Addendum B Attachment 65Los Gatos Union School District
17010 Roberts Road
Los Gatos, CA 95032
(408) 335 -2000 Phone rr r
(408) 395 -6481 Fax
www.l¢usd.kl2.ca.us f
Dr. Diana G. Abbati, Superintendent
SENT VIA MAIL and EMAIL at jpaulson(a?losgatoscp.go%
April 10, 2015
Town of Los Gatos
c/o Joel Paulson, Community Development Department
110 E. Main Street
Los Gatos, CA 95031
Re: North 40 Specific Plan Area -Voluntary Contribution Agreement between the Los Gatos
Union School District and North 40 Developers
Honorable Mayor, Town Council Members and Staff:
Thank you for the opportunity to provide additional comments on the North Forty Specific Plan and share
the views of the Los Gatos Union School District ( "District ") as to the scope and content of the proposed
project's impact on our schools.
I am pleased to announce that the District and the North 40 Developers reached a unique agreement (see
attachment) to address the need for the expansion of school facilities. At the Monday, April 13, 2015 District
Board meeting, the Superintendent and the Assistant Superintendent will be recommending that the Board of
Trustees accept the agreement with the North 40 Developers for the following reasons:
• The North 40 Specific Plan is an appropriate way for the Town of Los Gatos to achieve its State
Regional Housing Needs Allocation (RHNA) requirement, and with this agreement, accommodate
future impacts to school district enrollment.
• The District is based on the principle of community or neighborhood schools. The District believes
that dividing neighborhoods between school districts does not support this principle.
If you require any additional information, please feel free to contact me. I also invite you to join the
Board of Trustees on Monday, April 13'" at 6:30 p.m. at the District office.
Very truly yours,
Diana g. Abbati
Diana G. Abbati, Ed.D.
Superintendent
cc: Los Gatos Union School District Board of Trustees
Assistant Superintendent- Business Services /CBO
Town of Los Gatos Mayor, Council Members and Planning Commissioners
Enclosure (1): Voluntary Agreement between the Los Gatos Union School District and North 40 Developers
Board of Tmstees • Scott Broomfield • Emi Eto • Leigh -Anne Marcellin • Alex Potts • Peter Noymer
ATPACHWNT 65
VOLUNTARY CONTRIBUTION AGREEMENT a
7u%r4 -1 e
This Voluntary Contribution Agreement ( "Agreement" s made and entered into on this
day of April, 2015 ("Effective Date "), by and be en Los Gatos Union School District
("District ") on the one hand, and Grosvenor USA and SummerFGi11 Homes LLC (each a
"Developer," collectively "Developers ") on the other,each sometimes referred to herein as a
"Party" and collectively as the "Parties."
RECITALS
A. The Town of Los Gatos ( "Town') is in the process of developing for approval by the
Town Council a Specific Plan (the "North Forty Specific Plan") for certain property within the
Town known as the "North Forty Property."
B. Developers have certain contractual relationships with the owners of portions of the
North Forty Property, and intend to attempt to develop the property with a mixed use project (the
"Project") potentially involving residential, commercial, hotel and/or office uses consistent with
the adopted North 40 Specific Plan. Attached hereto as Exhibit A is a description of the North
Forty Property in which Developers have a contractual interest.
C. District has publicly expressed concerns about its need for new school capital facilities
both to house students who would live within the new residential units in the Project as well as to
address existing capacity challenges, and has requested that the Town consider setting aside a
portion of the North Forty Property for school purposes.
D. Developers desire to assist in ameliorating impacts on District's schools by contributing
land and/or funds to District in excess of what they are required to pay through the normal SB50
school fee process. District desires to receive such additional contribution and in rewm publicly
acknowledges that the above - stated concerns have been satisfied, and that it supports both the
North Forty Specific Plan and the Project.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and
conditions contained herein, the Parties hereto agree as follows:
1) Options for Contribution. Upon the terms and conditions set out herein, Developers shall
jointly select for their contribution to the District either Option A or Option B, which are
described in sections 2 and 3 of this Agreement.
2) Option A — Land and Fees. The District needs, at a minimum, two (2) acres of land
(referred to as "School Property") for construction of needed school facilities. The School
Property must be contiguous, located within the District's boundaries, and is subject to approval
by the District, the California Department of Education, and the Department of Toxic Substance
Control, among other state agencies. This option is based on the following parameters:
a) Dedication/Acquisition of Land. The District will work with Developers to secure the
best suitable parcel, at a minimum, two (2) acres of land for a School Property within
District boundaries. Developers will consider dedication of land for School Property
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within the portions of the North Forty Property that they have under contract. If it is
determined by the Parties that land within the North Forty Property cannot be dedicated
for use by the District, Developers will attempt in good faith to locate other land within
the District boundaries for School Property prior to issuance of building permits for the
first phase of Developers' Project. Further, the District retains the right to work
collaboratively with Developers to provide additional funds for the purchase of a parcel
over two acres.
b) Payment of District School Impact Fees. In addition to dedication or acquisition of
School Property, each Developer shall also pay to District SB50 mandated School Impact
Fees pursuant to Sections 17620 et seq. of the Education Code and Sections 65995 et seq.
of the Government Code ("School Impact Fees ") for all commercial and residential
square footage within that portion of the North Forty Property which is in contract by
said Developer as of the Effective Date, and to which said Developer ultimately obtains
title. The rate for residential development shall remain at the current approved rate of
Two Dollars Twenty -Nine Cents ($2.29) per square foot for thirty-six (36) months from
the Effective Date. Should the School hnpact Fees rate per square foot increase after the
36 months for future residential development in the Project, the School Impact Fees rate
per square foot shall not exceed the lesser of the School Impact Fees rate per square foot
then in effect or Five Dollars ($5.00) per residential square foot.
c) School Impact Fees for the Los Gatos- Saratoga High School District. The District is the
agent for the Los Gatos - Saratoga Union High School District ( "Higb School District's
and collects and distributes School Impact Fees to the High School District. Developers
agree to pay School Impact Fees for the High School District at the fee rates in effect at
the time building permits are issued for all commercial and residential square footage
within the Project.
3) Option B — Monetary Payment As an alternative to Option A, the applicable Developer
will make a voluntary contribution ( "Additional Payment ") to the District at the time of Building
Permit issuance for each unit within that portion of the Project that is owned in fee simple by the
Developer in question for which a building permit is pulled by the Developer pulling such
building permit, in the total amount of Twenty -Three Thousand Five Hundred Dollars ($23,500)
per entitled market rate residential unit that is built by the Developer in question in the Project
within the District's boundaries. No Additional Payment shall be due on affordable or below -
market -rate housing units. No Developer will owe Additional Payment that is due and owing by
the other Developer. This option is based on the following parameters.
a) Payment Breakdown.
i) Additional Payment. Using the example provided in the North Forty current
application, the Project contains 271 residential market rate units in the District
boundaries for an estimated total of $6,368,500 (271 units x $23,500). The Parties
agree that the Additional Payment may increase or decrease depending on the number
of market rate units approved in the Project.
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ii) Payment of District School Impact Fees. In addition to making the Additional
Payment, each Developer shall also pay to District SB50 mandated School Impact
Fees pursuant to Sections 17620 et seq. of the Education Code and Sections 65995 at
seq. of the Government Code ("School Impact Fees ") for all commercial and
residential square footage within that portion of the North Forty Property which is in
contract by said Developer as of the Effective Date, and to which said Developer
ultimately obtains title. The rate for residential development shall remain at the
current approved rate of Two Dollars Twenty -Nine Cents ($2.29) per square foot for
thirty -six (36) months from the Effective Date. Should the School Impact Fees rate
per square foot increase after the 36 months for future residential development in the
Project, the School Impact Fees rate per square foot shall not exceed the lesser of the
School Impact Fees rate per square foot then in effect or Five Dollars ($5.00) per
residential square foot.
iii) School Impact Fees for the Los Gatos - Saratoga High School District. The District is
the agent for the High School District and collects and distributes School Impact Fees
to the High School District. Developers agree to pay School Impact Fees for the High
School District at the fee rates in effect at the time building permits are issued for all
commercial and residential square footage within the Project.
b) Limitation on Use of Proceeds. The District's expenditure of the Additional Payment
shall be limited to acquisition/lease of land and/or for the costs of construction or
modernization of school facilities.
c) No Refimd or Credit. The Additional Payment and School Impact Fees shall be absolute
as to all residential units developed within the Project after the Effective Date.
Developer acknowledges that in the event that the District receives funds from the State
of California or any other source to house existing or projected students generated from
the Project or within the District generally, Developer and/or its successors or assigns
shall not be entitled to any refund or credit or reduction in amount of the Additional
Payment and School Impact Fees as a result of the receipt of such State or other funds.
4) Election by Develoners of Option. No later than One Hundred Eighty (180) days
following approval of the North Forty Specific Plan ( "Date of Approval ") by the Town,
Developers shall jointly deliver to District a notice of their selection of either Option A or Option
B ("Notice of Election "),
a) The Date of Approval shall be defined as that date that is ninety (90) days following the
date of the last action by the Town Council taken to approve the North Forty Specific
Plan, assuming that no lawsuit, initiative, referendum or moratorium challenging said
approval on any grounds has been filed or instituted. If such a lawsuit, initiative,
referendum or moratorium is filed or instituted, then the Date of Approval shall be the
latest date upon which all such lawsuits or other challenges have been resolved to
Developers' satisfaction in their sole and absolute discretion, and no further suits or
challenges may be brought.
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b) The Parties acknowledge that the implementation of Option A will require a high degree
of cooperation between the Parties, and it may not be possible for them to agree on
suitable property pursuant to section 2(a) hereof. Accordingly, if Developers initially
select Option A, then at any time thereafter, Developers may give a notice to the District
that no earlier than thirty (30) days following delivery of the Notice Developers intend to
change their selection from Option A to Option B. If within said thirty -day period
Developers and District are unable to resolve their differences to the satisfaction of each
of the Parties in its or their sole and absolute discretion, then following the expiration of
said period, the Parties shall then proceed in all respects as though Developers had
selected Option B initially. If Developers do not give such Notice, but are nonetheless
unable to secure a suitable School Property prior to issuance of building pernrits for the
first phase of Developers' Project, then Developers' selection shall automatically default
to Option B. In such case, Developers shall make all payments under Option B as though
it were initially selected.
5) District Support for North Forty pecific Plan The District understands the myriad of
issues that impact Developers and the District agrees the concepts below are those with a nexus
to school policy. District agrees to support the North Forty Specific Plan and the Project based
upon the following principles linked to school policy and education issues only.
a) The North Forty Specific Plan is an appropriate way for the Town of Los Gatos to
achieve its State Regional Housing Needs Allocation (RHNA) requirement, and with this
Agreement, to accommodate future impacts to school district enrollment.
b) The District is based on the principle of community or neighborhood schools. The
District believes that dividing neighborhoods between school districts does not support
this principle.
C) The District recognizes much effort and time has been put into the North Forty Specific
Plan process and encourages the Town Council to take action on the plan in an
expeditious manner so the District can proceed with its long -term planning process.
6) Developers' Obligations Continent Upon- Development Nothing in this Agreement
obligates Developers to proceed with their Project entitlements, nor to purchase any land or
construct any improvements thereon. Developers shall have the sole and absolute discretion to
decide whether or not to proceed with their Project, as well as the scope and timing thereof if
they do elect to proceed. Developers' obligations to District hereunder, including any and all
transfers of real property and/or payments of monies, are expressly contingent upon Developers,
or their successors and assigns, electing actually to construct their Project.
7) Covenant Not to Oonose Plan and Project District hereby represents and warrants that if
Developers proceed to develop the Project under the adopted North Forty Specific Plan, then it
will not oppose by itself, or through its Board members, employees, agents or proxies, either
formally or informally, including in meetings, discussions or communications with community
members, Town staff, Planning Commissioners, and/or Council Members, such development of
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the Project (including all further entitlements or permits necessary or convenient to such
development that may be applied for from Town or any other public agency or entity) or file any
legal action related thereto.
8) Tenn of Agreement. This Agreement shall be of no further force effect from and after
the date that is ten (10) years following the Effective Date, but may be extended by mutual
agreement of the Parties. If there is a Memorandum of Agreement or any other documents
referencing this Agreement of record at that time, the Parties shall, upon request, execute and
allow recordation of quitclaims or other suitable documents to evidence the expiration of this
Agreement. This obligation shall survive the termination of this Agreement.
9) General Provisions.
a) Understanding of Agreement The parties hereto each affirm and acknowledge that they
have read this Agreement and have had the opportunity to have it fully explained by
counsel of choice, that they fully understand and appreciate the words and terns used in
this Agreement, as well as the effect of those words and terms, and further understand
that this is a final compromise, release, and settlement of the matters released herein.
Each party, or its attorney, has carefully and fully reviewed this Agreement and has
revised, or has had the opportunity to revise, this Agreement. Accordingly, the normal
rule of construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be utilized in the interpretation of this Agreement.
b) Execution of Documents The parties to this Agreement agree to execute any and all
documents reasonably necessary to effectuate the terms, conditions, purposes, and aims
of this Agreement.
c) Legal Action. If legal action is brought to enforce or interpret this Agreement or any
provision hereof, the prevailing party shall be entitled to recover its actual costs and
attorney's fees.
d) Miscellaneous. This 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 Agreement,
e) Notice of Breach No party shall be deemed to be in breach of this Agreement unless the
parry alleging breach shall have given written notice of the breach to said party, and said
party shall have failed to correct or cure the breach within a period of fifteen (15) days
following receipt of said notice.
f) Notices. Any notice or other communication required or permitted to be given under this
Agreement ("Notices ") shall he in writing and shall be (i) personally delivered; (ii)
delivered by a reputable overnight courier; (iii) delivered by certified mail, return receipt
requested and deposited in the U.S. Mail, postage prepaid; or (iv) delivered by telecopy.
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Telecopy notices shall be deemed received upon transmission during regular business
hours, (i.e. Monday through Friday between 9:00 a.m. and 5:00 p.m., Saturday, Sunday
and legally recognized holidays excepted) or otherwise on the next business day, and
provided that a copy of such notice is forwarded by United States Mail or reputable
overnight courier no later than the first business day following the day that the facsimile
transmission occurs. Non- telecopy notices shall be deemed received at the earlier of
actual receipt or (i) one (1) business day after deposit with a reputable overnight courier
as evidenced by a receipt of deposit; or (ii) three (3) business days following deposit in
the U.S. Mail, as evidenced by a return receipt. Notices shall be directed to the parties at
their respective addresses shown below, or such other address as either party may, from
time to time, specify in writing to the other in the manner described above:
To District:
Los Gatos Union School District
17010 Roberts Road
Los Gatos, CA 95032
Fax: (408) 395-6481
Attn: Dr. Diana G. Abbati, Superintendent
To Developers:
Grosvenor USA Ltd
1 California St., Suite 2500
San Francisco, CA 94111
Attn: Steve O'Connell, Sr. Vice President
Fax: (202) 785 -2632
And to:
SummerHill Homes LLC
3000 Executive Parkway, Suite 450
San Ramon, CA 94583
Attn: Wendi Baker, Vice President of Development
Fax: (925) 884 -8924
g) Integrated Agreement. This Agreement, together with the exhibits attached hereto, 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 patties from executing such other documents as are
necessary to perfect this Agreement.
h) No Third -Party Beneficiaries This 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.
i) Authority to Execute. Upon acceptance of this Agreement by the Board of Trustees of
District, execution by signature of any member of the Board of Trustees, or the
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Superintendent, of the District shall be deemed to have authority to bind the District to
the terms hereof.
P Amendments to be in Writing. 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 Agreement.
k) Recordation. As acknowledged herein, Developers currently have a contractual
relationship with the owners of certain portions of the North Forty Property, and are
therefore not the current owners of record of said Property. Prior to either Developer's
closing escrow on the purchase of any portion of the North Forty Property, neither this
Agreement, nor any memorandum, shall be recorded in the official records of Santa Clara
County. Until such time as a Developer acquires fee simple title to any portion of the
North Forty Property, this Agreement shall be binding on each of the Developers and
each of their respective assigns who are assigned the contract rights to purchase their
respective portions of the Project, and in the event of any such assignment, this
Agreement shall be assigned by the Developer in question to Developer's affiliated entity
who is being assigned such contract rights. During said time, if Developers obtain
entitlements from Town for their Project and subsequently sell or transfer all or a portion
of such entitlements to unrelated and unaffiliated developers, then Developers agree to
transfer such entitlements, or portions thereof, subject to the provisions of this
Agreement.
If one or both of the Developers acquire title to the North Forty Property, or any portion
thereof, then this Agreement shall be duly recorded against such acquired property
through a Memorandum of Agreement, and the covenants and agreements contain herein
shall not only be binding against the purchasing Developer, but shall also nm with the
land and shall bind and inure to the benefit of the successors and assigns of the Parties.
In addition, Developers agree for the benefit of District that any property owned by
Developers within the North Forty Project area, shall be held, transferred, and
encumbered subject to the provisions of this Agreement which are for the use and benefit
of it and of each and every person or entity who now or in the future develops the Project;
until all of the property therein has been developed.
1) Transfer, Nothing in this Agreement shall in any way limit the ability of
Developers to transfer, sell, assign, encumber or in any way convey (collectively a
"Transfer ") any interest in the North Forty Property or Project, whether property interests,
contractual interests or entitlements, without the consent of District, provided the
Developer in question gives written notice of the Transfer to District, and the transferee
("Transferee ") assumes the obligations of the Developer in question under this
Agreement. Upon the Transferee's written assumption of the obligations under this
Agreement and the closing of the Transfer, the transferring Developer shall be released
from all obligations under this Agreement, and District shall look solely to the Transferee
for performance of the obligations hereunder pertaining to the transferred property or
entitlement, and the Transferee shall have all rights and benefits set forth in this
Agreement.
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m) Mortearree Protection. No breach of this Agreement shall defeat or render invalid the
lien of any deed of trust or mortgage recorded against the Project. No lender taking title
to the Project through foreclosure or deed in -lieu shall be liable for any defaults or
monetary obligations of any Developer of the Project arising prior to acquisition of
possession of such portions of the Project by such lender.
n) Release of bli ations U on Satisfaction Thereof. Upon request, District shall promptly
execute in recordable form, and deliver to the requesting Developer for recordation,
documents evidencing satisfaction of the obligations hereunder with respect to all or any
portion of the North Forty Property (including individual residential units as appropriate)
developed by a Developer as to which all appropriate fees have been paid hereunder.
Without limiting the generality of the foregoing, this obligation shall apply to each
residential unit for which School Impact Fees and, if applicable an Additional Payment,
has been made.
IN WITNESS WHEREOF, the Parties hereto by their signatures execute this Agreement
pursuant to the terms and conditions above.
LOS GATOS UNIFIED SCHOOL DISTRICT,
a California public school district
M
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GROSVENOR USA E". a California limited abill Y�mpany
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By. By:
Name: Name: Jason R. Biggs
Title: _njrP _ �, Title: Assistant Secretary
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