Joint Development Program

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					                                                                        AGENDA ITEM #20




                                            Date:                       November 30, 2004
                                            Committee Meeting Date:      December 16, 2004
                                            Board Meeting Date:            January 6, 2005
BOARD MEMORANDUM                            ACTION     X     DISCUSSION        INFO


TO:               Congestion Management Program and Planning Committee
                  Santa Clara Valley Transportation Authority
                  Board of Directors

THROUGH:          Peter M. Cipolla
                  General Manager

FROM:             Carolyn M. Gonot
                  Chief Development Officer

SUBJECT:          Joint Development Program
                  Joint Development Policy and Developer Selection Process


RECOMMENDATION:

Approve the Joint Development Policy and Developer Selection Process.

BACKGROUND:
On November 18, 2004, The Congestion Management Program and Planning Committee received a
presentation on VTA’s proposed Joint Development Policy and Developer Selection Process.
Following the presentation and discussion, Committee members requested that the proposed Policy
and Developer Selection Process be submitted to both the Administration and Finance and Transit
Planning and Operations Committees in December 2004 for further discussion before submitting to
the VTA Board of Directors in January 2005.

Need and Authority For a Joint Development Program
The intent of VTA’s joint development effort is to create a long-term, continuing source of revenue
to support the operations of the VTA and increase utilization of this community’s public transit
system. VTA has completed two joint development projects with private real estate development
companies at the Chynoweth and Almaden light rail station sites. Several years have transpired
since the completion of these projects and during this time VTA has received several unsolicited
proposals from real estate development companies to develop VTA property at transit stations.
This development interest attests to the market viability of these properties as both potential sources
of income for the VTA and an opportunity to increase ridership.
VTA owns several acres of property at light rail stations available for joint development projects
due to the underutilization of parking. In the future VTA will also be acquiring property for BART
stations, for additional light rail stations and corridors and at or near current light rail stations,
particularly where multi-modal stations are planned to include Caltrain and BART co-locating with
VTA light rail stations. Subsequent to completion of joint development projects at Almaden and
Chynoweth, VTA, Santa Clara County and cities in Santa Clara County have adopted the
Community Design and Transportation Manual as the guide to development of light rail and multi-
modal train station areas.

Assembly Bill No. 670 (Papan), enacted in February 1999 allows VTA, the San Mateo County
Transit District (SamTrans) and the Bay Area Rapid Transit District (BART), to acquire land
entirely for the purpose of Transit Oriented Development (TOD). TOD consists of a project that is
a commercial, residential, or mixed-use development that is undertaken in connection with existing,
planned or proposed transit facilities and is located ¼-mile or less from the boundaries of the transit
facility. Assembly Bill No. 1937 (Dutra), enacted in February 2002, allows a transit operator to
enter into agreements with a public agency, public utility or person or entity for the purpose of joint
development. This legislation gives VTA the authority to develop and manage real property for
transit-oriented development, and to retain ownership of that property as an ongoing source of
revenue for the Agency. The financial need to jointly develop VTA property to create a continuous
revenue source to support transit and increase the utilization potential of public transit are the
driving force behind the joint development program.

Need for a Developer Selection Process and Joint Development Policy
At this point in time VTA has no comprehensive process for evaluating development proposals at
joint development sites. Several proposals have been held without action for several months while
the VTA Board and VTA member cities have adopted the Community Design & Transportation
Manual. It is now appropriate to identify an effective developer selection process. It is important
that the VTA has a public process that affords the development community equal notice and
opportunity to make development proposals on VTA property. It is also important for the VTA to
achieve the best possible project proposals from the best developers and design professionals and
for VTA to earn the highest revenue returns from land assets. While achieving these goals the VTA
must coordinate closely with member cities to assure that projects proposed within each city’s
jurisdiction meets local planning goals and objectives.


DISCUSSION:

Proposed Joint Development Policy
The development community needs a clear statement of VTA’s objectives for revenue
enhancement, ridership potential and achieving transit-oriented development that enhances
neighborhoods. The proposed Joint Development Policy (JDP) in Exhibit A provides guidance to
developers as to the performance standards and design criteria required for successful transit-
oriented development. Without a Policy, VTA remains in a reactive position and lacks a strong and
clear statement of objectives to present to the development community




                                             Page 2 of 5
The Policy focuses on creating a long-term revenue source for VTA, emphasizes planning for the
highest and best uses at transit stations and along rail corridors, and emphasizes increased ridership.
The Policy also reflects support for the Community Design and Transportation Manual as a
handbook for successful transit-oriented development. The successful application of the Joint
Development Policy to transit area projects will result in the highest quality urban development at
transit stations and the greatest revenues to the VTA. Attention to aesthetics and urban design
standards will encourage community and neighborhood support of projects.

A core objective expressed in the Policy is the use of VTA land assets to create a long-term source
of revenue at a rate of return that is competitive in the market. Developing housing or commercial
uses that can command the highest reasonable rents will enable the VTA to achieve revenues while
providing a profit incentive to developers that ensures that projects will be financed and perform as
financially sound over time.

Developer Selection Process
The Policy provides clear guidance to developers indicating how VTA’s properties for joint
development should be implemented. Exhibit B outlines a process for selecting developers and
evaluating proposals. This process results in the concurrent development of several VTA transit
station sites and expedites the developer selection to meet market demands and ensure income to
the VTA in the near future.

Staff is proposing a two-phased process to select developers for VTA’s joint development sites.
This process is designed to minimize the time and complication required to solicit developer
qualifications and establish a list of qualified developers for sites under consideration for
development in two to three years.

The first step in the developer selection process is to establish a list of six (6) to eight (8) qualified
developers through a request for qualifications (RFQ) process. Once the list of qualified developers
has been established, VTA can select a developer from the list to enter into negotiations to develop
a specific site. This process avoids having to go through a long and complicated request for
proposals (RFP) process for each development site. It will result in much faster development at a
given site than issuing an RFP for each site.

The second step in the developer selection process involves interviews of the qualified developer,
matching the most qualified developer to each individual site based upon interest, product type
(e.g., rental housing, retail, office, ownership housing), success developing similar sites,
neighborhood issues and other site-specific concerns. Once a developer is matched up with a site
VTA would enter into an Exclusive Negotiating Agreement (ENA) with the developer to negotiate
a Disposition and Development Agreement (DDA) or Ground Lease Agreement. (Exhibit C
provides an explanation of the Exclusive Negotiating Agreement and Disposition and Development
Agreement to be used once a qualified developer has been selected for a VTA joint development
site.)

During this process the detailed site plan, architecture and landscape plans would be developed and
processed through the applicable City and the environmental processing would occur. If




                                               Page 3 of 5
more than one development team desires one site a competition using the Development Proposal
Evaluation Criteria in Exhibit B can be conducted to select the superior project.

Currently, VTA has four development sites that have generated a significant amount of developer
interest: Tamien, West San Carlos, Capitol Expressway, and Curtner. Potentially, VTA can initiate
construction on these four sites within the next 18 to 24 months. VTA would use this process to
select a developer for each site and move forward on each site concurrently. This process also adds
the flexibility that if other sites become a more imminent development priority, VTA could use the
list of qualified developers without issuing a new RFQ.

Developers on the list of qualified developers would be required to update financial and staff
information annually and VTA would refresh the list by soliciting RFQs every 2-3 years. In the
event that a developer is selected and either fails to perform according to the joint development
policies of the VTA, or stipulations of the Exclusive Negotiating Agreement, Ground Lease or
Development Agreement, or VTA is presented with evidence of poor performance by the developer
elsewhere; the VTA can remove the development team from the list of qualified developers.

VTA staff will administer studies relative to market analysis, environmental review, hazardous
materials removal, urban design and transportation to determine the most appropriate and market-
sensitive land plan for each joint development site.

Unsolicited Proposals
VTA has been approached several times by developers with unsolicited proposals to develop VTA-
owned land. Staff recommends that unsolicited proposals be accepted only when a property has
unique characteristics that render the unsolicited proposal the most likely to solve all development
problems in order to achieve VTA Joint Development Policy objectives.
An example is a recent proposal to develop the El Camino Real and Page Mill Road corner parcel
owned by VTA. This property is not located at a light rail or future BART station. It is a park and
ride lot with very little use and with an obligation through the City of Palo Alto’s Housing Element
to locate 15 housing units on a small site of 19,200 square feet. VTA has been approached with a
property exchange that would offer a property of equal value that is larger and easier to develop and
an opportunity to retain park and ride parking spaces close to this site. Another factor in accepting
this proposal is that the developer has a successful proven track record with the City of Palo Alto’s
permitting process. These factors and the fact that this is a very small parcel render this site more
appropriate to accepting an unsolicited offer rather than going through an expensive request for
proposals process that would probably yield poor results.


ALTERNATIVES:

Alternatives to the actions recommended in this staff report are:

   1. Modify the Joint Development Policy or reject adoption of this Policy.
   2. Conduct a request for proposal process for each joint development site.




                                             Page 4 of 5
   3. Accept unsolicited joint development proposals and use the proposal evaluation criteria to
      evaluate project proposals.
   4. Reject or modify request for qualifications recommended.
   5. Reject or modify proposal evaluation criteria.


FISCAL IMPACT:

A budget for the Joint Development process will be developed for each transit site for the VTA
Board’s approval. The objective of the Joint Development Program is to increase ridership
potential and generate revenue for the operation and maintenance of the transit system. The four
transit station sites mentioned in the first RFQ process are projected to create a cumulative amount
of $2 million annually in ground lease payments.


Attachments: Exhibit A: Joint Development Policy
             Exhibit B: Developer Selection Process
             Exhibit C: Exclusive Negotiating Agreement and Development Agreement




Prepared by: David Miller, AICP, Commercial Development Manager




                                             Page 5 of 5
                                  EXHIBIT A
                          JOINT DEVELOPMENT POLICY


PURPOSE

VTA’s Joint Development Program is designed to secure the most appropriate private and public
sector development of VTA-owned property at and adjacent to transit stations and corridors.
VTA envisions its station areas and transit corridors as vibrant, prosperous, community assets
that create a strong sense-of-place for transit, pedestrians, and the surrounding community, and
are destinations in their own right.

The Joint Development Policy provides a framework for creating and pursuing the highest and
best opportunities for development around station areas and along corridors. The policy is
intended to establish guidelines and procedures for identifying such opportunities to optimize
return on investment to VTA. Joint Development includes coordination with local jurisdictions
in station area land use planning to establish development patterns that enhance transit use.

Goals
The VTA's Joint Development Program seeks to:

   1. Comprehensively plan and develop the highest and best housing, office and retail uses
      around station sites and along transit corridors.
   2. Increase transportation system capacity by increasing transit use.
   3. Generate both a long-term source of revenue for VTA, and allow VTA to participate in
      the increase in the value of its real property assets over time.


JOINT DEVELOPMENT POLICY

Joint development projects shall:

   1.      Create both a long-term source of revenue for VTA, and shall allow VTA to
           participate in the increase in the value of its assets over time
   2.      Encourage increased transit utilization and ridership.
   3.      Exhibit high urban design standards and quality.
   4.      Be consistent with local jurisdiction land use goals and shall be developed with a
           public participation process that respects neighborhood concerns.
   5.      Provide for efficient and safe vehicular and pedestrian circulation and shall provide
           adequate parking to serve both private and public demand, while maximizing shared
           parking opportunities.




                                               A-1
   6.      Implement the concepts, principles, practices outlined in VTA’s Community Design
           and Transportation (CDT) Program and shall include the elements of transit-oriented
           design (TOD).
   7.      Enhance and maintain existing or future transportation systems, operations, and
           infrastructure.
   8.      Address community needs in joint development consistent with VTA policy
           encouraging revenue generation and implementing TOD design principles.

Policy Discussion
The Joint Development Policy focuses on creating a long-term revenue source for VTA,
emphasizes planning for the highest and best uses at transit stations and along rail corridors, and
emphasizes increased ridership. A key objective expressed in the Policy is also the use of VTA
land assets to create a long-term source of revenue at a rate of return that is competitive in the
market. Developing housing or commercial uses that can command the highest viable rents
enable the VTA to achieve effective revenues while providing a profit incentive to developers.

The Joint Development Policy (JDP) provides guidance to developers by clearly outlining
performance standards and design criteria required for successful transit-oriented development.
Without this policy, VTA continues to be in a reactive position and lacks the strong proactive
guidance that a clear statement of objectives presents to the development community.

The Policy also reflects support for the Community Design and Transportation Manual as a
handbook for successful transit-oriented development. Implicit within the Policy is the vision of
the Community Design and Transportation Manual ”…to integrate VTA’s transportation system
planning into the planning decisions of cities and the County as a catalyst to create new
development patterns to achieve our long range goals of developing more dynamic, livable and
lasting communities”. These “new development patterns”, often termed transit-oriented
development or TOD, will be established at transit stations where the movement of people and
location residences, shopping and employment will be increasingly concentrated. VTA has an
opportunity through joint development to provide models for TOD. As urban infill,
redevelopment and increased intensities and densities of land use occur around transit stations, it
will be increasingly important to preserve quality of life and by creating successful, attractive
and livable environments.

Key to the success of VTA sponsored development of transit station sites is the opportunity for
“place-making” community centers that serve as a destination and a beneficial addition to
existing neighborhoods. There are few locations in the urban setting that are as public as a
transit station. The opportunity to improve the urban environment for thousands of people, and
to provide for a pleasant transit experience should be maximized. Transit stations should
function as community centers where both commuter and resident needs for dining, retail goods
and services can be met in a pedestrian-friendly environment. The successful application of the
Joint Development Policy to transit area projects will result in the highest quality urban
development at transit stations and the greatest revenues to the VTA. Attention to aesthetics and
urban design standards will encourage community and neighborhood support of projects.


                                                A-2
Increasing transit ridership by making stations more attractive, safe and convenient for
passengers is emphasized in the Policy. A commitment to locate higher residential densities in
close proximity to transit stations is fundamental to achieving increased ridership. The Policy
emphasizes the need to coordinate land planning and project design with city planning officials
and with neighborhood representatives. The important issues of safe and efficient traffic
movement and adequate parking at transit station development are also addressed in the Policy.
The Policy emphasizes enhancing the transportation systems, operations and infrastructure,
directing attention to the contribution of joint development toward public transit improvements
(e.g., light rail, BART, train and buses) and street and highway system improvements at transit
stations and along corridors. This is particularly necessary considering the potential increase in
localized traffic that occurs at transit stations.




                                               A-3
                                             EXHIBIT B
                                    DEVELOPER SELECTION PROCESS


PROPOSED DEVELOPER SELECTION PROCESS

VTA is proposing a two-phased process to select developers for our potential joint development
sites. This process is designed to minimize the time and complication required to solicit highly
qualified developer and establish a current developer list for sites under consideration for the
next two to three years. VTA has solicited comments from developers interested in joint
development sites. Universally, they have indicated that complicated applications from public
agencies discourage their participation in the process. It is important that VTA’s process be
adequate and complete enough to gather necessary information about the development team to
assure us that we have selected the most qualified developer. At the same time our process must
be streamlined enough to encourage developer participation.

DEVELOPER SELECTION PROCESS: TWO-PHASES


                          Qualified                                      DDA       Construct
   RFQ                    Developer                 ENA                Ground       On 3-4
                            List                  3-4 Sites             Lease        Sites
                                                                       3-4 Sites




             PHASE 1                                                PHASE 2
   (1)   RFQ = Request For Qualifications
   (2)   ENA = Exclusive Negotiating Agreement
   (3)   DDA = Disposition and Development Agreement



The first step in the developer selection process is to establish a list of six (6) to eight (8)
qualified developers through a request for qualifications (RFQ) process. Once the list of
qualified developers has been established VTA can select a developer from the list (based upon a
number of factors) to enter into negotiations to develop a specific site. This process avoids a
long and unnecessarily complicated request for proposals (RFP) process for each development
site.

As a site becomes an imminent development priority, VTA will move forward into selecting a
developer. Developers on the list of qualified developers would be required to update financial
and staff information annually and VTA would refresh the list by soliciting RFQs every 2-3
years. The evaluation criteria for the RFQ process are presented below.

The second step in the developer selection process involves interviews of the qualified
developer, matching the most qualified developer to each individual site based upon interest,


                                                              B-1
product type (e.g., rental housing, retail, office, ownership housing), success developing similar
sites, neighborhood issues and other site-specific concerns. Once a developer is matched up with
a site VTA would enter into an Exclusive Negotiating Agreement (ENA) with the developer to
negotiate a Disposition and Development Agreement (DDA) or Ground Lease Agreement.
During this process the detailed site plan, architecture and landscape plans would be developed
and processed through the City. The environmental processing would also occur. If more than
one development team desires one site a competition using the Development Proposal
Evaluation Criteria presented below can be conducted to select the superior project.

Proposal Request for Qualifications (RFQ) Process

The purpose of the RFQ process is to establish a short list of 6-8 real estate development firms
capable of completing successful transit oriented development (TOD). The first step in this
process is to select a method of advertisement that reaches the development community. This
could be at the national, state or local level. Publications such at the Urban Land Institute
monthly magazine, Wall Street Journal or International Council of Shopping Centers monthly
magazine could be used to reach a national audience. The California Real Estate Journal weekly
publication could be used to reach a statewide audience. Local publications would be used to
reach the local audience. Developers would be invited to submit their qualifications (as outlined
below) to the VTA for evaluation with the objective of being included on VTA’s preferred
developer short list from which development teams would be selected to build projects on four or
more identified sites within the next 1-2 years.

The policies and practices outlined in the Draft Joint Development Policy and the Community
Design and Transportation Program have been summarized in a matrix of criteria to be used to
assess developer qualifications in the RFQ process and, later to evaluate development proposals
for each transit development property. Staff will evaluate each project for consistency with the
adopted Joint Development Policy. Recommendations to the Board from will clearly explain the
ranking of development teams and proposals for consistency with the Policy. These criteria are:

Developer RFQ Criteria: Phase 1

   1. Successful experience in developing transit-oriented developments.
   2. Financial capacity to fund the scale of projects contemplated for VTA properties.
   3. Strength of the design and consulting team as demonstrated in designing attractive,
      award-winning projects, including design elements incorporated in the Joint
      Development Policies and Community Design and Transportation Manual.
   4. Ability to demonstrate experience in developing projects with strong revenue generation
      for public agencies as joint partners.
   5. Experience with Ground Leases involving public agencies.
   6. Ability to maintain a schedule and budget control for design and construction of a real
      estate project on the scale of the projects anticipated for the VTA sites.




                                               B-2
    7. Experience in successful property management and successful profit and loss
       management of real estate development projects over time.
    8. Successful experience in sales and leasing of residential units, retail space, and office
       space as appropriate to the land use mix contemplated for the project sites under
       consideration.

The matrix simply rates each criterion as excellent, good and unsatisfactory.

                                       RFQ Evaluation Matrix

Criterion                                                Unsatisfactory   Good      Excellent
1. TOD Experience
2. Financial Capacity
3. Urban Design Experience/Team Qualifications
4. Revenue Generation with Public Agencies
5. Ground Lease Experience
6. Schedule and Budget Control
7. Property Management Success
8. Sales and Leasing Success



Development teams would be required to provide documentation in the form of:
    •   Audited financial reports.
    •   Descriptions of all team members (e.g., financial partners, banking relationships, project
        management team, architect and other consultants, contractors and others that are
        proposed to perform on the team).
    •   Examples of completed TOD projects, including a description of uses and timing of the
        development from application of entitlements through construction completion, and
        graphics showing the site plans, building elevations and vignette drawings.
    •   Examples of successful ground leases.
    •   Evidence of lease up and product sales schedules.
    •   References of public agencies who partnered with the developer in a joint development
        project.


An RFQ evaluation panel consisting of key VTA staff and two to three representatives from the
Technical Advisory Committee (TAC) at the planning director level would review developer
qualifications. Those firms which demonstrated clear evidence of success with these criteria and
through background screening proved to be the most qualified, would be invited to an interview
by a panel consisting of key VTA staff involved in the development process and two to three
representatives from the Technical Advisory Committee (TAC) at the planning director level
including representatives from member agencies (e.g., cities) in which projects are located. The



                                                 B-3
top 6-8 firms would then be notified that they have been qualified to participate in negotiations
for exclusive development rights on a VTA site.

The Project Evaluation Process

From the list of qualified developers VTA staff together with two to three representatives from
the city where the site is located would match development teams up with project sites based
upon the level of interest the team has in a particular site, the product desired on the site and the
experience of the developer in providing that product, community planning and neighborhood
issues and the developer’s successful experience in community involvement and other criteria
specific to each development site.

The developer would then be invited enter into an Exclusive Negotiating Agreement (ENA) with
the VTA and to submit a proposal for developing the site including a site and landscape plans,
architectural building elevations and renderings, a schedule for development, terms for a ground
lease, a list of debt and equity partners and their financial contributions to the project, a list of
project management, design consultants, special consultants and contractors proposed to be
involved in the project, and other pertinent submittal information. A narrative describing the
design, entitlement, construction, ground lease, and property management particulars would
accompany the proposal. The developer would be required to meet extensively with VTA and
applicable City staff through project inception and design.

The project proposal would be evaluated for success in meeting VTA’s objectives and the Policy
using the following matrix of six major criteria:

Development Proposal Criteria: Phase 2

1. What are the short and long term revenue projections to the VTA from the proposal?
2. To what extent does the proposal encourage increased transit ridership?
3. What is the urban design quality of the proposal?
4. How does the land use mix support the goals and policies of that City’s General Plan, any
   adopted Specific or Area Plan, and VTA’s Joint Development Policy; and neighborhood
   concerns?
5. How well does the site plan design, traffic circulation and parking support the goals and
   policies of the Joint Development Policy?
6. How are the principles of successful Transit-Oriented Development (TOD) met in the project
   proposal? Does the project successfully implement the Community Design and
   Transportation Program concepts, principles, practices and actions?
7. How does the project enhance existing or future transportation systems, operations, and
   infrastructure?




                                                 B-4
                                      Development Proposal Evaluation Matrix

Criterion                                                                     Score (1-5)         Weight          Final Score
1. Increase Transit Ridership                                                                        2
2. Urban Design Quality                                                                              2
3. Land Use/Goals/Neighborhood Concerns                                                              1
4. Site Plan Traffic Circulation/Parking vs. JDP Goals                                               1
5. TOD Principles Met/CDT Program Implemented                                                        1
6. Long and Short Term Revenue to VTA                                                                3
7. Transport. System: Future/Operations/Infrastructure                                               1
NOTE: The score for criteria #1, #2, and #6 must meet a minimum total of 25 to qualify for developer selection.



The criteria are ranked 1 through 5 with 5 being the highest score. Criteria are weighted to
reflect the priorities of VTA with increased ridership, urban design quality and long and short-
term revenue weighted the highest. A minimum score of 25 is required from these three criteria.
A more detailed checklist of factors used to measure the extent to which the above criteria are
met will be used by the VTA staff in collaboration with the city in which the station is located to
arrive at the scoring for each criterion.

Once a project has been ranked, further negotiations with the developer would occur to improve
the project, as necessary, according to these criteria. In the event that a developer fails to meet
the criteria and can not modify the project or economic conditions of the ground lease fail to
meet the requirements of VTA, VTA may reject the developer’s proposal, terminate the ENA
and select another developer on the list to begin new project negotiations. Once a successful
project design and acceptable land disposition terms have been achieved the developer would
proceed to finalize the Development Agreement and Ground Lease.




                                                                     B-5
                                   EXHIBIT C
                     EXCLUSIVE NEGOTIATING AGREEMENT &
                   DISPOSITION AND DEVELOPMENT AGREEMENT
                                  (ENA & DDA)



EXCLUSIVE NEGOTIATING AGREEMENT

Once the Board has selected the preferred project, staff will prepare an Exclusive Negotiating
Agreement (ENA) between VTA and the development entity. The ENA is a tool commonly used
by redevelopment agencies to provide the developer with a specific schedule to finalize the
project design, to finalize the mix of uses and physical design of the project, to enable the
developer to complete due diligence investigations of the property, to negotiate the terms of a
Disposition and Development Agreement and Ground lease (if applicable) and to provide time
for the developer to submit a formal application to the local governmental jurisdiction for
planning approvals.

The term of the ENA can vary considerably, usually 90-120 days with extensions available, but
must be limited by VTA and must be accompanied by a significant nonrefundable developer
deposit of funds to be used to reimburse VTA for time and materials used to evaluate the
proposal and to demonstrate the developer’s seriousness about completing the project. The ENA
should stipulate specific performance by the developer to conduct all due diligence activities
such as review and acceptance of the title report, a report generated from a physical inspection of
the property including environmental analysis, a proforma for the project in sufficient detail to
permit financial analysis by VTA and written notice of intent to withdraw or to make an offer for
lease, purchase or other acquisition of land or air rights or other development rights. The
developer must also produce a Preliminary Site Plan showing building layout and dimensions,
parking, landscaping, access and building elevations in detail sufficient to depict the building
design textures, materials and colors. ENAs often permit an initial term of three to six months
with provisions to extend the ENA at the discretion of the Board.

During the ENA period VTA has several responsibilities to the developer including:

   •   VTA makes available to the developer all existing reports relating to the physical and
       environmental conditions of the property. Developer will treat all such reports in
       confidence according to VTA guidelines.
   •   VTA grants developer the right to enter the property to perform physical inspections,
       subject to reasonable conditions designed to minimize interference with existing facilities
       and/or uses on the property and to minimize potential liability to VTA associated with the
       inspections. Developer will not be authorized to share such information with any other
       party without VTA consent.
   •   VTA shall entertain no other development proposals for the land subject to the ENA
       during the term of the ENA.




                                               C-1
   •       VTA places the “good faith” deposit in an interest bearing account and shall have the
           right to draw down from the account payment for reasonable expenses incurred by VTA
           to completing its analysis of the proposal, including but not limited to internal
           administrative costs and necessary consultant services.
   •       Within 60 days after submittal of pertinent information by the developer as listed above
           to the reasonable satisfaction of VTA, the General Manager shall bring a
           recommendation to the VTA Board for action.
   •       If the proposal is terminated, the General Manager shall return any remaining balance of
           the good faith deposit, and VTA shall return any plans or other specifications originally
           labeled by the developer as work product. Developer shall return all documents and
           information provided by VTA.
   •       If at the conclusion of the ENA period, the proposal is entered into, the original amount
           of the deposit including interest shall be subtracted from the cost of land, lease or other
           development rights conveyed to the developer by VTA.

DISPOSITION AND DEVELOPMENT AGREEMENT

The Disposition and Development Agreement (DDA) presents the obligations of the
development entity and VTA and provides for specific performance measures for VTA and
developer. The DDA may take the form of a Ground Lease or a Joint Development Agreement
or both. The DDA must be finalized before the environmental document is prepared for the
project, as the DDA is defined as a “project” under the California Environmental Quality Act
(CEQA). VTA as the responsible agency under CEQA for the DDA approval as a project and
as such, must commission an environmental assessment and certify either a mitigated negative
declaration or an environmental impact report for the project prior to acting on the DDA. It is
advisable to coordinate the environmental document with the other responsible agencies (city or
county) that will be processing the land use approvals to enable use the same environmental
document.

Typical rights and responsibilities of VTA and the developer include, but are not limited to:

       •    Identification of the parties to the agreement including prohibition against change,
            transfer or assignment of ownership, management and/or control of developer during
            the term of the Agreement without VTA’s consent.
       •    Description of the site including a map. If the subject property agreement is an air
            space development, placement of supports shall be included on the map.
       •    Requirement and condition to developer’s performance that the developer must secure
            from appropriate local agencies all necessary permits and approvals and covenant that
            Agency will cooperate with developer in obtaining permits and approvals.
       •    Requirement and condition to developer and VTA’s performance that developer obtain,
            within a period of time agreed by developer and Agency:
                o Evidence of firm financing, including construction financing, long-term
                    financing and other financing necessary to operate the project, such as firm



                                                    C-2
            commitments of necessary financing from either a financial institution or any
            acceptable party providing developing capital; and
        o Evidence of firm commitments or letters of intent from parties and/or tenant who
            are part of the project.
        o Certification of compliance with the California Environmental Quality Act of
            1970, and or NEPA as amended.
•   Terms and conditions include, but are not limited to:
        o Compensation and payment schedule for property rights to be conveyed;
        o Payment schedule for property rights to be conveyed;
        o Payment of taxes and insurance;
        o Condition of site at time of beginning and end of agreement;
        o Financial statement of developer, including financial requirements and
            standards;
        o Hold harmless and indemnity clauses mutually acceptable to developer and
            VTA;
        o Permitted and prohibited uses;
•   Allocation of liability and responsibility as to the remediation of environmental
    contamination mutually acceptable to developer and VTA;
•   Development of a site plan including: schedule for submission of concept, schematic
    design, construction, grading and landscaping plans and drawings, over which
•   VTA shall have a reasonable right of approval, including over such aspects:
        o Effects on railway and parking operations;
        o Energy considerations;
        o Parking requirements and design:
        o Streetscape and landscaping;
        o Vehicular entrance and exit;
        o Design of site and improvements;
        o Schedule of Performance;
        o Insurance requirements;
        o Adherence to applicable local, state and federal laws;
        o Failure of either party to perform including defaults, remedies and termination
            by either party;
        o Relocation obligations of the developer (where applicable);
        o Ownership of improvements construction upon the property upon the expiration
            or termination of the agreement;
        o Requirements to restore property to original condition upon expiration or
            termination of term of agreement;
        o Possible performance bond requirements; and
        o Any other general or special provisions considered necessary by the VTA’s
            Board.




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