SPECIAL MEETING AGENDA PACKET - Laserfiche WebLink

City not liable for outstanding payments if Costco ceases operations Under the proposed sales tax sharing agreement, Costco would front the City $6,785,000 for transportation improvements and be repaid through a sales tax sharing agreement not to exceed 25 years at 1.5% interest with Costco where Costco receives 40% of the sales tax generated by the Costco store and the City receives 60% of the sales tax. Section E.4 of the term sheet has been modified to clarify that the City would not be responsible for paying back the funds provided by Costco if Costco ceases operations in Pleasanton: "The City is also not liable for repaying any outstanding balances to Costco in the event Costco ceases to operate within the City." Sales tax sharing terminates after 25 years Section E.4 of the term sheet has been modified to indicate that sales tax sharing would terminate after 25 years even if the $6,785,000 fronted by Costco is not repaid by the City: "The sales tax sharing between the City and Costco shall not exceed 25 years regardless of any outstanding monetary obligations from the City to Costco at that time." Project cost overruns Section E.5 has been added to the term sheet to clarify that the City will be solely responsible only for cost overruns associated with the 1-680 Onramp project, which has been included in the City's Transportation Impact Fee (TIF) since 1998 and was planned for construction regardless of JDEDZ-related development (cost overruns associated with other transportation improvements required by the JDEDZ will be shared equally between Costco and the City): "The City and Costco will fund Project cost overruns as follows: • The Stoneridge Drive and 1-680 Onramp project cost overruns will be funded by the City's TIF. • Cost overruns for the remaining Project scope to be shared equally between Costco and the City." In addition to the requested modifications described above, staff modified the Introduction section of the term sheet to add simplifying and/or clarifying statements that do not change the content or intent of that section. However, text was added at the end of the Introduction section to clarify that execution of the term sheet does not supersede the City's land use entitlement process or guarantee development rights to Costco or any other entity. Lastly, Section C (Assumptions Underlying Term Sheet) was deleted from the term sheet as the language in this section is redundant and the intent of this section is covered under the revised language in the Introduction section. Please refer to Attachment 2 of this report to review the modified term sheet in its entirety. Page 2 of 3