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SETTLEMENT AGREEMENT BETWEEN THE COUNTY OF SANTA CLARA AND
CITY OF SAN JOSE REGARDING NORTH SAN JOSE
This Settlement Agreement (“Agreement”) is made and entered into by and between the County of Santa Clara (“County”) and the City of San José (“City”) . The above parties are collectively referenced herein as “Parties” and individually as a “Party.” This Agreement shall be effective upon execution by all Parties and City of Santa Clara’s execution of an Acknowledgement, Agreement, and Mutual Release, as specified in Section 9 of this Agreement.
RECITALS
WHEREAS, on June 21, 2005, the City adopted the North San José Development Policy (“Policy”) which included General Plan amendments, modifications to the North San José Area Development Policy, the North San José Deficiency Plan, the Floodplain Management Plan for North San José, and an infrastructure fee program , which created the framework for new residential, industrial, retail, and office development in North San José; WHEREAS, the Policy meters development permits in the P olicy area by the maximum industrial and commercial square footage and the number of housing units that may be developed within each of four phases specified in the P olicy, along with construction of transportation improvements identified in the Policy;
WHEREAS, in July 2005, t he County, the City of Santa Clara , and related parties filed lawsuits challenging the Policy and alleging violations of the California Environmental Quality Act (CEQA);
WHEREAS, in March 2006, the Santa Clara County Superior Court rendered judgment in favor of the County and the City of Santa Clara on the basis that the City’s determination that there were no feasible mitigation measures for impacts to transportation facilities under the jurisdiction or control of non-City entities was not supported by substantial evidence; WHEREAS, on Novembe
r 16, 2006, the County, the City, the City of Santa Clara, and related parties executed two settlement agreements to resolve the CEQA litigation (collectively, the “2006 Settlement Agreement”), attached hereto as Exhibit A; WHEREAS, the 2006 Settlement Agreement required the City to fund and construct certain traffic improvements and the County to fund and complete certain studies and designs for traffic improvements;
WHEREAS, since the adoption of the Policy, the City alleges there have been significant changes to State laws, priorities, and circumstances that affect the City’s approach to long- range and future planning;
WHEREAS, due to changes to State laws, priorities, and circumstances, on May 17, 2022, the City Council adopted amendments to the Policy, as well as related amendments to the City’s General Plan, Zoning Ordinance, and Municipal Code (collectively, the “NSJ Amendments”) and
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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a corresponding Addendum to the Envision San Jos é 2040 General Plan Environmental Impact Report and Envision San José 2040 Supplemental Environmental Impact Report (“Addendum”); WHEREAS, among other changes, the NSJ Amendments eliminate several roadway improvements described in the 2006 Settlement Agreement, modify the Policy’s phased mitigation plan, and allow the City to conduct a project -by-project analysis of transportation impacts for future development projects;
WHEREAS, prior t o the City Council’s consideration of the NSJ Amendments and the Addendum, the County submitted a public letter asserting its rights under the 2006 Settlement Agreement and raising several CEQA issues (“County Letter”), attached hereto as Exhibit B; WHEREAS, among other things, the County Letter asserts that the NSJ Amendments and the Addendum violate CEQA;
WHEREAS, on June 21, 2022, the City Council considered, adopted, and subsequently executed a settlement agreement with the City of Santa Clara (“2022 Settlement Agreement”); WHEREAS, in the 2022 Settlement Agreement, the City of Santa Clara releases claims against the City related to the NSJ Amendments and 2006 Settlement Agreement in exchange for completion of the Montague Expressway expansion from 1 st Street to Lick Mill and other consideration;
WHEREAS, prior to the City Council’s approval of the 2022 Settlement Agreement, the County submitted public comments arguing that the 2022 Settlement A greement repudiated the City’s obligations under the 2006 Settlement Agreement (“Second County Letter” and, collectively with County Letter, “County Comment Letters”), attached hereto as Exhibit C; WHEREAS, on June 9 and June 10, 2022, the County and the City executed a Tolling Agreement related to the County’s CEQA claims (“Tolling Agreement”); WHEREAS, the County and the City subsequently amended the Tolling Agreement several times to extend the tolling period through December 15, 2022; WHEREAS, the Parties participated in mediation in an attempt to resolve the differences between the Parties; and
WHEREAS, the Parties wish to completely and fully settle all claims and issues related to the NSJ Amendments, Addendum, 2006 Settlement Agreement, and allegations raised in the County Comment Letters.
NOW, THEREFORE , for and in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree to the foregoing terms as follows:
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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TERMS OF SETTLEMENT
1. I-880 Interc hange Improvement . City shall design, develop, construct , and deliver an interchange improvement at the intersection of the Montague Expressway and I-880 (“I- 880 Interchange Improvement”), as specified in this Section 1 and subject to the terms and conditions of this Agreement.
a. Project Description. The I-880 Interc hange Improvement requires reconstructing the existing interchange and converting it from a full cloverleaf design to a partial cloverleaf design with two new traffic signals. The City shall design and deliver the project based on the geometric study attached hereto as Exhibit D, except that City and County may mutually agree in writing to an alternate project design if the California Department of Transportation (“Caltrans”) determines that the design in Exhibit D is not acceptable, or if the alternate design achieves comparable or better congestion relief.
b. Project Design
i. On or before December 31, 2024, City shall complete and submit a Project Study Report (PSR) for the I-880 Interchange Improvement to Caltrans for Caltrans review and approval , consistent with Caltrans’s Project Development Procedures Manual. City shall diligently respond to Caltrans comments and pursue approvals of the PSR from Caltrans until such approvals are obtained.
ii. On or before December 31, 2029, City shall complete and submit Plans Specifications & Estimate (PS&E) to Caltrans for Caltrans review and approval to allow for solicitation of proposals from qualified contractors to construct the project . City shall diligently respond to Caltra ns comments and pursue approvals of the PS&E from Caltrans until such approvals are obtained.
c. Environmental Review and Other
Approvals. City shall be responsible for
preparing all required environmental clearance—including CEQA and National Environmental Policy Act ( NEPA) compliance—for the I-880 Interchange Improvement. On or before December 31 , 2026 City shall prepare and submit to Caltrans for Caltrans review and approval all necessary environmental documents, including, as necessary, a N egative Declaration, Environmental Impact Report (EIR), and/or Environmental Impact Study (EIS) . City shall diligently respond to Caltrans if Caltrans has comments on the environmental documents. d. Additional Approvals. If any othe r approvals are required for the I-880 Interchange Improvement in addition to the PSR, PS&E, and environmental clearance to allow the City to p ublicly advertise, bid, and award the project to qualified contractors consistent with public contracting codes once full funding guarantees from third parties are obtained, the Parties agree to meet and confer as specified in Section 13
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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to discuss any additional necessary time for the City to complete the additional deliverables and obtain necessary approvals. City shall thereafter diligently pursue the additional permits and approvals from Caltrans and any other agency until such approvals are obtained and effective.
e. Funding. City shall be responsible for obtaining funding from thir d parties for the I-880 Interchange Improvement. The City shall use reasonable efforts to diligently apply for reasonably available sources of local, state, and federal funding until the project is fully funded. The City shall also use reasonable efforts to prepare grant applications to Santa Clara Valley Transportation Authority ( VTA), Metropolitan Transportation Commission (MTC), California Transportation Commission , and other public agencies. County acknowledges that City does not control the timing of third-party funding decisions.
f. Construction Implementation. Upon obtaining full funding guarantees from thir d parties for construction and any necessary approval from Caltrans or other public agencies as applicable, City shall (i) be responsible for having the project publicly advertised, bid, and awarded to qualified contractors consistent with public contracting codes ; (ii) perform construction administration and construction management services consistent with practices described in the Caltrans Construction Manual; and (iii) be responsible for the completion of construction of the project. City may execute agreements to designate another public agency or other third party to manage all or parts of the project delivery steps. City, or a designated managing agency, shall solicit proposals from qualified contractors for the project, execute a contract, and commence work within 12 months of receiving full funding guarantees and Caltrans approval for the project.
2. McCarthy/O’Toole Interchange . City sha
ll design, develop, construct, and deliver an
interchange at the intersection of the Montague Expressway, McCarthy Boulevard, and O’Toole Avenue (“ McCarthy/O’Toole Interchange”), as specified in this Section 2 and subject to the terms and conditions of this Agreement.
a. Project Description. The McC
arthy/O’Toole Interchange requires reconstructing
the existing at-grade intersection and constructing a grade -separated interchange.
Specifically, the McCarthy/O’Toole Interc hange shall be designed as a “single- point urban” interchange or , if mutually agreed upon in writing by the Parties, a design that achieves s imilar project goals and limits the need for right -of-way acquisition. It shall maintain all turning movements allowed by the existing at - grade intersection. The City shall design and construct the project based on the geometric study attached hereto as Exhibit E , except that City and County may mutually agree in writing to an alternate project design. b. Project Design.
i. On or before December 31, 2024, City shall complete and submit a Design and Project Alternatives Study to the County for review and approval.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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ii. On or before December 31 , 2029, City shall complete and submit Plans Specifications & Estimate (PS&E) to C ounty and other stakeholders for approval prior to solicitation of proposals from qualified contractors to construct the project.
c. Environmental Review and Other Approvals. City shall be responsible for obtaining all re quired environmental clearance—including CEQA and NEPA compliance—for the McCarthy/O’Toole Interchange. On or before December 31, 2026, City shall complete and obtain approval of the appropriate environmental clearance—including, as necessary, a Negative Declaration, EIR, and/or EIS. d. Additional Approvals . If any ot her approvals are required for the McCarthy/O’Toole Interchange beyond those specified in this Section to allow the City to p ublicly advertise, bid, and award the project to qualified contractors consistent with public contracting codes once full funding guarantees from third parties are obtained, the Parties agree to meet and confer as specified in Section 13 to discuss any additional necessary time for the City to complete the additional deliverables and obtain necessary approvals. City shall thereafter diligently pursue the additional permits and approvals until such approvals are obtained and effective.
e. Funding. City shal l be responsible for obtaining funding from third parties for the McCarthy/O’Toole Interchange. The City shall use reasonable efforts to diligently apply for reasonably available sources of local, state, and federal funding until the project is fully funded. The City shall use reasonable efforts to prep are grant applications to the VTA, MTC, California Transportation Commission, and other public agencies. County acknowledges that City does not control the timing of third-party funding decisions.
f. Construction Implementation. Upon obtaining f
ull funding guarantees from third
parties for construction and any necessary approval s, City shall (i) be responsible for having the project publicly advertised, bid, and awarded to qualified contractors consistent with public contracting codes ; (ii) perform construction administration and construction management services consistent with practices described in the Caltrans Construction Manual ; and (iii) be responsible for the completion of construction of the project. City may execute agreements to designate another public agency or other third party to manage all or parts of the project delivery steps. City, or a designated managing agency, shall solicit proposals from qualified contractors for the project, execute a contract, and commence work within 12 months of receiving full funding guarantees and (if applicable) Caltrans approval for the project.
3. Montague Widening (North 1
st Street to Lick Mill Boulevard ). City shall develop, construct, and deliver the widening of Montague Expressway to four lanes between North 1 st Street and Lick Mill Boulevard (“North 1st to Lick Mill Widening”), as specified in this Section 3 and subject to the terms and conditions of this Agreement.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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a. Project Description. The Nor th 1st to Lick Mill Widening requires expanding the Montague Expressway to eight through lanes —four lanes in each direction from North 1st Street to Lick Mill Bo ulevard—including the crossing of the Guadalupe River. It shall also include the construction of an adjacent bicycle/pedestrian crossing over the Guadalupe River.
b. Environmental Review and Other A pprovals. City shall be responsible for obtaining all required environmental clearance—including CEQA and N EPA compliance—and all other required approvals to construct the North 1st to Lick Mill Widening. City shall diligently pursue all necessary permits and approvals from Santa Clara Valley Water District (“Valley Water”), United States Army Corps of Engineers, and any other agency, until such approvals are obtained and effective. c. Construction Implementation. City s
hall complete construction of the North 1st to
Lick Mill Widening by no later than December 31, 2027.
d. Concurrent Water District Projects. The County s hall waive the City’s obligation to construct the bicycle/pedestrian crossing if Valley Water makes a legally binding commitment by no later than December 31, 2024 to complet e the crossing by no later than December 31, 2031.
4. Matching Funds for Measure B Projects. City sha ll provide 10% of total project costs for VTA’s Measure B Expressway Program Projects 6A, 6B, and 6C to satisfy the local match requirement for widening projects along the mainline of Montague Expressway. a. Project Description.
i. Project 6A: Complete 8-lane widening including HOV lanes and a uxiliary lanes between Trade Zone Boulevard and Main Street along Montague Expressway.
ii. Project 6B: Complete 8-lane widening including HOV lanes and a uxiliary lanes between Great Mall Parkway and Trade Zone Boulevard along Montague Expressway.
iii. Project 6C: Complete 8-lane widening including HOV lanes and a uxiliary lanes between Main Street and the McCarthy/O’Toole intersection along Montague Expressway.
b. Cost Calculation. The Cit y shall make full payment to the County of 10% of the total project cost for each project, which shall be calculated at the time the projects are complete. Projects shall be considered complete when notice of completion and acceptance is recorded for the construction contract. County shall use reasonable efforts to diligently design, fund, and complete Projects 6A, 6B, and 6C. Further, County shall coordinate the design of the projects as part of the quarterly meetings described in Section 13 below.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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c. Timing and Form of Payment to Satisfy Local Match Requirement. i. The City shall make full payment of 10% of total project costs within one year of each project’s completion except as otherwise specified in this Section 4(c).
ii. If the total project costs for Project 6A, 6B, or 6C exc eeds the currently estimated costs adjusted annually based on the Department of General Services California Construction Cost Index (“Adjusted Estimate”), City shall pay 10% of the Adjusted Estimate within one year of the project’s completion and 10% of any amount in excess of the Adjusted Estimate within five years of the project’s completion. The currently estimated costs in 2022 dollars are:
(1) Project 6A: $13 million (City’s 10% share is $1.3 million) (2) Project 6B: $13 million (City’s 10% share is $1.3 million) (3) Project 6C: $22 million (City’s 10% share is $2.2 million) d. In-kind Local Match in Lieu of Cash Payment for Project 6C. County recognizes that City will perform work under Section 1 of this Agreement on the I -880 Interchange Improvement that may include the scope of Project 6C. If the scope of Project 6C is incorporated in the City’s work under Section 1, the costs incurred from the overall I-880 Interchange Improvement with Project 6C included may be considered sufficient “in-kind” value to satisfy the City’s obligation to pay the 10% local match requirement for Project 6C. If the scope of Project 6C is not incorporated in the I -880 Interchange Improvement and Project 6C is deliver ed separately by the County, or if the VTA objects to use of this in- kind value as a sufficient local match, the City is responsible for the 10% local match pursuant to this Section 4.
5. Trimble Road Vehicle Delay Studies . After the City completes the construction of the I - 880 Interchange Improvement and the McCarthy/O’Toole Interchange, the City shall conduct a series of three vehicle delay studies at the intersection of the Montague Expressway and Trimble Road (“Studies”). If any of the three Studies reveals delays above the threshold identified below, the City shall be responsible for designing, obtaining funding from third parties, and completing the Trimble Flyover, as specified in Section 6, and subject to the terms and conditions of this Agreement. a. Costs and Consultant Selection. The City and the County shall identify a mutually agreeable consultant to execute the Studies and shall equally share the cost of the Studies.
b. Methodology. The Studies shall evaluate the existing traffic at the intersection of the Montague Expressway and Trimble Road using the Congestion Management Program Traffic Level of Service Analysis Methods in VTA’s Traffic Level of
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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Service Guidelines, originally published in January 1995 and updated in June 2003.
Such methods are currently described in Sections 2.1 through 2.9 of the Guidelines.
City and County may mutually agree in writing to an alternative methodology. c. Study Timeline. The Cit
y and County shall commission the three Studies after the completion of both the I-880 Interchange Improvement and the McCarthy/O’Toole Interchange, according to the following timeline:
i. Study 1 – Two years after completion
ii. Study 2 – Seven years after completion
iii. Study 3 – Twelve years after completion
d. Study Finalization. T he Studies specified in Section 5(c) shall be finalized within six months of being commissioned.
e. Threshold. If any of t he three Studies reveals that the “Average Control Delay” for vehicles is at Level F as defined by the Congestion Management Program Traffic Level of Service Analysis Methods in VTA’s Traffic Level of Service Guidelines specified above (or a different threshold mutually agreed upon in writing by the Parties), the City shall be responsible for completing the Trimble Flyover, as specified in Section 6.
f. Cost-Benefit A
nalysis. If the Study threshold in Section 5(e) is met, the City and the County mutually agree to conduct a cost -benefit analysis and evaluate alternative projects to mitigate traffic congestion on Montague Expressway. Based on the results of the S tudy, the City and the County may mutually agree that the City shall carry out an alternative traffic mitigation project on the Montague Expressway pursuant to specific benchmarks and timelines to be agreed upon in writing by City and County. Absent mutual agreement regarding an alternative mitigation project, the City shall be responsible for completing the Trimble Flyover, as specified in Section 6.
i. City and County shall i
dentify a mutually agreeable consultant to execute
the cost-benefit analysis and shall equally share the cost of the analysis .
City and County shall use their best efforts to agree upon and execute a contract with a consultant to carry out the analysis within six months of the Study threshold being met.
ii. The cost-benefit analysis shall be complete within one year of the Study threshold being met. If the cost-benefit analysis is not timely completed, or the City and County do not reach mutual agreement in writing regarding an alternative mitigation project within 15 months of the Study threshold being met, the City shall be responsible for completing the Trimble Flyover, as specified in Section 6.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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6. Trimble Flyover. If the City is required to complete the Trimble Flyover based on the procedures and standards set forth in Section 5, the City shall develop, construct, and deliver a flyover ramp at the intersection of the Montague Expressway and Trimble Road (“Trimble Flyover”), as specified in this Section 6 and subject to the terms and conditions of this Agreement.
a. Project Description. The Trim ble Flyover requires r econstructing the existing at- grade intersection to create a grade- separated interchange. The i nterchange shall be designed to grade separate westbound left turns from Montague Expressway to westbound T rimble Road from eastbound Montague Expressway traffic. Other turning movements at the existing intersection may be accommodated through traffic signal control. The City shall design and execute the project based on the geometric study attached hereto as Exhibit F , except that City and County may mutually agree in writing to an alternate project design. b. Project Design. Within 48 mont hs of the triggering Study, City shall complete the PS&E to allow for solicitation of proposals from qualified contractors to construct the project.
c. Environmental Review and Other Approvals . City sha ll be responsible for environmental clearance—including CEQA and NEPA compliance —for the Trimble Flyover. Within 24 months of when a Study threshold is met, as specified in Section 5(d) , City shal l complete and act on appropriate environmental clearance—including preparing, as necessary, a Negative Declaration, Environmental Impact Report (EIR), and/or Environmental Impact Study (EIS) .
City shall diligently pursue all necessary permits and approvals until such approvals are obtained and effective.
d. Funding. City shall be responsible for obtaining funding from third parties for the Trimble Flyover. City shall use reasonable efforts to diligently apply for reasonably available sources of local, state, and federal funding until the project is fully funded.
It shall prepare grant applications to the VTA, MTC, California Transportation Commission, and other public agencies. County acknowledges that City does not control the timing of third-party funding decisions.
e. Construction Implementation. Upon obtaining full funding guarantees from thir d parties for construction and any necessary approvals, City shall (i) be responsible for having the project publicly advertised, bid, and awarded to qualified contractors consistent with public contracting codes ; (ii) p erform construction administration and construction management services consistent with practices described in the Caltrans Construction Manual ; and (iii) be responsible for the completion of construction of the project. City may execute agreements to designate another public agency or other third party to manage all or parts of the project delivery steps. City, or a designated managing agency, shall solicit proposals from qualified contractors for the project, execute a contract, and commence work within 12 months of receiving full funding guarantees and necessary approvals for the project.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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7. Design, Developm ent, and Construction Standards
a. Construction Requirements. As applicable, Ci ty shall comply with the California Public Contract Code, the City Charter, and all other applicable laws in its designs, bids, awards, and construct ion of the improvements required by Sections 1, 2, 3, and 6. City shall provide construction administration and construction management services consistent with practices described in the Caltrans Construction Manual. b. Complete Streets Design Standards. If appl icable, all transportation improvements identified in this Agreement shall be designed and constructed in accordance with Caltrans’s, County’s, and City’s Complete Streets Design Standards & Guidelines, as may be amended or replaced.
8. Valley Transportation Plan 2050. City and County shall each use their best efforts to ensure that the I-880 Interchange Improvement, the McCarthy/O’Toole Interchange, and the Trimble Flyover are included in VTA’s Valley Transportation Plan 2050.
9. Termination of 2006 Settlement Agreement
a. This Agreement shall not become effective until and unless the County and the City of Santa Clara execute the Acknowledgement, Agreement, and Mutual Release, the form of which is attached hereto as Exhibit G, but which form may be modified by mutual agreement between the County and City of Santa Clara. City and County agree that the 2006 Settlement Agreement shall remain effective and that the City and County retain all rights and obligations under the 2006 Settlement Agreement until and unless the County and the City of Santa Clara execute an Acknowledgement, Agreement, and Mutual Release. County shall deliver a fully executed copy to City in accordance with Section 14.
b. Subject to the requirements of Section 9(a), the City and County hereby agree that the 2006 Settlement Agreement is terminated and shall no longer have any force or effect.
c. The City of Santa Clara shall not be considered a Party under this Agreement.
10. Material Breach, Enforcement, and Remedies.
a. Meet and Confer Process . If either Party believes that the other has materially breached this Agreement, it must request to meet and confer with the other Party.
The Party receiving such a request shall meet with the Party alleging a breach within 14 days of receiving the request.
b. Notice of Default. If the Par
ties are not able to resolve a dispute through the meet and confer process in Section 10(a), the Party alleging a breach of this Agreement shall send a written notice of default to the other Party specifying the nature of the alleged breach and, if possible, the manner in which said default may be satisfactorily cured. The Party receiving the notice of default shall have 30 days to
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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cure the default. If the alleged breach cannot reasonably be cured within 30 days, then the Party receiving the notice of default shall have 30 days to commence a cure and shall diligently complete it thereafter.
c. Mediation. Any Part y seeking to file a legal action or proceeding to enforce this Agreement or the rights of the Parties must first seek to mediate the dispute. If either Party requests mediation in writing, the other Party shall agree to mediate as soon as is feasible, and not more than 45 days after receiving such a request, unless the Parties mutually agree in writing to extend the 45 days. If the Party receiving a request for mediation does not attend mediation within 45 days, the mediation requirement in this Section 10(c) shall be waived. City and County shall equally share the cost of mediation. Subje ct to Sections 10 (a) and 10(b) above, if either Party determines that mediation was unsuccessful, it may file a legal action or proceeding to enforce this Agreement or its rights under the Agreement. The 45- day time period in this Section 10(c) may run concurrently with the 14- day time period in Section 10(a) and the 30-day time period in Section 10(b). d. Material Breach. Except a s otherwise provided herein, a material breach of this Agreement shall include, but not be limited to, any failure by City or County to perform the obligations of this Agreement within the timeframes specified in this Agreement.
e. Attorneys’ Fees. In any act ion at law or suit in equity to enforce this Agreement or the rights of the Parties , the prevailing P arty shall be entitled to reasonable attorneys’ fees and all other reasonable costs and expenses incurred in such action or suit.
f. Specific Performance. In any action at law or suit in equity, if a court determines that City or County has breached this Agreement, the Parties further agree that, in addition to any other rights of the Parties, the Parties shall be entitled to specific performance if reasonably applicable, and neither Party shall oppose specific performance as a remedy if specific performance is reasonably applicable.
11. Release. Except for the rights and duties set forth in this Agreement and except those provisions that survive termination, cancellation, or expiration of this Agreement, the Parties, individually and on behalf of each of their officials, employees, heirs, estates, executors, administrators, assigns, agents, representatives, insurers, and attorneys, hereby forever release and fully discharge one another and each of their officials, employees, heirs, estates, executors, administrators, assigns, agents, representatives, insurers, and attorneys from (1) any and all claims, disputes, or causes of action relating to the NSJ Amendments, (2) Addendum, (3) 2006 Settlement Agreement, and (4) any claims or allegations asserted in the County Comment Letters and corresponding public comments to the City Council.
12. Waiver of Civil Code Section 1542. The Parties each acknowledge that they are familiar
with California Civil Code section 1542. This Agreement is intended to release the claims and causes of action described herein , and the Parties hereby expressly waive the
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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provisions of California Civil Code section 1542 only with respect to the claims and causes of action described in this Agreement. California Civil Code section 1542 provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT 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 THE RELEASED PARTY.
13. Quarterly Meetings and Extensions of Time.
a. The Parties acknowledge and agree that the design, environmental clearance, funding, and completion of the projects described in this Agreement require significant coordination and review and approval by third parties (i.e., Caltrans and Valley Water). Therefore, the completion of each deliverable within the timeline in this Agreement may be outside the direct control of the City. The Parties agree to meet on a quarterly basis to discuss the City’s compliance with this Agreement and any unanticipated delays in completing the deliverables that are beyond the direct control of the City.
b. City may request reasonable extensions to the deadlines specified in Sections 1 -6 of this Agreement as necessary to address delays that occur for reasons that are beyond the City’s direct control. City shall provide notice of any anticipated delays and shall request in writing to meet and confer with the County within 14 calendar days of the occurrence or commencement of the relevant event or circumstance giving rise to the anticipated delay. City and County shall meet and confer as soon as is feasible, and not more than 14 days after receiving such a request. The County Executive or their designee agrees to act reasonabl y in reviewing such extension requests and may agree to provide reasonable extensions to the deadlines specified in Sections 1-6 as necessary to complete the specified deliverables. c. The meet and confer process in this Section 13 shall be available to the Parties if unanticipated delays, third-party approvals, or other factors impact the completion of the projects described in Sections 1 -6. County shall agree to reasonable extensions as necessary to allow the City to secure unanticipated permits and approvals.
d. City and County acknowledge that any extension granted under this Section 13 shall only be for the time period reasonably necessary to accommodate for circumstances beyond the City’s direct control.
e. Any extension of time, or request for extension of time, shall not relieve City of its responsibility to complete the projects in this Agreement.
14. Notices. Unless
otherwise provided in this Agreement, any notice required or permitted to be given hereunder shall be in writing and signed by the Party, officer, agent , or attorney
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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of the Party from whom it is to be sent, and shall be sent by both electronic mail and either (i) personally delivered to the Party to whom it is to be sent, (ii) sent by overnight courier service (such as Federal Express), or (iii) sent by certified or registered mail, return receipt requested, postage prepaid, to the respective address of the persons and/or parties set forth below, or to such other address as the Parties may specify in writing. Each notice shall be deemed to have been given on the date of receipt (or refusal to accept delivery) as indicated on the customary receipt used by the delivering service or, in the case of electronic mail transmission, acknowledgement of receipt of the transmission.
If to City: City of San José, Department of Transportation 200 East Santa Clara Street, 8th Floor
San José, CA 95113
Attn: Director of Transportation
Tel: (408) 535-3500
Email: [email protected]
City of San José, City Manager’s Office
200 East Santa Clara Street, 17th Floor
San José, CA 95113
Attn: City Manager
Tel: (408) 535-4800
Email: [email protected]
With a copy thereof to: City of San José , Office of the City Attorney 200 East Santa Clara Street, 16th Floor
San José, CA 95113
Attn: City Attorney
Tel: (408) 535-1900
Email: [email protected]
[email protected]
If to County: Office of the County Counsel, County of Santa Clara 70 West Hedding Street, East Wing, 9th Floor
San Jose, CA 95110-1770
Attn: County Counsel/Aaron Forbath/Tony LoPresti
Tel: (408) 299-5900
E-mail: [email protected]
[email protected]
[email protected]
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
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15. General Provisions
a. Integration. T he terms of this Agreement , including all exhibits, are contractual, and not merely recital, and constitute a fully binding and complete agreement between the Parties regarding its subject matter. This Agreement supersedes any and all prior or contemporaneous agreements, representations, and understandings of or between the P arties, and the Parties each warrant that they are not relying on any such prior representations. b. Headings. The headi ngs in this Agreement are included solely for convenience of reference and shall not affect the interpretation of any provision in this Agreement or any of the rights and obligations of the Parties.
c. Ambiguities. Each Par ty and its attorney cooperated in the drafting and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against any Party.
d. Amendments. The terms of this Agreement may not be altered, amended, modified, or otherwise changed in any respect except by a writing duly executed by City and County. e. Time of the Essence. Time is of th e essence in respect to all provisions of this Agreement that specify a time for performance.
f. Governing Law. This Agreement shall be deemed to have been entered into in Santa Clara County, California, and all questions of validity, interpretation, or performance of any of its terms or of any rights or obligations of the parties to this Agreement shall be governed by California law.
g. Additional Acts. The Part
ies agree to do such acts and to execute such documents as are necessary to carry out the terms and purposes of this Agreement. h. Successors and Ass igns. This Agreement shall be binding upon, and inure to the benefit of, the Parties’ successors, assigns, agents, and representatives. i. Authority to Execute Agreement. By signing below, each signatory warrants and represents that they executed this Agreement in their authorized capacity and that, by their signature on this Agreement, they or the entity upon behalf of which they acted, executed this Agreement.
j. Attorneys’ Fees and Costs.
Except as specified in Section 10, the Parties agree that each Party hereto shall bear its own attorneys’ fees and costs incurred in connection with the events that are subject to this Agreement, and each Party waives any claim for attorneys’ fees or costs against any other Party.
k. Severability. If any por
tion or provision of this Agreement is found to be illegal, invalid, unenforceable, nonbinding, or otherwise without legal force or effect, the remaining portion(s) will remain in force and be fully binding.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Settlement Agreement and General Release Page 15 of 16
North San José Development Policy
l. Counterparts. This Agreem ent may be executed in counterparts with the same force and effectiveness as though executed in a single document. m. Contract Execution. Unless otherwise prohibited by law or County or City policy, the Parties agree that an electronic copy of a signed agreement, or an electronically signed agreement, has the same force and legal effect as an agreement executed with an original ink signature. The term “electronic copy of a signed agreement” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed agreement in a portable document format. The term “electronically signed agreement” means a contract that is executed by applying an electronic signature using technology approved by the County and City.
IN WITNESS WHEREOF, and intendi
ng to be legally bound, the Parties have executed
this Agreement as of the Effective Date.
COUNTY OF SANTA CLARA
Dated:_______________ By:______________________________ JAMES R. WILLIAMS
County Counsel
APPROVED AS TO FORM AND LEGALITY
Dated:_______________ By:______________________________ Aaron Forbath
Deputy County Counsel
[signatures continue on following page]
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Settlement Agreement and General Release Page 16 of 16
North San José Development Policy
CITY OF SAN JOSE
Dated:_______________ By:______________________________ JENNIFER A. MAGUIRE
City Manager
APPROVED AS TO FORM
Dated:_______________ By:______________________________
NORA FRIMANN
City Attorney
Attachments
Exhibit A: 2006 Settlement Agreement
Exhibit B: County Letter
Exhibit C: Second County Letter
Exhibit D: I-880 Interchange Improvement Geometric Design Exhibit E: McCarthy-O’Toole Interchange Geometric Design Exhibit F: Trimble Flyover Geometric Design
Exhibit G: County and City of Santa Clara Acknowledgement, Agreement, and Mutual Release
2746623
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Exhibit A
Exhibit B
1 OFFICE OF THE COUNTY COUNSEL
COUNTY OF SANTA CLARA
County Government Center
70 West Hedding Street
East Wing, 9th Floor
San José, California 95110-1770
(408) 299-5900
(408) 292-7240 (FAX)
James R. Williams
COUNTY COUNSEL
Greta S. Hansen
CHIEF ASSISTANT COUNTY COUNSEL
Robert M. Coelho
Tony LoPresti
Steve Mitra
Kavita Narayan
Douglas M. Press
Gita C. Suraj
ASSISTANT COUNTY COUNSEL
May 17, 2022
SENT VIA EMAIL TO CITY CLERK FOR DISTRIBUTION TO HON. MAYOR AND
CITY COUNCIL
Hon. Mayor Sam Liccardo and Councilmembers
City of San José
200 East Santa Clara Street
San José, California 95113
Re: May 17, 2022 City Council Meeting Item No. 10.2: Comments on Draft Settlement Agreement Amendment with the City of Santa Clara and Proposed Amendments to the San José General Plan and North San José Development Policy, Addition of Chapter 20.65 to the Zoning Ordinance Regarding Overlay Districts, Amendments to Municipal Code Chapter 14.29 Regarding the North San José Traffic Impact Fee, and Addendum to the Envision San Jose 2040 General Plan Environmental Impact Report
Dear Mayor Liccardo and Council Members:
The County of Santa Clara (“County”) submits this letter to protect its rights pursuant to existing settlement agreements with the City of San José (“City”) and its former Redevelopment Agency (“RDA”) and to express its concerns regarding the Draft Settlement Agreement Amendment (“2022 Draft Amendment”) and the City’s rushed and legally flawed process for the above-referenced amendments to the San José General Plan, the North San José Development Policy, Zoning Ordinance, and Municipal Code (collectively, the “NSJ Amendments”). The County also submits the following comments on the corresponding Addendum to the Envision San Jose 2040 General Plan Environmental Impact Report and Supplemental Program Environmental Impact Report (SCH#2009072096) and Addenda Thereto (collectively, “Addendum”).
The County is extremely concerned that approval of such actions are, among other things, legally unenforceable and would constitute breach of contract, bad faith, and breach of the covenant of good faith and fair dealing as a result of the City’s blatant disregard of the binding settlement agreements that currently exist between the City and the County, and between the City, the County, and the City of Santa Clara. The County is truly disappointed by the City’s DocuSign Envelope ID: CDD6D07D-6AD0-4925-B117-95917DD6BD68
Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
course of action in putting the 2022 Draft Amendment and NSJ Amendments in front of the City Council for consideration.
The County respectfully requests that the City Council continue this item to a date uncertain so that the relevant parties can continue their productive discussions and hopefully reach a mutually agreeable resolution. While the County supports the City’s efforts to encourage additional housing production in North San José, the City must recognize its previous binding commitments to improve the County’s transportation infrastructure that serves these areas to ensure that the planned housing development does not exacerbate traffic congestion that harms our mutual residents and hampers the regional economy. The currently effective settlement agreements were intended to mitigate negative impacts to the county’s residents. While the County is certainly willing to consider appropriately amending these binding agreements in a legal manner, any change to them must provide adequate substitute mitigation, consistent with law and sound public policy.
I. Background
The City’s North San José Development Policy (“Policy”) was originally enacted in 2005 with the goal of making North San José an important employment center and innovation district.
In summary, the existing Policy authorizes up to 32,000 housing units, 26.7 million square feet of research and development and office space, 2.7 million square feet of retail uses, and 1,000 hotel rooms.
The existing Policy currently in effect is phased. Given the overarching goal of creating an employment center, each phase includes both housing and industrial development. The Policy’s concurrent development of jobs-creating land uses together with housing partially mitigates traffic impacts associated with the Policy by allowing people to live near their jobs and decreasing the number of long-distance trips. Specifically, each of the first three phases includes 8,000 dwelling units and 7 million square feet of industrial development. The fourth and final phase allows 8,000 dwelling units and 5.7 million square feet of industrial development. Each phase includes transportation improvement projects to help mitigate traffic impacts, and the Policy does not allow for the next Phase to occur—in whole or in part—until, among other things, the required transportation improvements from the preceding phase are reasonably assured to be completed.
In 2005, the County, along with the cities of Milpitas and Santa Clara, challenged the approval of the Policy and alleged that the Environmental Impact Report (EIR) certified by the City violated the California Environmental Quality Act (CEQA) because it failed to properly consider or impose mitigation for the Policy’s impacts to transportation facilities under the jurisdiction or control of the non-City entities. In March 2006, in a consolidated action, the Santa Clara County Superior Court rendered judgment in favor of the County, Milpitas, and the City of Santa Clara. The Court held that there was not substantial evidence to support the City’s conclusion that mitigation measures were infeasible for non-City transportation facilities.
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
On November 16, 2006, the County, the City, the RDA, and related parties executed two settlement agreements to resolve the CEQA litigation (collectively the “Settlement Agreement”).
1 Generally, the Settlement Agreement requires that the City undertake and/or fund specified transportation improvements prior to initiation of Phase 2 to mitigate the Policy’s impacts on the County’s Montague Expressway, which is an extremely important East-West thoroughfare that, among other things, links I-680 with Highway 101. The Court-approved stipulation dismissing the cases recognized that the County was foregoing its legal rights in exchange for the City’s binding commitment to provide major traffic mitigation projects.
Importantly, the Settlement Agreement establishes that discovery of new facts (e.g., the City’s incorrect assumptions about market interest in certain development types) or new law (e.g., the State Legislature revises methodologies for calculating traffic impacts) would not affect the binding nature of the Settlement Agreement.
2 Although virtually the full allocation of Phase 1 housing has been completed, other Phase 1 development has not been completed, and many of the Phase 1 traffic improvements are outstanding. The outstanding improvements are vital to relieving congestion on the Montague Expressway, a critical infrastructure backbone that affects county residents beyond those living in North San José.
3 The list below summarizes the status of the traffic mitigation improvements that the City agreed in the binding Settlement Agreement to fund and/or construct before the initiation of Phase 2 of the Policy:
1. Fund and construct improvements to Montague Expressway, including eight lanes between Lick Mill and Trade Zone:
• Widening between I-880 and First St. (Status: Complete)
1 One settlement agreement included the City, the City of Santa Clara, and related parties (“City, City of Santa Clara and County Agreement”). The other settlement agreement only include the City and County and related parties (“County Agreement”). The two settlement agreements had identical terms with respect to the Policy. One of the agreements also settled separate disputes with the City involving a proposal for a theatre at the Santa Clara County Fairgrounds, annexation of County pockets, and pass-through payments from the City’s redevelopment agency to the County.
2 Section 7 of the settlement agreement between the County, City, and RDA states: “Each of the Parties expressly and knowingly acknowledges that it or its attorneys may, after execution of this Settlement Agreement, discover claims, damages, facts, or law different from or in addition to those which each now knows or believes to exist or be applicable with respect to this Settlement Agreement. Nonetheless, it is the Parties’ intention fully, finally and forever to settle and release each and every matter released in this Settlement Agreement, known and unknown, suspected or unsuspected, which now exist, may exist, or heretofore have existed, which is released in this Settlement Agreement. In furtherance of this intention, the releases given by Santa Clara, San Jose and County shall be and remain in effect as full and complete releases of matters notwithstanding the discovery or existence of any such additional or different claims, damages, facts, or law.”
3 The attachments indicate what Settlement Agreement projects have been completed and not completed as of Apr il 2022.
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
• Widening between Lick Mill Blvd. and First St. (Status: Outstanding) • Widening between I-880 and Trade Zone Blvd. (Status: Outstanding) • Interchange modifications at I-880 (Status: Outstanding) • The Trimble flyover (Status: Outstanding)
• The McCarthy-O’Toole Interchange (Prior to Phase 3)(Status: Outstanding)
2. Fund up to an amount not to exceed $11 million to the County for the construction of the Montague Expressway widening project from East Capitol Avenue easterly to Park Victoria Drive, including the I-680 interchange modification. (Status: Complete)
3. Fund $1.5 million to the County for the Montague/Mission/US-101 Interchange study. (Status: Outstanding)
II. Current Status of Settlement Agreement and Re
quest for Continuance to Date
Uncertain
On March 23, 2022, the City’s Planning Commission approved a recommendation to the City Council for approval of the NSJ Amendments consistent with the City’s plans to move forward with residential development originally planned for Phase 2 and later phases without completing the previously required infrastructure in advance of each phase. The NSJ Amendments eliminate the phasing plan and would allow development beyond Phase 1 to move forward without the required infrastructure improvements described in the Policy and required by the Settlement Agreement. The NSJ Amendments now under consideration by the City Council would violate the City’s commitments in the Settlement Agreement.
The County recently discovered that the City has been negotiating for some time with the City of Santa Clara and engaged in an extended mediation process to discuss alternate terms under the settlement agreement that includes the City of Santa Clara and the County.
Alarmingly, the City has not included the County in these conversations despite its obligations under the Settlement Agreement, the County’s shared interest in traffic mitigation, and the integrated responsibilities of the three jurisdictions for many of the improvements. The County has engaged in recent discussions with City and City of Santa Clara representatives on potential amendments to the existing Settlement Agreement. Notwithstanding these discussions, the City has put the 2022 Draft Amendment in front of the City Council for discussion even though the 2022 Draft Amendment violates the existing Settlement Agreement on its face. //
//
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
III. Enforcement of the Settlement Agreement
Notwithstanding that City staff has appeared to recognize in writing on numerous occasions that amendments to the Settlement Agreement are a necessary prerequisite for the NSJ Amendments to move forward (even the 2022 Draft Amendment contemplates the need to negotiate with the County), the City Council is considering the NSJ Amendments and 2022 Draft Amendment on an expedited basis with no County concurrence in place.
Significantly, paragraph 7 of the Stipulation approving the Settlement Agreement provides:
Collectively the [Settlement] Agreements represent Respondents’ [City’s] commitment to invest millions of dollars for traffic improvements on Santa Clara County facilities in Milpitas and Santa Clara and to support regional funding for major traffic projects within Santa Clara.
The Settlement Agreement requires that the projects be completed “[i]n and as a part of the implementation of Phase I of the NSJ Plan.”
4 Thus, the fundamental consideration for the
Settlement Agreement was the City’s commitment to mitigate impacts to the County’s Expressway caused by development under the Policy concurrent with or prior to the development occurring, as required by the phasing plan.
If the City Council approves the NSJ Amendments, the County will consider this action to be a breach and/or anticipatory breach of contract, extreme bad faith, and a breach of the covenant of good faith and fair dealing. The NSJ Amendments would allow for the development of far more than the 8,000 housing units allowed in Phase 1, even though the Phase 1 traffic mitigation improvements will not be completed. In other words, the NSJ Amendments purport to allow the City to move forward with the housing portion of Phase 2 without fulfilling its prerequisite traffic mitigation commitments under the Settlement Agreement. The City cannot rewrite history and ignore the agreements that resolved the County’s successful CEQA challenge and allowed the City to execute the Policy since 2006. The County and its residents must receive the benefit of its bargain with the City, and the County is prepared to utilize all its available remedies to ensure that this occurs.
In addition, the 2022 Draft Amendment attached to the May 17, 2022 City Council Agenda packet purports to amend the November 16, 2006 Settlement Agreement and General Release (referred to herein as the City, City of Santa Clara and County Agreement) relating to North San José that included the City of Santa Clara, the Redevelopment Agency of the City of Santa Clara, the County of Santa Clara, the City of San José and the Redevelopment Agency of San José. However, the 2022 Draft Amendment only mentions and includes as signatories the City of San José, and the City of Santa Clara, and not the other parties to the City, City of Santa
4 City, City of Santa Clara and County Agreement ¶ 1.2; County Agreement ¶ 2(a).
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
Clara and County Agreement, including the County. This is in direct contradiction to basic contract law and Section 15 of the City, City of Santa Clara and County Agreement which states that:
Any Amendment or modification of this Settlement Agreement must be in writing, and signed by all of the Parties. Any amendment or modification not made in this manner shall have no force and effect. (Emphasis added)
The City’s proposed intentional breach of the City, City of Santa Clara and County Agreement by entering into the 2022 Draft Amendment and approval of the NSJ Amendments (that ignore the City’s obligation under Settlement Agreement) constitute extreme bad faith and a breach of the covenant of good faith and fair dealing, in addition to breach of contract and/or anticipatory breach. If the 2022 Draft Amendment moves forward, the County will have no choice but to assert its rights under the Settlement Agreement against the City and the City of Santa Clara.
IV. CEQA Compliance and Comments on the Ad
dendum
The Addendum before the City Council fails to satisfy CEQA’s procedural and substantive standards in several respects. A new or subsequent Environmental Impact Report (EIR) must be prepared for the NSJ Amendments because substantial changes have been made to the project and the circumstances surrounding the project.
A. The Addendum Violates CEQA’s Fundamental Purpose to Promote Informed Decision-Making
Informed decision-making and public participation are fundamental purposes of the CEQA process.
5 The prior Planning Commission staff report and Addendum violate basic principles of transparency and CEQA because there is only one passing reference to the Settlement Agreement in the Addendum in Section 2.1.2 (Areas of Known Controversy) and no discussion of the Settlement Agreement’s mitigation requirements. There is also no mention of the 2022 Draft Amendment in the Addendum. Theseomissions result in an inaccurate and misleading project description in violation of CEQA.
As explained above, the mitigation measures required by the Settlement Agreement address the legal inadequacies of the EIR for the North San José Development Policy identified in the Court’s judgment. Given this context, it is unconscionable and a clear abuse of discretion for the City to move forward with the NSJ Amendments and the 2022 Draft Amendment without
5 See Union of Med. Marijuana Patients, Inc. v. City of San Diego (2019) 7 Cal.5th 1171, 1184-1185. The EIR thus works to “inform the public and its responsible officials of the environmental consequences of their decisions before they are made,” thereby protecting “‘not only the environment but also informed self -government.’” Citizens of Goleta Valley v. Board of Supervisors (1990) 52 Cal.3d 553, 564 (quoting Laurel Heights Improvement Ass’n. v.
Regents of Univ. of Cal. (1988) 47 Cal.3d 376, 392).
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
any analysis of the Settlement Agreement in the Addendum. This omission makes informed public participation and decision-making impossible and violates the most fundamental CEQA tenets.
6 The City’s failure to implement the mitigation projects according to the phasing plan will also result in new and different physical impacts to the environment. These impacts are not analyzed in the Addendum. Omission of key information that CEQA mandates be included in an environmental analysis constitutes a failure to proceed in the manner required by law, and the City has failed to set forth sufficient information to foster informed public participation. 7 Moreover, eliminating the phasing plan and abandoning the City’s obligations under the Settlement Agreement constitutes a significant change that makes use of an addendum inappropriate. Finally, the City’s deferral of analysis to future individual projects constitutes inappropriate “piecemealing.”
The Addendum concludes that the environmental impacts of the NSJ Amendments were addressed by the Final EIR for the Envision 2040 General Plan8 but there is no discussion of how these are addressed. Moreover, it is not clear from the face of the Final EIR for the Envision 2040 General Plan that these impacts are addressed in that document. Also, there is no discussion of the relationship between the original EIR for the Policy and the 2040 Envision General Plan EIR. In other words, the City fails to offer a coherent explanation for why it is legally acceptable to address the environmental impacts of the NSJ Amendments in an addendum to the 2040 Envision General Plan EIR, instead of preparing a subsequent EIR to the Policy EIR. This creates a confusing record and makes it impossible for the public to understand and participate in the City’s decision-making process. For example, as discussed below, the traffic study attached to the 2040 Envision General Plan EIR Addendum discusses the EIR for the original Policy, even though the Addendum modifies the 2040 Envision General Plan EIR.
B. The Addendum’s Conclusions Are Not Supported by Substantial Evidence As a general rule, if an EIR has been prepared for a project, the lead agency must prepare a subsequent or supplemental EIR under Public Resources Code section 21666 and section 15162 of the CEQA Guidelines if substantial changes are made to the project or circumstances surrounding the project. The agency’s determination must be supported by substantial evidence.9 Importantly, substantial evidence includes fact, reasonable assumptions based on
6 See Ventura Foothill Neighbors v. County of Ventura (2014) 232 Cal.App.4th 429 (invalidating addendum and requiring supplemental environmental review under abuse of discretion standard where c ounty omitted key fact from addendum, i.e. that building had increased by fifteen feet in height from what was analyzed in prior EIR).
7 Sierra Club v. County of Fresno (2018) 6 Cal.5th 502, 516.
8 Addendum, Cover Memo, p. 2.
9 CEQA Guidelines § 15162(a).
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
fact, and expert opinion supported by facts.
10 Substantial evidence does not include argument,
speculation, unsubstantiated opinion or narrative, evidence that is clearly inaccurate or erroneous, or evidence that is not credible.
11 Here, the City’s Addendum (to the wrong EIR) concludes that no subsequent or supplemental environmental review is required and therefore the Addendum to the 2040 Envision General Plan EIR is the appropriate CEQA document. 12 But the City’s key conclusions
are not supported by substantial evidence.
The Addendum repeats on numerous occasions that abandoning the Policy’s phasing plan and the Transportation Impact Fee (TIF) will not increase the maximum residential development beyond 32,000 residential units (as analyzed in the 2040 General Plan EIR) and, therefore, the NSJ Amendments will have no new or increased impacts. This conclusion is not supported by evidence or analysis, and therefore does not satisfy CEQA’s standards. Given the substantial intervening development in North San José and the surrounding area since the original Policy EIR was prepared, it strains credulity to assume that accelerating residential development, abandoning nearby job-center development, delaying traffic improvements, and eliminating a key funding source will not lead to new or increased impacts.
To justify its conclusion of no new or increased impacts, the Addendum mentions Senate Bill 743 and states that the Vehicle Miles Travel (VMT) standard will be used to evaluate traffic impacts of individual projects moving forward.
13 However, the City fails to apply this standard
to the NSJ Amendments or to explain why—under the new standard—the elimination of the phasing plan and the TIF will not lead to new or increased environmental impacts.
The Addendum references and attaches as an exhibit the North San José Traffic Impact Fee Plan Update, dated February 18, 2022 (“Hexagon Study”). The Addendum’s reliance on this study suffers from several defects. First, and most importantly, the Hexagon Study does not analyze the NSJ Amendments and therefore does not provide substantial evidence to support the conclusion that the NSJ Amendments will result in no new or increased impacts. Moreover, reliance on the VMT standard does not relieve the City from analyzing the potential impacts of the NSJ Amendments on potentially significant transportation impacts related to air quality, noise, safety, or any other impact associated with transportation. 14 10 Pub. Res. Code § 20080(e)
11 Id.
12 Addendum, p. 2.
13 Id., p. 66.
14 Pub. Res. Code § 21099(b)(3).
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
Among other things, an adequate CEQA traffic study would need to compare existing traffic patterns to projected patterns after implementation of the proposed project. The Hexagon Study does not include such an analysis. In other words, it does not compare the transportation impacts of the NSJ Amendments to transportation impacts under the existing 2040 General Plan and Policy. Nor does it consider changed circumstances since the original Policy was adopted in 2006. Instead, the Hexagon Study “reviews 16 years of built development and traffic growth to update the required improvements to serve Phase 1 of the NSJADP that were previously identified.”
15 Crucially, it ignores the possible impact of abandoning the phasing plan, expediting the development of thousands of housing units, and eliminating the TIF. Indeed, as discussed below, the Hexagon Study’s analysis of mitigation measures appears to rest on the false assumption that the Policy—and the phasing plan—will remain in place.
The Addendum and the Hexagon Study also include misstatements and inaccuracies.
Importantly, they both describe the Montague Expressway Widening project as “complete.” 16 This is false—the widening between Lick Mill Boulevard and First Street and between I-880 and Trade Zone Boulevard are both outstanding. The Hexagon Study also states that the Trimble Road and Montague Expressway Flyover are “no longer necessary” without considering the City’s obligations under the Settlement Agreement.17 The County attaches a traffic analysis prepared by WSP, Inc. to support these comments.
T he Addendum assumes that the 2040 General Plan Transportation Network will remain in place after the NSJ Amendments, even though the TIF will be eliminated for new projects.18 This assumption is unfounded. The TIF provided the vast majority of funds for the completed traffic improvements.19 The City relies on the unsupported and speculative assertion that it will be able to obtain funding from other sources.20 No specific alternative funding sources or mechanisms are identified, and the Addendum does not consider any challenges to securing new financing or its likelihood of success. In other words, the Addendum does not account for the fact that it is replacing a stable and secure source of funding for traffic improvements with an unspecified and purely conjectural source of funding.
Eliminating the TIF is a major change that requires new environmental analysis and is not appropriate for consideration in an addendum. There is no substantial evidence to support the
15 Addendum, p. 66.
16 Id., p. 9, 65.
17 Hexagon Study, p. 18.
18 Addendum, p. 68.
19 Id.
20 Id.
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
City’s conclusion that alternative fundings sources will be available other than the TIF to ensure completion of the vast majority of the General Plan Transportation Network.
With respect to specific impacts to the County’s infrastructure, the Addendum contains two findings as follows:
Impacts to Adjacent
Jurisdictions – Same as 2040 General Plan EIR.
The 2040 General Plan EIR and SEIR found that implementation of the 2040 General Plan would result in significant increases in traffic congestion on already congested roadways in neighboring cities and on County and Caltrans facilities.
Amendment of the NSJADP would not contribute to new or substantially more severe traffic congestion in adjacent jurisdictions because no additional development capacity would be added to NSJ. As indicated previously, the City would continue to implement planned traffic improvement projects in the NSJ area using alternate funding mechanisms.
21 Impact TRANS-5: Implementation of the 2040 General Plan, including development in NSJ, would result in significant increases in traffic congestion on congested roadways in neighboring cities and on County and Caltrans facilities. (Significant Unavoidable Impact).
22 These findings are not supported by substantial evidence and are legally defective. They fly in the face of the Court’s ruling that there was no substantial evidence to support the City’s conclusion that mitigation measures for impacts to County facilities were infeasible. They also fail to address the City’s obligations under the Settlement Agreement to construct traffic improvements to mitigate impacts to the County’s Expressway prior to the initiation of further development. Moreover, there is no analysis to substantiate the bald conclusion in the first finding that no net increase in total development necessarily means that there will not be an increase in traffic impacts. As stated above, the 2005 Policy relied in large part on synergies between housing and job-center development to address traffic impacts. Those synergies will be gone under the proposed actions. Rather than rely on back-of-the-envelope generalities, CEQA demands that the City analyze the impacts of removing job-center development from the Policy while proceeding with the housing development.
C. The Addendum Violates CEQA’s Requirements for Mitigation Measures The most current and operative version of the Policy—adopted in 2015 and amended in 2017—also includes the improvements required by the Settlement Agreement and the mandatory
21 Id., p. 69.
22 Id., p. 82.
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
phasing plan.
23 It explains that “[e]ach improvement must be built, under construction, or funded and within one year from beginning of construction before the next phase of development can begin.”
24 Under CEQA, if an EIR identifies feasible mitigation measures that avoid or substantially lessen significant environmental impacts, these mitigation measures must be “required in” or “incorporated into” the project—unless they are within the responsibility and jurisdiction of another agency and have been (or can and should be) adopted by another agency. 25 Such
mitigation measures must be enforced and can only be modified under certain conditions.
The improvements mandated by the Settlement Agreement are legally required mitigation measures. The original Policy EIR identifies the improvements and explained that they would reduce and/or avoid significant project impacts at certain intersections. 26 The only
justification for excluding them from the project was “because the intersections are not within the jurisdiction of the City of San José.”
27 This justification was squarely rejected by the Court, and the Court-approved stipulation describes the Settlement Agreement as fulfilling the purpose of the Court’s judgment by requiring “the mitigation of extra-jurisdictional traffic impacts arising from the Project.”28 Finally, the Settlement Agreement requires that the projects be completed “[i]n and as a part of the implementation of Phase I of the NSJ Plan,”29 which is consistent with CEQA’s requirement that mitigation measures be made enforceable by, among other things, “incorporating” them into a plan or policy.30
CEQA requires public agencies to ensure that mitigation measures are “fully enforceable” and to adopt monitoring programs to ensure implementation. 31 “The purpose of these requirements is to ensure that feasible mitigation measures will actually be implemented as
23 Development Policy (rev. 2015).
24 Id., p. 29.
25 See Pub. Res. Code § 21081(a)(1).
26 Development Policy Draft Program EIR (March 2005), p. 169.
27 Id.
28 Stipulation ¶ 3; see also id. ¶ 8 (similar language); County Agreement ¶ 2(b) (same). The California Supreme Court subsequently validated the Superior Court’s analysis in City of Marina v. Board of Trustees of the Cal. State Univ. (2006) 39 Cal.4th 341.
29 County Agreement ¶ 2(a).
30 Pub. Res. Code § 21081.6(b).
31 Id. § 21081.6.
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Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
a condition of development, and not merely adopted and then neglected or disregarded.” 32 Crucially, mitigation measures may not be avoided by treating phases of the project as separate projects as this constitutes unlawful piecemealing.33
Here, the City is attempting to do just that. As stated in the Addendum, “the distribution and density of land uses . . . will remain unchanged.”
34 The Addendum goes on to explain—
without justification—that the improvement projects will now be implemented on a new timeline based on project-specific CEQA analyses.35 In other words, the City is swapping a whole- project analysis with corresponding mitigation measures for a piecemeal approach that would provide the City an (unlawful) opportunity to avoid its mitigation obligations based on a project- by-project analysis.
The City cannot abandon its mitigation obligations without proper evidence, analysis, and consideration. “[W]here a public agency has adopted a mitigation measure for a project, it may not authorize destruction or cancellation of the mitigation . . . without reviewing the continuing need for the mitigation, stating a reason for its actions, and supporting it with substantial evidence.”
36 Similarly, “[i]f a mitigation measure later becomes ‘impracticable or unworkable,’ the governing body must state a legitimate reason for deleting an earlier adopted mitigation measure, and must support that statement of reason with substantial evidence.” 37 As explained
above, the Addendum does not satisfy these standards.
As discussed above, the Addendum also fails to squarely address the scope and conclusions of the Hexagon Study. The stated purpose of the study is “to update the required improvements to serve Phase 1 of the [Policy].”
38 It concludes that based on recent development
patterns, only “three of the four major roadway improvements continue to be required to support Phase 1 development levels.”
39 However, the proposed amendments would abandon the Policy’s requirements to complete the outstanding improvements during Phase 1. Instead, it proposes a
32 Fed’n of Hillside and Canyon Ass’ns v. City of Los Angeles (2000) 83 Cal.App.4th 1252, 1261 (citing Pub. Res.
Code § 21002.1).
33 See Lincoln Place Tenants Ass’n v. City of Los Angeles (2005) 130 Cal.App.4th 1491, 1508.
34 Addendum, p. 68.
35 Id., p. 71.
36 Katzeff v. Dept. of Forestry & Fire Protec. (2010) 181 Cal.App.4th 601, 614.
37 Sierra Club v. County of San Diego (2014) 231 Cal.App.4th 1152, 1165-1166 (cleaned up); see also Mani Brothers Real Est. Group v. City of Los Angeles (2007) 153 Cal.App.4th 1385, 1403. 38 Hexagon Study, p. 40.
39 Id.
DocuSign Envelope ID: CDD6D07D-6AD0-4925-B117-95917DD6BD68
Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
project-by-project traffic mitigation plan.
40 The Addendum does not properly address the impact
of this fundamental change to legally binding mitigation measures.
Finally, the Addendum violates CEQA’s rule against deferred formulation of mitigation measures. The CEQA Guidelines provide that the “[f]ormulation of mitigation measures shall not be deferred until some future time.”
41 An agency may only delay the details of a mitigation measure “when it is impractical or infeasible to include those details during the project’s environmental review,” and only if the agency:
1. Commits itself to the mitigation,
2. Adopts specific performance standards the mitigation will achieve, and
3. Identifies the type(s) of potential action(s) that can feasibly achieve that performance standard and that will considered, analyzed, and potentially incorporated in the mitigation measure.
The Addendum does not satisfy any of these requirements. The NSJ Amendments would abandon the phasing plan without a clear substitute. The Addendum itself does not adopt performance standards, but instead references “the City’s Transportation Analysis Policy (Council Policy 5-1).”
42 Although this policy provides a general framework for analyzing traffic impacts, it does not include specific performance standards for mitigating the impact of the NSJ Amendments.
Courts routinely approve CEQA settlement agreements that require public agencies to implement additional mitigation measures.
43 The NSJ Amendments and 2022 Draft Amendment
threaten the effectiveness of the Settlement Agreement here, and undermine the legal viability of the proposed development. If a public agency settles a CEQA action by committing to mitigation measures for a regional development plan, it cannot abandon its obligations by pivoting to a project-by-project CEQA approach—especially if the underlying land-use regulations remain unchanged.
Again, we respectfully request that the City Council take no action at this time and continue the matter to a date uncertain so that the parties can continue to discuss a mutually agreeable resolution. Absent an amended Settlement Agreement agreed to by all parties, the
40 Addendum, p. 71 (“Individual development projects and transportation improvement projects in the NSJ policy area will be required to undergo project-level transportation analysis using VMT based on the City’s Transportation Analysis Policy.”).
41 CEQA Guidelines § 15126.4.
42 Addendum, p. 71.
43 See 2 Stephen L. Kosta & Michael H. Zischke, Practice Under the California Environmental Quality Act § 23.115 (rev. ed. 2022).
DocuSign Envelope ID: CDD6D07D-6AD0-4925-B117-95917DD6BD68
Letter to Hon. Mayor and Councilmembers
Re: NSJ Amendments
Date: May 17, 2022
proposed actions are unlawful and the County will be compelled to act accordingly to ensure Montague Expressway is not negatively impacted.
In the event that the City Council moves forward with approval of the NSJ Amendments and the 2022 Draft Amendment, the County has no choice but to pursue all of its available legal remedies to protect its rights, including enforcement of the existing settlement agreements, causes of action for, among other things, bad faith and breach of the covenant of good faith and fair dealing, as well as legal challenges to the flawed process that the City has utilized to consider the NSJ Amendments and 2022 Draft Amendment.
Thank you for your consideration.
Very truly yours,
JAMES R. WILLIAMS
County Counsel
CHRISTOPHER CHELEDEN
Lead Deputy County Counsel
cc: Honorable Board of Supe rvisors (via email with attachments) Jeffrey V. Smith, JD, MD, County Executive (via email with attachments) Miguel Márquez, JD, MPP, Chief Operating Officer (via email with attachments) James R. Williams, County Counsel (via email with attachments) Jennifer Maguire, City Manager (via email with attachments) Nora Frimann, C ity Attorney (via email with attachments)
Attachments
1. Completed and Outstanding Traffic Improvement Projects Required by Settlement Agreement (Table and Map)
2. WSP USA Memorandum, dated May 16, 2022
DocuSign Envelope ID: CDD6D07D-6AD0-4925-B117-95917DD6BD68
Settlement Agreements Projects – as described by the 2006 Settlement Agreement between County of Santa Clara, Santa Clara County Financing Authority, Silicon Valley Theatre Financing Corporation, City of San José, and Redevelopment Agency of City of San José and the 2006 Settlement Agreement between the County, City of San José and City of Santa Clara (Agreements contained same terms with regard to NSJ/County) Required Improvement Status Comment
Section 2.B.i – City Constructed Projects
In and as part of the implementation of Phase I of the NSJ Plan, City shall complete and fund mitigations as follows:
Widen to 8 lanes between Lick Mill to Trade Zone Incomplete Widening is outstanding between Lick Mill Ave to First St, and widening is outstanding from
McCarthy to Trade Zone
Widen to 8 lanes all portions of the Expressway
regardless of City Boundary
Incomplete Incomplete from Trade Zone to Great Mall
Complete from Great Mall to Pecten Ct.
Incomplete from Pecten Ct. to Park Victoria
Including the I-880 Interchange Incomplete Outstanding
Trimble Flyover Incomplete Outstanding
Montague Expressway/McCarthy-O’Toole
Interchange (as Part of NSJ Phase 3)
Incomplete Outstanding
2.B.ii – City Funded Projects
City shall fund up to an amount not to exceed $11
million dollars to widen Montague east of Capitol
Ave/Great Mall
Complete City contributed $11 million
2.B.iii - Montague and 101 and Mission and 101
Interchanges
Incomplete City has not contributed $1.5 million
Attachment 1
I-880
S Main St
Great Mall
Pecten
Park Victoria
Plumeria
Mission
Trimble
Fly-over
McCarthy
O’Toole
Interchange
I-880
Interchange
Modifications
EB/WB
Completed
byCounty
($11McontributedbyCSJ)
EB
Complete
WB
Outstanding
Lick Mill
First
US 101
MILPITAS
SANTACLARA
SAN JOSE
Complete
Outstanding
SettlementAgreementProjects
WSP USA
wsp.com
MEMO
TO: Harry Freitas, Director of Santa Clara County Roads and Airports FROM: WSP USA
SUBJECT: Transportation Improvement Documents
DATE: May 16, 2022
WSP was tasked by the County of Santa Clara with providing an overview of several transportation improvement reports regarding details related to the Trimble Flyover at Montague Expressway. This Memorandum presents that overview.
SUMMARY OF NORTH SAN JOSE TRANSPORTATION REPORTS
North San Jose Deficiency Plan by Hexagon (Jan 2006) – This original Hexagon Report (“2006 Report”) is 15 years old and does not use state of the practice traffic operations methodology, which is HCM 2000 in Traffix software, and doesn’t account for upstream/downstream effects of congestion. The “future condition” in the Hexagon Study is the base year (2000) + assumed build-out of the North San Jose Development Plan, so it doesn’t account for other growth, and no future analysis year is stated.
· The 2006 Report calls for inclusion of a Trimble Flyover as part of Phase 1 improvements and estimates a cost of $30M
North San José Transportation Improvement Phasing Study by City of San Jose (Draft) (October 2018) (“2018 Report”) analyzes a future condition that is existing plus future development not including any growth not part of the NSJ development plan. Phase 4 improvements are likened to 2040 conditions. This 2018 Report assumes the flyover for 2040 conditions and says it should be included as part of Phase “B” improvements (Phase B = Phases 3+4 from the original 4 phases). The 2018 Report also states that, while the flyover would provide improvement at the intersection, it wouldn’t enhance for through capacity on the corridor, and recommends a new I-880 overcrossing at Charcot Ave as more cost-effective.
· The 2018 Report’s analysis methodology appears to be partial toward what it designates as “major roadway improvements”.
· The 2018 Report’s intersection analysis is isolated, for example it doesn’t account for congestion from upstream/downstream intersections.
· The 2018 Report’s roadways are studied with link-based (and screenline-based) volume-to-capacity ratio analysis which rely on link capacity—ignoring that intersections are the primary source of congestion on arterials.
Attachment 2
As a result, the 2018 Report draws a conclusion that the Trimble flyover serves the intersection but doesn’t provide benefit for the corridor as a whole, even though intersection delays control corridor travel times and the Montague/Trimble intersection was one of the most congested in the corridor. Corridor benefits should be evaluated from the cumulative effect of intersection and roadway improvements—not roadway improvements in isolation.
The NSJ Phase 1 Transportation Improvements Update by Hexagon (April 2021) (“2021 Report”) looks at conditions in 2018 and compares them to what was forecast in theNorth San Jose Deficiency Plan by Hexagon (Jan 2006) Report for Phase 1 conditions. It points out the differences including that in 2018 a Trimble flyover wasn’t necessary (in 2018). The 2021 Report concludes that Phase 1 improvements for Trimble/Montague are complete (with the additional 4th through lane on Montague).
The analysis provided in the 2018 Report relies on determining level-of-service based on screenline volume to capacity (V/C) ratios using outputs generated from the City of San Jose 2015 model. Based on Figure 3 of the 2021 Report, which shows the screenlines used in the analysis, it is difficult to determine the rationale for the screenlines. For example, if the analysis is focused on development in North San Jose, a more reasonable location for the East and North screenlines would be to locate the screenlines closer to the San Jose city limits at Milpitas (East Screenline) and Santa Clara (North Screenline), to better isolate impacts caused by North San Jose Phase 1 and subsequent phase developments. In particular, the North Screenline seems problematic towards isolating North San Jose development impacts, as it is too long, as well as located on the wrong side of US 101 to capture travel on and off from US 101 to North San Jose.
For the screenline analysis, the 2015 City of San Jose (CSJ) model is used in the 2021 Report to determine the segment volume to capacity ratio for segment level of service for peak hour and 4-hour peak period traffic levels.
Results from the model reported in Tables 4 and 5 (East Screenline) show counterintuitive volumes for Brokaw Road and significant underestimation of volumes on East Tasman Drive in the PM peak conditions. Prior to use in the study, validation of the City of San Jose model is needed, to validate to actual screenline counts to demonstrate that the model volumes are reasonable; the 2021 Report does not indicate whether this validation was performed by Hexagon. In particular, it is not standard practice for models to be validated to 4-hour counts (which Hexagon appears to have done in its 2021 Report), which introduces uncertainty regarding the use of 4- hour volumes for estimating screenline level-of-service analysis.
The findings in the 2021 Report on the East Screenline improvements for Phase 1 should be revised, as there is a deficiency indicated for the AM eastbound direction in the screenline analysis reported in Table 4. This deficiency is based on the statement in the report: “If the volume-to-capacity ratio of a screenline for a four-hour commute or peak-hour periods under Year 2015 Conditions is higher than 0.9 (i.e. LOS E or F), the major roadway improvements would be needed to increase the overall capacity of the screenline.” Based on the results shown on Table 4 of the 2021 Report, AM peak hour westbound screenline V/C is greater than 0.9 (0.92 on Table 4), therefore the capacity is inadequate for Phase 1 development levels according to the impact thresholds. The concluding statements in the 2021 Report for the improvements required for Phase 1 for the East Screenline should be updated to address the deficiency. Finally, this and future analysis for North San Jose development policies should reflect the latest decision by the City of San Jose to not proceed with the Charcot Road overcrossing, and how the project phasing conclusions for projects originally defined in the North San Jose Deficiency Plan (January 2006) are impacted without the overcrossing.
The NSJ Traffic Impact Fee Plan Update by Hexagon (February 2022) (“2022 Report”) provides an update toThe NSJ Phase 1 Transportation Improvements Update (2021 Report) to consist of Year 2021 Updates within Section 4. Discussion related to COVID’s affect on transportation were also included within the 2022 Report. Several discussion points related to the I-880/Charcot interchange were also removed from various sections of the report.
The overall assessment of this document is the same as those noted within the section above.
KEY TAKAWAYS
The analysis methods included within the above reports do not provide sufficient detail and results to determine the effectiveness of a proposed flyover at the Trimble Road/Montague Expressway intersection. The Reports did not include a future analysis (20-Year Horizon) to determine future needs at the intersection. The Reports note that future improvements within the corridor should include the proposed flyover but do not provide quantitative analysis. Trimble Flyover would provide benefits at the Trimble Road/Montague Expressway intersection. Furthermore, it would also improve flow along Montague Expressway in combination with other intersection improvements along the corridor.
Exhibit C
OFFICE OF THE COUNTY COUNSEL
COUNTY OF SANTA CLARA
County Government Center
70 West Hedding Street
East Wing, 9th Floor
San José, California 95110-1770
(408) 299-5900
(408) 292-7240 (FAX)
James R. Williams
COUNTY COUNSEL
Greta S. Hansen
CHIEF ASSISTANT COUNTY COUNSEL
Robert M. Coelho
Tony LoPresti
Steve Mitra
Kavita Narayan
Douglas M. Press
Gita C. Suraj
ASSISTANT COUNTY COUNSEL
June 17, 2022
SENT VIA EMAIL TO CITY CLERK FOR DISTRIBUTION TO HON. MAYOR AND
CITY COUNCIL
Hon. Mayor Sam Liccardo and Councilmembers
City of San José
200 East Santa Clara Street
San José, California 95113
Re: June 21, 2022 City Council Meeting Item No. 2.8: Comments on North San José Settlement Agreement with City of Santa Clara
Dear Mayor Liccardo and Council Members:
The County of Santa Clara (“County”) submits this letter to the City of San José (“City”) to express its concerns and preserve its objections to the above-referenced draft settlement agreement with the City of Santa Clara (“Draft Agreement”).
The Draft Agreement purports to modify the City’s obligations under a 2006 settlement agreement between the County, the City, and the City of Santa Clara (“2006 Agreement”). At its May 17, 2022 meeting, the City Council considered a similar Draft Settlement Agreement Amendment (“Draft Amendment”) and related amendments to the North San José Development Policy, the San José General Plan, Zoning Ordinance, and Municipal Code (collectively, the “NSJ Amendments”).
The County submitted a letter objecting to the Draft Amendment and the NSJ Amendments (the “May 17 Letter”). It explained that the City’s proposed actions violated the California Environmental Quality Act (CEQA) and constituted a breach and/or anticipatory breach of contract, extreme bad faith, and breach of the covenant of good faith and fair dealing by, among other things, disregarding the mitigation measures required under the 2006 Agreement.
Despite the County’s objections, the City adopted the NSJ Amendments and approved the 2022 Draft Amendment. On June 10, 2022, the City and the County executed a Tolling DocuSign Envelope ID: E746453C-4BB7-410E-AD46-770E5B46182F
Letter to Hon. Mayor and Councilmembers
Re: Proposed North San José Settlement with City of Santa Clara June 17, 2022
Agreement to preserve their respective positions and attempt to avoid litigation. The Tolling Agreement requires the parties to mediate and use their best efforts to resolve all disputes related to the 2006 Agreement, the NSJ Amendments, and the May 17 Letter. The County is therefore deeply concerned by the City’s consideration of the Draft Agreement, which would, in an identical way to the Draft Amendment, result in the City’s intentional breach of the 2006 Agreement. The Draft Agreement seems to fly in the face of the City’s commitment to negotiate in good faith with the County as part of the mediation.
As explained in the May 17 Letter, the 2006 Agreement cannot be modified without the County’s approval. The Draft Agreement attempts to sidestep this obvious issue by styling itself as a new agreement and disclaiming any impact on the County’s rights under the 2006 Agreement. These changes are immaterial. The Draft Agreement suffers from the same defect as the Draft Amendment—it abandons the City’s obligations under the 2006 Agreement without the County’s consent. As explained in the May 17 Letter, the City’s actions also violate CEQA by modifying binding mitigation measures without proper environmental analysis.
The County therefore reiterates and incorporates by this reference all the claims and objections asserted in the May 17 Letter. The County will use its best efforts to resolve this matter in mediation, as required under the Tolling Agreement. However, if the Draft Agreement moves forward and mediation is unsuccessful, the County reserve its right to assert these claims in court, subject to the extended timeline provided by the Tolling Agreement.
Thank you for your consideration.
Very truly yours,
JAMES R. WILLIAMS
County Counsel
AARON FORBATH
Deputy County Counsel
c: Honorable Board of Supervisors (via email)
Jeffrey V. Smith, JD, MD, County Executive (via email)
Miguel Márquez, JD, MPP, Chief Operating Officer (via email) Jennifer Maguire, City Manager (via email)
Nora Frimann, City Attorney (via email)
DocuSign Envelope ID: E746453C-4BB7-410E-AD46-770E5B46182F
Exhibit D
Exhibit E
Montague Overpass at O'Toole/McCarthy
Concept
Right turn from WB Montague Expy
to McCarthy Ave underneath the
expressway through lanes
Ramps from O'Toole/McCarthy
to elevated expressway
Ramp from O'Toole/McCarthy
feeds into new #1 lane
Approx. ROW
Bike ramps to/from the expressway
would require approx. 5-10' wide ROW
acquisition for each ramp. Ramps can
stay at or near the existing grade.
Existing large power poles on
the south side of expressway
would have to be moved,
altered or avoided
11'
11'
11'
11'
11'
11'
11'
11'
11'
11'
11'
5'
4'
4'
4'
11'
11'
11'
11'
11'
11'
11'
11'
11'
11'
11'
4'
4'
15'11'
6'
11'11' 17'
15'11'5'11' 11' 11' 11'
5'
770'
850'
Montague begins
rising above grade
Montague begins
rising above grade
5'5'
5'
There is heavy truck traffic at
this intersection. Bridge design
needs to accommodate large
turning radii.
DRAFT
Exhibit F
Exhibit G
Acknowledgment, General Release, and
Settlement Agreement Page 1 of 6 DRAFT AGREEMENT
North San José Development Policy
DRAFT AGREEMENT
ACKNOWLEDGMENT, RELEAS E, AND SETTLEMENT AGREEMENT BETWEEN
THE COUNTY OF SANTA CLARA AND THE CITY OF SANTA CLARA REGARDING THE NORTH SAN JOSÉ DEVELOPMENT POLICY
This Acknowledgement, Release, and Settlement Agreement (“Agreement”) is made and entered into by and between the County of Santa Clara (“County”) and the City of Santa Clara (“City”), with the acknowledgement of the City of San José. The City and the County are collectively referenced herein as “Parties” and individually as a “Party.”
RECITALS
WHEREAS, on June 21, 2005, the City of San José (“San José”) adopted the North San José Development Policy (“Policy”) which included General Plan amendments, m odifications to the North San José Area Development Policy, the North San José Deficiency Plan, the Floodplain Management Plan for North San José, and an infrastructure fee program, which created the framework for new residential, industrial, retail, and office development in North San José; WHEREAS, the Policy meters development permits in the Policy area by the maximum industrial and commercial square footage and the number of housing units that may be developed within each of four phases specified in the Policy, along with construction of transportation improvements identified in the Policy;
WHEREAS, in July 2005, the County, the City, and related parties filed lawsuits challenging the Policy and alleging violations of the California Environmental Quali ty Act (CEQA);
WHEREAS, in March 2006, the Santa Clara County Superior Court rendered judgment in favor of the County and the City on the basis that San José’s determination that there were no feasible mitigation measures for impacts to transportation facilities under the jurisdiction or control of non-City entities was not supported by substantial evidence; WHEREAS, on Novembe
r 16, 2006, the County, the City, San José, and related parties executed two settlement agreements to resolve the CEQA litigation (collectively, the “2006 Settlement Agreement”), attached hereto as Exhibit A;
WHEREAS, the 2006 Settlement Agreement required San José to fund and construct certain traffic improvements and the County to fund and complete certain studies and designs for traffic improvements;
WHEREAS, due to changes to State laws, priorities, and circumstances, on May 17, 2022, the San José City Council adopted amendments to the Policy, as well as related amendments to the City’s General Plan, Zoning Ordinance, and Municipal Code (collectively, the “NSJ Amendments”) and a corresponding Addendum to the Envision San José 2040 General Plan
Acknowledgment, General Release, and
Settlement Agreement Page 2 of 6 DRAFT AGREEMENT
North San José Development Policy
Environmental Impact Report and Envision San José 2040 Supplemental Environmental Impact Report (“Addendum”);
WHEREAS, among other changes, the NSJ Amendments eliminate several roadway improvements described in the 2006 Settlement Agreement, modify the Policy’s phased mitigation plan, and allow San José to conduct a project -by-project analysis of transportation impacts for future development projects;
WHEREAS, prior t
o the San José City Council’s consideration of the NSJ Amendments and the Addendum, the County submitted a public letter asserting its rights under the 2006 Settlement Agreement and raising several CEQA issues (“County Letter”), attached hereto as Exhibit B;
WHEREAS, on June 28, 2022, the City and San José executed a settlement agreement (“2022 Settlement Agreement”);
WHEREAS, in the 2022 Settlement Agreement, the City releases claims against San José related to the NSJ Amendments in exchange for various roadway improvements and other consideration outside the scope of the 2006 Settlement Agreement; WHEREAS, prior t
o the City’s approval of the 2022 Settlement Agreement, the County submitted a letter to the City arguing that the 2022 Settlement Agreement improperly modified the 2006 Settlement Agreement without the County’s approval (“Second County Letter” and, collectively with County Letter, “County Comment Letters”), attached hereto as Exhibit C; WHEREAS, on December 15, 2022, the County and San José executed a settlement agreement with San José to resolve all claims related to the NSJ Amendments and all issues raised in the County Comment Letters (“NSJ Settlement Agreement”), attached hereto as Exhibit D;
WHEREAS, the NSJ Settlement Agreement does not take effect unless and until the County and the City execute this Agreement; and,
WHEREAS, the Parties wish to completely and fully settle all claims and issues raised in the County Comment Letters, except as otherwise provided herein.
NOW, THEREFORE, for and in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree to the foregoing terms as follows:
TERMS OF SETTLEMENT
1. Terminati on of 2006 Settlement Agreement. The City and County hereby agree that, in light of this Agreement, the 2022 Settlement Agreement, and the NSJ Settlement Agreement, the 2006 Settlement Agreement is terminated upon full execution of this
Acknowledgment, General Release, and
Settlement Agreement Page 3 of 6 DRAFT AGREEMENT
North San José Development Policy
Agreement and that the 2006 Settlement Agreement shall no longer have any force or effect.
2. Release. Except for the rights and duties set forth in this Agreement and except those provisions that survive termination, cancellation, or expiration of this Agreement, the Parties, individually and on behalf of each of their officials, employees, heirs, estates, executors, administrators, assigns, agents, representatives, insurers, and attorneys, hereby forever release and fully discharge one another and each of their officials, employees, heirs, estates, executors, administrators, assigns, agents, representatives, insurers, and attorneys from (1) any and all claims, disputes, or causes of action relating to the NSJ Amendments, (2) Addendum, (3) 2006 Settlement Agreement, (4) any claims or allegations asserted in the County Comment Letters and corresponding public comments to the City, and (5) the execution of the NSJ Settlement Agreement.
3. Waiver of Civil Code Section 1542. The Parties each acknowledge that they are familiar with California Civil Code section 1542. This Agreement is intended to release the claims and causes of action described herein, and the Parties hereby expressly waive the provisions of California Civil Code section 1542 only with respect to the claims and causes of action described in this Agreement. California Civil Code section 1542 provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT
THE CR
EDITOR 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 THE RELEASED PARTY.
4. Enforcement and Remedies. In a
ny action at law or suit in equity to enforce this
Agreement or the rights of the Parties, the prevailing Party shall be entitled to reasonable attorneys’ fees and all other reasonable costs and expenses incurred in such action or suit.
5. Effective Upon Execution. This Agreement shall become effective upon execution by both parties (“Effective Date”).
6. General Provisions
a. Integration. The terms of this Agreement, including all exhibits, are contractual, and not merely recital, and constitute a fully binding and complete agreement between the Parties regarding its subject matter. This Agreement supersedes any and all prior or contemporaneous agreements, representations, and understandings of or between the Parties, and the Parties each warrant that they are not relying on any such prior representations. b. Headings. The headings in this Agreement are included solely for convenience of reference and shall not affect the interpretation of any provision in this Agreement or any of the rights and obligations of the Parties.
Acknowledgment, General Release, and
Settlement Agreement Page 4 of 6 DRAFT AGREEMENT
North San José Development Policy
c. Ambiguities. Eac h Party and its attorney cooperated in the drafting and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against any Party.
d. Amendments. The terms of this Agreement may not be altered, amended, modified, or otherwise changed in any respect except by a writing duly executed by City and County.
e. Governing Law. This Agreement shall be deemed to have been entered into in Santa Clara County, California, and all questions of validity, interpretation, or performance of any of its terms or of any rights or obligations of the parties to this Agreement shall be governed by California law.
f. Additional Acts. The
Parties agree to do such acts and to execute such documents as are necessary to carry out the terms and purposes of this Agreement. g. Successors and Assigns. This A greement shall be binding upon, and inure to the benefit of, the Parties’ successors, assigns, agents, and representatives. h. Authority to Execute Agreement. By signing below, each signatory warrants and represents that they executed this Agreement in their authorized capacity and that, by their signature on this Agreement, they or the entity upon behalf of which they acted, executed this Agreement.
i. Attorneys’ Fees and Costs. Except as specified in Section 4, the Part ies agree that
each Party hereto shall bear its own attorneys’ fees and costs incurred in connection with the events that are subject to this Agreement, and each Party waives any claim for attorneys’ fees or costs against any other Party.
j. Severability. If a
ny portion or provision of this Agreement is found to be illegal, invalid, unenforceable, nonbinding, or otherwise without legal force or effect, the remaining portion(s) will remain in force and be fully binding.
k. Counterparts. This Agreement may be executed in counterparts with the same force and effectiveness as though executed in a single document. l. Contract Execution. Unless otherwise prohibited by law or County policy, the Parties agree that an electronic copy of a signed agreement, or an electronically signed agreement, has the same force and legal effect as an agreement executed with an original ink signature. The term “electronic copy of a signed agreement” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed agreement in a portable document format. The term “electronically signed agreement” means a contract that is executed by applying an electronic signature using technology approved by the County. [signatures on following page]
Acknowledgment, General Release, and
Settlement Agreement Page 5 of 6 DRAFT AGREEMENT
North San José Development Policy
IN WITNESS WHEREOF, and intending to be legally bound, the Parties have executed this Agreement as of the Effective Date.
COUNTY OF SANTA CLARA
Dated:_______________ By:______________________________ JAMES R. WILLIAMS
County Counsel
APPROVED AS TO FORM AND LEGALITY
Dated:_______________ By:______________________________ Aaron Forbath
Deputy County Counsel
CITY OF SANTA CLARA
Dated:_______________ By:______________________________ []
[]
APPROVED AS TO FORM
Dated:_______________ By:______________________________ []
[]
Acknowledgment, General Release, and
Settlement Agreement Page 6 of 6 DRAFT AGREEMENT
North San José Development Policy
ACKNOWLEDGED BY CITY OF SAN JOSÉ:
Although not a Party to this Agreement, the City of San José acknowledges this Agreement; that the 2006 Settlement Agreement is terminated pursuant to the combination of this Agreement, the 2022 Settlement Agreement, and the NSJ Settlement Agreement; and that the City of San José is a party to the 2022 Settlement Agreement and the NSJ Settlement Agreement.
CITY OF SAN JOSÉ
Dated:_______________ By:______________________________ JENNIFER A. MAGUIRE
City Manager
APPROVED AS TO FORM
Dated:_______________ By:______________________________
NORA FRIMANN
City Attorney