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HomeMy WebLinkAboutReso 69-2022 (22-324)Page 1 of 8 AGREEMENT FOR CONSTRUCTION AND REIMBURSEMENT FOR RELOCATING AND CONSTRUCTING SEWER IMPROVEMENTS This Agreement for Construction and Reimbursement for Relocating and Constructing Sewer Improvements (“Agreement”) is entered into by and between the City of South San Francisco, a municipal corporation organized under the laws of the State of California (the "City"), and KILROY REALTY, LLC, a Delaware limited liability company ("Kilroy"), this _____ day of ___________, 2022 (“Effective Date”), with reference to the facts set forth in the Recitals below. RECITALS A. Kilroy is the owner of a ___-acre parcel located at 375 Oyster Point Boulevard, South San Francisco, with frontages on Oyster Point Boulevard. The site is surrounded by various existing commercial and industrial uses to the north and west. B. Kilroy is currently undertaking a project where it proposes to construct approximately 803,800 square feet of office and R&D development including a café and parking structure (collectively, “Project”). C. An existing 8-inch public sanitary sewer main is located on Oyster Point Boulevard (“Existing Sewer Line”) along the approximate frontage of the Project. D. Additionally, in order to accommodate the additional flow that would result from the Project’s commercial and ancillary uses, it would be necessary for Kilroy to upsize the Existing Sewer Line from 8-inch to a 12-inch pipe. E. The Existing Sewer Line has been identified as requiring upsizing and other realignment work as a part of the City’s Capital Improvements Program (CIP). The City anticipated to upsize the Existing Sewer Line to a 12-inch pipe as contemplated by the CIP. F. The sewer improvement work that Kilroy would be performing in connection with the Project would be as follows, which are described more particularly in Exhibit B (collectively, “Sewer Improvements”): 1. Oyster Point Boulevard Upsizing a. Upsizing the segment of sewer line at Oyster Point Boulevard from 8-inch to 12-inch; and b. Design and potholing work for the foregoing sewer work at Huntington Avenue. G. Kilroy agrees to construct the Sewer Improvements so long as Kilroy is reimbursed for the work equal to: 1. The portion of the estimated cost of the City’s financial responsibility covering the upsizing of the Existing Sewer Line to a 12-inch line; plus 2. The actual reasonable costs of Sewer Improvements as described in Recital F(1)(a)- Page 2 of 8 (b) the amounts in this Recital G (1) and (2) are hereinafter referred to as the “Reimbursement”. As described further below, the Reimbursement shall be granted to Kilroy through a credit in the full amount of the Sewer Capacity Fee due and payable by Kilroy for the Project and all future developments that may be proposed and permitted at the Remainder Parcel, at the time of their respective building permit issuances. H. The City is agreeable to Kilroy constructing the proposed Sewer Improvements subject to Kilroy submittal of plans and cost estimates and approval by the City thereof, and Reimbursement to Kilroy as referenced Recital G above and as set forth in Section 1 below. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows: AGREEMENT 1. Construction and Reimbursement for Sewer Improvements. The City approves Kilroy's proposed construction of the Sewer Improvements and agrees to Reimburse Kilroy as follows: a) As authorized by this Agreement, Kilroy agrees to submit plans and specifications prior to construction of the Sewer Improvements for approval by the City Engineer including approval for design. Kilroy agrees to construct the Sewer Improvements in accordance with the plans and specifications that have been approved by the City and complete the Sewer Improvements within one (1) year of the execution of this Agreement, subject to extension for matters outside the reasonable control of Kilroy that cannot be anticipated and mitigated with Kilroy’s due diligence. Upon completion of construction by Kilroy, the City shall have the right to inspect and accept the Sewer Improvements for compliance with the approved plans and specifications, which acceptance shall not be unreasonably withheld, as a condition of Reimbursement. b) City agrees to issue a Reimbursement to Kilroy, within thirty (30) days of the City's receipt of substantiating documentation from Kilroy and reasonable approval by the City of the completion thereof, demonstrating: i. The amount of East of 101 Sewer Impact Fee due at the time of building permit issuance for the Project or for subsequent development(s) that have received Planning entitlements at the Remainder Parcel at a future date; and ii. The actual reasonable cost of completing the Sewer Improvements based on: the actual reasonable costs of the Oyster Point Boulevard work (the “Reimbursement Amount”). The Reimbursement Amount, based on cost estimates previously approved by the City, is estimated to be approximately $1,077,240.00. Summary of Page 3 of 8 the costs are shown on the table below: Design Cost $ 78,000 Construction Cost $ 908,400 Construction Contingency (10%) $ 90,840 Reimbursement Amount $ 1,077,240 The Reimbursement Amount shall be drawn down by the amount of Sewer Capacity Fee that is due for the Project or any Planning-entitled future development at the Remainder Parcel, until the Reimbursement Amount is reduced to zero. c) If City property is destroyed or damaged by reasons of Kilroy’s construction of the Sewer Improvements as authorized by this Agreement, Kilroy shall repair, replace, or pay for the repair or replacement, of such destroyed or damaged property at its sole cost and expense. 2. Hold Harmless and Indemnification. To the fullest extent permitted by law, Kilroy agrees to indemnify, defend (with counsel reasonably acceptable to the City), and hold harmless the City of South San Francisco and its elected and appointed officers, employees, agents, contractors and consultants (collectively, the “City Indemnitees”) from and against any and all third party liability, loss, damage, claims, expenses and costs (including, without limitation, attorneys’ fees and costs of litigation) (collectively, “Liability”) of every nature to the extent arising out of or in connection with carrying out the Sewer Improvements by or on behalf of Kilroy pursuant to this Agreement, except to the extent any such Liability is caused by the negligence or willful misconduct of the City Indemnitees. 3. No Relief of Other Obligations. This Agreement does not relieve Kilroy from complying with all generally applicable laws and regulations in the performance of this Agreement and constructing the Sewer Improvements. This Agreement also does not relieve Kilroy from obtaining all required entitlements, permits, authorizations, or other approvals for any other work proposed at the Project Site or at the Remainder Parcel in the future. 4. Insurance. Kilroy shall maintain, or ensure that its contractors or subcontractors maintain, during the life of this Agreement the following policies of insurance: a) Worker’s Compensation and Employers’ Liability Insurance in the statutory coverage. b) Commercial General Liability Insurance: In an amount not less than ONE MILLION DOLLARS ($1,000,000) for injuries including, but not limited to, death to any one person and subject to the same limit for each person; in an amount not less than TWO MILLION DOLLARS ($2,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. c) Automobile Liability (Code 1) Insurance: In an amount not less than ONE MILLION Page 4 of 8 DOLLARS ($1,000,000) combined single limit per accident for bodily injury and property damage. d) It is agreed that the insurance required hereunder shall be in an aggregate amount of not less than Two Million Dollars ($2,000,000) and shall be extended to include as additional insureds the City of South San Francisco, its officials, employees and agents, with respect to operations performed by Kilroy as described herein. Evidence of the insurance described above shall be provided to City upon execution of this Agreement. 5. Default. In the event of default by Kilroy hereunder which is not cured following written notice and an opportunity to cure, the costs and expenses of City for which Kilroy shall be liable shall include but not be limited to the City’s costs of suit and reasonable attorney’s fees if the City is the prevailing party in any such suit. 6. Independent Contractor. Kilroy is an independent contractor and nothing contained in this Agreement shall be construed as creating an employer/employee, joint venture, or principal/agent relationship between City and Kilroy. 7. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue to be in full force and effect. 8. Term. This Agreement is effective upon execution unless otherwise modified in writing by mutual agreement of the parties. 9. Execution in Counterparts. This Agreement may be executed in counterparts and/or by facsimile or other electronic means, and when each party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterpart, shall constitute one Agreement, which shall be binding upon and effective as to all parties. 10. Entire Agreement. This Agreement represents the entire and integrated agreement between the parties. This Agreement may be modified or amended only by a subsequent written agreement signed by both parties. 11. Knowing and Voluntary Execution. Both parties to this Agreement have had the opportunity to be advised by and to have this Agreement reviewed by legal counsel of their choosing. [SIGNATURE PAGE FOLLOWS] Page 5 of 8 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date written above. CITY OF SOUTH SAN FRANCISCO By: __________________________ Mike Futrell, City Manager Attest: __________________________ City Clerk Approved as to form: __________________________ City Attorney [SIGNATURES CONTINUE ON NEXT PAGE] Page 6 of 8 KILROY REALTY, LLC, a Delaware limited liability company By: _______________________ _______________________ _______________________ Page 7 of 8 Exhibit A (Description of sewer realignment work) Page 8 of 8 Exhibit B (Description of Sewer Improvements and Plans and Specifications) 5099936.3