16 Attachment 4 - North 40 Transportation Demand Management Agreement - Market Hall
SMHH-54443\2295352.2 Page 1 of 7 ATTACHMENT 4
DRAFT – FOR DISCUSSION ONLY
4845-2286-0215v1 ALF\09427065
WHEN RECORDED MAIL TO:
TOWN OF LOS GATOS
110 E. MAIN STREET
LOS GATOS, CA 95030
ATTN: TOWN CLERK
______________________________________________________________________________
NO FEE PER GOVERNMENT CODE
SECTIONS 6103 AND 27383
NORTH 40 TRANSPORTATION DEMAND MANAGEMENT AGREEMENT
(MARKET HALL)
This North 40 Transportation Demand Management Agreement (“TDM Agreement” or
“Agreement”) is entered into effective this ___ day of _________, 2020, by and between the
Town of Los Gatos, a California General Law Town (“Town”) and SummerHill N40 LLC, a
California limited liability company (“SummerHill”), each a “Party” and collectively “Parties,”
with respect to the following facts and circumstances:
WHEREAS, in 2017, the Town approved Phase 1 of the North 40 project (“N40 Phase
1”) to be developed on part of the property known as the North 40 site, bounded generally by
California State Route 17 to the west, Lark Avenue to the south, California State Route 85 to the
north and Los Gatos Boulevard to the east; and
WHEREAS, N40 Phase 1 includes a commercial condominium development that will be
created on Lot 27 of Tract 10441 (within N40 Phase 1) that is expected to contain a commercial
condominium containing approximately 20,761 square feet of commercial space plus 2,772
square feet of community space (the “Market Hall Commercial Condo”), a garage condominium,
and forty nine (49) affordable senior apartments and (1) manager apartment within one
commercial condominium (the “Senior Affordable Condo”), collectively known as the “Market
Hall Development”; and
WHEREAS, that portion of the N40 Phase 1 site to be benefitted and burdened by the
effect of this Agreement is, initially, the entire Market Hall Development, more particularly
described in Exhibit A attached hereto and incorporated herein by this reference (provided that
the legal description of the burdened property is subject to adjustment as provided in Section 13
hereof); and
SMHH-54443\2295352.2 Page 2 of 7 ATTACHMENT 4
DRAFT – FOR DISCUSSION ONLY
4845-2286-0215v1 ALF\09427065
WHEREAS, the requirements of development approved for the Market Hall Condo
include the implementation of a TDM program (the “TDM Program”); and
WHEREAS, it is not practicable for the Market Hall Condo to mitigate transportation
impacts on and through a Market Hall Condo site-only TDM Program; and
WHEREAS, the TDM program will serve N40 Phase 1 and other Town locations and
measure effectiveness by total reductions in vehicle miles for travel originating and concluding
both within and outside the Market Hall Development, in order to offset the impact of the Market
Hall Development; and
WHEREAS, the Town is best positioned to implement, monitor, and adjust such a
program.
NOW THEREFORE, in consideration of the foregoing recitals and the conditions and
covenants contained herein, the Parties hereto agree as follows
1. TDM Contribution. The total SummerHill contribution to the TDM Program for
the Market Hall Condo shall be in the form of annual payments, each of the sum of Seventeen
Thousand Six Hundred Forty-Nine and 75/100 Dollars ($17,649.75) (the “TDM Contribution”).
The first such payment shall be due and payable within ten (10) days after the issuance by the
Town of the Certificate of Occupancy for the tenant improvements of the Market Hall Condo.
Subsequent annual payments shall be due and payable on each annual anniversary of the date of
the first payment. Each annual payment shall be adjusted by the San Francisco-Oakland-San
Jose Metropolitan Area Consumer Price Index for All Urban Consumers, all items (CPI). The
adjustment shall be based upon the CPI published on December 31 of the preceding year.
2) Use of Funds. The Town shall program the use of funds for townwide TDM
measures, such measures being at the Town’s sole discretion. The funds shall be used toward
TDM measures, which may include the accrual of funds over time without limit, to be used
toward future TDM measures.
3) Senior Affordable Condo Is Not Obligated by this TDM Agreement. Although
Exhibit A to this Agreement initially describes all of the Market Hall Development (Lot 27 of
Tract 10441), it is the intent of SummerHill and the Town that this TDM Agreement not bind or
burden the Senior Affordable Condo consisting of forty nine (49) affordable senior apartments
and (1) manager apartment because the TDM Program funding obligation for the Senior
Affordable Condo is being met by a separate TDM Agreement that has been entered into
between SummerHill and the Town with respect to an adjacent residential project knows as
“Bellaterra.” Accordingly, the TDM Contribution referenced above and this TDM Agreement
shall not bind the Senior Affordable Condo or the garage condominium that will be created
within Lot 27 when a condominium plan is recorded, which separation shall be effected pursuant
to the terms of Section 13, below.
4) Term. As the transportation impact from the Market Hall Condo will continue in
perpetuity, so shall the TDM Program and fees shall continue in perpetuity or until such point as
the Town acts to cancel the TDM Program.
SMHH-54443\2295352.2 Page 3 of 7 ATTACHMENT 4
DRAFT – FOR DISCUSSION ONLY
4845-2286-0215v1 ALF\09427065
5) Operation of TDM Program. The Parties acknowledge that the TDM Program is a
Town-operated and managed program. SummerHill’s role is limited to providing funding as
required by this Agreement. No relationship of agency, partnership, or joint venture exists
between the Parties with respect to the TDM Program. The Town shall defend, indemnify, and
hold harmless SummerHill and its agents, members, managers, employees, officers, directors,
shareholders, successors and assigns from any third party claims, lawsuits, damages, liabilities,
costs and expenses (including attorneys’ fees and costs) for personal injury or property damage
arising out of, or relating to, the operation of the TDM Program, except to the extent the claim at
issue is caused by the negligence or willful misconduct of SummerHill.
6) Dispute Resolution. Any dispute under this TDM Agreement, including with regard to
the payment amounts to be paid pursuant to Section 1 hereunder, shall first be negotiated by the
Parties. If negotiation fails, either Party may demand binding arbitration, which shall be
conducted under the auspices of the Judicial Arbitration and Mediation Service (JAMS). Each
Party shall bear its own costs and attorneys’ fees in the arbitration, regardless of the outcome
thereof.
7) Integrated Agreement. This TDM Agreement shall be deemed the complete and total
agreement of the Parties concerning the subject matter hereof, which supersedes memoranda or
correspondence, if any, and any previous drafts or oral understandings, if any, made by the
Parties concerning the subject matter hereof. Nothing herein shall preclude the Parties from
executing such other documents as are necessary to perfect this Agreement.
8) No Third-Party Beneficiaries. This TDM Agreement is intended exclusively for the
benefit of the Parties hereto, and no third parties are entitled to any rights hereunder or to claim
to be beneficiaries hereof.
9) Successors and assigns. This TDM Agreement shall be binding upon, and inure to the
benefit of, the Parties and their respective successors, transferees and assigns. This TDM
Agreement may be assigned by SummerHill to any entity that controls, is controlled by, or is
under common control with SummerHill. In addition, the Parties acknowledge that it is
expressly contemplated that this TDM Agreement will be assigned by SummerHill to the Market
Hall Commercial Condo owner, which will assume all obligations of SummerHill hereunder.
SummerHill shall give written notice of such assignment to the Town. Upon the giving of such
notice, SummerHill shall be released from all obligations and duties of any nature hereunder. If
requested by SummerHill, Town shall record a document releasing SummerHill or its affiliated
assignee(s) from all such obligations in the Official Records of Santa Clara County, California.
10) Amendments to be in Writing. This TDM Agreement may not be altered, amended,
modified or changed in any respect or particular whatsoever except by writing duly executed by
all the Parties to this TDM Agreement.
11) Notice. All notices shall be given personally or by first class mail, postage prepaid,
addressed as shown below. Notices shall be deemed given on the earlier of the date delivered or
the second day following the date on which the same have been mailed in the manner required
by the prior sentence. Any of the Parties may, by notice given in the manner required by this
Section, designate any further or different addresses to which subsequent notices shall be sent.
SMHH-54443\2295352.2 Page 4 of 7 ATTACHMENT 4
DRAFT – FOR DISCUSSION ONLY
4845-2286-0215v1 ALF\09427065
a) Notice to the Town:
Town of Los Gatos
110 E. Main St.
Los Gatos, CA 95030
Attn: Town Manager
b) Notice to SummerHill
SummerHill N40 LLC
3000 Executive Parkway, Suite 450
San Ramon, CA 94583
Attn: Chief Operating Officer
with a copy to
SummerHill N40 LLC
777 South California Ave.
Palo Alto, CA 94304
Attn: General Counsel
12) Recording. The Parties shall cause this TDM Agreement and all amendments and
supplements to it, to be recorded against the property described in Exhibit A in the Official
Records of Santa Clara County, California.
13) Covenants to Run with the Land. All rights and obligations under this Agreement are
intended by the Parties to be, and shall be construed as, covenants running with the Market Hall
Development, subject to the provisions of this section. All persons who may have or may
acquire an interest in the Market Hall Development shall be deemed to have notice of, and be
bound by, the terms of the Agreement, subject to the provisions of this section. When
SummerHill closes escrow on the sale of any or all of the condominiums within the Market Hall
Development, SummerHill will assign all of its rights and obligations under this Agreement to
the new owner of the Market Hall Commercial Condo only (excluding the garage condominium
and/or the Senior Affordable Condo), and thereafter SummerHill shall be released from all
obligations under this Agreement that arise from and after the date of such closing and
assignment. Written notice of such assignment shall be provided to the Town.
At any time after a condominium plan has been recorded that creates the condominiums
within the Market Hall Development, at the request of the Town, SummerHill, or the owner of
the Senior Affordable Condo, the Parties to this Agreement shall enter into an amendment to this
Agreement that replaces Exhibit A of this Agreement with the legal description for only the
Market Hall Commercial Condo and excluding the Senior Affordable Condo and the garage
condominium.
14) Mortgagee Protection. No breach of this Agreement shall defeat or render invalid the
lien of any deed of trust or mortgage recorded against all or any portion of the Market Hall
Development. No lender taking title to all or any portion of the Market Hall Development
SMHH-54443\2295352.2 Page 5 of 7 ATTACHMENT 4
DRAFT – FOR DISCUSSION ONLY
4845-2286-0215v1 ALF\09427065
through foreclosure or deed in-lieu of foreclosure shall be liable for any defaults or monetary
obligations of SummerHill arising prior to acquisition of possession of such property by such
lender. The foreclosing lender shall have the right to find a substitute developer to assume the
obligations of SummerHill, which substitute shall be considered for approval by the Town
pursuant to this Agreement, which approval shall not be unreasonably withheld, conditioned or
delayed. The Town agrees to provide any lender of SummerHill that has recorded a deed of trust
or mortgage against all or any portion of the Market Hall Development of which the Town has
been given notice (each, a “Lender”) with written notice of any default relating to SummerHill
and/or the Market Hall Development given by the Town to SummerHill. The Town agrees that,
notwithstanding anything to the contrary contained in this Agreement, Lender shall have an
additional ninety (90) days from the date Lender receives notice of a default to cure any such
default, provided that Lender shall not have any obligation to cure any such default.
15) Miscellaneous. This TDM Agreement may be signed in counterparts. Each executed
duplicate hereof shall be considered as an original. Facsimile or signatures on electronically
transmitted documents in PDF form and copies of signatures shall have the same force and effect
as original signatures. The captions and titles herein are for convenience only and shall not be
used to interpret this TDM Agreement.
[SIGNATURES ON FOLLOWING PAGE]
SMHH-54443\2295352.2 Page 6 of 7 ATTACHMENT 4
DRAFT – FOR DISCUSSION ONLY
4845-2286-0215v1 ALF\09427065
IN WITNESS WHEREOF, The Parties acknowledge and accept the terms and
conditions of this TDM Agreement as evidenced by the following signatures of their duly
authorized representatives. It is the intent of the Parties that this TDM Agreement shall become
operative on the date first above written.
SummerHill N40 LLC, a California limited liability company
By: SummerHill Homes LLC, its manager
By: ____________________________
Its: ____________________________
By: ____________________________
Its: ____________________________
TOWN OF LOS GATOS, a California municipal corporation
By: Laurel Prevetti
Its: Town Manager
APPROVED AS TO FORM:
Robert Schultz, Esq.
Town Attorney
ATTEST:
__________________________________
Shelley Neis
Town Clerk
SMHH-54443\2295352.2 Page 7 of 7 ATTACHMENT 4
DRAFT – FOR DISCUSSION ONLY
4845-2286-0215v1 ALF\09427065
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY SUBJECT TO THIS TDM AGREEMENT
Real property located in the Town of Los Gatos, County of Santa Clara, State of California,
described as follows:
LOT 27 AS SHOWN ON THE MAP OF “TRACT 10441”, FILED FOR RECORD ON
OCTOBER 11, 2018 IN BOOK 918 OF MAPS, AT PAGES 4 THROUGH 18, SANTA CLARA
COUNTY RECORDS.