San Carlos City Council
October 9, 2023

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emergency diesel generators, a cooling tower, water/wastewater use, and solid waste generation.

While the project would start with only one generator, the plans include room for a second generator that could be installed by future tenants, so modeling included two generators. The building would be all electric, so no natural gas input was included.

Daily and annual operational air emissions predicted with build‐out of the proposed project are reported in Table 4 and compared against BAAQMD thresholds.

Table 4: Regional Air Pollutant Emissions for Operational Period Description ROG

2.54 0.57

1.96 10
NOx

1.15 0.48

0.66 10
PM10

2.43 0.71

1.73 15
PM2.5

0.63 0.18

0.45 10
Project Annual Emissions (tons/year)
Existing Use Emissions (tons/year)
Net Total Operational Emissions (tons/year)
BAAQMD Thresholds (tons/year)
Exceeds Annual Threshold? No No No No
Net Daily Operational Emissions (lbs/day) 10.77
54 3.63
54 9.47
82 2.45
54BAAQMD Thresholds (lbs/day)
Exceeds Daily Threshold? No No No No
Source: Illingworth & Rodkin, 2022, Table 5 in Attachment A.

As shown in Table 4, project annual and daily emissions are below relevant significance thresholds established by BAAQMD for operational air pollutant emissions.

As vehicular emissions have improved over the years, carbon monoxide hotspots have become less of a concern. BAAQMD presents traffic‐based criteria as screening criteria for carbon monoxide impacts, as follows.6 The project would implement a Transportation Demand Management Program per San Carlos Municipal Code to reduce project trips. The project is therefore consistent with the Congestion Management Plan (CMP) of the San Mateo City/County Association of Governments (C/CAG), which is the first threshold. The other two screening thresholds are whether the project would increase traffic volumes at affected intersections to more than 44,000 vehicles per hour or to more than 24,000 vehicles per hour where vertical and/or horizontal mixing is substantially limited (such as a tunnel or underground parking garage). These hourly traffic volumes are very high and much higher than those in the vicinity. For example, El Camino Real is one of the highest volume roadways in the vicinity and is projected to carry approximately 35,000 vehicles per day. Spread over a day, that would be substantially fewer than 44,000 vehicles per hour. The project’s underground parking garage would serve only project vehicles with expected parking for 745 vehicles, which is again substantially fewer than the threshold of 24,000 vehicles per hour. Therefore, conditions in and around the project would be well below screening levels and the project would not result in individually or cumulatively significant impacts from CO emissions. 6 Bay Area Air Quality Management District. May 2017. California Environmental Quality Act Air Quality Guidelines, p. 3‐2, 3‐3. 841 Old County Road Project Initial Study/MND Page 31

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The project is below significance thresholds established by BAAQMD and meets localized CO screening criteria. As a result, the project would have a less than significant impact on regional air quality during the operational period.
c) Sensitive Receptors
A toxic air contaminant (TAC) is defined by California law as an air pollutant that may cause or contribute to an increase in mortality or an increase in serious illness, or which may pose a present or potential hazard to human health. In the Bay Area, a number of urban or industrialized communities exist where the exposure to TACs is relatively high compared to other communities.

According to the BAAQMD CEQA Guidelines, the project site is not in an impacted community.7 BAAQMD’s adopted thresholds for the purpose of assessing impacts of a proposed project on exposure of sensitive receptors to risks and hazards in an area that is not an identified impacted community are a project‐specific cancer risk exceeding 10 in one million (or cumulative risk of 100 in one million), a non‐cancer risk exceeding a Hazard Index of 1.0 (or a cumulative Hazard Index of

10.0), and/or the annual average PM2.5 concentration exceeding 0.3 µg/m3 (or 0.8 µg/m3 cumulatively).

Certain population groups, such as children, the elderly, and people with health problems, can be particularly sensitive to air pollution. With respect to air pollutants, examples of sensitive receptors include health care facilities, retirement homes, school and playground facilities, and residential areas. The project itself is not considered a sensitive receptor. The closest sensitive receptors to the project site are the residences to the south, west, and north, as well as The Children’s Place Preschool and Little Learners Preschool, all located about 500 feet or more from the project site.

Risks are reported for the maximally exposed individual, which is the sensitive receptor identified as the most impacted. Age sensitivity factors are applied to address increased risks depending on age.

A community health risk assessment was performed using the recommended EPA dispersion model AERMOD to factor in receptor locations and meteorological conditions as included in full in Attachment A and summarized below.

Construction activity that uses traditional diesel‐powered equipment results in the emission of diesel particulate matter including fine particulate matter, which is considered a TAC. The generation of these emissions would be temporary, confined to the construction‐period, and are factored into the community risk prior to the operational period. Construction‐period and operational risk are shown in Table 5.

Operational emissions from the proposed emergency generators and cooling tower would also contribute to community risk. The project proposes to include one stand‐by emergency diesel generator located on the northeastern boundary of the property to power both buildings in the event of a power failure. The project also proposes to leave room for a second generator to be installed by the tenant. Diesel emergency generators emit DPM and are subject to BAAQMD permitting. Other than under emergency conditions, emergency generators would be operated primarily for testing and maintenance purposes, which is typically less than 1 hour at a time, and would be limited under BAAQMD permitting to a total of up to 50 hours per year. The project also proposes a cooling tower on the roof of the proposed southern building. A cooling tower is an air‐ conditioning system that uses water and air as heat exchangers to cool a building. Particulate matter 7 Bay Area Air Quality Management District. May 2017. California Environmental Quality Act Air Quality Guidelines, Figure 5‐1.

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emissions from such evaporative cooling can occur because emitted water droplets can contain dissolved solids that can become small particulate matter (i.e., PM10 and PM2.5) emissions. The cooling towers are not powered by a diesel engine, so no DPM emissions would be produced.

Table 5: Construction and Operation Risk (Unmitigated)
Cancer Risk Annual PM25
Source (per million) (µg/m3) Hazard Index
Project Construction (Years 0‐4) 4.10 0.02 <0.01
Project Generator Operation (Years 4‐30)
Project Cooling Towers (Years 4‐30)

0.11 ‐‐

0.01 <0.01

0.02 0.3
<0.01
‐‐
Total/Maximum Project Risk, Unmitigated 4.21
10 <0.01

1.0BAAQMD Single‐Source Threshold
Exceed Threshold? No No No
Source: Illingworth & Rodkin, 2022, Table 6 in Attachment A.

As shown in Table 5, construction‐period project health risks combined with operational period health risks to off‐site sensitive receptors would not exceed project‐specific threshold levels.

While specific tenants have not yet been identified, this type of project is also likely to include research laboratories with fume hoods. Laboratory fume hoods would be required to employ appropriate exhaust systems to control any emission of air pollutants. Emissions of air pollutants or TACs are subject to BAAQMD permitting requirements that would require the District to apply all applicable rules and regulations to limit or control these emissions. Regulation 2, Rule 1: General Requirements, and Regulation 2, Rule 5: New Source Review of Toxic Air Contaminants would apply to any potential emissions from these sources. The District’s risk policy is to not issue a permit to any source that would cause a cancer risk of greater than 10 chances per million. Therefore, although the specifics of the laboratory and fume hood emissions is not quantifiable at this time, the quantities that would be emitted would by regulation remain below applicable threshold levels and the project‐specific community health impact would be less than significant.

Community health risk assessments typically also look at all substantial sources of TACs located within 1,000 feet of the project site (i.e., influence area). These sources can include railroads, freeways or highways, high‐volume surface streets, and stationary sources permitted by BAAQMD.

The project vicinity includes three high volume roadways with average daily traffic (ADT) above 10,000 (El Camino Real, Old County Road and Commercial Steet), Caltrain and freight rail, seven stationary sources of air pollution, and the site of the proposed Alexander Center for Life Science (ACLS), which would be anticipated to undergo simultaneous construction with this project and introduce an additional twelve stationary sources in the form of emergency generators. Therefore, an additional cumulative community risk analysis is warranted. The cumulative cancer risk, hazard index, and annual PM2.5 concentrations are summarized in Table 6. 841 Old County Road Project Initial Study/MND Page 33

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Table 6: Cumulative Community Risk (Unmitigated)
Cancer Risk
(per million)
Annual PM25
3Source (μg/m ) Hazard Index
Total/Maximum Project Risk (Years 0‐30)
Additional Cumulative Sources
El Camino Real, ADT 35,086
Old County Road, ADT 34,472
Commercial Street, ADT 34,472
Caltrain and freight rail

4.21 0.02 <0.01

4.43 3.42

0.28 0.13

0.04 0.06
<0.01

0.19 0.67
<0.04
<1.44

0.8 <0.01
<0.01
<0.01
<0.01
<0.01
<0.03

0.01 1.31

28.80 <0.01

7.03 ACLS project generators
ACLS project Construction Emissions
CEMEX concrete manufacturing (facility ID #2939)
Other stationary sources

0.36 <2.21
<51.78
100
<0.06
<0.16

10.0 All Cumulative Sources
BAAQMD Cumulative Source Threshold
Exceed Threshold? No Yes No
Notes: Risks in this table are reported for the maximally exposed individual, factoring in age‐sensitivity.

Source: Illingworth & Rodkin, 2022, Table 7 in Attachment A As shown in Table 6, the cumulative source threshold for PM2.5 is exceeded for the maximally exposed individual due largely to proximity to the CEMEX facility, which represent 47% of the cumulative PM2.5 volumes. However, because the project‐specific risk would not exceed the single source thresholds, contributing approximately 1.4% of the total cumulative PM2.5 level, per BAAQMD guidance, the project would not be considered to have a cumulatively considerable contribution to this impact. It can also be noted that during the course of analysis of this project, a proposal has been submitted to the City to remove the CEMEX facility and redevelop the site with office/R&D uses, which would lower cumulative risk. Therefore, the project’s impact related to exposure of sensitive receptors would be less than significant.
d) Other Emissions
Odors from construction activities are associated with construction equipment exhaust and the application of asphalt and architectural coatings. Odors emitted from construction activities would be temporary and not likely to be noticeable much beyond a project site’s boundaries. The proposed office/R&D use is consistent with the type of development in the area and is not a use type considered by BAAQMD to be a source of substantial objectionable odors.8 Therefore, the potential for objectionable odor impacts to adversely affect a substantial number of people is less than significant.
8 Bay Area Air Quality Management District. May 2017. California Environmental Quality Act Air Quality Guidelines, Table 3‐3.

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4. BIOLOGICAL RESOURCES
Would the project:
a) Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service?

b) Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or US Fish and Wildlife Service?



c) Have a substantial adverse effect on state or federally protected wetlands (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means?
d) Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites?
e) Conflict with any local policies or ordinances protecting biological resources, such as a tree preservation policy or ordinance?  f) Conflict with the provisions of an adopted Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan?

a, b) Special Status Species and Habitat. The project site consists entirely of developed land and has been under industrial or commercial usage for many decades. It is situated within an urbanized area and is surrounded on all sides by commercial or transportation uses. As would be expected for a project in such conditions, the General Plan EIR identified no biological habitat or occurrences of sensitive species on or adjacent to the project site.9 The site and its vicinity have little or no habitat value and would not have a substantial adverse effect, either directly or through habitat modifications, on special status species, except for possibly migrating birds, as discussed below.

That being said, the federal Migratory Bird Treaty Act and Fish and Game Code of California protect special‐status bird species year‐round, as well as their eggs and nests during the nesting season. 9 City of San Carlos, San Carlos 2030 General Plan EIR, June 2009, Chapter 4.3: Biological Resources. 841 Old County Road Project Initial Study/MND Page 35

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The list of migratory birds includes almost every native bird in the United States. On‐site or adjacent trees could be used by protected birds. Construction activities could adversely affect nesting birds protected by the Migratory Bird Treaty Act and/or Fish and Game Code of California.

Mitigation Measure
Bio‐1: Pre‐Construction Nesting Bird Survey. Initiation of construction activities during the avian nesting season (February 15 through September 15) shall be avoided to the extent feasible. If construction initiation during the nesting season cannot be avoided, pre‐construction surveys for nesting birds protected by the Migratory Bird Treaty Act of 1918 and/or Fish and Game Code of California within 100 feet of a development site in the project area shall be conducted within 14 days prior to initiation of construction activities. If active nests are found, a 100‐foot buffer area shall be established around the nest in which no construction activity takes place.

The buffer width may be modified upon recommendations of a qualified biologist regarding the appropriate buffer in consideration of species, stage of nesting, location of the nest, and type of construction activity based upon published protocols and/or guidelines from the U.S. or California Fish and Wildlife Services (USFWS, CDFW) or through consultation with USFWS and/or CDFW. The biologist may also determine that construction activities can be allowed within a buffer area with monitoring by the biologist to and stoppage of work in that area if adverse effects to the nests are observed. The buffer shall be maintained until after the nestlings have fledged and left the nest. These surveys would remain valid as long as construction activity is consistently occurring in a given area and would be completed again if there is a lapse in construction activities of more than 14 consecutive days during the nesting season.

With implementation of mitigation measure Bio‐1, which requires avoidance of nesting season or a nesting survey and buffers from any nests as appropriate, the impact related to special‐status and non‐status bird species would be less than significant with mitigation. c, d) Wetlands and Wildlife Corridors
The proposed project site is currently developed and does not contain wetland areas. It is an urban area that does not have the potential to be used as a significant wildlife corridor. The project has no impact on wetlands and wildlife corridors.
e) Local Policies and Ordinances
There is no Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan that covers the project site. The project would have a significant environmental impact if it were to conflict with any local policies or ordinances protecting biological resources. San Carlos Municipal Code Sections 18.18.070 and 18.41.020 related to protected trees are applicable to the site, as detailed in Standard Condition: Protection of Trees, included in Table 1.

The San Carlos Municipal Code sets forth regulations for “protected trees” which are defined as “heritage” or “significant” trees. Removal of any protected tree requires approval by the Community Development Director. In granting a tree removal permit, the Director may attach reasonable conditions to ensure compliance with the content and purpose of this chapter, such as,

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but not limited to, requiring replacement of trees removed with plantings acceptable to the Director.

There are currently 6 trees on the project site, with 4 street trees located along Bransten Road and two within the parking lot/landscape area, all of which would be removed during demolition activities. These include 4 Bradford pear trees (Pyrus calleryana ‘Bradford’) and two Mexican fan palms (Washingtonia robusta). Based on trunk size, 4 of the trees would be considered protected trees under the City’s Municipal Code and would require appropriate approval for removal. A total of 112 new trees are proposed to be planted on site as part of the proposed development.

The removal of the trees at the site would not intrinsically be considered an environmental impact because the trees proposed for removal are neither endangered nor special‐status from a state and federal biological standpoint, and implementation of requirements in Standard Condition:

Protection of Trees would ensure consistency with applicable plans and policies. Therefore, the impacts related to local biological policy conflicts would be less than significant. f) Conservation Plans
There is no Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan that cover the project site. There would be no impact related to conflict with conservation plans.
841 Old County Road Project Initial Study/MND Page 37

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5. CULTURAL RESOURCES
Would the project:
a) Cause a substantial adverse change in the significance of a historical resource pursuant to Public Resources Section 15064.5?  
b) Cause a substantial adverse change in the significance of an archaeological resource pursuant to Public Resources Section 15064.5?

c) Disturb any human remains, including those interred outside of formal cemeteries?
This section utilizes information from the Historic Resource Evaluation prepared for this analysis by Preservation Architecture, and dated March 15, 2022, included in full in Attachment B. a) Historic Resources
Portions of the existing structures were built in 1977 and 1978, so do not qualify as historic by age (50+ years is considered historic‐age). According to the Historic Resource Evaluation (Attachment B), the remaining structures are without historical design or construction distinction. No detailed evidence of the buildings’ origins was able to be located, and no original architects or engineers were identifiable. While associated by proximity and by their mid‐20th century building supply uses, which were common in this locale in that period, the properties and buildings have no design or construction relationships. They were not unified by shared ownership or users, nor have any important persons been identified as individually associated with these properties and buildings.

Additionally, the subject parcels and their buildings are not directly associated with any events of historic significance because no individual discoveries, innovations or inventions of importance are identifiably associated. Based on these findings, the existing structures would not be considered significant historic resources under CEQA and the project would have a less than significant impact on historic resources.
b) Archaeological Resources
The project site has been previously developed and is predominantly covered by paving and structures.

There are only a few known archaeological sites in the city, located primarily near the banks of Cordilleras and Pulgas Creeks (located over 500 feet from the project site).10 A records search of the Northwest Information Center (included in Attachment B) confirmed the lack of recorded resources at the project site. However, due to the project site location and characteristics of the area, the 10 City of San Carlos, Adopted October 2009, 2030 General Plan, Land Use Element, p. 76.

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potential for discovery of unrecorded historic‐period archaeological resources or Native American archaeological resources are considered moderate and moderate to high respectively. Native American resources are discussed further in the Section 18, Tribal Cultural Resources.

Given the moderately high potential for unrecorded archeological resources and Native American resources, mitigation measures Culture‐1, Culture‐2, and Culture‐3 shall be implemented.

Mitigation Measures
Culture‐1: Further Site Assessment. Prior to ground disturbance, a qualified consultant shall conduct further archival and field study research to determine the appropriate locations for cultural or tribal cultural resource (historic / archaeological / paleontological / Native American) monitoring during removal of asphalt or concrete, fill, vegetation, or structures. Field study may include, but is not limited to, hand auger sampling, shovel test units, or geoarchaeological analyses as well as other common methods used to identify the presence of buried archaeological resources.

Culture‐2: Archaeological Sensitivity Training. In anticipation of discovery of unknown archaeological resources during construction, Archaeological Sensitivity Training shall be carried out by a qualified archaeologist for all personnel who will engage in ground disturbing activities on the site. The training shall be conducted at the start of construction and prior to ground disturbance.

The training shall include suitable photographic materials showing the kinds of artifacts and evidence of prehistoric archaeological sites likely to be found in the area, as well as written and verbal descriptions for archaeological resources and signs of potential archaeological discovery. The training shall also include written materials describing what to do in the event of a discovery, or suspected discovery of archaeological resource.

Culture‐3: Protection of Accidentally Discovered Cultural Resources. In the event that any previously undiscovered cultural resource (historic/archaeological/ paleontological/Native American) are uncovered during ground disturbing activities, all such activity shall cease until these resources have been evaluated by a qualified consultant and specific measures can be implemented to protect these resources in coordination with the City and in accordance with sections 21083.2 and/or 21084.1 of the California Public Resources Code.

Implementation of requirements in Standard Condition: Protection of Human Remains and Mitigation Measures Culture‐1, Culture‐2, and Culture‐3 would reduce the impacts associated with possible disturbance of unidentified cultural resources at the project site to a level of less than significant with mitigation.
c) Human Remains
There are no known human remains that would be disturbed by the proposed project. If human remains are found during construction activities at the project site, they would be handled according to relevant regulations as detailed in Standard Condition: Protection of Human Remains, included in Table 1. Therefore, the impacts related to human remains would be less than significant.
841 Old County Road Project Initial Study/MND Page 39

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6. ENERGY
Would the project:
a) Result in potentially significant environmental impact due to wasteful, inefficient, or unnecessary consumption of energy resources, during project construction or operation?

b) Conflict with or obstruct a state or local plan for renewable energy or energy efficiency?
a, b) Energy
The threshold of significance related to energy use is whether the project would result in wasteful, inefficient, or unnecessary consumption of energy resources or conflict with or obstruct state or local plans for renewable energy or energy efficiency.

The project would include short‐term demolition and construction activities that would consume energy, primarily in the form of diesel fuel (e.g., mobile construction equipment), gasoline (e.g., vehicle trips by construction workers), and electricity (e.g., power tools). Energy would also be used for conveyance of water used in dust control, transportation and disposal of construction waste, and energy used in production and transport of construction materials.

During operation, energy demand from the project would include fuel consumed by employee and delivery vehicles, and electricity consumed by the proposed structures, including lighting, research equipment, water conveyance, heating and air conditioning.

Energy usage for the project was calculated based on energy usage and vehicle miles travelled information from the emissions modeling and is included in full in Attachment C. Table 7 shows a summary of the project’s estimated total construction energy consumption and annual operational energy consumption.

As shown in Table 7, project construction would require what equates to 26,712 MMBtu11 of energy use. The project would implement construction management practices per mitigation measure Air‐1 (See Air Quality Section). While focused on emissions and dust reduction, the construction management practices would also reduce energy consumption through anti‐idling measures and proper maintenance of equipment. The project would comply with the 2019 requirements of the California Green Building Standards Code (CALGreen) to divert a minimum of 65 percent of construction and demolition debris. Therefore, the project would not involve the inefficient, wasteful, and unnecessary use of energy during construction, and the project’s construction energy consumption.
11 MMBtu stands for Metric Million British Thermal Unit. For comparison purposes in this analysis, all forms of energy usage have been converted to MMBtu even though different types of energy would originally be measured in different units. See the energy Calculations in Attachment C for additional details.

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Table 7: Construction and Operational Energy Usage
Source Energy Consumption
Amount and Units Converted to MMBtu
Construction Energy Use (Total)
Construction Worker Vehicle
Trips (Gasoline)
51,301 gallons
153,439 gallons
5,632 MMBtu
21,080 MMBtuConstruction Equipment and
Vendor/Hauling Trips (Diesel)
Total Construction Energy Use 26,712 MMBtu
Operational Vehicle Fuel Use (Gross Annual)
Gasoline
Diesel
202,787 gallons
41,447 gallons
22,263 MMBtu
5,694 MMBtu
Operational Built Environment (Gross Annual)
Electricity 4.15 GWh
0 kBtu
14,167 MMBtu
0 MMBtuNatural Gas Usage
Total Gross Annual Operational Energy Use 42,124 MMBtu
Note: The energy use reported in this table is gross operational energy use for the proposed project with no reduction to account for energy use of existing uses.

Source: Energy Calculations included as Attachment C
As also shown in Table 7, project annual energy consumption would equate to 42,124 MMBtu of energy use. Consistent with the City’s Reach Code, the project has proposed all‐electric construction with no gas connections. The project’s required TDM plan (see Section 17, Transportation) will also include various measures designed to reduce total vehicle trips.

When subtracting existing operational fuel and built environment energy use from the project totals above, the total net increase in annual operational energy use would be 33,178 MMBtu (see Attachment C for additional detail).

As detailed in Section 17: Transportation, with implementation of the required TDM Plan, the project would result in low levels of vehicle travel relative to regional averages and would help meet regional efforts to reduce vehicle travel and therefore related vehicular consumption of fuel energy.

As detailed in Section 3: Air Quality and Section 8: Greenhouse Gas Emissions, the project is also consistent with regional and local climate actions plans. The project incorporates energy and energy‐related efficiency measures meeting all applicable requirements, including water and waste efficiency. The project would be required to comply with all standards of the City’s Reach Code, Title 24 of the California Code of Regulations, and CALGreen, as applicable, aimed at the incorporation of energy‐conserving design and construction.

While representing a change from the former uses at the site, the project is consistent with the type of development in the area and allowed under the land use designation and zoning. 841 Old County Road Project Initial Study/MND Page 41

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Therefore, although the project would incrementally increase energy consumption, it would not result in a significant impact related to energy consumption in a wasteful, inefficient, or unnecessary manner or otherwise conflict with energy plans and the impact in this regard would be less than significant.

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7. GEOLOGY AND SOILS
Would the project:
a) Directly or indirectly cause potential substantial adverse effects, including the risk of loss, injury, or death involving:
i) Rupture of a known earthquake fault, as delineated on the most recent Alquist‐Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other
substantial evidence of a known fault? (Refer to Division of Mines and Geology Special Publication 42)


ii) Strong seismic ground shaking?
iii) Seismic‐related ground failure, including liquefaction? iv) Landslides?


b) Result in substantial soil erosion or the loss of topsoil?  c) Be located on a geologic unit or soil that is unstable, or that would become unstable as a result of the project, and potentially result in on‐ or off‐site landslide, lateral spreading, subsidence, liquefaction or collapse?

d) Be located on expansive soil, as defined in Table 18‐1‐B of the Uniform Building Code (1994), creating substantial direct or indirect risks to life or property?

e) Have soils incapable of adequately supporting the use of septic tanks or alternative waste water disposal systems where sewers are not available for the disposal of waste water?

f) Directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? 
This section utilizes information from the Design‐Level Geotechnical Investigation prepared for the applicants by Cornerstone Earth Group, dated July 16, 2021, which is available as part of the project application materials.
a, c, d) Geologic Hazards
There are no faults traces across the site and therefore, fault rupture hazard is not a significant impact. However, the San Francisco Bay Area is a seismically active region, and the site is likely to encounter strong seismic ground shaking during the lifetime of the project. 841 Old County Road Project Initial Study/MND Page 43

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Landslides are downward and outward movements of slope‐forming materials such as rock, soil, and artificial fill. Landslides occur on some of the upper hilly slopes, more commonly in the western area of the city. There are no hillsides near the project site and therefore would be no impact resulting from landslides.

The project site is underlain with 1.5 to 11 feet of highly variable undocumented fill consisting of generally medium stiff sandy lean clays and dense to very dense clayey sands with variable amounts of gravel. Beneath the fill is variable including hard sandy lean clay followed by medium dense clayey sand or very dense poorly graded sand with silty, medium stiff to very stiff lean clays with varying amounts of sand and medium dense clayey sands with gravel. Below these layers the site is generally underlain by deep alluvial soils consisting of medium stiff to very stiff clays interbedded with occasional layers of medium dense to dense sands. Given the characteristics of the soils, the site was concluded to have the following characteristics:
•
•
•
•
moderate to high expansion potential to wetting and drying cycles, high potential for liquefaction that could result in total settlement of ½ inch or less low potentially for lateral spreading to affect the site low potential for significant differential seismic settlement affecting the proposed structures.

The geotechnical analysis concluded that the potential geological hazards can be addressed through proposed excavation and appropriate design and construction, which would occur as part of the standard design‐level geotechnical recommendations and structural plans as specified in Standard Conditions: Compliance with design‐level Geotechnical Investigation and Structural Design Plans, as included in Table 1.

Due to the extent of the proposed excavation for below grade parking, the Geotechnical Investigation identified a significant potential to affect nearby private structures and parking areas and/or public sidewalks and roadways outside of the project site during excavation and dewatering, which may include cracking or vertical movement. In addition to implementation of the Standard Condition above requiring conformance with design‐level geotechnical recommendations, the following mitigation measure would reduce the risk of damage to nearby improvements due to the potential for ground instability during construction activities at the site.

Mitigation Measure
Geo‐1: Excavation Monitoring. The construction contractor shall implement a monitoring program to monitor the effects of the construction on nearby improvements, including the monitoring of cracking and vertical movement of adjacent structures, nearby streets, sidewalks, parking and other improvements. This shall include the installation of inclinometers or other instrumentation as part of the shoring system to closely monitor lateral movement at locations considered by the geotechnical engineer to be critical areas. The monitoring program shall be active from the beginning of excavation until the framing of the subterranean structure is complete and dewatering ceases.

Implementation of mitigation measure Geo‐1 and Standard Condition: Compliance with design‐ level Geotechnical Investigation and Structural Design Plans would reduce the effects of geologic hazards caused by seismic activities and expansive or unstable soils to less than significant with mitigation.

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b) Soil Erosion
The project would be subject to a National Pollution Discharge Elimination System (NPDES) permit from the Regional Water Quality Control Board (RWQCB). The construction contractors would be required to prepare a Stormwater Pollution Prevention Plan (SWPPP) and an Erosion Control Plan.

The SWPPP must describe the site, the project, erosion and sediment controls, runoff water quality monitoring, means of waste disposal, control of post‐construction sediment and erosion control measures, maintenance responsibilities, and management controls. All construction activities would be required to comply with Chapters 18 and 33 and Appendix J of the City Building Code, which regulate excavation activities, the construction of foundations and retaining walls, and grading activities, including drainage and erosion control. Soil erosion after construction would be controlled by implementation of approved landscape and irrigation plans. With required implementation of a SWPPP and Erosion Control Plan to prevent erosion, sedimentation, and loss of topsoil during and following construction, the soil erosion impacts of the project would be less than significant.
e) Septic Tanks
The project would not include the use of septic tanks and associated disposal facilities. Therefore, the project would have no impact in this regard.
f) Unique Geologic Feature or Paleontological Resource
The site is generally flat and currently developed and there are no unique geologic features at the site. There are no known paleontological resources associated with the project site and as discussed in the Cultural Resources section, as a previously developed site and with no native soils being disturbed, the potential for identifying unrecorded resources is very low. Construction of the project involves ground disturbance and if unknown paleontological resources are encountered, there is the potential for a significant impact.

Mitigation Measures Culture‐1 through Culture‐3 would also reduce the potential impact related to unknown paleontological resources.

Compliance with the protection procedures specified in mitigation measures Culture‐1 through Culture‐3 would assure that if any previously‐unknown paleontological resources are discovered, these would be handled appropriately and the impact with respect to paleontological resources would be less than significant with mitigation.
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8. GREENHOUSE GAS EMISSIONS
Would the project:
a) Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment?  b) Conflict with an applicable plan, policy or regulation adopted for the purpose of reducing the emissions of greenhouse gases?
This section utilizes information from the Air Quality & Greenhouse Gas Assessment prepared for this analysis by Illingworth & Rodkin, Inc. and dated May 6, 2022, included in full as Attachment A. a) Greenhouse Gas Emissions
BAAQMD determined that greenhouse gas (GHG) emissions and global climate change represent cumulative impacts. Construction and operation of the proposed project would be additional sources of GHG emissions, primarily through consumption of fuel for transportation and energy usage on an ongoing basis.

State Assembly Bill 32 (AB 32) required California state and local governments to reduce greenhouse gas emissions to 1990 levels by 2020. State Senate Bill 32 was subsequently adopted to require that there be a further reduction in GHG emissions to 40% below the 1990 levels by 2030.

In April 2022, BAAQMD issued new GHG emissions thresholds to address 2030 reduction targets, revising the quantified threshold to a checklist of compliance, requiring consistency with either criterion A or B to make a determination that the impact would be less than significant as follows:

A. Projects must include, at a minimum, the following project design elements:

1. Buildings
a. The project will not include natural gas appliances or natural gas plumbing (in both residential and nonresidential development).
b. The project will not result in any wasteful, inefficient, or unnecessary electrical usage as determined by the analysis required under CEQA Section 21100(b)(3) and Section 15126.2(b) of the State CEQA Guidelines.

2. Transportation
a. Achieve compliance with electric vehicle requirements in the most recently adopted version of CALGreen Tier 2.
b. Achieve a reduction in project‐generated vehicle miles traveled (VMT) below the regional average consistent with the current version of the California Climate Change Scoping Plan (currently 15 percent) or meet a locally adopted Senate Bill 743 VMT target, reflecting the

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recommendations provided in the Governor’s Office of Planning and Research’s Technical Advisory on Evaluating Transportation Impacts in CEQA:
i. Residential projects: 15 percent below the existing VMT per capita ii. Office projects: 15 percent below the existing VMT per employee iii. Retail projects: no net increase in existing VMT
B. Be consistent with a local GHG reduction strategy that meets the criteria under State CEQA Guidelines Section 15183.5(b).

Regarding criterion A, the proposed buildings would be constructed in conformance with CALGreen and the Title 24 Building Code, which requires high‐efficiency water fixtures, water‐efficient irrigation systems, and compliance with current energy efficacy standards and would meet BAAQMD’s checklist as follows:

A.1.a. Avoid construction of new natural gas connections for the residential building, Conforms – compliance with City Reach Code would prohibit natural gas infrastructure in new buildings.

A.1.b. Avoid wasteful or inefficient use of electricity, Conforms – would meet CALGreen Building Standards Code requirements that are considered to be energy efficient.

A.2.a. Include electric vehicle charging infrastructure that meets current Building Code CALGreen Tier 2 compliance, and
Conforms – the project would provide 95 EV/Clean Air parking spaces out of the 745 proposed on‐site parking spaces and would be in compliance with this requirement.

A.2.b. Reduce VMT per service population by 15 percent over regional average.

Conforms – The TDM plan would reduce vehicle trips by 20 percent to meet Section 18.25.030 of the City of San Carlos Municipal Code. With this required TDM Plan reduction, VMT per service population would be reduced by at least 15 percent over regional average (see Section 17 Transportation).

As indicated above, all relevant criteria would be met and the project would therefore be considered to have a less than significant impact with respect to Greenhouse Gas Emissions.

Note that it is not necessary to consider criterion B since the project meets criterion A. However, the following information is provided for informational purposes.

On September 27, 2021, the San Carlos City Council adopted a new Climate Mitigation and Adaptation Plan (CMAP) to reduce GHG emissions. The CMAP aims to reduce emissions 40% by 2030 and 80% by 2050 relative to 1990 levels. This CMAP is an update to the 2009 Climate Action Plan (2009 CAP) that provides updated information, an expanded set of GHG reduction strategies, climate adaptation strategies and a planning horizon out to 2050. There is not currently a checklist for development project, but the following goals and strategies found in the CMAP would be relevant to this project:
841 Old County Road Project Initial Study/MND Page 47

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Goal 1: Reduce energy use
o Strategy 1: Regional Energy Conservation and Efficiency Programs. Promote available energy efficiency and conservation opportunities, incentives, and technical assistance for businesses and residents.

Conforms – The TDM plan would reduce vehicle trips by 20 percent to meet Section

18.25.030 of the City of San Carlos Municipal Code. With this required TDM Plan reduction, VMT per service population would be reduced by at least 15 percent over regional average (see Section 17 Transportation).

Goal 2: Transition to carbon‐free energy sources
o
o
Strategy 4: Electrification. Transition to electricity as the primary energy source citywide.

Strategy 5: Building Codes. Advance electrification through local amendments to the California Building Code.
o Strategy 7: Peninsula Clean Energy. Continue to support and promote PCE as the community’s official electricity provider with a goal to provide 100 percent carbon‐free renewable energy by 2025.

Conforms – compliance with City Reach Code would prohibit natural gas infrastructure in new buildings. Peninsula Clean Energy is the electricity provider.

Goal 4: Promote sustainable development that reduces vehicle miles traveled o Strategy 17: Vehicles Miles Traveled. Reduce community‐wide transportation‐related emissions per resident and employee, with an emphasis on reductions from existing and new development in the city’s core commercial, office, and industrial areas, including development on the east side.

Conforms – The TDM plan would reduce vehicle trips by 20 percent to meet Section

18.25.030 of the City of San Carlos Municipal Code. With this required TDM Plan reduction, VMT per service population would be reduced by at least 15 percent over regional average (see Section 17 Transportation).

Goal 7: Become a zero‐waste community
o Strategy 27: Construction and Demolition Waste. Increase the amount of waste recycled during construction and demolition of buildings.

Assumed conformance – The project would be required to comply with Chapter 8.05 of the City of San Carlos’s Municipal Code, which outlines requirements for Recycling and Diversion of Construction and Demolition Debris.

As detailed above, the project would conform with relevant goals and strategies of the San Carlos CMAP, which is consistent with the less than significant impact conclusion.

To further support conclusions related to the qualitative criteria above, GHG emissions were modeled quantitatively using CalEEMod, as discussed in the Air Quality section, and are included

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here as an informational item. To meet 2020 reduction targets, BAAQMD had recommended threshold of significance for operational GHGs of 1,100 metric tons CO2e12 per year or, if the project was too large to meet that threshold, an efficiency threshold of 4.6 metric tons CO2e per service population (residents and employees) per year. Because this is a large office/R&D project, the applicable threshold for this analysis is the efficiency threshold. While BAAQMD did not update recommendations to address 2030 reduction targets, industry standard is to assume an additional 40% reduction per State directives, which equates to a standard of 2.8 metric tons CO2e per year per service population. A summary of the results is included in Table 8.

Table 8: Greenhouse Gas Emissions
GHG
in metric tons CO2e per year
Proposed
ProjectExisting Use Net Increase
1,637
57 Description
Project Emissions, Operational 830
0 2,467
Project Emissions, Construction
(averaged over 40 years) 572
Project Emissions, Total 830 2,524 1,694

1.6Project GHG Efficiency
3(Emissions per Service Population)
Project Service Population 2030
Extrapolated Efficiency Threshold 2.8
Exceeds Threshold? No
Source: Illingworth & Rodkin, 2022, Table 9 in Attachment A. 1 2
CO2e is carbon dioxide equivalent units, the standard measure of total greenhouse gasses.

Standard practice is to divide the construction emissions by 40 years (an average building life) and add that to the operational emissions for comparison to thresholds.
3 Service Population was calculated at approximately 300 square feet per employee for office/R&D, which equates to 1,085 employees.

As shown in Table 8 above, quantified GHG emissions would be below the relevant efficiency threshold and therefore consistent with the less than significant impact conclusion. b) Greenhouse Gas Reduction Plans
See the Air Quality section for an analysis of the project’s consistency with the regional Clean Air Plan. Additionally with respect to GHG emissions, the Clean Air Plan includes the goal to reduce Bay Area GHG emissions 40 percent below 1990 levels by 2030, and 80 percent below 1990 levels by 2050. This is consistent with the target reductions intended to be met by the BAAQMD thresholds and City’s CMAP. As demonstrated under criterion a) above, the project would be consistent with BAAQMD thresholds and the City’s CMAP and would therefore be consistent with the GHG emissions reduction goal of the Clean Air Plan.
12 CO2e is carbon dioxide equivalent units and is the standard measure of total greenhouse gasses. 841 Old County Road Project Initial Study/MND Page 49

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Additionally, emissions associated with the development of the proposed project were analyzed per the BAAQMD May 2017 CEQA Air Quality Guidelines, as updated. BAAQMD’s thresholds and methodologies take into account implementation of state‐wide regulations and plans, such as the AB 32 Scoping Plan and adopted state regulations such as Pavley and the low carbon fuel standard.

Therefore, there would be no impact with respect to consistency with GHG reduction plans.

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9. HAZARDS AND HAZARDOUS MATERIALS
Would the project:
a) Create a significant hazard to the public or the environment through the routine transport, use, or disposal of hazardous materials?  b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment?


c) Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or waste within one‐quarter mile of an existing or proposed school?

d) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, would it create a significant hazard to the public or the environment?
e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area?

f) Impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan?
g) Expose people or structures, either directly or indirectly, to a significant risk of loss, injury or death involving wildland fires?  This section utilizes information from the Phase I Environmental Site Assessment prepared for the applicants by PES Environmental, Inc., dated November 30, 2021, which is available as part of the project application materials.
a) Routine Use of Hazardous Materials
It is likely that equipment used at the site during construction activities could utilize substances considered by regulatory bodies as hazardous, such as diesel fuel and gasoline. However, all construction activities would be required to conform with Title 49 of the Code of Federal Regulations, US Department of Transportation, State of California, and local laws, ordinances, and procedures.

While specific tenants have not yet been identified, any commercial uses would involve household hazardous waste such as cleaners. R&D laboratories additionally are likely to handle materials considered to be biological hazards and/or chemical hazards. The San Mateo County Environmental Health Division enforces regulations pertaining to safe handling and proper storage of hazardous 841 Old County Road Project Initial Study/MND Page 51

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materials to prevent or reduce the potential for injury to health and the environment. Occupational safety standards exist in federal and state laws to minimize worker safety risks from both physical and chemical hazards in the workplace. The California Division of Occupational Safety and Health Administration is responsible for developing and enforcing workplace safety standards and ensuring worker safety in the handling and use of hazardous materials. Additionally, the City is in the process of developing regulations relating to BioSafety standards, with which future tenants of this proposed project would be required to comply.

With compliance with applicable regulations, project construction and operations are not anticipated to create a significant hazard to the public or environment through the routine transport, use or disposal of hazardous materials (less than significant). b, d) Hazardous Materials Site and Accidental Release
The site is a listed hazardous materials site for past contamination related to historic use of the 833 Old County Road property as a petroleum fueling facility and as an oil storage facility. A portion of the project site was also a former railroad spur, which may cause contamination due to chemicals associated with train operations, railroad ties, spills, or releases from rolling stock, and the use of pesticides and/ or herbicides. Historical records also indicate the former presence of a machinery manufacturing plant and furniture assembly facility. No current use of the project site is reported as a concern regarding hazardous materials.
803/821 Old County Road ‐ A 750‐gallon underground storage tank (UST) used to store gasoline, diesel, and/or kerosene until 1996 was removed from the southwest corner of the 803 Old County Road property in 1997. Several holes were found in the bottom of the tank at that time.

Groundwater remediation was done in 2000, and the property received a Case Closure notice from the San Mateo County Health System in 2012. The GeoTracker database shows the property as a completed and closed LUST cleanup site as of July 2012. 833 Old County Road – Eight groundwater monitoring wells were installed in 2002, and testing showed total petroleum hydrocarbons and benzene were detected in high levels. Quarterly testing was recommended at that time, but reports were only found until March 2005. In 2004, aboveground storage tanks and piping were removed, with a note that removal of all below grade piping and demolition of fuel dispensers/islands would occur at a later date, with no follow up documentation. Regional Water Quality Control Board lists this as an open case and that additional groundwater monitoring would still need to be completed to receive case closure. One existing groundwater monitoring well was found to be compromised and backfilled with dirt and debris, creating a potential conduit allowing hazardous material to enter groundwater, although no known hazardous materials were present on the current site. The other 6 wells’ condition is unknown at present. In 2020, a Phase I report noted the possible presence of a subsurface gasoline vapor tank and underground product piping. The property owner (a separate entity than the current project applicant) had not completed the San Mateo County Department of Environmental Health facility closure process by providing evidence of removal of the UST and piping.

Due to the known potential for contamination at the site, various tests of the groundwater and soils have been performed at the site over the years, with the following conclusions:
 Soils: Elevated concentrations of petroleum hydrocarbons and associated compounds were found in soil investigations. Affected soils were found primarily between 6 and 12 feet below ground surface. The limits of the petroleum hydrocarbon‐affected soil have been identified in

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areas studied laterally and vertically on all sides with the exception of the northeastern extent where the property boundary was reached. At the property boundary, available soil data indicate that likely concentrations of total petroleum hydrocarbon as gasoline and quantified as diesel are below commercial regulatory action levels for a commercial property. 

Groundwater: Elevated concentrations of petroleum hydrocarbons and associated compounds were found at the project site, and it has been identified as a potential source of petroleum hydrocarbon‐affected groundwater on one or more hydraulically downgradient sites. Affected groundwater is roughly coincident with the affected soil and is bounded as well to the subject property on all sides except the northeastern boundary. By the time the affected groundwater reaches the site boundary, concentrations of total petroleum hydrocarbons have decreased significantly from the highest concentrations and possible free phase product found in the center of the property to levels below associated regulatory levels for non‐drinking water.

Soil Vapors: Soil vapor sampling did not identify widespread chemical vapors across the site except in very localized areas consistent with high concentrations of total petroleum hydrocarbon as gasoline in soil and/or groundwater. These chemical vapors were typically volatile organic compounds (VOCs) associated with petroleum fuels including benzene, xylenes, MTBE, ethylbenzene, and hexane. Naphthalene was found in one localized spot at an elevated concentration and may be related to historical uses of the subject property as a lumber yard.

Scattered occurrences of chloroform were found along the subject property boundaries with Old County Road and Bransten Road at concentrations above regulatory action levels. The source of the chloroform is unknown and may be related to water and/or sewer leaks on‐ or off the subject property.
841 – 851 Old County Road – The properties have been investigated for soil and groundwater contamination over the years and have been found to have groundwater contaminated with petroleum hydrocarbon, benzene, and chloroform originating from 833 Old County Road. Although multiple businesses at this property have been listed as handling hazardous materials, no violations were ever issued.

The project site is currently an open but inactive fuel leak case with the Regional Water Quality Control Board (RWQCB).

The proposed project includes a subterranean garage that would require removal of all soil within the bounds of the project site to a depth of approximately 25 feet, which would effectively remediate the environmental concerns associated with the on‐site soil contamination. This soil excavation process would allow for discovery and removal of all suspected or unknown subsurface features that could be contributing to off‐site or downgradient contamination levels. These would be managed properly and transported off site.

Mitigation Measure
Haz‐1: Adherence to Remediation Measures. The applicant shall work with RWQCB to re‐ activate the fuel leak case and prepare and implement an agency approved remediation plan. The plan may include preparation of a Site Mitigation Plan to provide procedures and protocols for excavation, waste classification, and transportation/disposal of the contaminated soil; design of an excavation dewatering treatment system to manage the residual contamination in groundwater and excavation water generated during remediation and grading activities and potential off‐site up‐gradient considerations; evaluation and design, if needed, of a soil vapor barrier extension to the waterproofing 841 Old County Road Project Initial Study/MND Page 53

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system for some or all of the perimeter subterranean garage walls to mitigate chemically‐affected soil vapor from migrating onto the project site; and further assessment of adjacent down‐gradient properties, as required by the RWQCB, to evaluate conditions following completion of the on‐site remediation and subgrade construction activities.

Existing Buildings – All existing structures on the project site were constructed in or before the 1970s and therefore have the potential for both asbestos containing materials and lead‐based paint.

Mitigation Measure
Haz‐2: Lead‐Based Paint and Asbestos Abatement. Prior to demolition, the project sponsor shall demonstrate that buildings have been assessed for asbestos‐containing materials and lead‐based paint and that any suspected such materials have been abated by a licensed abatement contractor and disposed of according to all state and local regulations.

Implementation of mitigation measures Haz‐1 and Haz‐2 would requirement implementation of a Remediation Plan in coordination with RWQCB to address existing site contamination and hazardous building material assessment and abatement prior to demolition of existing buildings, which would reduce the effects of hazardous materials from the soil or demolition to less than significant with mitigation.
c) Hazardous Materials Near Schools
No school is located within one‐quarter mile of the project site. Therefore, the project would have no impact with respect to hazardous materials near schools. e) Airport Hazards
The closest airport is the San Carlos Airport, approximately 0.4 miles from the project site. According to the Airport Land Use Compatibility Plan, the project site is within the Airport Influence Area (Area B). The site is not within a primary flight path but is within the traffic pattern zone. Office and R&D uses are identified as compatible uses in this zone. The majority of the site has an allowable height of 155 feet above mean sea level. Factoring in the height of the site, the highest rooftop elements would reach maximum heights of approximately 132 feet above mean sea level, which would be below the FAA height limits. Because of the location within the Airport Land Use Compatibility Plan area, the project would be subject to Airport Land Use Commission approval to receive confirmation that their proposed building is compatible with height constraints and would not include elements dangerous to aircraft such as blinking lights, smoke columns, or attraction of birds.13 The project appears to be in conformance with the applicable rules. There are no other airports, either public or private within the vicinity of the project. There would be a less than significant impact related to airport hazards.
13 City/County Association of Governments of San Mateo County, Adopted October 2015, Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport, Exhibits 4‐3 and 4‐4 and p. 4‐26.

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f) Emergency Response Plan
The project would not include any changes to existing public roadways that provide emergency access to the site or surrounding area. The proposed project would be designed to comply with the California Fire Code and the City Fire Marshal’s code requirements that require on site access for emergency vehicles, a standard condition for any new project approval.

No substantial obstruction in public rights‐of‐way has been proposed with the project’s construction activities. However, any construction activities can result in temporary intermittent roadway obstructions, but these would be handled through standard procedures with the City to ensure adequate clearance is maintained.

Therefore, with compliance with applicable regulations and standard procedures, the impact with respect to impairment or interference with an Emergency Response or Evacuation Plan would be less than significant.
g) Wildland Fire
The project site is located in an urbanized area removed from areas typically subject to wildland fire.14 Therefore, the project would have no impact related to wildland fire. 14 City of San Carlos, San Carlos 2030 General Plan EIR, June 2009, p. 4.6‐18. 841 Old County Road Project Initial Study/MND Page 55

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10. HYDROLOGY AND WATER QUALITY
Would the project:
a) Violate any water quality standards or waste discharge requirements or otherwise substantially degrade surface or ground water quality?


b) Substantially decrease groundwater supplies or interfere substantially with groundwater recharge such that the project may impede sustainable groundwater management of the basin? c) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or through the addition of impervious surfaces, in a manner which would:
i) result in substantial erosion or siltation on‐ or off‐site; ii) substantially increase the rate or amount of surface runoff in a manner which would result in flooding on‐ or off‐site;
iii) create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted runoff; or 
d) In flood hazard, tsunami or seiche zones, risk release of pollutants due to project inundation? 
e) Conflict with or obstruct implementation of a water quality control plan or sustainable groundwater management plan?
This section utilizes information from the Design‐Level Geotechnical Investigation prepared for the applicants by Cornerstone Earth Group, dated July 16, 2021, which is available as part of the project application materials.
a) Water Quality and Discharge
Water quality is regulated by both State and Federal agencies under the authority of the Clean Water Act (CWA). Projects that have the potential to degrade water quality are subject to the regulations of those agencies. Operational activities may involve common urban pollutants such as surface litter, oil, gasoline, grease, paint, fertilizers, pesticides, and herbicides. Construction activities involving soils disturbances have the potential to result in increased erosion and sedimentation to surface waters, and could produce contaminated storm water runoff, a major contributor to the degradation of water quality.

The proposed project is located in an industrially zoned area and would include a net reduction of impervious surfaces with new landscaped areas. The project reduces the amount of impervious surface and includes a plan for stormwater retention on‐site in compliance with regulations. During construction, the City would require the project to develop and implement BMPs to control erosion

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associated with construction such as watering the exposed soil, and permanent features to treat stormwater runoff. The impervious surface coverage is reduced to 89% (from 92.5% coverage) with the addition of landscaped areas in compliance with Section 18.07.040 of the San Carlos Municipal Code.

Stormwater runoff water quality is regulated by the National Pollutant Discharge Elimination System (NPDES) Program (established through the CWA). The NPDES program objective is to control and reduce pollutants to water bodies from surface water discharges. Locally, the program is administered by the Bay Area Regional Water Quality Control Board (RWQCB). Compliance with the NPDES Permit is mandated by State and Federal statutes and regulations. The City of San Carlos participates in San Mateo’s Stormwater Management Plan, which outlines maintenance activities to be undertaken by cities; targets industrial and illicit discharge; describes public information about stormwater; provides guidance to cities for construction permits; and establishes monitoring programs to measure the success of the other portions of the plan. Compliance with the NPDES Permit is mandated by State and Federal statutes and regulations. The municipalities in San Mateo County have to require post‐construction stormwater controls as part of their obligations under Provision C.3 of the countywide municipal stormwater NPDES permit, which is similar to other municipal stormwater permits in the Bay Area. Any new construction would be subject to Provision C.3, which requires: pollutant removal treatment systems, operation and maintenance of treatment measures, and a limitation on increase of peak stormwater runoff discharge rates. Project applicants must prepare and implement a Stormwater Control Plan, as detailed in Standard Condition:

Stormwater Control Plan, included in Table 1, containing treatment and source control measures that meet the “maximum extent practicable” standard as specified in the NPDES permit and the SMCWPPP C.3 Guidebook. Project applicants must also prepare a Stormwater Facility Operation and Maintenance Plan and execute agreements to ensure the stormwater treatment and flow‐control facilities are maintained in perpetuity.

The proposed project would retain much of the existing stormwater control system while also adding additional water efficient landscaping, including green terraces and patios. The project has prepared preliminary stormwater treatment plans and C.3 worksheets demonstrating the change in impervious area at the site and appropriateness of stormwater system elements. The proposed project would reduce the impervious surfaces by 4,576 square feet to 132,784 square feet, representing a post‐project condition with impervious surfaces on 89% of the site. The use of additional street‐level flow through planters is not proposed, as the project would be built on top of an underground parking garage. There are currently two locations along Bransten Road and Commercial Street that are designated for flow‐through treatment planters to treat roof runoff. The project applicants are requesting a 45% reduction in LID treatment measures, due to the project’s qualification as a “Special Project” Category C. As detailed in the Geotechnical Investigation, stormwater infiltration locations within 10 feet of the buildings would create a geotechnical hazard.

Details of the on‐site stormwater system will be finalized through compliance with C.3 requirements.

Through compliance with post‐construction requirements in Standard Condition: Stormwater Control Plan related to implementation of the NPDES permit C.3 requirements, including project preparation and implementation of a Stormwater Control Plan and Stormwater Facility Operation and Maintenance Plan, the long‐term volume of water and water quality impacts from project operation would be less than significant and the project would comply with applicable water quality control regulations.
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b) Groundwater Recharge and Supplies
The groundwater at the site is not used by this or other projects as a water supply. Additionally, the project would comply with stormwater drainage requirements (see item a above). The project would not substantially deplete groundwater supplies or interfere substantially with groundwater recharge and would have a less than significant impact related to groundwater.

As discussed in more detail in the Section 7: Geology and Soils, project construction activities would require excavation and related dewatering activities. Because groundwater at the site is not used for drinking water or for aquatic habitat and draw‐down from dewatering activities would be temporary, this would not be considered a significant impact on groundwater supplies.

As discussed under this Section 10(a) above, the project would comply with stormwater drainage requirements. The project would not substantially deplete groundwater supplies or interfere substantially with groundwater recharge, and would have a less than significant impact related to groundwater.
c) Drainage Pattern Alteration
As discussed under item a, the site is currently fully developed, and runoff drains to the City’s storm drainage system. The project would reduce impervious site area and slow and treat run‐off with bio‐ retention areas prior to discharge into the storm drainage system. Through compliance with applicable regulations, as detailed in Standard Condition: Stormwater Control Plan, included in Table 1, the runoff from the site would be the same or reduced from that existing and would not cause erosion, siltation, or flooding. Project impacts related to alteration of drainage patterns would be less than significant.
d) Inundation
The project is not located within a Federal Emergency Management Agency (FEMA) Flood Zone and is therefore not considered to be subject to a substantial risk of flooding.15 The project site is not located within an area subject to inundation in the event of a failure of any dam.16 The project site is not located in an area that is protected by levees.

A tsunami or seiche originating in the Pacific Ocean would lose much of its energy passing through San Francisco Bay. Areas most likely to be inundated are those at or below sea level and within 1½ miles of the shoreline. The site is approximately 2¾ miles inland from the San Francisco Bay shoreline. The site elevation is also more than 66 inches above mean sea level, which is the projected potential sea‐level rise by 2100.17 Relatedly, the site is mapped by the State of California Tsunami Inundation Map as not being within an inundation area.18 Additionally, the site is not located proximate to a hillside that could generate mudflow.

Therefore, the potential for inundation due to tsunami, seiche, dam or levee failure, sea level rise, or mudflow would be less than significant.
15 Federal Emergency Management Agency (FEMA), effective 4/5/2019, Flood Insurance Rate Map (FIRM), Map Number 06081C0042F, available at https://www.fema.gov/flood‐maps. 16 17
City of San Carlos, San Carlos 2030 General Plan, p.194.

California Department of Water Resources, California Climate Science and Data for Water Resources Management, June 2015.
18 California Emergency Management Agency, Tsunami Inundation Map for Emergency Planning, Redwood Point/Palo Alto Quadrangle, June 15, 2099, available at http://www.conservation.ca.gov/cgs/geologic_hazards/Tsunami/Inundation_Maps.

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11. LAND USE AND PLANNING
Would the project:
a) Physically divide an established community? 
b) Cause a significant environmental impact due to a conflict with any land use plan, policy, or regulation adopted for the purpose of avoiding or mitigating an environmental effect?

a) Physical Division of a Community
The project involves redevelopment of a currently‐developed site and does not involve any physical changes that would have the potential to divide an established community (no impact). b) Conflict with Land Use Plan
An environmental impact could occur when a project conflicts with a policy or regulation intended to avoid or reduce an environmental impact. The following discussion does not replace or preclude a consistency assessment for project approval considerations, which take into account more than potential impacts to the environment.

The site is currently zoned IH (Heavy Industrial), under which R&D use is explicitly allowed and office use is allowed with a conditional use permit. The applicant is proposing approval under a Planned Development (PD) rezone, which would define development standards including intensity, height, setbacks, etc.

The potential for the project, including the requested rezoning, to result in environmental impacts have been individually considered in all topic areas in this document and would not result in any significant impacts following mitigation. Therefore, the project would not conflict with a land use plan, policy, or regulation in a way that would result in a significant environmental impact and would have a less than significant impact with regard to land use plan conflicts. 841 Old County Road Project Initial Study/MND Page 59

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12. MINERAL RESOURCES
Would the project:
a) Result in the loss of availability of a known mineral resource that would be of value to the region and the residents of the state?  
b) Result in the loss of availability of a locally‐important mineral resource recovery site delineated on a local general plan, specific plan or other land use plan?
a, b) Mineral Resources
San Carlos, including the project site, contains no known mineral resources.19 The project would have no impact with regard to mineral resources.
19 City of San Carlos, San Carlos 2030 General Plan, p.111.

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13. NOISE
Would the project result in:
a) Generation of a substantial temporary or permanent increase in ambient noise levels in the vicinity of the project in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies?

b) Generation of excessive groundborne vibration or groundborne noise levels?
c) For a project located within the vicinity of a private airstrip or an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project expose people residing or working in the project area to excessive noise levels?

This section utilizes information from the Noise Assessment prepared for the applicant by Coffman Engineers and dated April 14, 2022, included in full as Attachment D. a) Excessive Noise
Construction Noise
Standard construction practices and hours would be followed, consistent with City regulations.

Construction equipment that generates excessive noise, such as pile drivers and blasting equipment, are not expected to be used in this project. The acoustical analysis estimated both the energy average of sound (Leq) and the single loudest piece of equipment (Lmax) and found that the Leq would range from 58 to 65 dBA, and the Lmax would range from 58 to 68 dBA. The City’s noise ordinance limits during construction hours are 55 dBA L50 (measured using Leq) and 70 dBA Lmax.

While the project construction would possibly exceed the L50 limit, the City’s Municipal Code includes exemptions for construction activities conducted during certain daytime hours. As detailed in Standard Condition: Construction Noise, included in Table 1, the San Carlos Noise Ordinance (Chapter 9.30 of the Municipal Code) restricts construction activities to the hours of 8:00 AM to 5:00 PM on weekdays, 9:00 AM to 5:00 PM on Saturdays. All construction on the project would be conducted within the allowable hours. The impacts from noise generated by construction of the project would be less than significant.

Operational Noise
Operation of an office/R&D use does not typically produce substantial levels of noise. Traffic‐ related noise impacts generally occur with at least a doubling of traffic volumes on roadways adjacent to areas already at or above acceptable noise conditions. As detailed in the traffic study 841 Old County Road Project Initial Study/MND Page 61

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(Attachment E), the net new traffic would be well below a doubling of volumes on area roadways and would therefore not result in traffic‐related noise impacts.

The project intends to support unspecified research and life science tenants and therefore may have various pieces of mechanical equipment on the rooftops, including heat pumps, cooling towers and air handling units. Because the specific tenants and equipment has not yet been determined, the following measure would be implemented to ensure rooftop equipment noise levels would not result in a significant impact on the closest residential area.

Mitigation Measure
Noise‐1: Rooftop Mechanical Equipment Noise Assessment. The applicant shall conduct a detailed mechanical noise analysis once rooftop equipment has been selected. If any equipment exceeds 87 dBA at 5 feet, provide silencers, barriers, or other noise mitigation treatments to reduce expected noise levels from the mechanical equipment to within the noise ordinance limits.

Except in an emergency situation, the standby generators would be run during monthly testing during daytime hours. Even if both generators (should a tenant install a second generator) be tested at the same time, the noise level would be below local noise limits.

The impacts from noise generated by operation of the project would be less than significant with mitigation.
b) Groundborne Vibration
Operation of an office/R&D use would not produce substantial levels of off‐site vibration.

Typically, the most groundborne vibration would be caused by construction equipment during demolition, site excavation, and grading. Vibratory rollers, large bulldozers and loaded trucks carrying soil would produce the most vibrations. Construction vibration is evaluated to determine if it would result in building damage or annoyance at residential areas. Proposed construction activities do not include vibration‐generation with the potential to impact the closest residential uses at over 500 feet away.

For structural damage to engineered concrete and masonry buildings like the adjacent structures, the California Department of Transportation recommends a vibration limit of 0.3 in/sec peak particle velocity (PPV). The project would be considered to result in a potentially significant vibration impact if it were to result in groundborne vibration levels exceeding 0.3 in/sec PPV at the adjacent commercial buildings, as that is the vibration level considered to have the potential to cause damage to such structures.

The Acoustical Analysis projected that construction‐related vibration levels at nearby commercial buildings could exceed the damage threshold of 0.3 in/sec PPV if the following construction equipment were to be utilized within 5 feet of the adjacent buildings: Vibratory Rollers (up to 1.23 PPV at 5 feet), Large Bulldozers (up to 0.52 PPV at 5 feet), and Loaded Trucks (up to 0.45 PPV at 5 feet). Further analysis of vibratory roller vibration shows that at distances farther than 20 feet from existing structures, the vibration levels fall below the criteria. For other equipment such as large bulldozers and loaded trucks, vibration levels are expected to fall below the criteria at about 10 feet from the existing structures. The following mitigation measure would reduce the risk of structural damage to nearby structures due to construction vibration.

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Mitigation Measure
Noise‐2: Construction Vibration Reduction and Monitoring. Wherever feasible, operation of vibratory rollers shall be avoided within 20 feet of existing buildings and operation of other construction equipment such as large bulldozers or loaded trucks shall be avoided within 10 feet of existing structures on adjacent lots. If vibratory rollers must operate within 20 feet of existing buildings or other major construction equipment must operate within 10 feet of existing buildings, then a vibration monitoring plan shall be prepared and implemented to monitor construction vibration at the nearest structures.

With implementation of mitigation measure Noise‐2, which requires setbacks for high vibration‐ generating construction work or vibration monitoring, the impact from groundborne vibrations during construction would be less than significant with mitigation. c) Airport Noise
The closest airport to the project site is the San Carlos Airport, approximately 0.5 miles to the south. The project site is within the boundary of the Airport Land Use Compatibility Plan (ALUCP) but is not within the area substantially impacted by airplane flyover noise (expected to be 60 dBA or less).20 Impacts related to excessive aircraft noise exposure would be less than significant. 20 City/County Association of Governments of San Mateo County, Adopted October 2015, Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport, Exhibit 4.1. 841 Old County Road Project Initial Study/MND Page 63

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14. POPULATION AND HOUSING
Would the project:
a) Induce substantial unplanned population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)?

b) Displace substantial numbers of existing people or housing, necessitating the construction of replacement housing elsewhere?  a) Substantial Population Growth
While neither housing nor population are directly created as a result of this project, employment opportunities can indirectly increase population and the demand for housing.

The General Plan estimated job growth in San Carlos of 8,530 jobs between 2005 and 2035, which would raise the projected jobs‐to‐housing ratio from 1.4 in 2010 to 1.7 in 2035. The trends in job growth and jobs‐to‐housing ratio are similar to those county‐wide and consistent with regional projections, and the General Plan EIR concluded the impact related to population growth would be less than significant.21, 22
Plan Bay Area 2050 is the current regional long‐range plan charting the course for the future of the nine‐county San Francisco Bay Area. Plan Bay Area 2050 focuses on four key issues — the economy, the environment, housing, and transportation. Plan Bay Area 2050 estimates a total addition of 1,403,000 total jobs to the Bay Area between 2015 and 2050. The project’s addition of up to 1,085 employees would increase jobs in the City and region incrementally. Compared to the total jobs projection for the entire Bay Area, the addition of 1,085 jobs would not be substantial or unplanned.

The location of an employment center near local and regional transit (see Section 17:

Transportation) would be consistent with Plan Bay Area 2050 goals to reduce vehicle travel while meeting area demand for growth.

Therefore, the proposed project represents a small portion of the job growth identified for the area, so resultant potential for population growth would not be substantial and unplanned, and the project would have a less than significant impact related to population growth. b) Displacement of Housing or People
There is currently no housing or people at the site that would be displaced by the project. The project would have no impact related to displacement of housing or people. 21 City of San Carlos, San Carlos 2030 General Plan, Housing Element, pp.11, 12. 22 City of San Carlos, San Carlos 2030 General Plan EIR, June 2009, Chapter 4.10: Population and Housing.

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15. PUBLIC SERVICES
Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives for any of the following public services? a) Fire protection
b) Police protection
c) Schools





d) Parks
e) Other public facilities
a‐e) Public Services
The proposed project is located on a developed site within San Carlos that is already served by public services. The project would not directly add population, and an office/R&D use would not be anticipated to substantially increase utilization of public services, such that new or physically altered facilities would be required. The minimal increases in demand for services expected with the worker population and potential indirect population growth (see Section 14: Population and Housing), would be offset through payment of development fees and annual taxes, a portion of which go toward ongoing provision of and improvements to public services. Therefore, the impact to public services would be less than significant.
841 Old County Road Project Initial Study/MND Page 65

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16. RECREATION
Would the project:
a) Increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated. 

b) Include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment.
a‐b) Recreation
As an office/R&D project, the proposed project would not construct or substantially increase the use of public recreational facilities. On‐site open space would be provided for employees in the form of a courtyard between the two buildings and upper‐level terraces. The use of public recreational facilities would not be anticipated to increase substantially due to project employees such that physical deterioration would occur, or construction or expansion would be necessary. Therefore, the impact related to recreation would be less than significant.

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17. TRANSPORTATION
Would the project:
a) Conflict with a program, plan, ordinance or policy addressing the circulation system, including transit, roadway, bicycle, and pedestrian facilities?

b) Would the project conflict or be inconsistent with CEQA Guidelines section 15064.3, subdivision (b)?
c) Substantially increase hazards due to a geometric design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm )?

d) Result in inadequate emergency services?
This section utilizes information from the CEQA Transportation Analysis prepared for this analysis by W‐ Trans, dated November 3, 2022, and included in full as Attachment E. a) Circulation System Plans and Facilities
The Transportation Analysis assessed pedestrian, bicycle, and transit access and circulation and consistency with applicable regulations.

Pedestrians and Bicyclists: Sidewalks and crosswalks are provided on most streets in the immediate vicinity of the proposed project. Sidewalks exist along both sides of Industrial Road, as well as Old County Road, except for the segment south of Montgomery Street where there is only sidewalk on the east side. Currently, only intermittent sidewalks are available on Commercial Street, however a new sidewalk along the south side between Old County Road and Industrial Road has been proposed as part of a separate project. A pedestrian tunnel provides access from El Camino to Old County Road, under the above‐grade Caltrain tracks.

Bicycle access to the proposed project site is currently available as Class II bike lanes on Old County Road and Industrial Road. All other streets in the project area require bicyclists to ride in the street and/or on sidewalks. A number of improvements to bicycle lanes around the project site are anticipated under the City of San Carlos Bicycle and Pedestrian Master Plan, 2020.

In order to provide improved and continuous access between the project site and San Carlos Caltrain Station and SamTrans bus stops along El Camino Real, the project would also include the following changes to the existing pedestrian and bicycle network:
 Demolish and reconstruct the sidewalks along the project frontages along Bransten Road, Commercial Street and Old County Road. This would include ADA‐compliant curb ramps and improved sidewalks.
841 Old County Road Project Initial Study/MND Page 67

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

Construct a new Class IV Bikeway along the western side of Old County Road between Bransten Road and Commercial Street. It is noted that Old County Road north of Bransten Road would remain a Class III Bike Route until additional portions of the Old Country Road Class IV Bikeway is completed by others. The detailed design of the transition between the styles of bike lane is undergoing review and has not yet been finalized.

Establishment of a bicycle crosswalk across Old County Road at the intersection of Old County Road/Bransten Road that connects the future Class IV Bikeway on Old County Road with Bransten Road.

All of these changes are required to be designed and constructed to meet City standards and would not increase hazards due to a geometric design feature or incompatible use. Therefore, the impact to pedestrian and bicycle facilities would be less than significant.

Transit: Existing transit service to the study area is provided by Caltrain, and San Mateo County Transit District (SamTrans). The project site is located approximately 0.46 miles from the Caltrain station, and 0.1 miles from bus stops offering service from Route 397 (San Francisco to Palo Alto), Route 398 (San Francisco to Redwood City) and Route ECR (Daly City CART station to Palo Alto). As a project close to transit stops, the project is expected to generate trips via transit services. According to state CEQA guidelines, the addition of new transit riders should not be treated as an adverse impact because such development also improves regional flow by adding less vehicle travel onto the regional network. Therefore, the project is anticipated to have a less than significant impact on transit facilities and services.

Local Residential Streets: The City is working separately with local residents of the East San Carlos Neighborhood who are concerned about cut through traffic on their local streets. Based on analysis of the project trip generation, TDM plan reduction, trip distribution pattern and likely paths of travel, the number of cars from this project estimated to use local streets to travel between Old County Road and Industrial Road does not exceed the standards set by the City of San Carlos Neighborhood Traffic Management Program for a local street, and therefore does not qualify as a significant impact under CEQA.

Per Senate Bill 743 discussed under item b) below, auto delay, level of service (LOS), and similar measures of vehicular capacity or traffic congestion are no longer considered as a basis for determining significant impacts under CEQA. The following discussion is provided for informational purposes and to demonstrate compliance with circulation system roadway policies and is based on the Transportation Operations Analysis prepared by W‐Trans, which is available as part of the project application.

The proposed project would generate an average of 2,346 net new trips daily, with 295 new trips during the AM peak hour and 237 new trips during the PM peak hour. The Transportation Operations Analysis concluded that with implementation of improvements included in the City’s Transportation Improvement Fee Program, the project would not cause any study intersections or freeway segments to degrade from acceptable operations to unacceptable operations. While some intersections / freeway segments operate at conditions considered unacceptable under existing and/or cumulative conditions, the project’s contribution to those intersections would be below applicable threshold levels. Therefore, the project would be consistent with applicable circulation system roadway planning and policies and would have a less than significant impact on the circulation system.

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b) Vehicle Circulation and Congestion
Senate Bill (SB) 743 changes CEQA transportation impact analysis significance criteria to eliminate auto delay, level of service (LOS), and similar measures of vehicular capacity or traffic congestion as a basis for determining significant impacts under CEQA (although a jurisdiction may choose to maintain these measures under its General Plan). The changes in CEQA Guidelines to implement SB 743 present vehicles miles traveled (VMT) as an appropriate measure of transportation impacts.

This discussion is a summary of the data, analysis, and conclusions in the complete Transportation Analysis, included in full as Attachment E.

Because the project site is currently occupied by commercial uses, the trip generation of those businesses was estimated and deducted from the trip generation of the proposed project. The proposed project would fit under both “Research and Development Center” and “General Office Building” land uses listed in the current Trip Generation Manual23. For a conservative analysis, and to be consistent with other recently analyzed Life Sciences office projects in San Carlos, the higher daily trip generation rate for “Research and Development Center” and the peak hour trip generation rates for “General Office Building” were applied to approximate the number of vehicle trips generated by the proposed project based on the proposed square footage. The number of employees was estimated using an occupancy of approximately one employee per 300 square feet of office space, giving an estimate of 1,085 employees.

Consistent with both the California Office of Planning and Research’s (OPR) publication Transportation Impacts (SB 743) CEQA Guidelines Update and Technical Advisory (2018) and the City of San Carlos’ Transportation Significance Criteria Implementing Vehicle Miles Traveled (2020), a proposed project exceeding a level of 15 percent below existing regional VMT per employee may indicate a significant transportation impact. Under OPR’s publication, as well as CEQA Guidelines Section 15064.3(b)(1), “generally, projects within one‐half mile of either an existing major transit stop or a stop along an existing high‐quality transit corridor should be presumed to cause a less than significant transportation impact.” The project is located within 0.5 miles of the El Camino Real transit corridor (a high quality transit corridor). However, under the City’s policies, as an office project, the VMT should be analyzed for potential impact. The C/CAG‐VTA Bi‐County Model was used to determine the VMT per service population baseline for the planning area, based on the “existing” year of 2019, to be 17.0 miles per day. Using a threshold of 15 percent below existing VMT, the significance threshold for the City of San Carlos would be 14.5 miles per day per employee. (See Attachment E for additional detail.)
A TDM plan is required for the proposed project to meet the City of San Carlos’ development guidelines, as detailed in Standard Conditions: Transportation Demand Management, included in Table 1, which would further reduce traffic generated by the project and contribute to use of alternate modes discussed above. The proposed draft TDM plan is estimated to reduce VMT by

21.7% (see Attachment E for details), but a more conservative estimate of 20% is used to compare against significance thresholds. The TDM plan must be completed and approved by the City prior to the first certificate of occupancy for the project, outlining the required 20% reduction, program and service measures, planning and design measures, monitoring, reporting, and assurance of success of the plan.
23 Institute of Transportation Engineers, Trip Generation Manual, 11th Edition, 2021. 841 Old County Road Project Initial Study/MND Page 69

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The estimated project VMT Service Population was calculated and compared against the significance threshold, with and without the reduced rate with implementation of the required TDM program, as summarized in Table 9 below.

Table 9: Project Vehicle Miles Traveled
Significance
Baseline VMT Threshold (15%
Below Baseline) Project VMT Rate
Project VMT Rate
(with TDM)Daily Trips Rate
Employment‐based
VMT per Service
Population

17.0 14.5 15.2 12.2
Note: VMT Rate is measured in VMT per Service Population; Project Reduced VMT Rate is 15.2 less 20% Source: W‐Trans CEQA Transportation Analysis, 2022, Table 5 in Attachment E.

The estimated VMT per Service Population for this development, without considering the TDM measures required by the City of San Carlos Municipal Code, is 15.2 miles per day per employee.

Taking into account implementation of the requirements in Standard Condition: Transportation Demand Management, the estimated VMT per employee for the project would be 12.2 miles, which is less than the 14.5 VMT threshold for office projects, resulting in a less than significant impact. c) Hazards
The Transportation Analysis evaluated the sight distance at both project driveways and the proximity of the accesses to adjacent intersections. Vehicles would access the project site from driveways on Commercial Street and Bransten Road, with each driveway providing access to both the parking garage and the main internal roadway. Pedestrian entrances would face Old County Road, Bransten Road and Commercial Street, and walkways would connect the two buildings.

Sight distance at both driveways was found to be more than adequate compared to criteria in the Highway Design Manual published by Caltrans.

The vehicle queue for the westbound approach to Old County Road (on Commercial Street) was found on analysis to extend beyond and block access to the project site driveway on Commercial Street during peak hours. However, in the event the driveway is blocked, motorists would access the site via the Bransten Road driveway. As such, the queue on Commercial Street would not be a significant impact.

All roadway modifications proposed by the project would be designed and constructed to meet current City standards. None of the proposed changes, including changes to sidewalks, crosswalks, bicycle facilities, and travel lanes would increase hazards due to geometric design features. Overall, the project would have a less than significant impact.
d) Emergency Access
All driveways and internal roadways would be designed and constructed to meet current City standards, ensuring adequate emergency access. Emergency vehicles would access the project site via driveways on Commercial Street and Bransten Road. While the project would add project‐ generated traffic, all roadway users must yield the right‐of‐way to emergency vehicles. The project would have a less then significant impact on emergency access.

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18. TRIBAL CULTURAL RESOURCES
Would the project:
a) Cause a substantial adverse change in the significance of a tribal cultural resource, defined in Public Resources Code section 21074 as either a site, feature, place, cultural landscape that is geographically defined in terms of the size and scope of the landscape, sacred place, or object with cultural value to a California Native American tribe, and that is:
i) Listed or eligible for listing in the California Register of Historical Resources, or in a local register of historical resources as defined in Public Resources Code section 5020.1(k), or 
ii) A resource determined by the lead agency, in its discretion and supported by substantial evidence, to be significant pursuant to criteria set forth in subdivision (c) of Public Resources Code Section 5024.1. In applying the criteria set forth in subdivision (c) of Public Resource Code Section 5024.1, the lead agency shall consider the significance of the resource to a California Native American tribe.
a) Tribal Cultural Resources
A record search of the Native American Heritage Commission Sacred Lands File was completed for the project and indicated there are no known sacred lands present in the vicinity of the site (see Attachment B). While no tribes have requested consultation for project in this area, notice was sent to listed tribes on February 10, 2022, per recommendation of the Native American Heritage Commission. One response was received within the required 30 response period from the Indian Canyon Band of Costanoan Ohlone People requesting tribal cultural resource monitoring during ground disturbance activities.

The records search performed by the Northwest Information Center (included in Attachment B) indicated that there is a moderate to high potential for the inadvertent discovery of previously unrecorded Native American resources based on the characteristics of the site and history of the region.

Mitigation Measures Culture‐1, Culture‐2, and Culture‐3 would require appropriate monitoring and proper handling of any discoveries and would also reduce the potential impact related to unknown tribal cultural resources.

Compliance with the protection procedures specified in Mitigation Measures Culture‐1, Culture‐2, and Culture‐3 and Standard Condition: Protection of Human Remains would require that if any previously‐unknown tribal cultural resources and/or human remains are discovered, these would be handled appropriately and the impact of the project would be less than significant with mitigation. 841 Old County Road Project Initial Study/MND Page 71

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19. UTILITIES AND SERVICE SYSTEMS
Would the project
a) Require or result in the relocation or construction of new or expanded water, or wastewater treatment or storm water drainage, electric power, natural gas, or telecommunications facilities, the construction or relocation of which could cause significant environmental effects?

b) Have sufficient water supplies available to serve the project and reasonably foreseeable future development during normal, dry and multiple dry years?


c) Result in a determination by the wastewater treatment provider which serves or may serve the project that it has adequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments?
d) Generate solid waste in excess of State or local standards, or in excess of the capacity of local infrastructure, or otherwise impair the attainment of solid waste reduction goals?

e) Comply with federal, state, and local management and reduction statutes and regulations related to solid waste?
a, d‐e) Utilities
The project would result in redevelopment of a site already provided with utilities and services.

Utility connections would be made to lines in adjacent streets that are either already existing or will be upgraded through coordination with the nearby Alexandria Center for Life Science project.

Certified professionals have prepared utility plans for the project (see Figure 5), which are reviewed by City staff, and utility providers would provide will‐serve letters prior to issuance of construction permits. No capacity concerns have been raised that are not being addressed by the planned improvements. The project would comply with the City’s requirements for waste and recycling.

Therefore, while the project would be denser than what is existing on the site and could have a greater demand for utilities and generation of wastewater and solid waste, this would be served by existing facilities and existing regulations and processes would ensure the lines and connections to the site are appropriately sized. The impact on utilities and service systems would be less than significant.
b) Water Supply
The discussion under this topic utilizes information from the Water Supply Assessment prepared for the applicants pursuant to Senate Bill 610 by EKI Environment & Water, Inc., dated October 2022,

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which incorporates a letter of formal approval by Cal Water and which is available as part of the project application materials.

The purpose of a Water Supply Assessment is to evaluate whether a water provider has sufficient water supply to meet the current and planned water demands within its service area, including the demands associated with the proposed project, during normal and dry hydrologic years over a 20‐ year time horizon. Cal Water’s Bear Gulch, Mid‐Peninsula, and South San Francisco Districts share one contractual allocation of supply (referred to as their Individual Supply Guarantee or ISG) from the City and County of San Francisco’s Regional Water System, and thus Cal Water manages the supplies for all three Districts collectively. Cal Water’s ISG for the three Peninsula Districts is 39,993 acre‐feet per year. The Region Water System has historically met demand in its service area in all year types. Future water availability is constrained by hydrology, physical facilities, and the institutional parameters that allocate the water supply of the Tuolumne River. In addition, statewide regulations and other factors can impact the system reliability. For example, the adoption of the Water Quality Control Plan for the San Francisco/Sacramento‐San Joaquin Delta Estuary (Bay‐Delta Plan Amendment) is anticipated to reduce reliability during drought years in the future. The Cal Water Mid‐Peninsula District Water Shortage Contingency Plan and Development Offset Program (discussed below) are being implemented to address future supply reliability.

If the “worst‐case” supply scenario under the Bay‐Delta Plan Amendment is implemented, shortfalls of up to 53% are projected during drought years. To address these future dry‐year shortfalls, Cal Water would enact its Water Shortage Contingency Plan, which includes Mandatory Staged Restrictions of Water Use. The overall reduction goals in the Water Shortage Contingency Plan are established for six drought stages and address water demand reductions over 50%. The Water Shortage Contingency Plans for all three Peninsula Districts were revised as part of the 2020 UWMP update process and include detailed information about how drought risks are evaluated by Cal Water on an annual basis to determine the potential need for reductions.

In July 2021, Cal Water began preparation of a Development Offset Program for its three Peninsula Districts. The purpose of the Development Offset Program is to ensure that overall customer demand for water does not exceed available current or future supply under a range of hydrologic conditions, and to ensure the availability of water for residential, commercial, and other purposes for future water use in the three Peninsula Districts. As approved by the California Public Utilities Commission, the Development Offset Program will require any new residential, commercial, or industrial development within any of the three Peninsula Districts that is projected to increase demand by more than 50 acre‐feet per year to pay a special facilities fee, referred to as a developer offset fee, consisting of a fee of $15,400 per acre‐feet of net demand increase.

The WSA prepared for this project utilized the historic water usage at the site (average of 2.1 acre‐ feet per year) and water usage estimation methodology per Cal Water preferences to project that the average annual net increase in water demand for the proposed project would total 46 acre‐feet per year. This total includes all indoor and outdoor water usage.

This WSA concluded that the three Peninsula Districts’ contractual ISG allocation of 39,993 acre‐feet per year is sufficient to meet projected future demands with the proposed project having a minimal impact of less than 50 acre‐feet per year. Future demands of the three Peninsula Districts, inclusive of the proposed project, are projected to reach, at most, 85% of Cal Water’s contractual ISG allocation in normal hydrologic years. The shortfalls that are currently projected during dry years will be addressed through planned implementation of the Mid‐Peninsula District Water Shortage Contingency Plan and Development Offset Program. Because the water demand estimated for the 841 Old County Road Project Initial Study/MND Page 73

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project is less than 50 acre‐feet per year, this project is not required to contribute to the Development Offset Program. Therefore, because the Water Supply Assessment prepared in collaboration with Cal Water determined that there would be adequate water supply, the project impact related to water supply would be less than significant.

The project would also implement relevant water efficiency standards. The City of San Carlos has adopted green building standards and water efficient landscaping ordinances consistent with previous versions of the CalGreen building standards and the California Model Water Efficient Landscape Ordinance (MWELO). As part of state requirements, all new developments must comply with these efficiency standards. As such, the project development is expected to implement a number of water‐efficient features, including, but not limited to:
• Use of low‐flow lavatory faucets, kitchen faucets, toilets, and urinals in accordance with CalGreen Code; and
• Inclusion of low‐water use landscaping and high‐efficiency irrigation systems to minimize outdoor water use in accordance with MWELO.
c) Wastewater
Increased wastewater production due to the Alexandria Center for Life Science (ACLS) project, as well as other potential projects in the area, was modeled by civil engineering company Mott MacDonald. The report indicated that with the increased wastewater generated by the ACLS project, there would be a bottleneck due to a section of 8‐inch diameter sewer pipe under Industrial Road that connects a 15‐inch pipe on Commercial Street to the 21‐inch main on Industrial Road. The ACLS project would upsize the 8‐inch section to a 15‐inch pipe and remove the bottleneck.

This project would connect to the wastewater pipe under Commercial Street, which connects to the studied area and would go through the upgraded pipe. With the larger flow capacity of the 15‐inch pipe, the project would have a less than significant impact.

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20. WILDFIRE
If located in or near state responsibility areas or lands classified as very high fire hazard severity zones, would the project:
a) Substantially impair an adopted emergency response plan or emergency evacuation plan? 

b) Due to slope, prevailing winds, and other factors, exacerbate wildfire risks, and thereby expose project occupants to, pollutant concentrations from a wildfire or the uncontrolled spread of a wildfire?
c) Require the installation or maintenance of associated infrastructure (such as roads, fuel breaks, emergency water sources, power lines or other utilities) that may exacerbate fire risk or that may result in temporary or ongoing impacts to the environment?


d) Expose people or structures to significant risks, including downslope or downstream flooding or landslides, as a result of runoff, post‐fire slope instability, or drainage changes?
a‐d) Wildfire Risk and Emergency Response
The project site is within the developed urban area of San Carlos, which is not located in a very high fire hazard severity zone.24, 25 The proposed project would have no impact related to wildfire. 24 25
California Department of Forestry and Fire Protection. 2007. San Mateo County Fire Hazard Severity Zones in State Responsibility Area. Available: https://osfm.fire.ca.gov/divisions/wildfire‐planning‐engineering/wildland‐hazards‐building‐ codes/fire‐hazard‐severity‐zones‐maps/.

Department of Forestry and Fire Protection Fire and Resource Assessment Program, San Mateo County Very High Fire Hazard Severity Zones, November 24, 2008, available at: https://osfm.fire.ca.gov/media/6800/fhszl_map41.pdf. 841 Old County Road Project Initial Study/MND Page 75

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21. MANDATORY FINDINGS OF SIGNIFICANCE
a) Does the project have the potential to substantially degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self‐sustaining levels, threaten to eliminate a plant or animal community, substantially reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? 
b) Does the project have impacts that are individually limited, but cumulatively considerable? (“Cumulatively considerable” means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects)? 

c) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly?
a) Environmental Quality
With the implementation of mitigation measures Bio‐1 to protect nesting birds during construction and Culture‐1 through Culture‐3 to address the potential discovery of currently unknown cultural, tribal cultural, or paleontological resources at the site, the project would not degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self‐sustaining levels, or threaten to eliminate a plant or animal community. The project would not impact rare or endangered wildlife species or eliminate important examples of the major periods of California history or prehistory. b) Cumulative Impacts
The project would not result in adverse impacts that are individually limited but cumulatively considerable, including effects for which project‐level mitigation were identified to reduce impacts to less than significant levels. All potential effects of the project were assessed in the context of area development, including specifically assessment of emissions impacts analyzed against cumulative thresholds per the Air District recommendations. Project‐specific impacts would be less than significant with implementation of mitigation measures identified in this document, including mitigation measure Air‐1 to address construction period dust and emissions, and Noise‐2 to reduce ambient noise pollution, and would not result in contribution of considerable levels to cumulative impacts.

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c) Adverse Effects on Human Beings
The project would not result in substantial adverse effects on human beings, either directly or indirectly. Mitigation Measures Air‐1, Geo‐1, Haz‐1, Haz‐2, Noise‐1, and Noise‐2 would minimize the potential for safety impacts related to construction‐period emissions, appropriate techniques for safety during excavation and dewatering and building construction, disturbance of site contaminants, and noise and vibration levels from construction and operational equipment. Therefore, the potential adverse effects on human beings would be less than significant with mitigation. 841 Old County Road Project Initial Study/MND Page 77

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DOCUMENT PREPARERS
Lamphier ‐Gregory
(Primary Report Preparers)
Rebecca Auld, Vice President
Jenna Sunderlin, Planner
4100 Redwood Road, STE 20A ‐ #601
Oakland, CA 94619
510‐535‐6690
Illingworth & Rodkin
(Air Quality and Greenhouse Gas Analysis)
Zachary Palm, Emissions Consultant
James A. Reyff, Principal
429 E. Cotati Ave
Cotati, CA 94931
707‐794‐0400
Coffman Engineers
(Noise Assessment)
Christopher Barnobi, PE, Discipline Manager, Acoustics
1939 Harrison Street, Suite 320
Oakland, CA 94612
510‐251‐9578
W‐Trans
(Transportation Analysis)
Kenneth Jeong, P.E., Senior Engineer
Mark Spencer, P.E., Senior Principal
414 13th Street, 5th Floor
Oakland, CA 94612
510‐444‐2600
City of San Carlos
This document was prepared in consultation with City of San Carlos staff, including Lisa Costa Sanders, Principal Planner.

SOURCES

1. BAAQMD, May 2017, California Environmental Quality Act Air Quality Guidelines.

2. Bay Area Air Quality Management District. June 2, 2010. News Release http://www.baaqmd.gov/~/media/Files/Communications%20and%20Outreach/Publications/Ne ws%20Releases/2010/ceqa_100602.ashx.

3. California Department of Transportation, State Scenic Highway Mapping System, http://www.dot.ca.gov/hq/LandArch/16_livability/scenic_highways/scenic_hwy.htm.

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4. California Department of Water Resources, California Climate Science and Data for Water Resources Management, June 2015.

5. California Emergency Management Agency, Tsunami Inundation Map for Emergency Planning, Redwood Point/Palo Alto Quadrangle, June 15, 2099, available at http://www.conservation.ca.gov/cgs/geologic_hazards/Tsunami/Inundation_Maps.

6. City/County Association of Governments of San Mateo County, Adopted October 2015, Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport.

7. City of San Carlos, San Carlos 2030 General Plan.

8. City of San Carlos, San Carlos 2030 General Plan EIR, June 2009.

9. Cornerstone Earth Group, July 16, 2021, Design‐Level Geotechnical Investigation.

10. Department of Forestry and Fire Protection Fire and Resource Assessment Program, San Mateo County Very High Fire Hazard Severity Zones, November 24, 2008, available at:
https://osfm.fire.ca.gov/media/6800/fhszl_map41.pdf.

11. Federal Emergency Management Agency (FEMA), effective 4/5/2019, Flood Insurance Rate Map (FIRM), Map Number 06081C0042F, available at https://www.fema.gov/flood‐maps.

12. Institute of Transportation Engineers, Trip Generation Manual, 11th Edition, 2021.

13. Metropolitan Transportation Commission, 2021, Transit Priority Area, accessed at:
https://www.arcgis.com/home/item.html?id=370de9dc4d65402d992a769bf6ac8ef5AllWest.

14. PES Environmental, Inc., November 30, 2021, Phase I Environmental Site Assessment.

15. Preservation Architecture, March 15, 2022, 803‐841‐851 Old County Rd., San Carlos, Historic Resource Evaluation.
841 Old County Road Project Initial Study/MND Page 79

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841 OLD COUNTY ROAD PROJECT SC/MMRP, JUNE 2023 PAGE 1

STANDARD CONDITIONS AND MITIGATION MONITORING AND REPORTING PROGRAM FOR THE 841 OLD COUNTY ROAD PROJECT
Verification
Standard Condition Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed
Standard Condition: Exterior Materials. Pursuant to San Carlos Municipal Code Chapter 18.29, the colors and materials of the structure and improvements shall be in substantial compliance with those presented and described within the application materials. Any changes determined to be significant as determined by the Community Development Director shall be reviewed and approved by the Planning Commission.

Prior to
issuance of
building
permits
Applicant
Verify
inclusion of
requirements
in planning
documents
San Carlos
Planning
Division
Standard Condition: Exterior Lighting Plan. Pursuant to San Carlos Municipal Code Chapter 18.29, a final exterior lighting plan with specifications in conformance with the approved plans is subject to review and approval by the Planning Division prior to Building Permit issuance.

Prior to
issuance of
building
permits
Applicant
Verify
inclusion of
requirements
in planning
documents
San Carlos
Planning
Division
Standard Condition: Signage. New signs are subject to compliance with San Carlos Municipal Code Chapter 18.22. No signs have yet been approved as part of this project. Any signs that are visible from U.S. Highway 101 shall require approval by the Planning Commission.

Prior to new
sign erection Applicant
Verify any
signs are in
compliance
San Carlos
Planning
Division
Standard Condition: Protection of Trees. Pursuant to San Carlos Municipal Code Sections 18.18.070 and 18.41.020, the project proponent shall obtain a permit to remove any tree(s) protected under the City’s Interim Protected Tree Ordinance, as determined by an arborist, and shall also prepare a tree protection plan that includes a map of the tree protection zone and is included in the construction drawings and bid package. Removed trees will be replaced in accordance with the ordinance at the discretion of the Community Development Director. If any removed trees are within the jurisdiction of California Department of Fish and Wildlife (CDFW), and CDFW issues a Lake and Streambed Agreement for the Prior to
issuance of
building
permits
Applicant
Verify
inclusion of
requirements
in construction
documents
San Carlos
Building
Division

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841 OLD COUNTY ROAD PROJECT SC/MMRP, JUNE 2023 PAGE 2
Verification
Standard Condition Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed
project, the tree replacement ratios shall comply with CDFW requirements.

Standard Condition: Protection of Human Remains. If human remains are unearthed during ground-disturbing activities, Section 7050.5(b) and (c) of the California Health and Safety code will be implemented. Section 7050.5(b) and (c) states:
(b) In the event of discovery or recognition of any human remains in any location other than a dedicated cemetery, there shall be no further excavation or disturbance of the site or any nearby area reasonably suspected to overlie adjacent remains until the coroner of the county in which the human remains are discovered has determined, in accordance with Chapter 10 (commencing with Section 27460) of Part 3 of Division 2 of Title 3 of the Government Code, that the remains are not subject to the provisions of Section 27492 of the Government Code or any other related provisions of law concerning investigation of the circumstances, manner and cause of death, and the recommendations concerning treatment and disposition of the human remains have been made to the person responsible for the excavation, or to his or her authorized representative, in the manner provided in Section 5097.98 of the Public Resources Code. The coroner shall make his or her determination within two working days from the time the person responsible for the excavation, or his or her authorized representative, notifies the coroner of the discovery or recognition of the human remains.
(c) If the coroner determines that the remains are not subject to his or her authority and if the coroner recognizes the human remains to be those of a Native American, or has reason to believe that they are those of a Native American, he or she shall contact, by telephone within 24 hours, the Native American Heritage Commission. [In which case, section 5097.98 of the California Public Resources Code would apply.]
Prior to and
during
construction
activities
involving
ground
disturbance
Applicant
Verify
inclusion of
requirements
in construction
documents
San Carlos
Building
Division

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841 OLD COUNTY ROAD PROJECT SC/MMRP, JUNE 2023 PAGE 3
Verification
Standard Condition Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed
Standard Condition: Stormwater Control Plan. A stormwater and drainage control plan shall be prepared and implemented in compliance with the San Mateo Countywide Water Pollution Prevention Program (SMCWPPP), Provision C.3 of the County’s Municipal Regional Stormwater NPDES Permit and any other required provisions of the City of San Carlos Municipal Code. The plan shall specify best management practices for the control and prevention of stormwater pollution. The plan shall address both construction-phase and post-construction pollutant impacts from development.

Construction-phase measures shall include: erosion control measures such as installing fiber rolls, silt fences, gravel bags, or other erosion control devices around and/or downslope of work areas and around storm drains prior to earthwork and before the onset of any anticipated storm events; monitoring and maintaining all erosion and sediment control devices; designating a location away from storm drains when refueling or maintaining equipment; scheduling grading and excavation during dry weather; and removing vegetation only when absolutely necessary.

Post-construction drainage controls shall be specified to capture and treat stormwater onsite.

Prior to
issuance of
building
permits
Applicant
Verify
inclusion of
requirements
in planning
documents
San Carlos
Planning
Division
Standard Condition: Compliance with design-level Geotechnical Investigation and Structural Design Plans. Consistent with plan check procedures for Building Permit consideration, proper foundation engineering and construction shall be performed in accordance with the recommendations of a Registered Geotechnical Engineer and a Licensed Professional Engineer. The structural engineering design, with supporting Geotechnical Investigation, shall incorporate seismic parameters compliant with the California Building Code.

Prior to
issuance of
building
permits
Applicant
Verification
that design
requirements
are met and
reviewed by
qualified
professional
San Carlos
Building
Division

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841 OLD COUNTY ROAD PROJECT SC/MMRP, JUNE 2023 PAGE 4
Verification
Standard Condition Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed
Standard Condition: Construction Noise. Construction Activities shall comply with the City’s noise ordinance (Chapter 9.30 of the San Carlo Municipal Code), which includes restriction of construction activities to the hours of 8:00 AM to 5:00 PM on weekdays, and 9:00 AM to 5:00 PM on Saturdays.

Prior to
issuance of
demolition,
building or
grading
permits
Applicant
Verify
inclusion of
requirements
in construction
documents
San Carlos
Building
Division
Transportation Demand Management (TDM). Pursuant to Chapter

18.25 of the City of San Carlos Municipal Code and San Mateo County Congestion Management Program Land Use Implementation Policy (C/CAG TDM Policy), a Transportation Demand Management Plan shall be implemented for the life of the project as presented to and approved by the Planning Commission. The owner and/or future tenants shall be responsible for supplying Planning Staff with the contact information for the Designated TDM Contact person.

A report documenting the TDM activities undertaken and their results shall be submitted to the Community Development Director annually at the responsibility of the applicant. The Director may impose reasonable changes to assure the program’s objectives will be met. The owner and/or future tenants shall be responsible for ensuring that C/CAG TDM Policy requirements and monitoring and reporting are met.

As new more efficient and effective TDM measures become available to reduce vehicle trips, these measures may be included or substituted to maintain the trip reduction levels described in the Plan. Any such substitutions shall be to the satisfaction of the Community Development Director. Any changes determined to be substantive or inconsistent with the TDM Plan by the Community Development Director shall require review and approval by the Planning Commission.
[Note that if a Transportation Management Association (TMA) is established in San Carlos that can serve the project site, it is expected that the property owner shall participate in the TMA as fulfillment of TDM requirements. The level of financial contribution Prior to
issuance of
building
permits
-and-
Annually
Applicant
Verify
inclusion of
requirements
in project
documents
San Carlos
Planning
Division

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841 OLD COUNTY ROAD PROJECT SC/MMRP, JUNE 2023 PAGE 5
Verification
Standard Condition Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed
of the participants in the TMA shall be based on an equitable measure such as square footage (or similar metric) as agreed upon by the participants and the City.]
Verification
Mitigation Measure Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed
Mitigation Measure Air-1: Basic Construction Management Practices. The project shall demonstrate proposed compliance with all applicable regulations and operating procedures prior to issuance of demolition, building or grading permits, including implementation of the following BAAQMD “Basic Construction Mitigation
Measures”.

1. All exposed surfaces (e.g., parking areas, staging areas, soil piles, graded areas, and unpaved access roads) shall be watered two times per day.

2. All haul trucks transporting soil, sand, or other loose material off-site shall be covered.

3. All visible mud or dirt track-out onto adjacent public roads shall be removed using wet power vacuum street sweepers at least once per day. The use of dry power sweeping is prohibited.

4. All vehicle speeds on unpaved roads shall be limited to 15 mph.

5. All roadways, driveways, and sidewalks to be paved shall be completed as soon as possible. Building pads shall be laid as soon as possible after grading unless seeding or soil binders are used.

6. Idling times shall be minimized either by shutting equipment off when not in use or reducing the maximum idling time to 5 minutes (as required by the California airborne toxics control measure Title 13, Section 2485 of California Code of Regulations [CCR]). Clear signage shall be provided for construction workers at all access points.

Prior to
issuance of
demolition,
building or
grading
permits
Applicant
Verify
requirements
are included in
construction
contracts and
are met during
construction
San Carlos
Building
Division

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841 OLD COUNTY ROAD PROJECT SC/MMRP, JUNE 2023 PAGE 6
Verification
Mitigation Measure Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed

7. All construction equipment shall be maintained and properly tuned in accordance with manufacturer’s specifications. All equipment shall be checked by a certified mechanic and
determined to be running in proper condition prior to
operation.

8. Post a publicly visible sign with the telephone number and person to contact at the Lead Agency regarding dust complaints.

This person shall respond and take corrective action within 48 hours. The Air District’s phone number shall also be visible to ensure compliance with applicable regulations.

Mitigation Measure Bio-1: Pre-Construction Nesting Bird Survey.

Initiation of construction activities during the avian nesting season (February 15 through September 15) shall be avoided to the extent feasible. If construction initiation during the nesting season cannot be avoided, pre-construction surveys for nesting birds protected by the Migratory Bird Treaty Act of 1918 and/or Fish and Game Code of California within 100 feet of a development site in the project area shall be conducted within 14 days prior to initiation of construction activities. If active nests are found, a 100-foot buffer area shall be established around the nest in which no construction activity takes place. The buffer width may be modified upon recommendations of a qualified biologist regarding the appropriate buffer in consideration of species, stage of nesting, location of the nest, and type of construction activity based upon published protocols and/or guidelines from the U.S. or California Fish and Wildlife Services (USFWS, CDFW) or through consultation with USFWS and/or CDFW.

The biologist may also determine that construction activities can be allowed within a buffer area with monitoring by the biologist to and stoppage of work in that area if adverse effects to the nests are observed. The buffer shall be maintained until after the nestlings have fledged and left the nest. These surveys would remain valid as long as construction activity is consistently occurring in a given area and would be completed again if there is a lapse in construction activities of more than 14 consecutive days during the nesting season.

Prior to
initiation of
construction
activities or
re-initiation of
construction
activities if
inactive for 30
days or more
Applicant
If construction
is initiated or
re-initiated
during nesting
season,
verification of
survey and
that any
required
buffers are
included in
construction
documents
San Carlos
Building
Division

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841 OLD COUNTY ROAD PROJECT SC/MMRP, JUNE 2023 PAGE 7
Verification
Mitigation Measure Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed
Mitigation Measure Culture-1: Further Site Assessment. Prior to ground disturbance, a qualified consultant shall conduct further archival and field study research to determine the appropriate locations for cultural or tribal cultural resource
(historic/archaeological/paleontological/Native American) monitoring during removal of asphalt or concrete, fill, vegetation, or structures. Field study may include, but is not limited to, hand auger sampling, shovel test units, or geoarchaeological analyses as well as other common methods used to identify the presence of buried archaeological resources.

Prior to
construction
activities
involving
ground
disturbance
Applicant
Verify
inclusion of
requirements
in construction
documents
San Carlos
Building
Division
Mitigation Measure Culture-2: Archaeological Sensitivity Training.

In anticipation of discovery of unknown archaeological resources during construction, Archaeological Sensitivity Training shall be carried out by a qualified archaeologist for all personnel who will engage in ground disturbing activities on the site. The training shall be conducted at the start of construction and prior to ground disturbance.

The training shall include suitable photographic materials showing the kinds of artifacts and evidence of prehistoric archaeological sites likely to be found in the area, as well as written and verbal descriptions for archaeological resources and signs of potential archaeological discovery. The training shall also include written materials describing what to do in the event of a discovery, or suspected discovery of archaeological resource.

Prior to
construction
activities
involving
ground
disturbance
Applicant
Verify
inclusion of
requirements
in construction
documents
San Carlos
Building
Division
Mitigation Measure Culture-3: Protection of Accidentally Discovered Cultural Resources. In the event that any previously undiscovered cultural resource (historic/archaeological /paleontological/Native American) are uncovered during ground disturbing activities, all such activity shall cease until these resources have been evaluated by a qualified consultant and specific measures can be implemented to protect these resources in coordination with the City and in accordance with sections 21083.2 and/or 21084.1 of the California Public Resources Code.

Prior to and
during
construction
activities
involving
ground
disturbance
Applicant
Verify
inclusion of
requirements
in construction
documents
San Carlos
Building
Division

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841 OLD COUNTY ROAD PROJECT SC/MMRP, JUNE 2023 PAGE 8
Verification
Mitigation Measure Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed
Mitigation Measure Geo-1: Excavation Monitoring. The
construction contractor shall implement a monitoring program to monitor the effects of the construction on nearby improvements, including the monitoring of cracking and vertical movement of adjacent structures, nearby streets, sidewalks, parking and other improvements. This shall include the installation of inclinometers or other instrumentation as part of the shoring system to closely monitor lateral movement at locations considered by the geotechnical engineer to be critical areas. The monitoring program shall be active from the beginning of excavation until the framing of the subterranean structure is complete and dewatering ceases.

Prior to
issuance of
building or
grading
permits
Applicant
Verify
inclusion of
requirements
in construction
documents
and met
during
construction
San Carlos
Building
Division
Mitigation Measure Haz-1: Adherence to Remediation Measures.

The applicant shall work with RWQCB to re-activate the fuel leak case and prepare and implement an agency approved site-specific Site Mitigation Plan. The Site Mitigation Plan shall provide procedures and protocols for excavation, waste classification, and transportation/disposal of the contaminated soil; design of an excavation dewatering treatment system to manage the residual contamination in groundwater and excavation water generated during remediation and grading activities; a soil vapor barrier extension to the waterproofing system for some or all of the perimeter subterranean garage walls to mitigate chemically- affected soil vapor from migrating onto the project site; and further assessment of adjacent down-gradient properties, as required by the RWQCB, to evaluate conditions following completion of the on- site remediation and subgrade construction activities.

Prior to
issuance of
grading
permits
Applicant
Verify
inclusion of
requirements
in construction
documents
San Carlos
Building
Division
Mitigation Measure Haz-2: Lead-Based Paint and Asbestos Abatement. Prior to demolition, the applicant shall demonstrate that buildings have been assessed for asbestos-containing materials and lead-based paint and that any suspected such materials have been abated by a licensed abatement contractor and disposed of according to all state and local regulations.

Prior to
issuance of
demolition
permits
Applicant
Verify
inclusion of
requirements
in construction
documents
San Carlos
Building
Division

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841 OLD COUNTY ROAD PROJECT SC/MMRP, JUNE 2023 PAGE 9
Verification
Mitigation Measure Timing/
Schedule
Implementation
Responsibility Monitoring
Action
Monitoring
Responsibility
Date
Completed
Mitigation Measure Noise-1: Rooftop Mechanical Equipment Noise Assessment and Abatement. The applicant shall conduct a detailed mechanical noise analysis once rooftop equipment has been selected. If any equipment exceeds 87 dBA at 5 feet, the applicant shall provide silencers, barriers, or other noise mitigation treatments to reduce expected noise levels from the mechanical equipment to within the noise ordinance limits.

Prior to
installation of
rooftop
equipment
Applicant
Verify
requirements
are met
San Carlos
Building
Division
Mitigation Measure Noise-2: Construction Vibration Reduction and Monitoring. Construction Vibration Reduction and Monitoring.

Wherever feasible, operation of vibratory rollers shall be avoided within 20 feet of existing buildings and operation of other construction equipment such as large bulldozers or loaded trucks shall be avoided within 10 feet of existing structures on adjacent lots. If vibratory rollers must operate within 20 feet of existing buildings or other major construction equipment must operate within 10 feet of existing buildings, then a vibration monitoring plan shall be prepared and implemented to monitor construction vibration at the nearest structures.

Prior to
issuance of
demolition,
building or
grading
permits
Applicant
Verify
inclusion of
requirements
in construction
documents
and met
during
construction
San Carlos
Building
Division

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LAMPHIER-GREGORY 4100 REDWOOD ROAD, STE 20A - #601 OAKLAND, CA 94619

LAMPHIER-GREGORY
MEMO
TO:Lisa Costa Sanders, Principal Planner
City of San Carlos Planning Division
600 Elm Street
San Carlos, CA 94070-3085
650.802.4207
[email protected]
FROM: Rebecca Auld, Vice President
Lamphier-Gregory, Inc
SUBJECT:841 Old County Road Project IS/MND – Review and Discussion of Comments DATE: May 30, 2023

PURPOSE OF THIS MEMO
This memo provides a brief discussion of comments received in response to the Initial Study/Mitigated Negative Declaration (“IS/MND”) for the 841 Old County Road Project (“project”). Though the California Environmental Quality Act (“CEQA”) does not require a Lead Agency to formally respond to written comments received on an IS/MND, this memorandum is being provided by the IS/MND preparer to demonstrate that the comments do not present substantial evidence supporting a fair argument that the project may have a significant environmental impact or that the IS/MND should be revised and recirculated for public review.

COMMENTS RECEIVED
The comment period ran from January 20, 2023, through February 21, 2023. One comment letter was received via email after the comment period, as listed below. While received after the close of the comment period, this letter is responded to in this document as if it were received during the comment period.
•Debbie and Gary Baldocchi, dated May 9, 2023

CONCLUSIONS
No revisions to the IS/MND are necessary to address these comments.

The information in this document does not identify new significant impacts or mitigation measures or changed impact conclusions. The comments in this email and this response do not require recirculation of the IS/MND or preparation of an environmental impact report under section 15073.5 of the CEQA Guidelines.

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DISCUSSION OF COMMENT LETTER
Debbie and Gary Baldocchi
This comment letter numbered the comments (1) through (6) and the responses here reference the numbers in the comment letter.

Comment 1 relates to water usage. As indicated in the IS/MND (pp. 72-74) (as well as the referenced 642 Quarry Road MND), a Water Supply Assessment (WSA) was conducted for each project in coordination with the water supplier. A WSA details water usage as required by the water supplier and the final version includes approval from Cal Water.

The water supplier for the 642 Quarry Road project is Mid Peninsula Water District (MidPen). The 841 Old County Road project is in a different area of the City with a different water supplier, the California Water Service Company (Cal Water).

Cal Water has adopted the Water Shortage Contingency Plan (WSCP) and Development Offset Program.

These were factored into the project’s WSA, as were capacity increases due to Cal Water’s contractual allocation of San Francisco Public Utilities Commission supply (shared among the three Peninsula Districts), and the acquisition of the Los Trancos County Water District and the Skyline County Water District.

Acre-feet is a common unit of annual water usage for development and is what is used in the water supplier’s (Cal Water) planning and policy documents and the IS/MND. Million gallons is a unit that can also be used to represent volumes of water and 1 million gallons equals approximately 3.069 acre-feet.

The project’s annual net increase use of 46-acre-feet per year (AFY), as reported in the IS/MND, equates to approximately 15 million gallons per year. Million gallons is more commonly used when discussing daily usage as million gallons per day (MGD).

The following detailed information is included in the project WSA (p.21), which is specific to Cal Water’s system (and different from the MidPen system information presented in the 642 Quarry Road project MND):
“Cal Water’s collective current and projected purchase quantities for the three Peninsula Districts are approximately equal to an average of 29.38 MGD (32,932 AFY) in 2020 and 30.35 MGD (34,019 AFY) in 2045, respectively (Cal Water, 2021c). Both current and projected quantities are less than Cal Water’s ISG for the three Peninsula Districts of 35.68 MGD (39,993 AFY).” As indicated in the IS/MND, the WSA for this project concludes that the water supply is adequate to meet the projected future demands with the proposed project.

Comment 1 also asked about the potential for using recycled water. Recycled water is not available in San Carlos and the project was not designed to use recycled water.

Comment 2 relates to the potential to increase local flooding, again referencing analysis done for the 642 Quarry Road MND. The 642 Quarry Road project is in a flood hazard zone caused by proximity to Belmont Creek. As noted in the Hydrology and Water Quality section of the IS/MND (p.58), the 841 Old County Road project is not near a creek and is not in a flood hazard zone, and diverting groundwater flow around the underground parking garage is not a significant flood concern for this project.

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Comment 3 relates to solar panels for energy production. The requirement for solar panels is part of the City’s Reach Code, the compliance with which is noted on pp. 41 and 48 of the IS/MND. The location of the photovoltaic panels (PV) is shown on page A2.07 of the full project plan set, available on the City’s website at: https://www.cityofsancarlos.org//home/showdocument?id=8239. As discussed on pages 40- 42 and Attachment C of the IS/MND, the project meets efficiency requirements and does not conflict with or obstruct relevant plans and does not require comparison to other types of land uses.

Comment 4 relates to the use of hazardous materials in laboratories. The project is proposed as a shell to lease to R&D tenants, with no specific tenant (or BioSafety level, “BSL”) yet identified. The IS/MND includes a discussion of the use of hazardous materials at the site on pp. 51-52 as follows: “R&D laboratories additionally are likely to handle materials considered to be biological hazards and/or chemical hazards. The San Mateo County Environmental Health Division enforces regulations pertaining to safe handling and proper storage of hazardous materials to prevent or reduce the potential for injury to health and the environment. Occupational safety standards exist in federal and state laws to minimize worker safety risks from both physical and chemical hazards in the workplace. The California Division of Occupational Safety and Health Administration is responsible for developing and enforcing workplace safety standards and ensuring worker safety in the handling and use of hazardous materials.

Additionally, the City is in the process of developing regulations relating to BioSafety standards, with which future tenants of this proposed project would be required to comply.” With respect to the specific concerns listed in this comment, the IS/MND specifies that the project site is not in a flood hazard zone (p. 58), will be designed by geotechnical engineers to withstand potential liquefaction damage (p.43-44), has adequate water supply (p. 72-74), and includes emergency generators to address power outages (Figure 3 and pp. 30-34). Any building tenants would be required to follow all safety procedures based on the proposed BioSafety levels.

Comment 5 relates to stormwater treatment. The term low impact development (LID) refers to systems and practices that use or mimic natural processes, often referring to landscaped areas that allow for infiltration of stormwater through the soil, which results in natural filtering. Stormwater treatment requirements allow for different solutions to be utilized for projects in proximity to transit, where higher site density helps to meet other environmental objectives mostly related to reducing vehicle travel (Special Project Category “C”). As indicated in the IS/MND (pp.56-57), the project meets the requirements. In such cases, the regulations allow for use of select certified non-LID treatments, which in this case consist of media filters. The stormwater treatment proposal is explicitly allowed under the existing regulations and has already specified the measures that are proposed in place of 100% LID treatment to meet the objectives of stormwater regulations. Therefore, consistent with conclusions in the IS/MND, the project would not have a significant impact on water quality standards, and no additional measures are necessary under stormwater regulations or CEQA.

Comment 6 requests consideration of a project with no underground parking. CEQA requires consideration of the project as proposed with implementation of mitigation measures or alternatives to reduce or avoid potential impacts. As discussed under Comment 2 above, the project site is not in a flood hazard zone and would not result in significant impacts relating to flooding (other referenced projects are located in flood hazard zones).It is almost universal for projects to require site-specific design and construction considerations for soil and groundwater conditions and as indicated in the IS/MND (pp.15, 16, 43, 44), compliance with design-level geotechnical investigation and structural design plans are required as standard conditions of all projects. As indicated in the IS/MND (p.44), the proposed excavation for the parking garage (which removes soil prone to liquefaction) and design and

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construction of the proposed buildings would address potential geological hazards to proposed buildings. Similarly, dewatering for excavation of underground levels is a common occurrence and a geotechnical investigation (and review by City engineers) would indicate if such activities would result in dangerous conditions. While not considered a danger such that the proposed construction activities cannot be allowed, monitoring for minor shifting or cracking of nearby improvements that could be perceptible though the use of instrumentation (inclinometers) or close inspection would allow for changes in activities at the site to reduce the potential for such minor damage and the mechanism for repair if needed. Per section 15063 of the CEQA Guidelines, when there are no residual significant environmental impacts following mitigation, an MND may be prepared, and the presentation and discussion of alternatives is not required in an MND.

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May 9, 2023
Dear Lisa Costa Sanders and Members of the Planning and Transportation Commission, We submit the following questions and comments regarding the MND for the proposed Life Sciences development at 841 Old County Road. We note that the public comment period for the MND closed in February 2023 and that no date has been set for Planning and Transportation Commission review. We regret that we did not see the public notice of the MND. (1) Water Use--MND refers to use in acre feet terms vs gallons and does not mention the MidPen water storage capacity. However, 48.1 acre feet is 15,673,453 gallons, right? According to the 642 Quarry Road MND, the total water storage capacity is about 11 million square feet, but this is not disclosed in the MND. Why doesn't this MND disclose the information in gallon measurements as prior MNDs have done? We perceive this as inadequate and a tactic to prevent full transparency regarding the amount of water use. If recycled water infrastructure was available, could this biolab development use recycled water for its operations? If not, why? (2) Displacement of ground water and increased risk of street flooding due to the underground parking structure and shallow ground water. There is no discussion of the displacement of ground water by the 2-story underground parking structure. Won't that will increase the amount of flood waters directed around the site similar to what was described in the 642 Quarry Road MND? That MND said that the underground parking structure on that site would add about a foot of storm water to streets and increase the amount of street flooding during heavy rains. We perceive this MND to be inadequate because it does not discuss this issue.
(3) Energy Use--Will the development have solar panels? If not, why? Is it due to the rooftop exhaust stacks and HVAC equipment? Although the MND asserts that the development complies with green building standards, we did not see solar panels mentioned. We perceive the MND to be inadequate because it does not mention solar panel use as an offset against energy use. In addition, we ask for information about the amount of energy use compared to office use.
(4) Hazardous Materials--Are the buildings being designed for BSL-3 lab use? If so, a MND is inadequate on it's face and an EIR should be required due to the risks associated with high- containment labs being sited in an area prone to flooding, liquefaction, rolling blackouts and water shortages due to drought.
(5) Water quality and discharge--The MND reads in part: The project applicants are requesting a 45% reduction in LID treatment measures, due to the project’s qualification as a “Special Project” Category C. As detailed in the Geotechnical Investigation, stormwater infiltration locations within 10 feet of the buildings would create a geotechnical hazard.

We ask for further explanation as to why the applicants are requesting a significant reduction in low impact development treatment measures (LID). Are there mitigations that could make this development more environmentally sustainable and allow them to retain and treat storm water on site? We view the MND as inadequate because it does not include other possible mitigations.
(6) Soils: Risk of damage to adjacent structures, infrastructure and streets due to extensive excavation for two stories of below grade parking. We contend that the MND is

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inadequate because it does not explore the option of disallowing two floors of underground parking. In addition, the MND does not include a discussion of the cumulative impacts on street flooding due to water displacement from other underground parking structures nearby, including MBC Biolabs at 930 Brittan. In addition, because this site is at "high risk of liquefaction", the underground parking structures should be denied.

The MND reads in part: Due to the extent of the proposed excavation for below grade parking, the Geotechnical Investigation identified a significant potential to affect nearby private structures and parking areas and/or public sidewalks and roadways outside of the project site during excavation and dewatering, which may include cracking or vertical movement. In addition to implementation of the Standard Condition above requiring conformance with design‐level geotechnical recommendations, the following mitigation measure would reduce the risk of damage to nearby improvements due to the potential for ground instability during construction activities at the site.

Geo‐1: Mitigation measures:

Excavation Monitoring. The construction contractor shall implement a monitoring program to monitor the effects of the construction on nearby improvements, including the monitoring of cracking and vertical movement of adjacent structures, nearby streets, sidewalks, parking and other improvements. This shall include the installation of inclinometers or other instrumentation as part of the shoring system to closely monitor lateral movement at locations considered by the geotechnical engineer to be critical areas. The monitoring program shall be active from the beginning of excavation until the framing of the subterranean structure is complete and dewatering ceases.

Implementation of mitigation measure Geo‐1 and Standard Condition: Compliance with design‐ level Geotechnical Investigation and Structural Design Plans would reduce the effects of geologic hazards caused by seismic activities and expansive or unstable soils to less than significant with mitigation. (P. 44)
Due to the significant public safety and environmental risks identified above, we ask the Planning Commission to deny certification of the MND because it does not adequately address these issues. Thank you for considering our questions and concerns.

Respectfully,
Debbie and Gary Baldocchi

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4864-3640-1272 v2
ORDINANCE NO. ___

AN ORDINANCE OF THE CITY OF SAN CARLOS APPROVING THE
841 OLD COUNTY ROAD PROJECT PLANNED DEVEOPMENT PLAN AND RELATED

ZONING MAP AMENDMENT TO REZONE THE PROJECT SITE FROM HEAVY INDUSTRIAL (IH) TO PLANNED DEVELOPMENT (PD) AT 841 OLD COUNTY ROAD (APN 046-133-160, 046-134-050, 046-134-060, 046-135-010, 046-135-020, 046-135-030, 046-135- 040, 046-182-100, 046-182-110, 046-182-150).

RECITALS
WHEREAS, pursuant to Title 18 of the City of San Carlos Municipal Code (the “Zoning Code”), SI 74, LLC, a California limited liability company filed an application for approval of a Planned Development Plan and accompanying Zoning Map Amendment for the development of the 841 Old County Road Project (APN 046-133-160, 046-134-050, 046-134-060, 046-135-010, 046-135-020, 046-135-030, 046-135-040, 046-182-100, 046-182-110, 046-182-150); and WHEREAS, SI 74, LLC, a California limited liability company transferred title to the Property to The Sobrato Family Foundation, a California nonprofit public benefit corporation.

Both entities are controlled by members of the Sobrato family. The City has since updated the application to reflect that The Sobrato Family Foundation, a California nonprofit public benefit corporation is the applicant;
WHEREAS, by Resolution PTC2023-11, adopted on June 7, 2023, the Planning and Transportation Commission recommends the City Council adopt the Mitigated Negative Declaration and the Mitigation Monitoring and Reporting Plan pursuant to the California Environmental Quality Act (CEQA) for the implementation of the mitigation measures outlined in the Mitigated Negative Declaration; and
WHEREAS, at a duly noticed public hearing held on June 7, 2023, the Planning and Transportation Commission approved the Design Review Permit, Transportation Demand Management Plan, Grading and Dirt Haul Certificate and Tentative Map; and WHEREAS, by Resolution PTC2023-12, adopted on June 7, 2023, the Planning and Transportation Commission recommends the City Council approve the Zoning Map Amendment as set forth in Exhibit A to this Resolution and adopt the Planned Development (PD) Plan as set forth in Exhibit B to this Resolution; and
WHEREAS, the City Council of the City of San Carlos held duly noticed public hearings on August 28, 2023 and October 9, 2023 to consider the Mitigated Negative Declaration, Mitigation Monitoring and Reporting Plan, the proposed Planned Development Plan and the proposed Zoning Map Amendment; and
WHEREAS, by Resolution 2023-__, adopted October 9, 2023, the City Council made findings and adopted the Mitigated Negative Declaration and Mitigation Monitoring and Reporting Plan pursuant to the California Environmental Quality Act (CEQA) for the implementation of the mitigation measures outlined in the Mitigated Negative Declaration.

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4864-3640-1272 v2

NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF SAN CARLOS DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1: The Zoning Map Amendment of San Carlos is hereby amended from Heavy Industrial (IH) District to Planned Development (PD) District (Exhibit A), by the adoption of a Planned Development Plan for the construction of two research and development buildings with a total of 339,170 square feet above grade with one four story building at a height of 74’-6” to the roof parapet and 85’ to the top of the mechanical screen and a five story building at a height of 90’-6” to the roof parapet and 101’ to the top of the mechanical screen with below grade and at- grade parking and landscaping improvements on the 3.41 acre site located at 841 Old County Road (APNs 046-133-160, 046-134-050, 046-134-060, 046-135-010, 046-135-020, 046-135- 030, 046-135-040, 046-182-100, 046-182-110, 046-182-150) as shown on the plans prepared by Studios Architecture dated January 11, 2023 (Exhibit B).

SECTION 2: The City Council finds that the Planned Development Zone change and Plan of Development is consistent with the General Plan as described in Exhibit C.

SECTION 3: That the City Council hereby adopts the Plan of Development filed as “803- 851 Old County Road” attached hereto as Exhibit B. This plan indicates the location of the proposed building, the size of the building, the parking to be provided and areas to be landscaped.

Standards of Development are as follows:

1. The land use regulations for the PD zone shall be those uses allowed in the Heavy Industrial (IH) Zoning District. Research and Development Use shall be considered a Permitted Use. In addition, the following uses are permitted within the 1,500 square feet tenant space:
a. Instructional Services, Eating and Drinking Establishments (excluding night clubs), Animal Care, (excluding Veterinary Services), Personal Services (excluding Tattoo or Body Modification Parlor), Retail Sales (excluding Cannabis Dispensaries, Retail Establishments Selling Ammunition or Firearms), Sales and Services, Government Offices, and Cultural Institutions all as defined in Chapter 18.40 of the San Carlos Municipal Code.

2. Life Science/Research and Development tenants shall comply with the City’s Bio Safety regulations in effect at the time laboratory tenant improvements plans are submitted to the Building Department.

3. All tenants may only conduct activities classified as Biosafety Level 1 or 2 unless the City (including but not limited to any City agency, body, department, officer or employee) or its electorate (through the power of initiative or otherwise) adopts any ordinance, resolution, order, rule, official policy, standards, specifications, guidelines and/or other regulations (collectively, ‘New City Laws’) permitting activities classified as Biosafety Level Three or Biosafety Level Four and the tenant obtains all permits, approvals or other authorizations required by the New City Laws.

4. The buildings shall be situated on the property in accordance with the Plan of Development (attached hereto as Exhibit B) prepared by Studio Architecture, Inc.

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4864-3640-1272 v2
dated January 11, 2023. This plan indicates the location of the building, the size of the building, the parking to be provided and areas to be landscaped.

5. Floor area and height of the buildings shall be provided in substantial compliance with the Plan of Development. The project shall comply with the current zoning standards in effect except as follows:
i. The maximum building height is limited to 74’-6” to the top of the roof parapet and 83’ to the top of the mechanical screen for the four-story (north) building and 90’-6” to the top of the roof parapet and 99’ to the top of the mechanical screen for the five-story (south) building. ii. The total allowed floor area for the site is 339,170 square feet resulting in a FAR of 2.28.
iii. The exterior side yard setback along Commercial Street shall be 2’-6”.

6. The project shall be constructed in accordance with all requirements of the Mitigated Negative Declaration, Mitigation Monitoring & Reporting Plan, Design Review Certificate, Transportation Demand Management Plan and Grading and Dirt Haul Certificate.

SECTION 4: The City Council hereby declares that it would have passed this Ordinance sentence by sentence, paragraph by paragraph, and section by section, and does hereby declare that any provisions of this Ordinance are severable and if for any reason any sentence, paragraph or section of this Ordinance shall be held invalid, such decision shall not affect the validity of the remaining parts of this Ordinance.

SECTION 5: This Ordinance shall be published and posted according to law and shall take effect and be in force from and after 30 days after its passage and adoption. *****
I, City Clerk Crystal Mui, hereby certify that the foregoing Ordinance was introduced on the 9th day of October, 2023 and passed and adopted as an Ordinance of the City of San Carlos at a regular meeting thereof held on the ____ day of __________, 2023 by the following vote:
_______________________________
CITY CLERK of the City of San Carlos
APPROVED:

MAYOR of the City of San Carlos
AYES, COUNCILMEMBERS:

NOES, COUNCILMEMBERS:

ABSENT, COUNCILMEMBERS:

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4864-3640-1272 v2
Exhibits:

A. Zoning Map
B. Planned Development Plan
C. Findings

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4864-3640-1272 v2

EXHIBIT A

SAN CARLOS ZONING MAP
841 Old County Road (APN 046-133-160, 046-134-050, 046-134-060, 046-135-010, 046-135- 020, 046-135-030, 046-135-040, 046-182-100, 046-182-110, 046-182-150) zoned Planned Development (PD)

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4864-3640-1272 v2

EXHIBIT B

PLANNED DEVELOPMENT PLAN

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EXHIBIT C

REQUIRED FINDINGS FOR PLANNING COMMISSION CONSIDERATION 841 OLD COUNTY ROAD PROJECT
Planned Development Zoning and Planned Development Plan Findings:

In considering whether to recommend the Planned Development Zoning designation and Planned Development Plan, the City Council must consider the following findings.

A. The proposed development is consistent with the General Plan and any applicable specific plan, including the density and intensity limitations that apply.

Basis for Finding: The City does not have an adopted Specific Plans, however the East Side Innovation District Vision Plan is considered a guiding document for development in the area.

The project is consistent with the East Side Vision planning strategies within the area, including implementing the Discovery Path along Bransten Road, implementing the East Side connect multi-modal street, inclusion of an Activity Hub at the corner of Old County Road and Commercial Street, inclusion of a publicly accessible plaza space, promoting environmental stewardship and contribution towards community benefits. The project is consistent with the General Plan and the General Plan classification of Planned Industrial as outlined below. The project complies with the Heavy Industrial District development standards except for height, floor area and side yard setback.

General Plan Policies:
•LU-5.2: Implement the City’s adopted Economic Development Plan, which is updated annually as it relates to supporting the local economy. •LU-5.3: Support and encourage businesses and land uses that contribute to the City’s financial viability.
•LU-5.7: Support high-wage industries that provide quality jobs for workers at all education levels.
•LU-5.13: Consider use of multiple level parking facilities to provide increased space where available land is limited.
•LU-5.15: Promote economic revitalization on underutilized parcels designated for higher intensity land uses.
•LU-6.1: Support commercial/industrial activity and businesses on the East Side. •LU-6.2: Prohibit the conversion of property designated for industrial/commercial land on the East Side to non-industrial/commercial uses. ·Ensure proposed new uses in the East Side do not introduce land use conflicts that would adversely impact industrial/commercial activities.
•LU-6.3: Support the expansion of key growth industries while maintaining the overall diversity of land uses within East Side employment areas. •LU-6.6: Encourage new development on the East Side to feature high quality architecture that reinforces the character of the area. •LU-8.1: Require all development to feature high quality design that enhances the visual character of San Carlos.
•LU-8.3: Encourage design features and amenities in new development and redevelopment, including, but not limited to:
oVisual buffers.
oFacilitation of pedestrian activity.

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oDistinctiveness and variety in architectural design
•LU-8.4: Promote pedestrian-scaled design through site planning, building design, finish details and landscaping for all types of development by requiring height and locational transitions between buildings of varied levels that are sensitive to the interrelationships of surrounding uses and structures, especially residential. •LU-8.5: Optimize architectural quality by encouraging the use of quality materials, particularly as accents and authentic detailing, such as balconies and window trims. •LU-8.8: Encourage design of convenient pedestrian walkways with shade and minimal tripping hazards, preferably with landscape buffers.
•LU-8.10: On all sides of buildings, require the incorporation of quality architectural design elements for all building façades and stepping back upper floors in order to reduce bulk and mass and to break up monotonous wall lines. •LU-8.18: Encourage “green building” practices in new development and redevelopment, such as those that make a building more energy efficient and reduces its effect on human health and the environment through better siting, design, construction, maintenance and operation.
•LU-11.1: Require high quality design for buildings at visually significant locations in gateway areas.
•LU-11.2: Encourage design features, such as landscaping, art and displays in gateway areas that are welcoming, attractive and contribute to a unique sense of place. •LU-11.3: Encourage distinctive architectural features, such as tower elements or a plaza at building entry, for buildings located at visually significant locations within gateway areas.
•CSH-3.1: Strive to reduce base-line and development-related traffic by 20 percent through public-private partnership efforts.
•CSH-3.2: Support city-wide efforts to reduce vehicular trips within and through the community.
•CSH-3.3 Support the incorporation of Transportation Demand Measures in new development to reduce traffic impacts.
•CSH-3.11: New developments and businesses shall be required to provide adequate loading, unloading and delivery areas, and/or shall be required to conduct such activities during nonbusiness/ peak hours
•EM-11.9 Coordinate with major employers, neighboring municipalities, transit agencies and providers to enhance regional transit and shuttle service.

B. The subject site is physically suitable for the type and intensity of the land use being proposed;
Basis for Finding: The proposed project is consistent with the General Plan land use classification, which seeks to allow retail service, office, research and development and industrial uses. This designation offers maximum flexibility for non-residential use. The research and development use would be compatible with other research and development uses in the surrounding area. The

3.41-acre site is large enough to accommodate the intensity of development while providing adequate landscaping, adequate on-site circulation and emergency access.

C. Adequate transportation facilities and public services exist or will be provided in accord with the conditions of PD plan approval, to serve the proposed development; and the approval of the proposed development will not result in a reduction of traffic levels of service or public services so as to be a detriment to public health, safety, or welfare;

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Basis for Finding: The City has undertaken an environmental review of the project as required by the California Environmental Quality Act (CEQA), including a complete Initial Study/Mitigated Negative Declaration and a separate Transportation Impact Analysis. The analysis concluded that there will not be a significant reduction in traffic levels of service associated with the project. There are no anticipated public service concerns associated with the project that would be detrimental to the public health, safety, or welfare.

D. The proposed development will not have a substantial adverse effect on surrounding land uses and will be compatible with the existing and planned land use character of the surrounding area;
Basis for Finding: The project includes demolition of the existing buildings and construction of a new research and development office/lab. The project has been designed to be in scale with other proposed developments in the area including proposed developments at 789 Old County Road and 987 Commercial Street. The upper level of the building steps back from Old County Road to reduce the apparent mass of the building. Street trees are included along Old County Road, Commercial Street and Bransten Road to further screen the building.

E. The development generally complies with applicable adopted design guidelines; and Basis for Finding: The City does not have adopted design guidelines. The project has undergone review by City staff to ensure quality architecture. The building is designed with large windows at the ground level and upper level stepbacks to reduce apparent building mass. The building color and materials are high quality and appropriate for the area.

F. The proposed development is demonstratively superior to the development that could occur under the standards applicable to the underlying base district, and will achieve superior community design, environmental preservation and/or substantial public benefit. In making this determination, the following factors shall be considered:

1. Appropriateness of the use(s) at the proposed location.

2. The mix of uses, housing types, and housing price levels.

3. Provision of units affordable to persons and families of low and moderate income or to lower income households.

4. Provision of infrastructure improvements.

5. Provision of open space.

6. Compatibility of uses within the development area.

7. Creativity in design and use of land.

8. Quality of design, and adequacy of light and air to the interior spaces of the buildings.

9. Overall contribution to the enhancement of neighborhood character and the environment of San Carlos in the long term.

Basis for Finding: The proposed development complies with the development standards in the zoning code with the exception of height, floor area and exterior side yard setback. The property is located along Old County Road, Bransten Road and Commercial Street and is appropriate for higher intensity land use. The project includes contribution of community benefit that may be utilized to benefit the greater community.

Findings for Zoning Map Amendment:

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1. The change in district boundaries is consistent with the purpose of this title to promote the growth of the City in an orderly manner and to promote and protect the public health, safety, peace, comfort and general welfare.

Basis for Finding: The change in district boundaries from Heavy Industrial to Planned Development maintains consistency with the underlying zoning land uses and development standards. The change in district boundaries is consistent with the zoning title and supports development of the site consistent with the economic development objectives of the City. The change in zoning will not impact public health, safety, peace, comfort and general welfare.

2.The change in district boundaries is necessary to achieve the balance of land uses desired by the City, consistent with the General Plan, and to increase the inventory of land within a given zoning district.

Basis for Finding: The change in zoning district boundaries from Heavy Industrial to Planned Development is necessary to support the economic development of the site consistent with the General Plan. The Planned Development Zoning regulations for the site maintains consistency with the Heavy Industrial zoning designation land uses and development standards. The change in district boundaries also maintains consistency with the General Plan designation of Planned Industrial which permits research and development (R&D), biotechnology, light industrial, flex space, warehousing and related uses. The project is consistent with General Plan policies to encourage new commercial development to expand the City’s tax base and to support the expansion of key growth industrials.

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4856-2172-3000 v2
1 3
8 5
ORDINANCE NO. _____

AN ORDINANCE OF THE CITY OF SAN CARLOS

APPROVING A DEVELOPMENT AGREEMENT WITH THE SOBRATO FAMILY FOUNDATION, FOR THE 841 OLD COUNTY ROAD PROJECT.

WHEREAS, The Sobrato Family Foundation, a California nonprofit public benefit corporation, is the fee owner of the property located at 800-851 Old County Road, San Carlos, California and identified as Assessor Parcel Numbers 046-133-160, 046-134-050, 046-134-060, 046-135-010, 046-135-020, 046-135-030, 046-138-040, 046-182-100, 046-182-110 and 046- 182-150 (the “Property”); and
WHEREAS, pursuant to Title 18 of the City of San Carlos Municipal Code (“SCMC”) and California Government Code Sections 65864 to 65869.5, SI 74, LLC, a California limited liability company, filed an application for approval of a Development Agreement for the Property in conjunction with its application for a Planned Development Plan and accompanying Zoning Map Amendment, Design Review, Grading and Dirt Haul Certificate, Tentative Parcel Map and Transportation Demand Management Plan to facilitate the development of a research and development campus that will include two office/laboratory buildings, which total approximately 339,170 square feet with below grade parking (the “Project”); and WHEREAS, SI 74, LLC, a California limited liability company submitted an application for a Development Agreement and later transferred title to Sobrato Family Foundation, a California nonprofit public benefit corporation. Both entities are controlled by members of the Sobrato family. Following the transfer, the City updated the application to reflect that Sobrato Family Foundation, a California nonprofit public benefit corporation is the owner of the Property and the applicant; and
WHEREAS, by Resolution PTC2023-11, adopted on June 7, 2023, the Planning and Transportation Commission recommended that the City Council adopt the Mitigated Negative Declaration for the Project (“MND”) and adopt the Mitigation Monitoring and Reporting Plan for the Project (“MMRP”) pursuant to the California Environmental Quality Act (CEQA) for the implementation of the mitigation measures outlined in the MND; and WHEREAS, by Resolution PTC2023-12, adopted on June 7, 2023, the Planning and Transportation Commission recommended that the City Council adopt an ordinance approving the Zoning Map Amendment to change the site from Heavy Industrial (IH) Zoning District to Planned Development (PD) Zoning District and adopt the Planned Development Plan; and WHEREAS, the Planning and Transportation Commission discussed the specific terms of the Development Agreement and recommended that the City Council approve the Development Agreement by Resolution PTC-2023-12, adopted on June 7, 2023; and WHEREAS, at a duly noticed public hearing held on June 7, 2023, the Planning and Transportation Commission approved the Design Review, Grading and Dirt Haul Certificate, the Tentative Parcel Map, and the Transportation Demand Management Plan, subject to approval of the Planned Development Plan and effective on the effective date of the Planned Development Plan; and

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WHEREAS, by Resolution 2023-__, adopted October 9, 2023, the City Council made findings and adopted the MND and the MMRP pursuant to the California Environmental Quality Act (CEQA) for the implementation of the mitigation measures outlined in the MND; and WHEREAS, the City Council of the City of San Carlos held a duly noticed public hearing on August 28, 2023 and introduced an ordinance amending the Zoning Map to change the site from Heavy Industrial Zoning District (IH) to Planned Development Zoning District (PD) and adopted the Planned Development Plan; and
WHEREAS, the City Council of the City of San Carlos held a duly noticed public hearing regarding the adoption of the Development Agreement on October 9, 2023.

NOW THEREFORE THE CITY OF SAN CARLOS DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1: The City Council finds that the Project is a development for which a development agreement is appropriate in order to: 1) eliminate uncertainty in the City’s land use planning for the project and provide for the orderly development of the project; 2) assure installation of necessary improvements on the property; 3) provide for the public infrastructure and services appropriate to the development of the project; 4) secure City improvements that benefit the community; 5) provide for the developer to deliver community benefits in excess of those that the City could require as conditions of approval; and 6) otherwise achieve the goals and purposes of Chapter 18.37 of the SCMC.

SECTION 2: The City Council finds that the Development Agreement is consistent with the General Plan as described in Exhibit A.

SECTION 3: The City Council hereby approves the Development Agreement included as Exhibit B and the City Manager is hereby authorized to execute the Development Agreement on behalf of the City. The City Manager is further authorized, with concurrence of the City Attorney, to approve minor, non-monetary amendments to the Development Agreement that are necessary for the development of the Project as contemplated in the Development Agreement.

SECTION 4: Severability. The City Council hereby declares that it would have passed this Ordinance sentence by sentence, paragraph by paragraph, and section by section, and does hereby declare that any provisions of this Ordinance are severable and if for any reason any sentence, paragraph or section of this Ordinance shall be held invalid, such decision shall not affect the validity of the remaining parts of this Ordinance.

SECTION 5: Publication and Effective Date. This Ordinance shall be published and posted according to law and shall take effect and be in force from and after 30 days after its passage and adoption.
****
I, City Clerk Crystal Mui, hereby certify that the foregoing Ordinance was introduced on the 9th day of October, 2023 and passed and adopted as an Ordinance of the City of San Carlos at a regular meeting thereof held on the ____ day of ________, 2023 by the following vote:

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AYES, COUNCILMEMBERS: __________________________________________________ NOES, COUNCILMEMBERS: _________________________________________________ ABSENT, COUNCILMEMBERS: _______________________________________________ ______________________________
CITY CLERK of the City of San Carlos
APPROVED:

MAYOR of the City of San Carlos
Exhibits:

A. Consistency with the General Plan
B. Development Agreement

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Exhibit A
Development Agreement Finding:

In considering whether to approve the Development Agreement, the City Council must find the Development Agreement consistent with the General Plan.

Basis for Finding: The Development Agreement and provision of community benefits including the new pedestrian/bicycle pathway, publicly accessible open space, community serving cafe and financial contributions are consistent with the following General Plan policies:
•LU-1.12: Promote the development of publicly accessible urban trails throughout the city to provide access to the natural environment and facilitate nonmotorized transportation options.
•LU-3.10: Encourage the creation of safe, walkable environments that include elements such as wide, smooth sidewalks, good lighting, safe crosswalks, clear signage, curb bulb-outs, curb cuts, street furniture and trees and traffic-calming measures which allow people of all ages and abilities to exercise and safely access public transportation, community centers and schools and goods and services.
•LU-8.9: Encourage the design of attractive outdoor pedestrian spaces that encourage impromptu public gathering places with features such as plazas, interior walkways and paseos, ornamental gates, trellises, lighting, trees and landscaping, seating and fountains.
•CHS-7.1: Trails and paths intended for general circulation shall provide reasonably direct and convenient routes of travel for potential users.
•CHS-7.7: Public trails should be located and designed so that they serve the needs of the public while minimizing private property impacts.

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Exhibit B
Development Agreement

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RECORDING REQUESTED BY

AND WHEN RECORDED
RETURN TO:

City of San Carlos
600 Elm Street
San Carlos, California 94070
Attn: Cit
y Clerk

Space Above This Line Reserved for Recorder’s Use
Exempt from Recording Fee Per Government Code
Section 27383

DEVELOPMENT

AGREEMENT
by and between the

CITY OF SAN CARLOS,
a California municipal
corporation and

THE SOBRATO FAMILY FOUNDATION,
a California nonprofit public benefit corporation
regarding the
841 Old County Road Project
Effective Date: _____________

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i

TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS ............................................................................................................3

1.1 Definitions .......................................................................................................................3 ARTICLE 2 EFFECTIVE DATE AND TERM ..............................................................................7

2.1 Effective Date ..................................................................................................................7

2.2 Term. ................................................................................................................................7

2.3 City Representations and Warranties ...............................................................................8

2.4 Developer Representations and Warranties .....................................................................8 ARTICLE 3 DEVELOPMENT OF PROPERTY ............................................................................9

3.1 Vested Rights ...................................................................................................................9

3.2 Reservations of Authority ................................................................................................9

3.3 Regulation by Other Public Agencies ............................................................................10

3.4 Life of Project Approvals; Termination .........................................................................11

3.5 Initiatives .......................................................................................................................12

3.6 No Affirmative Obligation to Develop; Timing of Development .................................12

3.7 No Conflicting Enactments ............................................................................................13

3.8 Changes in the Law ........................................................................................................13

3.9 No Reservation of Sanitary Sewer or Potable Water Capacity .....................................13 ARTICLE 4 FEES AND OTHER CHARGES ..............................................................................14

4.1 City Fees. .......................................................................................................................14

4.2 Other Agency Fees .........................................................................................................14

4.3 Taxes and Assessments ..................................................................................................15 ARTICLE 5 DEVELOPER COMMUNITY BENEFITS COMMITMENTS...............................15

5.1 Public Benefits ...............................................................................................................15

5.2 Community Benefits ......................................................................................................16 ARTICLE 6 ANNUAL REVIEW .................................................................................................18

6.1 Periodic Review .............................................................................................................18

6.2 Certificate of Good Faith Compliance ...........................................................................19

6.3 No Waiver ......................................................................................................................19

6.4 Reimbursement of Annual Review Costs ......................................................................19 ARTICLE 7 MORTGAGEE PROTECTION ................................................................................20

7.1 Mortgagee Protection .....................................................................................................20

7.2 Mortgagee Not Obligated ..............................................................................................20

7.3 Notice of Default to Mortgagee; Right to Cure .............................................................20

7.4 No Supersedure ..............................................................................................................21

7.5 Technical Amendments to this Article 7 .......................................................................21 ARTICLE 8 AMENDMENT OF AGREEMENT AND PROJECT APPROVALS .....................21

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8.1 Amendment of this Agreement ......................................................................................21

8.2 Amendments to Development Agreement Statute .........................................................23

8.3 Amendments to Project Approvals ................................................................................23

8.4 Reliance on Initial Study and MND ..............................................................................24

8.5 Subsequent CEQA Review ............................................................................................24 ARTICLE 9 COOPERATION AND IMPLEMENTATION ........................................................24

9.1 Additional Project Approvals ......................................................................................24

9.2 Scope of Review of Additional Project Approvals ........................................................25

9.3 Processing Applications for Additional Project Approvals ...........................................25

9.4 Other Agency Additional Project Approvals; Authority of City ...................................25

9.5 Implementation of Necessary Mitigation Measures and Conditions .............................26

9.6 Cooperation in the Event of Legal Challenge ................................................................26

9.7 Revision to Project .........................................................................................................28

9.8 State, Federal or Case Law ............................................................................................28

9.9 Compliance with Laws ..................................................................................................28

9.10 Indemnity and Hold Harmless .......................................................................................29

9.11 Sales Tax Point of Sale Designation ..............................................................................30 ARTICLE 10 ASSIGNMENT .......................................................................................................30

10.1 Transfers ........................................................................................................................30 ARTICLE 11 DEFAULT; REMEDIES; TERMINATION ..........................................................32

11.1 Breach and Default ........................................................................................................32

11.2 Withholding of Permits ..................................................................................................32

11.3 Termination ....................................................................................................................32

11.4 Specific Performance for Violation of a Condition .......................................................32

11.5 Resolution of Disputes ...................................................................................................32

11.6 Rights and Remedies Are Cumulative ...........................................................................33

11.7 Limitation on Damages ..................................................................................................33

11.8 Surviving Provisions ......................................................................................................34 ARTICLE 12 MISCELLANEOUS PROVISIONS .......................................................................34

12.1 Incorporation of Recitals, Exhibits and Introductory Paragraph ...................................34

12.2 Severability ....................................................................................................................34

12.3 Construction ...................................................................................................................34

12.4 Covenants Running with the Land .................................................................................35

12.5 Notices ...........................................................................................................................35

12.6 Counterparts and Exhibits; Entire Agreement ...............................................................36

12.7 Recordation of Agreement .............................................................................................36

12.8 No Joint Venture or Partnership ....................................................................................36

12.9 Waivers ..........................................................................................................................36

12.10 California Law; Venue ...................................................................................................37

12.11 City Approvals and Actions ...........................................................................................37

12.12 Estoppel Certificates ......................................................................................................37

12.13 No Third Party Beneficiaries .........................................................................................37

12.14 Signatures .......................................................................................................................37

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12.15 Time ...............................................................................................................................37

12.16 Days ...............................................................................................................................37

LIST OF EXHIBITS
Exhibit A Property Legal Description
Exhibit B Impact Fees
Exhibit C Initial Shell Condition
Exhibit D [Form of ] POPA] Easement
Exhibit E [Form of] Public Parking Agreement
Exhibit F [Form of] Assignment & Assumption Agreement
Exhibit G Parking Exhibit

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1 DEVELOPMENT

AGREEMENT
THIS DEVELOPMENT AGREEMENT (“ Agreement”) dated for reference purposes as of the Effective Date, is entered into by and between the CITY OF SAN CARLOS, a California municipal corporation organized and existing under the laws of the State of California (“ City”) and THE SOBRATO FAMILY FOUNDATION, a California nonprofit public benefit corporation (“Developer”). City and Developer are sometimes referred to individually herein as a “Party” and collectively as “Parties.”

R E C I T A L S
The following recitals are a substantive part of this Agreement ; capitalized terms used herein and not otherwise defined are defined in Section 1.1 of this Agreement.

A. In order to strengthen the public planning process, encourage p rivate participation in comprehensive planning and reduce the economic costs and risk 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. This Agreement has been dra fted and processed pursuant to the Development Agreement Statute.

B. Developer owns fee title to the approximately 3.4 acres of real property located at 803-851 Old County Road, San Carlos, California (APNs 046-133-1 60, 046-134-050, 046-134- 060, 046-135-010, 046-135-020, 046-135-030, 046-138-040, 046-182-100, 046-182-110 and 046- 182-150), more fully described on Exhibit A, attached and incor porated herein by reference (the “Property”). The Property is located in the heart of the East Side Innov ation District in San Marcos and is currently occupied by a garden supply center, kennels and a tree services office.

C. Developer wishes to redevelop th e Property, consistent with the East Side Innovation District Vision Plan, as a mixed-use office and R&D/ life sciences development with approximately 339,170 gross square feet (“gsf”) of office, R&D and life sciences uses; including a southern structure along Commercial Street that is approximately 90’-6’’ at the top of the roof parapet and approximately 99’ at the top of the mechanical screen, and a northern structure along Bransten that is approximately 74’6’’ at the top of the roof pa rapet and approximately 83’ at the top of the mechanical screen. The buildings may be built in pha ses, include two levels of below grade parking and have a central plaza and courtyard between them (collectively, the “ 841 Old County Road Project” or the “Project”).

D. To achieve the Parties’ mutual goals of redevelopment as expeditiously as possible, the Developer desires to receive assurance that it may proceed with the Project in accordance with the Applicable City Regulations. Therefore, this Agreement betw een City and Developer sets forth, among other things, the applicable fees, policies and zoning requirements that will apply to Developer’s development of the Project and provides Developer with a vested right to develop the Project.

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E. Approval and development of the Project relies on the following analysis under the California Environmental Quality Act (“ CEQA”) (set forth in Public Resources Code, Section 21000 et seq.) and the State CEQA Guidelines (“CEQA Guidelines”) (set forth in California Code of Regulations section 15000 et seq.): (1) an Initial Study/Mitigated Negative Declaration prepared by Lamphier-Gregory (“ IS/MND”), to be adopted by the City Council; and (2) a Mitigation Monitoring and Reporting Program (“ MMRP”), concluding that no additional environmental review is necessary.

F. Prior to approval of this Agreem ent, the City has taken the fol lowing actions in connection with the development of the Project on the Property:
(a) Adoption of the IS/MND by the City Council by Resolution No. __ __ on _____;
(b) Approval of the MMRP by Resolution No. ____, adopted by the Cit y Council on _____;
(c) Approval of the Tentative Map by the Planning and Transportatio n Commission on June 7, 2023;
(d) Approval of the Zoning Map Amendm ent and Planned Development Pl an by Ordinance No. __ adopted by the City Council on ____ to allo w site specific standards as follows:
(i) Building height;
(ii) Floor area ratio;
(iii) Above grade setback along Commercial Street;
(iv) Below grade setback from property line for parking structure; and (v) Parking lot tree planting requirement for the grade level roof of the structured, below grade parking;
(e) Approval of Design Review Certificate by the Planning and Transportation Commission on June 7, 2023;
(f) Approval of the Transportation Demand Management Plan by the Planning Commission on June 7, 2023; and
(g) Approval of Grading and Dirt Hau l Certificate by the Planning a nd Transportation Commission on June 7, 2023.

The approvals and development policies described in this Recital F, together with the MMRP and this Agreement, are collectively referred to herein as the “Project Approvals.”

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G. The Development Agreement Statut e provides that the purpose of development agreements is to strengthen th e public planning process, encour age comprehensive planning, obtain private participation in meeting community needs, and re duce uncertainty in the approval of development. The City has determined that by entering into t his Agreement, City will further the purposes set forth in the Development Agreement Statute and City will benefit from the redevelopment of the Property, public parking, financial contributions and other benefits provided in this Agreement.

H. The terms and conditions of this Agreement have undergone review by City staff, the Planning and Transportation Commission and the City Council at publicly noticed meetings and have been found to be fair, just and reasonable and in conf ormance with the goals, policies, standards and land use designations specified in the City’s Gen eral Plan and the East Side Innovation District Vision Plan and, further, the City Council finds that the economic interests of City’s citizens and the public health, safety and welfare will be best served by entering into this Agreement.

I. On June 7, 2023, after a duly noticed public hearing, the Planning Commission, the initial hearing body for purposes o f development agreement revi ew, adopted its Resolution No.

PC2023-12 recommending approval of this Agreement to the City C ouncil. After duly noticed public hearings, on [________], the City Council introduced Or dinance No. [_____] approving this Agreement (“Enacting Ordinance”), and adopted it on [________]. The Enacting Ordinance will become effective on [__________], thirty (30) days thereafter.

A G R E E M E N T
NOW, THEREFORE, in consideration of the promises, covenants and provisions set forth herein, the receipt and adequacy of which is hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions.
“Additional Project Approvals” is defined in Section 9.1. “Administrative Project Amendment” is defined in Section 8.3.2. “Affiliate of Developer” means an entity or person that directly or indirectly control s, is controlled by, or is under comm on control with Developer. For t he purposes of this definition, “control” means the possession, direct or indirect, of the powe r to direct or cause the direction of the management and policies of an entity or person, whether thr ough the ownership of voting securities, by contract, or oth erwise, and the terms “controlli ng” and “controlled” have the meanings correlative to the foregoing.
“Agreement” means this Development Agreement.
“Agreement Amendment” is defined in Section 8.1.3.

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“Applicable City Regulations ” means (a) all City policies, standards and specifications set forth in this Agreement and the Project Approvals, including the specific conditions of approval adopted with respect to the Project Approvals; (b) with respect to matters not addressed by this Agreement or the Project Approva ls but governing permitted uses of the Property, building locations, sizes, densities, in tensities, design and heights, s ite design, setbacks, lot coverage and open space, and parking, those City ordinances, rules, regulations, official policies, standards and specifications in force and effect on the Effective Date; and ( c) with respect to all other matters, including building, plumbing, mechanical and electrical codes, those New City Laws which may be applied to the Project and Developer pursuant to the terms of this Agreement, including but not limited to Section 3.2.
“Applicable Laws” means (a) all State and Federal laws and regulations applicable to the Property and the Project as enacted, adopted and amended from t ime to time; and (b) the Applicable City Regulations.
“Biosafety Levels” means those levels used to identify the protective measures n eeded in biomedical laboratory setting to protect workers, the environme nt, and the public and as defined in the Biosafety in Microbiology and Biomedical Laboratories (BMBL) 6th Edition published by the Centers for Disease Control and Prevention and National Institutes of Health. “Certificate of Occupancy ” or “ COO” means an official document issued by the City Building Official that certifies that the building (not including any tenant improvements) proposed as part of the Project has been inspected and determined to com ply with the Project Approvals, including the applicable California Building Standards Code and the City’s local ordinances which govern construction and occupancy. A “temporary” COO confirms t he building is safe for the proposed temporary use or occupancy but is still subject to a p unch list of items required to be complete to obtain a final COO. A “final” COO means the buildin g has been inspected and determined safe for the proposed use and occupancy and all final punch list items are complete. “CEQA” is defined in Recital E.
“CEQA Guidelines” is defined in Recital E.
“Changes in the Law” is defined in Section 3.8.
“City” means the City of San Carlos, a California municipal corporation. “City Party” and “City Parties” are defined in Section 9.10. “Claims” means liabilities, obligations, orders, claims, damages, fine s , p e n a l t i e s a n d expenses, including reasonable attorneys’ fees (which may include, without limitation, reasonable City Attorney’s time as a pass-through cost without markup) and costs. “Connection Fees” means those fees charged by City or by a utility provider to utility users as a cost for connecting to water, sanitary sewer and other applicable utilities. “Community Benefits” is defined in Section 6.1.

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“Community Benefit Space” is defined in Section 5.2.4.
“Community Benefit Use ” is defined as a Restaurant and Coffee Shop Use (defined below), Retail Sales (excluding Cannabis Dispensaries and Retail Establ ishments Selling Ammunition or Firearms), Instruc tional Services, Animal Care, S ales and Services (excluding Veterinary Services), Personal Services (excluding Tattoo or Bo dy Modification Parlor), Government Offices, and Cultural Institutions, all as defined i n Chapter 18.40 of the San Carlos Municipal Code.
“Community Development Director” means the Director of Community Development of the City of San Carlos, or his/her designee.
“Default” is defined in Section 11.1.
“Developer” means The Sobrato Family Foundation, a California nonprofit public benefit corporation, and its permitted assignees and successors-in-interest under this Agreement. “Development Agreement Statute” is defined in Recital A. “Effective Date” is defined in Section 2.1.
“Enacting Ordinance” is defined in Recital I.
“Exactions” means exactions that may be imposed by the City as a condition of developing the Project, including requireme nts 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 improvement s, mitigation measures in con nection with environmental review of the Project, or impos itions made under Applicable Cit y Regulations. For purposes of this Agreement, Exactions do not include Impact Fees.
“Expiration Date” is defined in Section 2.2.1.
“Force Majeure Delay” is defined in Section 2.2.2.
“Impact Fees ” means the monetary amount charged by City in connection with a development project for the purpose of defraying all or a porti on of the cost of mitigating the impacts of the development proj ect or development of the public facilities related to the development project, including, any “fee” as that term is defin ed 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. Impact Fees do not include Other Agency Fees.
“Initial Shell Condition” is defined in Exhibit C.
“IS/MND” is defined in Recital E.
“Litigation Challenge” is defined in Section 9.6.

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“MMRP” is defined in Recital E.
“Mortgage” is defined in Section 7.1.
“Mortgagee” is defined in Section 7.1.
“New City Laws” means and includes any ordinances, resolutions, orders, rules , official policies, standards, specificati ons, guidelines or other regula tions, which are promulgated, adopted, enacted or amended by the City (including but not limi ted to any City agency, body, department, officer or employee) or its electorate (through the power of initiative or otherwise) after the Effective Date.
“Operating Memorandum” is defined in Section 8.1.2.
“Other Agency Fees” is defined in Section 4.2.
“Other Agency Add itional Approvals ” means Additional Project Approvals to be obtained from entities other than City.
“Party/Parties” is defined in the introductory paragraph preceding the Recita ls of this Agreement.
“Planning Commission” means the Planning Commission of the City of San Carlos. “POPA Easement” is defined in Section 5.1.
“Prevailing Wage Laws” is defined in Section 9.9.
“Processing Fees ” means all fees for processing development project application s, including any required supplemental or other further environmen tal review, plan checking and inspection and monitoring for land use approvals, design review , grading and building permits, General Plan maintenance fees, encroachment permits, 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 in effect at the time such work occurs, and which are intended to cover the actual costs of processing the foregoing, and which may include the cost of retaining outside contractors for plan checking or other purposes and City’s administrative expenses related to such retention as set forth in Section 9.3.
“Project” is defined in Recital C.
“Project Approvals” is defined in Recital F.
“Property” is defined in Recital B.
“Restaurant/Coffee Shop Use ” is defined as any Eating and Drinking Establishment (excluding night clubs).
“Term” is defined in Section 2.2.1.

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ARTICLE 2

EFFECTIVE DATE AND TERM

2.1 Effective Date. This Agreement shall become effective upon the later to occur of (i) the date the Enacting Ordinance is effective and (ii) execution by the Parties (“ Effective Date”).

2.2 Term.

2.2.1 T e r m o f A g r e e m e n t . T h e “Term” of this Agreement shall commence on the Effective Date and shall expire upon the earliest to occur of t he following: (1) the issuance of a final Certificate of Occupancy for the Project; (2) termination of this Agreement in accordance with its terms, including without limit ation this Section

2.2; or (3) the tenth (10th) anniversary of the Effective Date. Upon such termination, this Agreement shall be deemed terminated and of no further for ce and effect, subject, however, to the extension provisions set forth in Section 2.2.2 and Section

2.2.3, and subject to Section 11.8 below and those provisions that expressly survive termination. Termination of the Term as it may be extended is referred to herein as the “Expiration Date.” City shall have the right to extend the Term if it deems necessary for Developer to satisfy all its obligations under this Agreement.

2.2.2 Enforced Delay; Extension of Times of Performance. Subject to the limitations set forth below, performance by either Party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended (except as otherwise excluded or qualified herein), where delays are due to: war; insurrection; strikes and labor disputes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; pande mics or epidemics; quarantine restrictions; freight embargoes; governmental restri ctions or priority; litigation and arbitration, including court delays; legal chall enges to this Agreement, the Project Approvals, or any other approval required for the Project or any initiatives or referenda regarding the same; environmental conditions, pre- existing or discovered; unusually severe weather but only to th e extent that such weather or its effects (includi ng, without limitation, dry out time) result in delays that cumulatively exceed twenty (20) days for every winter season occurring after Commencement of Construction of the Project; acts or omissions of the other party; or acts or failures to act of any public or governmental agency or entity (except that acts or failures to act of City s hall not excuse performance by City); moratorium (each a “Force Majeure Delay”). An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if written notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause.

If written notice is sent after such sixty (60) day period, the n the extension shall commence to run no sooner than sixty (60) days prior to the giving of such notice.

Times of performance under this A greement may also be extended in writing by the mutual agreement of City and Developer. The Term of this Agreement shall not be subject to extension for any Force Majeure Delay.

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2.2.3 Extension of Term for Commencement of Construction of the Proje ct. If the Developer is in good faith complia nce with this Agreement and h as commenced construction of the South Building (as defined below), the City Manager may in his or her reasonable discretion ente r in an Insubstantial Amendmen t to extend the Term until a final Certificate o f Occupancy has been issued for all buildings and structures shown in the Project Approvals; provided, however, t hat the extension shall not exceed two (2) years and notwithstanding such extension, subject to Force Majeure and all applicable not ice and opportunity to cure, the Term shall expire and this Agreement shall terminat e if after commencement of con struction of the Project, work stops for more than six (6) consecutive months. U pon such termination, this Agreement shall be deemed terminated and of no further force and effect except for those provisions that expressly survive termination.

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 performanc e of the obligations of 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 any of the warrantie s and representations in this S ection 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 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 performanc e of the obligations of Developer hereunder have been duly authorized by a l l n e c e s s a r y company action and all necessary member approvals have been obtained.

2.4.3 This Agreement is a valid obligation of Developer and is enforceable in accordance with its terms.

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2.4.4 Developer has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the fili ng of any involuntary petition by Developer’s creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantiall y all, of Developer’s assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Developer’s assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.

During the Term of this Agreement, Developer shall, upon learning of any fact or condition which would cause any of the war ranties and representations in this Section 3.4 not to be true, immediately give written notice of such fact or condition to City.

ARTICLE 3

DEVELOPMENT OF PROPERTY

3.1 Vested Rights. The City hereby grants to Developer the present vested right to develop and construct on the Property all the improvements authorized by, and in accordance with, the Project Approvals. To the extent permitted by Applicable Laws, and except as otherwise provided herein, no future modification of the City’s General P lan, Municipal Code, ordinances, policies or regulations shall apply to the Property that purports to: (i) limit the permitted uses of the Property, the density and intensity of use, or the maximum height and size of proposed buildings; (ii) impose requirements for reserv ation or dedication of land for public purposes or requirements for infrastructure, public improvements, or public utilities, other than as provide d in the Project Approvals or p ursuant to this Agreement; (iii) impose conditions upon develo pment of the Property other than as permitted by the Applicable Laws, Changes in the Law, the Project Approvals and this Agreement; (iv) limit the timing, phasing or rate of development of the Property; provided, however, that nothing in this Agreement shall prevent or preclude City from adopting any land use ordinances, policies, regulations or amendments permitted herein or relieve Developer of its obligation to develop the Property within the times provided in this Agreement; (v) limit the location of building sites, grading or other improvements on the Propert y in a manner that is inconsistent with or substantially more restrictive than the li mitations included in this Agreement or the Project Approvals ; (vi) frustrate in a more th an insignificant way the intent or purpose of the Project Approvals in relation to the P roject; (vii) limit or control the ability to obtain public utilities, services, or facilities ; (viii) require the issuance of additional permits or approvals by the City other than those required by Applicable Laws; or (ix) limit the processing or procuring of applications and approvals of Additional Project Approvals.

3.2 Reservations of Authority. The Parties acknowledge and agree that City is restricted in its authority to limit its police power by contract. This Agreement shall be construed to reserve to City all such power and authority which cannot be restricted by contract.

Notwithstanding any other provisi on of this Agreement to the co ntrary, the following regulations and provisions shall apply to the development of the Project:

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3.2.1 Except as otherwise provided in Section 4.1 Processing Fees, Connection Fees and other fees of every kind and nature imposed by the City, and an y increase or modification to those fees that are in force and effect at the time land use or development permits, approvals or entitlements are applied for or issued on any or all portions of the Project.

3.2.2 Regulations relating to hearing bodies, petitions, applications , notices, findings, records, hearings, reports, reco mmendations, appeals and any ot her matter of procedure then applicable in City at the time of permit application.

3.2.3 Regulations governing construction standards and specifications, including City’s building code, plumbing code, m echanical code, electrical code, fire code and grading code, and all other uniform construction codes then app licable in City at the time of permit application.

3.2.4 New City Laws applicable to the Property or Project, which do n ot conflict with this Agreement.

3.2.5 New City Laws which may be in conflict with this Agreement but which are necessary to protect persons or property from dangerous or haza rdous conditions which create a threat to the public health or safety or create a physical risk, based on findings by the City Council identifying the dangerous or hazardous conditions requiring such changes in the law, why there are no feasible al ternatives to the imposition of such changes, and how such changes would alleviate the dangerous or hazardous condition. City’s decision to apply New City Laws to the Project shall be reviewed based on substantial evidence, and this section sha ll not be construed to impose the requirements set forth in Government Code Section 65589.5.

3.2.6 The Property shall be subject to any New City Laws regulating o r prohibiting laboratory uses classified as Biosafety Level 3 or 4, regardles s of whether those New City Laws conflict with this Agreement, the Applicable City Regulations, or the Project Approvals.

3.2.7 Exactions required by this Agreement, the Project Approvals or any Additional Project Approvals.

3.3 Regulation by Other Public Agenc ies. Developer acknowledges and agrees that other public agencies not within the control of City possess authorit y to regulate aspects of the development of the Property separately from or jointly with City, and this Agreement does not limit the authority of such other public agencies. Developer shall, at the time required by Developer in accordance with Developer’s construction schedu le, apply for all such other permits and approvals as may be required by other governm ental or quasi- governmental entities in connection with the development of, or the provision of services to, the Project. Developer shall also pay all required fees, in cluding Other Agency Fees, when due to such public agencies. Developer acknowledges that City does not control the amount of any such fees. City sh all reasonably cooperate with D eveloper in Developer’s effort to obtain such permits and approvals; provided, however, City shall have no

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obligation to incur any costs, without compensation or reimbursement by Developer, or to amend any policy, regulation or ordinance of City in connection therewith.

3.4 Life of Project Approvals; Termination.

3.4.1 Generally. Except as otherwise e xpressly provided herein, the t erm of any and all Project Approvals shall automatically be extended for the longer of the Term of this Agreement or the term otherwise applicable to such Project Appr ovals, subject to the provisions of this Section 3.4. The termination of this Agreement at the end of the Term set forth in Section 2.2.1 shall have no effect on the Project Approvals, subject to the provisions in Sec tion 3.4.2 below; provided, how ever, if this Agreement is terminated by either Party before expiration of th e Term other than by Developer due to a Default by City, this Agreement and all P roject Approvals shall terminate and have no further force or effect.

3.4.2 Continuing Vested Rights. In orde r to address and clarify Devel oper’s ability to build and operate the Project after the Expiration Date if not yet completed, the Parties agree that the following terms shall govern Developer’s vested rights. (a) Provided Developer has satisfied all its obligations under this Agreement as of the Expiration Date and termin ation of this Agreement, and D eveloper has obtained a final Certificate of Occupancy for the Project, the Project Approvals shall continue in effect as required for operation an d use of the Project, subject only to California law that may apply to continued reliance on such approvals.
(b) If development of the Project ha s not been completed as of the Expiration Date and termination of this Agre ement, Developer may continue work after such termination and may complete the Project as approved by the Project Approvals so long as the following conditions are satisfied:
(i) As of the Expiration Date Develope r is not in Default, or if su bject to a breach that has not yet been cured then Developer may not exercise its rights under this S ection 3.4.2(b) unless and unti l it timely cures the breach in the reasonable judgment of City; (ii) As of the Expiration Date, physical site work has commenced and qualifies for vesting under California common law established b y Avco Community Builders v. South Coast Regional Commission, 17 Cal.3rd 785 (1976), provided such work does not stop for six (6) consecutive months or longer; and
(iii) As of the Expiration Date, Developer has satisfied all applicab le mitigation measures and conditions of approval adopted by City as part of the Project Approvals that have come due as and when required.

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(c) If Developer fails to satisfy a ll conditions under Section 3.4. 2(b) by the Expiration Date, the following sh all apply with regard to futur e development or operation of the Project:
(i) Developer’s vested rights secured by this Agreement with regard to the Project shall terminate and all Project Approvals shall be deemed terminated and may not be relied on by Developer or the Project , notwithstanding any ability under Applicable City Regulations that may provide for extensions of the Project Approvals; and (ii) Developer shall have no vested right to construct or continue construction of the Project with out first obtaining new City discretionary approvals then required.
(d) The terms and conditions of this Section 3.4.2 and their enforcement shall survive expiration or termination of this Agreement.

3.5 Initiatives. If any New City Law is enacted or imposed by a citizen-sponsored initiative or referendum, which New City Law w ould conflict with the Project Approvals or this Agreement or reduce the development rights or assurances provid ed by this Agreement, such New City Law shall not apply t o t h e P ro p e r t y o r P r o j e c t ; provided, however, the Parties acknowledge that City’s approval of this Agreement is a legislative action subject to referendum. Without limiting the generality of the foregoing , no moratorium or other limitation (whether relating to t he rate, timing, phasing or se quencing of development) affecting any entitlements or permits to use that are approved or to be approved, issued or granted by City shall apply to the Property or Project. Develop er agrees and understands that City does not have authorit y or jurisdiction over any othe r public agency’s ability to grant governmental approvals or permits or to impose a moratori um or other limitations that may affect the Project. C ity shall reasonably cooperate wi th Developer and, at Developer’s expense, undertake such actions as may be necessary to ensure this Agreement remains in full force and effect. City, except to submit to vot e of the electorate initiatives and referendums required by law to be placed on a ballot and fulfill any legal responsibility to defend a ballot measure passed by its voters, shall not supp ort, adopt or enact any New City Law, or take any other action which would violate the express provisions or spirit and intent of this Agreement.

3.6 No Affirmative Obligation to Dev elop; Timing of Development. Th e City acknowledges and agrees that the Developer has no affirmative obligation to develop the Project.

However, if the Developer, in its sole discretion, opts to deve lop the Project, such development shall comply with this Agreement. However, and not in any limitation of any of the foregoing, since the Cal ifornia Supreme Court held in Pardee Construction Co. v.

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 later-adopted initiative restricting the timing of development to prevail over such parties’ agreement, it is the desire of the Parties hereto to avoid that result. Therefore, notwiths tanding the adoption of an initiative after the Effective Date by City’s electorate to the contrary, the Parties acknowledge that, except as othe rwise provided for in this Agre ement or the Existing

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Approvals, Developer shall have the vested right to develop the Project in such order and at such rate and at such times as Developer deems appropriate in the exercise of its business judgment.

3.7 No Conflicting Enactments. Except as otherwise provided in this Agreement, City shall not impose on the Project (whether by action of the City Counci l or by initiative, referendum or other means) any New City Law that is in conflict with this Agreement or the Existing Approvals. Without limiting the generality of the foregoing, the City shall not (i) apply to the Property any change in land use designation or permitted use of the Property; (ii) limit or control the ability to obtain public utilities, services, or facilities; (iii) limit or control the uses; building setbacks, square footage, dimensions, floor plates, height; or location of buildings and structures; or spacing between bui ldings in a manner that is inconsistent with or more restrictive than the limitations included in the Existing Approvals or this Agreement; or (iv) limit or control the rate, timing, o r sequencing of the approval, development or construction of all or any part of the Project or Existing Approvals, except as otherwise provided in this Agreement or the Existing Approvals.

3.8 Changes in the Law. As provided in Section 65869.5 of the Devel opment 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 c hanges 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 the City, created or operating pursuant to the laws of the State of California (“Changes in the Law”). In the event Changes in the L aw prevent or preclude complia nce with one or more provisions of this Agreement, the Parties 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, and City and Developer shall agree to such action as may be reasonably required. Nothing in this Agreement shall preclude Developer from contesting by a ny available means (including administrative or jud icial proceedings) the applicab ility to the Project of any such Changes in the Law.

3.9 No Reservation of Sanitary Sewer or Potable Water Capacity. Cit y has found the Project to be consistent with the General Plan which anticipates that there will be sufficient potable water and sanitary sewer capacity to serve future development contemplated by the General Plan, including the Project. However, nothing in this Agreement is intended to exempt the Project or the Property from any water use rationing requirements that may be imposed on a City-wide basis from time to time in the future or be constru ed as a reservation of any existing sanitary sewer or potable water capacity. Nonetheless, to the maximum extent permitted by law and consistent with its authority, City upon D eveloper’s request shall cooperate with Developer (at no expense to City) in Developer’s effort to reserve such capacity for sewer and water services as may be necessary to serve the Project.

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ARTICLE 4

FEES AND OTHER CHARGES

4.1 City Fees.

4.1.1 Impact Fees. Developer shall, for the first five (5) years of the Term, pay when due all existing Impact Fees as show n on Exhibit B at the rates in effect as of the Effective Date, except as increased pursuant to the escalation provisions in effect as of the Effective Date, and shall not be required to pay any Impact Fee enacted or established after the Effective Date or any increase in such ex isting Impact Fees.

Thereafter, and during the remainder of the Term (as it may be extended), Developer shall pay all original and any new Impact Fees at the rates in effect at the time due. The Impact Fees itemized on Exhibit B represent t he Parties’ good faith effort to identify the Impact Fees applicable to the Project. City and Developer agree to amend and restate Exhibit B, as necessary, in the event one or more Impact Fees have been inadvertently omitted or if any cost or credit a mounts have been inadvertently miscalculated.

4.1.2 All Other City Fees. Except as otherwise provided in Section 4. 1.1 above as to Impact Fees, Developer agrees t o pay when due any existing, new , increased or modified fees, including Processing Fees and Connection Fees, at the rates then in effect at the time land use or development permits, approvals o r entitlements are applied for or issued on any or all portions of the Project so long as any new fees or increases in existing fees from the amount existing as of th e Effective Date applies on a Citywide basis or applies to properties in the Eas t Side Innovation District Vision Plan area and is consistent with the provisions of applicable California law, including the provisions of Government Code Section 66000 et seq.

4.1.3 Right to Protest. Developer acknowledges being aware of all Cit y fees in effect as of the Effective Date that might be imposed on the Property and the Project, and Developer accepts and shall not protest or challenge imposition of the types and amounts of such fees in effect as of the Effective Date. Other than as specified in the previous sentence, Developer retains all rights to protest an imposition, fee, dedication, reservation, or othe r exaction, as set forth in Cal ifornia Government Code Section 66020, and nothing in this Agreement shall diminish or eliminate any of Developer’s rights set forth in such Section 66020. City may impose, and Developer shall comply with and not protest, those Exactions re quired by this Agreement and the Project Approvals.

4.2 Other Agency Fees. Nothing in this Agreement shall preclude Cit y from collecting fees from Developer that are lawfully imposed on the Project by anot her agency having jurisdiction over the Project, whi ch the City is required to co llect on behalf of such other agencies (“Other Agency Fees”).

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4.3 Taxes and Assessments. As of the Effective Date, assessments are in effect and applicable to the Property or the Project as shown on the latest property tax bill for the Property. City is not aware of any pending efforts to initiate or consider new or increased assessments that would apply to the Property or the Project. City may impose and Developer agrees to pay any and all existing, new, modified or increased taxes and assessments, other than Impact Fees, imposed on the Property or the Project in accordance with the laws in effect as of the date due, at the rate in effect at the time of payment. Nothing herein shall be construed so as to limit Developer from exercising whatever rights it may otherwise have in connection with protesting or otherwise objecting to the imposition of tax es or assessments on the Property; provided, Developer acknowledges being aware of all t axes and assessments in effect as of the Effective Date, and Developer accepts and agrees that it shall not protest or challenge their imposition on the Property and the Project. In the event an assessment district is lawfully formed to provide funding for services, im provements, maintenance or facilities which are substantially the same as those services, improvements, maintenance or facilities being funded by the fees or assessments to be pai d by Developer under the Project Approvals or this Agreeme nt, then at City’s election, t aking into consideration City’s expectations as to when it would receive Developer’s pay m e n t o f s u c h f e e s o r assessments, either (a) the fees or assessments to be paid by Developer shall be subject to reduction/credit in an amount equal to Developer’s new or increased assessment under the assessment district, or (b) the new assessment district shall reduce/credit Developer’s new assessment in an amount equal to such fees or assessments to be paid by Developer under the Project Approvals or this Agreement.

ARTICLE 5

DEVELOPER COMMUNITY BENEFITS COMMITMENTS

5.1 Public Benefits. Developer shall perform and provide the publi c benefit obligations described in this Section 5.1 in consideration for the rights and benefits conferred by City to Developer under this Agreement , which exceed those dedicatio ns, conditions, and exactions that may be imposed under Applicable Law. Prior to the issuance of final Certificate of Occupancy for the Project, Developer shall execute and record an easement and maintenance agreement providing for public access to the both (1) the approximately 5,000 square foot portion of the central outdoor plaza located in the middle of the two buildings and between the gate and Old County Road (“Front Plaza”) and (2) the approximately 12,000 square foot amenity courtyard between the buildings (“Courtyard”), each as shown in the Project Approvals (“Front Plaza”) and maintenance of the Front Plaza and Courtyard by Developer, in substantially the form attached hereto as Exhi bit D (“POPA Easement ”), prior to the issuance of final Certificate of Occupancy for t he Project. The POPA Easement shall requir e Developer to allow public acc ess to the Courtyard during daylight hours (sunrise to sundown) and to the Front Plaza during the longer of daylight hours (sunrise to sundown) or the hours that the tenant of the Community Benefit Space is open to the public, subject to the Developer’s reasonable rules and regulations related to safety, ma intenance, and repairs, as wel l as improvements/renovations that meet the spirit and intent of the POPA Easement and subject to the reasonable approval of the Community Development Director. The POPA Easement shall allow Developer to temporarily exclude the publi c or temporarily limit

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public access to portions of the Front Plaza and/or Courtyard if necessary to address safety concerns and perform maintenance and repairs to improvements wi thin or immediately adjacent to the Front Plaza and to allow a reasonable limited number of private events per year for tenants of the Project and for non-profit or community events . T h e P O P A Easement shall require Developer to maintain the Front Plaza and Courtyard at all times and indemnify and hold City harmless from any and all Claims ar ising from or relating to the design, construction, or maintenance of the Front Plaza and the public’s use thereof.

The POPA Easement shall terminate in the event that (i) the Pro ject is demolished or (ii) the Project undergoes a substant ial change that is not already permitted under the Project Approvals and public access cannot be maintained by modifying t he boundaries of the Front Plaza and Courtyard , provided that the POPA Easeme nt shall not terminate in the event of demolition and reconstruction of any building or buildings in the Project following a casualty.

5.2 Community Benefits.

5.2.1 Developer shall design and construct the improvements for the Project listed below and pay the following amounts listed below (“Community Benefits”) in exchange for the approval of the Planned Development zoning designation and a Planned Development Plan that allow Developer to construct buildings with a greater height and Floor Area Ratio than permitted under the Property’s previous Heavy Industrial zoning designation. These approv als have a value of Fourteen M illion Dollars ($14,000,000). The Parties agree that the Community Benefits h ave a value of Seven Million Six Hundred Ninety Thousand Dollars ($7,000,000$7,690,000). (a) Design and construction of a space to be occupied by a Restaurant/Coffee Shop (or other Community Benefit Use pursuant to Section 5.2.4 below), along with four (4) designated parking spaces for customers (not employees) in the surface parking lot during occupancy (“Exclusive Retail Customer Spaces”) in the location shown in the Project Approvals:
 Approximately 1,500 square feet
 Value: $555,000
(b) Design and construction of a Bike/Pedestrian Path as shown in the Project Approvals:
 Approximately 4,240 square feet
 Value: $148,400
(c) Provide public parking on nights and weekends on the surface parking lot.  Approximately 46 parking spaces, subject to the Exclusive Retail Customer Spaces
 Value: $690,000

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(d) Addition of one dual head electric vehicle charging hub to provide two (2) charging stations on the surface parking lot.
(c)(e) Payments:
 Green Energy Efficiency & Sustainability Fund- $500,000  Community Improvement & Recreation Fund - $3,000,000
 Downtown Improvements Fund - $2,796,000

5.2.2 Design and Construction of Comm unity Benefit Space and Bike/Ped estrian Path.

The Community Benefit Space (defined in Section 5.2.4) and Bike/Pedestrian Path referenced in Section 5.2.1 shall be designed and submitted for approval as part of the Project building permit application, and shall be construct ed in substantial conformance with the Project Approvals. The Parties shall enter into a Subdivision Improvement Agreement with respec t to the Bike/Pedestrian Path and any work related to the Bike/Pedestrian P ath that occurs on public prope rty will be a public work subject to Prevailing Wage Laws.

5.2.3 Timing of Payments. The payment s set forth in Section 5.2.1(c) shall be made in full prior to the issuance of the first building permit for the Project.

5.2.4 Community Benefit Space Timing. The South Phase building shown in the Project Approvals (“South Building”) shall include space suitable for a Restaurant/Coffee Shop Use or Community Benefit Use (“ Community Benefit Space ”). The final certificate of occupancy for the South Building must be request ed (except as provided in this Section 5.2.4) and issued prior to the issuance of a final certificate of occupancy for any other building or structure in the Project . In the event that Developer has commenced construction of the South Building and a final certificate of occupancy for any other building or structure is requested by the Developer, the Developer will deposit $555,000 w ith the City which shall be re turned in full without interest to the Developer upon issuance of the final certificate of occupancy for the South Building that includes the Community Benefit Spac e in compliance with this Agreement. In the ev ent that the South Building has commenced construction under this Section, but does not receive its final certificate of occupancy within the Term (not including any extension of the Term), the $555,000 shall become non-refundable and the City shall elect to deposit the $555,000 in one or more of the funds described in Section 5.2.1(c) above, and D eveloper will have no further obligations related to the Restaurant/Coffee Shop sp ace Community Benefit Space and can use the space Community Benefit Space for any permitted purpose.

5.2.5 Community Benefit Space Tenant Improvements and Marketing Efforts. Developer shall construct or pay all costs associated with completion of the Community Benefit Space to an “Initial Shell Condition” as defined in Exhibit C prior to the issuance of a final certificate of occupancy for the South Buil ding. The Parties acknowledge and agree that the intent is that the Community Benefit Space will be used for a Restaurant/Coffee Shop Use. The Developer will make good faith efforts

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to market and lease the Community Benefit Space to a tenant pro viding a Restaurant/Coffee Shop Use, but may also market the Community B enefit Space to other Community Benefit Uses (“ Marketing and Leasing Efforts ”) and will provide the City Community Development Director regular updates (not less than quarterly) on these Marketing and Leasing Efforts until a lease is entered into with a tenant. Developer or Assignee shall offer the Community Bene fit Space at an initial triple net rent rate that does not exceed a fair market rent rate consistent with this Agreement. Developer or Assignee will promptly notify Cit y when a tenant providing a Community Benefit Use has executed a lease of the Community Benefit Space. If a lease is not entered into, and there are no active negotiations likely to lead to a lease, despite good faith Marketing and Leasing Effor ts within three (3) years of the final Certificate of Occupancy for the South Building, and after a good faith meet and confer by the Parties, the Developer shall pay a community amenity fee in the amount of $555,000 to t he City to use for any purpos e the City deems appropriate in its sole and absolute discretion and the Develop er will have no further obligations related to the Community Benefit Space and c a n u s e t h e Community Benefit Space for any permitted purpose. In the even t the initial tenant’s lease term is less than ten (10) years or terminates i n less than ten (10) years, the Developer’s obligati ons hereunder to make Marketing and Leasing Efforts to enter into a new lease consistent with this Agreement and provide regular updates to the City Community Development Director shall continue until the date that is ten (10) years from issuance of the final Certificate o f Occupancy for the South Building (“ Initial Leasing Period ”). After the Initial Leasing Period, the Developer will have no further obligations related to the Community Benefit Space and can use the Community Benefit Space for any permitted purpose. This Section

5.2.5 shall survive termination of this Agreement through the Initial Leasing Period.

5.2.6 Public Parking and EV Charging St ations. Developer shall desig nate the surface parking lot, consisting of approximately forty-six (46) spaces, as available for use by the public at no cost during the hours of 6 p.m. to 11 p.m. Monday through Friday and from 7:00 a.m. to 11:00 p.m. on weekends and federal holidays. Prior to the issuance of a Certificate of Occupancy for the South Bui lding, the Parties shall enter into a Public Parking Agreement in substantially th e form attached hereto as Exhibit E to document Developer’s obligation to provide public parking.

Developer shall also provide one dual head electric vehicle charging hub to create two (2) charging stations and de signate two (2) parking spaces in the surface parking lot for vehicles using the charging stations. The charging stations shall be available for use by the public during the same hours as the ot her spaces in the surface parking lot. The public parking spaces and the charging stations shall be in substantially the locations shown on the conceputal plan attached hereto as Exhibit G.

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ARTICLE 6

ANNUAL REVIEW

6.1 Periodic Review.

6.1.1 As required by the City of San Carlos City Code Section 18.37.080, Developer shall be required to demonstrate comp liance with the provisions of th e Agreement at least once a year at which time the Community Development Director shall review the Agreement.

6.1.2 The annual review shall be conducted as provided herein:
(a) Documentation of Compliance. By the last business day of January of each year, the Developer shall provide documentation of its compliance with the Agreement during the previous calendar year. Promptly upon rec eipt of Developer’s documentation of com pliance, the City’s Community Development Director shall review the documentation and determi ne, on the basis of substantial evidence, whether the Developer has complied with the provisions of this Agreement.
(b) Finding of Compliance. If the Co mmunity Development Director, o n the basis of substantial evidence, f inds compliance by Developer wi th the provisions of this Agreement, the Community Development Director shall issue a finding of compliance, w hich shall be in recordable for m and may be recorded with the County Recorder after conclusion of the review. (c) Finding of Noncompliance. If the Community Development Director finds Developer has not complied with t he provisions of this Agreemen t, the Community Development Director m ay issue a finding of noncompli ance which may be recorded by the City with the County Recorder afte r it becomes final. The Community Dev elopment Director shall specify i n writing to Developer the respects in which applicant has failed to comply, and shall set forth terms of compliance and specify a reasonabl e time for Developer to meet the terms of compliance.

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(d) Appeal of Determination. Within seven days after issuance of a finding of compliance or a finding of noncompliance, any interested person may file a written appeal of the finding with the City Council. The appellant shall pay fees and charges for the filing and processing of the appeal in amounts established by resolution of the City Council. The appellant sh all specify the reasons for the appeal. The i ssuance of a finding of compli ance or finding of noncompliance by the Community Development Director and the expiration of the appeal period without appeal, or the confirma tion by the City Council of the issuance of the finding on such appeal, sha ll conclude the review for the applicable period and such determination sha ll be final. (Ord. 1438 § 4 (Exh. A (part)), 2011
(e) If after City’s determination beco mes final pursuant to subsect ion(d) Developer does not comply with any terms of compliance within t he prescribed time limits, the Parties may terminate or modify the Agreement by mutual consent or the Director may refer this Agreement to t he City Council for termination or modification and the City Council shall conduct a public hearing. After the publ ic hearing, the City Council ma y terminate this Agreement, modify the finding of noncompliance and specify a reasonable time for Developer to meet the terms of compliance, or rescind the finding of noncompliance and issue a finding of compliance. If the City Council modifies the finding of noncompliance and the Developer does not meet the terms of compliance within the prescribed time limits, the Community Development Director shall issue a notice of terminat ion in accordance with section 11.3.

6.2 Certificate of Good Faith Compliance. If, after an annual review, City finds Developer has complied in good faith with the material terms of this Agreement, City shall within ten (10) days after receiving a request from Developer issue to Develope r a certificate of compliance certifying that Developer has so complied through the period of the applicable annual review.

6.3 No Waiver. Failure of City to conduct an annual review shall no t constitute a waiver by 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.

6.4 Reimbursement of Annual Review Costs. Developer shall pay the City for the reasonable costs incurred, including charges for City Attorney and other City staff time, in conducting its annual review of the Agreement within thirty (30) days of receipt of an invoice therefore.

Reimbursement shall be based on City’s charges for City Attorney and staff time billed for legal review and development proj ect application review pursuan t to City’s fee schedule in effect at the time.

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ARTICLE 7

MORTGAGEE PROTECTION

7.1 Mortgagee Protection. This Agreement shall be superior and senior to any lien placed upon the Property or any portion thereof after the date of recording the Agreement, including the lien of any deed of trust or mortgage (“ Mortgage”). Notwithstanding the foregoing, no breach hereof shall defeat, render invalid, diminish or impair the lien of any Mortgage made in good faith and for value, but all of the terms and cond itions contained in this Agreement shall be binding upon and effective against and shall run to the benefit of any person or entity, including any deed of trust beneficiary or mortgagee (“Mortgagee”), who acquires title or possession to the Property, or any portion thereof, by foreclosure, trustee’s sale, deed in lieu of foreclosu re or otherwise, subject to the provisions in Section 2.1 limiting the benefits of this Agreement to Developer and its su ccessors but not a separate owner of the Property.

7.2 Mortgagee Not Obligated.

7.2.1 Notwithstanding the provisions of Section 7.1 above, except as specified in Section

7.2.2, no Mortgagee shall have any obligation or duty under thi s Agreement to construct or complete the constr uction of the Project, or any p ortion thereof, or to guarantee such construction or com pletion; provided, however, t hat a Mortgagee shall not be entitled to devote the Property to any use except in full compliance with the Project Approvals and this Agreement nor to construct any i mprovements thereon or institute any uses other than those uses and improve ments provided for or authorized by this Agreement and the Project Approvals.

7.2.2 Any Mortgagee or successor in interest to a Mortgagee that is n ot proceeding to construct or complete construction of the Project pursuant to the Project Approvals and this Agreement must comply with all federal and state law a nd permit conditions applicable to the Proj ect construction and shall not allow or permit a nuisance.

7.3 Notice of Default to Mortgagee; Right to Cure. With respect to any Mortgage granted by Developer as provided herein, so long as any such Mortgage shal l remain unsatisfied of record, the following provisions shall apply:

7.3.1 City, upon serving Developer any notice of Default, shall also serve a copy of such notice upon any Mortgagee at the address provided to City, and no notice by City to Developer hereunder shall affect any rights of a Mortgagee u nless and until a copy thereof has been so served on such Mortgagee; provided, however, that failure so to deliver any such notice shall in no way affect the validity of the notice sent to Developer as between Developer and City. In the event of a Default by Developer, any Mortgagee shall have the right to remedy, or cause to be remedied, such Default within sixty (60) days following the later to occur of (i) the date of Mortgagee’s receipt of the notice referred to in Section 7.3.1 above, or (ii) the expiration of the period provided herein for Developer to remedy or cure such Default, and City shall

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accept such performance by or at the insistence of the Mortgagee as if the same had been timely made by Developer; provided, however, that (a) if such Default is not capable of being cured within the timeframes set forth in this Section 8.3.2 and Mortgagee commences to cure the Default within such timeframes, then Mortgagee shall have such additional time a s is required to cure the Defa ult so long as Mortgagee diligently prosecutes the cure to completion and (b) if possession of the Property (or portion thereof) is required to effectuate such cu re or remedy, the Mortgagee shall be deemed to have timely cured or remedied if i t commences the proceedings necessary to obtain possession thereof within sixty (60) days after receipt of the copy of the notice, diligently pursues such proceedings to completion, and, after obtaining possession, diligently completes such cure or remedy.

7.3.2 Any notice or other communication which City shall desire or is required to give to or serve upon the Mortgagee shall be in writing and shall be se rved in the manner set forth in Section 12.5, addre ssed to the Mortgagee at the ad dress provided by Mortgagee to City. Any notice or other communication which Mortgagee shall give to or serve upon City shall be de emed to have been duly given or served if sent in the manner and at City’s address as set forth in Section 12.5, or at such other address as shall be designated by City by notice in writing given to th e Mortgagee in like manner.

7.4 No Supersedure. Nothing in this Article 7 shall be deemed to su persede or release a Mortgagee or modify a Mortgagee’s obligations under any subdivi sion or public improvement agreement, temporary access agreement or other obli gation incurred with respect to the Project outside this Agreement, nor shall any pr ovision of this Article 7 constitute an obligation of City to such Mortgagee, except as to the notice requirements of Section 7.3.

7.5 Technical Amendments to this Article 7. City agrees to reasonab ly consider and approve interpretations and/or technical amendments to the provisions o f this Agreement that are required by lenders for the acquisition and construction of the improvements on the Property or any refinancing thereof and to otherwise cooperate in good faith with Developer at Developer’s expense to facilitate Developer’s negotiations with lenders.

ARTICLE 8

AMENDMENT OF AGREEMENT AND PROJECT APPROVALS

8.1 Amendment of this Agreement.

8.1.1 Amendment of Agreement by Mutual C o n s e n t . E x c e p t a s o t h e r w i s e expressly provided herein (including but not limited to Section 6.1 relat ing to City’s annual review and Section 11.3 relating to termination in the event of a D e f a u l t ) , t h i s Agreement may be terminated, modified or amended in writing fro m time to time only by mutual consent of the Parties hereto or their successor s-in-interest or assigns, and in accordance with the provisions of Government Code sections 65867, 65867.5 and 65868.

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8.1.2 Refinement by Operating Memoranda.
(a) The Parties acknowledge that the provisions of this Agreement r equire a close degree of cooperation between City and Developer, and dur ing the course of implementing this Agree ment and developing the Projec t refinements and clarifications o f this Agreement become appropr iate and desired with respect to the details of performance of City and Developer. If and when, from time to time, during the Term of this Agreement, City and Developer agree that such a refinement is necessary or appropriate, City and Developer shall effectuate suc h refinement through a memorandum ( t h e “Operating Memorandum”) approved in writing by City and Developer, which, after execution, shall be attached hereto as an addendum and become a part hereof. Any Operating Memorandum may be further refined from time to time as necessary with future approval by City and Deve loper. No Operating Memorandum shall constitute an amendment to this Agre ement requiring public notice or hearing. The City Manager, in consul tation with the City Attorney, shall make the determination on behalf of Ci ty whether a requested refinement may be effectuated pursuant to this Section 8.1.2 or whether the requested refinement is of such a character to cons titute an amendment hereof pursuant to Section 8.1.3 below. The City Manager shall be authorized to execute any Operating Memoranda hereunder on behalf of City.
(b) Any amendment to this Agreement that, in the context of the overall Project contemplated by this Agreement that does not substantially affe c t (i) the Term; (ii) permitted uses of the Property; (iii) provisions for the reservation or dedication of land; (iv) conditions, terms, restrictions or requirements for Additional Project Approvals; (v) increases in the density or intensity of the use of the Property or the max imum height or size of proposed b uildings; (vi) monetary contributions by Developer; or (vii) the provisio n of Community Benefits described in Article 5 shall be deemed an Insubstantial Amendment. The City Manager, except to the extent otherwise required by Applicable Law, may approve the Insubstantial Amendment without notice and public hearing.

8.1.3 Agreement Amendments. Any revision to this Agreement which is determined not to qualify for an Operating Memorandum as set forth in Section 8.1.2 shall be deemed an “ Agreement Amendment ” and shall require giving of notice and a public hearing before the Planning Commission and City Council in accordance with Applicable Law. The City Manager shall have the authority in her or her reasonable discretion to determin e if a proposed revision is an Agreement Amendment subject to this Secti on 8.1.3 or qualifies for an Ope rating Memorandum subject to Section 8.1.2.

8.1.4 Requirement for Writing. No modi fication, amendment or other ch ange to this Agreement or any provision hereof shall be effective for any pu rpose unless

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specifically set forth in writing which refers expressly to thi s Agreement and is signed by duly authorized representatives of each Party or their successors.

8.2 Amendments to Development Agreement Statute. This Agreement has been entered into in reliance upon the provisions of the Development Agreement Statute as those provisions existed as of the date of execution of this Agreement. No amend ment or addition to those provisions which would materially affect the interpretation or enforceability of this Agreement shall be applicable to this Agreement, unless such am endment or addition is specifically required by the California State Legislature, or i s mandated by a court of competent jurisdiction. If such amendment or change is permissi ve (as opposed to mandatory), this Agreement shall not be affected by same unless the Parties mutually agree in writing to amend this Agreement to permit such applicability.

8.3 Amendments to Project Approvals.

8.3.1 Generally. Project Approvals (exce pt for this Agreement the ame ndment process for which is set forth in this A rticle 8) may be amended or mod ified from time to time, but only at the written re quest of Developer or with the written consent of Developer at its sole discretion. All amendments to the Project Approvals shall automatically become part of the Project Approvals. The permitt ed uses of the Property, the maximum density, the intensity of use, the maximum height and size of the proposed buildings, provisions for reservation or dedication of land for public purposes, the conditions, terms, restrictions and requirements for subsequent discretionary actions, the provi sions for public improvements a nd financing of public improvements, and the othe r terms and conditions of deve lopment as set forth in all such amendments shall be automatically vested purs uant to this Agreement, without requiring an am endment to this Agreement. Am endments to the Project Approvals shall be g overned by the Project Approval s and the Applicable Laws. City shall not r equest or process any amendmen t to the Project Approvals that would affect the Property or the Project without Developer’s prior written consent.

8.3.2 Administrative Amendments of Project Approvals. Upon the request of Developer for an amendment or modification of any Project Approvals (exce pt for this Agreement the amendment process for which is set forth in this Article 8), the City Manager or his or her designee shall determine, at his or her discretion and subject to referral to a hearing body if considered appropriate: (a) wh ether the requested amendment or modification is mi nor when considered in light of the Project as a whole; and (b) whether the requ ested amendment or modification substantially conforms with the material terms of this Agreement and the Appl icable Laws and may be processed administratively. If the City Manager or his or her designee finds that the requested amendment or modification is both minor and substantially conforms with the material terms of this Agreement and the Appl icable Laws, the amendment or modification shall be determined to be an “Administrative Project Amendment,” and the City Manager or his or her designee may approve the Administrative Project Amendment, without public notice or a pu blic hearing.

Without limiting the generality of the foregoing, lot line adju stments, minor

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reductions in the density, intensity, scale or scope of the Project, minor alterations in vehicle circulation patterns or vehicle access points, variations in the location of structures that do not substantia lly alter the design concepts o f t h e P r o j e c t , substitution of comparable lands caping for any landscaping show n on any development plan or landscape p lan, variations in the location or installation of utilities and other infrastructure connections and facilities that do not substantially alter design concepts of the Project, and minor adjustments to a subdivision map or the Property legal description shall be deemed to be minor amen dments or modifications. Any request of Developer for an amendment or mod ification to a Project Approval that is determined not to be an Administrative P r o j e c t Amendment as set forth above shall be subject to review, consideration and action pursuant to the Applicable Laws and this Agreement.

8.4 Reliance on Initial Study and MND. The Initial Study and MND, which have been certified by City as being in compliance with CEQA, address the potential environmental impacts of the entire Project as it is described in the Project Approvals as described in the MMRP.

It is agreed that, in acting on any discretionary Additional Project Approvals for the Project, City will rely on the Initial Study and MND to satisfy the requ irements of CEQA to the fullest extent permissible by CEQA, and City will not require a new initial study, negative declaration or subsequent or supplemental EIR unless City determines that such additional analysis and processing are required by CEQA and will not impos e on the Project any mitigation measures or other conditions of approval other than those specifically imposed by the Project Approvals and the MMRP or specifically required by the Applicable Laws.

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

ARTICLE 9

COOPERATION AND IMPLEMENTATION

9.1 Additional Project Approvals. Certain subsequent land use approvals, entitlements, and permits other than the Exis ting Approvals, will be necessar y or desirable for implementation of the Project (“Additional Project Approvals”). The Additional Project Approvals may include, without limitation, the following: amend ments of the Project Approvals, grading permits, building permits, sewer and water c onnection permits, certificates of occupancy, lot l ine adjustments, site plans, de velopment plans, land use plans, building plans and specifications, parcel maps and subdi vision 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 cond itions upon Project development and construction that are inconsistent with the Exi sting Approvals and the terms and conditions of this Agreement. Further, except as expressly provided herein, City shall not exercise discretion in determining whether or how to grant Additional Project

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Approvals in a manner that would prevent development of the Pro ject for the uses and to the maximum intensity of development set forth in the Existing Approvals.

9.2 Scope of Review of Additional Project Approvals. By approving t he Project Approvals, City has made a final policy decision that the Project is in th e best interests of the public health, safety and general welfare. Accordingly, City shall not u s e i t s a u t h o r i t y i n considering any application for a discretionary Additional Project Approval to change the policy decisions reflected by th e Project Approvals or otherwis e to prevent or delay development of the Project as set forth in the Project Approval s. Instead, the Additional Project Approvals shall be deemed to be tools to implement those final policy decisions.

9.3 Processing Applications for Additional Project Approvals.

9.3.1 Developer acknowledges that City cannot begin processing applic ations for Additional Project Approvals until Developer submits complete a pplications on a timely basis. Developer shall use diligent good faith efforts to (i) 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 (ii) 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 req uired under Applicable Laws. It is the expres s intent of Developer and City to cooperate and diligently work to obtain any and all Additional Project Approvals.

9.3.2 Upon submission by Developer of all appropriate applications and Processing Fees for any pending Additional Project Approval, City shall, to the full extent allowed by Applicable Laws, promptly and diligently, subject to City or dinances, policies and procedures regarding hiring and contracting, commence and complete all steps necessary to act on Developer’s currently pending Additional Pr oject Approval applications including: (i) if l egally required, providing notice and holding public hearings; and (ii) acting on any such pending Additional Projec t Approval application. Upon Developer’s request and prior approval, when City deems it necessary or desirable, City w ill endeavor to retain consultant s to assist in reviewing and processing Devel oper’s applications, at Developer ’s expense including any added expense for City staff to retain and supervise such consultants.

City similarly will consider Developer’s request to arrange ove rtime staff assistance; provided, Developer acknowledges that City will hav e other development applications and planning work in process or waiting to be processed from time to time, and Develope r’s Additional Project Approval applications are not entitled to priority treatment to the disadvantage of such other applications and work; and provided further, Developer acknowledges there are practical constraints on City’s ability to arrange staff overtime.

9.4 Other Agency Additional Project Approvals; Authority of City. C ity shall cooperate with Developer, to the extent appropriate and as permitted by law, i n Developer’s efforts to obtain, as may be required, Other Agency Additional Project Approvals. Notwithstanding the issuance to Developer of Other Agency Additional Project Ap provals, Developer agrees that City shall have the right to review, modify, approv e and/or reject any and all

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submissions subject to the Other Agency Additional Project Approvals which, but for the authority of the other governme ntal or quasi-governmental entit ies issuing the Other Agency Additional Project Approvals, would otherwise require City approval. Developer agrees that City may review, modify, approve and/or reject any such materials or applications to ensure consistency with this Agreement and the Project Approvals and Developer shall incorporate any and all changes required by City prior to submitting such materials and applications to th e other governmental or quasi-g overnmental entities for review and/or approval.

9.5 Implementation of Necessary Mitigation Measures and Conditions. Developer shall, at its sole cost and expense, comply wi th the MMRP requirements and co nditions of approval included with the Project Approvals as applicable to the Property and Project.

9.6 Cooperation in the Event of Legal 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 City’s approval of this Agreement or any of the Project Approvals (eac h , a “Litigation Challenge”), and the Parties shall keep each other informed of all devel opments relating to such defense, subject only to confidentiality requirements t hat may prevent the communication of such information. Developer’s monetary obligations under this Section

9.6 and its subsections shall survive expiration or earlier termination of this Agreement.

9.6.1 Meet and Confer. If a Litigation Challenge is filed, upon receipt of the petition, the Parties will have twenty (20) days to meet and confer regarding the merits of such Litigation Challenge a nd to determine whether to defend against the Litigation Challenge, which period may be extended by the Parties’ mutual agreement so long as it does not impact any litigation deadlines. The City and De veloper mutually commit to meet all required litigation timelines and deadlines. The Parties shall expeditiously enter a joint defense agreement, which will inclu de among other things, provisions regarding confidentiality. The City Manager is authorized to negotiate and enter such joint defense agreement in a form acce ptable to the City Attorney. Such joint defense agreement shall also provide that any proposed settlement of a Litigation Chall enge shall be subject to City’s and Developer’s approval, each in its reasonable discretion. If the terms of the proposed settlement would constitute an amendment or modification of this Agreement, the settlement shall not become effective unless such amendment or modification is approved by Developer, and by City in accordance with Applicable Laws, and City reserves its full legislative discretion with respect thereto.

9.6.2 Defense Election. If, after meeting and conferring, the Parties mutually agree (each in its sole discretion) to defend against the Litigation Challenge, then the following shall apply:
(a) Joint Representation. For the purposes of cost-efficiency and coordination, the Parties shall first consider defending the Litigation Chall enge jointly, with counsel and under terms of joint representation mutually acceptable to

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the City and Developer (each in its sole discretion), at the Developer’s sole cost and expense.
(b) If the Parties cannot reach timely and mutual agreement on a joint counsel, and Developer continues to elect (in its sole discretion) to de fend against the Litigation Challenge, then:
(i) 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;
(ii) City may, in its sole discretion, elect to be separately represented by the outside legal counsel of its choice in any such action or proceeding with the reasonable co sts of such representation to be paid by Developer;
(iii) 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 o f such litigation, all necessar y and reasonable costs incurred by City in connection with the Litiga tion Challenge, including City’s admin istrative, outside legal fees and costs, and court costs;
(iv) The Parties intend that the City’s role under subsection (b)(ii ) shall be primarily oversight although the City reserves its right to protect the City’s interests, and the City shall make good faith effort s to maximize coordination and minimiz e its outside legal costs (for example, minimizing filing separate briefs, and duplication of effort to the extent feasible).
(v) For any Litigation Challenge which t h e D e v e l o p e r h a s e l e c t e d t o defend under this Section 9.6.2(b) Developer shall indemnify, defend, and hold harmless the City and the City Parties from an y liability, damages, claim, action, cause of action, judgment (including City costs to effectua te such judgment, including an y attorneys’ fees or cost awards, including attorneys’ fees award ed under Code of Civil Procedure Section 1021.5, assessed or awarded against City by way of judgment, s ettlement, or stipulation), l oss (direct or indirect), obligation, order, fine, penalty or proce eding (including legal costs, attorneys’ fees, expert witness or cons ultant fees, staff time, expenses or costs) related to such Litigation Challenge. “Attorneys’ fees” as used in this Section 9.6.2(b)(v) shall include reasonable City Attorney’s time as a pass-through cost without markup.

9.6.3 Developer Election Not To Defend. If Developer elects, in its s ole and absolute discretion, not to defend against the Litigation Challenge, it shall deliver written

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notice to the City regarding such decision. If Developer elects not to defend, the City has the right, but not the obligation, to proceed to defend against the Litigation Challenge and 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, at its sole cost and expense. If Developer elects not to defend, the City has the right, but not the obligation, to terminate this Agreement and any Project Approvals then in effect, and to consider the Devel oper’s application for any Add itional Project Approvals withdrawn. In the event the City does not terminate this Agreement, then if the terms of a proposed settlement would constitute an amend ment or modification of this Agreement, the settlement shall not become effective unless such amendment or modification is approved by Developer, and by City in accordance with Applicable Laws, and City reserves its full leg islative discretion with respect thereto. In the event the Developer does not approve such amendment or modification, the City retains the right, but not the obliga tion, to terminate this Agreement and any Project Approvals then in effect, and to cons ider the Developer’s application for any Additional Project Approvals wi thdrawn. If Developer elects pursuant to this Section 9.6.3 not to defend against the Litigation Challenge and so notifies City, and City thereafter elects not to defend against the Litigation Challenge, Developer sh all be liable for and shall p romptly reimburse City for (i) any costs, fees or payments owed as a result of the Litigation Challenge that may be City’s obligation, whether by judgment, settlement or otherwise, and (ii) all necessary and reasonable costs incurred by City in con nection with the Litigation Challenge, including City’s administrative, outside legal fees and costs, and court costs.

9.7 Revision to Project. In the event of a court order issued as a result of a successful Litigation Challenge, City shall, to the extent permitted by law or court order, in good faith seek to comply with the court order in such a manner as will maintain t he integrity of the Project Approvals and avoid or minimize t o the greatest extent possible ( i ) a n y i m p a c t t o t h e development of the Project as provided for in, and contemplated by, the Project Approvals, or (ii) any conflict with the Project Approvals or frustration of the intent or purpose of the Project Approvals.

9.8 State, Federal or Case Law. Where any state, federal or case la w allows City to exercise any discretion or take any act with respect to that law, City s hall, in an expeditious and timely manner, at the earliest possible time, (a) exercise its discretion in such a way as to be consistent with, and carry out the terms of, this Agreement and (b) take such other actions as may be necessary to carry out in good faith the terms of this Agreement.

9.9 Compliance with Laws. Developer, at its sole cost and expense, shall comply with the requirements of, and obtain all permits and approvals required by local, State and Federal agencies having jurisdiction ove r the Property or Project. Fur thermore, Developer shall carry out the Project work in conformity with all Applicable Laws including, if and to the extent applicable, all State Labor Code requirements and implementing regulations of the Department of Industrial Relations pertaining to “public works,” including the payment of prevailing wages (collectively, “ Prevailing Wage Laws ”). Developer shall require the contractor(s) for all work that is subject to Prevailing Wage Laws to submit, upon request

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by City, certified copies of payroll records to City at the Pro perty or at another location within City, and to maintain and make records available to City and its designees for inspection and copying to ensure compliance with Prevailing Wage Laws. Developer shall also include in each of its contractor agreements, a provision in form reasonably acceptable to City, obligating the contractor to require its contractors and/or subcontractors to comply with Prevailing Wage Laws and to submit, upon request by City, certified copies of payroll records to City and to maintain a nd make such payroll records a vailable to City and its designees for inspection and copying during regular business ho urs at the contractor’s or subcontractor’s regular place of business. Developer shall defend (with counsel reasonably acceptable to the City), indemnify, assume all responsibility f or, and hold harmless City Parties from and against any and all present and future Claims arising out of or in any way connected with Developer’s or its contractors’ or subcontractor s’ obligations to comply with all Prevailing Wage Laws, i ncluding all Claims that may be made by contractors, subcontractors or other third-party claimants pursuant to Labor Code sections 1726 and 1781. Nothing herein is intended to require compliance with Prevailing Wage Laws beyond what is required by law. Developer hereby waives and releases City Parties from any and all manner of Claims or other compensation whatsoever, in law or equity, of whatever kind or nature, whether known or unknown, direct or indirect, forese eable or unforeseeable, absolute or contingent, now existing or which may in the future arise, including lost business opportunities or economic advantage, and special and c onsequential damages, arising out of, directly or indirectly, or in any way connected with Developer’s obligation to comply with all Prevailing Wa ge Laws. Developer is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE

RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR OR RELEASED PARTY.”
INITIALS: DEVELOPER ____________
As it relates to this Section 9.9, Developer hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code.

9.10 Indemnity and Hold Harmless. Dev eloper shall indemnify, defend (with counsel reasonably acceptable to City) and hold harmless the City, incl uding its elected and appointed officers, officials, employees, contractors, representatives and authorized agents (each a “City Party” and collectively “City Parties”) from and against any and all Claims, including Claims for any bodily injury, death, or property dama ge, resulting directly or indirectly from the development or construction of the Project, and, if applicable from compliance with the terms of this Agreement, and/or from any ot her 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 ( e a c h a “Developer Party” and collectively “ Developer Parties ”); provided that Developer’s obligation to indemnify and hold harmless (but not Developer’s duty to defend ) shall be limited (and

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shall not apply) to the extent such Claims are found to arise f rom the gross negligence or willful misconduct of a City Party. Developer shall further indemnify, defend (with counsel reasonably acceptable to City) and hold harmless the City Parties from and against any and all Claims arising from or relate d to any Developer Party’s fai lure to comply with any Applicable Laws, including withou t limitation Prevailing Wage L aws. Developer’s obligations under this Section 9.10 shall survive expiration or earlier termination of this Agreement.

9.11 Sales Tax Point of Sale Designati on. The Developer shall use go od faith, diligent efforts to the extent allowed by law to require all persons and entitie s providing materials to be used in connection with the construction and development of, or incorporated into, the Project, including by way of illustration but not limitation bulk lumber, concrete, structural steel, roof trusses and other pre- fabricated building componen ts, 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 $5 Million Dollars or more; or (c) otherwise designat e the Property as the place of use of material used in the construction of the Project and the place of sale of all fixtures installed in and/or furnished in order to have the local portio n 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 shal l cause such general contractor(s) to instruct its/their subcontractors to, cooperate with City to ensure the local sales/use tax derived from constr uction of the Project is alloc ated to City to the fullest extent possible and to the extent allowed by law. This Section 9.11 shall not apply to tenants who perform their own tenant improvement work.

9.11.1 To assist City in its efforts to ensure that such local sales/u se tax is so allocated to City, Developer shall on an annual basis, or as frequently as quarterly upon City’s request, provide City with such information as shall be reasona bly requested by City regarding subcontractors wo rking on the Project with contr acts in excess of the amount set forth above, incl uding a description of all appl icable work and materials and the dollar value of such subcontracts, and, if applicable, evidence of their designation, such as approvals or applications for the di rect payment permit, o f C i t y a s t h e p l a c e o f u s e o f s u c h w o r k a n d m a t e r i a l s . C i t y m ay use such information to contact each subcontractor who may qualify for l ocal allocation of use taxes to City. Notwithstanding the foregoing, the failure o f any general contractor(s) or subcontractor(s) to allocate sales and use tax revenues as provided herein or to comply with this Se ction 9.11 shall not constitute a breach by Developer under this Agreement.

ARTICLE 10

ASSIGNMENT

10.1 Transfers. Prior to the issuance of a final Certificate of Occupancy for the Project, neither City nor Developer may assign its rights or delegate its duties under this Agreement, except for Developer Permitted Transfer s as defined below, without the express written consent of the other Party, which consent will not be unreasonably withheld or delayed. Developer shall provide the City with written notice of any proposed tran sfer or assignment of

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Developer’s rights or obligations hereunder at least thirty (30 ) days prior to such Assignment and request City’s cons ent to such transfer, as prov ided herein. Each such notice of proposed transfer shall be accompanied by reasonable (non-confidential) evidence of the corporate, limited liability company or other l egal entity’s existence and good standing, experience with si milar projects, and financial resources. City may refuse to give consent to a proposed transfer only if, in light of the proposed transferee’s reputation, experience with simila r projects, and/or financial resources, such transferee would not, in City’s reasonable opinion, be able to perform the obligations proposed to be assumed by such transferee, and such determinations will be mad e by the City Manager.

Prior to any transfer, the Developer and assignee shall enter i nto an assignment and assumption agreement in substantially the form of Exhibit E F (“Assignment and Assumption Agreement”), and subject to prior approval, which shall not be unreasonably withheld or delayed, of the City Manager and the City Attorney. So long as City has not provided Developer notice of breach before or during City’s rev iew of Developer’s proposed assignment, upon Develope r’s and assignee’s execution of the Assignment and Assumption Agreement, Developer shall be released from any further liability or obligation hereunder related to the portion of the Property and the assignee shall be deemed to be the “Developer,” with all rights and obligations related thereto. T he City will review any submittals under this Section within fifteen (15) business days. In the event the City does not respond timely and such submittal clearly identifies this s ection and the deadline for review, the submittal will be deemed approved. Developer acknow ledges that satisfying the terms of this Agreement will achieve certain goals, objecti ves and public benefits for City which provide material consideration and incentive for City agreeing to enter into this Agreement and agreeing to grant the Existing Approvals, and justify certain restrictions on the right of Developer to assign or transfer its interest under this Agreement in order to assure achievement of such goals, objectives, and public benefits, and therefore Developer agrees to and accepts the restrictions set forth in this Sectio n 10.1 as reasonable and as a material inducement for City to enter into this Agreement. Deve loper shall pay the reasonable costs borne by City in connection with its review of the proposed assignment, including costs of attorney review and City staff time.

Notwithstanding any other provision of this Agreement to the co ntrary, each of following transfers are permitted and shall not require City consent unde r this Section 10.1 (each a “Developer Permitted Transfer”):
(a) Any transfer for financing purposes to secure the funds necessa ry for construction and/or permanent financing of the Project; (b) An assignment of this Agreement to an Affiliate of Developer; (c) Dedications and grants of easeme nts and rights of way required in accordance with the Project Approvals; or
(d) Any leasing activity.

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ARTICLE 11
DEFAULT; REMEDIES; TERMINATION

11.1 Breach and Default. Subject to extensions of time under Section 2.2.2 or by mutual consent in writing, failure by a Party to perform any action or covenan t or satisfy any obligation required by this Agreement within thirty (30) days following receipt of written notice from another Party specifying the failure shall constitute a “ Default” under this Agreement; provided, however, that if the failure to perform is non-monetary and cannot reasonably be cured within such thirty (30) day period, a Party shall be allo wed additional time as is reasonably necessary to cure the failure so long as such Party commences to cure the failure within the thirty (30) day period and thereafter diligently and continuously prosecutes the cure to completion at the earliest practicable date. Notwithsta nding the above notice and cure provisions, if such failure to perform by Developer or a c ircumstance regarding the Project in City’s reasonable opi nion creates a public health or welfare emergency, City may but is not obligated to implement a cure and Developer ther eafter shall promptly reimburse City its costs and expe nses, including attorney’s fee s. The City shall provide Developer with reasonable notice appropriate for the circumstances of its determination of and nature of the emergency. If notice cannot be given prior to commencement of the cure, the City shall provide the Developer with its explanation of the emergency and a reasonable explanation for why prior notice could not be given.

11.2 Withholding of Permits. In the e vent of a Default by Developer, or following notice of breach to Developer pursuant to Section 11.1 above and during t he cure period provided therein, upon a finding by the City Manager or his or her desig nee that Developer is in breach, City shall have the right to refuse to issue any permit or other Additional Project Approvals to which Developer woul d otherwise 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.

11.3 Termination. In the event of a Default by a Party, the non-defaulting Party or Parties shall have the right to terminate this Agreement effective immediatel y upon the defaulting Party’s receipt of the notice of intent to terminate. Termination of this Agreement shall be subject to the provisions of Sect ion 11.8 hereof. The City Cle rk shall record a notice of termination of this Agreement with the County Recorder followin g termination of this Agreement.

11.4 Specific Performance for Violation of a Condition. If City issu e s a P r o j e c t A p p r o v a l pursuant to this Agreement in reliance upon a specified conditi on 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 Dev eloper to satisfy such condition.

11.5 Resolution of Disputes.

11.5.1 Resolution Prior to Legal Action. With regard to any dispute involving the Project or this Agreement, the resolution of which is not provided for by this Agreement or

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Applicable Laws, prior to instituting legal action pursuant to Section 11.5.2, a Party shall, at the request of the other Party, meet with designated representatives of the requesting Party promptly following its request, which meeting may be continued by mutual consent. The parties to any such meetings shall attem pt in good faith to resolve any such disputes, and by mutual consent may arrange a third party to mediate the dispute. In the event the Parties are not able to resolve the dispute and reach an agreement within fourte en (14) days of the request, ei ther Party may initiate legal action or take such other actions available under this Agreement or the law. Nothing in this Section 11.5.1 shall in any way be interpreted as requiring that Developer and City and/or City’s d esignee 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, and the fact of pa rticipation in such meetings a nd any information provided or oral or written state ments made by a Party shall no t be admissible or otherwise used against the Party in any subsequent legal action . Nothing in this Section 11.8 shall require a Party to postpone instituting any injunctive proceeding or to pursue resolution under this Section 11.5.1 if it believes in good faith that such postponement will cause irreparable harm to such Party.

11.5.2 Institution of Legal Actions. In addition to any other rights o r remedies, a Party may institute legal action to cure, correct or remedy any Defau lt, to enforce any covenants or agreements herein, to enjoin any threatened or att empted violation thereof, or to obtain any other remedies consistent with the pu rpose of this Agreement. Any such legal action shall be brought in the Superi or Court for San Mateo County, California, except for actions that include claim s in which the Federal District Court for the Northern District of the State o f California has original jurisdiction, in which case the Northern District of t he State of California shall be the proper venue.

11.5.3 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 ag ainst Developer, service of process on Developer shall be made by personal servi ce upon Lisa Sobrato Sonsini, Developer’s registered agent for service of process in California, at 599 Castro St. Suite 400, Mountain View, CA 94041, or in such other manner as may be provided by law.

11.6 Rights and Remedies Are Cumulativ e. 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 another Party, exc ept as otherwise expressly provided herein.

11.7 Limitation on Damages. Notwithst anding anything to the contrary he re in, ne ithe r P arty shall have the right to recover any consequential, special, or punitive damages in the event of a Default by the other Party. In no event shall City or the Indemnified Parties be liable

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in damages for any default under this Agreement, it being expressly understood and agreed that the sole legal remedy available Developer for a Default by City shall be an action in mandamus, specific performance or other injunctive or declarato ry relief to enforce the provisions of this Agreement, or to terminate this Agreement. City shall have all remedies available in law or equity, incl uding but not limited to an act ion in mandamus, specific performance or other injunctive or declaratory relief to enforc e the provisions of this Agreement, or to terminate this Agreement. In addition, City sh all have the right to seek actual damages from Developer, including but not limited to enforcing payment of money or the performance of obligations requiring payment of money by Developer under the terms of this Agreement, including but not limited to Sections 5.2, 6.4, 9.6.2, 9.6.3, 10.1,

11.1 and 12.12. As part of recovering such damages, City shall be entitled to interest thereon at the lesser of ten percent (10%) per annum or the max imum rate permitted by law, compounded annually, from the date of expenditure. In connection with the foregoing provisions, each Party acknowledg es, warrants and represents th at 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 w aivers herein contained, and after such advice and consultation has presently and actual ly intended, with full knowledge of such Party’s rights and remedies otherwise availab le 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 another Party.

11.8 Surviving Provisions. In the event this Agreement is terminated , no Party shall have any further rights or obligations hereunder, except for those obligations of Developer which by their terms survive expiration or termination, or which are set forth in Section 9.6 (Cooperation in the Event of Legal Challenge).

ARTICLE 12

MISCELLANEOUS PROVISIONS

12.1 Incorporation of Recitals, Exhibits and Introductory Paragraph. The Recitals contained in this Agreement, the introductory paragraph preceding the Recita ls and the Exhibits attached hereto are hereby incorporated into this Agreement as if fully set forth herein.

12.2 Severability. If any term or provision of this Agreement, or th e application of any term or provision of this Agreement to a particular situation, is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining terms and provisions of this Agreement, or the application of this Agreement to other situat ions, shall continue in full force and effect unless amended or modified by mutual consent of the Parties

12.3 Construction. Each reference herein to this Agreement or any of the Project Approvals or Additional Project Approvals shall be deemed to refer to the Agreement, Project Approval or Additional Project Approval as it may be amended from time to time, whether or not the particular reference refers to such possible amendment. Section headings in this Agreement are for convenience only and are not intended to be used in int erpreting or construing the terms, covenants or conditions of this Agreement. This Agreement has been reviewed and

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revised by legal counsel for Ci ty and Developer, and no presump tion or rule that ambiguities shall be construed against the drafting party shall apply to the interpretation or enforcement of this Agreement. Unless the context clearly requires otherwise, (i) the plural and singular numbers shall each be deemed to include the other; (ii) the masculine, feminine, and neuter genders shall each be deemed to include th e others; (iii) “ shall,” “will,” or “agrees” are mandatory, and “may” is permissive; (iv) “or” is not exclusive; and (v) “include,” “includes” and “ including” are not limiting and shall be construed as if followed by the words “without limitation.”

12.4 Covenants Running with the Land. Except as otherwise more specifically provided in this Agreement, this Agreement and all of its provisions, rights, po wers, standards, terms, covenants and obligations, shall be binding upon the Parties and their respective successors (by merger, consolidation, or ot herwise) and assigns, and all o ther persons or entities acquiring the Property, or any interest therein, and shall inur e to the benefit of the Parties and their respective successors and assigns, as provided in Gov ernment Code Section 65868.5.

12.5 Notices. Any notice or communication required hereunder between City and Developer must be in writing, and may be given either personally, by regi stered or certified mail (return receipt requested), or by F e d e r a l E x p r e s s o r o t h e r s i m ilar courier promising overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (i) actual receipt by any of the addressees designa ted below as the party to w h o m n o t i c e s a r e t o b e s e n t , o r ( i i ) f i v e ( 5 ) d a y s a f t e r a r e g istered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Notices and communications may be sent by email to expedite transmittal of information and responses, but shall not be deem ed given unless and until followed by transmittal by one of the other processes described in this Section 12.5. Any party hereto may at any time, by giving ten (10) days written n otice to the other party hereto, designate any other address in substitution of the addr ess to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below:

To City: City of San Carlos
600 Elm Street
San Carlos, CA 94070
Attention: Director of Community Development
With a copy to: City of San Carlos
600 Elm Street
San Carlos, CA 94070
Attention: City Attorney

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To Developer:

The Sobrato Family Foundation
c/o The Sobrato Organization
599 Castro St. Suite 400
Mountain View, CA 94041
Attention: Lisa Sobrato Sonsini
With a copy to: The Sobrato Organization
599 Castro St. Suite 400
Mountain View, CA 94041
Attention: Robert Tersini
Attention: Jeff Sobrato
Holland & Knight
560 Mission Street, Suite 1900
San Francisco, CA 94105
Attention: Tamsen Plume

12.6 Counterparts and Exhibits; Entire Agreement. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original. This Agreement, together with the Existing Approvals and attached Exhibits, constitutes the final and exclusive understanding and agreement of the Parties and supersedes all n egotiations or previous agreements of the Parties with respect to all or any part of the subject matter hereof.

12.7 Recordation of Agreement. Pursuant to California Government Code Section 65868.5, the City Clerk will record this Agreement no later than ten (10) days after the Effective Date.

12.8 No Joint Venture or Partnership. It is specifically understood and agreed to by and between the Parties hereto that: (i) the Project is a private development; (ii) City has no interest or responsibilities for, or duty to, third parties concerning any public improvements until such time, and only until such time, that City accepts the same pursuant to the provisions of this Agreement or in connection with the various Project Approvals o r Additional Project Approvals; (iii) Developer shall have full power over and exclu sive control of the Project herein described, subject only to the limitations and obligatio ns of Developer under this Agreement, Project Approvals, Additional Project Approvals, and Applicable Laws; and (iv) City and Developer hereby renounce the existence of any form of agency relationship, joint venture or partnership between City and Developer and agree that nothing contained herein or in any document executed in connection herewith shall be construed as creating any such relationship between City and Developer.

12.9 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 any such rights or remedies. A Party may specifically a nd expressly waive in writing any condition or breach of this Agreement by another Pa rty, 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 another Party shall not be

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deemed to imply consent or waiver of the necessity of obtaining such consent for the same or similar acts in the future.

12.10 California Law; Venue. This Agreement shall be construed and en forced in accordance with the laws of the State of California, without reference to choice of law provisions. The exclusive venue for any disputes or legal actions shall be the Superior Court of California in and for the County of San Mateo or the US District Court, Northern California District.

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

12.12 Estoppel Certificates. A Party ma y, at any time during the Term of this Agreement, and from time to time, deliver written notice to another Party requ esting such Party to certify in writing that, to the knowledge of the certifying Party, (i) this Agreement is in full force and effect and a binding obligation of the Parties, (ii) this Agreement has not been amended or modified either orally or in writing, or if amended; identifying the amendments, (iii) the requesting Party is not in default in the performance of its ob ligations under this Agreement, or if in default, to describe therein the nature and amount of any such defaults, and (iv) any other information r easonably requested that relates to implementation of the Agreement. The requesting Party shall be responsible for all reasonable costs incurred by the Party from which such certification is requested and shall reimburse such costs within thirty (30) days of receiving the certifying Party’s request fo r reimbursement. The Party receiving a request hereunder shall execute and return such cer tificate or give a written, detailed response explaining why it will not do so within fourteen (14) days following the receipt thereof. The failure of either Party to provide the req uested certificate within such fourteen (14) day period shall constitute a confirmation that this Agreement is in full force and effect and no modification or default exists. The Director of Community Development, the Planning Director or the City Manager, or their authorized designee, shall have the right to execute any certificate requested by Developer hereunder. Ci ty acknowledges that a certificate hereunder may be relied upon by transferees and Mortgagees.

12.13 No Third Party Beneficiaries. City and Developer hereby renounc e the existence of any third party beneficiary to this Agreement and agree that nothin g contained herein shall be construed as giving any other person or entity third party beneficiary status.

12.14 Signatures. The individuals executing this Agreement represent and warrant that they have the right, power, legal capacity, and authority to enter into a nd to execute this Agreement on behalf of the respective legal entities of Developer and City.

12.15 Time. Time is of the essence of this Agreement and of each and every term and condition hereof.

12.16 Days. The word “ days” as used in this Agreement refers to calendar days unless specifically provided otherwise. In the event that any period t o perform an obligation or notice period under this Agreement starts or ends on a Saturday, Sunday, or state or national holiday, the applicable time period shall be extended to the next regular City business day.

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39 IN WITNESS WHEREOF, this Agreement has been entered into by and between Developer and City as of the day and year first above written.

CITY:

City of San Carlos,
a municipal corporation organized and existing
under the laws of the State of California
By:

Name:

Title:
[signature must be notarized]
APPROVED AS TO FORM:

By:

Name:

Title:

ATTEST:

By:

Name:

Title:
[Developer signatures begin on next page.]

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40 DEVELOPER:

THE SOBRATO FAMILY FOUNDATION,
a California nonprofit public benefit corporation
By:

Name: Lisa Sobrato Sonsini
Title: Secretary
[signature must be notarized]

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State of ) County of )
On , before me, , a notary public,
personally appeared , who proved to me on the basis of satisfa ctory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatu re(s) on the instrument the pe rson(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJUR Y under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the documen t to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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State of ) County of )
On , before me, , a notary public,
personally appeared , who proved to me on the basis of satisfa ctory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatu re(s) on the instrument the pe rson(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJUR Y under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the documen t to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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43 Exhibit A
Property Legal Description

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Order Number: NCS-1033730-SC
Page Number: 9

First American Title Insurance Company

LEGAL DESCRIPTION

Real property in the City of San Carlos, County of San Mateo, State of California, described as follows:

PARCEL ONE:

BEGINNING AT A POINT ON THE NORTHEASTERLY LINE OF THE COUNTY ROAD LEADING FROM SAN CARLOS TO REDWOOD CITY, DISTANT THEREON SOUTH 42° 22' 30" EAST 706.74 FEET FROM THE

MOST WESTERLY CORNER OF THAT TRACT OF LAND KNOWN AS SPEEDWAY ACRES CONVEYED TO ASA E. HULL FROM C. S. MORTON, ET AL., BY DEED DATED JUNE 16, 1924 AND RECORDED IN BOOK 128 AT PAGE 107 (23249A), OFFICIAL RECORDS OF SAN MATEO COUNTY THENCE ALONG THE NORTHEASTERLY LINE OF SAID COUNTY ROAD, SOUTH 42° 22' 30" EAST 206.41 FEET THENCE LEAVING THE LAST MENTIONED LINE, NORTH 48° 53' EAST 234.56 FEET TO THE SOUTHWESTERLY LINE OF THE LAND DESCRIBED AS PARCEL 2 IN THE DEED TO SOUTHERN PACIFIC RAILROAD COMPANY RECORDED JUNE 18, 1926 IN BOOK 243 AT PAGE 17 (62690A), OFFICIAL RECORDS OF SAN MATEO COUNTY THENCE ALONG THE LAST MENTIONED LINE, NORTH 42° 22' 30" WEST 206.41 FEET TO A POINT WHICH BEARS NORTH 48° 53' EAST FROM THE POINT OF BEGINNING; THENCE SOUTH 48° 53' WEST 234.56 FEET TO THE POINT OF BEGINNING.

PARCEL TWO:

BEGINNING AT A POINT ON THE NORTHEASTERLY LINE OF THE COUNTY ROAD LEADING FROM SAN CARLOS TO REDWOOD CITY, DISTANT THEREON SOUTH 42° 22' 30" EAST 913.16 FEET FROM THE

MOST WESTERLY CORNER OF THAT TRACT OF LAND KNOWN AS SPEEDWAY ACRES CONVEYED TO ASA E. HULL FROM C. B. MORTON, ET AL., BY DEED DATED JUNE 16, 1924 AND RECORDED IN BOOK 128 AT PAGE 107 (23249A), OFFICIAL RECORDS OF SAN MATEO COUNTY; THENCE FROM SAID POINT OF BEGINNING LEAVING THE NORTHEASTERLY LINE OF SAID COUNTY ROAD, NORTH 48° 43' EAST 234.56 FEET TO THE SOUTHWESTERLY LINE OF THE LAND DESCRIBED AS PARCEL 2 IN THE DEED TO SOUTHERN PACIFIC RAILROAD COMPANY RECORDED JUNE 18, 1926 IN BOOK 243 AT PAGE 17 (62690A), OFFICIAL RECORDS OF SAN MATEO COUNTY THENCE ALONG THE LAST MENTIONED LINE, SOUTH 42° 22' 30" EAST 56.68 FEET TO THE NORTHWESTERLY LINE OF COMMERCIAL WAY AS

ESTABLISHED BY DEED TO THE CITY OF SAN CARLOS, A MUNICIPAL CORPORATION, RECORDED OCTOBER 12, 1973 IN BOOK 6485 AT PAGE 501 (82827AG) OFFICIAL RECORDS OF SAN MATEO

COUNTY THENCE ALONG SAID NORTHWESTERLY LINE OF COMMERCIAL WAY AND THE SOUTHWESTERLY PROLONGATION THEREOF, SOUTH 48° 53' WEST 234.56 FEET TO THE

NORTHEASTERLY LINE OF SAID COUNTY ROAD THENCE ALONG THE LAST MENTIONED LINE, NORTH 42° 12' 30" WEST 56.68 FEET TO THE POINT OF BEGINNING.

PARCEL THREE:

BEING ALL OF PARCEL 2 AS DESCRIBED IN THE DEED FROM CALIFORNIA CONCRETE PRODUCTS AND ASA E. HULL TO SOUTHERN PACIFIC RAILROAD COMPANY RECORDED JUNE 18, 1926 IN VOLUME 243 OF OFFICIAL RECORDS AT PAGE 17 (243 O.R. 17); AND A PORTION OF PARCEL 2 AS DESCRIBED IN THE DEED FROM K.A. WINTER ET. AL. TO SOUTHERN PACIFIC RAILROAD COMPANY RECORDED JUNE 18, 1926 IN VOLUME 243 OF OFFICIAL RECORDS AT PAGE 12 (243 O.R. 12); BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID PARCEL 2 OF SAID 243 O.R. 17;

THENCE ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL NORTH 42°22'30" WEST 293.10 FEET TO THE MOST SOUTHERLY CORNER OF SAID PARCEL 2 OF SAID 243 O.R. 12;

THENCE ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL NORTH 42°22'30" WEST 56.70 FEET TO

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Order Number: NCS-1033730-SC
Page Number: 10

First American Title Insurance Company
THE BEGINNING OF A TANGENT CURVE TO THE LEFT HAVING A RADIUS OF 397.97 FEET;

THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 1°29'08" A DISTANCE OF 10.32 FEET TO THE SOUTHEASTERLY LINE OF THE LANDS AS DESCRIBED IN THE QUITCLAIM DEED FROM UNION PACIFIC RAILROAD COMPANY TO KELLOGG ET. AL. RECORDED MAY 31, 2002 IN DOCUMENT NUMBER 2002-106037, OFFICIAL RECORDS OF SAN MATEO COUNTY;

THENCE ALONG SAID SOUTHEASTERLY LINE NORTH 48°53'00" EAST 17.01 FEET TO A POINT ON THE NORTHEASTERLY LINE OF SAID PARCEL 2 OF SAID 243 O.R. 12; SAID POINT LYING A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 414.97 FEET; A RADIAL LINE TO SAID POINT BEARING NORTH 46°15'05" EAST;

THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 1°22'25" A DISTANCE OF 9.95 FEET;

THENCE TANGENT FROM SAID CURVE ALONG SAID NORTHEASTERLY LINE SOUTH 42°22'30" EAST

57.07 FEET TO THE MOST NORTHERLY CORNER OF SAID PARCEL 2 OF SAID 243 O.R. 17;

THENCE ALONG THE NORTHEASTERLY LINE OF SAID PARCEL SOUTH 42°22'30" EAST 293.10 FEET TO THE SOUTHEASTERLY CORNER OF SAID PARCEL;

THENCE ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL SOUTH 48°53'00" WEST 17.00 FEET TO THE POINT OF BEGINNING.

EXCEPTING THEREFROM ALL MINERALS AND ALL MINERAL RIGHTS OF EVERY KIND AND CHARACTER

NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UNDERLYING THE PROPERTY, INCLUDING,

WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, OIL AND GAS AND RIGHTS THERETO,

TOGETHER WITH THE SOLE, EXCLUSIVE AND PERPETUAL RIGHT TO EXPLORE FOR, REMOVE AND

DISPOSE OF SAID MINERALS BY ANY MEANS OR METHODS SUITABLE TO GRANTOR, ITS SUCCESSORS

AND ASSIGNS, BUT WITHOUT ENTERING UPON OR USING THE SURFACE OF THE PROPERTY, AND IN

SUCH MANNER AS NOT TO DAMAGE THE SURFACE OF THE PROPERTY, OR TO INTERFERE WITH THE

USE THEREOF BY GRANTEE, HER HEIRS AND ASSIGNS, AS RESERVED IN QUITCLAIM DEED RECORDED OCTOBER 26, 2007 AS INSTRUMENT NO. 2007-154663 OF OFFICIAL RECORDS.

PARCEL FOUR:

BEGINNING AT THE MOST SOUTHERLY CORNER OF THAT CERTAIN 20 ACRE TRACT DESCRIBED IN THE AGREEMENT BETWEEN ASA B. HULL AND I.H. WINTER ET AL, RECORDED NOVEMBER 24, 1925 IN BOOK 201 OF OFFICIAL RECORDS OF SAN MATEO COUNTY AT PAGE 290; THENCE FROM SAID POINT OF BEGINNING ALONG THE SOUTHEASTERLY LINE OF SAID 20 ACRE TRACT, NORTH 48°53' EAST 230.00 FEET; THENCE LEAVING SAID SOUTHEASTERLY LINE AND RUNNING ACROSS SAID 20 ACRE TRACT, NORTH 42° 22' 30" WEST 90.02 FEET AND SOUTH 48° 53' WEST 230.00 FEET TO A POINT ON THE NORTHEASTERLY LINE OF THE COUNTY ROAD LEADING FROM REDWOOD CITY TO CARLOS; THENCE ALONG SAID NORTHEASTERLY LINE OF SAID COUNTY ROAD, SOUTH 42° 22' 30" EAST 90.03 FEET TO THE POINT OF BEGINNING.

PARCEL FIVE:

BEGINNING AT A POINT ON THE NORTHEASTERLY LINE OF THAT CERTAIN COUNTY ROAD LEADING

FROM REDWOOD CITY TO SAN CARLOS, SAID POINT OF BEGINNING BEING DISTANT ALONG SAID NORTHEASTERLY LINE OF SAID COUNTY ROAD NORTH 42° 22’ 30” WEST 180.04 FEET FROM THE MOST SOUTHERLY CORNER OF THAT CERTAIN 20 ACRE TRACT DESCRIBED IN AGREEMENT BETWEEN ASA E. HULL AND K.A. WINTER, ET AL, SAID AGREEMENT BEING FILED FOR RECORD NOVEMBER 24, 1925 IN VOLUME 201 OF OFFICIAL RECORDS AT PAGE 290, RECORDS OF SAN MATEO COUNTY, CALIFORNIA; THENCE FROM SAID POINT OF BEGINNING ALONG SAID NORTHEASTERLY LINE OF SAID

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Order Number: NCS-1033730-SC
Page Number: 11

First American Title Insurance Company
COUNTY ROAD NORTH 42° 22’ 30” WEST 90.02 FEET TO A POINT WHERE SAID NORTHEASTERLY LINE OF SAID COUNTY ROAD IS INTERSECTED BY THE SOUTHEASTERLY LINE OF A 50 FOOT PRIVATE ROAD RUNNING THROUGH ABOVE DESCRIBED 20 ACRE TRACT; THENCE ALONG SAID SOUTHEASTERLY LINE OF SAID 50 FOOT ROAD NORTH 48° 53’ EAST 230 FEET; THENCE LEAVING SAID SOUTHEASTERLY LINE OF SAID 50 FOOT PRIVATE ROAD AND RUNNING SOUTH 42° 22’ 30” EAST 90.02 FEET AND SOUTH 48° 53’ WEST 230.0 FEET TO THE POINT OF BEGINNING.

PARCEL SIX:

BEGINNING AT A POINT ON THE NORTHEASTERLY LINE OF THE OLD COUNTY ROAD FROM REDWOOD

CITY TO SAN CARLOS (SAID ROAD LYING NORTHEASTERLY OF THE TRACKS OF THE SOUTHERN

PACIFIC RAILROAD), SAID POINT OF BEGINNING BEING DISTANT ALONG SAID NORTHEASTERLY LINE OF SAID ROAD, NORTH 42° 22’ 30” WEST 90.02 FEET FROM THE MOST SOUTHERLY CORNER OF THAT CERTAIN 20 ACRE TRACT DESCRIBED IN AGREEMENT BETWEEN ASA E. HULL AND K.A. WINTER, ET AL, RECORDED NOVEMBER 24, 1925 IN VOLUME 201 OF OFFICIAL RECORDS AT PAGE 290, RECORDS OF SAN MATEO COUNTY, CALIFORNIA; THENCE FROM SAID POINT OF BEGINNING ALONG SAID NORTHEASTERLY LINE OF SAID COUNTY ROAD, NORTH 42°22’ 30” WEST 90.02 FEET; THENCE NORTH 48° 53’ EAST 230.0 FEET; THENCE SOUTH 42°22’ 30” EAST 90.02 FEET; THENCE SOUTH 48°53’ WEST 230.0 FEET TO THE POINT OF BEGINNING.

PARCEL SEVEN:

A PARCEL OF LAND SITUATE IN THE CITY OF SAN CARLOS, COUNTY OF SAN MATEO, STATE OF CALIFORNIA, BEING PARCEL THREE AS DESCRIBED IN A DEED RECORDED NOVEMBER 26, 1991 IN DOCUMENT NUMBER 91155625 OFFICIAL RECORDS OF SAN MATEO COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE SOUTHEASTERLY LINE OF THAT CERTAIN 20 ACRES TRACT DESCRIBED IN THE AGREEMENT BETWEEN ASA E. HULL AND K.A. WINTER, ET AL, RECORDED NOVEMBER 24, 1925 IN BOOK 201 OFFICIAL RECORDS OF SAN MATEO COUNTY, PAGE 290, SAID POINT OF BEGINNING BEING DISTANT ALONG SAID SOUTHEASTERLY LINE NORTH 48° 53’ EAST 230.0 FEET FROM THE MOST SOUTHERLY CORNER OF SAID 20 ACRE TRACT; THENCE FROM SAID POINT OF BEGINNING ALONG SAID SOUTHEASTERLY LINE NORTH 48° 53’ EAST, 100.00 FEET, THENCE LEAVING SAID SOUTHEASTERLY LINE AND RUNNING ACROSS SAID 20 ACRE TRACT NORTH 41° 07’ WEST, 270.00 FEET OF THE SOUTHEASTERLY LINE OF A 50 FOOT PRIVATE ROAD RUNNING THROUGH THE ABOVE DESCRIBED 20 ACRE TRACT; THENCE ALONG SAID SOUTHEASTERLY LINE OF SAID 50 FOOT PRIVATE ROAD SOUTH 48° 53’ WEST, 105.93 FEET; THENCE LEAVING SAID SOUTHEASTERLY LINE OF SAID 50 FOOT ROAD SOUTH 42° 22’ 30” EAST, 270.06 FEET TO THE POINT OF BEGINNING.

EXCEPTING THEREFROM THAT PORTION OF THE ABOVE DESCRIBED PROPERTY WHICH LIES SOUTHEASTERLY OF A LINE PARALLEL TO AND 90.02 FEET MEASURED PERPENDICULARLY NORTHWESTERLY OF THE ABOVE SAID SOUTHEASTERLY LINE OF SAID 20 ACRE TRACT AND NORTHEASTERLY OF THE COURSE CALLED SOUTH 42° 22’ 30” EAST, 57.074 FEET AND THE NORTHWESTERLY EXTENSION THEREOF, AS SAID COURSE IS DESCRIBED IN PARCEL #2 OF THE ABOVE SAID DEED RECORDED JUNE 18, 1926 IN BOOK 243 OFFICIAL RECORDS OF SAN MATEO COUNTY PAGE 12.

ALSO EXCEPTING THEREFROM, THAT PORTION THEREOF LYING WITHIN THE PARCEL DESCRIBED IN

THE QUITCLAIM DEED FROM UNION PACIFIC RAILROAD COMPANY, A DELAWARE CORPORATION TO WANDA MAE ADAMS RECORDED OCTOBER 26, 2007 AS INSTRUMENT NO. 2007-154663 OF OFFICIAL RECORDS.

For reference purposes only:

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Order Number: NCS-1033730-SC
Page Number: 12

First American Title Insurance Company
APN: 046-182-100 (affects Parcel One);
046-182-110 (affects Parcel Two);
046-182-150 (affects Parcel Three);
046-135-030 (affects Parcel Four);
046-135-010 (affects Parcel Five);
046-135-020 (affects Parcel Six);
046-135-040 (affects portion of Parcel Seven);
046-134-050 (affects portion of Parcel Seven);
046-134-060 (affects portion of Parcel Seven);
and 046-133-160 (affects portion of Parcel Seven)

JPN:
046-018-182-04A
046-018-182-05A
046-013-135-03A
046-013-135-01A
046-013-135-02A
046-013-134-03A
046-013-133-016A

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44 Exhibit B
Impact Fees
Commercial Linkage fee
(Chapter 8.51 of the San Carlos Municipal Code)
$6,634,785.00
Sewer fees (connection and capacity)
(Chapter 13.04 of the San Carlos Municipal Code)
$2,893,081.89
Traffic impact fee
(Chapter 8.50 of the San Carlos Municipal Code)
$1,829,614.58
Child Care impact fee
(Chapter 8.52 of the San Carlos Municipal Code)
$1,621,543.00
Total City impact fees $12,979,024.47


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45 Exhibit C
Initial Shell Condition

Exhibit | Landlord Work | Initial Shell Condition
Approx. SF: 1,500 The Exhibit describes the Premises Delivery obligations of the landlord.

SCOPE CATEGORY Details
Flooring
Floor Type “AS-IS” Post tensioned concrete slab
Doors & Windows
Storefront Windows &
Doors
- One pair of storefront doors
- Any modifications to base building storefront require Landlord’s approval and are Tenant’s responsibility.
- Reke ying of locks is the responsibility of Tenant.

Finishes
Demising Wall
- Demising walls cons isting of 6" metal or wood studs, batt insulation and 5/8" Type X
- Drywall from floor to deck.

Perimeter Walls &
Roof
- Insulation to be in stalled on the interior side of all perimeter walls from floor to deck
Fire Suppression
Fire/Life Safety
- Fire suppression, life safety systems and fire protection equipment as required by local fire department code for the shelf space.
- Tenant is required to modify systems lo accommodate its design and as required per local jurisdictional requirements.

Plumbing
Water Distribution
- One (1) 1" domestic cold-water supply line with shut off valve stubbed into the space.

Tenant is responsible for all connections, equipment and devices as required by Tenant design or local jurisdiction requirements.

Sanitary Sewer
- One (1) 4' sanitary sewer line to service the space.

Tenant is responsible for all connections, equipment and devices as required by Tenant design or local jurisdiction codes.

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46 #227199473_v1
HVAC
HVAC
- HVAC duct chase distribution into space based on standard retail use. All distribution within space by tenant. Any extraordinary requirements necessitated because of Tenant’s use of the Premises will be at the expense of Tenant. Roof top space provided for tenant’s equipment
Electrical Signs
- One (1) J-box for signage lo cated at the main entrance lo space.

Tenant is responsible for all connections, equipment and devices as required by Tenant design or local jurisdiction codes, including exit signs.

Medium-Voltage
Electrical Distribution
- Electrical service provided at main electrical room to be 400 Amps (120/208V, 3-phase, 4-wire) Distribution to space by tenant
- Lighting and exit signs for t he space including new restroom that meet the local jurisdiction codes.

Communications
Tenant will be required upon the “Delivery of the Premises” to switch all utility account(s) responsibility and all billing information into their name.

Telephone System
- 2” telephone/data conduit to space with pull string. - Tenant is responsible for a ll connections, equipment and devices as required by Tenant design or local jurisdiction codes and for provisioning telephone and data service.

Water Utility
- Landlord to provide the wat er submeter (including capacity charges) with a 5/8" restricted submeter size. Any upsizing of the submeter is the responsibility of the Tenant (in no event shall exceed a 1” submeter) and shall be reimbursed to the Landlord.
- Tenant is responsible for act ivation of the water submeter account with the local utility.
- Tenant is responsible for a ll plumbing distribution and equipment.

Electric Meter
- LL provided meter socket.
- Tenant is responsible for act ivation their account in their name with the local utility company.

Parking Spaces
- LL will designate four (4) parking spaces on the surface parking lot for the exclusive customer use during Tenant’s business hours. Tenant and Tenant employees may not use these
spaces.

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47 #227199473_v1
Notation:
- Tenant is responsible for all electrical distribution and equipment.

All work other than that set forth above will be at Tenant’s expense and subject to Landlord's written prior approval.

Landlord will neither supply nor install: specially ceilings, restrooms. trade fixtures; additional lighting fixtures and built-in lighting; special finishes; acoustic treatment; plastering; signs: locker. show window floors and backs; curtain walls and interior partitions (except as set forth above); special ceilings; restrooms or special toilet rooms; electrical, plumbing and ventilation connections to trade fixtures. or required for special uses and trade processes; bulletproof glass. bank vaults, remote tellers, or any such custom installations.

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48 Exhibit D
[Form of ] POPA Easement

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

City of San Carlos
600 Elm Street
San Carlos, California 94070
Attention: City Clerk
Record for the Benefit of
The City of San Carlos
Pursuant to Government Code
Section 27383

Space Above Reserved for Recorder’s Use Only
[FORM OF] PASEO PRIVATELY OWNED PUBLICLY ACCESSIBLE OPEN SPACE

EASEMENT AND MAINTENANCE AGREEMENT
This Paseo Privately Owned Publicly Accessible Open Space Easement and Maintenance Agreement (“Easement POPA Agreement”) is made and entered into on this ____ day of , ( “ Easement POPA Agreement Effective Date”) by and between THE SOBRATO FAMILY FOUNDATION, a California nonprofit public benefit corporation (“DeveloperOwner”), and the CITY OF SAN CARLOS, a charter city and California munic ipal corporation (“City”) (together, the “Parties”).

R E C I T A L S
A. Developer Owner is the current fee owner of that certain real property consisti ng of approximately 3.4 acres locat ed within the City of San Carlo s, County of San Mateo, State of California, designated as APNs 046-133-160, 046-134-050, 046-134-060, 046-135-010, 046-135- 020, 046-135-030, 046-138-040, 046-182-100, 046-182-110 and 046 -182-150 and legally described in Exhibit “A”, attached hereto and incorporated herein by reference (the “Property”).

B. The Property is being developed as a mixed-use and R&D/life sci ences development project consisting of approximately 339,170 gross s quare feet of office, R&D and life sciences uses in two buildings, two levels of below-grade parking and a front plaza and central courtyard (the “Project”).

C. On [_________], the City Council of the City of San Carlos adopted Ordinance No. [_________], approving a Development Agreement by and between C ity and Developer Owner

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49 #227199473_v1
(“Development Agreement”) and issued several other approvals id entified in the Development Agreement (“Project Approvals”), subject to certain conditions of approval (“Conditions”).

D. E. The Project Approvals contemplate, among other things, that the Developer Owner will designate, design and improve a an approximately 5,000 square foot privately owned publicly accessible privately owned (“POPA”) central outdoor plaza (the “Front Plaza”) containing adjacent to a restaurant/coffee shop or other permitted use allowed under the Development Agreement (the “Restaurant/Coffee Shop”) w ithin the Property in the area legally described and shown in described in Exhibit “B.1”, attached hereto and incorporated herein by reference (“Front Plaza Easement Area”).

E. The Project Approvals also contemplate that the Owner will designate, design and improve an approximately 12,000 square foot POPA outdoor courtyard centrally located between the buildings (the “Courtyard”) containing outdoor amenities for the future tenant and the public within the Property in the area legally described and show in E xhibit “B.2”, attached hereto and incorporated herein by reference (“ Courtyard Easement Area”). The Front Plaza Easement Area and Courtyard Easement Area are referred to herein as, collectively, the “Easement Areas.” F. City and Developer Owner now desire that Developer Owner grant to City an easement easements for use and enjoyment of the privately owned Easement Area Areas as publicly accessible space and provide for the maintenance of the Easement Area Areas as set forth below.

POPA EASEMENT AGREEMENT
NOW, THEREFORE, the Parties hereby incorporate the above recitals by this reference and agree as follows:

1. Grant of Front Plaza Easement and Courtyard Easement. For valuable consideration, including the benefits and rights conferred upon Developer Owner under the Project Approvals and subject to the terms of this POPA Agreement , Developer Owner hereby grants and dedicates to the City a non-exclusive easement for use and enjoyment by t he general public (“Easement”) on, over and across that certain real property located in the Front Plaza Easement Area, as described and shown on Exhibit “B ”. This grant of Easement conveys .1” (“Front Plaza Easement”) and the Courtyard Ease ment Area, as described and sh own on Exhibit “B.2” (“Courtyard Easement”). These grants of Front Plaza Easement and Courtyard Easement convey no rights affecting the use of Developer’s Owner’s lands that are not included in the Easement Area Areas and Developer Owner reserves the right to lands outside the Easement Area Areas in any lawful manner.

2. Use and Closure. The public’s right to use the Easement Area Areas is limited to the longer of daylight hours (sunrise to sunset) or , for the Front Plaza Easement, the hours that the Restaurant/Coffee Shop is open to the public. The Easement Area Areas may be used by the general public for informal recreational uses, which may includ e lawn areas, pathways, planted areas, benches, tables, chairs, common areas, green space and the like. The Easement Area Areas shall be open to the public, at minimum, from sunrise to sunset , 7 days a week, except for closures permitted in Section 5.

Formatted: List Paragraph,
Justified, Level 4, Space
Before: 12 pt, Numbered +
Level: 1 + Numbering Style:

A, B, C, … + Start at: 1 +
Alignment: Left + Aligned at:

0.5" + Tab after: 1" + Indent
at: 0", Tab stops: 0.5", Left

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50 #227199473_v1

3. Maintenance. Developer Owner covenants and agrees that it shall maintain, repair and replace, or cause to be maintaine d, repaired and replaced, the Easement AreaAreas, and all improvements, including lighting, hardscaping and landscaping, located thereon, in first-class condition and repair and in compliance with the Maintenance Sta ndards (defined below).

Developer’s Owner’s compliance with the Maintenance Standards shall be judged by a comparative standard with the custom and practice generally app licable to comparable first-class passive recreational areas locat ed within San Mateo County. To accomplish such maintenance, Developer Owner shall either staff or contract with and hire licensed and quali fied personnel to perform such maintenance work, including the provision of labor , equipment, materials, support facilities, and any and all other items necessary to comply with the requirements of this Section 3.

All maintenance work shall conform to all applicable Federal an d State Occupational Safety and Health Act standards and regulations for the performance of mai ntenance. The following standards (“Maintenance Standard s”) shall be complied with by Developer Owner and its maintenance staff, contractors and subcontractors:
a. Maintain the surface of all pedestrian areas level, smooth and evenly covered with the type of surfacing material originally installed thereon or such substitute therefor as shall be in all respects equal thereto or better in quality, appearance and durability; b. Remove all papers, debris, filth and refuse, and sweep, wash down and/or clean all hard surfaces, including brick , metal, concrete, glass, wood an d other permanent poles, walls or structural members as required;
c. Maintain such appropriate entranc e, exit and directional signs, markers and lights as shall be reasonably required;
d. Clean lighting fixtures and re-lamp and/or re-ballast as needed; e. Maintain, repair and replace and keep in first-class condition all benches, outdoor dining furniture, planters, trash containers, and other exterior elements, if any; f. Maintain, repair and replace all drinking fountains and associated plumbing; g. Provide adequate security lighting in all areas, and maintain, repair and replace all security and decorative light fixtures and associated wiring systems; h. Pay the electrical expense of operating the lighting and irriga tion controller, upon the direct receipt of invoices for electrical service from Pacific Gas and Electric; i. Maintain, repair and replace all surface and storm lateral drainage systems; j. Promptly remove any graffiti on or about the Easement AreaAreas; k. Perform landscape maintenance inc luding watering/irrigation, fe rtilization, pruning, trimming, shaping, and rep lacement, as needed, of all trees, shrubs, grass, and other plants or plant materials, weeding of all plants, planter s and other planted areas, staking for support of plants as necessary, and clearance, clea ning and proper disposal of all cuttings, weeds, leaves and other debris; and

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51 #227199473_v1
l. Perform other maintenance as required by law.

4. Default and Remedies. Breach of, failure, or delay by Developer Owner to perform any term or condition of this Easement POPA Agreement shall constitute a default. In the event of any default of any term, condition, or obligation of this Easement POPA Agreement, City shall give the Developer Owner notice in writing specifying the nature of the alleged default and the manner in which such default may be satisfactorily cured (“Noti ce of Breach”). The defaulting party shall cure the default within 30 days following receipt o f 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 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, th en 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 City shall take no furthe r action to exercise any remed ies available hereunder. If the alleged failure is not cured, then a default shall exist under this Easement POPA Agreement and the City may bring any action at law or in equity to enforce th e terms of this Easement POPA Agreement. In addition, if the default is the failure to meet the Maintenance Standards set forth in Section 3 above, the City, in addition to its other rights and remedies, may enter and perform or cause its agents and contractors to enter the Easement Area Areas and perform the required maintenance and City costs shall be reimbursed by Developer Owner within thirty (30) days of billing by City or City may record a lien or place the amount owed as a special assessment against the Property in the amount of the work performed.

5. Temporary Closure for Maintenance and Events . Developer Owner reserves the right to temporarily exclude the public from or limit public access to and or all or portions of the Easement Area Areas if necessary to address safety concerns and perform maintenance and repairs to improvements within or immediately adjacent to the Front Plaza and to allow . In addition, the Owner reserves the right to exclude the public from all or port ions of the Easement Areas a reasonable limited number of private events times per year for events or exclusive use of the Easement Areas by tenants of the Project ( each individually a “Tenant Event” and collectively, “Developer Tenant Events”), not to exceed four (4) Developer Events per yearTenant Events per y e a r f o r t h e F r o n t P l a z a E a s e m e n t A r e a , a n d n o t t o e x c e e d t w o (2) times per month for the Courtyard Easement Area. Each such Tenant Event may not last more than 24 hours (although two Tenant Events could allow a total of 48 hours), including any s et up or tear down/clean-up activities. In addition to the Tenant Events, non-profit or co mmunity organizations may hold private events on the Front Plaza Easement Area and/or Courtyar d Easement Area up to six (6) times per year (each no more tha n 24 hours per event including set up/clean up) under a typical form of event agreement (i.e. event details, cleaning fee, insurance and liability protection for the Owner, organization and City), each to be approved by the Owner , Tenant and City Community Development Director. During ev ents held by non-profit or comm unity organizations, event attendees and event volunteers and staff shall be permitted to park in the surface parking lot at no charge. In the event of planned maintenance or a Tenant Event during which the Front Plaza Easement Area and/or Courtyard Easement Area will be closed, Owner shall post signs within the Front Plaza Easement Area and/or Courtyard Easement Area at lea st forty-eight (48) hours prior to the closure for a Tenant Event or for planned maintenance. In the case of an emergency or repairs requiring attention with in forty-eight (48) hours, Owne r shall post signs to inform the public of the closure and secure the area.

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6. Term. This Easement POPA Agreement will commence immediately upon the Effective Date and will continue in perpetui ty until and unless terminate d by an agreement executed, acknowledged and recorded by the City or terminated according to the provisions of Section 7 of this Easement POPA Agreement.

7. Termination. This Easement POPA Agreement shall terminate in the event that (i) the Project is demolished or (ii) the Project undergoes a substantial change that is not already permitted under the Project Approv als and public access to the Easement Areas cannot be maintained by modifying the boundaries of the Front PlazaEasement Areas. Notwithstanding the foregoing, this Easement POPA Agreement shall not terminate in the event of demolition and re construction of any building or buildings in the Project following a casualty. This POPA Agreement shall terminate with respect to only th e Front Plaza Easement or only the Courtyard Easement Area if the Project undergoes a substantial change that is not already permitted under the Project Approvals and public access to the Front Plaza Easement Area or the Courtyard Easement Area cannot be maintained by modifying the boundaries of the Front P laza Easement or the Courtyard Easement.

8. Insurance. Developer Owner shall obtain and maintain insurance against claims for injuries to persons or damage to property which may arise out o f any manner including (a) any injury to or death of any person or damage to or destruction of any property occurring in, on or about the Easement AreaAreas, or any part thereof, whether such injury, death, damage or destruction is caused by the person or property of the DeveloperOwner, representatives, employees or subcontractors. The insurance carrier is required to mainta in an A.M. Best rating of not less than “A-:VII”.

a. Coverages and Limits. DeveloperOwner, at its sole expense, shall maintain the types of coverages and minimum limits indicated below, unless o therwise approved by City in writing. These minimum amounts of coverage will not co nstitute any limitations or cap on Developer's Owner's indemnification obligations under this Easement POPA Agreement.

(i) Commercial General Liability Insurance. Developer Owner shall maintain occurrence based coverage with limits not less than $2,000,000 per occurrence. If the submitted policies contain aggregate limits, such limits will apply separately to the Services, project, or locati on that is the subject of this Easement POPA Agreement or the aggregate will be twice the required per occur rence limit. The Commercial General Liability insurance policy shall be endorsed to name the City, its officers, agents, employees and volunteers as additional in sureds, and to state that the insurance will be primary and not contribute with any insurance or self- insurance maintained by the City.

(ii) Business Automobile Liability Insurance. Developer Owner shall maintain coverage with limits not less than $1,000,000 per each accident for owned, hired and non-owned automobiles.

(iii) Workers' Compensation and Employer's Liability Insurance. Developer Owner shall maintain coverage as required by the California Labor Cod e and

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Employer’s Liability limits with limits not less than $1,000,00 0 per each accident for bodily injury or disease. The Worker’s Compensation policy shall contain an endorsement stating that the insurer waives any right to subrog ation against the City, its officers, agents, employees, and volunteers.

b. Notice of Cancellation. The Developer's Owner's obligations under this Section shall survive the termination of this Easement POPA Agreement and will not be canceled without Developer Owner providing thirty (30) days prior written notice to City sent pursuant to the Notice provisions of this Easement POPA Agreement.

c. Providing Certificates of Insurance and Endorsements. Prior to City’s execution of this Easement POPA Agreement, Developer Owner shall provide to City certificates of insurance and above-referenced endorsements sufficient to satis faction of City’s Risk Manager. In no event shall Developer Owner commence any work or provide any Services under this Easement POPA Agreement until certificates o f insurance and endorsements have been accepted by City’s Risk Manager.

d. Failure to Maintain Coverage. If Developer Owner fails to comply with these insurance requirements, then Ci ty will have the option to decla re Developer Owner in default.

e. Submission of Insurance Policies . City reserves the right to r equire, at any time, complete copies of any or all required insurance policies and endorsements.

9. Indemnification. Developer Owner agrees to indemnify, defend, and hold harmless the City, and each of its councilmembers, commissioners, officers, employees, representatives, agents, and contractors (“Indemnified Parties”), from and against any a nd all demands, claims, legal or administrative proceedings, losses, costs, penalties, fines, liens, judgments, damages and liabilities of any kind (“Claims”), arising in any manner out of (a) any in jury to or death of any person or damage to or destruction of any property occurring in the Front Plaza Easement Area or the Courtyard Easement Area, whether such inju ry, death, damage or destructio n is caused by the person or property of the DeveloperOwner, its officers, directors, m embers, employees, agents, consultants, contractors or subcontractors (collectively, “Agents”), members of the public, Agent’s invitees, guests or visitors (collectively, “Invitees”), or third persons, relating to any use or activity under this Easement POPA Agreement, (b) the use of the Easement Area Areas or any activities conducted thereon by the DeveloperOwner, its Agents or Invitees, or third persons, relating to any use or activity under this Easement POPA Agreement, (c) any release or discharge, or threatened release or discharge, of any Hazardous Material caused or allow ed by the DeveloperOwner, its Agents or Invitees, on, in, under or about the Front Plaza Easement Area or the Courtyard Easement Area, any improvements or into the environment, or (d) any failure by the Developer Owner to faithfully observe or perform any terms, covenants or conditions of this Easement POPA Agreement; except to the extent of Claims resulting from the negligence or willful misconduct of any Indemnified Parties. The for egoing indemnity shall include, without limitation, reasonable attorneys', experts’ and consulta nts' fees and costs, investiga tion and remediation costs and all other reasonable costs and expenses incurred by the Indemnified Parties. The Developer's Owner's obligations under this Section s hall survive the termination of this Easement POPA Agreement.

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54 #227199473_v1
Indemnified Parties shall have no liability to the Developer Owner or any of the Developer’s Owner’s Agents or Invitees as the result of damage or loss to property or injury or death to any such person arising on the Front Plaza Easement Area or the Courtyard Easement Area or out of the Developer’s Owner’s use of the Front Plaza Easement Area or the Courtyard Easement Area, except to the extent caused by the negligence or willful misconduct of any Indemnified Parties.

10. Miscellaneous Provisions.
a. Entire Agreement /Integration, Amendments, Recitals . T h i s Easement POPA Agreement contains the entire understanding and agreement of the Parties. This Easement POPA Agreement may be altered, amended or modified only by an instrument in writing, executed by the City and DeveloperOwner, or fee title owner of the Property. All recitals set forth above are incorporated by reference into this Easement Agreement POPA Agreement. The Parties acknowledg e that this Agreement has bee n executed initially pursuant to the terms of the Deve lopment Agreement, but the Dev elopment Agreement will terminate and have no further force or effect as to the terms of this POPA Agreement upon its execution. In the event of any inconsistency between the Development Agreement and this POPA Agreement, upon execution, this POPA Agreement controls. b. Counterparts. This Easement POPA Agreement may be executed in one or more counterparts, each of which shall, for all purposes, be deemed an original and all such counterparts, taken together, shall constitute one and the same instrument. c. Recitals; Attachments. The Rec itals above and Attachments atta ched hereto are incorporated herein by reference.
d. Binding on Successors and Assigns. Developer’s Owner’s Property is to be burdened by, and City is to be benefited by, the provisions of this Easement POPA Agreement pertaining to the grant of Easement, and such Property shall be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied, and i mproved subject to the foregoing easements, limitations, restrictions, obligations and conditions. All provisions of this Easement POPA Agreement shall run with the land and be binding upon all parties having or acquiring any right, title, or interest in the Easeme nt AreaAreas, and shall be binding upon and inure to the benefit of the City and its and their successors and assigns. e. Partial Invalidity. If any term or provision of this Easement POPA Agreement or the application of it to any person or circumstance shall to an y extent be invalid or unenforceable, the remainder of this Easement POPA Agreement or the application of such term or provision to persons or circumstances, other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Easement POPA Agreement shall be valid and shall be enforced to the extent permitted by law. f. Not a Public Dedication. Except as expressly provided herein, nothing herein contained shall be deemed to be a gift or dedication of the Eas ement Area Areas or any other portion of Developer’s Owner’s Property to the general public or for any public purpose whatsoever, it being the intention of the parties that this Easement POPA Agreement shall be limited to and for the purposes herein expressed.

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55 #227199473_v1

11. Exhibits; Attachments. The foll owing attachments are attached to this Easement POPA Agreement and are hereby incorporated herein by this reference for all purposes as if set forth herein in full:

Exhibit A Descript ion of Property
Exhibit B.1 Legal Description of Front Plaza Easement Area Exhibit B.2 Legal Descri ption of the Courtyard Easement Area

12. Attorneys’ Fees. Should any legal action be brought by any par ty with respect to this Easement POPA Agreement, the prevailing party shall be entitled to recover fr om the non- prevailing party its reasonable attorney’s fees and such other costs as may be found by the court.

13. Joint and Several Liability. If more than one person or entity is included in the definition of Developer or Maintenance Owner, the liability of all such persons hereunder shall be joint and several.

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

CITY
CITY OF SAN CARLOS, a municipal corporation
By: __________________________________
[Signature must be notarized]
ATTEST:

By: ____________________________

APPROVED AS TO FORM:

B
y: ____________________________

DEVELOPE
ROWNER

THE SOBRATO FAMILY FOUNDATION,

a California nonprofit public benefit corporation

By: _______________________________
Name: _____________

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56 #227199473_v1
Its: ______________
[Signature must be notarized]

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57 Exhibit E

When Recorded, Mail to:

City of San Carlos
600 Elm Street
San Carlos, California 94070
Attn: City Clerk

This Instrument Benefits City Only.

No Fee Required. Gov. C. 27383

SPACE ABOVE THIS LINE FOR RECORDER’S USE
APN: ____

PUBLIC PARKING AGREEMENT

This Public Parking Agreement (“Agreement”) is made and execute d as of ___________ (“Effective Date”) by and between _______ (“Owner”) and the CIT Y OF SAN CARLOS, a California municipal corporation (“City”). Owner and City are referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Owner is the current fee owner of that certain real p roperty consisting of approximately 3.4 acres located w ithin the City of San Carlos, County of San Mateo, State of California, designated as APNs 046-133-160, 046-134-050, 046-134-060, 046-135-010, 046-135- 020, 046-135-030, 046-138-040, 046-182-100, 046-182-110 and 046 -182-150 and legally described in Exhibit “A”, attached hereto and incorporated herein by reference (the “Property”).

WHEREAS, the Property is being de veloped as a mixed-use and R&D /life sciences development project consisting of approximately 339,170 gross s quare feet of office, R&D and life sciences uses in two buildings, two levels of below-grade parking and a front plaza and central courtyard (the “Project”).

WHEREAS, on [_________], the City Council of the City of San Ca rlos adopted Ordinance No. [_________], approving a Development Agreement by and between City and Owner (“Development Agreement”) and issued several other approv als identified in the Development Agreement (“Projec t Approvals”), subject to certain conditions of approval (“Conditions”).

WHEREAS, the Development Agreement requires the Owner to provid e privately owned, publicly accessible open space within the Project and there will be a retail tenant that will be open to the public pursuant to a Priva tely Owned Publicly Accessible Open Space Easement and Maintenance Agreement (“POPA Agr eement”). The public will need the right to park in the Project to enjoy the privately ow ned, publicly accessible open space and to visit the retail tenant in the Project.

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58 WHEREAS, the Development Agreemen t requires Owner and City to e xecute a parking agreement under which Owner will share the Project’s commercial parking with the public by offering nightly and weekend public parking in the surface parking lot.

WHEREAS, the Parties desire to execute and record this Agreemen t to make the Project’s commercial parking available to the public upon the terms and c onditions stated below to satisfy the requirements of the Development Agreement.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Parties hereby agree as follows:

1. Parking Terms and Conditions.

1.1. Public Use of Surface Parking. The surface parking lot, together with those areas necessary for ingress and egress to the surface parking l ot as more particularly described in Exhibit B (collectively, the “Public Parking Area”), shall be available for use by the general public during the Hours of Public Use (as said term is defined below). The Public Parking Area shall include one dual head electric vehicl e charging hub to provide two (2) charging stations and Owner shall designate two (2) par king spaces for vehicles using the charging stations. Owner may modify the Public Parking Area from time to time, in its sole discretion, upon providing reasonable advance notic e to City of such modifications, provided however, that nothing herein limits the Owner’s obligation to comply with the requirements to obtain building permits, and/or City approval in its regulatory capacity of the modifications, if applicable.

1.2. Hours of Public Use. The Public Parking Area shall be open to the general public Monday through Friday fro m 6:00 p.m. to 11:00 p.m.; and Saturday, Sunday, and Federal holidays from 7:00 a.m. to 11:00 p.m. and during such other hours that Owner and City have agreed to grant a non-profit or community organization the right to hold an event in the courtyard in the Project pursuant to the POPA Agreement (collectively the “Hours of Public Use”). At all other times, Owner shall have exclusive control over the Public Parking Area for the exclusive use of the Owner, Owner’s tenant s, and the guests, licensees, employees, agents, servants and representatives of Owner and Owner’s tenants.

Owner shall post multiple conspicuous signs, as approved by the City, in the Public Parking Area to inform the public of the Hours of Public Use.

1.3. Parking Rates. Owner shall make the Public P arking Area available at no cost to the public. Owner shall be free to establish parking rates for the other parking areas in the Project in its sole and ab solute discretion, and Owner s hall have the right to install any access control and fee collection mechanisms it deems necessary or prudent to restrict ingress and egress to and from such other parking areas.

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59 1.4. Independent Parking Management; Security. In its sole discretion, Owner may contract with, or grant a c oncession to, third-party entiti es to staff, operate, and/or provide security in the Public Parking Area and the other parking areas of the Project.

2. Maintenance of Public Parking Area. During the term of this Ag reement, Owner shall maintain the Public Parking Area in good condition. All Public Parking Area improvements shall be repaired or replaced with materials, apparatus and facilities of at least equal quality of the materials, apparatus and facilities at initial construction of the Public Parking Area. Owner may temporarily limit or close the Public Parking Area to perform maintenance, repair and replacement activities.

3. Term; Termination. The term of this Agreement shall commence on the Effective Date and shall automatically terminate on the date at which the Property is no longer operating as the Project as defined above. Owner’s obligation to make the Public Parking Area available to the public under this Agreement shall commence upon City’s issuance of a final certificate of occupancy for the South Building.

4. Insurance. During the term of this Agreement, Owner shall maint ain Commercial General Liability Insu rance coverage with a combined single lim it of at least $_,000,000 per occurrence/aggregate. Owner shall furnish City with certificates of insurance evidencing that City is included as an additional insured on the Commercial General Liability policy [to be completed prior to execution in consultation with the Parties’ risk management].

5. Mortgagee Protection. No violatio n or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of t rust or other financing or security instrument; provided, however, that any successor of Owner to t he Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, of this Agreement whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. In the event of a default on the part of Owner hereunder, City shall give notice to any beneficiary of a deed of trust or mortgage whose address has been furnished to City, and City shall offer such beneficiary or mortgagee a reasonable opp ortunity to cure the default, including obtaining possession of the Property by power of sale or a judicial foreclosure, if the beneficiary has such authority and such a remedy is necessary to effect a cure.

6. Estoppel Certificates. Any party to this Agreement shall, promptly upon the request of any other party, execute, acknowledge and deliver to or for the benefit of any other party, at any time, from time to time, and at the expense of the party, reque sting a certificate as herein below described, promptly upon request, its certificate certifying (l ) that this Agreement is unmodified and in full force and effect (or, if there have been modifications, that this Agreement is in full force and effect, as modified, and stat ing the modifications), (2) wh ether there are then existing any charges, offsets or defenses against .the enforcement of any ag reement, covenant or condition hereof on the part of the party requesting the certificate to b e performed or observed (and, if so, specifying the same), (3) whether there are then existing any d efaults on the part of the parry requesting the certificate known to the parry delivering the ce rtificate in the performance or observance of any agreement, covenant or condition hereof to be performed or observed and

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60 whether any notice has been given of any default which has not been cured (and, if so, specifying the same), and (4) any other matters reasonably requested.

7. Indemnification. Owner shall be solely liable for the operation , upkeep and maintenance of the Public Parking Area and all other parking ar eas in the Project. Owner, to the fullest extent permitted by law, shall indemnify, defend, and h old harmless the City, its officers, agents, and employees from any and all liabilities, claims, dem ands, damages, or costs resulting from or growing out of such Owner’s acts or omissions related t o the operation, upkeep and maintenance of the Public Parking Area and other parking areas in the Project, except to the extent that any such liabilities are the result of the gross negligenc e or willful misconduct of City, its officers, agents, or employees. The Owner’s duty to indemnify a nd hold harmless City includes the duty to defend as set forth in Civil Code section 2778. Own er’s indemnification obligations under this Section shall survive expiration or termination of this Agreement.

8. Notices. If at any time after the execution of this Agreement it becomes necessary for one of the Parties hereto to serve any notice, demand or communication upon the other Party, such notice, demand or communication shall be in writing and sh all be served personally or by depositing the same in the certified United States mail, return receipt requested, postage prepaid, and shall be addressed to:

If to City:
________________
________________
________________

If to Owner:

________________
________________
________________
With a copy to:

________________
________________
________________

9. Entire Agreement. This Agreement constitute the entire agreemen t of the parties hereto with respect to the subject matter hereof and thereof, a nd supersede all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

10. Amendments. This Agreement may not be amended, modified, and/or removed unless otherwise approved and agreed upon by a written agreemen t between City and Owner (or subsequent owner of the Project), and recorded with the County Recorder’s Office.

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61 11. Successors and Assigns. The ter ms and conditions of this Agree ment shall be binding upon and shall inure to the benefit of each of the Parties hereto, and their respective heirs, legal representatives, successors and assigns.

12. Force Maje ure. All obligations in this Agreement shall not be deemed to be in default and all performance shall be extended where such delays are due to: war; insurrection; strikes and labor disputes; loc kouts; riots; earthquakes; flood s; fires; casualties; condemnation; acts of God; acts of terrorism or the public enemy; epidemics; quarantine restrictions; litigation and arbitration, including court delays or compliance with court orders; environmental conditions; acts or omissions of the other Party; or acts or failures to act of any public or governmental agency or entity (except that acts or failures to act of City shall no t excuse performance by City); or moratorium. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other Party within ninet y (90) days of such Party’s actual knowledge of the commencement of the cause.

13. Entire Agreement; Integration. Thi s Agreement contains the enti re understanding and agreement of the Parties. The Parties acknowledge that this Agree ment has been executed initially pursuant to the terms of the Development Agreement, b ut the Development Agreement will terminate and have no further force or effect as to the te rms of this Agreement upon its execution. In the event of any inconsistency between the Develo pment Agreement and this Agreement, once executed, this Agreement controls.

14. Not a Public Dedication. Excep t as expressly provided herein, nothing herein contained shall be deemed to be a gift or dedication of the Public Parking Area or any other portion of Owner’s Property to the general public or for any public pur pose whatsoever, it being the intention of the parties that th is Agreement shall be limited t o and for the purposes herein expressed.

15. Governing Law. This Agreement sh all be governed and construed i n accordance with the laws of the State of California.

16. Severability. If any of the pr ovisions contained in this Agree ment shall for any reason be held to be invalid, illegal, or unenforceable in any respect, then such provision(s) shall be deemed severable from the rema ining provision(s) contained i n this Agreement, and this Agreement shall be construed as if such invalid, illegal, or un enforceable item had never been contained herein.

17. Recordation. This Agreement shall be recorded in the Official Records of the County of San Mateo following execution by the Parties.

IN WITNESS WHEREOF, the Parties execute this Agreement as of the date set forth above.

[Signature Pages to Follow]

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62 OWNER:

By: _____________________________
Name: _____________________________
Its: _____________________________

CITY:

CITY OF SAN CARLOS, a California municipal corporation

________________________________

City Manager

APPROVED AS TO CONTENT:

________________________________

Community Development Director

APPROVED AS TO FORM:

B y :

Name:

Its: City Attorney

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63 ARTICLE 13

ACKNOWLEDGMENT

State of California )
)
County of )

On before me,
____________________________________________________
(insert name and title of the officer)

personally appeared _____________________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature ______________________________________ (Seal) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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64 EXHIBIT A

Property Legal Description

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65 EXHIBIT B

Public Parking Area

[legal description or site plan]

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66 Exhibit F

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Attn:

(Space Above for Recorder’s Use)
[FORM OF] ASSIGNMENT OF RIGHTS AND ASSUMPTION OF OBLIGATIONS

UNDER DEVELOPMENT AGREEMENT
(______________)

THIS ASSIGNMENT OF RIGHTS AND ASSUMPTION OF OBLIGATIONS UNDER D E V E L O P M E N T A G R E E M E N T ( t h i s “ A s s i g n m e n t ” ) i s m a d e a n d e n t e r e d into as of _________, 20__, by and between _______, a _________ (“Assignor ”), and __________________, a ____________ (“Assi gnee”), and approved a nd agreed to by the City of ______, a ________ (“City”).

RECITALS
A. Assignor and City entered into tha t certain Development Agreeme nt dated as of ______ for the _____ project, and recorded on _____ in the Offi cial Records of the San Mateo County Recorder’s Office (“Official Records”) as Document No. _ ______, (the “Development Agreement”), with respect to approximately ____ acres of lan d within the City, as more particularly described in Exhibit A attached hereto (the “Property”).

B. Assignor and Assignee have entered into that certain Agreement for Purchase and Sale ____________ dated ____________ (as may be amended from time to time, the “Purchase Agreement”), pursuant to which Assignor intends to transfer to Assignee the Property.

Concurrently with transfer of the Property to Assignee, and solely in connection with such transfer in accordance with the Purchase Agreement, Assignor desires to assign to Assignee, and Assignee desires to accept from Assignor the rights, interests and obligations as Developer Owner under the Development Agreement.

C. Section 10.1 of the Developmen t Agreement provides that the Developer shall be released from its obligations under the Development Agreement u pon the assignment of the Developer’s rights, interests and obligations under the Development Agreement if the City agrees to such release in writing, and Assignor wishes to memorialize that, upon the effective date of this Assignment, as set forth in Section 4 hereof, Assignor is hereby fully released from the duties and obligations of “Developer” with r espect to the Development Agre ement, including, without limitation, the Project Approvals , which release is hereby give n by the City’s execution of this Assignment as provided below.

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67 AGREEMENTS
NOW, THEREFORE, in considerati on of the foregoing recitals and for the purposes and in consideration of the mutual c ovenants hereinafter contained, and for other good and valuable consideration, the receipt of which is hereby acknowledged, Ass ignor and Assignee agree as follows:

1. Defined Terms. All capitalized terms used but not defined i n this Assignment shall have the meanings given to them in the Development Agreement.

2. Assignment and Assumption. Assignor hereby assigns to Assign ee and Assignee hereby expressly and unconditionally assumes from Assignor, all rights, title, duties, interests and obligations under the Development Agreement.

3. Compliance with Assignment Re quirements; Release. Approval of this Assignment by the City pursuant to Section 10.1 of the Developm ent Agreement is an express condition precedent to the effectiveness of this Assignment. E ach of Assignor and Assignee has complied with and satisfied all of the requirements and conditi ons under the Development Agreement with respect to assignment and assumption of the Assi gned Interests, including, without limitation, those set fort h in Section 10.1 of the Deve lopment Agreement, and all of the requirements and conditions under the Development Agreement for the release of Assignor from those obligations related to the Assigned Property and the Assigned Interests, set forth in Section

10.1 of the Development Agreemen t (collectively, the “Requireme nts”). Upon approval by the City pursuant to Section 10.1 of the Development Agreement, Ass ignor shall be fully released from all of the duties, obligations and liabilities of the “Dev eloper” under the Development Agreement with respect to the Assigned Interests.

Assignee on behalf of itself and its successors and assigns, wa ives any right to recover from, and forever releases, acquits and discharges, Assignor and its directors, officers, employees and agents of and from any and all claims, demands, losses, lia bilities, damages (including foreseeable and unforeseeable con sequential damages), liens, ob ligations, interest, injuries, penalties, fines, lawsuits and other proceedings, judgments and awards and costs and expenses, (including, without limitation, reasonable attorneys’ fees and costs and consultants’ fees and costs) of whatever kind or nature, known or unknown, contingent or otherwise, whether direct or indirect, known or unknown, foreseen or unforeseen, that Assignee may now have or that may arise at any time on account of or in any wa y be connected with the Developm ent Agreement, except as otherwise expressly set forth in the Purchase Agreement. This waiver is not intended to supersede or otherwise modify any terms of the Purchase Agreement.

In connection with the foregoing release, Assignee acknowledges that it is familiar with Section 1542 of the California Civil Code, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR

OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR

HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF

KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

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68 Assignee agrees that the release contemplated by this Section i ncludes unknown claims.

Accordingly, Assignee hereby waives the benefits of Civil Code Section 1542, or under any other statute or common law principle of similar effect, in connection with the releases contained in this Section.

Assignor Assignee
Without limiting the foregoing a nd notwithstanding any contrary provision in the Development Agreement, City (i ) acknowledges and agrees to the terms and conditions of this Assignment and that the Requirements have been satisfied, (ii) hereby fully releases Assignor, and Assignor is fully released, from all of the duties and obligati ons of the “Developer” under the Development Agreement and (iii) shall look solely towards Assignee with respect to performance, compliance and satisfaction of all covenants and obligations of Developer related to the Assigned Property.

4. Effective Date. Subject to the condition precedent set fort h in Section 3 above, this Assignment shall be effective upon the later to occur of (i) the date all Parties have duly executed this Assignment and (ii) the date of the transfer of the Assigned Property to Assignee in accordance with the Purchase Agreement (the “Effective Date”). The Parties shall use a mutually acceptable escrow agent to record this Assignment Agreement and establish the Effective Date pursuant to mutually acceptable joint escrow instructions.

5. Acknowledgement of the Developm ent Agreement and Project App rovals.

Assignee further agrees that: (i) Assignee has had adequate opportunity to obtain and review copies of the Development Agreement and Project Approvals, and all oth er documents and materials containing or relating to the terms and conditions of the development of the project; (ii) Assignee has read and understands all of the terms and conditions of sai d documents and materials; (iii) except as expressly set forth in the Purchase Agreement, Assign or has not made any representations or warranties with respect to the Assigned Property, the Project Approvals or any other aspect of development of the Property or the Development Agreement, and (iv) with such knowledge and understanding, which includes the nature and extent of the fees, taxes, assessments and other financial mechanisms and obligations described in suc h documents and materials, Assignee nevertheless has volun tarily, freely and knowingly ass umed and agreed to perform all obligations and requirements and be bound by all of the provisi ons of such documents and materials.

6. Terms of Development Agreemen t and Purchase Agreement Not Affected. Except that Assignee shall be subject to , and Assignor shall be releas e d f r o m , t h e D e v e l o p m e n t Agreement, the provisions of the Development Agreement shall remain in full force and effect and shall not be altered, amended or modified by this Assignment, n or shall any of the provisions of the Purchase Agreement be altered, amended or modified by this Assignment. In the event of any conflict between any provision of the Purchase Agreement and any provision of this Assignment, the provisions of this Agreement shall control.

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69 7. Modifications. Thi s Assignment may be amended, terminated or o t h e r w i s e modified in any respect only by a writing duly executed on behalf of Assignor and Assignee and approved by the City.

8. Attorneys’ Fees. In the event of any controversy, claim, dis pute, or litigation between the parties hereto to enforce or interpret any of the provisions of this Assignment or any right of either party hereto, the non-prevailing party to such litigation agrees to pay to the prevailing party all costs and expenses, including, without lim itation, reasonable attorneys’ fees, incurred therein by the prevailing party, including, without li mitation, fees incurred during a trial of any action and any fees incurred as a result of an appeal fr om a judgment entered in such litigation. To so recover, it shall not be necessary that the prevailing party prevail in each and every one of its claims. Rather, the amount of the award of attorneys’ fees shall, in the court’s discretion, reflect the degree to which the prevailing party or parties have prevailed in some of their claims.

9. Consent of City. By signature of the Community Development D irector of the City below, the City approves and agrees to the assignment, assumpti on and release set forth in this Assignment. The City is a party to this Assignment solely resp ect to Section 3 and Section 4 hereof.

10. Governing Law. Thi s Assignment shall be governed by and con strued in accordance with the laws of California, as they apply to contracts executed in and to be carried out entirely within California.

11. Further Assurances. Each party to this Assignment, upon th e request of any other party to this Assignment, will execute, acknowledge and deliver such further documents or instruments and perform such further acts as may be necessary, desirable or proper to carry out more effectively the purpose of this Assignment. Each of the i ndividuals executing this Assignment certifies that he or she is duly authorized to do so.

12. Counterparts. This Assignment may be executed in one or more counterparts. All counterparts so executed shall c onstitute one agreement, bindin g on all parties, even though all parties are not signatory to the same counterpart.
[Signatures appear on the following page]

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70 IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the date and year first above written.

ASSIGNOR:
__________, a ____________
By:

Name:

Its:

By:

Name:

Its:

ASSIGNEE:
______________________, a
________________________
By:

Name:

Its:

By:

Name:

Its:

ATTEST:

By:

APPROVED AS TO FORM:

By:

ACKNOWLEDGED AND APPROVED
TO BY CITY:

CITY OF ______, _________
By:

Name:

Its: ______________________________

[Si
gnatures must be notarized]

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71 EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
[to be inserted upon execution]

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72 EXHIBIT G

PARKING DIAGRAM

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COM
M

ERCIAL ST

BRANSTEN RD

OLD COUNTY ROAD
SOUTH
PHASE
NORTH
PHASE
(4) RETAIL PARKING
(1) EV AMBULATORY STALL
(1) STANDARD EV STALL

EV STALL

RETAIL PARKING STALL

BUILDING ENTRANCE
LEGEND
N
C O P Y R I G H T © 2 0 2 3 b y S T U D I O S a r c h i t e c t u r e Scale: 1" = 80'-0"

SURFACE PARKING DIAGRAM
841 OLD COUNTY RD
09/29/23

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October 09, 2023

Packet Pg. 376

599 Castro Street, Suite 400 Mountain View, CA 94041 www.sobrato.com September 19th, 2023 To: Mayor Rak, Vice Mayor Dugan, and City Council CC: Al Savay, Lisa Costa-Sanders, Greg Rubens, Tamsen Plume, and Robert Tersini From: The Sobrato Organization RE: The Sobrato Organization’s Old County Road Development Dear Mayor Rak, Vice Mayor Dugan, and City Council Members, On August 28th we presented our proposal for a two-building office development located on 841 Old County Road. City Council requested that we work with Staff to review our community benefits proposal. In an effort to respond to this feedback, we have revisited our proposal and have made some significant additions to our community benefits in order to fully comply with the goals of the Eastside Innovation District Vision Plan. Below is a summary of our existing community benefits, which were presented at the hearing, followed by our proposed additions. We also note, as discussed at the hearing, that the Project includes the additional substantial cost of site remediation and subterranean parking. Existing Community Benefits: • Approximately 5,000 SF publicly accessible central outdoor plaza (the “Front Plaza”) • Approximately 1,500 SF space for Restaurant/Coffee Shop or other Community Benefit Use with adjacent courtyard with retail seating • Green Energy Efficiency & Sustainability Fund Payment- $500,000 • Community Improvement & Recreation Fund Payment- $3,000,000 • Downtown Improvements Fund Payment- $2,796,000 • New streetscape improvements on all fronts of our property providing large sidewalks, bike, and pedestrian paths along Bransten and Old County with robust planting and street trees, including an approximately 4,240 SF linear Bike/Pedestrian Path as shown in the Project Approvals. Additional Community Benefits: • Public Access to Courtyard. In addition to the Front Plaza, an additional approx. 12,000 square foot public amenity courtyard (“Courtyard”) between the two office buildings which will include a large grass lot, a wood deck, a large gaming area with a number of different games for public enjoyment, a large green wall screen the office drop off area, and quieter outdoor seating areas separated by planters for both the tenants and public to work and meet. This brings the total to 17,000 sf with the Front Plaza. We note that the original intent of this area was as an exclusive tenant amenity to attract tenants, which remains important to attract tenants, so this area could be reserved for exclusive tenant use up to twice a month (for up to 24 hours each time). A retractable gate would be installed to facility this use while keeping the Front Plaza open to the public. In addition, we propose that non-profits and community members could reserve the Courtyard and/or Front Plaza for private events up to 6 times per year, through an approval process facilitated by the City and coordinated with the landlord / tenant(s).

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October 09, 2023

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September 27, 2023