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F. Costco has expressed an interest in locating one of its stores in the JDEDZ and has indicated a willingness to assist the City in designing and constructing the Project improvements, subject to the terms and conditions of this Agreement. The City and Costco intend to enter into a separate Improvement Agreement to govern the process and timing of Costco's construction of the Project improvements. G. The City estimates that the cost for the acquisition of the Required Right of Way and for the design and construction of the Project Improvements is 521,470,000("Preliminary Cost Estimate"). This cost estimate includes an estimated amount to design and construct the JDEDZ Street improvements ofS12,860,000; an estimated amount to design,construct and acquire the right of way for the Stoneridge Drive and I-680 Project of 57,110,000 and an estimated amount to acquire the Required Right of Way of 51,500,000. Attachment 4 provides a breakdown of the Preliminary Cost Estimate for the Project Improvements. H. Costco intends to advance the costs for the development of the Project Improvements and the City intends to reimburse Costco a portion of Costco's expenditures incurred in designing and constructing the Project Improvements so that,after such reimbursement, Costco shall have borne only its fair share of impact mitigation costs in the amount to$6,785,000,based on its proportionate impacts on JDEDZ traffic,(the"Costco Fair Share"). Costco shall pay the Costco Fair Share as follows: (1)53,700,000 will be used for Project Improvement costs in lieu of paying the City's Traffic Development Fee, and(2) $3,085,000 will be incurred and contributed by Costco towards the design and construction costs of the Project Improvements. 1. Furthermore, Costco shall advance all additional costs for the design and construction of the Project Improvements,subject to reimbursement by the City,as provided for in Section 4.1. J. The Required Right of Way will be determined during the design phase of Project Improvements. Costco will dedicate the Costco Right of Way to the City at no cost to the City. Costco shall be responsible for fifty percent (50%)of the cost of acquiring the remaining Required Right of Way,and the City shall be responsible for the other fifty percent(50%). Costco will be reimbursed the Costco Acquisition Costs as provided in Section 4.2. K. The costs for right of way for Stoneridge Drive and I-680 Project Right of Way is included in the 57,110,000 Stoneridge Drive and 1-680 Project estimate and will not be considered part of Costco Acquisition Costs. Reimbursement of Costco expenditures made for the Stoneridge Drive and 1-680 Project will be made in accordance with Article 4. L. The amount the City intends to reimburse Costco pursuant to this Agreement will not exceed the Costco Construction Costs(plus any accrued interest)and the Costco Acquisition Costs. The City will maintain no proprietary interest in the proposed Costco Store. 1310 01 M18870.8 17,2018