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HomeMy WebLinkAboutSuccessor Reso 03-2018 (18-466)City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA Successor Agency Resolution: RES 03 -2018 File Number: 18 -466 Enactment Number: RES 03 -2018 RESOLUTION APPROVING AN UPDATED DEVELOPMENT MANAGEMENT SERVICES AGREEMENT BETWEEN CITY OF SOUTH SAN FRANCISCO AND KILROY, LLC. WHEREAS, on January 18, 2017, the Development Management Services Agreement ( "DMSA ") between the City of South San Francisco ( "City ") and Oyster Point Development LLC ( "OPD ") was approved by City Council on January 18, 2017; and WHEREAS, the DMSA outlined the Successor Agency's and developer's roles and administrative procedures to manage the construction of the Oyster Point project, Phase IC and IIC Cap Repair; and WHEREAS, since adoption of the DMSA, the developer changed, a contractor was selected, Notice to Proceed was issued for construction, and the project budget and schedule was updated; and WHEREAS, Kilroy Realty TRS, Inc. ( "TRS "), officially assumed the role of developer in June 2018; and WHEREAS, given these developments over the past year, the City and TRS agree that it would be appropriate to update the DMSA; and WHEREAS, the key changes include identification of a new developer, updated project cost which reflects what was approved by the South San Francisco Oversight Committee in 2017 and Department of Finance in 2018, updated schedule which reflects construction completion towards the end of 2020, and change in the project management structure; and WHEREAS, additional minor administrative changes have been made, such as updating the list of City and TRS consultants and template modifications to the Project Management Plan. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco hereby take the following actions: Finds and determines that the recitals are true and correct; and Approves the updated DMSA, attached hereto and incorporated herein as Exhibit A; and Authorizes the City Manager to enter into and execute the updated DMSA and to implement the Agreement. City of South San Francisco Page 1 File Number. 18 -466 Enactment Number. RES 03 -2018 At a meeting of the Joint Special Meeting City Council and Successor Agency on 10/24/2018, a motion was made by Richard Garbarino, seconded by Pradeep Gupta, that this Resolution be approved. The motion passed. Yes: 4 Addiego, Normandy, Gupta, and Garbarino Absent: At City of South San Francisco Page 2 AMENDED AND RESTATED AGREEMENT FOR DEVELOPMENT MANAGEMENT SERVICES By and Between City of South San Francisco and Kilroy Realty TRS, Inc. 1 Development Management Services Agreement – 10/16/2018 AMENDED AND RESTATED AGREEMENT FOR DEVELOPMENT MANAGEMENT SERVICES THIS AMENDED AND RESTATED AGREEMENT FOR DEVELOPMENT MANAGEMENT SERVICES (“Agreement”) is made and entered into effective September ___, 2018 by and between the City of South San Francisco, a municipal corporation (hereinafter referred to as “City”) and Kilroy Realty TRS, Inc., a Delaware corporation (hereinafter referred to as “TRS”). RECITALS A. Oyster Point Development LLC (“OPD”), City and the Successor Agency to the former South San Francisco Redevelopment Agency (“Agency”) are parties to that certain Disposition and Development Agreement (“DDA”), dated March 23, 2011. Pursuant to that certain Consent, Assignment and Assumption Agreement dated June 1, 2018 (the “DDA Consent”), the DDA was assigned to KR Oyster Point Developer, LLC, a Delaware limited liability company (“KR Developer”), and then pursuant to that certain Assignment and Assumption Agreement dated June 1, 2018 (the “DDA Assignment”), the DDA was ultimately assigned to KR TRS. The DDA provides for construction of improvements in Phases IC and IIC on certain property owned by City and, in part, now owned by an affiliate of TRS. (For purposes of this agreement, the “Property” shall mean the “City Property” as defined in the DDA.) B. The DDA allocates to TRS the obligation to design and construct specified public improvements in Phase IC and allocates to the Agency the obligation to construct specified public improvements in Phase IIC, both of which are subject to payment obligations of TRS and the Agency. Agency currently has set aside in an escrow account $27,978,031.62, pursuant to Section 3.4.4 of the DDA, to be used to pay for public improvements as required by Sections 3.4.2 and 3.4.6 of the DDA. This amount does not include funds which have previously been paid to the TRS or its predecessors for public improvement costs as required by Sections 3.4.2 and 3.4.6. Pursuant to Section 3.4.4 of the DDA, the Agency has established an escrow account with Bank of New York Mellon (“Escrow Deposit and Trust Agreement”) and has, pursuant to Section 5 of the Escrow Deposit and Trust Agreement, delegated authority to the South San Francisco City Manager and City Attorney, acting on behalf of the Agency, to disburse funds for Phase IC Improvement Costs and Phase IIC Improvement costs from funds within the Escrow Funding Account. City (acting on behalf of the City and Agency to implement the Agency’s obligations) and TRS desire to have TRS manage the design and construction of the improvements specified herein subject to the terms set forth herein, which are intended to be consistent with allocation of responsibilities set forth in the DDA. C. City (acting on behalf of the Agency) desires that TRS engage consultants, manage the design and construction of public improvements in Phase IC on behalf of the Agency and in coordination with Agency and City staff and as set forth in this Agreement. 2 Development Management Services Agreement – 10/16/2018 The list of public improvements in Phase IC, identified herein as the “Phase IC Improvements,” is included in Section 3.2.1 of the DDA. The parties also contemplate that TRS will manage the clay cap repair portion of Phase IIC, identified herein as the “Phase IIC Cap Repair,” as set forth in Section 3.3.2(a)(ii) of the DDA if that Phase IIC Cap Repair project is determined by the City and Agency to be necessary. The updated project budget for the Phase IC Improvements, (“Project Budget”), based on the initial budget set forth in DDA Exhibit 3.4.1, is attached hereto as Exhibit A, subject to adjustment as set forth herein. The updated project budget for the Phase IIC Clay Repair is set forth in DDA Exhibit 3.4.1. D. OPD and City entered into that certain Agreement for Development Management Services effective ______, 2017 (the “Original DMSA”) to set forth the terms upon which OPD, as Developer, would provide City and Agency with development management services for the design, engineering, permitting, construction and completion of the Phase IC Improvements and the Phase IIC Clay Repair (the “Development Services”). Pursuant to the DDA Consent and DDA Assignment, the Original DMSA was ultimately assigned to TRS. City and TRS desire to amend and restate the Original DMSA in its entirety pursuant to the terms herein. AGREEMENT NOW, THEREFORE, taking the foregoing recitals into account, and in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE I General Understandings Section 1.01 Relationship to DDA. This Agreement is a mechanism to implement the obligations of TRS and Agency with respect to development of the Phase IC Improvements and Phase IIC Cap Repair, pursuant to and as contemplated by Article III of the DDA. In the event of a conflict between the DDA and this Agreement, the DDA shall control. Capitalized terms used herein that are defined in the DDA shall be defined as set forth in the DDA. Section 1.02 No Partnership. The parties do not intend by this Agreement to create a partnership, principal/agent, employee or joint venture relationship and nothing in this Agreement shall be construed as creating any such relationship between the parties. Neither TRS nor City, acting on its own behalf or on behalf of the Agency, nor their respective subsidiaries, agents or employees, are the representatives of the other party for any purpose (except with respect to TRS to the extent specifically authorized herein to be City’s representative in connection with performing the Development Services), nor do any such 3 Development Management Services Agreement – 10/16/2018 parties have the power or authority as an agent, employee or in any other capacity to bind or otherwise create or assume any obligation on behalf of the other party for any purpose. Section 1.03 Non-Exclusive Services. TRS may devote as much of TRS’s time, attention and energies in the performance of the Development Services as TRS deems necessary to perform the Development Services. TRS may, directly or indirectly, in any capacity, engage, invest or participate in or provide the same or similar services to any business or entity. Section 1.04 Independent Contractor. TRS enters into this Agreement, and will remain throughout the term of this Agreement, as an independent contractor and not as an agent or employee of City or Agency. TRS’s personnel performing Development Services are agents, employees or subcontractors of TRS (collectively, “TRS Personnel”) and are not employees or agents of City or Agency. TRS has and hereby retains the right and obligation to exercise full control of and supervision over the performance of TRS’s obligations hereunder and full control over the employment, direction, compensation and discharge of all TRS Personnel. Section 1.05 City’s Representative. City appoints the Director of Public Works, or her/his designee, for the purpose of administering this Agreement (“City’s Representative”). Unless and until written notice to TRS to the contrary is given by City, all instructions of City and Agency and approvals required to be given by City and Agency hereunder shall be given only by such representative, and TRS may rel y thereon. City may change representatives by written notice to TRS. City’s Representative shall endeavor to render decisions in a timely manner in order to avoid Project delays. (a) As referenced herein the “Approval” (and any variation thereof) of City means the prior written approval of City’s Representative, which may be granted or withheld in its sole discretion unless otherwise expressly provided to the contrary in this Agreement. Use of the term “reasonable” (or any variation thereof) in connection with any variation of the term “Approval” means that such Approval shall not be withheld, conditioned or delayed unreasonably. Unless this Agreement expressly sets forth another time period for performance or additional budget authority is required by Agency to implement the action, City shall use best efforts to either grant an Approval, or set forth in writing the basis for any objection, within ten (10) business days of receipt of the notice requesting that such Approval be given. If City shall not have given written notice of approval or disapproval of such action to TRS within ten (10) business days (or such other time period as applicable) after receipt of the notice requesting that such Approval be given (whether “reasonable” or otherwise), then City shall be deemed to have denied such Approval. Section 1.06 TRS’s Representative. TRS appoints the following person as its representative for the purpose of administering the Development Services of TRS under this Agreement: Jonas Vass, Senior Vice President, Development or his respective designee (“TRS’s Representative”). If during the term of this Agreement, this position no longer 4 Development Management Services Agreement – 10/16/2018 exists within TRS or is otherwise not administering the Development Services, then another person of equivalent capability and experience acceptable to City shall be assigned to the Phase IC Improvements project within 30 days. City acknowledges and agrees that TRS’s Executive Vice President, Senior Vice President and/or Director of Development are acceptable as replacement TRS’s Representatives. Section 1.07 Professional Consultants. (a) The parties contemplate that TRS will contract directly with any professional consultants, subject to City’s Approval, whose services may be deemed necessary or advantageous by TRS and Agency in connection with construction of the Phase IC Improvements and the Phase IIC Cap Repair. All such approved fees and costs associated with the services rendered by such professional consultants shall be paid subject to, in accordance with and with funding from the Project Budget, a copy of which is attached hereto as Exhibit A. (b) City, acting on behalf of the Agency, may also retain such other professional consultants as set forth in Exhibit B hereto and pursuant to agreements between City and such professional consultants. Compensation for the services rendered by professional consultants retained by City shall be paid by Agency with funding from the Project Budget and subject to reasonable approval as to budget authority by TRS. At City’s request, TRS shall provide City with advice and recommendations for the selection and engagement of such professional consultants. Any agreement authorized pursuant to this Section 1.07(b) shall also name TRS as an indemnitee and additional insured to the agreement. In the event the City desires to replace any consultants listed on Exhibit B, City will consult with TRS regarding such replacement. Section 1.08 Contract Documents. (a) It is contemplated that TRS, in relation to the Phase IC Improvements and Phase IIC Cap Repair, shall enter into agreements with the design consultants, including but not limited to landscape architects, civil engineers, geotechnical engineers, environmental consultants and other technical consultants identified and recommended by TRS following consultation with City or recommended by City and retained by TRS for the Phase IC Improvements and the Phase IIC Cap Repair (each a “Design Consultant”). City and TRS will consult and agree on the proposed scope of work and the form of any bid request prior to TRS’s solicitation of bids. (b) It is contemplated that TRS shall enter into an agreement or agreements (each, an “TRS-Contractor Agreement”) with one or more general contractors recommended by TRS following consultation with City for the Phase IC Improvements and, upon prior written approval by the Agency and City for the Phase IIC Cap Repair (each, a “Contractor”). 5 Development Management Services Agreement – 10/16/2018 (c) TRS shall provide the City with up to three qualified fee and scope proposals for each Design Consultant and Contractor and make a recommendation for City’s Approval. Upon approval of selection of each Design Consultant and Contractor by TRS and City, TRS shall have primary responsibility for negotiating all material project contracts, in consultation with City, and subject to City’s Approval. (d) City acknowledges that the previously executed agreements listed on Exhibit D have been approved and have been assigned from OPD to TRS. Section 1.09 Compliance with Laws. In the performance of the Development Services under this Agreement, TRS shall at all times act in accordance with, and provide City with reasonable notice of, any requirements imposed by any applicable federal, state and local statutes, rules, laws, ordinances, encumbrances and covenants, conditions and restrictions, as necessary for conformance to the Performance Standard, and which affect the design, development, construction, or completion of the Phase IC Improvements and the Phase IIC Cap Repair (collectively, the “Requirements”). It is understood that (except with respect to any licenses or permits required by TRS in the ordinary course of its business or in order for TRS to be permitted and authorized to provide the Development Services hereunder), TRS’s performance of the Requirements shall be subject to and conditioned upon Agency making necessary funds available to TRS from the Escrow Account under and in accordance with the Project Budget. Section 1.10 Ownership of Plans and Materials. All Progress and Final Plans and Specifications (defined below) with respect to the Phase IC Improvements and Phase IIC Cap Repair, including without limitation any non-privileged work product of TRS, shall at all times be the property of City; provided that, until issuance of the final Certificate of Completion pursuant to DDA Section 6.10.1, TRS shall have a non-exclusive license to use all Progress and Final Plans and Specifications as reasonably necessary for performance of the Development Service and to ensure integration and coordination with the “Developer Project,” as defined in the DDA. Unless Approved by City, Consultant shall provide to TRS, for delivery to the City (1) an AutoCAD (latest version) and a complete full size set of Progress Plans and Specifications at the 35%, 65% and 95% design document phases, (2) an AutoCAD and a complete full size set of the Final Plans and Specifications approved by the City, and (3) not later than thirty (30) days after acceptance of the Phase IC Improvements by the City, an AutoCAD and a complete full size set of As-Built Plans for the Phase IC Improvements.. Unless Approved by City, each Consultant’s contract shall provide that Consultant shall, upon written request of the City, provide to TRS, for delivery to the City all of Consultant’s non- privileged work product for the Phase IC Improvements, and City shall have the right to use and rely on the Plans and Specifications and the work product without further compensation or consent from the Consultant. TRS shall maintain and update the list of approved consultants and approved contracts attached hereto as Exhibit D and shall provide City with an updated copy of that list when it is updated. 6 Development Management Services Agreement – 10/16/2018 ARTICLE II Development Manager’s Services Section 2.01 Nature and Scope of Services . (a) TRS shall use commercially reasonable efforts to perform, manage, arrange, supervise and coordinate all of the Development Services for the Phase IC Improvements in accordance with the Final Plans and Specifications, the Project Budget, the Project Schedule, and all Requirements. TRS shall perform the Development Services in accordance with the degree of professional skill and care ordinarily provided by development managers practicing in the same or similar locality under the same or similar circumstances (the “Performance Standard”). TRS further agrees to furnish its best skill and judgment in the performance of its duties hereunder. (b) TRS shall also perform, manage, arrange, supervise and coordinate all of the Development Services for the Phase IIC Cap Repair in accordance with Phase IIC Cap Repair Plans and Specifications, an approved Phase IIC Cap Repair Project Budget (consistent with DDA Exhibits 3.3.2B and 3.4.1), an approved Project Schedule, all Requirements, and the Performance Standard. Section 2.02 Pre-Construction, Design, Schedule, Budget and Other Matters. (a) The “Project Schedule” is attached hereto as Exhibit C. TRS must obtain City’s Approval to any modifications of the Project Schedule. TRS shall notify and keep City informed of any events of actual delays or other events that may reasonably cause delays affecting the Project Schedule. In the event of any approved changes to the Project Schedule or any changes requested by City that affect the Project Schedule, TRS shall prepare a revised Project Schedule and submit it to City for its reasonable Approval. The Project Budget is attached hereto as Exhibit A. The term “Project Budget” as used herein shall also mean and include any revisions to the Project Budget as and when approved by City in consultation with TRS and, if the revision will require additional funds, the Agency. The total cost of the Phase IC Improvements project as set forth in the Project Budget shall be referred to herein as the “Budgeted Costs”. TRS must obtain City’s Approval, and where additional funds are necessary the Agency’s approval, to any modifications of the Project Budget. TRS shall notify and keep City informed of any variance or reasonably anticipated variance in the line items in the Project Budget. The “Project Management Process” (“PMP”) attached hereto as Exhibit E shall be used by TRS and City to manage the Phase IC Improvements consistent with the Project Schedule and Project Budget. In the event of any approved revisions to the Project Budget or any other changes requested by City, TRS shall prepare and submit to City a revised Project Budget. The parties may enter into a project management plan for the Phase IIC Cap Repair in a form similar to the PMP or through an amendment to the PMP. 7 Development Management Services Agreement – 10/16/2018 (b) TRS and City have identified the Design Consultants listed in Exhibit D to provide services for the Phase IC Improvements. TRS shall confer with City in selecting, engaging and retaining, coordinating, and managing and administering the services of the Contractor and any other Design Consultants or other service or contractor parties required for the Phase IC Improvements including, but not limited to, surveyors, special consultants, and testing laboratories (with such contracts and any amendments thereto subject to approval by City’s Representative and with funding approved by the Agency if funding is required beyond that set forth in the Project Budget). (c) The current plans and specifications for the Phase IC Improvements and Phase IIC Cap Repair are set forth in Exhibit F. TRS shall coordinate with City, the Design Consultants, each Contractor and other appropriate consultants to obtain final drawings and specifications (including mock-ups and color samples) acceptable to City (the “Final Plans and Specifications”), and, with regard thereto, TRS’s responsibilities will include, without limitation, the following: (i) reviewing, commenting on and coordinating changes in work-in- progress documents up to but not including 100% design (the “Progress Plans and Specifications”) that are requested by City; (ii) obtaining cost estimates from each Contractor and Design Consultants and preparing revisions to the Project Budget for the construction phase in light of design development at the 35%, 65%, and 95% Design phases and for Landscape design at Schematic Design (SD), Design Development (DD), and Construction Document (CD); and (iii) coordinating the finalization and Approval by City of Final Plans and Specifications. (d) TRS shall submit to City for its review and Approval Phase IC Improvements and Phase IIC Cap Repair Progress Plans and Specifications at the 35%, 65%, and 95% Design and for Landscape design at Schematic Design (SD), Design Development (DD), and Construction Document (CD) milestones. (e) TRS shall review Progress Plans and Specifications during their development and provide advice on proposed site use and improvements, selection of materials, building systems and equipment, and methods of project delivery. TRS shall provide recommendations on relative feasibility of construction methods, availability of materials and labor, time requirements for the procurement, installation and construction, and factors related to construction cost including, but not limited to, costs of alternative designs or materials, preliminary budgets, and possible economies. (f) As the Design Consultant progresses with the preparation and/or completion of the 35% and 65% design and for Landscape design at SD and DD design documents, TRS shall, with the assistance of the Contractor for the site work, and construction of the Phase IC Improvements and Phase IIC Cap Repair projects, prepare and update the construction cost estimate in increasing detail and refinement. The estimated cost of each contract shall be indicated with supporting detail. Such estimates shall be provided for City’s review and Approval. TRS shall advise City if it appears that the construction costs may exceed the Project Budget and make recommendations for corrective action, including without 8 Development Management Services Agreement – 10/16/2018 limitation any value engineering of the Progress Plans and Specifications to achieve necessary reductions in such costs to make it confirm to the Approved Project Budget. City may, at its discretion and as it deems necessary to ensure conformance to the Project Budget, direct a value engineering exercise after cost estimates for each milestone estimate are provided to City; provided, however, that City shall not have sole authority to direct value engineering with respect to “Streets and Utilities at Hub,” per DDA Exhibit 3.2.1A. Upon resubmission, City shall either submit further written comments or approve the plan. If further design changes (including those related to value engineering) are proposed, TRS shall use best efforts to have the Design Consultants prepare and then TRS and City shall review the design changes within 15 business days of submission of the design changes. Any such design changes should be substantively consistent with the Phase IC Improvements and Phase IIC Cap Repair specified in the DDA. (g) TRS and each Contractor shall consult with City and Design Consultants regarding the TRS-Contractor Agreement and exhibits thereto, and make recommendations whenever design details adversely affect constructability, cost or schedules. (h) TRS and each Contractor shall provide recommendations and information to City regarding the assignment of responsibilities for temporary facilities and equipment, materials and services for use by each Contractor. TRS shall verify that such requirements are included in the proposed Contract Documents. (i) TRS shall provide recommendations and information to City regarding each Contractor’s safety programs. (j) TRS shall review with each Contractor the identified major subcontractors and their bids, preparing and making recommendations to Contractor for the Contractor’s selection and award of subcontracts. (k) TRS shall use commercially reasonable efforts to obtain all building, grading, development, and other permits and governmental approvals necessary to commence and complete the Project. City shall provide all information in a timely manner that may be necessary or appropriate for applying for or obtaining such permits. City authorizes TRS to act as its agent to submit applications for and thereafter diligently pursue such permits, upon approval of such applications by City. With respect to permits to be issued by the City, the City shall expedite processing of applications for such permits to the greatest extent feasible within the course of its normal permitting process. If TRS requests special services for permit expediting beyond the City’s normal course, City shall make such services available to the greatest extent feasible, provided that TRS pays applicable fees for expedited review. (l) Prior to submitting landfill grading and proposed landfill cap replacement plans to any regulatory or governmental agency, TRS shall submit to the City for review and Approval of such plans. 9 Development Management Services Agreement – 10/16/2018 Section 2.03 Construction Management. (a) Following the commencement of construction, TRS shall make bi- weekly visits to the job site to review the work and progress of construction. (b) TRS shall provide administrative, management and related services to coordinate scheduled activities and responsibilities of the Contractor with those of TRS, City and Design Consultant to manage the Phase IC Improvements project in accordance with the Project Budget, the Project Schedule and the Contract Documents. (c) TRS shall create and maintain a Risk Register in a form similar to that provided in the PMP. TRS shall recommend courses of action to City when requirements of a contract are not being fulfilled. TRS shall make efforts consistent with the Performance Standard to resolve issues listed on the Risk Register and to resolve and settle any conflict among each Contractor, Design Consultant and any of the professional consultants and shall keep City fully informed with respect to such conflicts and settlement discussions and resolution of issues. (d) TRS shall consult with City regarding proposed changes and modifications to the Final Plans and Specifications and coordinate issuance of change orders, consistent with the change order process set forth herein in Section 2.03(j). (e) TRS shall respond promptly to any questions from City or Agency regarding the Project or progress of construction, construction methods, scheduling, and the like. (f) TRS shall coordinate the delivery and/or dedication of portions of the Phase IC Improvements and Phase IIC Cap Repair following issuance of any Certificates of Completion, per DDA Section 6.10. (g) TRS shall coordinate efforts by all appropriate parties to complete each phase of the Phase IC Improvements and Phase IIC Cap Repair in accordance with the Final Plans and Specifications, as the same may be amended from time to time with the approval of all necessary parties (including City’s and, when necessary for additional funding, Agency’s Approval), such efforts to include, without limitation, assisting in the scheduling of inspections and the preparation of punch list items. (h) TRS shall implement procedures for the review and processing of applications for payment submitted by each Contractor to ensure the completion of the Phase IC Improvements and the Phase IIC Cap Repair improvements in accordance with the City’s required payment procedures as set forth in the PMP. TRS shall request that the Design Consultant review and certify such applications for payment submitted by each Contractor. As set forth in the PMP, TRS shall monitor actual costs relative to the Project Budget and shall prepare a monthly budget status report, in a form reasonably acceptable to City, as set forth in 10 Development Management Services Agreement – 10/16/2018 the PMP. The budget status report should include the Project Budget, work under contract, projections of cost to be incurred though completion of the Project, a comparison of actual cost to the Project Budget and depletion to date, projected use and proposed modification of any contingency budgets. TRS shall issue the budget status report for City’s reasonable Approval of the actual costs reflected therein. If actual costs are projected to exceed the Project Budget, TRS shall recommend actions to be taken to complete the Project within the Project Budget. TRS shall also develop and issue to City cash flow projections. TRS shall work with each Contractor in preparing such reports, and City will arrange for TRS to have appropriate access to each Contractor’s accounting records, to enable TRS to prepare the information required by this subsection 2.03(h). In addition to the foregoing, TRS shall provide City with any additional reports required in the PMP in compliance with the timelines set forth therein. (i) Reserved. (j) TRS shall review requests for changes, assist in negotiating each Contractor’s proposals, submit recommendations to the applicable Design Consultant and City, and if they are accepted, shall assist the Design Consultant in reviewing change orders submitted by each Contractor and change directives which incorporate the Design Consultant’s modifications to the Contract Documents, and shall coordinate budget revisions caused by change orders. Change orders, as recommended by Project Manager, as defined in the Project Management Process, are subject to approval as follows: Value of Single Proposed Change Order and within Project Budget Cumulative Value of Change Orders Required Agency Approval Required TRS Approval $0- $10,000 N/A TRS’s Representative or designee $10,001 to $75,000 N/A City’s Representative or designee TRS’s Representative or designee $75,000 or greater Greater than three (3) percent of Total Phase IC Costs calculated in three (3) percent increments City Manager Chief Executive Officer 11 Development Management Services Agreement – 10/16/2018 If a change order requires additional funding from the Agency, the change order is also subject to approval of additional budget authority from the Agency prior to approval of the change order. In addition, TRS shall advise City and seek City and TRS approval for any depletion of contingency budgets that meet the following standards: Dollar or Percentage Value Reduction of Single Use of Contingency Budget for Specific Budget Line Item within Project Budget Cumulative Percentage Value Reduction for Specific Budget Line Item within Project Budget Required Agency Approval Required TRS Approval Less than $75,000 N/A City’s Representative or designee TRS’s Representative or designee Client’s Any amount in excess of $75,000 but less than 10% of the total Phase IC Improvements (or Phase IIC Cap Repair if applicable) Contingency Budget N/A City’s Representative TRS’s Representative N/A Any amount in excess of the 10% of original contingency budget as calculated in 10% increments City Manager Chief Executive Officer (k) TRS shall receive certificates of insurance, in accordance with Article V hereof, and copies of all policies and endorsements naming City and Agency, their officers, employees and agents as an insured from each Contractor and shall forward them to City. (l) Without limitation of TRS’s obligations to complete the Phase IC Improvements as set forth herein, TRS will coordinate any environmental remediation of the Phase IC Improvements, as identified in Exhibit 3.2.1 of the DDA, and the Phase IIC Cap Repair, as identified in Exhibit 3.3.2 of the DDA. 12 Development Management Services Agreement – 10/16/2018 (m) TRS and each Contractor shall coordinate the delivery, storage, protection and security of TRS or City purchased materials, systems, and equipment until such items are incorporated into the work. (n) With the Design Consultant and City’s engineering and inspection personnel, TRS shall observe each Contractor’s final testing and start-up of utilities, operational systems and equipment. (o) As soon as reasonably possible after completion of the work, and all inspections of the work, TRS shall coordinate with Design Consultant to: (i) submit to City “as built” Final Plans and Specifications; and (ii) submit to City a certificate of compliance executed by the Design Consultant. The certificate of compliance shall certify such installations as substantially conforming to the Final Plans and Specifications. TRS shall coordinate obtaining the final certificate of completion for the Phase IC Improvements and Phase IIC Cap Repair. (p) TRS shall secure from each Contractor and transmit to the Design Consultant warranties and similar submittals required by the Contract Documents for delivery to City and Agency, and TRS shall deliver all keys, manuals, record drawings, and maintenance stocks to City. (q) TRS shall comply with the requirements of Section 6.5.1 of the DDA regarding the posting, maintenance, and release of Performance Security or City Security in connection with the Phase IC Improvements. TRS shall coordinate with City Representative to obtain from the Phase IIC Cap Repair Contractor government security bonds required by City for the Phase IIC Cap Repair prior to commencement of construction of the Phase IIC Cap Repair. (r) TRS shall coordinate efforts by all appropriate parties to complete the punch list items identified by City, each Design Consultant and Contractor, and TRS. (s) TRS shall obtain, or cause each Design Consultant or Contractor to obtain, on behalf of City, permanent certificates of occupancy (or other appropriate and necessary governmental documentation of acceptance or completion) with respect to the Phase IC Improvements and Phase IIC Cap Repair. Section 2.04 All Phases. During all phases of the Phase IC Improvements and Phase IIC Cap Repair, TRS’s responsibilities will include the following: (a) Providing City’s Representative with informal progress reports so as to keep City fully apprised of the progress of the Phase IC Improvements and Phase IIC Cap Repair, and providing City with the Draw Requests (as provided in Section 2.07) and the Project Status Reports as provided in the PMP; 13 Development Management Services Agreement – 10/16/2018 (b) Preparing and submitting to City supplements and refinements to the Project Budget or any line item thereof for City or Agency’s Approval as development of the Phase IC Improvements or Phase IIC Cap Repair move through their various phases to completion; (c) Notifying City of any actual or anticipated change in the Project Schedule of which TRS becomes aware; (d) Coordinating and managing the performance of each Contractor, the Design Consultant and the other consultants and subcontractors under their respective contracts with City or TRS and communicating City’s instructions, requirements and approvals provided for in such contracts after obtaining such instructions, requirements or approvals with respect thereto; (e) Assisting City with respect to City’s negotiations with all applicable utility companies, whether governmental or otherwise, for the installation or modification of all applicable utility services to the Phase IC Improvements and Phase IIC Cap Repair on a timely basis, with City and TRS each bearing their allocated share of the cost of all required utility deposits and costs of installation; (f) Coordinating the performance of any tests and inspections required by any governmental authority; (g) Promptly notifying City upon learning of any event of default or event which, with the giving of notice and the passage of time or both, might constitute a default or event of default under any document or instrument pertaining to the Phase IC Improvements or Phase IIC Cap Repair (including, without limitation, providing all materials and submissions required thereunder). In the event of any default or event of default by any person, TRS shall consult with City concerning the action to be taken with respect thereto and take such action as City shall reasonably direct with respect to such default or event of default; (h) Sending to City copies of all material written notices received by TRS from each Design Consultant, each Contractor, other consultants and contractors and legal authorities; (i) Obtaining all third-party consents, approvals and permits necessary or appropriate for the completion and operation of the Phase IC Improvements and Phase IIC Cap Repair in accordance with the Approved Plans; and (j) Performing generally such other acts and things as may be reasonably required in accordance with this Agreement for the full and complete supervision, coordination, planning, design, development, construction and completion of the Phase IC Improvements and Phase IIC Cap Repair projects and advising and consulting with City with respect thereto. 14 Development Management Services Agreement – 10/16/2018 (k) Although the parties recognize and agree that engineering, landscape architecture, construction and certain other services with respect to the Phase IC Improvements and Phase IIC Cap Repair will be provided pursuant to contracts between City, TRS and other third parties as contemplated by this Agreement, no delegation by TRS of any of its development management obligations hereunder shall be permitted without the prior written consent of City and no such delegation shall relieve TRS of any responsibility or liability with respect to such obligations hereunder. Notwithstanding the foregoing, City’s execution of this Agreement shall serve as its written consent for TRS to engage the development management services of the consultants identified in Exhibit D hereto. Section 2.05 Post-Construction Services. (a) TRS shall coordinate the transition of improvement systems operation from each Contractor to City’s operating staff. (b) TRS shall assist City in monitoring and administering work to be performed under each Contractor’s warranties. Section 2.06 Reserved. Section 2.07 Draws. (a) Commencing as of the date hereof and continuing through completion of construction, TRS shall prepare and submit to City, on a monthly basis on the twelfth (12th) of each month (each such date, a “Draw Date”), a “Draw Request”. The Draw Request for the month shall include a project cost summary spreadsheet which shall be a static financial account of all costs incurred (hard and soft) to date, any costs paid by TRS and any funding required from Agency pursuant to the terms of the DDA and this Agreement together with any additional information requested by City. Payment shall be made solely from Agency funds on or before the thirtieth (30th) day of each month. Attached to the Application for Payment shall be the invoices payable to all professional consultants with respect to the Project. Each Draw Request shall be certified by TRS as being consistent with the terms and provisions of this Agreement. (b) In connection with the foregoing Draw Request submissions, TRS shall organize and coordinate a schedule of monthly draw meetings to be attended by TRS, City, or their respective affiliates, and TRS shall review applications for payment submitted by each Contractor and other consultants and contractors and advise City and Agency with respect to the appropriateness of such payments. (c) Once construction of the Phase IC Improvements or Phase IIC Cap Repair has commenced, TRS shall review the amounts due each Contractor. Section 2.08 Lien Protection. TRS will exercise commercially reasonable efforts consistent with the Performance Standards to cause a Contractor to obtain conditional lien 15 Development Management Services Agreement – 10/16/2018 releases with respect to the contracts it is administering with respect to the Phase IC Improvements and Phase IIC Cap Repair prior to making any payment under such contracts and will obtain unconditional lien releases following such payment. TRS shall oversee each Contractor in its processing of lien releases. TRS shall timely file a notice of completion upon completion of the work. TRS shall assist City in contesting any liens or causing any liens which are recorded to be removed from the Property as directed by City. TRS shall track the filing of any preliminary twenty- (20-) day notices pursuant to the provisions of California Civil Code Sections 8100 et seq. (as effective January 1, 2017) against the Property and shall notify City of the filing of any notices within three (3) business days of TRS’s discovery of the same. Section 2.09 Copies of Documents. TRS shall furnish to City such items as may be included in the Contract Documents or as may be needed in connection with the Phase IC Improvements and Phase IIC Cap Repair or as requested by City, as well as all modifications thereof and addenda thereto. Section 2.10 Time. TRS shall perform the Development Services as expeditiously as is consistent with the Performance Standard and in accordance with the Project Schedule. Upon request of City, TRS shall submit for City’s reasonable Approval updates to the Project Schedule for completion of the Project, which Project Schedule shall include allowances for periods of time required for City’s Approval of submissions, and for approvals of authorities having jurisdiction over the Project. With respect to actual Force Majeure delays, the Project Schedule shall be automatically extended for a period of time commensurate with the time such delay is in effect, and TRS shall submit to City written notice of its intent to update the Project Schedule accordingly. Section 2.11 Reserved. Section 2.12 Cost Overruns. (a) Prior to execution of an TRS-Contractor Agreement, TRS shall negotiate the price, including all costs and expenses to be paid under the TRS-Contractor Agreement, and the form and terms of the TRS-Contractor Agreement, all of which must be consistent with the Project Budget or, as applicable, the Phase IIC Cap Repair Project Budget. (b) For purposes of this Agreement, the following terms shall have the following meanings: (i) “Cost Overrun” means, (i) the amount, if any, by which actual Project hard and soft costs exceed or are reasonably projected by City and TRS (after taking into account reasonably projected savings in any line items) to exceed the Budgeted Costs; and (ii) any amount not otherwise included in the Project Budget that is necessary to complete the Phase IC Improvements or, if applicable, the Phase IIC Cap Repair. In the event any revision to the Project Budget hereafter shall revise the Budgeted Costs below the total amount set forth 16 Development Management Services Agreement – 10/16/2018 on Exhibit A as of the date of this Agreement, then, for purposes of calculating Cost Overruns in all events, no Cost Overrun shall occur unless and until the actual Project hard and soft costs exceed (after taking into account reasonably projected savings in any line items) the Budgeted Costs set forth on Exhibit A hereto as of the date of this Agreement. (ii) “Achieved Cost Savings” means any actual demonstrated cost saving in any hard cost line item or soft cost line item (set forth in the Project Budget) following the completion of all of the work pertaining to such line item as determined by City in its reasonable Approval after delivery by TRS of a Budget Adjustment Request. Consistent with DDA Section 3.4.3 and Exhibit 3.4.1, City shall be entitled to any cost savings associated with Phase IC improvements construction, provided that any cost savings associated with construction of the Streets and Utilities at the Hub shall be paid by the Parties toward the construction of Phase IIC Improvements, as set forth in DDA Section 3.4.3. (iii) “Contingency” means the hard cost contingency line item and the soft cost contingency line item set forth in the Project Budget as such line item may be decreased through usage. (iv) “Unavoidable Cost Overruns” means cost overruns resulting from additional costs incurred as a result of changes in laws, rules, regulations or codes, casualty and/or other matters beyond the reasonable control of TRS in its provision of Development Services in accordance with the Performance Standard. (c) Cost Overruns shall be funded as follows: (i) First, any Cost Overruns shall be funded from Achieved Cost Savings; (ii) Second, any Cost Overruns shall be funded from the Contingency; (iii) Third, any Cost Overruns shall be funded by TRS and/or Agency as required pursuant to the DDA. Section 2.13 Certificates of Completion. TRS shall seek, and City shall, upon approval of the improvements by the City, issue Certificates of Completion with respect to any individual Phase IC Improvements, as well as a final Certificate of Completion confirming completion of the Phase IC Improvements, consistent with the terms of the DDA. ARTICLE III Compensation of Development Manager Section 3.01 Reserved. 17 Development Management Services Agreement – 10/16/2018 ARTICLE IV Termination and Events of Default Section 4.01 Right to Terminate. (a) City may terminate this Agreement in the event that the Contractor has not been issued a notice to proceed to begin the construction of the Phase IC Improvements or, as applicable, the Phase IIC Cap Repair respectively within any time period required pursuant to the DDA, subject to Force Majeure, in which event no further amounts other than (i) monthly installments of the Development Management Fee which have accrued as of the date of such termination, plus (ii) any reimbursable expenses in accordance with Section 3.02 shall be payable to TRS. (b) City or Agency may immediately terminate this Agreement for Cause, in which event no further amounts other than (i) monthly installments of the Development Management Fee which have accrued as of the date of such termination, plus (ii) any reimbursable expenses in accordance with Section 3.02 shall be payable to TRS. For purposes of this Agreement, “Cause” means that an Event of Default is in effect, without cure within any applicable grace or cure period. (c) If City shall materially breach its obligations hereunder, and such breach remains uncured for a period of (i) in the event of a monetary default, fifteen (15) days, or (ii) in the event of a non-monetary default, thirty (30) days, after written notification of such breach, TRS may terminate this Agreement by giving written notice to City and Agency, in which event, Agency shall remain obligated to pay TRS all unpaid fees and reimbursable expenses incurred through the date of termination, which fees, costs and expenses shall be paid in full within 30 days following such termination. Section 4.02 Events of Default. In addition to Developer Events of Default and Agency Events of Default identified under the DDA, which are incorporated by reference as applicable to performance of this Agreement, each of the following shall constitute an “Event of Default” with respect to TRS: (a) Any material default in TRS’s performance of its obligation hereunder (other than those defaults specified in the remainder of this Section 4.02); (b) The misappropriation of funds of City or Agency by TRS or the commission of an act of fraud against the City or Agency. Upon the occurrence and during the continuance of an Event of Default, and following provision of notice and expiration of all applicable cure periods as set forth in Section 10.4 of the DDA, City or Agency shall have the right to terminate TRS for Cause under Section 4.01(b) and shall have the right to exercise all remedies available at law or 18 Development Management Services Agreement – 10/16/2018 equity, and in accordance with Article X of the DDA. Section 4.03 Survival. All representations made by TRS herein, together with any and all causes of action and other rights and remedies which City or Agency may have as a result of breach of any representation of this Agreement, shall survive any expiration or termination of this Agreement for a period of six (6) months. All indemnification obligations of either party shall survive this Agreement in accordance with Section 11.8 of the DDA. Section 4.04 City’s Right Upon Termination. Upon a termination of this Agreement for any reason, within five (5) business days of termination, TRS shall deliver to City all Project documents in TRS’s possession or control. ARTICLE V Insurance Section 5.01 DDA Applies. TRS shall comply with the insurance requirements set forth in Section 6.6 of the DDA. Section 5.02 Owner/Contractor Controlled Program. Contractor has obtained a contractor controlled insurance program for the construction of the Phase IC Improvements and the construction on the Developer Property. Not later than sixty (60) days prior to commencement of construction of the Phase IIC Improvements, TRS will obtain at least two (2) estimates for policies of insurance providing blanket coverage for all typical and customary design and construction-related activities (such as an owner controlled insurance program). The parties will review the estimates and if such coverage is found to be financially and/or administratively beneficial to the Phase IIC Cap Repair, TRS will obtain such policies of insurance for development of the Property. In the event TRS obtains blanket coverage for the Property, it shall administer such policy and, to the extent applicable to the Property, coordinate with City. In the event that TRS and City agree that TRS shall not obtain such blanket coverage for the Property, TRS shall assist City in administering any construction- related insurance policies (including any wrap policy) maintained by City with respect to the Phase IIC Cap Repair, by providing information and facilitating the City’s processing of claims until the final Certificate of Completion for the Phase IIC Cap Repair has been issued. ARTICLE VI Representation and Warranties, Indemnification and Limitation of Liability Section 6.01 TRS’s Representations and Warranties. (a) TRS represents and warrants that it is a corporation duly organized, existing and in good standing under the laws of the State of Delaware, and in good standing and authorized to do business in California. TRS’s sole shareholder is Kilroy Realty, L.P., a 19 Development Management Services Agreement – 10/16/2018 Delaware limited partnership. All other representations of Developer under Article II of the DDA are incorporated by reference into this Agreement as though set forth in full herein. (b) Reserved. Section 6.02 Indemnification. (a) The indemnification provisions set forth in the DDA are incorporated by reference into this Agreement as though set forth in full herein. (b) In addition to TRS’s indemnification obligations set forth in Section 6.14 of the DDA, TRS agrees, at its sole cost and expense, to defend, indemnify and hold harmless City and Agency and their officers, employees and agents, successors and assigns, from (i) any claim for damages or injuries to persons or property arising from (A) the negligence or willful misconduct of TRS or its Personnel or agents, (B) a material breach of TRS’s obligations hereunder or (C) TRS acting outside of its scope of authority set forth herein. Nothing contained in this section shall require TRS to defend, indemnify or hold harmless Agency or City or any of its officers, employees and agents from any claims or actions (i) that result from gross negligence or willful misconduct on the part of Agency or City or (ii) that result from a breach of City or Agency’s obligations hereunder. (c) Reserved. (d) Nothing herein will be deemed to indemnify either party against such party’s own negligence or willful misconduct. ARTICLE VII Miscellaneous Section 7.01 Notice. Any notice or approval required or permitted to be given hereunder by one party to the other shall be in writing, and the same shall be given and shall be deemed to have been received (i) upon actual receipt when personally delivered, (ii) on the date of transmission, if given by electronic mail or other electronic means (with suitable evidence of transmission retained by sender); (iii) on the delivery date as recorded by the delivery service, if send by Federal Express or other overnight mail; or (iv) on the date of receipt as noted on the signature card, if sent by certified mail, return receipt requested; provided that all such notices are sent to the party at the addresses hereinafter specified. To City: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager and Assistant City Manager 20 Development Management Services Agreement – 10/16/2018 With a copy to: Meyers Nave 555 12th Street, Suite 1500 Oakland, CA 94607 Attn: Steven T. Mattas, Assistant City Attorney To TRS: c/o Kilroy Realty Corporation 100 First Street, Suite 250 San Francisco, California 94105 Attn: Jonas Vass, SVP, Development With a copy to: c/o Kilroy Realty Corporation 12200 W. Olympic Blvd., Suite 200 Los Angeles, California 90064 Attn: Legal Department From time to time either party may designate another address or addressee for itself for all purposes under this Agreement by giving to the other party not less than fifteen (15) days’ advance written notice of such change of address or addressee in accordance with the provisions hereof. Refusal to accept delivery of notice shall be deemed receipt thereof. Section 7.02 Reserved. Section 7.03 Assignment; Binding Effect. TRS binds itself, its heirs, executors, successors, assigns and legal representatives to City and Agency with respect to all covenants, conditions, stipulations and provisions of this Agreement. Until completion of construction of the Phase IC Improvements and Phase IIC Cap Repair, TRS shall not assign or transfer any interest in this Agreement except (i) in accordance with Section 8.2.1 of the DDA, or (ii) with the prior written consent of City. Transfers of ownership interests among the members of Oyster Point Development, LLC shall be permitted. Section 7.04 Reserved. Section 7.05 Entire Agreement. Except as set forth in Section 1.01 hereof, this Agreement represents the entire and integrated agreement between City and TRS and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be amended only by written instrument signed by the party charged to be bound thereby. Section 7.06 Governing Law. This Agreement shall be construed in accordance with the laws of the State of California. Section 7.07 Reserved. 21 Development Management Services Agreement – 10/16/2018 Section 7.08 Time of the Essence. Time is of the essence in connection with this Agreement and each and every provision hereof. Section 7.09 Headings. The section headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect any of the terms hereof. Section 7.10 Waiver. The waiver of either party of any breach or violation of, or default under, any provisions of this Agreement shall not be deemed a continuing waiver of such provision or a waiver by such party of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. Section 7.11 Services Prior to Execution. Notwithstanding the fact that this Agreement is executed as of the date first set forth above, the parties recognize that a portion of the work and services required hereunder was performed prior to such date, all of which work and services shall be governed by the terms and conditions of this Agreement and shall be deemed to be included as a part of Development Services. TRS shall not be entitled to any additional compensation for such prior activities and services, except as expressly provided herein. Section 7.12 Severability. In case any one or more provisions set forth in this Agreement, or the application thereof to any person or circumstance shall for any reason be held invalid, illegal or unenforceable in any respect, any such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or the application of such provisions to other persons or circumstances, and this Agreement shall be enforced to the greatest extent permitted by law. If, in City’s reasonable judgment, such invalidity, illegality or unenforceability materially alters this Agreement, City shall have the right to terminate this Agreement in accordance with Article IV hereof. Section 7.13 Exculpation. No officer, director, employee, of City, Agency, KR Developer or TRS shall have any personal liability for any matter related to this Agreement Section 7.14 Force Majeure. As used herein, the term “Force Majeure” shall mean Force Majeure Event as that term is defined in Section 11.2.1 of the DDA. Section 7.15 Effective Date and Term. This Agreement shall become effective as of the date of execution of the Agreement between TRS and City. This Agreement shall remain in effect as to the Phase IC Improvements until the issuance of the final Certificate of Completion for the Phase IC Improvements has been issued by the City. This Agreement shall remain in effect as to the Phase IIC Cap Repair until the issuance of the final Certificate of Completion for the Phase IIC Cap Repair has been issued by the City. Section 7.16 Dispute Resolution for Matters Decided Jointly by TRS and City. In the event that the City Representative and the TRS Representative are unable to agree on any issue that requires approval by the City and TRS and assuming the resolution of the issue does 22 Development Management Services Agreement – 10/16/2018 not require additional funding beyond that set forth in Project Budget including any approved amendments thereto or that resolution of the issue if agreed to between TRS and City is contingent upon additional funding, the parties agree to implement the following process: (a) The first step shall involve presentation of the issue to the Director of Public Works and Jonas Vass, Senior Vice President, Development of TRS or their respective designees who shall have the authority to resolve the matter upon mutual consent provided that adequate budget authority exists for resolution of the issue. The Assistant City Manager and the Executive Vice President shall consider and decide the issue within three (3) business days of presentation of the issue. If the parties cannot resolve the issue, then City and TRS shall proceed with the second step. (b) The second step shall involve presentation of the issue to the City’s City Manager and Tracy Murphy, Executive Vice President, Life Science of TRS who shall have the authority to resolve the matter upon mutual consent provided that adequate budget authority exists for resolution of the issue. The City Manager and TRS’s above-referenced Executive Vice President shall consider and decide the issue within three (3) business days of presentation of the issue. At the commencement of this second step, TRS and City shall within three (3) business days of commencement of the second step agree on a list of three mutually agreed upon experts as set required by the third step. If the parties cannot resolve the issue, then City and TRS shall proceed with the third step. (c) The third step shall involve the addition of one of the pre-selected experts to the panel of the City Manager and TRS’s above-referenced Executive Vice President for any design or contracting disputes that may need to be resolved in order to continue the timely implementation of the Phase IC Improvements project or the Phase IIC Cap Repair. The expert shall be selected from the list of three mutually agreed upon neutral experts. If the parties are not able to agree on an expert from the list, the City Manager, in his/her role as the Agency’s Executive Director, and TRS’s above-referenced Executive Vice President shall each strike one name from the list of experts and the remaining expert shall be designated expert. The decision on the dispute shall be determined by the votes of two of the three members of the panel. If additional budget authority is necessary to implement the action, the City, shall as set forth herein, take reasonable efforts to request the budget authority from the Agency, Oversight Board and Department of Finance. During the time period for consideration of additional budget authority, TRS or the City, in their sole and absolute discretion, may advance the additional costs and may seek reimbursement from the Agency upon approval of additional funding by Agency. Section 7.17 SB 854 Compliance. This Agreement is subject to compliance monitoring and enforcement by the California Department of Industrial Relations (DIR), pursuant to California Labor Code section 23 Development Management Services Agreement – 10/16/2018 1771.4. Prior to commencement of construction, TRS, the Contractor retained by TRS and its subcontractors must be registered with the DIR and qualified to perform public work pursuant to Labor Code Section 1725.5, subject to limited legal exceptions under Labor Code section 1771.1. For the avoidance of doubt, nothing in this Agreement shall require such registration by Design Consultants or other consultants and contractors of TRS that are not otherwise classified as public works contractors pursuant to the Labor Code. In accordance with the provisions of Labor Code section 1773.3, TRS shall provide notice to the DIR of the award of any public works contract subject to the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code, within five days of the award. The notice shall be transmitted electronically in a format specified by the DIR (see https://www.dir.ca.gov/pwc100ext/) and shall include the name of the contractor, any subcontractor awarded the contract and the contract award dates, the contract amount, the estimated start and completion dates, job site location, and any additional information the DIR requires. [Signatures on following page] 24 Development Management Services Agreement – 10/16/2018 City of South San Francisco, a municipal corporation By: ________________________________________ Mike Futrell, City Manager Approved as to form: By: ________________________________________ Jason Rosenberg, City Attorney KILROY REALTY TRS, INC., a Delaware corporation By: ________________________________________ ______________, _________________ By: ________________________________________ ______________, _________________ 3070465.1 25 Development Management Services Agreement – 10/16/2018 Exhibit List Exhibit A: Project Budget Exhibit B: City (on behalf of Agency) Consultants Exhibit C: Project Schedule Exhibit D: Approved Kilroy Design Consultants & Approved Agreements Exhibit E: Project Management Process Exhibit F: Approved Conceptual Plans Oyster Point Development South San Francisco, CA PHASE IC & IIC CAP REPAIR - BUDGET ROPS Approval (May'18) Agency ShareOPD ShareTotalPhase ICAgency ShareOPD ShareTotal DDA Cost CategoriesABC = A + BEFG = E + F 1Streets and Utilities at Hub 1,919,198$ 7,676,794$ 9,595,992$ 4,059,685$ 16,238,739$ 20,298,424$ 2Streets and Utilities at Point5,434,533$ -$ 5,434,533$ 11,030,136$ -$ 11,030,136$ 3Clay Cap Repair at City Parcels - Phase IC539,516$ -$ 539,516$ 612,900$ -$ 612,900$ 4 Reconfiguration Parking Lot at Marina & Open space Landscape 4,247,756$ -$ 4,247,756$ 8,238,145$ -$ 8,238,145$ 5Recreation Fields1,969,117$ -$ 1,969,117$ 2,723,232$ -$ 2,723,232$ 6Future Hotel Site792,931$ -$ 792,931$ 1,219,574$ -$ 1,219,574$ 7Landscaping at Beach / Park3,496,408$ -$ 3,496,408$ 4,837,618$ -$ 4,837,618$ 8 Landscaping at BCDC Area in City Parcels and Palm Promenade -$ 9,533,859$ 9,533,859$ 3,658,435$ 9,533,859$ 13,192,294$ 18,399,459$ 17,210,653$ 35,610,112$ 17,980,266$ 36,379,725$ 25,772,598$ 62,152,324$ ROPS Approval (May'18) Agency ShareOPD ShareTotal Phase IIC Cap Repair Agency ShareOPD ShareTotal DDA Cost CategoriesABC = A + BEFG = E + F 1 Clay Cap Repair 572,366$ -$ 572,366$ 1,460,052$ -$ 1,460,052$ Adjustment for Difference in Requested and DOF ROPS Approval in May'18 ($798,374) [Notes A and B] (89,312.00)$ -$ (89,312.00)$ 572,366$ -$ 572,366$ 798,374$ 1,370,740$ -$ 1,370,740$ Note A: Requested ROPS $18.0M for Phase IC and $0.89M for IIC Cap Repair for total $18.89M (OB and SA) in Dec'17. Note B: Final DOF ROPS approval May'18 of $18,778,640: $17,980,266 for Ph. IC and $798,374 for IIC Cap Repair. TOTAL TOTAL DDA Budget (2011 $'s) Ref. Exhibit 3.4.1 2017 Revised Budget ROPS Approval (2017 $'s)PHASE IC 2011 BUDGET ADJUSTED ESCALATION FROM 2011 TO DEC 2017 PHASE IIC CAP REPAIR 2011 BUDGET ADJUSTED ESCALATION FROM 2011 TO DEC 2017 DDA Budget (2011 $'s) Ref. Exhibit 3.4.1 2017 Revised Budget ROPS Approval (2017 $'s) Prepared by OPD LLC Page 1 of 1 EXHIBIT B Consultants on Behalf of Agency Consultant Responsibility RRM Design Group Landscape Peer Review Meyers Nave Legal Swinerton Management & Consulting Project Management and Administration Tetra Tech Landfill Environmental Peer Reviewer Rich Hopper Traffic Engineering CSG Plan Checker AKEL Engineering Group, Inc. Stormwater Analysis Michael Baker Sewer Flow Analysis Exhibit C Project Schedule Notice to Proceed March 2018 Grading Complete January 2020 Underground Utilities June 2020 Road March 2020 Concrete Pier Ramps May 2020 Parking Lot September 2020 Landscaping August 2020 Construction Complete September 2020 EXHIBIT D Kilroy Approved Design Consultants and Approved Contracts Consultant / Contractor Responsibility Teichert Construction General Contractor Langan Treadwell Rollo Geotechnical, Environmental Wilsey Ham Civil Engineering, Surveying James Corner Field Operations Landscape Architecture Cummings Construction Management Glumac Utility Consultant RGA Utility Consultant EXHIBIT E Project Management Process (See Attached) Project Management Process (PMP) For Design and Construction Projects Oyster Point Development Phase IC Edited: October 2018 TABLE OF CONTENTS 1.0 Executive Agreement 1.1 Project Manager 1.2 PMP Ratification 2.0 Introduction 3.0 Project Description & Scope 4.0 Project Resource Allocation Plan 5.0 Project Management Structure 6.0 Project Oversight Team 7.0 Integrated Project Team (IPT) 7.1 Roles & Responsibilities of the IPT Members 7.2 IPT Consultants and Contractors 7.3 IPT Contracting Authority 7.4 IPT Directory 8.0 Contract Administration & Status Reports 8.1 Project Schedule 8.1.1 Design Schedule 8.1.2 Construction Schedule 8.2 Project Budget 8.2.1 Project Budget Approval Process 8.2.2 Project Budget Revisions Process 8.3 Monthly Draw Process 8.3.1 Project Status Update 8.3.2 Project Budget Update 8.3.3 Project Payment Approval 8.3.4 Invoices with Backup 8.3.5 Monthly Cash Flow 8.3.6 Lien Waivers 8.4 Chart of Accounts 8.5 Draw Dates 8.6 Contingencies 9.0 Design Phase 9.1 Project Baseline 9.2 Design Submittals and Review Process 9.3 Current Working Estimates (CWE) 9.4 Design Changes Procedures 9.5 Design Milestone Meetings 10.0 Construction 10.1 Construction Change Procedures 10.2 Construction Quality Assurance Management 10.3 Construction Meetings 10.3.1 Weekly OAC Meetings 10.3.2 Construction Milestone Meetings 10.4 Construction Risk Manager 10.5 Commissioning Quality Assurance (QA) & Systems Testing 10.6 Substantial Completion 10.7 Deficiencies 10.8 Letter of Acceptance 10.9 Claims 10.10 Construction As-Built Drawings 10.11 Operations and Maintenance (O&M) manuals 11.0 Warranty Protocol APPENDIX Attachment – A: Project Management Structure Attachment – B: IPT Directory Attachment – C Project Schedule Attachment – D: Example Project Budget Attachment – E: Example Project Paym ent Approval Attachment – F: Example Conditional Lien Waiver Attachment – G: Example Unconditional Lien Waiver Attachment – H: Chart of Accounts Attachment – I: Example Monthly Project Status Report Attachment – J: Example Change Order Log Attachment – K: Example Form of Risk Register 5 1.0 Executive Agreement The Integrated Project Team (IPT) members listed below fully support the provisions of this Project Management Process (PMP). Each team member is dedicated to the successful execution of this project to ensure that the complete, comprehensive objectives of designing and constructing the project are attained with minimum number of changes, at the least possible cost growth, and within the agreed timeframe. The PMP is a living document and may be updated at any time as required by the IPT. All changes to the PMP will be coordinated with the IPT for concurrence prior to implementation. 1.1 Project Manager: The Project Manager (PM) in the Oyster Point Development Infrastructure Phase IC (“Phase IC Improvements”) is responsible for the overall execution of the project from initiation of the Design Phase through the completion of Construction Bid documents, including follow-on construction services. The PM reports to the IPT and is responsible for developing and maintaining this PMP, in coordination with the IPT and IPT support members. The PM will provide any updates to this PMP, with all supporting project documentation, to all members of the IPT and will update the documentation as required by the IPT. 1.2 PMP Ratification: This PMP has been developed and fully coordinated with the IPT members and is integral to the successful completion and occupancy of this project. The IPT members are fully engaged and committed to work together within the guidelines of the PMP. Each signatory acknowledges review and approval of this document. IPT Member Kilroy Realty TRS, Inc. Representative IPT Member City of South San Francisco/ South San Francisco Successor Agency Representative Support to IPT Project Manager Construction Manager Support Team to City/Agency IPT Client Representative 2.0 Introduction The purpose of the Project Management Process (PMP) is to provide guidelines for design and construction projects in conjunction with Agreement for Development Management Services, dated February 1 2017 and the Disposition and Development Agreement (“DDA”), dated March 23, 2011. It is to be reviewed, approved, and signed by the IPT . 6 ▪ Establish the framework and process for the management and execution of the procurement, design, and construction of the Phase IC Improvements. ▪ Outline the project scope, budget, construction resource requirements, roles, responsibilities, authorities of the City of South San Francisco (“City”) and the South San Francisco Successor Agency (“Agency”), and Kilroy Realty TRS, Inc. (“TRS”). ▪ Outline the technical performance requirements for the management and control of the project from initiation of concept design through construction, and final delivery to the customer/user. ▪ Establish decision procedures for the review and resolution of inquiries and proposals for changes. Providing a quality project on schedule and within budget is the primary objective of all IPT members and support team members. The operating procedure described in this plan supplements existing regulations for the purpose of establishing more detailed and specific relationships among organizations participating in this project. It is intended that this management plan be a living document subject to change as conditions warrant or as project experience dictates. 3.0 Project Description and Scope TRS, the City and the Agency are parties to that certain Disposition and Development Agreement (“DDA”), dated March 23, 2011 and pursuant to that certain Consent, Assignment and Assumption Agreement dated August 18, 2016, which relate to development of specified real property owned by TRS and the City, respectively. The DDA provides for construction of improvements in Phases IC and IIC on the properties owned by City and TRS. The DDA allocates costs and responsibilities for the design and construction of the improvements to Phases IC and IIC. The City (acting on behalf of the City and Agency) and TRS desire to have TRS manage design and construction of the improvements specified herein subject to the terms set forth herein which are intended to be consistent with the allocation of responsibilities set forth in the DDA. 4.0 Project Resource Allocation Plan The Project Budget is shown in Attachment – D. The budget summary includes all Project Budget estimated costs for the project including all project development costs, design services, site preparation and construction costs, construction support, and project support costs. 5.0 Project Management Structure See Attachment - A for Project Management Structure. 6.0 Project Oversight Team The Project Oversight Team provides strategic leadership and oversight in the delivery of the Phase IC Improvements program and resolves issues that cannot be resolved at lower levels. Specifically, the Team will provide the following oversight and direction: 7 • Render decision on recommendations or changes presented by the IPT with input from IPT support team members • Stay informed of the project development and status • Confirm and prioritize the requirements for the project • Resolve any issues that cannot be resolved at other lower project management levels. • Levels of Oversight: o 1st Level of Project Oversight: Jonas Vass, Senior Vice President and Eunejune Kim, Public Works Director o 2nd Level of Project Oversight: John Kilroy, Chief Executive Officer and Mike Futrell, City Manager 7.0 Integrated Project Team (IPT) The Integrated Project Team (IPT) is essential to the successful execution of the overall project goals and objectives. The IPT support team members are advisory to the IPT members. The IPT is established at the very onset of the initial project authorization and assists the PM in developing the strategies for the design and construction processes and resource requirements. 7.1 Roles and responsibilities of the IPT Members: 1. Project Manager (PM): The Project Manager (PM) reports to and receives direction from the IPT. The PM has the single point stewardship responsibility for all aspects of the project during the execution and has overall responsibility for project management, schedule and cost compliance. The Project Manager is the proponent of the acquisition planning and the solicitation process. The PM represents the interests of both TRS and the Agency/City and manages all associated services in the execution of this project including; a) environmental requirements, b) schedules all project conformance review meetings, c) prepares the agenda, coordinates time, d) prepares and distributes minutes, e) updates the required Project Status Reports, f) briefs IPT on the project status during the weekly Project meetings, and g) keeps them informed on conformance with the project, changes, and problem areas regarding the project. The PM has a limited delegation of authority set by the IPT and has the authority to direct the contractor within the scope of the contract. The PM manages project funds that are within IPT’s control. The PM is the primary conduit for all change orders, and correspondence associated with any contract that supports this project. The PM coordinates all necessary approvals for changes by IPT members and prepares and transmits requests for changes and all approved changes to the IPT. 2. Client Representative (CR): The CR is responsible for project coordination with the City and the Agency and for reporting project status to the Project Oversight Team. The Client Representative will support the PM in coordinating and validating Agency requirements and requests for changes during the design and construction phases. CR will attend all design and project review meetings, contractor selection activities, and the government’s conformance review meetings representing the interests of the City and the Agency. The CR represents the City and the Agency interests and objectives for this project. The CR will be the primary point of contact representing user requirements. 8 3. Construction Manager (CM): The Construction Manager (CM) reports to and receives direction from the IPT. The CM has the main point of responsibility for all onsite construction administration related aspects of the project once construction bid documents are issued and through construction close out. The CM has overall responsibility for daily onsite construction administration and schedule. The CM represents the interests of both TRS and the Agency/City and manages all associated services in the execution of this project including; a) construction administration b) construction schedule updates c) prepares project meeting agenda and minutes, e) updates the required Project Status Reports, f) briefs IPT on the project status during the weekly Project meetings, and g) keeps them informed on conformance with the project, changes, and problem areas regarding the project. The CM has a limited delegation of authority set by the IPT and has the authority to direct the contractor within the scope of the contract. 7.2 IPT - Consultants and Contractors (Integrated Project Team) 1. Architect-Engineer (A/E): The A/E services may include but are not limited to the following: program of requirements, conceptual design, project design manual, proposed schematic design, design development, construction bid documents including specifications, Construction Cost. The A/E services may include assisting the PM in providing project conformance oversight and construction observation for in -place elements for review of conformance. The Project Manager (PM) will enforce and administer the existing contract. All changes to the A/E’s contract will be proposed and implemented by the Project Manager and subject to approval by the IPT . 2. Construction Contractor: The firm awarded the contract is responsible for providing Quality Assurance and Quality Control (QA/QC) in accordance with the contract. The PM will provide conformance reviews with technical assistance from the A/E. All changes to the contract will be proposed and implemented only by the Project Manager subject to approval of IPT. 7.3 IPT Contracting Authority The PM/CM are the only IPT members authorized to direct changes to the design and construction contracts and such changes shall require prior authorization per Sec tion 2.03(j) of the Agreement for Development Management Services. Changes that the IPT determines should be made to the contracts must be directed through the PM. The IPT must not provide any direction or clarifications to the contractor or his/her subcontractors without going through the PM/CM. All issues that will impact the scope and intent of the contract must be brought to the attention of the PM/CM for review and resolution by the PM/CM. 7.4 IPT Directory (see Attachment – B) The Integrated Project Team (IPT) directory provides the key point of contact for coordination of project issues. 9 8.0 Contract Administration and Status Reports The Project Manager/Construction Manager is responsible for managing the overall project and coordination of project issues and actions with the IPT. The PM/CM will ensure that accurate project status reports are maintained and provided to the IPT members in a timely manner. Project issues will be coordinated by various means including teleconference, electronic messaging, and on-site meetings. The PM will establish uniform and consistent project reporting processes with the IPT. The PM will coordinate and validate users’ requirements during the programming and schematic design phase of the project. Construction progress review meetings will be conducted as an expansion of the monthly/weekly project conformance review meetings. These meetings will be held every 2 weeks or on an as - needed basis. The construction progress review meetings will be attended by the IPT and chaired by the PM/CM and may be held at the project site or by tele-conference calls. The expanded agenda will address and resolve any outstanding project scope, cost, schedule, and pending requests for changes. 8.1 Project Schedule (Attachment – C) 8.1.1 Design Schedule: The project design schedule will be developed by the PM and coordinated with the IPT at the initial team meeting. A Project Design Schedule is provided as an attachment to this PMP as Attachment – C. Considerations in the development of the design project schedule will include the following factors: ▪ Date of initial authorization to begin design ▪ Each Phase of design (35% etc.) and review period ▪ City review period durations 8.1.2 Construction Schedule: The construction schedule will be developed during the development of the RFP. The construction schedule will be refined by the Project Team during the final design development to establish all essential time lines. The IPT will review the schedule to ensure appropriate durations have been included for all aspects of the construction, to include the following considerations: 1. Construction contract period of performance. 2. Commissioning. 3. Substantial Completion (contractor). 4. Final completion (all punch list/bond release items completed) (contractor). 10 8.2 Project Budget (Attachment – D) 8.2.1 Project Budget Approval Process: The Project Budget is attached hereto as Attachment D. 8.2.2 Project Budget Contingency: Based on size and complexity of the project, the dollar threshold level for the Direct Cost Contingency and any amendments thereto will be recommended by the Project Manager and subject to approval by the IPT. 8.2.3 Project Budget Revisions Process: The project budget revision will be developed by the PM and distributed to the IPT for review and approval as required by Section 2.02(a) of the Agreement for Development Management Services. 8.3 Monthly Draw Process 8.3.1 Monthly Project Status Report (Attachment – I): The Monthly Project Status Report will be developed by the PM and distributed to the IPT for review on a monthly basis as part of the draw package. 8.3.2 Change Order Log (Attachment – J): The Change Order Log will be developed by the PM and distributed to the IPT for review on a monthly bas is as part of the draw package. 8.3.3 Project Payment Approval (Attachment – E): The project payment approval will be developed by the PM and distributed to the IPT for review and approval on a monthly basis as part of the draw package. 8.3.4 Invoices with Backup: The project invoices with backup will be vetted by the PM and distributed to the IPT for review on a monthly basis as part of the draw package. 8.3.5 Monthly Cash Flow: The project cash flow and contingency budgets will be updated on a monthly basis by the PM and distributed to the IPT for review as part of the draw package. 8.3.6 Lien Waivers (Attachment - F & G): The project conditional and unconditional lien waivers will be reviewed by the PM and distributed to the IPT for review on a monthl y basis as part of the draw package. 11 8.4 Chart of Accounts (Attachment – H) The project will utilize the chart of accounts as shown in Attachment H. The chart of account has specific cost codes for both hard and soft project costs. If the chart of accounts requires any revisions the PM will make these changes and distribute to the IPT for review and approval. 8.5 Draw Dates & Distribution The PM will distribute the monthly draw package electronically via email for review no later than the 12th of each month to allow time for the IPT to review, approve and fund by the 30th of the month. 8.6 Contingencies 8.6.1 Direct Cost Contingency: The Direct Cost Contingency is to be used for changes in the project scope as directed by the IPT and/or unforeseen conditions not anticipated in the construction drawings. 8.6.2 Contractor Contingency: The Contractor Contingency (included within the 19% General Conditions and mark ups line item) funds shall be used during the estimating period to cover undeveloped detail in the progress drawings and then be reduced at the time of the construction contract to be used for gaps in the buyout or other omissions by the contractors. 8.6.3 Indirect Cost Contingency: The Indirect Cost Contingency is to be used for unanticipated soft costs such as additional services by design consultants and/or additional administrative costs. 9.0 Design Phase All IPT and IPT support team members will be asked to formally review and comment on the 35%, 65% and 95% design documents and for landscape design at Schematic Design (SD), Design Development (DD), and Construction Document (CD), to ensure that the project specific requirements are incorporated in the design documents. The PM will provide copies to: City staff for technical review and input. Additionally, the PM, or a designated representative, will perform Technical and Environmental compliance reviews prior to issuing for bid, thereby minimizing the potential changes during construction. 9.1 Project Baseline The project baseline (“Baseline”) was previously established within the Disposition and Development Agreement (“DDA”), dated March 23, 2011. Any changes to the Baseline will require approval by the Project Oversight Team. 12 9.2 Design Submittals and Review Process The PM will distribute the design documents for review by the IPT at the following milestones: 35%, 65% and 95% and for landscape design at Schematic Design (SD), Design Development (DD), and Construction Document (CD). The IPT will have two weeks to review and provide comments to the PM to be included in the next design phase. During the review period, the design team will continue working on the design documents as to not delay the design process. Following the 95% design review period, changes will be incorporated as appropriate as the 100% Design documents. 9.3 Total Project Cost (TPC) The total project Total Project Cost shall be developed by the Contractor and distributed by the PM to the IPT at the 35% and 65% design and for landscape design at Schematic Design (SD), Design Development (DD), and Construction Document (CD) milestones. The General Contractor or project Preconstruction services provider, will provide at each submittal an updated construction cost estimate. The IPT will review the TPC submittal , provide comments, and approve or reject the TPC. The 95% and CD design documents will service as the basis for the bid documents and any final changes in the 100% design documents shall be incorporated into the construction contract. The PM shall update the project TPC during construction as required and post the TPC as part of the monthly Project Status Report. 9.4 Design Change Procedures Any requested programmatic design changes during design phase shall be submitted by the Client Representative to the PM in writing describing the scope and justification for the change. The PM will review the change request into consideration and determine the impact on funding, schedule and justification of requested change. 9.4.1 Programmatic Changes During Design: Changes need to be submitted in writing by the Client Representative to the PM describing the scope and justification for the change. Programmatic Changes are the result of requirements that IPT determines were not originally identified during programming and that need to be implemented into the design or new requirements. A revised construction cost estimate and schedule reflecting the requested design change impact(s) to project needs to be provided. Implementation of Programmatic Changes: The PM will develop a description of the scope change, a cost estimate, determine potential delays, and impact on budget. Changes that impact the total project cost above the previously established threshold or schedule shall be brought to the Project Oversight Team for review and approval 9.5 Design Milestone Meetings 13 The PM will schedule design milestone meetings with the IPT and City Staff at 35%, 65%, and 95% Design and for landscape design at Schematic Design (SD), Design Development (DD), and Construction Documents (CD) milestones. The PM will schedule interim design updates between milestones with the IPT and City Staff . 10.0 Construction Phase The concept of informal partnering should be used for the construction of all projects. Partnering creates an environment that nurtures cooperative team-building that is in pursuit of common goals and objectives. This is an approach to conducting business that focuses on making the goals of all the project stakeholder better understood and managed to achieve positive results. 10.1 Construction Change Procedures: 10.1.1 Technical Changes: These are changes that must be incorporated to allow the construction to proceed on schedule and to provide a fully functional project. The change may be generated as a result of differing site conditions, errors or omissions in the programming or specifications, or changes in order to be code compliant. Funding for Technical changes is covered by the Direct Cost Design Contingency funds and is managed by the Project Manager. Approval of change orders shall be as set forth in Section 2.03(j) of the Agreement for Development Management Services. Implementation of Technical Changes: These changes, will receive top priority for implementation. Approval authority for these changes rests with the Public Works Director and must be processed through the PM within 10 working days. Technical changes are funded from the Direct Cost Contingency funds. The PM will monitor the expenditure of the Direct Cost Contingency funds. Expenditure of contingency funds shall be reported to City for monitoring purposes. When a technical change (in the judgment of the PM) impacts the project’s construction contingency funds the PM shall inform the IPT of the requested change and impact to the project (see attached flow chart). When the IPT is in agreement with the technical change, the PM shall inform the Project Oversight Team of the requested change and impact to the project. 10.1.2 Programmatic Changes during Construction: These are generally requests for changes to the construction contract initiated by the City and are covered under the Direct Cost Contingency funds. Such changes after contract award are normally very expensive and may delay completion of the project. They should be held to a minimum. Implementation of Programmatic Changes: Programmatic Changes will be managed to avoid exhausting available contingency funds prior to identification and resolution of all mandatory technical changes. Implementation of program changes can not cause unacceptable schedule or cost impacts to the contract. 14 Program changes may be deferred for future consideration if funds are still available following completion of the contract work. Deferred changes, if implemented, may be competitively bid in a separate follow-on contract at the end of the main contract. Program changes may be implemented during the basic contract work if they cannot reasonably be deferred due to the nature of the work or if earlier implementation is in the best interest of the project stakeholders. The PM and IPT will maintain a priority list of deferred program changes with preliminary cost estimate(s). All requests for program changes will be submitted by the Client Representative to the PM. When required the PM will provide a written scope of work, preliminary cost estimate and impact statement for the proposed program change. The PM will review the proposed change with the IPT (scope change, schedule, cost estimate and impacts) to determine if the change is out of project or contract scope, exceeds available funds or if the change should be deferred, the PM and IPT will submit the requested change, along with the City approved source of funds, to the Project Oversight Team for review and approval. If the change is approved, the PM may request additional funds from the City for the change. 10.2 Construction Quality Assurance Management: Construction Quality Assurance is the responsibility of the CM. The goal is to achieve a quality construction by conforming to the contract requirements. A close working relationship facilitates communication and issue resolution shall be established early in the project between the Contractor , the CM and the PM to achieve this goal. 10.3 Risk Register: PM/CM shall prepare and submit to IPT on a monthly basis a Risk Register and shall make recommendations to the IPT to resolve issues on the Risk Register (Attachment - K). 10.4 Quality Assurance (QA) & Special Testing; All material testing and special inspection, shall be identified in the specification. Testing and Special Inspections as required by building code will be performed by an independent third party. 10.5 Substantial Completion: Prior to substantial completion and final acceptance of the project, periodic conformance inspections shall be conducted on an area-by-area basis or on a functional basis by the CM. The purpose of these conformance inspections is to minimize delays and insure efficient turnover. The Contractor shall correct any construction deficiencies identified during these visits before a final turn over is scheduled. 10.6 Deficiencies: At project completion, if the space is not safe and cannot be used for its intended use, the PM shall first determine that any major deficiencies have been corrected; before a final acceptance inspection is scheduled with the IPT, end-user representative(s) and other participants is conducted. Teams may include representatives from the City and PM, and others as appropriate. 10.7 Letter of Acceptance: Prior to turnover to the City, the CM shall obtain from the “Client Representative” a signed “letter of acceptance”. 15 10.8 City Assumes Responsibility: Upon substantial completion and turnover to the City, the City will assume responsibility for the operation and maintenance of the project. 10.9 Claims: The CM will immediately inform the IPT if there are any pending claims. Upon determination by the CM that a contractor’s claim in whole or in part has merit, the CM will prepare a standard change request with the agreed amount and forward it with rationale for merit to City for funding guidance. Standard procedures for estimating and negotiating will be followed to assure timely execution of a completed contract modification to resolve the claim. Approval of change orders shall be as set forth in Section 2.03(j) o f the Agreement for Development Management Services. 10.9 As-Built Documents: Completed as-built drawings including all electronic drawing files are to be provided within 30 days of turnover and before final payment. The PM will ensure that the contractor prepares the completed as-built drawings both red-line and on CADD. The as-built drawings will be delivered to the City directly along with a copy of the specifications, warranties, and O&M manual. 10.10 Operations and Maintenance (O&M) manual: Shall be identified in the General Conditions of the Specification. 11.0 Warranty Protocol: The PM/CM will maintain a list of any deficiencies outstanding at substantial completion. The PM/CM will coordinate closely with the contractor to insure prompt correction of deficiencies. Prior to the handover date, the PM/CM will conduct a pre-warranty conference with the contractor and with the City representative in attendance. During the pre -warranty conference the contractor shall provide a list of sub-contractors, phone numbers and names of contact person responsible for the execution of any warranty work. The City will have the responsibility of administering the warranty program throughout the contractually specified warranty period. The City upon notification of a possible warranty requirement, will do an initial investigation to ensure that the problem is covered under warranty. The City will then contact the contractor listed on the on the warranty list and issue a request for corrective action. The City shall m aintain a log of all warranty requests received with: request date, actions taken, completion date or pending and will inform the initiators of such status on a weekly basis. If required, the PM will assist in resolving warranty items in the event the cont ractor is not available to respond in an expeditious manner. At eleven (11) months after transfer, the PM/CM will conduct joint inspections with the contractor, City and any other representatives to identify defects and plan corrective actions. The CM will contact the City prior to these inspections for the list of warranty call log and potential latent defects on the project. These items will be reviewed by the PM/CM for possible follow-up action. During this same inspection, the PM/CM may conduct a Post Delivery Evaluation of the Project. 16 (Attachment-A) Project Management Structure 17 (Attachment – B) IPT Directory The Integrated Project Team (IPT) directory providing the key point of contact for coordination of project issues is as follows: POC Project Manager: (Jonas Vass, Kilroy Realty Corporation, 100 First Street Suite 250, San Francisco, CA 94105, 415-778-7741) IPT Member – Kilroy Realty TRS, Inc.: (Jonas Vass, Kilroy Realty Corporation, 100 First Street, Suite 250, San Francisco, CA 94105, (415)-778-7741) IPT Member – City of South San Francisco/South San Francisco Successor Agency: (Eunejune Kim, 550 N. Canal Street, South San Francisco, CA 94080, (650) 877-8550) Client Representative: (Dennis Wong, Swinerton, 260 Townsend Street, San Francisco, CA 94107, (415) 617-1451) Construction Manager: (Ari Erfani, Cummings Corporation, 475 Sansome Street, Suite 700, San Francisco, CA 94111, (330) 957-9981 (Eugene Lam, Cummings Corporation, 475 Sansome Street, Suite 700, San Francisco, CA 94111, (510) 396-3033) 18 (Attachment – C) Project Schedule Notice to Proceed March 2018 Grading Complete January 2020 Underground Utilities June 2020 Road March 2020 Concrete Pier Ramps May 2020 Parking Lot September 2020 Landscaping August 2020 Construction Complete September 2020 19 (Attachment – D) Example Project Budget Oyster Point Development South San Francisco, CA PHASE IC & IIC CAP REPAIR - BUDGET ROPS Approval (May'18) Agency ShareOPD ShareTotalPhase ICAgency ShareOPD ShareTotal DDA Cost CategoriesABC = A + BEFG = E + F 1Streets and Utilities at Hub 1,919,198$ 7,676,794$ 9,595,992$ 4,059,685$ 16,238,739$ 20,298,424$ 2Streets and Utilities at Point5,434,533$ -$ 5,434,533$ 11,030,136$ -$ 11,030,136$ 3Clay Cap Repair at City Parcels - Phase IC539,516$ -$ 539,516$ 612,900$ -$ 612,900$ 4 Reconfiguration Parking Lot at Marina & Open space Landscape 4,247,756$ -$ 4,247,756$ 8,238,145$ -$ 8,238,145$ 5Recreation Fields1,969,117$ -$ 1,969,117$ 2,723,232$ -$ 2,723,232$ 6Future Hotel Site792,931$ -$ 792,931$ 1,219,574$ -$ 1,219,574$ 7Landscaping at Beach / Park3,496,408$ -$ 3,496,408$ 4,837,618$ -$ 4,837,618$ 8 Landscaping at BCDC Area in City Parcels and Palm Promenade -$ 9,533,859$ 9,533,859$ 3,658,435$ 9,533,859$ 13,192,294$ 18,399,459$ 17,210,653$ 35,610,112$ 17,980,266$ 36,379,725$ 25,772,598$ 62,152,324$ ROPS Approval (May'18) Agency ShareOPD ShareTotal Phase IIC Cap Repair Agency ShareOPD ShareTotal DDA Cost CategoriesABC = A + BEFG = E + F 1 Clay Cap Repair 572,366$ -$ 572,366$ 1,460,052$ -$ 1,460,052$ Adjustment for Difference in Requested and DOF ROPS Approval in May'18 ($798,374) [Notes A and B] (89,312.00)$ -$ (89,312.00)$ 572,366$ -$ 572,366$ 798,374$ 1,370,740$ -$ 1,370,740$ Note A: Requested ROPS $18.0M for Phase IC and $0.89M for IIC Cap Repair for total $18.89M (OB and SA) in Dec'17. Note B: Final DOF ROPS approval May'18 of $18,778,640: $17,980,266 for Ph. IC and $798,374 for IIC Cap Repair. TOTAL TOTAL DDA Budget (2011 $'s) Ref. Exhibit 3.4.1 2017 Revised Budget ROPS Approval (2017 $'s)PHASE IC 2011 BUDGET ADJUSTED ESCALATION FROM 2011 TO DEC 2017 PHASE IIC CAP REPAIR 2011 BUDGET ADJUSTED ESCALATION FROM 2011 TO DEC 2017 DDA Budget (2011 $'s) Ref. Exhibit 3.4.1 2017 Revised Budget ROPS Approval (2017 $'s) Prepared by OPD LLC Page 1 of 1 20 (Attachment – E) Example Project Payment Approval OPD - PHASE IC - PROJECT PAYMENT APPROVAL TO:Jonas Vass Eunejune Kim Kilroy Realty Corporation City of South San Francisco 100 1st Street, Suite 250 550 N. Canal DATE:8/22/2018 San Francisco, CA 94105 South San Francisco, CA 94080 DRAW #:22 PROJECT:OPD Phase IC WE ARE SUBMITTING THE FOLLOWING INVOICES FOR PAYMENT: Ref #Cost Code Commitment ID Vendor Reference Revised Contract Value Paid to Date Contract Value Remaining % To be Paid by Developer % To be Paid by Agency Invoice Number Invoice Date Amount requested this period Amount Approved For Payment Amount Paid this Period Outside of this Draw Amount Funded by Developer Amount Funded by Agency Notes Contracted Invoices Do not print --> Invoices with no contract (or under hourly engagement) Incidental expenses drawn from working capital over past month Total Amount Approved for Payment to Vendor in Draw:-$ Amount paid outside of draw through Working Capital Account Amount to be replenished to Working Capital (Total Invoices Paid this Period Outside this Draw):-$ *** Developer pays 100% until meeting the obligation cap of $9,533,089.Total invoices paid during period and approved in draw: Total to be funded by Developer this period:-$ Total to be funded by Agency this period:-$ Cumming Corporation Kilroy Realty TRS Inc.City of South San Francisco SIGNED:8/22/2018 SIGNED:DATE:SIGNED:DATE: Jarrod Ross NAME:NAME: Senior Cost Manager TITLE:TITLE: -$ 21 (Attachment – F) Conditional Lien Waiver Form 22 (Attachment – G) Unconditional Lien Waiver Form 23 (Attachment – H) Chart of Accounts Cost Code Description 1.0 - HARD COSTS - PHASE IC 1.1 - DIRECT COSTS - (PHASE IC) 1.1.01 Streets and Utilities at Hub 1.1.02 Streets and Utilities at Point 1.1.03 Clay Cap Repair at City Parcels - Phase IC 1.1.04 Reconfiguration Parking Lot at Marina & Open space Landscape 1.1.05 Recreation Fields 1.1.06 Future Hotel Site 1.1.07 Landscaping at Beach / Park 1.1.08 Landscaping at BCDC Area in City Parcels and Palm Promenade 1.2 - INDIRECT COSTS - (PHASE IC) 1.2.01 Streets and Utilities at Hub 1.2.02 Streets and Utilities at Point 1.2.03 Clay Cap Repair at City Parcels - Phase IC 1.2.04 Reconfiguration Parking Lot at Marina & Open space Landscape 1.2.05 Recreation Fields 1.2.06 Future Hotel Site 1.2.07 Landscaping at Beach / Park 1.2.08 Landscaping at BCDC Area in City Parcels and Palm Promenade 1.3 - CA SERVICES (LANGAN) 2.0 - OWNER MANAGED ITEMS 2.1 - OWNERS CONTINGENCY 3.0 - SOFT COSTS - PHASE IC 3.1 - ACQUISITION & DILIGENCE COSTS 3.1.01 Title Fees 3.1.02 Other Closing Costs 3.1.03 Legal 3.2 - ENTITLEMENTS 24 3.2.01 Legal 3.2.02 Community Outreach 3.3 - PROFESSIONAL FEES / CONSULTANTS 3.3.01 Architect 3.3.02 Structural Engineer 3.3.03 MEP Engineer 3.3.04 Geotechnical Engineer 3.3.05 Civil Engineer 3.3.06 Environmental Consultant 3.3.07 Code Consultant 3.3.08 Graphic Designer 3.3.09 Landscape Architect 3.3.10 Miscellaneous Consultants 3.3.11 Parking Consultant 3.3.12 Joint Trench Consultant 3.3.13 Consultant Reimbursables 3.3.14 Lighting Consultant 3.3.15 Preconstruction 3.3.16 Master CA Services 3.4 - PERMITTING / ADMIN FEES 3.4.01 Permit / Plan Check Fees 3.4.02 Other Utility Connection Fees 3.4.03 Testing & Special Inspection 3.4.04 On Site Security 3.4.05 Insurance 3.4.06 Accounting Fees 3.4.07 Audit Fees 3.4.08 Legal (Contracts) 3.4.09 3D Model / Renderings 3.4.10 Other Marketing / Promotion 3.4.11 Other Project Admin Costs 3.4.12 Soft Cost Contingency 3.4.13 Start-up & Maintenance 3.5 - PROJECT MANAGEMENT / CONSTRUCTION MANAGEMENT 3.5.01 Development Management Fee 25 (Attachment – I) Example Monthly Project Status Report Project: Kilroy Oyster Point Date: Month XX, XXXX Subject: Quarterly Report Report No: 1 Page 1 of 1 1. Project Progress / Scope 1.1 Completed Work 1.2 Current Work 1.3 Upcoming Work During the upcoming quarter, the project team will focus on the scope of work summarized in Table 1: Table 1: Upcoming Work Milestone Description 2. Risk Items 3. Schedule Update 4. Cost Report Documents & Graphs 5. Change Order Status OPD - Phase IC, & IIC Cap Repair COMPANY:Cumming +1 (415) 400-8749 ADD PHOTO Milestones: (A) Budget Against Anticipated Final Cost Within Budget A B C D = (C-B) Approved Budget Current AFC Previous AFC Period Change Total - IC & IIC Cap Repair Hard Costs - IC Soft Costs - IC Hard Costs - IIC Cap Repair Include but not limit to: None as of today - Not commenced. Soft Costs - IIC Cap Repair (B) Change Orders E F G (E+F) / B Approved Variation Costs Pending Variations Costs Anticipated Variations Costs % of AFC (C) Committed Costs Against Payments J K = J/B L M = L/J Include but not limit to: Total value of PO % against AFC Payments to date % paid against Committed Costs Total - IC & IIC Cap Repair Hard Costs - IC Innovation: N/A Soft Costs - IC Hard Costs - IIC Cap Repair Soft Costs - IIC Cap Repair * HC - Hard Costs; SC - Soft Costs 13-Sep-18PROJECT: The Project is located on a 42-acre waterfront site in the heart of South San Francisco’s East-of-101 sub-market. hat benefits the entire South San Francisco community. Entitled for 2.25 million square feet, the vision for the master planned mixed use development includes the creation of a world- class biotech center of the future; a vibrant community connected to transit and conveniently located near shops and restaurants; a cohesive open space network that engages the surrounding areas and a new expertly designed mixed-use neighborhood at Oyster Point. Initiating Phase I of the master planned vision includes the release of extensive site infrastructure upgrades encompassing new roads, utilities and public open space amenities. Project Programme Work In ProgressCurrent Project Status Others Project RisksSafety, Health and the Environment Mobilization & Utility Coordination 19-Mar-18 1-May-18 Landfill Potholing 19-Mar-18 1-May-18 Project Update TBD Financial Position - All costs in USD Phase IC Temporary Road Phase IC Streets and Utilities Phase IC Earthwork / Landfill Rem. Phase IIC Cap Repair Phase IC Landscaping 1-Dec-181-Oct-18 Project Scope 1-Oct-20 TBD May Jun AugApril Decisions Required Procurement Project Flash Report - Oyster Point Development Report Nr 8 JulStartScheduled Dates 19-Mar-18 1-Apr-18 1-Oct-18 DecNov 1-May-18 1-Nov-18 End OctSeptMar Jan Feb Chris ThompsonPROJECT MANAGER: Confidential Rev 0 26 (Attachment – J) Example Change Order Log Kilroy Oyster Point Phase IC, ID, & IID South San Francisco, CA 10/1/2018 PHASE IC Phase IC – Agency Phase IC – Developer PHASE IDPHASE IID TOTAL CONTINGENCY: POTENTIAL CHANGE ORDERS:TOTAL CHANGE REQUEST PHASE IC Phase IC – Agency Phase IC – Developer PHASE IDPHASE IIDCOMMENTS: Approved Changes: Sub-Total Approved Changes:$0$0$0$0$0$0 Pending Changes: Sub-Total Pending Changes:$0$0 $0 $0 $0 $0 Anticipated Changes: Sub-Total Anticipated Changes:$0$0$0$0$0$0 TOTAL POTENTIAL CHANGE ORDERS:$0 $0 $0 $0 $0 $0 TOTAL CONTINGENCY REMAINING:$0 $0 $0 $0 $0 $0 Change Order & Contingency Summary 27 (Attachment – K) Example Form of Risk Register Exhibit F Approved Conceptual Plans See attached plans. Under Development by JCFO: Oyster Point Development Phase IC 100% Construction Documents Landscape Submission, February 12, 2018 MA R I N A P A R K I N G ( 2 8 1 S P A C E S ) OYSTER P O I N T B L V D MA R I N A B L V D GULL D R CR E S C E N T B E A C H / OP E N S P A C E BO U N D A R Y O F OY S T E R P O I N T S P E C I F I C P L A N D I S T R I C T FU T U R E H O T E L D E V E L O P M E N T S I T E / IN T E R I M B O A T S T O R A G E OP E N S P A C E / R E C R E A T I O N (E ) O Y S T E R P O I N T M A R I N A P L A Z A ( E ) O Y S T E R P O I N T B U S I N E S S P A R K (F U T U R E P H A S E 2 , 3 & 4 DE V E L O P M E N T A R E A ) OF F I C E / R & D C A M P U S PH A S E I O F F I C E / R & D BO U N D A R Y “ P H A S E I D ” (E ) O Y S T E R P O I N T M A R I N A FE R R Y T E R M I N A L (E ) O Y S T E R C O V E M A R I N A ( E ) B O A T R A M P & F I S H I N G P I E R P A R K I N G (E ) M A R I N A P A R K I N G ( 1 1 6 S P A C E S ) FE R R Y P A R K I N G ( 1 4 8 S P A C E S ) I N T E R I M P A R K I N G ( 8 6 S PACES) BO U N D A R Y O F PH A S E I P R E C I S E P L A N OYSTER POINT BLVD (P H A S E I C I T Y “ P H A S E I C ” E N T A I L S A L L OT H E R A R E A S I N P H A S E I P R E C I S E P L A N ) VDV T BLVLV POINTNT ERE PPO OYYSY TETERE YSY OYSTER POINT, South San Francisco Phase I Precise Plan DRAFT February 23, 2011 Pe r k i n s + W i l l Me y e r + S i l b e r b e r g Wi l s e y H a m IP D N 7Phase I Conceptual Site Plan Ex h i b i t F - P h a s e I C P l a n s 0 10 0 OYSTER POINT, South San Francisco Phase I Precise Plan DRAFT February 23, 2011 Pe r k i n s + W i l l Me y e r + S i l b e r b e r g Wi l s e y H a m IP D 4Existing Conditions Overall Plan: Aerial Topo, Record Boundary & Utilities N Ex h i b i t F - P h a s e I C P l a n s OP B P 1 OP B P 3 OP B P 2 0 10 0 OYSTER POINT, South San Francisco Phase I Precise Plan DRAFT February 23, 2011 Pe r k i n s + W i l l Me y e r + S i l b e r b e r g Wi l s e y H a m IP D N Existing Parcel Map Ex h i b i t F - P h a s e I C P l a n s 0 10 0 OYSTER POINT, South San Francisco Phase I Precise Plan DRAFT February 23, 2011 Pe r k i n s + W i l l Me y e r + S i l b e r b e r g Wi l s e y H a m IP D N 6Proposed Parcel Map Ex h i b i t F - P h a s e I C P l a n s OF F I C E / R & D C A M P U S (P H A S E 1 ) FL E X I B L E - U S E RE C R E A T I O N A L P L A Y F I E L D S 3 A C R E S FU T U R E H O T E L DE V E L O P M E N T S I T E IN T E R I M B O A T S T O R A G E 4. 7 A C R E S HA R B O R MA S T E R OY S T E R P O I N T M A R I N A BA Y T R A I L BA Y T R A I L WE S T B A S I N ( 2 6 9 B O A T S L I P S ) CO N T I N U E ‘F O R E S T E D E D G E ’ PL A N T I N G S IM P R O V E D B A Y T R A I L CO N N E C T I O N NE W T R A I L C O N N E C T I O N DO C K A N D GU E S T D O C K (N ) R E S T R O O M DO C K 1 & 2 D O C K 3 & 4 D O C K 5 & 6 DO C K 7 & 8 (N ) R E S T R O O M OY S T E R P O I N T YA C H T C L U B (E ) O I N T E R I M P A R K I N G ( 8 6 S P A C E S ) CR E S C E N T P A R K AN D B E A C H PH A S E 2 , 3 & 4 DE V E L O P M E N T A R E A GU L L D R I V E O Y S T E R P O I N T B O U L E V A R D M A R I N A B O U L E V A R D WEST MARINA PARKING ( 281 SPACES) O YS TE R P O I N T BO U L E V A R D CO N C E P T U A L L A N D S C A P E P L A N F O R T H E P U B L I C R E A L M W I T H P H A S E O N E S S K S D E V E L O P M E N T Pr e p a r e d f o r t h e C i t y o f S o u t h S a n F r a n c i s c o b y R O M A D e s i g n G r o u p FE B R U A R Y 2 2 , 2 0 1 1 CR E S C E N T P A R K U P P E R T R A I L / Ph o e n i x c a n a r i e n s i s C a n a r y I s l a n d D a t e P a l m , 2 5 ’ B . T . H . /    & ' + ! , *     & #     ' " & +  MA R I N A B L V D U P P E R T R A I L / Ph o e n i x c a n a r i e n s i s C a n a r y I s l a n d D a t e P a l m , 2 5 ’ B . T . H . /    & ' + ! , *     & #     ' " & +  CR E S C E N T P A R K /  $ ' (      - &  ) ' , ! +  + ' $  )  & +  + , )   )  * *  * '  OY S T E R P O I N T B L V D M E D I A N / Ol e a n d e r s s p . -  )    $   &   )  OY S T E R P O I N T B L V D G A T E W A Y M E D I A N / Ph o e n i x c a n a r i e n s i s C a n a r y I s l a n d D a t e P a l m , 2 5 ’ B . T . H . /  Bo u g a i n v i l l e a s s p BI O S W A L E BI O S W A L E C B A 17 Prepared for the City of South San Francisco Concept Design for the Public Realm DRAFT February 23, 2011 Phase I Conceptual Landscape Plan for the Public Realm Ex h i b i t F - P h a s e I C P l a n s OYSTER POINT, South San Francisco Phase I Precise Plan DRAFT February 23, 2011 Pe r k i n s + W i l l Me y e r + S i l b e r b e r g Wi l s e y H a m IP D 20Overall Phase I Utility Plan N 0 10 0 Ex h i b i t F - P h a s e I C P l a n s 0 10 0 OYSTER POINT, South San Francisco Phase I Precise Plan DRAFT February 23, 2011 Pe r k i n s + W i l l Me y e r + S i l b e r b e r g Wi l s e y H a m IP D 21Overall Grading & Drainage Plan N Ex h i b i t F - P h a s e I C P l a n s