................................ 9

4.2 Processing Fees.................................................................................................... 10

4.3 Other Agency Fees............................................................................................... 10

4.4 Connection Fees................................................................................................... 10 ARTICLE 5 PUBLIC BENEFITS............................................................................................... 10

5.1 Affordable Housing Obligations.......................................................................... 10

5.2 Driveway Lease ................................................................................................... 10

5.3 Community Center Improvements....................................................................... 11

5.4 Wetlands Interpretive Signage............................................................................. 11

5.5 City of Pacifica Business License........................................................................ 11

5.6 Sales Tax Point of Sale Designation.................................................................... 11 ARTICLE 6 ANNUAL REVIEW ............................................................................................... 11

6.1 Annual Review..................................................................................................... 11

TABLE OF CONTENTS
(continued)
Page
-iiARTICLE 7 COOPERATION AND IMPLEMENTATION...................................................... 12

7.1 Subsequent Approvals ......................................................................................... 12

7.2 Processing Applications for Subsequent Approvals............................................ 13 ARTICLE 8 AMENDMENT OF AGREEMENT AND PROJECT APPROVALS................... 13

8.1 Amendment by Written Consent ......................................................................... 13

8.2 Major Amendments to Agreement....................................................................... 13

8.3 Minor Amendment............................................................................................... 14

8.4 Requirement for Writing...................................................................................... 14

8.5 Subsequent CEQA Review.................................................................................. 14 ARTICLE 9 INSURANCE, INDEMNITY AND COOPERATION IN THE EVENT OF LEGAL CHALLENGE ....................................................................................... 14

9.1 Insurance Requirements....................................................................................... 14

9.2 Indemnity and Hold Harmless............................................................................. 15

9.3 Defense and Cooperation in the Event of a Litigation Challenge ....................... 15 ARTICLE 10 ASSIGNMENT, TRANSFER AND NOTICE..................................................... 15

10.1 Assignment .......................................................................................................... 15

10.2 Successive Assignment........................................................................................ 16 ARTICLE 11 MORTGAGEE PROTECTION............................................................................ 16

11.1 Mortgagee Protection........................................................................................... 16

11.2 Mortgagee Not Obligated .................................................................................... 16

11.3 Notice of Default to Mortgagee ........................................................................... 17

11.4 No Supersedure.................................................................................................... 17 ARTICLE 12 DEFAULT; REMEDIES; TERMINATION ........................................................ 17

12.1 Breach and Default .............................................................................................. 17

12.2 Withholding of Permits........................................................................................ 17

12.3 Termination.......................................................................................................... 18

12.4 Specific Performance for Violation of a Condition ............................................. 18

12.5 Legal Actions....................................................................................................... 18

12.6 Rights and Remedies Are Cumulative................................................................. 18

TABLE OF CONTENTS
(continued)
Page
-iii12.7 No Damages......................................................................................................... 18

12.8 Resolution of Disputes......................................................................................... 19

12.9 Surviving Provisions............................................................................................ 19 ARTICLE 13 GENERAL PROVISIONS ................................................................................... 19

13.1 Covenants Binding on Successors and Assigns and Run with Land................... 19

13.2 Notice................................................................................................................... 19

13.3 Permitted Delays.................................................................................................. 20

13.4 Counterparts......................................................................................................... 20

13.5 Waivers................................................................................................................ 20

13.6 Construction of Agreement.................................................................................. 21

13.7 Headings .............................................................................................................. 21

13.8 Severability .......................................................................................................... 21

13.9 Time is of the Essence ......................................................................................... 21

13.10 Extension of Time Limits.................................................................................... 21

13.11 Signatures............................................................................................................. 21

13.12 Entire Agreement................................................................................................. 21

13.13 Estoppel Certificate.............................................................................................. 21

13.14 Recordation of Termination................................................................................. 22

13.15 City Approvals and Actions................................................................................. 22

13.16 Negation of Partnership ....................................................................................... 22

13.17 No Third Party Beneficiaries............................................................................... 22

13.18 Governing State Law ........................................................................................... 22 1 DEVELOPMENT AGREEMENT (DA-4-21)
This Development Agreement (“Agreement”), dated as of the Effective Date, is entered into by and between the City of Pacifica, a California municipal corporation (“City”) and Crespi Breakwater, LLC, a California limited liability company (“Developer”). Developer and City may be referred to individually in this Agreement as a “Party” and collectively as the “Parties.”

R E C I T A L S
A. In order to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic costs and risks of development, the Legislature of the State of California enacted section 65864 et seq. of the Government Code (“Development Agreement Statute”) which authorizes a city and a developer having a legal or equitable interest in real property to enter into a binding, long-term development agreement establishing certain development rights in the property.

B. In accordance with the Development Agreement Statute, the City Council of the City of Pacifica enacted Pacifica Municipal Code (“PMC”) section 9-4.5001 et seq. (“Development Agreement Regulations”), which authorize the execution of development agreements and set forth the required contents and form of those agreements. The provisions of the Development Agreement Statute and the City’s Development Agreement Regulations are collectively referred to herein as the “Development Agreement Law.” C. Developer is the owner of that certain real property located at 570 Crespi Drive in the City of Pacifica (“Developer Property”). Developer has concurrently entered into an Agreement for Purchase and Sale (Including Joint Escrow Instructions) (“Purchase Agreement”) to purchase a portion of 540 Crespi Drive from the City of Pacifica to develop the Project as described below (“Acquisition Property”). The Acquisition Property is a portion of a larger City property on which the City’s Community Center is located, the remainder of which will be retained by City for public purposes (“Community Center Parcel”). The Developer Property and the Acquisition Property are described in Exhibit A attached hereto and incorporated herein by this reference and may be collectively referred to as the “Property.” D. Developer, with City’s consent and consistent with the terms of the Purchase Agreement, has submitted applications to the City for a General Plan Amendment (GPA-096- 19), Rezoning (RZ-194-16), Zoning Text Amendment (TA-116-19), Development Agreement (DA-4-21), Site Development Permit (PSD-811-16), Use Permit (UP-076-16), Parking Exception (PE-183-19), Sign Permit (S-129-19), Tentative Subdivision Map (SUB-233-16), and Heritage Tree Removal Authorization to develop 19 residential units, including three and only three below market rate units, (“Residential Project”) and approximately 3,100 square feet of commercial space (“Commercial Space”) on the Property (“Project”). The Residential Project shall consist of both flats and townhome products, as shown in more detail in the Existing Approvals, as defined in Recital G below.

E. City and Developer have reached mutual agreement on the terms of this Agreement and Purchase Agreement and desire to voluntarily enter into this Agreement to 2 facilitate development of the Project subject to the conditions and requirements set forth herein.

F. Pursuant to the California Environmental Quality Act (“CEQA”) (Public Resources Code section 21000 et seq.), a Mitigated Negative Declaration (“MND”) has been prepared and adopted for the Project. As required by CEQA, the City has adopted written findings and a Mitigation Monitoring and Reporting Program (“MMRP”) on , pursuant to Resolution No. .

G. Prior to or concurrently with approval of this Agreement, the City will take numerous actions in connection with the development of the Project on the Property. The approvals and development actions described herein are collectively referred to as the “Existing Approvals”: (1) General Plan Amendment; (2) Rezoning; (3) Zoning Text Amendment; (4) Site Development Permit; (5) Use Permit; (6) Parking Exception; (7) Sign Permit; (8) Tentative Subdivision Map; and (9) Heritage Tree Removal Authorization.

H. City has given the required notice of its intention to adopt this Agreement and has conducted public hearings thereon pursuant to Government Code section 65867 and PMC section 9-4.5006. The City has reviewed and evaluated this Agreement in accordance with the Development Agreement Law and found that the provisions of this Agreement and its purposes are consistent with the Development Agreement Law and the goals, policies, standards and land use designations specified in the General Plan.

I. On the City Council introduced Ordinance No.
(“Enacting Ordinance”) approving this Agreement and authorizing its execution, and adopted that Ordinance on .

A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other valuable consideration, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions.
“Affiliated Party” is defined in Section 10.1.
“Agreement” shall mean this Development Agreement between City and Developer, including all Exhibits hereto.
“Applicable Law” is defined in Section 3.2.
“Assignee” is defined in Section 10.1.
“Assignment” is defined in Section 10.1.
“CEQA” means the California Environmental Quality Act, California Public Resources 3 Code section 21000, et seq., as amended from time to time. “CEQA Guidelines” means the State CEQA Guidelines (California Code of Regulations, Title 14, section 15000, et seq.), as amended from time to time. “Changes in the Law” is defined in Section 3.7.
“City” means the City of Pacifica, a municipal corporation. “City Council” means the City Council of the City of Pacifica. “City Manager” means City’s City Manager or his or her designee. “City Parties” means and includes City and its elected and appointed officials, officers, employees, attorneys, contractors and representatives.
“Claims” means liabilities, obligations, orders, claims, damages, fines, penalties and expenses, including attorneys’ fees and costs.
“Commence Construction” shall be deemed to have occurred when the Developer has begun vertical construction as evidenced by an approved foundation City inspection. “Connection Fees” means those fees charged by City on a citywide basis or by a utility provider to utility users as a cost for connecting water, sanitary sewer, and other applicable utilities, except for any such fee or portion thereof that constitutes an Impact Fee, as defined below.
“Default” is defined in Section 12.1.
“Developer” means Crespi Breakwater, LLC, and its permitted successors and assigns. “Development Agreement Law” is defined in Recital B.
“Development Agreement Regulations” is defined in Recital B. “Development Agreement Statute” is defined in Recital A. “Effective Date” means the date that this Agreement becomes effective as determined under Section 2.1.
“MND” is defined in Recital F.
“Enacting Ordinance” refers to the Ordinance identified in Recital P. “Exactions” means exactions that may be imposed by the City as a condition of developing the Project, including requirements for acquisition, dedication or reservation of land; and obligations to construct on-site or off-site public and private infrastructure improvements such as roadways, utilities or other improvements necessary to support the Project, whether such exactions constitute subdivision improvements, mitigation measures in connection with 4 environmental review of the Project, or impositions made under Applicable City Regulations.

For purposes of this Agreement, Exactions do not include Impact Fees. “Existing Approvals” means and includes those permits and approvals for the Project granted by City to Developer as of the Effective Date as set forth in Recital G. “Extension Term” is defined in Section 2.2.1.
“General Plan” means the City of Pacifica’s General Plan, as amended from time to time.
“Impact Fees” means the monetary amount charged by City in connection with a development project for the purpose of defraying all or a portion of the cost of mitigating the impacts of the development project or development of the public facilities related to the development project, including, any “fee” as that term is defined by Government Code section 66000(b). For purposes of this Agreement, a fee that meets both the definitions of an Impact Fee and an Exaction will be considered to be an Impact Fee. “Initial Term” is defined in Section 2.2.
“Litigation Challenge” is defined in Section 9.3.
“Major Amendment” is defined in Section 8.2.
“Minor Amendment” is defined in Section 8.2.
“MND” is defined in Recital J.
“Mortgage” means any mortgage, deed of trust, security agreement, and other like security instrument encumbering all or any portion of the Property or any of the Developer’s rights under this Agreement
“Mortgagee” means the holder of any Mortgage, and any successor, assignee or transferee of any such Mortgage holder.
“Municipal Code” means and refers to the City of Pacifica’s Municipal Code, as amended from time to time.
“New City Laws” means and includes any ordinances, resolutions, orders, rules, official policies, standards, specifications, guidelines or other regulations, which are promulgated or adopted by the City (including but not limited to any City agency, body, department, officer or employee) or its electorate (through their power of initiative or otherwise) after the Effective Date.
“Notice of Breach” is defined in Section 12.1.
“Other Agency Fees” is defined in Section 4.3.
“Other Agency Subsequent Approvals” means Subsequent Project Approvals to be 5 obtained from entities other than the City.
“Permitted Delay” is defined in Section 13.3.
“Planning Commission” means the City of Pacifica Planning Commission. “Processing Fees” means all fees for processing development project applications, including any required supplemental or other further environmental review, plan checking and inspection and monitoring for land use approvals, design review, grading and building permits, General Plan maintenance fees, and other permits and entitlements required to implement the Project, which are in effect at the time those permits, approvals or entitlements are applied for, and which are intended to cover the actual costs of processing the foregoing. “Project Approvals” means the Existing Approvals and all Subsequent Approvals. “Project” is defined in Recital I.
“Property” is defined in Recital C.
“Subdivision Map Act” means California Government Code sections 66410 through 66499.58, as it may be amended from time to time.
“Subsequent Approvals” is defined in Section 7.1.
“Term” means the Initial Term plus any Extension Term, if such Extension Term is granted under the terms of this Agreement.

ARTICLE 2

EFFECTIVE DATE AND TERM

2.1 Effective Date. The Effective Date of this Agreement shall be the later of (1) the date that is thirty (30) days after the date that the Enacting Ordinance is adopted, or (2) the date this Agreement is fully executed by the Parties. The Effective Date is inserted at the beginning of this Agreement.

2.2 Initial Term of Agreement. Unless earlier terminated, the “Initial Term” of this Agreement shall commence on the Effective Date and shall expire on the earlier of (1) the three year (3) anniversary of the Effective Date, or (2) Developer’s satisfaction of all obligations contained herein.

2.2.1 Extension of Initial Term. At the request of Developer, the Initial Term of this Agreement shall be extended from the date of expiration of the Initial Term until the date which is two (2) years following the expiration of the Initial Term (“Extension Term”), provided that at the end of the Initial Term: (a) Developer is not, at the time, in Default of any of its obligations hereunder following notice and expiration of applicable cure periods, including the requirement to Commence Construction; (b) Developer is diligently making progress on the construction of the Project; (c) the applicable Developer warranties and representations in Section 2.4 below continue to be true and correct; and (d) no event has occurred which with the passage of time or 6 giving of notice or both would constitute a Default by Developer hereunder. Following the expiration of the Term, or the earlier completion of development of the Project and satisfaction of all of Developer’s obligations in connection therewith and under this Agreement, this Agreement shall be deemed terminated and of no further force and effect.

2.2.2 Memorandum of Extension. If the Extension Term is granted, City and Developer agree to execute, acknowledge and record in the Official Records of San Mateo County a memorandum evidencing approval of the Extension Term.

2.2.3 Termination of the Agreement. In the event the Purchase Agreement is terminated or Developer fails to purchase the Acquisition Property, this Agreement shall automatically be deemed terminated and of no further force and effect.

2.3 City Representations and Warranties. City represents and warrants to Developer that, as of the Effective Date:

2.3.1 City is a municipal corporation, and has all necessary powers under the laws of the State of California to enter into and perform the undertakings and obligations of City under this Agreement.

2.3.2 The execution and delivery of this Agreement and the performance of the obligations of the City hereunder have been duly authorized by all necessary City Council action and all necessary approvals have been obtained.

2.3.3 This Agreement is a valid obligation of City and is enforceable in accordance with its terms.

During the Term of this Agreement, City shall, upon learning of any fact or condition which would cause of any of the warranties and representations in this Section 2.3 not to be true, immediately give written notice of such fact or condition to Developer.

2.4 Developer Representations and Warranties. Developer represents and warrants to City that, as of the Effective Date:

2.4.1 Developer is duly organized and validly existing California limited liability company existing under the laws of the State of California, and is in good standing and has all necessary powers under the laws of the State of California to own property interests and in all other respects enter into and perform the undertakings and obligations of Developer under this Agreement.

2.4.2 The execution and delivery of this Agreement and the necessary performance of the obligations of Developer hereunder have been duly authorized by all necessary action and all necessary shareholder approvals have been obtained.

2.4.3 This Agreement is a valid obligation of Developer and is enforceable in accordance with its terms.
7 2.4.4 Developer has not (a) made a general assignment for the benefit of creditors; (b) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Developer’s creditors; (c) suffered the appointment of a receiver to take possession of all, or substantially all, of Developer’s assets; (d) suffered the attachment or other judicial seizure of all, or substantially all, of Developer’s assets; or (e) admitted in writing its inability to pay its debts as they come due.

During the Term of this Agreement, Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 2.4 not to be true, immediately give written notice of such fact or condition to City.

ARTICLE 3

DEVELOPMENT OF THE PROPERTY

3.1 Vested Rights. Developer shall have the vested right to develop the Property and the Project in accordance with and subject to the Existing Project Approvals, the Subsequent Project Approvals, Applicable Law and this Agreement, which shall control the permitted uses, density and intensity of use of the Property and the maximum height and size of buildings on the Property.

3.2 Applicable Law. City and Developer acknowledge and agree that City is restricted in its authority to limit its police power by contract and that the limitations, reservations and exceptions contained in this Agreement are intended to reserve to City all of its police power that cannot be so limited. Notwithstanding the foregoing reservation of City, it is the intent of City and Developer that this Agreement be construed to provide Developer with rights afforded by law, including but not limited to, the Development Agreement Statute. Therefore, the laws, rules, regulations, official policies, standards and specifications of City applicable to the development of the Property and/or the Project shall be (collectively, “Applicable Law”):

3.2.1 Those rules, regulations, official policies, standards and specifications of the City set forth in the Project Approvals and this Agreement, including without limitation Section 3.1 above;

3.2.2 With respect to matters not addressed by and not otherwise inconsistent with the Project Approvals and this Agreement, those laws, rules, regulations, official policies, standards and specifications (including City ordinances and resolutions) governing permitted uses, building locations, timing and manner of construction, densities, intensities of uses, heights and sizes, requirements for on- and off-site infrastructure and public improvements, in force and effect on the Effective Date, except as set forth in section 3.1 above;

3.2.3 New City Laws that relate to hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure imposed at any time, provided such New City Laws are uniformly applied on a City-wide basis to all substantially similar types of development projects and properties;

3.2.4 New City Laws that revise City’s uniform construction codes, including City’s building code, plumbing code, mechanical code, electrical code, fire code, grading code and other uniform construction codes, as of the date of permit issuance, provided, that such New City 8 Laws are uniformly applied on a City-wide basis to all substantially similar types of development projects and properties;

3.2.5 New City Laws that are necessary to protect physical health and safety of the public; provided, that such New City Laws are uniformly applied on a City-wide basis to all substantially similar types of development projects and properties;

3.2.6 New City Laws that do not conflict with this Agreement or the Project Approvals, provided such new City Laws are uniformly applied on a City-wide basis to all substantially similar types of development projects and properties; and

3.2.7 New City Laws that do not apply to the Property and/or the Project due to the limitations set forth above, but only to the extent that such New City Laws are accepted in writing by Developer in its sole discretion.

3.3 Development Timing. Developer shall phase and construct the Project within the timeframes set forth below:

3.3.1 Developer shall obtain a building permit to construct the Commercial Space prior to, or concurrently with, issuance of a building permit for the Residential Project. In no event shall City issue a building permit for any portion of the Project prior to the issuance of a building permit for the Commercial Space.

3.3.2 Developer shall Commence Construction of the Commercial Space prior to, or concurrently with, Commencement of Construction of any other portion of the Project, but no later than two years from the Effective Date, subject to a Permitted Delay.

3.3.3 Developer shall complete construction of and obtain a certificate of occupancy for the entire Project, including the Commercial Space, prior to the date that is twenty-four (24) months from the Commencement of Construction of the Commercial Space subject to extension due to a Permitted Delay; provided, however, such 24-month time period shall be extended by the City for up to 6 months upon the written request of Developer if, in City's reasonable determination, Developer has made substantial progress toward completion of construction of the Project prior to the expiration of such initial 24-month period.

3.3.4 Except as set forth above, since the California Supreme Court held in Pardee Construction Co. v. The City of Camarillo, 37 Cal.3d 465 (1984), that the failure of the parties therein to consider and expressly provide for the timing of development resulted in a lateradopted initiative restricting the timing of development prevailing over such parties’ agreement, it is the desire to avoid that result by acknowledging that, unless otherwise provided for in this Agreement, Developer’s vested rights under this Agreement include the right to develop the Property and the Project in such order and at such rate and at such times as Developer deems appropriate in the exercise of its discretion, subject to the terms, requirements and conditions of the Project Approvals and this Agreement.

3.4 Regulation by Other Public Agencies. City and Developer acknowledge and agree that other governmental or quasi-governmental entities not within the control of City possess authority to regulate aspects of the development of the Property and the Project and that this 9 Agreement does not limit the authority of such other public agencies. City shall reasonably cooperate with Developer in Developer’s effort to obtain such permits and approvals as may be required by other governmental or quasi-governmental entities in connection with the development of, or the provision of services to, the Property and/or the Project; provided, however, City shall have no obligation to incur any costs, without compensation or reimbursement, or to amend any City policy, regulation or ordinance in connection therewith.

3.5 Life of Project Approvals. The term of any and all Project Approvals shall automatically be extended for the longer of the Term or the term otherwise applicable to such Project Approval. Without limiting the generality of the foregoing, pursuant to the Subdivision Map Act, any vesting or tentative maps heretofore or hereafter approved in connection with development of the Project or the Property shall be extended for the Term (and may be subject to other extensions provided under the Subdivision Map Act).

3.6 Developer’s Right to Rebuild. City agrees that Developer may renovate or rebuild portions of the Project at any time within the Term should it become necessary due to any casualty, including natural disaster or changes in seismic requirements. Such renovations or reconstruction shall be processed as a Subsequent Project Approval consistent with all prior Project Approvals and Applicable City Law. Any such renovation or rebuilding shall be subject to all design, density and other limitations and requirements imposed by this Agreement, and shall comply with the Project Approvals, Applicable City Law, and the requirements of CEQA.

3.7 State and Federal Law. As provided in Section 65869.5 of the Development Agreement Statute, this Agreement shall not preclude the applicability to the Project of changes in laws, regulations, plans or policies, to the extent that such changes are specifically mandated and required by changes in State or Federal laws or by changes in laws, regulations, plans or policies of special districts or other governmental entities, other than City, created or operating pursuant to the laws of the State of California (“Changes in the Law”). In the event Changes in the Law prevent or preclude, or render substantially more expensive or time consuming, compliance with one (1) or more provisions of this Agreement, the City and Developer shall meet and confer in good faith in order to determine whether such provisions of this Agreement shall be modified or suspended, or performance thereof delayed, as may be necessary to comply with Changes in the Law. Nothing in this Agreement shall preclude City or Developer from contesting by any available means (including administrative or judicial proceedings) the applicability to the Project any such Changes in the Law. If Changes in the Law preclude or substantially prevent or preclude, or render substantially more expensive or time consuming, performance of this Agreement in a manner that makes the Project economically infeasible, Developer, in its sole and absolute discretion, may terminate this Agreement by providing written notice thereof to City.

ARTICLE 4
FEES

4.1 Impact Fees. Developer shall pay any and all Impact Fees imposed by City that are in place as of the Effective Date, at the rate in effect of the time of building permit issuance. In addition, City may impose and Developer shall comply with those Exactions required by this Agreement and the Project Approvals.
10 4.2 Processing Fees. Subject to Developer’s right to protest and/or pursue a challenge in law or equity to any new or increased Processing Fee, City may charge and Developer agrees to pay any and all Processing Fees which are in effect on a City-wide basis at the time those permits, approvals or entitlements are applied for, and which are intended to cover the actual costs of processing the foregoing.

4.3 Other Agency Fees. Nothing in this Agreement shall preclude City from collecting fees from Developer that are lawfully imposed on the Project by another agency having jurisdiction over the Project, which the City is required to collect pursuant to Applicable Law (“Other Agency Fees”).

4.4 Connection Fees. Subject to Developer’s right to protest and/or pursue a challenge in law or equity to any new or increased connection Fee, City may charge and Developer shall pay any Connection Fee that is lawfully adopted.

ARTICLE 5

PUBLIC BENEFITS

5.1 Affordable Housing Obligations.

5.1.1 Construction of Below Market Rate Units. Prior to the issuance of a building permit for any portion of the Project, Developer shall enter into an Affordable Housing Agreement, in a form approved by the City, in its discretion, providing among other things for the provision of three units as ownership Below Market Rate Units in accordance with the requirements of the City’s Inclusionary Ordinance, PMC section 9-4.4700 et seq., as to construction and restriction of ownership units, as may be amended (the “Below Market Rate Units”). The Below Market Rate Units shall be provided as follows: (1) one flat restricted to low-income households; (2) one townhome restricted to low-income households; and (3) one townhome restricted to moderate-income households. In addition, one townhome Below Market Rate Unit shall be provided in each building.. Developer may not pay an in-lieu fee to meet the requirements in this Section 5.1.1.

5.1.2 Affordable Housing Contribution. Developer shall make a payment in the amount of $272,000.00, subject to annual adjustment based on the San Francisco Bay Area Consumer Price Index beginning one year after the Effective Date (“Affordable Housing Contribution”) toward the development of affordable housing in the City. The Affordable Housing Contribution shall be paid to City prior to the issuance of the first building permit for the Project.

5.2 Driveway Lease. Prior to issuance of a certificate of occupancy for any portion of the Project, Developer shall enter into a license agreement with the City, in a form approved by the City in its discretion, for the use of the City’s driveway located on the Community Center Property. Among other things, the license agreement shall set forth the financial terms, with Developer’s, or its successor-in-interest, payment to City in the amount of $7,700 per year, increased annually as of the Effective Date of this Agreement pursuant to the Engineering News Record Construction Cost Index for the San Francisco Bay Area. 11 5.3 Community Center Improvements. Developer shall make the following improvements to the Community Center: (1) add a total of 14 parking spaces to the Communitty Center parcel in locations to bed determined by the City; (2) construct a drop-off location in front of the Community Center; and (3) improve the landscaping along Crespi Drive; (“Community Center Improvements”). The Community Center Improvements shall be completed in a good and workmanlike manner according to plans and specifications to be approved by City. The Community Center Improvements must be completed to the satisfaction of City prior to the issuance of the first certificate of occupancy.

5.4 Wetlands Interpretive Signage. Prior to the issuance of the first certificate of occupancy, Developer shall install educational/interpretative signage on the portion of the Developer Property on which wetlands are located. The location, content and materials of the signage must be approved by City prior to installation.

5.5 City of Pacifica Business License. Developer, at its expense, shall obtain and maintain a City of Pacifica business license at all times during the Term, and shall include a provision in all general contractor agreements for the Project requiring each such general contractor to obtain and maintain a City of Pacifica business license during performance of the work of construction.

5.6 Sales Tax Point of Sale Designation. Developer shall use good faith, diligent efforts to the extent allowed by law to require all persons and entities providing bulk lumber, concrete, structural steel and pre-fabricated building components, such as roof trusses, to be used in connection with the construction and development of, or incorporated into, the Project, to (a) obtain a use tax direct payment permit; (b) elect to obtain a subcontractor permit for the job site of a contract valued at Five Million Dollars ($5,000,000) or more; or (c) otherwise designate the Property as the place of use of material used in the construction of the Project in order to have the local portion of the sales and use tax distributed directly to City instead of through the county-wide pool. Developer shall instruct its general contractor(s) for the Project to, and cause such general contractor(s) to instruct its/their subcontractors to, cooperate with City to ensure the local sales/use tax derived from construction of the Project is allocated to City to the fullest extent possible. To assist City in its efforts to ensure that such local sales/use tax is so allocated to City, Developer shall on an annual basis provide City with such information as shall be reasonably requested by City regarding subcontractors working on the Project with contracts in excess of the amount set forth above, including a description of all applicable work and the dollar value of such subcontracts. City may use such information to contact each subcontractor who may qualify for local allocation of use taxes to City.

ARTICLE 6

ANNUAL REVIEW

6.1 Annual Review.

6.1.1 Purpose. As required by California Government Code section 65865.1 and PMC section 9-4.5009, City and Developer shall review this Agreement and all actions taken pursuant to the terms of this Agreement with respect to the development of the Project every twelve (12) months to determine good faith compliance with this Agreement. Specifically, City’s annual review shall be conducted for the purposes of determining compliance by Developer with its 12 obligations under this Agreement. Each annual review shall also document: (a) the status of the Project development, and (b) any extension of the Initial Term of this Agreement pursuant to Section 2.2.

6.1.2 Conduct of Annual Review. The annual review shall be conducted as provided in this Section 6.1.2. By December 1st of each year, Developer shall provide documentation of its good faith compliance with this Agreement during the calendar year, and such other information as may reasonably be requested by the Planning Director. If the Planning Director finds good faith compliance by Developer with the terms of this Agreement, Developer shall be notified in writing and the review for that period shall be concluded. If the Planning Director is not satisfied that Developer is performing in accordance with the terms and conditions of this Agreement, the Planning Director shall prepare a written report specifying why the Developer may not be in good faith compliance with this Agreement, refer the matter to the City Council, and notify Developer in writing at least fifteen (15) business days in advance of the time at which the matter will be considered by the City Council. This notice shall include the time and place of the City Council’s public hearing to evaluate good faith compliance with this Agreement, a copy of the Planning Director’s report and recommendations, if any, and any other information reasonably necessary to inform Developer of the nature of the proceeding. The City Council shall conduct a public hearing at which Developer must submit evidence that it has complied in good faith with the terms and conditions of this Agreement. Developer shall be given an opportunity to be heard at the hearing. The findings of the City Council on whether Developer has complied with this Agreement for the period under review shall be based upon substantial evidence in the record. If the City Council determines, based upon substantial evidence, that Developer has complied in good faith with the terms and conditions of this Agreement, the review for that period shall be concluded. If the City Council determines, based upon substantial evidence in the record, that Developer has not complied in good faith with the terms and conditions of this Agreement, or there are significant questions as to whether Developer has complied with the terms and conditions of this Agreement, the City Council, at its option, may continue the hearing and may notify Developer of the City’s intent to meet and confer with Developer within thirty (30) days of such determination, prior to taking further action. Following such meeting, the City Council shall resume the hearing in order to further consider the matter and to make a determination regarding Developer’s good faith compliance with the terms and conditions of this Agreement.

In the event City determines Developer is not in good faith compliance with the terms and conditions of this Agreement, City may give the Developer a written Notice of Breach, in which case the provisions of Section 12.1, below, shall apply.

6.1.3 Failure to Conduct Annual Review. Failure of City to conduct an annual review shall not constitute a waiver by the City of its rights to otherwise enforce the provisions of this Agreement nor shall Developer have or assert any defense to such enforcement by reason of any such failure to conduct an annual review.

ARTICLE 7

COOPERATION AND IMPLEMENTATION

7.1 Subsequent Approvals. Certain subsequent land use approvals, entitlements, and permits other than the Existing Approvals, will be necessary or desirable for implementation of the Project (“Subsequent Approvals”). The Subsequent Approvals may include, without limitation, 13 the following: amendments of the Existing Approvals, grading permits, building permits, design review permits, sewer and water connection permits, certificates of occupancy, lot line adjustments, site plans, development plans, land use plans, building plans and specifications, parcel maps and/or subdivision maps, and any amendments to, or repealing of, any of the foregoing. Except as otherwise expressly provided herein, the City shall not impose requirements or conditions upon the development and construction of the Project that are inconsistent with the Existing Approvals and the terms and conditions of this Agreement.

7.2 Processing Applications for Subsequent Approvals.

7.2.1 Timely Submittals by Developer. Developer acknowledges that City cannot begin processing applications for Subsequent Approvals until Developer submits complete applications on a timely basis. Developer shall use diligent good faith efforts to (a) provide to City in a timely manner any and all documents, applications, plans, and other information necessary for City to carry out its obligations hereunder; and (b) cause Developer’s planners, engineers, and all other consultants to provide to City in a timely manner all such documents, applications, plans and other materials required under Applicable Law. It is the express intent of Developer and City to cooperate and diligently work to obtain any and all Subsequent Approvals.

7.2.2 Timely Processing by City. Upon submission by Developer of all appropriate applications and Processing Fees for any pending Subsequent Approval, City shall, to the full extent allowed by Applicable Law, promptly and diligently, subject to City ordinances, policies and procedures regarding hiring and contracting, commence and complete all steps necessary to act on Developer’s currently pending Subsequent Approval applications including: (a) providing at Developer’s expense and subject to Developer’s request and prior approval, reasonable overtime staff assistance, additional staff and/or staff consultants for concurrent, expedited planning and processing of each pending Subsequent Approval application (Developer shall pay such costs at cost plus 10% for administrative costs incurred); (b) if legally required, providing notice and holding public hearings; and (c) acting on any such pending Subsequent Approval application.

ARTICLE 8

AMENDMENT OF AGREEMENT AND PROJECT APPROVALS

8.1 Amendment by Written Consent. Except as otherwise expressly provided herein (including Section 6.1 relating to City’s annual review and Section 12.1 relating to termination in the event of a breach), this Agreement may be terminated, modified or amended only by mutual written consent of the Parties hereto or their successors in interest or assignees and in accordance with the provisions of Government Code sections 65967, 65867.5 and 65868.

8.2 Major Amendments to Agreement. Any amendment to this Agreement which affects or relates to (a) the Term; (b) permitted uses of the Property; (c) provisions for the reservation or dedication of land; (d) conditions, terms restrictions or requirements for subsequent discretionary actions; (e) the density or intensity of the use of the Property or the maximum height or size of proposed buildings; or (f) monetary contributions by Developer, shall be deemed a “Major Amendment” and shall require giving of notice and a public hearing before the Planning 14 Commission and City Council. Any amendment which is not a Major Amendment shall be deemed a “Minor Amendment” and shall not, except to the extent otherwise required by Applicable Law, require notice of public hearing before the Parties may execute an amendment hereto. The City Manager or his or her designee shall have the authority to determine if an amendment is a Major Amendment or a Minor Amendment.

8.3 Minor Amendment. The City Manager or his or her designee shall have the authority to review and approve amendments to this Agreement provided that such amendments are not Major Amendments.

8.4 Requirement for Writing. No modification, amendment or other change to this Agreement or any provision hereof shall be effective for any purpose unless specifically set forth in a writing which refers expressly to this Agreement and is signed by duly authorized representatives of the Parties or their successors in interest.

8.5 Subsequent CEQA Review. In the event that any additional CEQA documentation is legally required for any discretionary Subsequent Approval, then the scope of such documentation shall be focused, to the extent possible consistent with CEQA, on the specific subject matter of the Subsequent Approval, and the City, at Developer’s expense, shall conduct such additional CEQA review as expeditiously as possible.

ARTICLE 9

INSURANCE, INDEMNITY AND COOPERATION IN THE EVENT OF

LEGAL CHALLENGE

9.1 Insurance Requirements. Developer shall procure and maintain, or cause its contractor(s) to procure and maintain, until the earlier of (a) the expiration of this Agreement; or (b) the completion of the Project, a commercial general liability policy in an amount not less than two million ($2,000,000) combined single limit, including contractual liability together with a comprehensive automobile liability policy in the amount of one million ($1,000,000), combined single limit. Such policy or policies shall be written on an occurrence form, so long as such form of policy is then commonly available in the commercial insurance marketplace. Developer’s insurance shall be placed with insurers with a current A.M. Best’s rating of no less than A-:VII or a rating otherwise approved by the City in its sole discretion. Developer shall furnish at City’s request appropriate certificate(s) of insurance evidencing the insurance coverage required hereunder, and City Parties shall be named as additional insured parties in such policies. The certificate of insurance shall contain a statement of obligation on the part of the carrier to notify City of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination (ten (10) days advance notice in the case of cancellation for nonpayment of premiums) where the insurance carrier provides such notice to the Developer. Coverage provided hereunder by Developer shall be primary insurance and shall not be contributing with any insurance, selfinsurance or joint self-insurance maintained by City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of City.
15 9.2 Indemnity and Hold Harmless. Developer shall indemnify, defend (with counsel reasonably acceptable to City) and hold harmless City Parties from and against any and all Claims, including Claims for any bodily injury, death, or property damage, resulting directly or indirectly from the development or construction of the Project by or on behalf of Developer, and/or from any other acts or omissions of Developer under this Agreement, whether such acts or omissions are by Developer or any of Developer’s contractors, subcontractors, agents or employees, except to the extent such Claims arise from the sole active negligence or willful misconduct of City or City Parties.

9.3 Defense and Cooperation in the Event of a Litigation Challenge. City and Developer shall cooperate in the defense of any court action or proceeding instituted by a third party or other governmental entity or official challenging the validity of any provision of this Agreement, or the Project Approvals (“Litigation Challenge”), and the Parties shall keep each other informed of all developments relating to such defense, subject only to confidentiality requirements that may prevent the communication of such information. To the extent Developer desires to contest or defend such Litigation Challenge, (a) Developer shall take the lead role defending such Litigation Challenge and may, in its sole discretion, elect to be represented by the legal counsel of its choice; (b) City may, in its sole discretion, elect to be separately represented by the legal counsel of its choice in any such action or proceeding with the reasonable costs of such representation to be paid by Developer; (c) Developer shall reimburse City, within ten (10) business days following City’s written demand therefor, which may be made from time to time during the course of such litigation, all reasonable costs incurred by City in connection with the Litigation Challenge, including City’s administrative, legal, and court costs and City Attorney oversight expenses; and (d) Developer shall indemnify, defend, and hold harmless City Parties from and against any damages, attorneys’ fees or cost awards, including attorneys’ fees awarded under Code of Civil Procedure section 1021.5, assessed or awarded against City by way of judgment, settlement, or stipulation. Any proposed settlement of a Litigation Challenge shall be subject to City’s approval not to be unreasonably withheld, conditioned or delayed. If the terms of the proposed settlement would constitute an amendment or modification of this Agreement or any Project Approvals, the settlement shall not become effective unless such amendment or modification is approved by City in accordance with Applicable Law, and City reserves its full legislative discretion with respect thereto. If Developer opts not to contest or defend such Litigation Challenge, City shall have no obligation to do so.

ARTICLE 10

ASSIGNMENT, TRANSFER AND NOTICE

10.1 Assignment. Because of the necessity to coordinate development of the entirety of the Property pursuant to plans for the Project, particularly with respect to the provision of on- and off-site public improvements and public services and benefits, certain restrictions on the right of Developer to assign or transfer its interest under this Agreement with respect to the Property, or any portion thereof, are necessary in order to assure the achievement of the goals, objectives and public benefits of the Project and this Agreement. Developer agrees to and accepts the restrictions set forth in this Section 10.1 as reasonable and as a material inducement to City to enter into this Agreement. Developer shall have the right to sell or transfer its fee interest, or ground lease its interests in the Property, in whole or in part (provided that no such partial transfer shall violate the provisions of the Subdivision Map Act) to any person, partnership, joint 16 venture, firm, company, corporation or other entity (any of the foregoing, an “Assignee”) subject to the written consent of City, which consent shall not be unreasonably withheld, provided that Developer may assign its rights under this Agreement without the consent of City to any corporation, limited liability company, partnership or other entity which is controlling of, controlled by, or under common control with Developer, and “control,” for purposes of this definition, means effective management and control of the other entity, subject only to major events requiring the consent or approval of the other owners of such entity (“Affiliated Party”).

Developer shall provide the City with written notice of any proposed transfer or assignment of Developer’s rights or obligations hereunder (each, an “Assignment”) at least thirty (30) days prior to such Assignment. Each such notice of proposed Assignment shall be accompanied by evidence of Assignee’s agreement to assume Developer’s obligations hereunder. Developer shall pay the actual costs borne by City in connection with its review of the proposed Assignment, including the costs incurred by the City Attorney’s Office. If City consents to such Assignment, a written assignment and assumption agreement, in a form approved by City, shall be recorded in the Official Records of San Mateo County. Assignee shall succeed to the rights, duties and obligations of Developer only with respect to the parcel or parcels, or portion of the Property so purchased, transferred, ground leased or assigned, and Developer shall continue to be obligated under this Agreement with respect to any remaining portions of the Property retained by Developer and not assigned.

10.2 Successive Assignment. In the event there is more than one Assignment under the provisions of this Article 10, the provisions of this Article 10 shall apply to each successive Assignment and Assignee. This Article 10 does not apply to sale and/or rental of the residential units or the Commercial Space.

ARTICLE 11

MORTGAGEE PROTECTION

11.1 Mortgagee Protection. Neither entering into this Agreement nor a breach hereof shall defeat, render invalid, diminish or impair the lien of any Mortgage made in good faith and for value. Nothing in this Agreement shall prevent or limit Developer, at its sole discretion, from granting one or more Mortgages encumbering all or a portion of Developer’s interest in the Property or portion thereof or improvement thereon as security for one or more loans or other financing, but all of the terms and conditions contained in this Agreement shall be binding upon and effective against and shall run to the benefit of Mortgagee who acquires title or possession to the Property, or any portion thereof, by foreclosure, trustee’s sale, deed in lieu of foreclosure or otherwise. Developer shall provide the City with a copy of the deed of trust or mortgage within ten (10) days after its recording in the official records of San Mateo County; provided, however, that Developer’s failure to provide such document shall not affect any Mortgage, including without limitation, the validity, priority or enforceability of such Mortgage.

11.2 Mortgagee Not Obligated. No Mortgagee (including one who acquires title or possession to the Property, or any portion thereof, by foreclosure, trustee’s sale, deed in lieu of foreclosure or otherwise) shall have any obligation to construct or complete construction of improvements, or to guarantee such construction or completion; provided, however, that a Mortgagee shall not be entitled to devote the Property to any use except in full compliance with this Agreement and the other Project Approvals nor to construct any improvements thereon or institute any uses other 17 than those uses or improvements provided for or authorized by this Agreement, or otherwise under the Project Approvals. Except as otherwise provided in this Section 11.2, all of the terms and conditions contained in this Agreement and the other Project Approvals shall be binding upon and effective against and shall run to the benefit of any person or entity, including any Mortgagee, who acquires title or possession to the Property, or any portion thereof.

11.3 Notice of Default to Mortgagee. If City receives a notice from a Mortgagee requesting a copy of any Notice of Default given Developer hereunder and specifying the address for service thereof, then City agrees to use its diligent, good faith efforts to deliver to such Mortgagee, concurrently with service thereon to Developer, any Notice of Default given to Developer. Each Mortgagee shall have the right during the same period available to Developer to cure or remedy, or to commence to cure or remedy, the event of Default claimed or the areas of noncompliance set forth in City’s Notice of Default. If a Mortgagee is required to obtain possession in order to cure any Default, the time to cure shall be tolled so long as the Mortgagee is attempting to obtain possession, including by appointment of a receiver or foreclosure, but in no event may this period exceed 120 days from the date the City delivers the Notice of Default to Developer.

11.4 No Supersedure. Nothing in this Article 11 shall be deemed to supersede or release a Mortgagee or modify a Mortgagee’s obligations under any subdivision or public improvement agreement or other obligation incurred with respect to the Project outside this Agreement, nor shall any provision of this Article 11 constitute an obligation of City to such Mortgagee, except as to the notice requirements of Section 11.3.

ARTICLE 12
DEFAULT; REMEDIES; TERMINATION

12.1 Breach and Default. Subject to Permitted Delays or by mutual consent in writing, and except as otherwise provided by this Agreement, breach of, failure, or delay by either Party to perform any term or condition of this Agreement shall constitute a “Default.” In the event of any alleged Default of any term, condition, or obligation of this Agreement, the Party alleging such Default shall give the defaulting Party notice in writing specifying the nature of the alleged Default and the manner in which the Default may be satisfactorily cured (“Notice of Breach”).

The defaulting Party shall cure the Default within thirty (30) days following receipt of the Notice of Breach, provided, however, if the nature of the alleged Default is non-monetary and such that it cannot reasonably be cured within such thirty (30) day period, then the commencement of the cure within such time period, and the diligent prosecution to completion of the cure thereafter, shall be deemed to be a cure, provided that if the cure is not diligently prosecuted to completion, then no additional cure period shall be provided. If the alleged failure is cured within the time provided above, then no Default shall exist and the noticing Party shall take no further action to exercise any remedies available hereunder. If the alleged failure is not cured, then a Default shall exist under this Agreement and the non-defaulting Party may exercise any of the remedies available under this Agreement.

12.2 Withholding of Permits. In the event of a Default by Developer, or following notice of breach to Developer pursuant to Section 12.1 above and during the cure period provided therein, upon a finding by the Planning Director that Developer is in breach, City shall have the right to refuse to issue any permit or other Subsequent Approvals to which Developer would otherwise 18 have been entitled pursuant to this Agreement until such Default or breach is cured. This provision is in addition to and shall not limit any actions that City may take to enforce the conditions of the Project Approvals.

12.3 Termination. In the event of a Default by a Party, the non-defaulting Party shall have the right to terminate this Agreement upon giving notice of intent to terminate pursuant to Government Code section 65868 and regulations of City implementing such section. Following notice of intent to terminate, the matter shall be scheduled for consideration and review in the manner set forth in Government Code section 65867 and City regulations implementing said section. Following consideration of the evidence presented in said review before the City Council, a Party alleging Default by the other Party may give written notice of termination of this Agreement to the other Party. Termination of this Agreement shall be subject to the provisions of Section 12.9.

12.4 Specific Performance for Violation of a Condition. If City issues a Project Approval pursuant to this Agreement in reliance upon a specified condition being satisfied by Developer in the future, and if Developer then fails to satisfy such condition, City shall be entitled to specific performance for the purpose of causing Developer to satisfy such condition.

12.5 Legal Actions.

12.5.1 Institution of Legal Actions. In addition to any other rights or remedies and subject to the limitation of damages in Section 12.7, a Party may institute legal action to cure, correct or remedy any Default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation thereof, or to obtain any other remedies consistent with the purpose of this Agreement. Any such legal action shall be brought in the Superior Court for San Mateo County, California, except for actions that include claims in which the Federal District Court for the Northern District of the State of California has original jurisdiction, in which case the Northern District of the State of California shall be the proper venue.

12.5.2 Acceptance of Service of Process. In the event that any legal action is commenced by Developer against City, service of process on City shall be made by personal service upon the City Clerk of City or in such other manner as may be provided by law. In the event that any legal action is commenced by City against Developer, service of process on Developer shall be made by personal service upon John R. Hansen, Developer’s registered agent for service of process, or in such other manner as may be provided by law.

12.6 Rights and Remedies Are Cumulative. The rights and remedies of the Parties are cumulative, and the exercise by a Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other Party, except as otherwise expressly provided herein.

12.7 No Damages. In no event shall a Party, or its boards, commissions, officers, agents or employees, be liable in damages, including without limitation, actual, consequential or punitive damages, for any Default under this Agreement. It is expressly understood and agreed that the sole legal remedy available to a Party for a breach or violation of this Agreement by the other 19 Party shall be an action in mandamus, specific performance or other injunctive or declaratory relief to enforce the provisions of this Agreement by the other Party, or to terminate this Agreement. This limitation on damages shall not preclude actions by a Party to enforce payments of monies or the performance of obligations requiring an obligation of money from the other Party under the terms of this Agreement including, but not limited to, obligations to pay attorneys’ fees and obligations to advance monies or reimburse monies. In connection with the foregoing provisions, each Party acknowledges, warrants and represents that it has been fully informed with respect to, and represented by counsel of such Party’s choice in connection with, the rights and remedies of such Party hereunder and the waivers herein contained, and after such advice and consultation has presently and actually intended, with full knowledge of such Party’s rights and remedies otherwise available at law or in equity, to waive and relinquish such rights and remedies to the extent specified herein, and to rely to the extent herein specified solely on the remedies provided for herein with respect to any breach of this Agreement by the other Party.

12.8 Resolution of Disputes. With regard to any dispute involving the Project, the resolution of which is not provided for by this Agreement or Applicable Law, a Party shall, at the request of another Party, meet with designated representatives of the requesting Party promptly following its request. The parties to any such meetings shall attempt in good faith to resolve any such disputes. Nothing in this Section 12.8 shall in any way be interpreted as requiring that Developer, City and/or City’s designee reach agreement with regard to those matters being addressed, nor shall the outcome of these meetings be binding in any way on City or Developer unless expressly agreed to in writing by the parties to such meetings.

12.9 Surviving Provisions. In the event this Agreement is terminated, neither Party shall have any further rights or obligations hereunder, except for those obligations of Developer set forth in Article 9.

ARTICLE 13

GENERAL PROVISIONS

13.1 Covenants Binding on Successors and Assigns and Run with Land. Except as otherwise more specifically provided in this Agreement and subject to the limitations on assignment set forth herein, this Agreement and all of its provisions, rights, powers, standards, terms, covenants and obligations, shall be binding upon the Parties and their respective successors (by merger, consolidation, or otherwise) and assigns, and all other persons or entities acquiring the Property, or any interest therein, and shall inure to the benefit of the Parties and their respective successors and assigns, as provided in Government Code section 65868.5.

13.2 Notice. Any notice, demand or request which may be permitted, required or desired to be given in connection herewith shall be given in writing and directed to the City and Developer as follows:

If to the City: City Clerk
City of Pacifica
170 Santa Maria Avenue
Pacifica, CA 94044
Telephone: 650-738-7300
20 with a copy to: City Attorney
City of Pacifica
1901 Harrison Street, Suite 900
Oakland, CA 94612
Telephone: 510-273-8780
If to Developer: Crespi Breakwater, LLC
Attn: Eamon Murphy and Brendan Murphy
Telephone:
with a copy to: Michael K. Brown
200 Pringle Ave, Suite 400
Walnut Creek, Ca 94596
Telephone: 925-943-5000
Notices are deemed effective if delivered by certified mail, return receipt requested, or commercial courier, with delivery to be effective upon verification of receipt. Any Party may change its respective address for notices by providing written notice of such change to the other Parties.

13.3 Permitted Delays. Performance by either of the Parties of an obligation hereunder shall be excused during any period of “Permitted Delay.” Permitted Delay shall mean delay beyond the reasonable control of a Party caused by (a) calamities, including without limitation earthquakes, floods, and fire; (b) civil commotion; (c) riots or terrorist acts; (d) strikes or other forms of material labor disputes; (e) shortages of materials or supplies; or (f) vandalism. A Party’s financial inability to perform or obtain financing or adverse economic conditions generally shall not be grounds for claiming a Permitted Delay. The Party claiming a Permitted Delay shall notify the other Party of its intent to claim a Permitted Delay, the specific grounds of the same and the anticipated period of the Permitted Delay within thirty (30) business days after the occurrence of the conditions which establish the grounds for the claim. If notice by the Party claiming such extension is sent to the other Party more than thirty (30) days after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the giving of such notice. The period of Permitted Delay shall last no longer than the conditions preventing performance. In no event shall any Permitted Delay extend the Term of this Agreement.

13.4 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

13.5 Waivers. Notwithstanding any other provision in this Agreement, any failures or delays by any Party in asserting any of its rights and remedies under this Agreement shall not operate as a waiver of any such rights or remedies, or deprive any such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce 21 any such rights or remedies. A Party may specifically and expressly waive in writing any condition or breach of this Agreement by the other Party, but no such waiver shall constitute a further or continuing waiver of any preceding or succeeding breach of the same or any other provision. Consent by one Party to any act by the other Party shall not be deemed to imply consent or waiver of the necessity of obtaining such consent for the same or similar acts in the future.

13.6 Construction of Agreement. All Parties have been represented by counsel in the preparation and negotiation of this Agreement, and this Agreement shall be construed according to the fair meaning of its language. The rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement.

Unless the context clearly requires otherwise, (a) the plural and singular numbers shall each be deemed to include the other; (b) the masculine, feminine, and neuter genders shall each be deemed to include the others; (c) “shall,” “will,” or “agrees” are mandatory, and “may” is permissive; (d) “or” is not exclusive; (e) “includes” and “including” are not limiting; and (f) “days” means calendar days unless specifically provided otherwise.

13.7 Headings. Section headings in this Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants, or conditions of this Agreement.

13.8 Severability. If any term or provision of this Agreement, or the application of any term or provision of this Agreement to a specific situation, is found to be invalid, or unenforceable, in whole or in part for any reason, the remaining terms and provisions of this Agreement shall continue in full force and effect unless an essential purpose of this Agreement would be defeated by loss of the invalid or unenforceable provisions, in which case any Party may terminate this Agreement by providing written notice thereof to the other Party.

13.9 Time is of the Essence. Time is of the essence of this Agreement. All references to time in this Agreement shall refer to the time in effect in the State of California.

13.10 Extension of Time Limits. The time limits set forth in this Agreement may be extended by mutual consent in writing of the Parties in accordance with the provisions of this Agreement.

13.11 Signatures. The individuals executing this Agreement represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Agreement on behalf of the respective legal entities of Developer and the City. Each Developer Party shall be jointly and severally liable for the obligations of the other Developer Party.

13.12 Entire Agreement. This Agreement (including all exhibits attached hereto, each of which is fully incorporated herein by reference), integrates all of the terms and conditions mentioned herein or incidental hereto, and constitutes the entire understanding of the Parties with respect to the subject matter hereof, and all prior or contemporaneous oral agreements, understandings, representations and statements, and all prior written agreements, understandings, representations, and statements are terminated and superseded by this Agreement.

13.13 Estoppel Certificate. Developer or its lender may, at any time, and from time to time, deliver written notice to the City requesting the City to certify in writing that: (a) this Agreement 22 is in full force and effect; (b) this Agreement has not been amended or modified or, if so amended or modified, identifying the amendments or modifications; and (c) Developer is not in Default of the performance of its obligations, or if in Default, to describe therein the nature and extent of any such Defaults. Developer shall pay, within thirty (30) days following receipt of City’s invoice, the actual costs borne by City in connection with its review of the proposed estoppel certificate, including the costs expended by the City Attorney’s Office in connection therewith. The Planning Director shall be authorized to execute any certificate requested by Developer hereunder. The form of estoppel certificate shall be in a form reasonably acceptable to the City Attorney. The Planning Director shall execute and return such certificate within thirty (30) days following Developer’s request therefor. Developer and City acknowledge that a certificate hereunder may be relied upon by tenants, transferees, investors, partners, bond counsel, underwriters, bond holders and Mortgagees. The request shall clearly indicate that failure of the City to respond within the thirty-day period will lead to a second and final request.

Failure to respond to the second and final request within fifteen (15) days of receipt thereof shall be deemed approval of the estoppel certificate.

13.14 Recordation of Termination. Upon completion of performance of the Parties or termination of this Agreement, a written statement acknowledging such completion or termination shall be recorded by City in the Official Records of San Mateo County.

13.15 City Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by City, the City Manager or his or her designee is authorized to act on behalf of City, unless specifically provided otherwise or the context requires otherwise.

13.16 Negation of Partnership. The Parties specifically acknowledge that the Project is a private development, that no Party to this Agreement is acting as the agent of any other in any respect hereunder, and that each Party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. None of the terms or provisions of this Agreement shall be deemed to create a partnership between or among the Parties in the businesses of Developer, the affairs of the City, or otherwise, or cause them to be considered joint venturers or members of any joint enterprise.

13.17 No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the signatory Parties and their successors and assigns, including Mortgagees. No other person shall have any right of action based upon any provision in this Agreement.

13.18 Governing State Law. This Agreement shall be construed in accordance with the laws of the State of California, without reference to its choice of law provisions.

IN WITNESS WHEREOF, the City and Developer have executed this Agreement as of the Effective Date.

CITY:

CITY OF PACIFICA, a municipal corporation
23 By: ________________________________
Kevin Woodhouse, City Manager
[Signature must be notarized]
ATTEST:

By: ________________________
Sarah Coffey, City Clerk
APPROVED AS TO FORM:

By: __________________________________
Michelle Marchetta Kenyon, City Attorney
DEVELOPER:

Crespi Breakwater, LLC,
a California limited liability company
By: ________________________________
Name: ______________________________
Its: _________________________________ [Signature must be notarized] By: ________________________________
Name: ______________________________
Its: _________________________________
[Signature must be notarized]

Pacifica City CouncilJanuary 12, 2026

Pacifica City Council
January 12, 2026